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Samsung Heavy Industries? Crisis Response Strategies, the Topics and Tone of News Coverage Related to Taean Oil Spill

Permanent Link: http://ufdc.ufl.edu/UFE0025019/00001

Material Information

Title: Samsung Heavy Industries? Crisis Response Strategies, the Topics and Tone of News Coverage Related to Taean Oil Spill Content Analysis of the News Articles of Five Korean Newspapers
Physical Description: 1 online resource (96 p.)
Language: english
Creator: Lee, Sang-Hoon
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2009

Subjects

Subjects / Keywords: advertisement, crisis, management, newspapers, samsung, tone
Journalism and Communications -- Dissertations, Academic -- UF
Genre: Mass Communication thesis, M.A.M.C.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: This study sought to examine the crisis response strategies used by Samsung Heavy Industries during the oil spill in Taean County, South Korea on December 7, 2007 through an analysis of the news articles from five Korean newspapers, namely Chosun, Donga, Chungang, Hankyorae, and Kyunghyang. Coombs flowchart and crisis response strategies were employed to analyze Samsung s crisis management. The tones used in the articles and the scale of Samsung s advertisements in each of the five Korean newspapers were also analyzed to examine the level of Samsung s media control through its leveraging of advertising power. Further, ten topics were analyzed to determine its relation with the tone of the articles. This study expected that the rebuilding posture such as compensation and apology strategies and the bolstering posture such as reminding and ingratiation strategies would appear more frequently than any other strategies in media coverage. The results showed that the compensation and apology strategies appeared quite frequently in the news coverage as expected. However, the reminding and ingratiation strategies were not as prevalent in the news articles. In contrast, the most frequently used approaches were the excusing strategy, which allows the company to avoid its responsibility, and the too soon to know/no answer yet strategy, which an organization uses to postpone expressing its viewpoint on the crisis. These particular research findings demonstrate that Samsung s crisis management did not completely identify with Coombs crisis management model which is based upon the U.S. social milieu largely due to the cultural and social considerations that play a big role in different countries. In addition, this study observed a positive relation between the tone of the news articles and the scale of Samsung s advertisements. In other words, the more positive the tone of the articles, the greater the increase in the scale of advertisements; the more negative the tone of the articles, the greater the decrease in the scale of advertisements. This study found not only Samsung Heavy Industries passive and irresponsive approach to crisis management but also Korean media s financial dependence on large corporations. Although Samsung passed through the Taean oil spill crisis using these responses without incurring severe damage to its finances or reputation, the approach taken by the company cannot be viewed as a desirable way of communication from a long-term perspective. The results of this study were meaningful from two perspectives. The present study explored the crisis management approaches and media-corporation relationship used in the Korean market. By doing so, the results can help researchers understand the differences between Samsung s crisis management strategies and Coombs strategies and adapt Coombs crisis management model so that it can be more applicable to the Korean society and its market. Further, by illustrating the negative results of potentially unethical relationships between the media and corporations, this study can encourage Korean media and public relations practitioners to improve their ethical practices and thus maintain desirable, long-term relationships with the public.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Sang-Hoon Lee.
Thesis: Thesis (M.A.M.C.)--University of Florida, 2009.
Local: Adviser: Choi, Youjin.
Electronic Access: RESTRICTED TO UF STUDENTS, STAFF, FACULTY, AND ON-CAMPUS USE UNTIL 2010-02-28

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2009
System ID: UFE0025019:00001

Permanent Link: http://ufdc.ufl.edu/UFE0025019/00001

Material Information

Title: Samsung Heavy Industries? Crisis Response Strategies, the Topics and Tone of News Coverage Related to Taean Oil Spill Content Analysis of the News Articles of Five Korean Newspapers
Physical Description: 1 online resource (96 p.)
Language: english
Creator: Lee, Sang-Hoon
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2009

Subjects

Subjects / Keywords: advertisement, crisis, management, newspapers, samsung, tone
Journalism and Communications -- Dissertations, Academic -- UF
Genre: Mass Communication thesis, M.A.M.C.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: This study sought to examine the crisis response strategies used by Samsung Heavy Industries during the oil spill in Taean County, South Korea on December 7, 2007 through an analysis of the news articles from five Korean newspapers, namely Chosun, Donga, Chungang, Hankyorae, and Kyunghyang. Coombs flowchart and crisis response strategies were employed to analyze Samsung s crisis management. The tones used in the articles and the scale of Samsung s advertisements in each of the five Korean newspapers were also analyzed to examine the level of Samsung s media control through its leveraging of advertising power. Further, ten topics were analyzed to determine its relation with the tone of the articles. This study expected that the rebuilding posture such as compensation and apology strategies and the bolstering posture such as reminding and ingratiation strategies would appear more frequently than any other strategies in media coverage. The results showed that the compensation and apology strategies appeared quite frequently in the news coverage as expected. However, the reminding and ingratiation strategies were not as prevalent in the news articles. In contrast, the most frequently used approaches were the excusing strategy, which allows the company to avoid its responsibility, and the too soon to know/no answer yet strategy, which an organization uses to postpone expressing its viewpoint on the crisis. These particular research findings demonstrate that Samsung s crisis management did not completely identify with Coombs crisis management model which is based upon the U.S. social milieu largely due to the cultural and social considerations that play a big role in different countries. In addition, this study observed a positive relation between the tone of the news articles and the scale of Samsung s advertisements. In other words, the more positive the tone of the articles, the greater the increase in the scale of advertisements; the more negative the tone of the articles, the greater the decrease in the scale of advertisements. This study found not only Samsung Heavy Industries passive and irresponsive approach to crisis management but also Korean media s financial dependence on large corporations. Although Samsung passed through the Taean oil spill crisis using these responses without incurring severe damage to its finances or reputation, the approach taken by the company cannot be viewed as a desirable way of communication from a long-term perspective. The results of this study were meaningful from two perspectives. The present study explored the crisis management approaches and media-corporation relationship used in the Korean market. By doing so, the results can help researchers understand the differences between Samsung s crisis management strategies and Coombs strategies and adapt Coombs crisis management model so that it can be more applicable to the Korean society and its market. Further, by illustrating the negative results of potentially unethical relationships between the media and corporations, this study can encourage Korean media and public relations practitioners to improve their ethical practices and thus maintain desirable, long-term relationships with the public.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Sang-Hoon Lee.
Thesis: Thesis (M.A.M.C.)--University of Florida, 2009.
Local: Adviser: Choi, Youjin.
Electronic Access: RESTRICTED TO UF STUDENTS, STAFF, FACULTY, AND ON-CAMPUS USE UNTIL 2010-02-28

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2009
System ID: UFE0025019:00001


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1 SAMSUNG HEAVY INDUSTRIES CRISIS RESPONSE STRATEGIES, THE TOPICS AND TONE OF NEWS COVERAGE RELATED TO TAEAN OIL SPILL : CONTENT ANALYSIS OF THE NEWS ARTICLES OF FIVE KOREAN NEWSPAPERS By SANGHOON LEE A THESIS PRESENTED TO T HE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN MASS COMMUNICATION UNIVERSITY OF FLORIDA 2009

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2 2009 Sanghoon Lee

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3 To my dear family and friends

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4 ACKNOWLEDGMENTS I would like to thank my chair, Dr. Youjin Choi. She was greatly helpful, supportive and patient throughout this thesis process despite her physical condition of carrying a baby. She was a knowledgeable and dedicated profe ssor who gave me invaluable support for my thesis and enlightened me on my interested academic area. Her insights, guidance and candor were fundamental to the completion of this study. I would also like to extend my gratitude to my committee members Dr. Lynda Lee Kaid and Dr. Renee Martin -Kratz er. Dr. Kaid generously shared her wealth of knowledge in methodology with me and motivated me to develop my thesis more completely. Dr. Martin -Kratzer sincerely understood my struggles as an international stu dent and offered me great suggestions on research designs of this study I would like to thank all of them for the help and advice which brought a successful ending to my master s thesis process. I would also like to thank my parents for their continued s upport and patience through my academic endeavors. They were my motivation to stay strong through difficulties that I faced. Furthermore, they always believed me and encouraged me to do my best. This would not have been possible without their immense support. Also, I want to thank my friends in South Korea for being true companions who shared not only good times but also bad times. They have always stood by my side and have given me invaluable advice when I was facing difficulties. Lastly, I would like t o thank my fellow students. I have learned so much about myself through their friendship. his study.

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5 TABLE OF CONTENTS page ACKNOWLEDGMENTS .................................................................................................................... 4 LIST OF TABL ES ................................................................................................................................ 7 LIST OF FIGURES .............................................................................................................................. 8 ABSTRACT .......................................................................................................................................... 9 CHAPTER 1 INTRODUCTION ....................................................................................................................... 11 2 LITERATURE REVIEW ........................................................................................................... 16 Definition of Crisis ...................................................................................................................... 16 Types of Crises ............................................................................................................................ 17 Crisis Management Models ........................................................................................................ 19 Coombs Crisis Response Strategies .......................................................................................... 23 Crisis Media Relations ................................................................................................................ 30 Characteristics of Korean Media ................................................................................................ 32 Samsung Heavy Industries Path to Accidents: The Big Oil Spill in T aean County, South Korea ............................................................................................................................. 34 H ypotheses and Research Questions .......................................................................................... 35 3 METHODOLOGY ...................................................................................................................... 42 Research Design and Sampling Procedure ................................................................................ 42 Measurement ............................................................................................................................... 44 Crisis Response Strategies .................................................................................................. 44 Tones of News Articles ....................................................................................................... 45 Topics ................................................................................................................................... 46 The Number of Advertisements .......................................................................................... 47 The Revenue of Advertisements ......................................................................................... 47 Pretest and Coding Procedure .................................................................................................... 48 4 FINDINGS ................................................................................................................................... 51 Data Analysis ............................................................................................................................... 51 Findings from Hypotheses and Research Questions ................................................................. 52 5 DISCUSSION .............................................................................................................................. 68 Discussion and Implications ....................................................................................................... 68 Limitations ................................................................................................................................... 80

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6 Fu ture Research ........................................................................................................................... 81 APPENDIX A CODING SHEET FOR CONTENT ANALYSIS ..................................................................... 83 B CODING BOOK FOR CONTENT ANALYSIS ...................................................................... 85 C COST OF NEWSPAPER ADVERTISEMENTS ..................................................................... 87 LIST OF REFERENCES ................................................................................................................... 88 BIOGRAPHICAL SKETCH ............................................................................................................. 96

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7 LIST OF TABLES Table page 2 1 Crisis r esponse s trategies by p ostures ................................................................................... 27 2 2 Crisis t ype m atr ix ................................................................................................................... 29 4 1 Frequencies of strategies in newspaper coverage ................................................................ 54 4 2 Frequencies of the topics for the oil spill .............................................................................. 54 4 3 Cross tabulation of topics by newspapers ............................................................................ 57 4 4 Adjusted standardized residuals of the topics by newspapers ............................................. 58 4 5 Cross tabulation of the strategies by periods ........................................................................ 60 4 6 Adjusted standardized residuals of the strategies by periods .............................................. 61 4 7 The number of news coverage about the strategy and the number of strategy in each period ...................................................................................................................................... 61 4 8 Tones of news coverage in five Korean newspapers ........................................................... 62 4 9 Multiple comparisons of the tone of five Korean newspapers ............................................ 63 4 10 Regression analyses of the tone of articles with the scale of Samsung advertisements .... 64 4 11 Multiple regression analyses of five Korean newspapers with the scale of Samsung advertisements ........................................................................................................................ 66

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8 LIST OF FIGURES Figure page 2 1 Coombs transgression decision flowchart ........................................................................... 26 2 2 Coombs accidents decision flowcharts ................................................................................ 31

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9 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for Degree of Master of Arts in Mass Communication SAMSUNG HEAVY INDUSTRIES CRISIS RESPONSE STRATEGIES, THE TO PICS AND TONE OF NEWS COVERAGE RELATED TO TAEAN OIL SPILL : CONTENT ANALYSIS OF THE NEWS ARTICLES OF FIVE KOREAN NEWSPAPERS By Sanghoon Lee August 2009 Chair: Youjin Choi Major: Mass Communication T his study sought to examine the crisis response strateg ies used by Samsung Heavy Industries during the oil spill in Taean County, South Korea on December 7, 2007 through an analysis of the news articles from five Korean newspapers namely Chosun, Donga, Chungang, Hankyorae, and Kyunghyang. Coombs flowchart an d crisis response strategies were employed to analyze Samsung s crisis management. The tone s used in the articles and the scale of Samsung s advertis ements in each of the five Korean newspapers were also analyzed to examine the level of Samsung s media con trol through its leveraging of advertising power Further ten topics were analyzed to determine its relation with the tone of the articles. This study expected that the rebuilding posture such as compensation and apology strategies and the bolstering post ure such as reminding and ingratiation strategies would appear more frequently than any other strategies in m edia coverage The results showed that the compensation and apology strategies appeared quite frequently in the news coverage as expected However, the reminding and ingratiation strategies were not as prevalent in the news articles. In contrast the most frequently used approaches were the excusing strategy which allows the company to avoid its responsibility and the too soon to know/no answer yet strategy

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10 which an organization uses to postpone expressing its viewpoint on the crisis. These particular research findings demonstrate that Samsung s crisis management did not completely identify with Coombs crisis management model which is based upon t he U.S. social milieu largely due to the cultural and social considerations that play a big role in different countries. In addition, this study observed a positive relation between the tone of the news articles and the scale of Samsung s advertisement s In other words, the more positive the tone of the articles, the greater the increase in the scale of advertisements ; the more negative the tone of the articles, the greater the decrease in the scale of advertisements. This study found not only Samsung Hea vy Industries passive and irresponsive approach to crisis management but also Korean medias financial dependence on large corporations. Although Samsung passed through the Taean oil spill crisis using these responses without incurring severe damage to it s finances or reputation, the approach taken by the company cannot be viewed as a desirable way of communication from a long -term perspective. The results of this study were meaningful from two perspectives. The present study explored the crisis management approaches and media -corporation relationship used in the Korean market. By doing so, the results can help researchers understan d the differences between Samsung s crisis management strategies and Coombs strategies and adapt Coombs crisis management mod el so that it can be more applicable to the Korean society and its market. Further, by illustrating the negative results of potentially unethical relationships between the media and corporations, this study can encourage Korean media and public relations p ractitioners to improve their ethical practices and thus maintain desirable, long term relationships with the public.

