Crisis communication under transformative change: The ...eprints.qut.edu.au/45481/1/Amisha_Patel_Thesis.pdf · CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE 1 Crisis communication

CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE

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Crisis communication under transformative change:

The emergent context and roles

of primary and secondary organisations

A thesis submitted in accordance with the requirements for the degree of Doctor of

Philosophy at the Queensland University of Technology

by

Amisha Madhuri Annand Patel

BBus(Hons)

School of Advertising, Marketing and Public Relations, QUT Business School,

Queensland University of Technology

Australia

April

2011


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Key Words

Crisis communication, public relations, change, punctuated equilibrium theory,

pharmaceutical industry


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Abstract

In an era of complex challenges that draw sustained media attention and

entangle multiple organisational actors, this thesis addresses the gap between current

trends in society and business, and existing scholarship in public relations and crisis

communication. By responding to calls from crisis communication researchers to

develop theory (Coombs, 2006a), to examine the interdependencies of crises

(Seeger, Sellnow, & Ulmer, 1998), and to consider variation in crisis response

(Seeger, 2002), this thesis contributes to theory development in crisis

communication and public relations. Through transformative change, this thesis

extends existing scholarship built on a preservation or conservation logic where

public relations is used to maintain stability by incrementally responding to changes

in an organisation‘s environment (Cutlip, Center, & Broom, 2006; Everett, 2001;

Grunig, 2000; Spicer, 1997). Based on the opportunity to contribute to ongoing

theoretical development in the literature, the overall research problem guiding this

thesis asks:

How does transformative change during crisis influence corporate actors’

communication?

This thesis adopts punctuated equilibrium theory, which describes change as

alternating between long periods of stability and short periods of revolutionary or

transformative change (Gersick, 1991; Romanelli & Tushman, 1994; Siggelkow,

2002; Tushman, Newman, & Romanelli, 1986; Tushman & Romanelli, 1985). As a

theory for change, punctuated equilibrium provides an opportunity to examine public

relations and transformative change, building on scholarship that is based primarily


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on incremental change. Further, existing scholarship in public relations and crisis

communication focuses on the actions of single organisations in situational or short-

term crisis events. Punctuated equilibrium theory enables the study of multiple crises

and multiple organisational responses during transformative change. In doing so,

punctuated equilibrium theory provides a framework to explain both the context for

transformative change and actions or strategies enacted by organisations during

transformative change (Tushman, Newman, & Romanelli, 1986; Tushman &

Romanelli, 1985; Tushman, Virany, & Romanelli, 1986). The connections between

context and action inform the research questions that guide this thesis:

RQ1: What symbolic and substantive strategies persist and change as crises

develop from situational events to transformative and multiple linked events?

RQ2: What features of the crisis context influence changes in symbolic and

substantive strategies?

To shed light on these research questions, the thesis adopts a qualitative

approach guided by process theory and methods to explicate the events, sequences

and activities that were essential to change (Pettigrew, 1992; Van de Ven, 1992).

Specifically, the thesis draws on an alternative template strategy (Langley, 1999) that

provides several alternative interpretations of the same events (Allison, 1971;

Allison & Zelikow, 1999). Following Allison (1971) and Allison and Zelikow

(1999), this thesis uses three alternative templates of crisis or strategic response

typologies to construct three narratives using media articles and organisational

documents. The narratives are compared to identify and draw out different patterns

of crisis communication strategies that operate within different crisis contexts. The


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thesis is based on the crisis events that affected three organisations within the

pharmaceutical industry for four years. The primary organisation is Merck, as its

product recall crisis triggered transformative change affecting, in different ways, the

secondary organisations of Pfizer and Novartis. Three narratives are presented based

on the crisis or strategic response typologies of Coombs (2006b), Allen and Caillouet

(1994), and Oliver (1991).

The findings of this thesis reveal different stories about crisis communication

under transformative change. By zooming in to a micro perspective (Nicolini, 2009)

to focus on the crisis communication and actions of a single organisation and

zooming out to a macro perspective (Nicolini, 2009) to consider multiple

organisations, new insights about crisis communication, change and the relationships

among multiple organisations are revealed at context and action levels. At the

context level, each subsequent narrative demonstrates greater connections among

multiple corporate actors. By zooming out from Coombs‘ (2006b) focus on single

organisations to consider Allen and Caillouet‘s (1994) integration of the web of

corporate actors, the thesis demonstrates how corporate actors add accountability

pressures to the primary organisation. Next, by zooming further out to the macro

perspective by considering Oliver‘s (1991) strategic responses to institutional

processes, the thesis reveals a greater range of corporate actors that are caught up in

the process of transformative change and accounts for their varying levels of agency

over their environment.

By zooming in to a micro perspective and out to a macro perspective

(Nicolini, 2009) across alternative templates, the thesis sheds light on sequences,


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events, and actions of primary and secondary organisations. Although the primary

organisation remains the focus of sustained media attention across the four-year time

frame, the secondary organisations, even when one faced a similar starting situation

to the primary organisation, were buffered by the process of transformative change.

This understanding of crisis contexts in transforming environments builds on

existing knowledge in crisis communication.

