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[Note: This is my original research into the role of social media in crisis communications. First published in 2010, many of the points are as valid today, as they were back then. Hope you find the article useful.]
Introduction
Research by Brand Finance [1] has shown that a company’s brand can account for as much as 84% [2] of its total enterprise value and, based on the size of the enterprise, this can be quite substantial. In its 2007 Report on the World’s Most Valuable Brands, Brand Finance valued Coca-Cola’s branding at $43.1 trillion. Given a brand’s significant contribution to an enterprises’ overall value, companies must work to protect their image and reputation in any business crisis. Failing to do so can result in nett losses of up to 15% [3] of enterprise value, while properly doing so, can add an average of 5%.
Defined as any event that can have a material impact on a company, a business crisis characteristically threatens the company’s survival, occurs suddenly, and requires immediate and complete management attention. Actions taken by the company to mitigate the crisis is known as Crisis Management. As all crisis will affect a company’s image and reputation to a certain degree, integral to Crisis Management is the need to protect the company’s credibility and good reputation. This aspect of Crisis…