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11 CHAPTER 1 INTRODUCTION No company can avoid a crisis. According to a survey of Fortune 1000 companies, some corporations face as many as 10 major crises annually (Mitroff, Pauchant, & Shrivastava, 1989). Crises, in almost all circumstances, happen abruptly and prompt many questions from companies various stakeholders. Corporations that cannot cope with stakeholders questions face not o nly unnecessary financial damage but also emotional and perceptual damage ( Marra, 1998). Crises present corporations with great risks but also with great opportunities because the public is just as likely to focus on the corporations immediate management of the crisis. Proper management of a crisis helps others perceive a corporation as a responsible corporate citizen despite its temporary failings ( Kim 19 98). While a crisis may be unpredictable, that does not mean an organization cannot be prepared. Co mpanies can prepare effective crisis management strategies and response processes in advance so crisis managers can respond more effectively (Coombs, 1999a). For this reason, many scholars have studied how to plan for a crisis, with whom to communicate during a crisis, and what organizations should say to stakeholders after a crisis (Fink,1986; Mitroff & Pearson, 1993; Gonzalez Herrero & Pratt, 1995; Fearn Banks, 1996; Sturges, 1994; Coombs, 2007). Knowing how to respond to a potential crisis in advance helps organizations build and maintain good relationships with various stakeholders they must reach in a crisis. Many case studies stress the importance of crisis management in the public relations literature (Shrivastara et al., 1988; Regester & Larkin, 2008; Ice, 1991; Johnson & Sellnow, 1995; Mitroff & Anagnos, 2001). The Tylenol case of Johnson & Johnson, which began on Sept. 29, 1982 when the first of seven people died after taking cyanide laced Tylenol capsules, is a famous example of ethical

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12 practice s in a real crisis situation. Johnson & Johnson behaved candidly and communicated with media and the public openly and frequently. The company did not hide sensitive and important information. They also followed their rigorous credo, of protecting the co nsumer by recalling hundreds of thousands of Tylenol products from stores (Mitroff & Anagnos, 2001; Marra, 1998). Although the company suffered a financial setback, Johnson & Johnsons systematic and responsible management of the crisis helped it escape a significant reputational loss, improved its relationship with the public, and ultimately increased its profits. Conversely, there are cases of organizations that failed to cope effectively in a crisis. The Three Mile Island nuclear power accident, Challe nger space shuttle explosion, and Exxon Valdez oil spill are three cases that exemplify how inappropriate crisis management strategies led to extensive damage within the organizations involved (Marra, 1998). Among these, the Exxon Valdez oil spill is the most well known case. Exxon was vehemently criticized by media and the public after the tanker Exxon Valdez spilled oil into Prince William Sound, Alaska, on March 24, 1989. The craft leaked 10.8 million gallons of Prudhoe Bay crude oil into the sea, spr eading 750 km from the spill site and affecting 1,750 km of shoreline along the way (Davidson, 1990; Moore, 1994; Maki, 1991). Exxon could not escape public criticism because it failed to cope effectively with the ensuing crisis. Moreover, it had not invested significant effort beforehand to develop and maintain good relationships with various stakeholders, such as residents, media, environmental groups, and the local governments (Kim, 2002). Similar to the Exxon case, Samsung Heavy Industries Company cau sed a significant oil spill in Taean County, South Korea at the end of 2007. The oil spilled along the west coast of South Korea after a Hong Kongregistered supertanker Hebei Spirit, was struck by a Samsung Heavy Industries -owned barge that came unmoore d from its tugboat in rough seas. In October

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13 2008, the International Oil Pollution Compensation Funds (IOPC) noted that the most recent estimate of the total amount of losses caused by the oil spill ranges between Korean Won (KRW) 566.3 billion and KRW 601.3 billion (about $56 to 60 million) (The International Oil Pollution Compensation Funds Web site). Samsung executed various crisis response strategies during the Taean oil spill. However, the outcome of those strategies remains controversial because of the small amount of compensation offered by the corporation. In addition, Samsung did not react to the oil spill until 47 days after it happened. Although Samsung publicly apologized for the accident, they included no detailed reference to compensation. While this omission could be part of their crisis response strategy, many Koreans considered Samsungs response to the oil spill inadequate and Taean residents protested against Samsung ( Son, 1/23/2008, The Hankyorae, p06). The purposes of this study are as follows: First, it will examine the crisis response strategies of Samsung Heavy Industry during the oil spill in Taean County, South Korea through an analysis of the news coverage Samsungs efforts received. Second, it will examine the relationship be tween the tone of the news coverage about Samsungs reaction to the oil spill and the scale of Samsung advertisements placed in the five Korean newspapers. Last, ten topics were analyzed to determine its relation with the tone of the articles. Among many crisis management models (Pauchant & Mitroff, 1992; Mitroff, 2001; Littlejohn, 1983, Person & Clair, 1998; Gonzalez Herrero & Pratt, 1995; Sturges, 1994; Fink, 1986; Coombs, 2007), Coombss 10 kinds of crisis response strategies based on decision flowchart s will be used to examine Samsungs crisis response strategies after the accident because Coombss strategies are the most recent and his operational definitions are the clearest (Coombs, 2007). Furthermore, scholars have tested and verified Coombss cris is -response

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14 strategies through several case studies (Englehardt et al., 2004; Coombs, 2004; Vlad et al., 2006). Also, Coombss crisis -response strategies have provided crisis managers in the field with a set of tested guidelines for coping effectively wit h crises. In addition, this study will examine how top circulated Korean newspapers commented to Samsungs response. Shim and Song (2008) report that Samsung has controlled the Korean media by leveraging its advertising power. Almost every newspaper comp any in Korea depends primarily on the revenues generated from advertisements placed by organizations. Most newspaper companies are reluctant to announce their revenues transparently, however, and there is usually a big difference between real advertising revenues and the advertising revenues that companies publicly announce (Song, 2005). However, the fact that the management of most newspaper companies depend on advertising revenue excessively has been commonly admitted through large numbers of media repo rts and studies r elated to newspaper industry ( Lee 2008; Lee, 2008; Kim, 2008). The development of the Internet and the decrease of newspaper subscription rates ha ve caused Korean newspaper companies to depend on advertising revenues much more than ever (Lee, 2008). Generally, about 51 percent of the content of Korean daily newspapers is advertising (Son, 2008). According to research conducted by the Korea Broadcasting Advertising Corporation, the total amount of advertisement costs paid by Samsung for K orean media has ranked consistently in the top five among Korean corporations over the past five years ( Korean Broadcasti ng Advertising Corporation). Therefore, most media companies do not want to confront large corporations by publishing negative news st ories about those large clients. If a media company addresses the faults of a large corporation, the corporation may withdraw their advertising. Large corporations media control has been a controversial issue for a long time. This study will

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15 objectivel y examine the relations between the tone of news coverage of Samsung and the exact amount of Samsung advertising in newspapers. Most crisis management literature has emerged from Western culture. However, the crisis response strategies these studies detai l may not apply to Samsung s oil spill crisis which occurred in South Korea. Or, S amsung may use alternative crisis response strategies acceptable to Korean society. This study will illuminate the potential difference between the crisis strategies used b y Samsung during the oil spill crisis and the crisis strategies developed by Coombs through analysis of news coverage of the Taean oil spill accident. This study will help Korean crisis managers build crisis -response strategies that can cope effectively w ith public relations crises specific to Korean society and organizations.

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16 CHAPTER 2 LITERATURE REVIEW Definition of Crisis The term crisis is used frequently in various academic fields and in daily life. Different fields use different definitions for t he term crisis. Sometimes, use of the term crisis causes confusion or an incorrect perception. For this reason, there need to pay careful attention to defining the phenomenon of crisis. Although it is hard to refer to a crisis through a single and clear definition, the definitions of crisis in the field of public relations are discussed at the organizational level with an emphasis on firms relationships with the public. Sapriel (2003) indicates that a crisis is an event, revelation, allegation or set of circumstances which threatens the integrity, reputation, or survival of an individual or organization (p. 348). Lerbinger (1997) observes that crisis is an event that brings, or has the potential for bringing, an organization into disrepute and imper ils its future profitability, growth, and, possibly, its very survival, further emphasizing the importance of the reputation which means peoples awareness of a company, favorable attitudes towards it, positive associations with it (Lerbinger, 1997, p. 4). He considers that a crisis can exert a huge influence on an organization. Fearn Banks (1996) indicates a crisis is a major occurrence with a potentially negative outcome affecting the organization, company, or industry, as well as its publics, produc ts, services, or good name (p. 2). Coombs (1999b ) provides a similar definition of a crisis as an event that is an unpredictable, major threat that can have a negative effect on the organization, industry, or stakeholders if handled improperly (p. 2). Coombs and Holladay (2001) define a crisis as one event or interaction within a larger relationship between an organization and its stakeholders that can damage or be a threat to a quality relationship (p.324). Lastly, Pearson and Clair (1998) argue an organizational crisis is a low -probability,

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17 high -impact situation that is perceived by critical stakeholders to threaten the viability of the organization and that is subjectively experienced by these individuals as personally and socially threatening (p. 66). Although these definitions of crisis by public relations scholars consist of different terms, there is a point of sameness: that a crisis is an unpredictable affair that violates significant expectations of various stakeholders, has an influence on an organizations performance and creates negative results (Coombs, 2007). While Lerbinger (1997) suggests suddenness, uncertainty, and time compression as characteristics of a crisis, Mitchell (1986) cites importance, immediacy, and uncertainty. Mitr off and Anagnos (2001) argue that a crisis is related to five characteristics of modern society: complexity, coupling, scope and size, speed, and visibility. Alternatively, Marra (1992) indicates that the characteristics of a crisis are stress, instability and aggravation of relationships with the public. The distinctive element in Marras argument is the emphasis on the link between a crisis and the firm s relationship with the public. Generally, it is much more difficult to recover from a tarnished rel ationship with the public than to recover from the associated financial damage. Irvine and Millar (1996) synthesize similar characteristics based on many scholars diverse arguments. According to their argument, a crisis happens very suddenly, requires a n immediate response, and interrupts the performance and routine of an organization. A crisis provokes stress and uncertainty, and it threatens the reputation and assets of the organization. Additionally, a crisis leads to criticism towards the organizat ion and leaves the organization permanently altered (Irvine & Millar, 1996). Types of Crises Organizations can face a variety of crises. Fearn -Banks(1996) suggests 41 kinds of crises that happened frequently in the U.S., including acquisition, bankruptcy, boycott bribery, contamination, earthquake, explosion, lawsuits, merger, murder, product failure, sexual

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18 discrimination, tax problems, and terrorism Usually an organization faces multiple risks, not just one, so it should prepare different crisis respon se strategies in order to avoid or reduce the damage of crises. However, it is impossible for an organization to anticipate crisis response strategies for every single situation. Therefore, an organization should prepare crisis management plans for the m ain types of crises they can face. The similarities of crises within each type enable one crisis management strategy to apply to any situation within a specific crisis type (Pauchant & Mitroff, 1992). Crisis scholars have developed crisis typologies. Le rbinger (1997) divides crisis situations into seven types: natural crises, technological crises, c onfrontation crises, crises of malevolence, crises of skewed management values, crises of deception, and crises of management misconduct. Pincus and Acharya (1988) classify crises into seven types: corporate restructuring (e.g., hostile Merger and acquisition), product problems (e.g., recalls), market turbulence (e.g., disadvantageous lawmaking), environmental hazards (e.g., oil spills), financial distress (e. g., bankruptcy), labor upheavals (e.g., strikes), and erosion of public confidence (e.g., boycotts). Various dimensions for categorizing types of crises have been developed by many scholars. Those dimensions are internal -external and intentional unintent ional (Coombs, 1995), the degrees of emergency and the flexibility of time needed to cope with the crisis (Linke, 1989), violent nonviolent and intentional unintentional act of nature (Newsom et al, 2000). Coombs (1995) offered the internal -external dime nsion and the intentional unintentional dimension, which lead to four types of crises. Those typologies are accidents (internal and unintentional), faux pas (external and unintentional), transgressions (internal and intentional), and terrorism (external a nd intentional). Coombs typologies will be addressed in the literature review part in detail as a part of the main framework in this study.

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19 Linke (1989) categorizes four types of crises using the degrees of emergency and the flexibility of time needed to cope with the crisis. Those typologies include exploding crisis (e.g., fire), immediate crisis (e.g., oil spills), building crisis (e.g., strike), and continuing crisis (e.g., malignant rumor). Notably, environmental accidents, such as the Taean oil spi ll accident, are classified as immediate crises (Linke, 1989). Newsom, Turk, and Kruckeberg (2000) suggest two dimensions with which to categorize crises: the degree of physical damage (violent -nonviolent) and the organizations intention regarding the cr isis (intentionalunintentional acts of nature). Their typologies include violent acts of nature (e.g., earthquake), nonviolent acts of nature (e.g., contagious disease), intentional violent crisis (e.g., terror), intentional nonviolent crisis (e.g., abus e of power), unintentional violent crisis (e.g., oil spills), and unintentional nonviolent crisis (e.g., mass unemployment). Crisis typology is a cornerstone of preparing for effective crisis management because it helps managers to prepare for the partic ular crises that could impact an organization. Thus, an organization should review the list of potential crises by type and select the most dangerous crisis in each type of crisis. Finally, an organization should develop proper crisis management plans fo r each type of crisis. Crisis Management Models It is a hard task to develop and maintain a comprehensive crisis management program because the crisis management procedure changes continuously and demands the incorporation of knowledge from diverse fields such as small -group decision making, media relations, environmental scanning, risk assessment, crisis communication, crisis plan development, evaluation methods, and reputation management (Coombs, 2007, p. 1). Recent studies on crisis management reflect a perspective that crises have a discernible life cycle (Gonzalez Herroro & Pratt, 1995; Sturges, 1994). The life cycle view means that the crisis

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20 management process consists of separate sections in a particular order and should be incorporated into the daily procedures of an organization. Crisis managers in an organization should check on potential crises and take actions to prevent or respond to them (Coombs, 2006). The life cycle perspective produces various staged approaches to crisis management. Fi nk (1986) suggests a four -stage model using a medical illness metaphor. The stages are pro -dromal acute chronic and resolution (Fink, 1986). The pro -dromal stage is the warning time during which signals are recognized before the beginning of the re al crisis. It is the stage in which solving the crisis is still relatively easy. The acute crisis stage means that a crisis and damage have occurred, and, organizations begin their response actions. At the chronic crisis stage, the reputation and image of organizations are evaluated. It is the time when organizations obtain positive or negative evaluations of their crisis response strategies. The crisis resolution stage is when organizations strive to prevent the same crisis (Fink, 1986). Fink treats a crisis as an extended event focusing on repeated life cycles but does not reflect the influence of organizational culture or structure on crisis management. Mitroff (1994) suggests a five -stage model. The stages are signal detection, probing and prevent ion, damage containment, recovery, and learning. Signal detection means that crisis managers should identify new crisis warning signs in order to prevent a crisis. Probing and prevention refers to seeking out existing risk factors and lessening the possi bility for damage. Damage containment means that crisis managers try to prevent a crisis from spreading or expanding further. Recovery refers to efforts to return to normal situations as soon as possible. Learning refers to retrospect and analysis of the organizations crisis management processes (Mitroff, 1994).

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21 Emphasizing organizational culture and relationships with stakeholders, Mitroff (2001) suggested another crisis model which has five phases, including classification of types/risks, mechanisms, s ystems, stakeholders, and scenarios. First, he classifies the types and risks of crises in view of seven categories, including economic, informational, physical, human resource, reputational, psychopathic, and natural disasters. Categorizing the types of crises helps organizations prepare for each type of crisis in advance. An organization doesnt have to prepare for all kinds of crises. However, the organization should prepare for at least one crisis in each category. Second, organizations must arrang e the management mechanisms to anticipate, recognize, resp ond to and learn from crises. The mechanisms include signal detection, damage containment, and postmortem. The signal detection mechanism refers to hear the early warning signals and transmit them to management before the crisis occurs. The damage containment mechanism prevents the undesirable effects of the crises from diffusing and the postmortem mechanism enables to learn from the crisis and to develop crisis management in the future. This sta ge demonstrates that a systematic approach is essential for managing a crisis effectively. The third stage emphasizes the systems that control organizations. Examples are technology, organizational structure, human factors, culture, and top management ps ychology of the organizations. At the fourth stage, organizations should consider their internal and external stakeholders. In modern society, the extent of stakeholder influence has gradually expanded. In addition to employees, customers and distributo rs, NGOs, politicians and competitors can be stakeholders. These stakeholders should collaborate and share crisis plans, participate in training, and make an effort to develop organizational ability in order to cope with a variety of crises. At the scenarios stage, organizations test their crisis communication plans under a simulated crisis situation (Mitroff, 2001).