At the action level, the thesis also reveals different interpretations from each

alternative template. Coombs‘ (2006b) narrative shows persistence in the primary

organisation‘s crisis or strategic responses over the four-year time frame of the

thesis. That is, the primary organisation consistently applies a diminish crisis

response. At times, the primary organisation drew on denial responses when

corporate actors questioned its legitimacy or actions. To close the crisis, the primary

organisation uses a rebuild crisis posture (Coombs, 2006). These finding are

replicated in Allen and Caillouet‘s (1994) narrative, noting this template‘s limitation

to communication messages only. Oliver‘s (1991) narrative is consistent with

Coombs‘ (2006b) but also demonstrated a shift from a strategic response that signals

conformity to the environment to one that signals more active resistance to the

environment over time. Specifically, the primary organisation‘s initial response

demonstrates conformity but these same messages were used some three years later

to set new expectations in the environment in order to shape criteria and build

acceptance for future organisational decisions. In summary, the findings demonstrate

the power of crisis or strategic responses when considered over time and in the

context of transformative change.


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The conclusions of this research contribute to scholarship in the public

relations and management literatures. Based on the significance of organisational

theory, the primary contribution of the theory relates to the role of

interorganisational linkages or legitimacy buffers that form during the punctuation of

equilibrium. The network of linkages among the corporate actors are significant also

to the crisis communication literature as they form part of the process model of crisis

communication under punctuated equilibrium. This model extends existing research

that focuses on crisis communication of single organisations to consider the

emergent context that incorporates secondary organisations as well as the localised

contests of legitimacy and buffers from regulatory authorities. The thesis also

provides an empirical base for punctuated equilibrium in public relations and crisis

communication, extending Murphy‘s (2000) introduction of the theory to the public

relations literature. In doing this, punctuated equilibrium theory reinvigorates

theoretical development in crisis communication by extending existing scholarship

around incrementalist approaches and demonstrating how public relations works in

the context of transformative change.

Further research in this area could consider using alternative templates to

study transformative change caused by a range of crisis types from natural disasters

to product tampering, and to add further insight into the dynamics between primary

and secondary organisations. This thesis contributes to practice by providing

guidelines for crisis response strategy selection and indicators related to the

emergent context for crises under transformative change that will help primary and

secondary organisations‘ responses to crises.


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Table of Contents

Key Words ................................................................................................................... 2

Abstract ........................................................................................................................ 3

Table of Contents ......................................................................................................... 8

List of Figures ............................................................................................................ 13

List of Tables.............................................................................................................. 14

Abbreviations ............................................................................................................. 16

Declaration of Originality .......................................................................................... 17

Dedication .................................................................................................................. 18

Acknowledgements .................................................................................................... 19

CHAPTER ONE ........................................................................................................ 20

Introduction ................................................................................................................ 20

1.1 Background to Research .................................................................................... 20

1.2 The Research Problem ....................................................................................... 24

1.3 Justification for the Research ............................................................................. 28

1.4 Research setting ................................................................................................. 32

1.5 Methodology ...................................................................................................... 33

1.6 Definitions of Key Terms ................................................................................... 36

1.7 Limitations and Scope of Research .................................................................... 39

1.8 Outline of Thesis ................................................................................................ 42

1.9 Conclusion.......................................................................................................... 43

CHAPTER TWO ....................................................................................................... 44

Literature Review ....................................................................................................... 44

2.1 Crisis Communication Research ........................................................................ 44

2.1.1 Rationales of Existing Crisis Communication Research .......................... 45

2.1.1.1 Defining Crisis and Crisis Communication ........................................ 46

2.1.1.2 Crisis Response Typologies using Qualitative Research .................... 48

2.1.1.3 Crisis Response Typologies using Quantitative Research .................. 54

2.1.2 Alternative Views: Crisis Communication Research and Change ............ 57

2.1.2.1 New Directions in Crisis Communication Research ........................... 61

2.1.3 Punctuated Equilibrium and Public Relations........................................... 63

2.2 Punctuated Equilibrium Theory ......................................................................... 70

2.2.1 Origins of Punctuated Equilibrium Theory ............................................... 70

2.2.2 Context: Macro Level of Punctuated Equilibrium Theory ....................... 73

2.2.3 Action: Micro Level of Punctuated Equilibrium Theory .......................... 77

2.2.4 Conclusions and Implications for Study ................................................... 82


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2.3 Synthesising Context and Action through Punctuated Equilibrium Theory ...... 83

2.3.1 Context in Punctuated Equilibrium and Crisis Communication ............... 85

2.3.1.1 Punctuated Equilibrium Theory and Context ...................................... 86

2.3.1.2 Crisis Communication and Context .................................................... 87

2.3.2 Action Level: Crisis Response Typologies during Equilibrium and

Punctuations ....................................................................................................... 90

2.3.2.1 Punctuated Equilibrium Theory and Organisational Actions ............. 90

2.3.2.2 Crisis Communication and Organisational Actions ............................ 91

2.3.2.3 Existing Crisis Response Typologies .................................................. 92

2.3.2.4 Integrating Change into Existing Crisis Response Typologies ........... 98

2.3.2.5 Summary of Context and Actions and Implications for Study ......... 103

2.3.3 Synthesising Punctuated Equilibrium Theory and Crisis Communication

.......................................................................................................................... 104

2.3.3.1 The Trigger for Punctuation .............................................................. 105

2.3.3.2 Punctuations: Focusing and Emergent Crisis Events ........................ 108

2.3.3.3 Ongoing Crisis Events ...................................................................... 113

2.3.3.4 Implications for Research ................................................................. 116

2.4 Research Questions .......................................................................................... 118

2.4.1 Guiding Research Questions ................................................................... 119

2.4.1.1 Communication Action ..................................................................... 120

2.4.1.2 Linking Context and Communication Action ................................... 121

2.4.1.3 Research Propositions ....................................................................... 122

2.5 Conclusion........................................................................................................ 123

CHAPTER THREE .................................................................................................. 124

Methodology ............................................................................................................ 124

3.1 Justification for Research Paradigm ................................................................. 124

3.2 Methodology .................................................................................................... 126

3.2.1 Qualitative Research ............................................................................... 127

3.2.2 Process Theory and Research.................................................................. 130

3.3 Research Procedures ........................................................................................ 135

3.3.1 Case Study Selection ............................................................................... 135

3.3.2 Sources of Evidence ................................................................................ 138

3.3.3 Media Reporting of Organisations .......................................................... 141

3.3.4 Organisational Documents ...................................................................... 143

3.3.5Additional documents .............................................................................. 144

3.3.6 Management of Data ............................................................................... 144


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3.4 Data Analysis ................................................................................................... 145

3.4.1 Time Ordered Displays ........................................................................... 146

3.4.2 Narrative Construction by Alternative Templates .................................. 152

3.4.2.1 The Role of Narratives in Process Research ..................................... 152

3.4.2.2 The Construction of Narratives in this Thesis................................... 154

3.4.3 Presentation of Patterns in Data .............................................................. 160

3.4.4 Comparisons of Alternative Templates ................................................... 163

3.5 Quality of Research .......................................................................................... 164

3.6 Limitations of the Research ............................................................................. 167

3.7 Ethical Consideration ....................................................................................... 169

3.8 Conclusion........................................................................................................ 170

CHAPTER FOUR .................................................................................................... 171

Results ...................................................................................................................... 171

4.1 Background of Merck, Pfizer and Novartis ..................................................... 172

4.1.1 Merck & Co ............................................................................................ 173

4.1.2 Pfizer Inc ................................................................................................. 173

4.1.3 Novartis ................................................................................................... 174

4.2 Description of Key Events ............................................................................... 175

4.2.1 Starting Points: Overview of Pharmaceutical Industry ........................... 176

4.3 Alternative Template 1: Restoring Reputations through Coombs‘ Theory ..... 178

4.3.1 Withdrawal of Vioxx............................................................................... 182

4.3.2 Merck‘s ongoing crisis ............................................................................ 188

4.3.2.1 Merck‘s Marketing Strategies ........................................................... 189

4.3.2.2 Merck‘s Internal Communication ..................................................... 190

4.3.2.3 Response of FDA .............................................................................. 194

4.3.2.4. Vioxx and Coombs ........................................................................... 195

4.3.3 Response to Senate Committee ............................................................... 195

4.3.4 Reaction to the Bextra Withdrawal ......................................................... 199

4.3.5 Merck‘s Defence against Litigation ........................................................ 201

4.3.5.1 Ernst Trial.......................................................................................... 202

4.3.5.2 Humeston Trial.................................................................................. 204

4.3.5.3 Other Trials ....................................................................................... 206

4.3.6 Defence against Research Findings ........................................................ 208

4.3.6.1 Merck‘s Defence against its Own Data ............................................. 208

4.3.6.2 Merck‘s Defence against New Data .................................................. 210


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4.3.7 Settlement of Litigation........................................................................... 213

4.3.8 Summary of Coombs‘ Template ............................................................. 216

4.4 Alternative Template 2: Restoring Legitimacy in Response to Accountability

Pressures ................................................................................................................. 219


4.4.2 Responses to the Withdrawal of Vioxx ................................................... 228

4.4.2.1 Pfizer‘s Reactions.............................................................................. 229

4.4.2.2 Pressures on Merck ........................................................................... 231

4.4.2.3 Spotlight on Regulators ..................................................................... 233

4.4.2.4 Pfizer under Threat ............................................................................ 236

4.4.2.5 Discussion of Cox-2 Drug Safety ..................................................... 241

4.4.2.6 Withdrawal of Bextra ........................................................................ 245

4.4.2.7 FDA Actions Trigger Response from Web of Actors ....................... 246

4.4.3 Defence against Litigation ...................................................................... 248

4.4.3.1 Vioxx Trials with Strong Media Coverage ....................................... 248

4.4.4 Defence against New Data ...................................................................... 251

4.4.5 Changes to Legislation ............................................................................ 254

4.4.6 Settlement of Litigation........................................................................... 257

4.4.7 Summary of Allen and Caillouet‘s (1994) Template .............................. 258

4.5 Alternative Template 3: Building Legitimacy across Multiple Organisations

through Oliver‘s Framework .................................................................................. 261