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22 There is a difference between Finks model and Mitroffs models. Finks model indicates that crises can be warded off while Mitroffs mode ls emphasize that crisis managers should actively seek to prevent crises. Fink is more explanative and emphasizes the features of each stage while Mitroff emphasizes crisis managers actions within each phase. Coombs (1999b ) developed a crisis management model that includes the three stages of pre crisis, crisis, and post -crisis. The pre crisis stage considers signal detection, crisis prevention, and preparation. Signal detection means managers identify sources of information to be scanned and collect an d evaluate information. Crisis prevention is the stage in which organizations try to limit the occurrence of the crisis by evaluating the warning signs observed in the signal detection stage and removing or decreasing the likelihood that a warning sign wi ll evolve into an actual crisis. Monitoring helps evaluate the effectiveness of those changes. In spite of these efforts, some crises, such as natural disasters, can happen. Therefore, an organization must diagnose its specific vulnerability depending on the organizations industry, size, and risk factors, assess crisis types, select and train its crisis team and spokesperson, develop its crisis management plan, and review the communication system during the crisis preparation stage. The crisis stage inc ludes crisis recognition, containment, and recovery. The crisis stage commences upon the launch of an event and finishes upon crisis resolution. The first step in this stage is to identify a crisis. Both the external stakeholders and internal members of the organization should agree that the situation is undoubtedly a crisis. After such agreement, crisis containment and recovery steps begin. Crisis containment and recovery help ensure that the negative effects of the crisis do not diffuse to other part s of the organization, thus limiting the duration of the crisis. Additionally, the crisis team must demonstrate anxiety and sympathy for victims of the crisis. The organization should address the initial response, reputational

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23 management concerns, enact ment of the contingency and business resumption plan, and follow up communication (Coombs, 1999b p. 113). Crisis learning and resolution comprise post -crisis management (Coombs, 1999b ). In the post crisis stage, the organization evaluates crisis respons e efforts. Generally, management evaluates its performance against the crisis management plan and the financial, human reputational and media impact of the crisis itself (Coombs, 1999b ). Coombs three stages crisis model (1999b ) encompasses other crisis models based such as Finks (1986) and Mitroffs (1994). The pre -crisis stage includes all of the stages of crisis preparation such as pro -dromal signs, signal detection, and probing. The crisis stage encompasses damage containment, crisis breakout, and recovery. The post -crisis stage contains learning and resolution. Coombs Crisis Response Strategies Systematic crisis response strategy is a part of an effective framework for crisis management (Coombs, 1995). The primary goal of crisis response strategies is to protect or recover the organizational image (Sturges, 1994). Coombs (1995) emphasizes that understanding public perception about an organizations responsibility for a crisis is critical in selecting proper crisis response strategies because pub lic perception about organizational responsibility for crisis occurrence and resolution can taint an organizations reputation. According to attribution theory, people judge the causes of events or crises using the three dimensions of locus, stability, an d controllability. Locus addresses whether the cause for an event is internal or external to a given actor. Stability concerns whether the cause is consistent or intermittent over time. Controllability considers whether the actor involved is able to inf luence the cause or if it is clearly beyond his/her control (Russell, 1982; Wilson, Cruz, Marshall & Rao, 1993). Therefore, an organizations high internal locus, stability, and controllability of the crisis

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24 tend to make the public believe that the organi zation is responsible for the crisis. Conversely, external, unstable, and uncontrollable attribution make public feel that the organization is less responsible (Weiner, Perry, & Magnusson, 1988). If the public perceives that the organization has signific ant responsibility for the crisis, then the crisis will damage the organization to a great extent. Coombs (1995) suggested five different types of crisis response strategies, including nonexistence, distance, ingratiation, mortification, and suffering. Th e nonexistence, distance and suffering strategies all attempt to influence attributions publics make about organizational responsibility for a crisis (Coombs, 1995, p. 453). Nonexistence strategies argue that no crisis actually takes place; thus, the or ganization has no responsibility. Denial, clarification, attack, and intimidation strategies all belong to this nonexistence strategy. Distance strategies emphasize that the crisis is unintentional and occurred because of an external locus of control. D istance strategies are divided into excuse strategies (e.g., denial of intention or volition) and justification strategies (e.g., minimizing injury, victim deserving, and misrepresentation of the crisis event). Suffering strategies seek the publics sympa thy and emphasize on positive aspect than negative one from the crisis. Suffering strategies make an organization to be seen as a victim of malevolent substance. On the other hand, mortification and ingratiation strategies attempt to offset negative cri sis attributions with positive impressions of the organi zation (Coombs, 1995, p. 453). Mortification strategies cause an organization to admit its responsibility for the crisis and win forgiveness. Such mortification strategies include remediation, which gives victims compensation or help; repentance, which allows the corporation to apologize for the crisis; and rectification, which establishes a mechanism to prevent a recurrence of the crisis in the future.

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25 Ingratiation strategies seek to obtain public approval for the organization by offering positive actions that are unrelated to the crisis. Ingratiation strategies include transcendence, which places the crisis in a larger, more desirable context; bolstering, which emphasizes the existing positive as pects of the organization; and praising others, which is used to win approval from the target of the praise (Coombs, 1995). Several scholars (Englehardt, et al, 2004; Vlad et al., 2006) have studied real crisis cases using Coombs crisis response strategi es (1995). Englehardt and his colleagues (2004) examined news content related to the crash of ValuJet Flight 592. Primarily, they analyzed the crisis response strategies of ValuJet by using corporate communication messages, such as news releases, statements, and press briefings, and published news/editorial items, such as news articles, editorials, and bylined columns. The results show that ValuJet primarily employed the mortification and ingratiation strategies as predicted by C oombs accident decision chart. However, a new type of strategy was added, specifically, compassion without blame. ValuJet expressed its compassion for the victims of the crisis but did not accept blame for the crisis. Vlad and colleagues studied the crisis response communicati on strategies of Merck during its Vioxx recall crisis using content analysis of news articles from The New York Times and The Wall Street Journal (Vlad et al., 2006). The study indicates that Merck primarily employed the mortification and ingratiation approaches as predicted by Coombs transgression decision flowchart (Figure 2 1) because it was no doubt that many people who took the drug of Merck which had positive performance history died. Notably, Merck used a new type of mortification strategy, recti fication without assuming responsibility. In other words, Merck recalled Vioxx but did not admit its fault, nor did the company ask for forgiveness relative to the injuries and deaths suffered by its Vioxx customers.

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26 Crisis Type Evidence Damage Victim St atus Performance History Crisis Response Strategy Positive Mortification, Ingratiation Victim Negative Mortification Major Positive Mortification, Ingratiation True Non Victim Negative Mortification Transgression Positive Distance, Ingratiation, Justification Victim Negative Mortification Minor Positive Justification, Ingratiation Non Victim Negative Justification Positive Nonexisten ce False Negative Clarification F igure 2 1. Coombs transgression decision flowchart While Coombss study (1995) has been frequently utilized in crisis research (Englehardt et al 2004; Vlad et al., 2006), research about real cases disclose situation -specific crisis response strategies other than what Coombs originally proposed. Thus, Coombs (2006) has expanded from five to 10 crisis response strategies based on the Situational Crisis Communication Theory (SCCT). According to the SCCT, a cr isis response strategy is determined by an organizations responsibility for the crisis and the damage the crisis inflicts on the organizations reputation. If public perception of the organizations responsibility for the crisis increases and the organiz ations reputation suffers, the organization should acknowledge its responsibility and help victims in an effort to retrieve its legitimacy (Coombs and Holladay, 2002).

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27 The 10 strategies SCCT establishes are based on how perceptions of the crisis or of th e organization in crisis are altered. The strategies can be grouped into 4 postures: denial, diminishment, rebuilding, and bolstering, which publics perceive as similar to one another as illustrated in Table 2 1. The denial posture seeks to remove any co nnection between the crisis and the organization while the diminishment posture attempts to decrease attributions of organizational control over the crisis or the negative effects of the crisis (Coombs, 2007, p. 139). The rebuilding posture attempts to develop the organizations reputation in a positive manner and the bolstering posture also tries to establish a positive relationship between the organization and its stakeholders as a supplemental posture to the other three (Coombs, 2007). Table 2 1 Cris is response s trategies by p ostures Denial Posture Attacking the Accuser The crisis manager confronts the person or group that claims that a crisis exists. The response may include a threat to use force (e.g., a lawsuit) against the accuser. Denial The cr isis manager states that no crisis exists. The response may include explaining why there is no crisis. Scapegoating Some other person or group outside of the organization is blamed for the crisis. Diminishment Posture Excusing The crisis manager tries t o minimize the organizations responsibility for the crisis. The response can include denying any intention to do harm or claiming that the organization had no control of the events which led to the crisis. Justification The crisis manager tries to minimi ze the perceived damage associated with the crisis. The response can include stating that there were no serious damages or injuries or claiming that the victims deserved what they received. Rebuilding Posture Compensation The organization provides money or other gifts to the victims. Apology The crisis manager publicly states that the organization takes full responsibility for the crisis and asks forgiveness. Bolstering Posture Reminding The organization tells stakeholders about its past good works. I ngratiation The organization praises stakeholders. Victimage The organization explains how it too is a victim of the crisis.

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28 Although the number of crisis response strategies in his 2007 study increased from five to 10 and the names of the strategies ch anged, the operant characteristics of the strategies remain similar. While the nonexistence strategies mentioned in the 1995 study are similar to those associated with the denial posture in the 2007 study, the distance strategies from 1995 are almost iden tical to those of the diminishment posture in the 2007 study. The remediation and repentance of mortification strategies in the 1995 study are similar to the compensation and apology approaches addressed in the rebuilding posture in the 2007 study (Coombs 2007). Coombs (1995; 2006; 2007) consistently suggests that practitioners should match crisis response strategies to crisis situations and consider four factors of crisis: crisis type, veracity of evidence, damage, and performance history. In terms of c risis type, Coombs developed a four -category typology based on the two dimensions (internal -external and intentional unintentional), illustrated in Table 2 2 Those categories are accidents (internal and unintentional), transgressions (internal and intent ional), faux pas (external and unintentional), and terrorism (external and intentional). The internal dimension indicates that the organization itself is responsible for the crisis, particularly through management error, while the external dimension place s blame on an entity or circumstance outside the organization. Additionally, the intentional unintentional dimension holds that the organization caused the crisis deliberately. Internal-external dimension indicates whether an organization causes a crisis by itself. A faux pas refers to an unintentional action taken by external actors. An organization believes that its action is appropriate in a faux pas situation. However, some external publics consider the organizations action improper. For example, w hen a cigarette company installed cigarette billboards in the central of the city, a faux pas had occurred.

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29 A transgression is an intentional action taken by internal actors. Examples of transgressions are selling dangerous products, hiding safety inform ation, and violating laws. The pharmaceutical company Merck committed a transgression when it hid the danger of its arthritis pain -relieving drug Vioxx and prolonged its recall (Vlad et al., 2006). Terrorism means intentional actions taken by external act ors. Examples of terrorism are product tampering, workplace violence, and sabotage. Accident is an unintentional action taken by internal actors during the normal organizational undertakings. The examples of accidents are product faults, employee injuri es or deaths, and natural disasters. The unintentional nature helps reduce an organizations responsibility. However, an organization burdened by an accident will still bear some responsibility because some publics expect organizations to prepare for the accidents in advance. The Taean oil spill belongs to accidents. Table 2 2 Crisis t ype m atrix Unintentional Intentional Internal Accidents Transgression External Faux pas Terrorism Second the veracity of evidence is related to the evaluation of whet her a crisis indeed occurred. Coombs (1995) suggested true, false, and ambiguous evidence. If there is any physical evidence that verifies that a crisis occurred, it is true evidence. However, if no such evidence exists, it is false. But when it is dif ficult to judge whether a crisis indeed happened, the evidence is ambiguous. Usually, an ambiguous case is related to questions of ethics. The third factor is the amount of damage attributable to a crisis. Depending on the level of damage, this can be su bdivided into two clusters, severe or minor damage. Serious injury, death or massive property damage can be perceived as severe damage while negligible injuries or

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30 normal property damage can be considered minor damage. Since the level of severity is depe ndent on public interpretation, the issue of framing by a third party such as mass media becomes a critical factor relative to damage perception. In the last factor, Coombs introduces the organizations performance history. The more positive the history e stablished by the organization, the greater the publics forgiveness during a crisis situation. This is also called the halo effect, in which the public has more generosity for an organization with a positive performance history. Positive performance his tory is essential to the nonexistence and distance strategies because publics are more willing to accept an organizations response statements when that organization has a good reputation. Also, positive performance history plays an important role in an i ngratiation strategy because it makes positive impressions that neutralize negative perceptions made by the crisis. In order to help organizations decide the most appropriate crisis response strategies for specific situations, Coombs (1995) developed four kinds of decision flowcharts depending on the type of crisis. Regarding these four factors, the Taean oil spill is an accident case with true evidence of financial and environmental damage. Samsung has maintained positive corporate reputation in South Ko rea. Coombs proposes that under the accident type of crisis, organizations involved with accident type crises with true evidence of severe damage to victims and with a positive performance history would likely employ the mortification and ingratiation str ategies as illustrated in Figure 2 2 Crisis Media Relations During crises, stakeholders tend to seek more information about organizations and are more likely to be swayed by news coverage about the crisis ( Carroll & McCombs, 2003). Once a crisis occurs, the media and stakeholders ask organizations for an immediate, thorough, and unqualified response. If no such response is forthcoming, then stakeholders consider as the

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31 Crisis Type Evidence Damage Victim Status Performance History Crisis Response Strateg y Positive Mortification, Ingratiation Victim Negative Mortification Major Positive Excuse, Ingratiation True Non Victim Negative Mortification Accident Positive Distance. Ingrat iation Victim Negative Distance Minor Positive Distance, Ingratiation Non Victim Negative Distance Positive Nonexistence False Negative Clarification Figure 2 2. Coombs accidents decisi on flowcharts organization to be stonewalling (Seeger, Sellnow, & Ulmer, 2001). Stakeholders usually obtain information on the crisis through the news media (Carroll & McCombs, 2003; Deephouse, 2000). Public trust in media increases sharply during the c risis because the media are able to report the crisis situation, reduce tension, and provide comfort (Lambe, Ca plan, Cai, & Signorelli, 2004). Reporters closely monitor companies in crisis situation. If reporters believe there is a story, they will not g o away until they get it (Reid, 2000). Thus, the importance of providing quick and accurate information to news media becomes more critical during crisis.

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32 Dilenschneider & Hyde (1985) suggest open and swift communication with journalists as being the mos t important principle to be observed in a crisis situation. If organizations do not provide journalists the information they want in a timely manner, the media will pursue less knowledgeable and reliable sources which might attack the organizations (Dilen schneider & Hyde, 1985). Using the example of a private hospital in Inglewood, California, that was involved in the riots related to Rodney King in Los Angeles in April 1992, Maynard demonstrated that maintaining a good relationship with media helps organ izations handle crises effectively. By providing updates to the news media every 15 minutes and having hospital executives speak frequently with reporters, the hospital overcame the crisis (Maynard, 1993). Conducting effective media relations in a crisis situation is essential to communicate with various stakeholders. Characteristics of Korean Media South Koreas media industry modernized in the 1960s with the development and implementation of media education and research in the country. In the 1960s, th en -president Chunghee Park led a successful coup dtat and established a military regime. A close relationship between Korean media and the military evolved due to the military regimes use of media for national economic development, and the South Korean governments power spread to every decision making process in Korean society (Park et al., 2000). In addition, the cultural dimensions in South Korea contribute to reinforcing the political power in Korean society. In terms of Hofstedes (1980) five dime nsions of societal culture, South Korea maintains high power distance, high collectivism, masculinity, and Confucian dynamism (Kim, 2003). Confucianism has been widely used to explain the paternalistic, collectivist philosophy among Koreans and why indivi dual inequalities are tolerated and individual interests are sacrificed for the benefit of society (Kim, 1997; Kincaid, 1987). Personal

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33 objectives and loyalty have been suppressed by political authority in order to maintain spiritual harmony within Korean society since the adoption of the basic Confucian philosophy during the Chosun dynasty of the 14th century (Yum, 1987). In the late 1960s, the Korean government tried to industrialize the nation in order to escape its deep rooted poverty (Choe, 1992). A t that time, South Korea was one of the worlds poorest nations, and 63% of the population worked in the agriculture sector (Yoo & Lee, 1987). The government illegally provided a few large corporations with enormous financial benefits and political favors In exchange for government support, these corporations illegally provided political funds to the government. The close relationships between the government and South Korean businesses developed into the Chaebol system, a network of conglomerate busines s groups (Kim & Hon, 2001). Yoo and Lee (198 7) defined a Chaebol as a business group consisting of large companies which are owned and managed by family members or relatives in many diversified business areas (Yoo & Lee, 19 8 7 p. 97). Chaebols possessi on of a wide range of business areas and employees enable them to influence the Korean economy greatly. Samsung is a representative example of Chaebol, having been established by its self -made founders through governmental support mechanisms such as prefe rential allotment of grants, disposal of government -vested properties, and preference in taxa tion and finance (Yoo & Lee, 198 7). Furthermore, the dimensions of South Korean society such as high power distance and Confucian influence affect businesses hie rarchical systems. Korean CEOs often have dictatorial decision -making rights. Simultaneously, the main role of the Korean press was to contribute to the national interests and foster economic modernization. In order to accomplish the national goals such as industrialization, the military regime limited freedom of speech. Between the 1960s and the

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34 1980s, it solidified the monopoly of existing media companies and provided them with preferential treatment, allowing politicians to uphold the socially unjusti fied regime (Shim, 2002). As mentioned earlier, almost all media in Korea depend primarily on corporate advertising revenues and not on subscriptions. Under these circumstances, large corporations such as Samsung have tremendous power to control the pres s. If a newspaper company publishes articles about the faults or irrationality of a certain large company who also provides significant advertising revenue, the subject of the negative news coverage is likely to remove their advertisements, leaving the ne wspaper without income. Samsung Heavy Industries Path to Accidents: The Big Oil Spill in Taean County South Korea Samsungs oil spill accident happened off South Koreas west coast on Dec. 7, 2007 when a Samsung tugboat towing a barge with a heavy crane snapped its towing cable. Rough seas caused by strong winds caused the barge to smash into a 147,000ton oil tanker, the Hebei Spirit, which was at anchor. The crash ripped three holes in the tankers hull, causing 10,500 tons of crude oil to leak out and wash onto beaches and into scores of marine farms. The oil polluted, in varying degrees of contamination, three of the four provinces along the western coast of South Korea. Clean up operations were carried out at sea and are still continuing along the shoreline, where more than 375 kilometers has been affected. In spite of the efforts of over 1 million voluntary workers, about 64,000 people who live in Taean lost their means of living by this accident. According to International Oil Pollution Compens ation Funds, the most recent estimate of the total amount of the losses caused by the oil spill was between Korean Won (KRW) 566.3 billion and KRW 601.3 billion (about $5660 million). The removal of the bulk oil was completed in March 2008. The major pa rt of secondary cleanup operations,

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35 involving surf washing, flushing and hot water high pressure treatment, were completed in June 2008. Some clean up operations in remote areas are still ongoing and are expected to be complete shortly (IOPC). The main c ommunication/public relations problem surrounding the situation was Samsung Heavy Industries Co.s nonresponse to this disaster. Samsung announced a public apology for the accident 47 days after it happened, but the apology included no detailed reference to compensation. Five Korean newspaper companies have addressed Samsungs response using considerably different tones, and some people argue that Samsung has controlled the Korean media by leveraging its advertising power (Jung & Choi, 2008; Shim & Song, 2008) H ypotheses and Research Questions Samsungs Taean oil spill crisis qualifies as an accident because none of the crew involved had any intention to crash. Considering the financial damage done to the residents and Samsungs responsibility, mortific ation strategies were the most appropriate approach to manage the problems, since the public expected some form of atonement from the organization. The mortification strategies not only maximize concern for the public, but they also provide compensation f or the victims (Coombs, 2007). Before the Taean oil spill accident, Samsungs business performance history was arguably positive. Samsung has total 263,000 of employees all over the company's branches. The estimated brand value is equivalent to approxim ately 17.7 billion dollars, and the total assets of Samsung were reported as 203.9 billion dollars in 2008. As reflected in the company's gigantic assets, Samsung is taking charge of 21 percent of total exports of the South Korean market. In other words, Samsung is a leading multinational company which affects national economy greatly in South Korea. Further, Samsung conducts a number of corporate social responsibility (CSR) activities as one of the largest multinational corporations in South Korea Acc ording to Samsungs Web site, for a 12 -year period from the

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36 foundation of Samsung Community Relations 1994 to 2006, Samsung committed a total of US $31.1 billion to social contribution activities (Samsung). According to Coombs 1995 decision flowchart, a n organization which committed an accident but has a positive performance history should use mortification and ingratiation strategies to rebuild its tarnished image. In other words, Samsung should be expected to respond to public concerns and victims an ger with messages expressing regret. Through analysis of news coverage following the crash of Flight 592 in 1996, Englehardt and colleagues (2004) found that ValuJet used mortification and ingratiation messages. Vlad and colleagues (2006) found that Merc k used mortification and ingratiation messages during the Vioxx recall. Similar results are anticipated in this paper. The mortification strategy from Coombs 1995 study belongs to the rebuilding posture including the compensation and apology strategies f rom Coombs 2007 study, and the ingratiation strategy from the 1995 study belongs to the bolstering posture including the reminding and ingratiation strategies from the 2007 study. Therefore, the following hypothesis is to be tested in this study : H1 : Med ia coverage of Samsung Heavy Industries corporate messages is more lik e ly to appear with the companys rebuilding and bolstering posture than any other crisis response strategies. Investigation of t he frequency of the topics within Taean oil spill article s can help examine what kinds of topics were considered as the most important issues and the least important issues in the Korean media. Furthermore, the results may illuminate Samsung s crisis management processes and the publics reactions for Samsung s responses during the Taean oil spill crisis. Additionally, each newspaper company may primarily focus on a specific topic when it addresses a particular incident. For example, through an analysis of the articles regarding Samsungs illegal funds, Jung & Choi (2008) observed that each Korean newspaper concentrated on one specific topic. According to their analysis, the Chosun newspaper insisted that an independent prosecution regarding Samsung s illegal funds was unnecessary while the

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37 Hankyorae newspaper criticized Samsungs unethical behaviors and urged that the company be thorough ly prosecut ed. Along that line, Samsungs branch, Chungang newspaper, seemed to avoid covering the issues related to Samsung s illegal funds. In this context, explor ing the fr equency of the topics associated with the Taean oil spill by each newspaper will show the aspect of the oil spill each newspaper chose to emphasize. Therefore, the following first and second research questions are proposed: RQ1 : What topic s were most freq uently covered in the Taean oil spill news coverage? RQ 2 : What topics were presented most frequently by each of the five newspapers ? The Taean oil spill accident has created immense and noticeable media attention, which provides an opportunity to study h ow Samsungs crisis response strategies relative to the oil spill are reported by Korean newspapers. This study focuses on the news coverage for about 1 2 months because Samsung had not reacted to the oil spill accident until 47 days after its occurrence a nd Samsungs response strategies changed after the 47th day since the accident. Thus, the following third research question is proposed: RQ 3 : How had Samsungs crisis management strategies in the news coverage changed for the 1 2 months after the oil spill? Several studies conducted by the Korean academic field have examined news frame s and tone differences based on the political characteristics of newspaper companies. Those studies demonstrate that news frames and tones reflect a specific political characteristic of a given newspaper company ( Shim & Song, 2008; Kim, 2004; Lee & Kim, 2006; Lee, 2001). It is a well known fact that Korean newspaper companies show distinguishable characteristics from one another. Park (2001) argues that social norms and valu es, the pressures and limitations within the media company, and journalists standpoints affect the selection of news frame s (Park, 2001). Through an analysis of news frame s in coverage by Korean newspapers of genetics and

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38 DNA, Jung (2004) found that each newspaper company utilizes news frames that are compatible with its political ideology (Jung, 2004). In a study of news stories concerning the abolition of patriarchal system among Korean families, Lee and Kim (2006) found that Chosun, Hankyorae, and Kuk min each used distinctive news frames that align with their companies characteristics. Kim and his colleagues (2008) argue that Korean newspaper readers are able to recognize the specific political characteristics of Korean newspaper companies. General ly, Chosun, Donga, and Chungang are classified as conservative newspapers while Hankyorae and Kyunghyang are considered liberal newspapers. According to Yoons study (2000), many journalists and scholars argue that the three major Korean newspapers, Chosu n, Donga, and Chungang, are conservative newspapers based on the fact that they have pursued the same political direction and have supported the Korean conservative party, Hannaradang. Thus, these conservative newspapers have been inclined to support sta ndpoints favoring the government and large corporations (Yoon, 2000). Notably, Samsungs branch, the Chungang newspaper, has addressed news stories about Samsung that offer both a positive attitude and tone in support of Samsungs standpoint. For example Chungang seemed to avoid covering the articles related to Samsungs faults when prosecutors investigated Samsungs illegal funds (Shim & Song, 2008). Conversely, Hankyorae and Kyunghyang are liberal newspapers that stand against political authority and capital strength, and speak in behalf of the socially neglected in contributes to liberalizing the Korean media, protecting the rights of the poor and the working class, and fostering equality among males and females. Parks survey shows that Korean journalists, journalism scholars and readers recognize Hankyorae as a liberal newspaper. A characteristic of Hankyoraes progressive nature is related to th e type of ownership. Generally, most Korean newspaper companies were found by capitalists and are owne d by founding

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39 families, whose goals are to make profits. Thus, most newspapers have made efforts to maintain close relationships with the government, which has the right to decide media laws and the large corporations that advertise in these media publica tions. Because newspaper companies cannot be independent from huge advertisers large corporations like Samsung newspaper company owners are inclined to force their journalists to report news articles that attract their advertisers and respond to the advertisers political favors. However, the owners hip structure of Hankyorae is different ly from those of the other newspaper companies. Hankyorae s progressive characteristics are deeply related to its ownership system. Most newspaper companies operate fo r profit, and this motivation has been the reason for their pro -government and pro-corporation characteristics. However, Hankyorae is owned by its readers and employees. Thus, Hankyoraes news coverage and editorial tone is not influenced by the governme nt and large corporations For this reason Hankyorae is able to maintain an independent voice Kyunghyang, another liberal newspaper, has an ownership structure similar to Hankyorae Kyunghyang seems able to stand apart somewhat from the gove rnment and corporate influence. The company states that it pursues sound progress and tries to protect the rights of the underprivileged and laborers criticizing and advising government and large corporations. In conclusion, the studies and discussions on the charac teristics of the Korean newspapers consistently demonstrate that Chosun, Donga, and Chungang, are conservative newspapers while Hankyorae and Kyunghyang are liberal newspapers. Therefore the following second hypothesis is proposed: H2 : The liberal newspap ers, Hankyorae and Kyunghyang would show different tones from the conservative newspapers, Chosun, Donga, and Chungang.

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40 A relationship between the tone of the news coverage in the five Korean newspaper companies and the number of advertisements sponsored by Samsung, and a relationship between the tone of news coverage and the revenue associated with Samsungs advertisements, are tested in the course of this study. Large corporations control of the media through the leveraging of their advertising power ha s been a pervasive and controversial issue. It is difficult to determine whether this is true or false without discovering the relationship between negative news articles and advertisements Several studies have attempted to investigate the tone of repor ts and its influence on corporations advertisement decisions by analyzing actual news coverage. Jung and Choi (2008) explored the relationship between the tone of news articles related to Samsung and Hyundai and the number of advertisements as well as th e tone of news articles and advertisement revenue. The results demonstrated that the more Samsung advertised in a newspaper, the fewer articles related to its accidents were published. Also, the publication of Hyundai advertisements was related to a decr ease in the number of negative news articles, an increase in the number of neutral articles, and an increase in the number of articles that addressed Hyundais corporate activities. While the newspapers did not blatantly increase the number of positive new s articles about the corporations in exchange for advertisements, neither did they report negative issues about the corporations even when those companies were involved with negative events. Rather, they increased the number of neutral news articles compa ratively in order to correspond with the corporations tremendous advertisement placements. Therefore, hypotheses regarding the tone of news articles related to the oil spill and Samsung s advertisements are proposed: H3a : The more negative the tone of the articles, the greater the decrease will be in the number of advertisements.

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41 H3b : The more negative the tone of the articles, the greater the decrease will be the total advertising revenue. Korean newspapers are inclined to report certain affairs or or ganizations with different tones depending on their political characteristics. Shim and Song (2008) analyzed Korean news coverage related to Samsungs slush fund in six Korean newspapers. Their results indicate that news coverage by the conservative news papers, such as Chosun and Chungang showed more positive or neutral tones toward Samsung and mitigate d the scope of Samsungs illegal slush fund. In contrast, news coverage from the liberal newspapers, such as Hankyorae and Kyunghyang criticized Samsung s unethical behaviors. Shim and Song argue that Samsung has exerted control over the Korean media by leveraging its advertising power. Judging from the above results, it is expected that differences exist among the newspaper companies in terms of followi ng fourth hypotheses were proposed: H4a: Th e relationship between the conservative newspapers (Chosun, Donga, and Chungang) and the number of Samsung advertisements will be different from the relationship between the liberal newspapers (Hankyorae and Kyung hyang) and the number of Samsung advertisements. H4b: Th e relationship between the conservative newspapers (Chosun, Donga, and Chungang) and the revenue from Samsung advertisements will be different from the relationship between the liberal newspapers (Ha nkyorae and Kyunghyang) and the revenue from Samsung advertisements. The second hypothesis and the first research question predict that the Korean newspaper companies would have different tones toward Samsungs responses for the oil spill and addressed s ome specific topics more frequently than others. This study will further examine the relations between the topics and the tones of the Taean oil spill news articles RQ4 : Is there a relation between the topics and the tone of news articles?

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42 CHAPTER 3 ME THODOLOGY Research Design and Sampling Procedure This study employed a quantitative content analysis to analyze the crisis management strategies used by Samsung Heavy Industries during the Taean oil crisis. Wimmer and Dominick (2000) argue that content an alysis is a method of studying and analyzing communication in a systematic, objective, and quantitative manner for the purpose of measuring variables (p135). There are many studies that analyze news contents related to crisis situations (Englehardt, et al, 2004; Vlad et al., 2006; Ihlen, 2002). For example, Vlad and his colleagues analyzed 200 news or editorial items about Mercks Vioxx recall in order to investigate Mercks crisis response strategies ( Vlad et al., 2006). Englehardt and his colleagues also conducted a content analysis of two large daily newspapers to examine ValuJet s crisis response strategies toward the crash of ValuJet flight 592 (Englehardt et al., 2004). Using a content analysis, these studies found the organizations crisis respo nse strategies during the crises. Thus, a content analysis of five Korean newspapers is a p roper method for investigating Samsungs crisis response strategies during the Taean oil spill. Five Korean daily newspapers were chosen based on their political c haracteristics and the amount of circulation: Chosun, Chungang, Donga, Hankyorae, and Kyunghyang. Chosun Chungang and Donga are newspapers which have the largest circulation sizes and sales in South Korea (Lee, 2008), and are accepted as politically conservative newspapers in terms of stance toward the government and large corporations (Lee, 2008). In 2007, Chosuns annual sales approached $400 million, Dongas sales were about $280 million, and Chungangs were approximately $340 million. In addition, according to the data of online community operated by one of the largest Korean daily newspaper company, Seoul Newspaper, Chosun s circulation size

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43 approached 2.3 million, Donga s was about 2.1 million, and Chungang s was approximately 2 million. Although Hankyorae and Kyunghyang have comparatively smaller circulation size sales (Hankyorae about 520 thousand Kyunghyang about 700 thousand ) and sales (Hankyorae $76 million, Kyunghyang $82 million), they are regarded as representative liberal newspap ers in South Korea (Lee, 2008). It is important to include both conservative and liberal newspapers to analyze crisis management strategy to reduce any bias caused by newspapers characteristics such as political views. Moreover, researchers point that K orean newspapers take completely different tones when they address the news related to Samsung Company depending on their political characteristics (Shim & Song, 2008) Thus, this study selects both conservative and liberal newspapers. From December 7, 2007 to December 31, 2008 news articles of Donga, Hankyorae, and Kyunghyang regarding the Taean oil spill were searched through the Korean Integrated Newspaper Database System (KINDS) d atabase made by Korea Press Foundation (http://www.kinds.or.kr/ ). News articles of Chosun and Chungang were searched through their Web sites because the KINDS does not provide news articles of Chosun and Chungang. The news article searches on KINDS, and Chosun and Chungang Web sites were conducted by entering the keywords Samsung and Taean in the search box. The first search with the keywords resulted in 379 news articles (Chosun 70, Donga 62, Chungang 36, Hankyorae 1 24, and Kyunghyang 87). There were irrelevant articles among t he 379 articles F or example, irrelevant articles included personal stories focused on politicians who expressed opinions about the oil spill and comments from the chief of Samsungs environmental research center regarding environmental friendliness accom panied by a quick mention of the Taean oil spill incident. After excluding irrelevant news articles by screening the headlines and lead paragraphs 216