4.5.1.1 Pressure and Opportunities for Pfizer ............................................... 268

4.5.1.2 Pressure from Congress .................................................................... 271

4.5.1.3 FDA Acts .......................................................................................... 274

4.5.2 Influence of the FDA .............................................................................. 280

4.5.2.1 Influence of the FDA on Bextra ........................................................ 282

4.5.2.2 Changes to the FDA .......................................................................... 283

4.5.3 Changes to Medical Reporting ................................................................ 288

4.5.4 Litigation ................................................................................................. 292

4.5.4.1 Liability trials .................................................................................... 292

4.5.4.2 Legal settlement ................................................................................ 295

4.5.5 Summary of Oliver‘s Template ............................................................... 296

4.6 Summary and Analysis of Crisis Communication Responses ......................... 299

4.6.1 Visual Maps using Coombs‘ Narrative ................................................... 301

4.6.2 Visual Maps using Allen and Caillouet‘s Narrative ............................... 304


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4.6.3 Visual Maps using Oliver‘s Narrative..................................................... 307

4.7 Comparison of Alternative Templates ............................................................. 310

4.7.1 Three Different Stories of and Drivers for Crisis Communication ......... 312

4.7.2 Differences in Interpretation ................................................................... 314

4.8 Conclusion........................................................................................................ 321

CHAPTER FIVE ...................................................................................................... 323

Conclusions and implications .................................................................................. 323

5.1 Summary of Findings and Theoretical Implications ........................................ 325

5.2 Conclusions about Research Questions ........................................................... 326

5.2.1 Research Question One: Persistence of and Changes in Crisis

Communication and Action ............................................................................. 327

5.2.1.1 Symbolic Strategies Prepare for and Support Substantive Strategies

....................................................................................................................... 329

5.2.1.2 Symbolic Strategies Adapt to Local Sites of Contested Legitimacy 334

5.2.2 Research Question Two: Uncovering the Features of Crisis Context..... 340

5.2.2.1 Model of Insight Formation Creates an Emergent Context for Crisis

....................................................................................................................... 341

5.3 Conclusions about the Research Problem ........................................................ 346

5.4 Implications for Theory .................................................................................... 351

5.4.1 Implications for Public Relations based on a New Theory for Change .. 352

5.4.2 Implications for Public Relations based on Crisis Communication during

Punctuations of Equilibrium ............................................................................ 355

5.4.3 Implications for Public Relations based on the Emergent Context and

Competitor Dynamics ..................................................................................... 356

5.4.4 Implications for Organisational Theory based on the Role of

Interorganisational Linkages and Buffers ........................................................ 358

5.4.5 Implications for Organisational Theory based on Communication Actions

during Transformative Change ........................................................................ 359

5.5 Implications for Practice .................................................................................. 361

5.5.1 Crisis Communication Decision-Making for Primary and Secondary

Organisations ................................................................................................... 361

5.5.1.1 Guidelines for Strategy Selection ..................................................... 362

5.5.1.2 Indicators of a Shift from Crisis Event to Focusing Event ............... 366

5.5.2 Integration of Change in Crisis Management ......................................... 368

5.6 Limitations ....................................................................................................... 370

5.7 Implications for Further Research .................................................................... 372

5.8 Conclusion........................................................................................................ 378

REFERENCES ......................................................................................................... 379


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List of Figures

Figure 2.1 The Relationship between Context and Action Levels................................... 85

Figure 2.2 Crisis Evolution under Punctuated Equilibrium Theory ............................... 105

Figure 3.1 Illustration of Data Analysis Process .............................................................. 156

Figure 4.1 Coombs‘ Crisis Response Strategies .............................................................. 182

Figure 4.2 Allen and Caillouet‘s Message Strategies ...................................................... 223

Figure 4.3 Merck‘s Web of Actors .................................................................................. 228

Figure 4.4 Same Start but Different Sequence of Events for Vioxx and Celebrex ......... 240

Figure 4.5 Oliver‘s Strategies .......................................................................................... 265

Figure 4.6 Explaining Differences in Vioxx and Celebrex ............................................. 279

Figure 4.7 Visual Map of Merck‘s Strategies using Coombs‘ Template ......................... 302

Figure 4.8 Visual Map of Merck‘s Crisis Communication using Allen and

Caillouet‘s Template ....................................................................................................... 305

Figure 4.9 Visual Map of Merck and Pfizer using Oliver‘s Template............................. 308

Figure 4.10 Zooming in and out of Alternative Templates ............................................. 311

Figure 4.11 Drivers for Change across Alternative Templates ........................................ 314

Figure 5.1 Hierarchy of Crisis Communication Strategies .............................................. 332

Figure 5.2 Crises as Core and Peripheral Events for Multiple Organisations ................ 337

Figure 5.3 Regulatory Insights under Formation ............................................................. 343

Figure 5.4 Process Model or Crisis Communication under Punctuated Equilibrium ..... 348


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List of Tables

Table 2.1 Qualitative Crisis Communication Case Studies ............................................. 52

Table 2.2 Coombs‘ Crisis Response Typology ................................................................ 56

Table 2.3 Strategies for Convergent Change ................................................................... 78

Table 2.4 Strategies for Transformative Change ............................................................. 80

Table 2.5 Coombs‘ Crisis Response Typology ................................................................ 93

Table 2.6 Allen and Caillouet‘s Crisis Response Typology ............................................ 96

Table 2.7 Oliver‘s Typology of Strategic Responses to Institutional Processes.............. 100

Table 3.1 Top Product Recalls in the United States ........................................................ 137

Table 3.2 Number of Media Articles per Year ................................................................ 143

Table 3.3 Number of Media Releases per Year ............................................................... 144

Table 3.4 Sample of Events Coded .................................................................................. 148

Table 3.5 Sample of Context of Events ........................................................................... 150

Table 3.6 Theoretical Emphasis of Alternative Templates .............................................. 155

Table 3.7 Alternative Template Strategies ....................................................................... 157

Table 4.1 Timeline of Key Events ................................................................................... 175

Table 4.2 Coombs‘ Crisis Response Strategies ............................................................... 179

Table 4.3 Merck Statements during Vioxx Withdrawal .................................................. 184

Table 4.4 Reinforcement of ‗Unexpectedness‘ of Trial Results ...................................... 186

Table 4.5 Merck Bolsters Financial Confidence .............................................................. 187

Table 4.6 Merck‘s Actions over Vioxx ............................................................................ 192

Table 4.7 Internal Emails Explained ................................................................................ 193

Table 4.8 FDA Advisory Committee‘s Votes on COX-2 ................................................ 200

Table 4.9 Vioxx Product Liability Trials in Media Reporting Order .............................. 207

Table 4.10 Merck Responses to NEJM ............................................................................ 210

Table 4.11 Allen and Caillouet‘s Message Strategies ...................................................... 220

Table 4.12 Merck Statements during Vioxx Withdrawal ................................................ 224

Table 4.13 Ingratiation Strategies Used by Merck during Vioxx Withdrawal ................ 226

Table 4.14 Timeline of Events ......................................................................................... 229

Table 4.15 Merck‘s Factual Distortion Responses to Medical Researchers .................... 232

Table 4.16 Merck‘s Factual Distortion Messages ............................................................ 233

Table 4.17 Comparisons between Celebrex and Vioxx ................................................... 238

Table 4.18 Merck‘s Responses to New Data on Vioxx ................................................... 252


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Table 4.19 Oliver‘s Strategic Responses to Institutional Processes ................................ 263

Table 4.20 Strategies Used by Pfizer in Response to the Vioxx Withdrawal .................. 269

Table 4.21 Pfizer Responses ............................................................................................ 276

Table 4.22 Changes to FDA policy and decision-making ............................................... 285

Table 4.23 Vioxx Product Liability Trials in Media Reporting Order ............................ 294

Table 5.1 Conclusions and Contributions of Research Question One ............................. 328

Table 5.2 Conclusions and Contributions of Research Question Two ............................ 341

Table 5.3 Macro Strategies and Recommendations ......................................................... 364


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Abbreviations

APPROVe – Adenomatous Polyp Prevention on VIOXX

COX-1 – Cyclooxygenase-1 (older generation drug compared to Vioxx, Celebrex,

and Bextra)

COX-2 – Cyclooxygenase-2 (base for Vioxx, Celebrex, and Bextra)

FDA – Food and Drug Administration

HMO – Health Maintenance Organisation

NEJM – New England Journal of Medicine

PhRMA – Pharmaceutical Research and Manufacturers of America

VICTOR – Vicriviroc in Combination Treatment with an Optimized Antiretroviral

Therapy Regimen in HIV-Infected Treatment-Experienced Subjects

VIGOR – Vioxx Gastrointestinal Outcomes Research


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Declaration of Originality

The work contained in this thesis has not been previously submitted to meet

requirements for an award at this or any other higher education institution. To the

best of my knowledge and belief, the thesis contains no material previously

published or written by another person except where due reference is made.

Signed:

Date:


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Dedication

This thesis is dedicated to

my father Dr Anand Kumar Patel and my mother Dr Madhu Anand Patel

who have taught me the most about perseverance and love.


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Acknowledgements

The passion for learning and sharing is what drives the people who have supported

me throughout this study. Thank you for inspiring me every day.

Thank you to my supervisory team of Brett Martin, Lisa Bradley, Jim Everett,

Stephen Cox, and Glen Broom. Whether it‘s been via a hallway chat or a two-hour

meeting, by sharing how you think, you have taught me so much about learning and

wisdom. Thank you for being such wonderful mentors and ingraining the ‗so what?‘

question into my (almost—shoes excluded) everyday thinking. It is indeed a

privilege to learn from you.

To Jane Browning and Jennifer Bartlett, for providing me with such constructive

ways to move forward. From ―no more dramas‖ to ―these streets will make you feel

brand new‖: you have given me the soundtrack for the study and believed in me

every step of the way.

To Robina Xavier and Ian Lings for showing me that this was within my reach.

Thank you for being awesome teachers and researchers, always listening, and

picking up a whiteboard marker to help me map out ideas.

A special thanks to Dorothy Chapman for editing the thesis and to Caroline Hatcher

and Karen Becker for their insights during my final seminar and to the examiners—

you‘ve all given me the chance to strengthen the contributions of the study.