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44 news articles were collected in total (Chosun 42, Donga 35, Chungang 1 7 Hankyorae 79, and Kyunghyang 4 3 ). The timeline of December 7, 2007 to December 31, 2008 was selected because the second court decision about the oil spill was made on December 10, 2008, a year after the accident occurred. The first court decision, made on June 23, 2008, indicated tha t only Samsung Heavy Industries held legal responsibility for the Taean oil spill while the Hebei Spirit was not at fault. Samsung appealed that decision. The court rendered its second judgment concerning the Taean oil spill on December 10, 2008. Accord ing to that decision, both Samsung Heavy Industries and the Hebei Spirit were responsible for the oil spill. That is, Samsung became much less burdened with legal and financial obligations. The second court decision caused an increase in the number of ar ticles related to the Taean oil spill because the second court decision overturned the first one. C hanges in Samsungs response strategies were expected based on the courts second decisio n. Thus, the period selected in this study included December 2008 since the court s decision on the Taean oil spill was announced at that time Measurement The unit of analysis is an individual news article in the five Korean newspapers. Each news article was assessed with three primary focuses; 1) Samsung crisis response strategies towards the oil spill, 2) the tones of each news article toward Samsung, and 3) the topics of the article Crisis Response Strategie s Crisis response strategies of the searched news articles are to be determined using Coombs 10 strategies (C oombs, 2007) and the too soon to know/no answer yet strategy that was employed in the Merck s Vioxx recall study (Vlad et al., 2006). Each news story has more

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45 than one strategy, and all the relevant strategies in each article were coded. Th ey are the fol lowing 11 strategies; Attacking the Accuser: The organization confronts the person or group that claims that a crisis exists. The response may include a threat to use force (e.g., a lawsuit) against the accuser. Denial : The organization states that no cri sis exists. The response may include explaining why there is no crisis. Scapegoating : Some other person or group outside the organization is blamed for the crisis. Excusing. The organization tries to minimize its responsibility for the crisis. The response can include denying any intention to do harm or claiming that the organization had no control of the events which led to the crisis. Justification. The organization tries to minimize the perceived damage associated with the crisis. The response include s stating that there were no serious damages or injuries, or claiming that the victims deserved what they received. Compensation. The organization provides money or other gifts to the victims. Apology. The organization publicly states that the organizati on takes full responsibility for the crisis and asks forgiveness. Reminding. The organization tells stakeholders about its past good works. Ingratiation. The organization praises stakeholders. Victimage. The organization explains how it too is a victim of the crisis. Too soon to know/No answer yet. The organization does not react to the crisis or postpones coping with the crisis. Tones o f News Articles The tone of each news article toward Samsung was evaluated by a five -point Likert scale measure (1 ve ry negative, 5 very positive). T his scale has been consistently used to evaluate the tone of news articles

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46 Topics This study examined the frequency of the topics associated with the Taean oil spill in the five Korean newspapers. In order to develop the topics examined in this study, the researcher read 10% of the articles contained in each newspaper and originally identified 13 topics : degree of damage, facts about the oil spill, Samsungs active response to the oil spill, Samsungs passive response to t he oil spill, Samsung employees volunteerism actions of impacted areas residents, problems in the compensation process, blame placed on Samsung for its irresponsibility, residents hardships of lives, critique or ask for the response of the government, the court process or decision for the oil spill accident, external publics' volunteerism, and others After the pretest, the topic, degree of damage was merged with facts about the oil spill. And the topics, Samsungs active response to the oil spill, Samsung's passive response to the oil spill, and Samsung employees volunteerism were merged and re -named as Samsung's response to the oil spill because Samsung employees volunteerism was one of the oil spill responses used by Samsung, and the c riteria between its active and passive responses were somewhat vague. This process reduced the 13 topics to ten topics. The final 10 topics are as follow s : Samsung's response to the oil spill. The story reports that Samsung donates money to the impacted a reas, conducts community involvements, or that Samsung s employees engage in the volunteerism in the impacted areas. Actions of impacted area's residents The story reports that the Taean residents conduct protests against Samsung or the government or tak e a legal counteraction. Problems in the compensation process The story reports on the insufficient amount of compensation money or the sluggish compensation process. Blame placed on Samsung for its irresponsibility. The story reports an issue or problem such that it attribute s to Samsung s responsibility for the crisis or its solution. Facts about the oil spill. The story reports facts regarding the circumstances of the oil spill ; i.e., the reason and timeline for the accident, the degree of damage in ter ms of the economical or environmental aspects, and so forth.

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47 Residents' hardships of lives The story describes the residents of the impacted area who suffer from economic hardships after the oil spill ; f or example, the suicide of a Taean resident. Critiqu e or ask for the response of the government The story reports the government s ineffective crisis response and urges the establishment of effective approaches for the residents of the impacted area. The court process or decision for the oil spill accident T he story reports an issue in terms of the court process or court decision about the oil spill accident and c riticizes the prosecution for the investigation process External publics' volunteerism The story reports ordinary citizens volunteerism excep t for Samsung employees. Others. The story reports the encouragement of tourism NGOs' activities toward the oil spill accident and so forth. The N umber o f Advertisements The number and size of the advertisements sponsored by Samsung were assessed using the online PDF file services of each newspaper covering the periods from December 7, 2007 to January 31, 2008 by the researcher. These online PDF file services allow users to access actual copies of Korean newspapers and their advertisements. In addition, two undergraduate students in the journalism department at Ewha Womans University in South Korea assisted with the coding, which was conducted at the Universitys library. They counted the number of advertisements that appeared in print newspapers between February 1, 2008 and December 31, 2008. The coders were given financial incentives for their coding. The Revenu e o f Advertisements The cost of advertisements in the five Korean newspapers was also calculated in order to evaluate the relative importance and proportion of Samsungs advertisements while the number of advertisements was coded. However, there is a substantial difference between the cost of advertisements officially announced by the newspaper companies and the amount actually paid for the adve rtisements (Song, 2005). In addition, most Korean newspaper companies are notably

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48 reluctant to reveal the actual cost of advertisements. The best way to calculate the cost of advertisements is by using the advertising rates of Korean newspapers Korean new spaper companies have different advertis ing rates depending on the type of newspaper (daily newspaper, economic newspaper, and so forth), the placement location, size, color, and the content of advertisement s All of Samsung s advertisements coded in this study were color ads, and all appeared in daily newspapers. Korean daily newspapers are 15 dan by 37 cm in size. A dan is a unit of newspaper measurement in Korea and is equal to 3.4 cm. A dvertising units are divided into 1 dan by 1 cm blocks. T he unit cost based on the section and placement location is multiplied by the size of the ad in order to calculate the advertising cost for a newspaper. For example, an ad appearing on page three in the main section of Chosun would cost KRW 170,000. The advertisi ng cost for an ad of 3 d an by 3 cm would be KRW 1,530,000. However, the front page its main section only allows 4 dan by 37 cm and 7 dan by 15 cm advertisements and these have established prices. Below is a table explaining the cost of newspaper advertise ments (T able C 1) Pretest and Coding Procedure Two coders the researcher and the other trained graduate student conducted a pretest independently to assess the coding sheet and to c heck inter -coder reliability. Before conducting the pretest the coders discussed the coding items, such as the tone, topics, and strategies to reduce potential inconsistencies (Wimmer & Dominick, 2003). After completing this training process, 10% of the news articles out of Chosun, Donga, Chungang, Hankyorae, and Kyunghyang were selected randomly and the sampled news articles were coded The coding sheet and codebook were revised after the pretest Specifically, the number of topics was narrowed as similar topics merged together. As explained above degree of damage was merged with facts about the oil spill and Samsungs active response to the oil spill

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49 Samsung's passive response to the oil spill and Samsung employees volunteerism were merged and categorized as Samsung's response to the oil spill Finally, ten types of topics including others were chosen after the revision For this study, the Holstis formula (1969) was use d to check intercoder reliability of the pretest by using the Program for Reliability Assessment with Multiple coders (PRAM) computer pro gram The PRAM simplif ies the determination of coefficients of intercoder reliability in cases more than two coders are used. Holstis formula is appropriate for the case in which tw o coders code the same units and it is one of the most popular coefficien ts in use (Neuendorf, 2002) For instance, Hughes and Garrett (1990) found that simple percent agreement such as Holsti s formula was used for 65% of the reported reliability coefficients in their sample of marketing research articles (Hughes & Garrett, 1990). Holsti s formula is as follows : Reliability= 2(OA)/ N1 + N2 OA= Observed Agreement N1= Number of coding decisions made by the primary coder N2= Number of coding decisions made by the secondary coder The variables coded by the two coders were the tone of article s 12 crisis response strategies, and 10 topics related to the oil spill. T he reliability for all of the variables was established at .9 28. Specifically, the intercoder reliability score for the tone of the article s was .889, and the reliab ility for all of the crisis response strategies was established at .963. The strategies with the lowest reliability were justification (.889) and too soon to know/no answer (.889) while those with the highest reliability were attacking the accuser (1.00), denial (1.00), compensation (1.00), apology (1.00), ingratiation (1.00), and vi ctimage (1.00). In addition, reliability for all of the topics was established at .889. The topics with the lowest reliability were

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50 problems in compensation process (.778) and residents' hardships (.778) and those with the highest reliability were external publics volunteerism (1.00) and others (1.00).

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51 CHAPTER 4 FINDINGS Data Analysis To examine the crisis response strategies used by Samsung Heavy Industries during the oil s pill in Taean County, 216 articles in the five Korean newspapers were collected from KINDS and their Web sites from December 7, 2007 to December 31, 2008. Samsung s crisis response strategies during the oil spill, the frequency of the topics, the tone of the news coverage about Samsungs reaction to the oil spill and the relation between the tone and the amount of Samsung advertisements placed in the five Korean newspapers were examined through the analysis of the five Korean newspapers. Of the 216 examp les of news content examined, Chosun has 42 articles (about 19. 4 %), Donga has 35 articles (about 1 6.2 %), Chungang has 1 7 articles (about 7.9 %), Hankyorae has 7 9 articles (about 3 6.6 %), and Kyunghyang has 43 articles ( about 20.0%). The average length of al l the articles were 12 15. 34 words (sd = 1 098.058). Fifty four articles were published in the first month after the oil spill (December 7, 2007 to January 6, 2008), 67 from the second, 18 from the third, 11 from the fourth, 5 from the fifth, 6 from the six th, 14 from the seventh, none from the eighth, 4 from the ninth, 2 from the tenth, 3 from the eleventh, and 32 from the last month (November, 7, 2008 to December 31, 2008). The statistical package for social sciences (SPSS) 13.0 was utilized to conduct the statistical data analyses. Descriptive statistics of the crisis response strategies used to test w hether the compensation, apology strategies, reminding, and ingratiation strategies were the ones that appeared most frequently in news coverage (H1), and t o investigate the changes in Samsung s crisis management strategies over time (RQ3). Specifically, a chi -square test was used to investigate the differences in the strategies by periods (RQ3). Descriptive statistics for

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52 the topics was used for RQs 1 and 2. In addition, a chi -square test was conducted to examine the difference s in topics across newspapers (RQ2). F or H2, a one -way analysis of covariance (ANOVA) was conducted to examine the difference s in the tone of the articles by newspapers. For H3 a an d H3b, regression analyses were used to examine the relations between the tone of the news articles and the scale of Samsung s advertisements For H4a and H4b, regression analyses were run to investigate the difference s among newspaper companies relative to the scale of Samsung s advertisements. For RQ4, a series of independent t test s was conducted to examine whether tone differences exist between articles that had a specific topic and ones that did not. Findings from Hypotheses and Research Questions Th e first hypothesis intended to examine whether the rebuilding posture such as the compensation and apology strategies and the bolstering posture such as the reminding and ingratiation strategies appear more frequently than any other strategies in the m edia coverage of Samsung Heavy Industries corporate messages in the five Korean newspapers during the first 12 months Of the 216 articles, 77 of them included content related to Samsungs crisis response strategies. In the 77 newspaper articles, the crisis response strategies were reported 95 times since more than one strategy appeared in some articles. The most frequently reported crisis response strategies were too soon to know/no answer (24 times, about 2 5.3 %) and excusing (24 times, about 25.3%). An e xample of the too soon to know/no answer strategy can be found in an article that describes the story of a Samsung executive who claimed that Samsung would delay any comments until the official investigation into the oil spill was completed (Kim & Woo, 12/10/2007, The Chosun, p. A02). Also, an example of the excusing strategy is found in an article in which a Samsung executive commented that due to terrible wind and waves, Samsung lost control of the barge and the accident occurred (Woo, 12/11/2007, T he Chosun, p. A08).

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53 The compensation (21 times, about 2 2.1 %) and the apology strateg ies (14 times, about 1 4.7 %) also appeared quite frequently An example of the compensation strategy can be seen in Samsung s decision to donate KRW 100 billion (about U S $100 million) to assist in the reconstruction of the damaged areas and in the development of the local communities (Shin & Woo 3/1/2008, The Chosun, p. A12). An example of the apology strategy may be seen in the comment made by a Samsung executive, who said we are sorry for the residents of the impacted areas, a statement that was made while comforting the residents of Taean who were protes ting outside Samsung s headquarter s (Shin & Woo, 3/1/2008, The Chosun, p. A12). In addition, the scapegoating (7 times, about 7.4%) and reminding (4 times, about 4.2%) strategies appeared during the 12 months. An example of the scapegoating strategy is seen in a Chosun article. According to the article, Samsung argued that the crew members who undertook the voyage were not Samsung s official employees and that the Hebei Spirit did not take appropriate measures to stop the oil spill ; therefore, the responsibility rests with those two parties rather than on Samsung (Son & Lee, 1/31/2008, The Hankyorae, p. 13). Fu rther, an example of the reminding strategy is found in an article that moderately describes Samsung s annual large -scale community involvement made by CEOs from each Samsung branch because of the negative attention Samsung received from the media (Kim, 12/17/2007, The Chosun, p. B03). Although compensation and apology strategies appeared in news coverage quite frequently as expected, the rest of the strategies used, such as reminding ( 4 times, about 4.2 %) and ingratiation (0 times, 0%) strategies were no t revealed frequently in the news content. Therefore, hypothesis 1 was not supported. Table 4 1 indicates these findings.

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54 T able 4 1 Frequencies of s trategies in n ewspaper c overage Strategy Frequency Percentage Excusing 24 25.3 Too soon to know/No answ er 24 25.3 Compensation 21 22.1 Apology 14 14.7 Scapegoating 7 7.4 Reminding 4 4.2 Others 1 1.1 Attacking the Accuser 0 0 Denial 0 0 Justification 0 0 Ingratiation 0 0 Victimage 0 0 Total 95 100.1 The first research question intended to examin e the frequency of the topics for the oil spi ll. In the 216 articles that appeared in the five Korean newspapers, the topics were reported 593 times because more than one topic appeared in some articles. The most frequently reported topics were problems in the compensation process ( 97 times, about 16. 4 %), facts about the oil spill ( 93 times, about 1 5.7 %), actions of the impacted areas residents ( 92 times, about 15. 5 %), and blame placed on Samsung for their irresponsibility ( 8 4 times, about 14.2%) Table 4 2 indicates these findings. Table 4 2 Frequenc ies of the topics for the oil spill Topics Frequency Percentage Problems in compensation process 97 16.4 Facts about the oil spill 93 1 5.7 Actions of impacted area's residents 92 15.5 Blame pla ced on Samsung for their irresponsibility 84 14.2 The court process or decision for oil spill 65 1 1.0 External publics' volunteerism 40 6.7 Critique for the response of the government/Ask for response 38 6.4 Samsung's response toward the oil spill 30 5 .1 Others 29 4.9 Residents' hardships of lives 2 5 4.2 Total 593 100 .1

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55 The following are examples of the topics that appeared frequently in the news co verage An example of problems in compensation process is found in one of the Donga articles. The a rticle explained that conflicts among local governments regarding more financial compensation caused the delay of the substantial compensation for the residents who suffered from the severe damage (Ji, 1/21/2008, The Donga, p. 13). Also, the topic that described facts about the oil spill was frequently reported on immediately after the accident. The date, time, place, and progress of the accident were often described as at 7:15 a.m. on December 7, 2007 and The Samsung Heavy Industries Co. barge smash ed into a 147,000ton oil tanker, the Hebei Spirit (Woo, 1/22/2008, The Chosun, p. A18). A majority of the news articles about reactions by residents who suffered from the damage seemed to focus on the dates and sizes of protests as well as their accusato ry characteristics. An example of actions of the impacted areas residents was seen in one of the Chosun articles. The article mentioned that almost 3,700 Taean residents protested against Samsung (Lee & Kim, 1/24/2008, The Chosun, p. A11). An example of the topic, blame placed on Samsung for its irresponsibility can be found in one of the articles that appeared in Hankyorae. The articles criticized Samsungs i rresponsibility and pointed out that the company did not make any public announcement conc erning substantial compensation or crisis recovery plan for the residents even after more than a month from the prosecution s announce ment of Samsungs legal responsibility for the accident. The article also argued that Samsung should prepare proactive a nd concrete compensation and reconstruction plans for the residents (Anonymous, 1/3/2008, The Hankyorae, p. 31).

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56 The second research question explored the frequency of the topics for the oil spill that were revealed in the news coverage by assessing each newspaper s coverage Chosun had 154 topics in the published 42 articles. Of these, the most frequent topics included facts about the oil spill (36 times about 23.4%), a ctions of impacted area's residents (3 3 times about 21. 4 %), and t he court pro cess or decision for the oil spill accident ( 30 times about 19.5%). Donga had 70 topics in the 35 articles it published. T he most frequent topics were facts about the oil spill (1 2 times 17.1 %) and problems in the compensation process ( 11 times about 15.7 %) In the case of Chungang newspaper, 35 topics were reported in the 17 articles. The most frequently reported topics included the court process or decision for oil spill ( 10 times about 2 8.6 %) and facts about the oil spill ( 9 times abou t 2 5.7 %). Hankyorae had 232 topics in the 79 articles it published. The most frequently covered topics were problems in the compensation process (55 times about 23.7%), b lame placed on Samsung for its irresponsibility (4 6 times about 19.8%), a ctio ns of impacted area's residents (33 times about 14.2 %) and facts about the oil spill (2 8 times about 12.1 %). Last, Kyunghyang newspaper had 102 topics in the 43 articles it published The most frequently reported topics were blame placed on Samsung for its irresponsibility (2 1 times about 20.6 %), problems in the compensation process (1 7 times about 16. 7 %), and a ctions of impacted area's residents (1 7 times about 16.7%). Further, a Chi -square analysis and crosstabulation revealed a significan t difference in topics across newspaper = 116.210, p < .001). T he topics relative to the oil spill differed greatly by newspapers Table 4 3 indicates above findings. Specifically, the adjusted standardized residuals of the topics by newspapers (Table 4 4) were analyzed to e xamine which topics contribute to significant result of chi -squar e test. The adjusted standardized residuals of the strategies by periods indicated that the frequency of the court process or decision for the oil spill was significantly high while the

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57 fr equency of problems in compensation process was significantly low in Chosun newspaper. In Donga newspaper, the frequency of critique or ask for the response of the government was significantly high while the frequency of blame placed on Samsung for i ts irresponsibility was significantly low. The frequency of the court decision or process for the oil spill was significantly high while the frequency of blame placed on Samsung for its irresponsibility was significantly low in Chungang newspaper. I n Hankyorae newspaper, the frequency of problems in compensation process was significantly high while the frequency of the court decision or process for the oil spill was significantly low. In Kyunghyang newspaper, the frequency of blame placed on Sa msung for its irresponsibility was significantly high while the frequency of facts about the oil spill was significantly low. Table 4 3 Cross -tabulation of topics by newspapers Newspaper Chosun Donga Chung A ng Hankyo Rae Kyung Hyang Total Top ic Samsung's response toward the oil spill 5 3.2% 4 5.7% 4 11.4% 11 4.7% 6 5.9% 30 5.1% Actions of impacted areas residents 33 21.4% 7 10.0% 2 5.7% 33 14.2% 17 16.7% 92 15.5% Problems in compensation process 12 7.8% 11 15.7% 2 5.7% 55 23.7% 17 16.7% 9 7 16.4% Blamed placed on Samsung for its irresponsibility 12 7.8% 5 7.1% 0 0% 46 19.8% 21 20.6% 84 14.2% Facts about the oil spill 36 23.4% 12 17.1% 9 25.7% 28 12.1% 8 7.8% 93 15.7% Residents hardships of lives 4 2.6% 2 2.9% 1 2.9% 10 4.3% 8 7.8% 25 4.2% Critique for the response of the government 7 4.5% 8 11.4% 2 5.7% 17 7.3% 4 3.9% 38 6.4% The court process or decision for oil spill 30 19.5% 7 10.0% 10 28.6% 9 3.9% 9 8.8% 65 11.0% External publics' volunteerism 4 2.6% 8 11.4% 3 8.6% 17 7.3% 8 7.8% 40 6.7% Others 11 7.1% 6 8.6% 2 5.7% 6 2.6% 4 3.9% 29 4.9% Total 154 99.9% 70 99.9% 35 100.0% 232 99.9% 102 99.9% 593 100.1% N = 593) = 116.210, p < .001

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58 Table 4 4 Adjusted standardized residuals of the topics by newspapers Newspape r Chosun Donga Chung ang Hankyo Rae Kyung Hyang Topic Samsung's response toward the oil spill 1.2 .3 1.8 .3 .4 Actions of impacted areas residents 2.4 1.4 1.7 .7 .4 Problems in compensation process 3.3 .2 1.8 3.9 .1 Blamed placed on S amsung for its irresponsibility 2.6 1.8 2.5 3.2 2.0 Facts about the oil spill 3.1 .4 1.7 1.9 2.4 Residents hardships of lives 1.2 .6 .4 .1 2.0 Critique for the response of the government 1.1 1.8 .2 .7 1.1 The court process or decision f or oil spill 3.9 .3 3.4 4.4 .8 External publics' volunteerism 2.4 1.7 .4 .5 .5 Others 1.5 1.5 .2 2.1 .5 The third research question sought to examine how Samsungs crisis response strategies, as described in the news coverage, changed during th e 12 months after the oil spill. T he analysis periods are divided into six two -month units ranging from December 7, 2007 till December 31, 2008. The first period (December 7, 2007 to February 6, 2008) had 121 articles Only 43 of the 121 newspaper items contained Samsung s crisis response strategies and the remaining news articles included the information on the general facts about the oil spill, the actions of the impacted areas residents, and so forth. During that period, a total of 5 4 crisis strateg ies from the 43 articles were reported. The most frequently reported includes too soon to know/no answer (20 times, about 3 7.0 %), excusing (16 times, about 29.6%), and apology (10 times, about 1 8.5 %). S capegoating ( 3 times, about 5.6 %), compensation ( 3 ti mes, about 5.6 %), reminding ( 1 times, about 1.9 %), and others (1 time, about 1.9 %) appeared as well The second period ( February 7, 2008 to April 6, 2008) had 27 articles. Only 14 of the 27 newspaper items included Samsung s crisis response strategies and 18 crisis strategies from the 14 articles were reported The most frequently reported were compensation (12 times, about

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59 66.7%) followed by apology (3 times, about 16.7%). e xcusing (2 times, about 1 1.1 %), scapegoating (1 time, about 5. 6 %), and reminding strategies (1 time, about 5. 6 %) appeared as well T he third period (April 7, 2008 to June 6, 2008) had 11 articles and only 2 of the 11 news articles were related to Samsung s crisis response strategies. The compensation (1 time, 50%) and too soon to kn ow/no answer strategy (1 time, 50%) appeared. The fourth period (June 7, 2008 to August 6, 2008) had 16 articles and only 1 of the16 articles contained Samsungs strategy. In that article, the excusing (1 time, 50%) and apology strategies (1 time, 50%) w ere included. The fifth period (August 7, 2008 to October 6, 2008) had 6 news articles. Only 1of the 6 articles had only 1 crisis strategy. Here, only the reminding strategy (1 time, 100%) appeared. T he last period (October 7, 2008 to December 31, 2008) yielded 35 articles. Only 16 of the 35 articles included Samsung s crisis response strategies and a total 18 strategies appeared in the news coverage. The results showed that the excusing (5 times, about 27.8%) and compensation (5 times, about 27.8%) str ategies appeared the most frequently. In addition, the scapegoating (3 times, about 16.7%), too soon to know/no answer (3 times, about 16.7%), and reminding (2 times, about 11.1%) strategies appeared. Further, a chi -square test was conducted to examine w hether there were different frequency of the strategies between periods. The results showed that each period reflected different tendency concerning the frequency of the crisis response strategy. The differences were statistically significant ( 2 = 79.220 df = 30 p <.001). Table 4 5 indicates these findings.

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60 Table 4 5 Cross -tabulation of the strategies by periods Periods 1 st 2 nd 3rd 4 th 5 th 6 th Total Strategy Attacking the accuser 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% D enial 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% Scapegoating 3 5.6% 1 5.6% 0 0% 0 0% 0 0% 3 16.7% 7 7.6% Excusing 16 29.6% 2 11.1% 0 0% 1 50.0% 0 0% 5 27.8% 24 26.1% Justification 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% C ompensation 3 5.6% 12 66.7% 1 50.0% 0 0% 0 0% 5 27.8% 18 19.6% A pology 10 18.5% 3 16.7% 0 0% 1 50.0% 0 0% 0 0% 14 15.2% R eminding 1 1.9% 0 0% 0 0% 0 0% 1 100% 2 11.1% 4 4.3% I ngratiation 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% V ictimage 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% 0 0% T oo soon to know/ No answer 20 37.0% 0 0 % 1 50.0% 0 0% 0 0% 3 16.7% 24 26.1% Others 1 1.9% 0 0% 0 0% 0 0% 0 0% 0 0% 1 1.1% Total 51 100.1% 18 100.1% 2 100% 2 100% 1 100% 18 100.1% 92 100% 30, N = 92) = 79.220, p < .001 Specifically the adjusted standardized residuals of the strategies by periods (Table 4 6) were analyzed to examine which strategies contribute to the significant results of chi -squar e test. The adjusted standardized re siduals of the strategies by periods indicated that the frequency of the too soon to know/no answer strategy was significantly high while the frequency of the compensation was significantly low in the first period. On contrast, in the second period, the fr equency of the compensation strategy was significantly high while the frequency of the too soon to know/no answer strategy was significantly low. In the third period, the frequency of the

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61 compensation strategy was significantly high while the frequency of the excusing was significantly low. In the fourth period, the frequency of the apology strategy was significantly high and the frequency of the too soon to know/no answer strategy was significantly low. In the fifth period, the frequency of the remindin g strategy was significantly high while the frequencies of the excusing while too soon to know/no answer strategies were significantly low. In the sixth period, the frequencies of the scapegoating and the reminding strategies were significantly high while the frequency of the apology strategy was significantly low. Table 4 6. Adjusted standardized residuals of the strategies by periods Periods 1st 2 nd 3rd 4 th 5 th 6 th Strategy Scapegoating .7 .4 .4 .4 .3 1.6 Excusing 1.3 1.6 .8 .8 .6 .2 C o mpensation 5.3 5.6 1.1 .7 .5 1.0 A pology 1.3 .2 .6 1.4 .4 2.0 R eminding 1.3 1.0 .3 .3 4.7 1.6 T oo soon to know/No answer 3.2 2.8 .8 .8 .6 1.0 Others .9 .5 .1 .1 .1 .5 The first period immediately after the oil spill had the hig hest number of articles and strategies. Beginning in the third period, the number of articles and strategies decreased noticeably. I n the last period, however, the numbers increased sharply because of the second court decision on the oil spill. Table 4 7 indicates these findings. Table 4 7 The number of news coverage about the strategy and the number of strategy in each perio d Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 The number of news coverage regarding the strategy 43 (35. 5 %) 14 (51.9% ) 2 (18.2%) 1 (6. 3 %) 1 (16.7%) 16 (45.7%) The number of strategy 5 4 1 8 2 2 1 18 Using an ANOVA test, the second hypothesis sought to discover whether there were differences in the tones of the news coverage (1 very negative, 5 very positive) among the five Korean newspapers The 42 articles in Chosun newspaper had an average tone of 2.81 ( SD =

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62 1.110); the 35 articles in Donga newspaper had an average tone of 3.03 ( SD = .822); the 17 articles in Chungang newspaper had an average tone of 3.41 ( SD = .870); the 79 articles in Hankyorae newspaper had an average tone of 1.97 ( SD = .905); the 43 articles in Kyunghyang newspaper had an average tone of 2.23 ( SD = .996). Therefore, in terms of the tones of the news coverage depending on five Korean newspaper companies t he mean differences were statistically significant (F (4, 215) = 14.53, p < .001) (Table 4 8). T able 4 8 Tones of news coverage in five Korean newspapers Newspaper N Tone Std. Deviation Std. Error 95% Confidence Interval for Mean Lower Bou nd Upper Bound Chosun 42 2.81 1.110 .171 2.46 3.16 Donga 35 3.03 .822 .139 2.75 3.31 Chungang 17 3.41 .870 .211 2.96 3.86 Hankyorae 79 1.97 .905 .102 1.77 2.18 Kyunghyang 43 2.19 1.029 .157 1.87 2.50 Total 216 2.46 1.073 .073 2.32 2.61 Further, Pos t hoc comparisons using the Bonferroni test (Table 4 9) indicated that the mean score s for the tones of Chosun (M = 2.81, SD = 1.110), Donga (M = 3.03, SD = .822), and Chungang (M = 3.41, SD = .870) were significantly different from those of Hankyorae (M = 1.97, SD = .905) and Kyunghyang (M = 2.23, SD = .996) but were not significantly differ ent between themselves. Also, the mean scores for the tones of Hankyorae and Kyunghyang were significantly different from those of Chosun, Donga, and Chungang but were not significa ntly different from each other. As expected, the liberal newspapers, Hankyorae and Kyunghyang, included news stories with more negative tones than did the conservative newspapers, Chosun, Donga and Chungang T herefore, hypothesis 2 was supp orted.