*Snaps* to the hallway monitors of Elizabeth Macpherson, Kim Johnston, Ingrid

Larkin, Bill Proud, Connie Bianchi, Gina Courtney, Katherine Harkin, Tanya Wolfe,

Amanda Beatson, Helen O‘Donnell, and Anne Lane. And to our always amazing

past and present professional staff Janelle Valentine, Sue Chapple, Robyn Sinfield,

Jenny Hall, Elyse Knowles, Maree Turner, Naomi Davidson, Tania Campbell,

Stephanie Parker and Terece Edgar who make administrative life a breeze.

Thank you to my buddies in industry and in fun: Tenile Bishop, Kiara Bowles,

Michelle Palmer, Monica McCabe, Melanie Mayne-Wilson and Kirsty McDonald.

Thanks for celebrating the milestones along the way.

And to the most fabulous friends I could ever wish for: Liz Gofton, Helen Browning,

Louisa Aherne, Duncan Smith, Matthew Hart, Sharyn McCormack, Tanya deKroo,

Kristin Carlos, Heather Harcourt, Linda Henry, Emma Lawlor, and Wendy

McKnight. Thanks for your encouragement, even when I sounded like a broken

record.

And the greatest thanks and love to my family – my husband Vimal, Mum, Dad, my

brother Alok, Aunty Dawn, Uncle Cameron, and Lucy the dog. Thanks for being the

best thinking caps, sounding boards, cooks, and pockets of love a girl could ever ask

for.

To my guiding lights who are always looking out for me: Mamaji, Chotai Dada, and

Gordon Jenkinson. I am blessed to have such an inspirational group of people in my

life.


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CHAPTER ONE

Introduction

1.1 Background to Research

Uncertainty, surprise, and disruption are common features in business and

society, yet most organisations and disciplines are engineered to embrace stability

and certainty (Ramo, 2009). At the same time, organisational crisis events such as

the BP oil disaster, the collapse of Lehman Brothers, Bear Stearns and Storm

Financial, and natural disasters remind organisations of the importance of crisis

management and communication. Today‘s complex problems and crises make

significant the role and value of public relations and crisis communication.

Crisis communication has developed from the public relations literature to

explain the way organisations communicate during crises (Seeger et al., 1998). The

rationale for existing crisis communication is based on a logic of preservation of

stability and restoration of reputation and legitimacy. In this way, crisis

communication is used to achieve outcomes of positive reputations and legitimacy

for organisations. As a result of this logic, existing research is based largely on

situational or short-term crisis events using cross-sectional design.

Early research used rhetoric and impression management to produce

typologies of crisis communication that continue to be used as the basis for applied

case studies of single organisations (Allen & Caillouet, 1994; Benoit, 2000; Benoit

& Brinson, 1994; Hearit, 1994, 2001; Hearit & Brown, 2004; Hearit & Courtright,

2003). These typologies were subsequently adapted by quantitative researchers to

produce decision-making frameworks that enable crisis managers to select the most


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effective sequence of standardised crisis response strategies in order to influence

stakeholder perceptions of crises and preserve organisational reputation (Coombs,

1998, 2002, 2004a, 2006a, 2007b; Coombs & Holladay, 2002, 2004, 2006).

As a whole, existing research in crisis communication serves the strong

practical requirement of the discipline (Jaques, 2009; Seeger et al., 1998). Yet even

the practical usefulness of this research is limited to communication decisions that

are based on preserving stability or a gradual, moving equilibrium between single

organisations and their environments (Grunig, 2000). By focusing on situational

crisis events and single organisations, these approaches have largely overlooked

what Seeger et al. (2005) call a ―fundamental suspension or disruption of

organisational stability and status quo‖ (p. 80) across multiple organisations. There

have been no studies of crisis communication across multiple and linked crisis

events that affect multiple organisations, an area that offers new theoretical

opportunities for scholarship in crisis communication and public relations.

Today‘s complex problems necessitate crisis communication research under

complex conditions of uncertainty, surprise and transformative change that

fundamentally suspend or disrupt organisational stability (Seeger, Ulmer, Novak, &

Sellnow, 2005). In response, research requires new types of theoretical and practical

solutions, creating opportunities for extending crisis communication and public

relations research.

Public relations scholars provide some support for advancing the genre of

crisis communication beyond ―objective phenomena‖ and standardised decision-


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based frameworks (Hearit & Courtright, 2003, p. 80). Crisis communication

researchers are calling for work that overcomes the existing perspective of crisis

where crisis response strategies are enacted to restore reputation or legitimacy. Such

approaches are held to be ill-equipped to deal with complex and unpredictable

change (Gilpin & Murphy, 2006; Gower, 2006). Theorists support the need for crisis

communication research under conditions of transformative change that disrupts a

return to stability as opposed to research that seeks to ensure the effectiveness of

crisis communication in restoring reputations and legitimacy. Researchers are calling

for studies that examine the interdependencies of crises (S. Kim, Avery, & Lariscy,

2009; Seeger et al., 1998), variation in crisis response strategies (S. Kim et al., 2009;

Seeger, 2002), and the deep structures behind public relations responses (Seeger,

Sellnow, & Ulmer, 2001).

Crisis communication researchers have suggested punctuated equilibrium,

chaos theory, and complexity theory (Gilpin & Murphy, 2006; Gower, 2006; Jaques,

2007; Murphy, 2000, 2007; Seeger, 2002; Seeger et al., 1998; Seeger et al., 2005) as

frameworks to move beyond the notions of controllability that feature in most crisis

work. Under these theories, a crisis is viewed as a change-inducing event that

fundamentally disrupts the status-quo, rendering largely ineffective the standardised

crisis response strategies designed to preserve the status-quo (Seeger et al., 2005).

Within these frameworks, crisis communication cannot be meaningfully reduced to a

set of standardised responses because an organisation‘s future is not able to be

predicted. Even though authors have suggested alternatives to extend crisis

communication research, there has been limited empirical work that explores crisis


23

communication under transformative change that fundamentally suspends

organisational stability (Seeger et al., 2005) and affects multiple organisations.

Punctuated equilibrium theory provides a framework to study crisis

communication when change is transformative and affects multiple organisations

over extended time frames. Punctuated equilibrium theory argues that evolution

occurs through patterns of long periods of stability that are punctuated by short

periods of revolutionary and transformative change (Romanelli & Tushman, 1994).

In this way, change occurs not through continual and incremental improvement but

in more radical ways. Since the 1990s, punctuated equilibrium has become an

established theory to account for change in organisations and industries (Gersick,

1991; Romanelli & Tushman, 1994; Siggelkow, 2002) and public policy

(Baumgartner & Jones, 1991; Birkland, 1998; Jones & Baumgartner, 2005; Jones,

Sulikn, & Larsen, 2003; Nohrstedt, 2008; Schrad, 2007; True, 1999). Punctuated

equilibrium theory offers a way to understand radical changes to patterns of

adaptation in organisational evolution, particularly in the effort to account for change

at the macro level and change within organisations.

The value of the punctuated equilibrium perspective in crisis communication

is supported by Murphy (2000) who defines crises as change-inducing events for

organisations and industries. Yet, there has been little empirical evidence to account

for crisis communication during times of transformative change. By offering a map

for transformative change, punctuated equilibrium theory allows crisis

communication theory to move beyond situational crisis events studied through

cross-sectional design to consider the transformative force of crisis events, indeed


24

that crises punctuate equilibrium, and have implications for crisis communication.

This thesis adopts punctuated equilibrium theory, as it is employed in organisational

theory, as a theoretical framework to explain change in crisis communication when

crisis events trigger transformative change across multiple organisations and

extended time frames. Such an approach will allow crisis communication to draw

implications for the treatment of change in public relations theory.

1.2 The Research Problem

This thesis employs punctuated equilibrium theory as a perspective through

which to study transformative change and its role in crisis communication.

Recognising the extensive research around crisis communication or response

strategies during situational crisis events and frameworks that support crisis as a

change-inducing event, punctuated equilibrium theory connects both the role of

crises as change-inducing events (Murphy, 2000) and the communication role that

occurs within this context. The role and type of crisis communication during

transformative change is empirically absent in crisis communication research.

Because there is little knowledge on this topic and opportunities to extend existing

scholarship around change, the central research problem guiding this thesis is:


communication?

Punctuated equilibrium theory provides an essential perspective to explore

this problem. Within the context of the organisational sciences, the overall thesis of

punctuated equilibrium theory is that organisational evolution occurs through

patterns of long periods of stability that are punctuated by ―short bursts of


25

revolutionary change‖ (Romanelli & Tushman, 1994, p. 1141). Long periods of

organisational stability are framed by deep structures or sets of fundamental choices

that organisations use to structure behaviour and obtain resources from their

environments (Gersick, 1991). Deep structures mesh together organisations and their

environments. This interdependence can create organisational inertia, where an

organisation is resistant to all but incremental change (Tushman & Romanelli, 1985,

p. 177). When punctuations occur, they are triggered by significant change events

that draw attention to and set in place a sequence of events that question and

dismantle the deep structures behind organisational behaviour and communication

(Gersick, 1991; Romanelli & Tushman, 1994; Siggelkow, 2002; Tushman, Newman

et al., 1986).

Punctuations occur when internal or external change threatens organisational

alignment and access to resources (Gersick, 1991). Some of the external triggers for

punctuations are changes in the macro environment, organisational performance,

product-related events or crises (Gersick, 1991; Sabherwal, Hirschheim, & Goles,

2001; Siggelkow, 2002; Tushman, Newman et al., 1986; Tushman, Virany et al.,

1986). While these trigger events are unlikely to be the direct cause of transformative

change, they provide the kinetic energy for transformative change (Gersick, 1991).

The ideal-typical nature of punctuated equilibrium provides an objective

basis to guide thinking, making the theory easily transferable and translatable from

evolutionary studies to organisational and political science (Robinson, 2007) and as

a result, crisis communication. Through the treatment of punctuated equilibrium

theory in both the organisational and public policy literatures, the theory is able to


26

provide a clear indication of the phases of change and the structure, process and

conditions for transformative change. As a result, punctuated equilibrium theory

accounts for both the context for transformative change and the actions of

organisations during transformative change. The duality between context and action

is useful for ongoing research in punctuated equilibrium theory.