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63 Table 4 9 Multiple comparisons of the tone of five Korean newspapers (I) Newspaper (J) Newspaper Mean Difference (I J) Std. Error Stg. Chosun Donga .219 .219 1.000 Chungang .602 .276 .300 Hankyorae .835* .183 .000 Kyunghyang .623* .208 .031 Donga Chosun .219 .219 1.000 Chungang .383 .283 1.000 Hankyorae 1.054* .195 .000 Kyunghyang .843* .218 .002 Chungang Chosun .602 .276 .300 Donga .383 .283 1.000 Hankyorae 1.437* .256 .000 Kyunghyang 1.226* .275 .000 Hankyorae Chosun .835* .183 .000 Donga 1.054* .195 .000 Chungang 1.437* .256 .000 Kyunghyang .211 .182 1.000 Kyunghyang Chosun .623* .208 .031 Donga .843* .218 .002 Chungang 1.226* .275 .000 Hankyorae .211 .182 1.000 *. The mean difference is significan t at the .05 level H ypothesis 3a intended to examine the relation between the number of Samsung advertisements and the tone of news articles during the oil spill and hypothesis 3b intended to examine the relation between the total revenue of advertiseme nts and the tone of the news coverage. In order to analyze the relations, regression analyses were performed. For the regression analys e s, the tone of news coverage was used as an independent variable and the number of advertisements and the total reven ue from advertisements were used as dependent variable s In terms of the number of advertisements, Chosun had 137 advertisements, Donga had 126, Chungang had 135, Hankyorae had 12, and Kyunghyang had 10. On the other hand, the number of articles coded in order to examine the tone of news coverage is 42 articles from

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64 Chosun 35 articles from Donga 1 7 articles from Chungang, 79 articles from Hankyorae, and 43 articles from Kyunghyang The results of a regression analysis (Table 4 10) show that the more pos itive the tone of the articles, the more the number of advertisements. In other words, t here was a significant ly positive relationship between the tone toward Samsung s oil spill and the number of Samsung s advertisements ( = .256, p < .001). Therefore, H3a was supported. In terms of the advertisement revenue, the total amount for Chosun was KRW 6,321,770,000 (about $ 6.3 billion), the total amount for Donga was KRW 7,294,125,000 (about $ 7.3 billion), the total amount fo r Chungang was KRW 5,738,860,000 (about $ 5.7 billion), the total amount for Hankyorea was KRW 315,780,000 (about $315 million), and the total amount for Kyunghang was KRW 259,400,000 (about $ 259 million). The results of a regression analysis (Table 4 10) illustrated that the more positive the tone of the articles, the more the revenue of advertisements increases. In other words, t here was also a significant ly positive relationship between the tone toward Samsung s oil spill in the news articles and the revenue of Samsung s advertisements = 271, p <. 0 01). Therefore, H3b was supported. Table 4 10. R egression analys es of the tone of articles with the scale of Samsung advertisement s Variable Unstandardized Coefficients Standardized Coefficients S ig. Adjusted R F ratio B Std. Error Beta The number of advertisements .106 .028 .256 .000 .061 F =14.965 (p< .001) The revenue of advertisements 5561.393 1349.440 .271 .000 .069 F= 16.985 (p< .001) H4a intended to examine whether there were any differences among the newspaper companies in terms of the number of Samsung advertisements. A regression analysis was

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65 conducted. Setting Chosun as a reference variable the difference s among newspaper companies were examined in terms of the number of Sa msung advertisements. The results of the regression analysis (Table 4 11) indicate that Hankyorae ( = -.516, p< .001) and Kyunghyang ( = .376, p < .001) received significantly less advertisements than Chosun. In contrast Donga and Chungang were not sig nificant ly different from Chosun with the number of Samsung advertisements In other words, the relations hip between the Chosun, Donga, and Chungang newspapers and the number of Samsung s advertisements was markedly differen t from the relations hip between the Hankyorae and Kyunghyang newspapers and the number of Samsung advertisements Therefore, H4a was supported. H4b sought to examine the differences among the newspaper s in terms of the revenue generated by carrying Samsung advertisements As with H4a a regression analysis was performed. Setting Chosun as a reference variable the difference s in the revenue produced by Samsung s advertisements were examined. The results of the regression analysis (Table 4 11) show ed that Hankyorae ( = .398, p < .00 1) and Kyunghyang ( = .302, p < .001) earned significantly lower revenue from Samsungs advertisements than Chosun while Donga and Chungang were not significant ly from Chosun. In other words, similar to the results of the number of advertisements, the r elations hip between the Chosun, Donga, and Chungang newspapers and the revenue associated with Samsung s advertisements were markedly different from the relations hip between the Hankyorae and Kyunghyang newspapers and the revenue realized through Samsung s advertisements Therefore, H4b was supported.

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66 Table 4 11. Multiple regression analyses of five Korean newspapers with the scale of Samsung advertisements Variable Unstandardized Coefficients Standardized Coefficients Sig. Adjusted R F ratio B Std. Error Beta The number of advertisements Donga .002 .042 .002 .956 Chungang .080 .043 .071 .062 Hankyorae .698 .049 .516 .000*** Kyunghyang .648 .060 .376 .000*** .386 F = 95.519 (p < .001) T he revenue of advertiseme nts Donga 1716.504 2132.131 .024 .580 Chungang 484.050 3099.544 .007 .877 Hankyorae 35003.1 3127.571 .398 .000** Kyunghyang 33839.1 4408.156 .302 .000** .223 F = 44.153 (p < .001) ***p < .001 The fourth research question inten ded to examine the relation between the topic and the tone of news articles during the oil spill. A series of t -tests were used to test the differences between articles that include a specific topic and articles that do not include the topic. I n this stud y, nine topics excluding others were examined. The tone of articles that include the topic s of Samsung s response toward the oil spill (t = 2.241, p < .0 5 ), a ctions of impacted area's residents (t = 2.277, p < .05), p roblems in compensation process (t = 6.202, p < .0 01), b lame placed on Samsung for its irresponsibility (t = 17.196, p < .0 01), f acts about the oil spill (t = 3.127, p < .0 05), residents' hardships of lives (t = 3.577, p < .0 01), or c ritique for the response of the government (t = 2.285, p < .05), showed different tones from the articles that do not include these topics. Specifically, articles with Samsung s response toward the oil spill and f acts about the oil spill tend to be

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67 more positive toward Samsung s responses th an articles that do not include the topics. Articles with p roblems in compensation process a ctions of impacted area's residents b lame placed on Samsung for its irresponsibility r esidents' hardships of lives and c ritique for the response of the government tend to describe Samsung more negatively than articles that do not include the topics.

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68 CHAPTER 5 DISCUSSION Discussion and Implications This study examined how the coverage of Samsung s response strateg ies toward the Taean oil spill accident was portrayed in the five Korean newspapers. T one s relative to Samsung article s and the scales of Samsung s advertis ements in each of the five Korean newspapers were also analyzed in order to examine Samsung s media control by leveraging its advertising power Also, ten topics were analyzed to determine the relation between the tone of the articles and the topics addressed in the news coverage. The first hypothesis predicted that Samsung would employ compensation, apology, reminding and ingratiation str ategies to cope with the Taean oil spill accident in accordance with Coombs crisis flowcharts and crisis response strategies ( Coombs 2005; Coombs, 2007). The results showed that Samsung employed the compensation strategy by virtue of the charity it provided to the citizens of Taean and its plan to establish infrastructures at the impacted area. However, the rest of the se strategies, such as apology, reminding, and ingratiation did not appear frequently during the process of crisis management. Rather, Samsung employed the excusing strategy which allows the company to reduce its responsibility by shifting the blame on the poor weather conditions that produced the terrible storm and the too soon to know/no answer yet strategy which an organization uses to postpone expressing its standpoint on the crisis Notably, the too soon to know/no answer strategy appeared most frequently. S trategies that seek to minimize or deny responsibility appeared quite frequently in the news coverage Once an organization admits its fault for a crisis, the organization must take not only ethical responsibility but also legal and financial responsibilities (Coombs, 2007). In the

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69 case of the Taean oil spill, the degree of damage was so enormous that Samsung tried to escape all responsibility for the crisis. The reminding and ingratiation strategies might rarely appear because those strategies were not perceived effective to relieve the anger of the residents in the impacted areas. Indeed, residents who lost their places of wor k due to the oil spill were very angry and harbored negative attitude s toward Samsung. Notably, neither Samsungs previous praiseworthy performance nor its flattering of the residents in the impacted areas helped those residents solve the hardships impose d on them because of the incident. In contrast, the most effective strategy in relieving citizens rage might be the compensation and apology strategies. These arguments are supported by the finding that the topic, problems in the compensation process was addressed most frequently in the news coverage because Samsung and the residents of the impacted areas could not reach agreement on the compensation. However, Samsung could not readily admit its culpability due to the enormous degree of damage. Instea d Samsung sought to deflect its legal responsibility for the oil spill and chose to cope with the accident by adopting a non responsive attitude despite blame s from the media and the public. On the other hand, Samsung blamed Hebei Spirit for the accident. This accusation can be regarded as Samsung s scapegoating strategy. By employing that approach, Samsung tried to share the responsibility with Hebei Spirit, and the court determined that Samsung and Hebei Spirit shared responsibility for the oil spill. In sum, the findings of the first hypothesis partially supported Coombs flowcharts and the crisis strategies (Coombs, 2005; Coombs, 2007). As expected, the compensation strategy appeared quite frequently in the news coverage. However, contrary to initia l expectation s, the apology, reminding, and ingratiation strategies were not used as often. This finding is

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70 meaningful because it showed that the crisis strategies used by Samsung during the oil spill crisis did not completely identify with the Coom bs cr isis management model which was based upon the U.S. market. A reason for this could be interpreted by the differences in cultural and social considerations between the U.S. and South Korea. That is, crisis managers in various countries should observe the strategic differences and take into consideration that the cultural and social background of the society involved may play a role in implementing crisis strategies. The basis of crisis management is to maintain long term and positive relationships with t he public and to maintain the reputation of the organizations involved by communicating proactive ly and ethically with the public. However, the crisis management strategies used by Samsung in the aftermath of the oil spill were irresponsible or evasive. Notably as soon as the public and media showed a reduced interest in the oil spill, and it was evident that Samsung had escaped any legal responsibility for the incident based on the court s decision Samsung submitted an appeal to the court for a reducti on of the compensation it was required to pay. In short, t he company won the case and even tried to skirt its financial responsibility as adjudicated by the court. The problem is that Samsung progressed through the crisis without paying any proper financ ial and mental compensation. B y the time the result of the appeal was announced public and media interest in the case had decreased dra ma tically. Consequently, the Taean residents who lost their means of making a living were essentially disregarded by s ociety. Samsung s unethical crisis responses might produce a short -term profit. As illustrated by its stable performance on the stock market even after the accident, Samsung suffered no substantial loss of revenue or reputation. Today, Samsung is still c onsidered one of the best Korean global companies. Yet Samsungs handling of the Taean oil spill is controversial for a global company that is represent ative of a single nation. As the phrase noblesse oblige

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71 implies Samsung should take its social resp onsibility seriously and be more critical of its management practices. In fact, several scholars and NGOs have criticized Samsung s unethical manners It would be of great help for Samsung to maintain a consistently mutually beneficial relationship with the public which would assist the company in further improv ing its business. T he change with Samsungs response strategies was examined through the third research question. Newspaper coverage of the Taean oil spill in the first period (December 7, 2007 to February 6, 2008) was enormous ; in fact, about 56.0% of the to t al coverage occur red during the first period. The first period showed the most important change with response strateg ies The beginning of the change took place on January 22, 2008 with Sa msung s public apology. For 47 days after the oil spill occurred, Samsung had primarily employed the too soon to know/no answer strategy and the excusing strategy despite overwhelming public blame regarding Samsungs irresponsibility regarding the acciden t M ore specifically, Samsung s apology strategy did not appear in the news coverage at all before its public apology appeared in almost all daily Korean newspapers as a form of advertising. Until that time, even the compensation strategy appeared only t wice in the news coverage published by Samsung s branch company, Chungang newspaper and these were issued on December 17, 2007 and January 19, 2008. However, Samsung contributed money and had its employees clean the impacted areas without expressing its standpoint as an offender in the disaster Finally, Samsung s apology strategy started to appear in the news coverage after its public apology was announced. Samsungs official public apology was announced just after the prosecution initially indicated th at Samsung would be indicted on charges of having caused the Taean oil spill. Samsung might change its crisis response strategy because the corporation believed it was

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72 impossible to deny its responsibility for the oil spill in light of the outcome from the prosecutions initial investigation. Interestingly, Samsung expressed grief not for its responsibility in the oil spill but for the oil spill itself and the pain inflicted by the disaster on the area residents. In other words, Samsung had not fully admi tted its fault and did not fully ask for forgiveness even after its faults were made known through the prosecution s investigation. For th ese reason s the excusing strategy (16 times, about 29.6%) appeared more often than the apology strategy (10 times, a bout 18.5%) in the first period. In the second period (February 7, 2008 to April 6, 2008), Samsung attempted to overcome the crisis by using a very active compensation strategy (12 times, about 66.7%) rather than the too soon to know/no answer ( 0 time s 0% ) or the excusing strategy (2 times, 11.1%) which had been used as its main strategies in the first period During this period, residents of the impacted area protested vigorously against Samsung s passive responses and the media vehemently addressed Sam sung s irresponsibility. Thus, it seems that Samsung relied on its compensation strategy (12 times, 66.7%) while it rarely used strategies that delay ed making its standpoint known, such as the too soon to know/no answer (0 time s 0%) or minimiz e its respo nsibility through the excusing strategy (2 times, 11.1%). In the third, fourth, and fifth period s the number of relevant articles as well as that of strategies decreased dramatically Thus, it might be not significant to analyze the strategies that took place during those periods. In any event, the results illustrated that the compensation and apology, and the reminding strateg ies to stimulate a public recall of Samsung s socially responsible practices were observed in these periods.

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73 During the sixth period (October 7, 2008 to December 31, 2008), the court rendered its second judgment concerning the Taean oil spill case on December 10, 2008. According to that decision both Samsung Heavy Industries and the Hebei Spirit were responsible for the oil spill. Consequently, new compensation strategies based on the court s decision emerged in the process of Samsung s crisis management. For example, Samsung appealed for much less in compensation payments KRW 5 billion (about $5 million) rather than the original KRW 100 billion (about $100 million), which Samsung promised to donate to the local community. In sum, Samsung s crisis strategies seem to have relied to a large extent on the result of the prosecution s investigation or the court s decision s During the period when the locus of legal responsibility was obscure, the corporation focused on the too soon to know/no answer and excusing strategies. Samsungs donation of $ 100 million was announced during the first period ; h owever, once the initial attentio n about the crisis began to dissipate and the degree of legal obligation had been decreased, Samsung appealed for a reduction in the amount of compensation money to KRW 5 billion (about $5 million) Further the court accepted Samsung s appeal which perm its Samsung to pay compensat ion only for the adjudicated legal responsibility thus neglecting any ethical responsibility. At this point, many media elements the public, and the residents of the impacted area asked Samsung for a more responsible attitude Notably, liberal newspapers, such as Hankyorae and Kyunghyang, pointed out that the compensation money KRW 5 billion was insufficient compared to the scale of damage caused by the oil spill, and they advocated that Samsung should take much more responsi bility for the accident. Also, about 7,000 Taean residents appealed the court decision. Nevertheless, Samsung did not react to those requests and instead announced its own plan without considering to the affected stakeholders opinions. It was difficult for the residents or other members of the public, such as environmental

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74 and citizen s groups, to find any forum where they could openly discuss crisis recovery and compensation policies with the company. Thus, it can be concluded that Samsung reflected a one -way, asymmetrical form of communication. Consequentially, Samsung aggravated the relationship between the residents and the company, resulting in the intensification of protests Ultimately Samsung s crisis response strategies were determined based on a legal rather than an ethical perspective. T his phenomenon can be explained with the unique characteristics of Korean society. As mentioned in the literature review, high power distance, high collectivism, the Confucian dynamism of Korean society an d the remaining vestiges of past military regime s result in the societal tendency to accept individual inequality and sacrifice individual interests for the benefit of the entire society (Kim, 1997; Kincaid, 1987). Samsung is one of the largest multinatio nal corporations in South Korea and it serves as a symbol of Koreas economic influence both nationally and internationally Many Korean s, therefore, might be concerned that damage to Samsung s reputation result in damage to the entire Korean society. Ironically, Samsung is one of the top choices among young people entering the work force, even though Korean s blamed Samsung for its irresponsibility with illegal funds the CEO s illegal inheritance etc. Simply put, Koreans do not want Samsung s reputati on or image to be damaged and they dont want to reveal Samsung s other faults to foreign countries. Thus, Korean s may tend to forgive Samsung s passive responses toward the residents of the impacted areas in order to preserve the benefit offered by Samsung for Korean society as a whole Also, these characteristics of Korean society caused the one -way and indirect communication that permits evading conflicts rather than seeking clarification or conflict resolution In other words, there are distinctive d ifferences between South Korea and the U.S. in

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75 terms of the cultural criteria for communication. Generally, Koreans use a more passive means of communication than Americans, who employ more active forms of communication, such as debate and self -defense. Koreans often hide their real intentions and attitudes and do not give obvious gestures. Alternatively, Koreans follow the one -way communication because they prefer the status quo and do not like unnecessary conflicts with others, especially their superio rs (Kim & Hon, 2001). Notably, the members of the representative company of Korea, Samsung, also have these characteristics of Korean society. Thus, Samsungs unresponsive and passive strategies can indeed stem from these characteristics inherent in Kore an society s hierarchical structure. The findings of hypothesis 2 indicated that there were significant differences in the tone s used by the five Korean newspapers. As expected, the conservative newspapers Chosun, Donga, and Chungang included articles tha t had more negative tones than did the Hankyorae and Kyunghyang newspapers Notably, Samsung s own branch, the Chungang newspaper did not run any article s that were coded with a very negative tone ; indeed, it published those that had the most positive to ne In contrast, the Hankyorae newspaper did not have any article s that were coded as having had a very positive tone and in fact, it published the articles that included the most negative tone. Further, a p ost h oc analysis showed that there were not any significant differences in the tones of the articles among Chosun, Donga, and Chungang while there were significant differences from Hankyorae and Kyunghyang. Also, there were not any significant differences in the tones of the articles among Hankyorae a nd Kyunghyang but there were significant differences in Chosun, Donga, and Chungang. Th ese findings imply that Chosun, Donga, and Chungang are conservative newspapers that side with large corporations while Hankyorae and Kyunghyang are liberal newspapers that criticize large corporations.

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76 The first research question examined the frequencies of the topics appeared in the five Korean newspapers Unlike car accident s or crime s, an oil spill accident is an exceptionally unusual event. Moreover, because the s cope of Samsungs oil spill accident was incredibly far reaching it gained a great deal of attention from the public. When the news broke about the incident, the media and the public wanted to have the objective facts regarding the circumstances of the c ase ; i.e., the reason for the accident, the degree of damage, and so forth. This seems to be the reason why the topic, facts about the oil spill, was dealt with very frequently by media reports in an early stage (93 times, about 15.7%). After the relev ant facts had been revealed to some extent the public started to pay attention to the locus of responsibility its scope and procedure to be used for compensation. H owever, Samsung did not make any immediate official statements regarding the issues. In response, t he members of the T a ean community held many protest s. From that point on the media seems to have been inclined to report on the negative side of Samsung s indifferent and irresponsible actions as well as its lack of public apology. As indicat ed in the result of the present study regarding the frequency of the topic, the most frequently discussed topics were problems in compensation process (97 times, 16.4%), actions of impacted area s residents (92 times, about 15.5%), and blame placed o n Samsung for its irresponsibility (84 times, about 14.2%). T he frequenc ies of the topics related to the Taean oil spill by each newspaper (RQ2) also supports the newspapers different political tendencies Hankyorae (7 9 articles, 232 topics) was the new spaper that reported oil spill stories most frequently and comprehensively while Chungang (16 articles, 35 topics), a branch of Samsung, was the newspaper that reported the least number of stories. Interestingly, the five newspapers focused on different a spects of the incident. After assessing each newspaper company's topics, this study found that Chosun and

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77 Donga belonged in one group, Hankyorae and Kyunghyang belonged in another, and Chungang was alone in its group. First, the most distinctive characteri stics in terms of the topics appeared in the Hankyorae and Kyunghyang newspapers. They addressed problems in the compensation process and blame on Samsung for its irresponsibility most frequent ly. In other words, Hankyorae and Kyunghyang focused mainly on the topics that placed blame on Samsung for the incident. When Samsung did not respond to these accusations, Hankyorae and Kyunghyang continued to attack Samsung by calling it irresponsible while covering the hardships caused to the residents of Taean C ounty by the incident, such as job loss and lack of compensation. Second, facts about the oil spill became the most frequently shared topic in Chosun and Donga. These newspapers focused on the timeline of the oil spill incident, the degree of damage, and the court process and decision. Even though Chosun and Donga covered the appeals and compensation issues faced by the residents of Taean, they did not attempt to place blame directly on Samsung. Rather, these two newspaper companies seemed to redirect th e blame to parties other than Samsung, such as the Korean government. On the other hand, when Hankyorae and Kyunghyang addressed the residents suicides, they usually placed the blame on both Samsung and the government. Lastly, the court process or decisi on for the oil spill ( 10 times about 28.6 %) and facts about the oil spill ( 9 times about 25.7 %) appeared most frequently in the Chungang newspaper. Samsung s branch Chungang reported a noticeably small number of stories on the oil spill and focused on facts about the oil spill. Articles on placing responsibility or shedding negative light on Samsung were rarely seen Rather, Chungang focused more on the positive activities undertaken by Samsung throughout this incident.

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78 In conclusion, the conservativ e newspapers of Chosun, Donga, and Chungang, focused on facts about the oil spill and the court process and the eventual decision. In contrast, the liberal newspapers, Hankyorae and Kyunghyang, focused on the compensation process and placed blame on Samsu ng for its irresponsibility. In addition, Samsungs branch, Chungang, seemed to attempt to underscore Samsungs positive aspects by addressing indirectly Samsungs CSR or community involvement in the Taean region. The fourth research question investigate d the tone of articles that include specific topics that were different from the articles that did not include these topics. Specifically, the news articles with the topics of Samsung s response toward the oil spill and facts about the oil spill tend to describe Samsung more positively compared to the news stories without the topics while the news articles with the topics, actions of impacted area s residents, problems in compensation process blame placed on Samsung for its irresponsibility, re sidents hardships, and critique for the response of the government tend to describe Samsung with a more negative tone compared to the news stories without the topics T his result can be in tandem with the finding that certain newspaper compan ies used specific tones in their articles and tended to address certain topics more often than others. For example, Chosun, Donga, and Chungang which ha d more positive articles toward Samsung covered responsibility-neutral topics such as facts about the oil spill and the court process or decision for the oil spill Hankyorae and Kyunghyang which have articles with a more negative tone primarily covered topics related to Samsungs responsibility such as the compensation process and blame placed on Samsung f or its irresponsibility. The findings of hypothes e s 3a and b demonstrated that there were positive relations between the tone of news articles and the scale of Samsung s advertis ements. Also, the findings

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79 of hypotheses 4a and b illuminated that there ex isted differences among Korean newspaper companies in terms of the scale of Samsung advertisements Samsung is one of the most important sources of revenue for the Korean media and it is the largest advertise r in Korean media (Jung & Choi, 2008). It is generally accepted that the relations between Samsung and the media companies influence the news coverage regarding Samsung. Geum (2006) argue s that although the effectiveness of advertisements on selling products is not always guaranteed, Korean corporat ions place advertisements in newspapers because putting advertisements can lead to cordial relations with the media. In other words, advertising can be considered the core factor in maintain ing close and informal relations between Korean corporations and the media (Geum, 2006). When large Korean corporations place ad vertising in the media, they usually anticipate that the media will offer news coverage to enhance corporate public relations. Also, corporations involved in crises expect the media to not pla ce too negative news coverage In other words, Korean corporations may expect the effectiveness of crisis management and corporate public relations through advertising bu y. The scale of Samsung advertisements of Chosun, Chungang, and Donga all of which t end to have more positive articles toward Samsung, was much larger than that of Hankyorae and Kyunghyang which published more negative articles. T h ese findings imply that not only does the tone used in newspaper articles may affect the scale of advertisem ents from corporations but also that the scale of advertisements can affect the tone used in the articles. When a newspaper company uses positive tones i n articles regarding a corporation, the corporation increases the scale of its advertisements with tha t particular newspaper. In return, the newspaper increases the

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80 number of positively toned articles about the corporation, thus creating a continuing vicious relationship between the newspaper company and the corporation. W hen observing this situation fr om a longterm public relations perspective, however, this relationship cannot be viewed as desirable or ethical. A lthough the unethical relationship s between large corporations and the media can be effective for a short term perspective, such undesirable relationships will ultimately collapse because public trust in corporations and the media will be reduced Therefore, in order to escape the vicious cycle, public relations practitioners should anticipate these negative effects and improve the level of t he ethics they practice Limitations This study has several limitations. First, there was a relatively small number of sample d articles related to Samsung s crisis response strategy. In the case s of Merck s Vioxx recall and ValuJet s crash of flight 592, Merck and ValuJet reacted to the crises very actively and immediately and the companies crisis responses announce ments had been addressed in the news coverage as news sources. However, Samsung Heavy Industries Co. officially react ed to the oil spill 4 7 days after it happened; further, Samsung s crisis responses were very passive. For these reasons, the number of the articles regarding Samsung s crisis response strategies was not high Second, other variables than the tone of the news coverage which ca n affect the scale of advertisements such as newspaper companies managerial abilities and change s in the general economic situation cannot be controlled in the process of analyzing the relations hip between the tone of the articles and the scale of Samsung s advertisements. Third, with respect to methodology, the present study suffers from a limitation inherent with content analysis T he best way to investigate and analyze a corporation s crisis

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81 management strategies would be to survey the corporate cris is managers victims, or other stakeholders who are involved directly with the crisis situation. However, it is very difficult for them to reveal the actual strategies employed since these are often deeply rooted to the core and secret information held by the company. Considering these situations, the content analysis of media seems to be the most appropriate method for the present study. Future Research The f indings from this study generate several potential research topics. Coombs flowchart has been a useful guide because it allows public relations practitioners in the field to cope with various crisis situations. Thus, the flowchart has been adapted to real crisis cases and modified through many recent studies (Brinson & Benoit, 1996, 1999; Coombs 1998, 1999c; Coombs & Holladay, 1996, 2001; Coombs & Schmidt, 2000). However, when Coombs flowchart and the crisis strategies based on the Western culture are adapt ed to other cultural situation s, such as in South Korea, unexpected results can be drawn a s was demonstrated in this study. Therefore, conduct ing research using crises cases from other countries would enable the establish ment of a crisis response repertoire suitable to each country s culture. The findings from research about crises in a varie ty of countries will provide useful guidelines for public relations practitioners who must cop e with crises in various nations Another suggestion for future research is looking at the relationship between tone of news articles and scale of advertisements when Samsung is not going through a crisis situation. Comparing the results of this suggested study with the results of Samsung that is going through a crisis will demonstrate whether the relationship between tone of articles and scale of advertisements i s influenced by the presence of a crisis. In addition, regarding the relation between the tone of the articles and the scale of corporations advertisements, conduct ing research that focuses on a longer period can reduce the

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82 effects of other variables that might influence the scale of advertisements. As mentioned in the limitation section other variables such as newspaper companies managerial abilities and change of the economic situation can affect the scale of advertisements. Therefore, research tha t includ es the pre ceding period as well as the period after the oil spill can examine the relation ship between the tone of the articles and the scale of corporate advertisements more rigidly.

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83 APPENDIX A CODING SHEET FOR CONTENT ANALYSIS V1. Coder 1.Sa nghoon Lee 2. V2. Newspaper 1. Chosun 2.Donga 3. Chungang 4. Hankyorae 5. Kyunghyang V3 Length of the article_____________ words V4 Date of news coverage________________ ex) 20071207 V 5 Tone relative to Samsung articles Tone relative to Sams ung articles Negative Neutral Positive 1 2 3 4 5 V6. Topics of the news articles Present 1 absent 0 1 Samsung's response toward the oil spill (S amsungs compensation, volunteerism and CSR activity) 2 Actions of impacted areas residents 3 Pr oblems in compensation process 4 Blame placed on Samsung for their irresponsibility 5 Facts about the oil spill (time, place, d egree of damage etc.) 6 Residents' hardships of lives 7 Critique /ask for the response of the government 8 The court process or decision for oil spill 9 External publics volunteerism 10. Others V 7 Presence of Samsungs crisis response strategy Present 1 absent 0 If present, move to V 8 V 8 Strategy appeared in article Present 1 absent 0 1 Attacking the Accuser The organization confronts th e person or group that claims that a crisis exists. The response may include a threat to use force (e.g., a lawsuit) against the accuser, e.g., We will sue the people who inten d to harm our reputation with unverified rumor 2 Denial The organization stat es that no crisis exists. The response may include explaining why there is no crisis, e.g., T he oil spill did not happen in Taean County. 3 Scapegoating Some other person or group outside the organization is blamed for the crisis, e.g., The oil spill oc curred because the oil tanker, Herbei Spirit did not avoid the barge. 4 Excusing The organization tries to minimize the organizations responsibility for the crisis. The response can include denying any intention to do harm or claiming that the

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84 organizati on had no control of the events which led to the crisis, e.g., Terrible weather led to the crash and the leakage of the oil. We made efforts to avoid the crash. 5 Justification The organization tries to minimize the perceived damage associated with the crisis. The response includes stating that there were no serious damages or injuries or claiming that the victims deserved what they received, e.g., The financial damage and environmental damage are expected to be smaller than expected 6 Compensation T he organization provides money or other gifts to the victims, e.g., Samsung announced that it donate 1,000,000,000 won in order to recover the environment and help the Taean residents 7 Apology The organization publicly states that the organization take s full responsibility for the crisis and asks forgiveness, e.g., We are fully responsible for the Taean oil spill accident and We are really sorry for that 8 Reminding The organization tells stakeholders about its past good works, e.g., We have con ducted various corporate social responsibility activities such as anti -poverty and sports promotions 9 Ingratiation The organization praises stakeholders, e.g., We are proud that we ha ve successfully led a diverse range of projects as a world -class pla yer in the shipbuilding, offshore plant, construction and engineering, and digital system industries, and The support of our loyal shareholders will help us to maintain and increase the investment value of our stock. 10. Victimage The organization explai ns how it too is a victim of the crisis, e.g., We are also suffering from the oil spill accident in terms of not only financial aspects but also reputational ones 11. Too soon to know/No answer The organization does not react at all or postpone stating th eir standpoints, e.g., It s not time to say something. Nothing has decided yet. 12. Others.

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85 APPENDIX B CODING BOOK FOR CONTENT ANA LYSIS Var iable Definitions Coding 1 Coder 1. Sanghoon Lee 2. 2 Newspaper 1 ) Chosun 2 ) Donga 3 ) Chungang 4 ) Hankyorae 5) Kyung hyang 3 Length The number of the words of the news article Num 4 Date of news coverage Num 5 Tone relative to Samsung articles 1) Very negative 2) Negative 3) Neutral 4) Positive 5) Very positive 6 Topics of the news articles 1. Samsung's response t oward the oil spill (S amsungs compensation, volunteerism and CSR activity) 2. Actions of impacted area's residents 3. Problems in compensation process 6. Blame placed on Samsung for their irresponsibility 7. Facts about the oil spill (time, place, degree of damage etc) 8. Residents' hardships of lives 9. Critique or ask for the response of the government 10. The court process or decision for oil spill 11. External publics volunteerism 12.Others 0) Absence 1) Presence 7 Samsungs crisis response strateg y in the article 0) Absen ce 1) Presen ce If present, move to var. 8 Strategy appeared in article 8 1. Attacking the Accuser 2. Denial 3. Scapegoating 4. Excusing 5. Justification 6. Compensation 7. Apology 0) Absence 1) Presence

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86 8. Reminding 9. Ingratiation 10. Victimage 11. Too soon to know/No answer 12. Others

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87 APPENDIX C THE COST OF NEWSPAPER ADVERTISEMENTS Table C 1 The cost of newspaper advertisement s News organization Main section Economy section Weekend section/etc Page 1 (color) 3 (color) 5 (color) Other Back C olor 1 Color 3 color Other Back color 1 color Other Back Color color Black 4dan 37 7dan 15 7,9 Other Other color B lack color Black Chosun Chungang Donga 61,050 50,000 170 150 140 130 70 notice 110 180 140 110 10 0 50 140 100 70 40 100 Hankyorae 37,000 25,000 70 60 40 80 60 40 30 50 --Kyunghyang 27,750 20,000 60 50 30 70 50 35 25 50 --Unit: KRW 1,000, 1 dan by 1 cm)

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BIOGRAPHICAL SKETCH Sanghoon Lee was born in South Korea. He received his bachelors degree in mass communication from Yonsei Un iversity, South Korea, in 2006. He completed h is Master of Arts in Mass Communication at University of Florida with an emphasis in public relations During his graduate study, his academic interests were crisis management and corporate social responsibility. Upon graduation, he plans to begin his professional career in the corporate sector in South Korea