At a context level, punctuated equilibrium theory sees change as

transformative and sets guidelines for the conditions of equilibrium, the nature of the

punctuation, and the renewal of equilibrium (Gersick, 1991). Public policy literatures

provide detailed examination of the punctuation itself, drawing on media interest and

attention as critical requirements for transformative change (Baumgartner & Jones,

1991; Birkland, 1998; Jones & Baumgartner, 2005; Jones, True, & Baumgartner,

1997). In the public relations literature, Murphy (2000) describes this as a process

where crises may ―initiate a period of confusion in media coverage followed by the

emergence of a new reputation for the organisation that underwent the crisis‖ (p.

453). A punctuation creates the opportunity for questioning the deep structures that

preserve stability (Gersick, 1991). As a result of this uncertainty, new structures can

emerge to guide the next period of stability (Gersick, 1991).

At the action level, punctuated equilibrium theory accounts for changes in

organisational strategy to complement the context for transformative change.

Organisational actions refer to the substantive and symbolic strategies enacted by

organisations during long periods of stability and punctuations of equilibrium.

During long periods of stability, organisations signal compliance to deep structures

through legitimation, justification, and rationalisation (Gersick, 1991; McDonough,


27

2000; Tushman & Romanelli, 1985). Within this context, organisational

communication delivered by organisational leaders or spokespersons is largely

symbolic, signalling organisational compliance to the logics of the deep structures

that guide organisational behaviour (Tushman & Romanelli, 1985).

However, during punctuations, organisational leaders are required to enact

substantive as well as symbolic strategies (Tushman, Virany et al., 1986).

Substantive strategies may include the reformation of organisational missions and

values, negotiation of power and status, and the employment of new executives

(Tushman, Newman et al., 1986). Because change has the potential to create

uncertainty (Gersick, 1991), organisational leaders must complement substantive

decisions with symbolic strategies that inspire confidence and enthusiasm for new

organisational directions (Tushman, Newman et al., 1986).

This thesis integrates punctuated equilibrium theory with the literature of

crisis communication to explain organisational communication as crisis events

develop into change-inducing events. Punctuated equilibrium theory provides a

means of integrating both context and action, which are essential to change and crisis

communication. The research questions that guide this thesis are:






28

These research questions represent a way to resolve gaps in crisis

communication and extend punctuated equilibrium theory by describing and

explaining crisis communication and the crisis context faced by multiple

organisations during transformative change. These research questions require data at

both the context and action levels with an emphasis of analysis on the action level

through substantive and symbolic strategies. The thesis is a longitudinal study of a

situational crisis that becomes a crisis that induces transformative change and affects

multiple organisations and industry actors. The pharmaceutical industry, and in

particular a product recall is the starting point for discovery. This crisis event led to a

change-inducing crisis affecting three pharmaceutical companies and requiring

regulatory intervention by the Food and Drug Administration.

1.3 Justification for the Research

The applied focus of existing crisis communication research offers limited

opportunities for ongoing or new theory development. The majority of existing crisis

communication research is based on demonstrating the effectiveness of crisis

response strategies that seek to restore image, reputations, and legitimacy. There is

opportunity to move beyond existing theoretical frameworks in public relations and

crisis communication provided by theorists who treat public relations as a series of

incremental adjustments to environments in order to preserve a gradual, moving

equilibrium (see Broom, 2006; Cutlip, Center, & Broom, 2006; Grunig, 1992, 2001,

2006; Grunig, Grunig, & Dozier, 2006).


29

Existing perspectives on change in the public relations literature limit the

ability to account for transformative change and crisis events. In the public relations

literature, the first insights into change were offered by Cutlip and Center in 1952

when they developed the adjustment and adaptation model based on systems theory.

Through this model, public relations activities are used to make incremental changes

to ensure that an organisation aligns with its environment in order to maintain

equilibrium (Cutlip, Center, & Broom, 2006). From a theoretical perspective, this

view of public relations limits change to a preservation role (Sha, 2004), constraining

not only the theoretical scope but quality of practice for crisis communication to a

conservation role, despite holding the potential for transformation.

Crisis communication research, as it is currently practised, must build on the

framework of crisis events as situational events that can be resolved in order to

restore reputation and maintain equilibrium. To do this, crisis communication

researchers could view crisis events not only as manageable but as events that hold

the potential for transformative change. This will enable theoretical development in

the area of crisis communication and public relations.

Advancing the treatment of change in crisis communication offers advantages

to the public relations literature. Punctuated equilibrium theory provides a relevant

theoretical framework to achieve this goal. With Murphy‘s (2000) acknowledgement

in the crisis communication literature, punctuated equilibrium theory provides a way

to see the opportunities brought about by crises. This thesis provides an opportunity

to extend and continue work that treats punctuated equilibrium theory as a lens to

examine crisis communication research.


30

Punctuated equilibrium theory draws together two streams of research in

crisis communication. It provides a space for work that has established typologies of

crisis response strategies (Allen & Caillouet, 1994; Benoit & Brinson, 1994; Hearit,

1995) developing into crisis decision-making models (Coombs, 1995). This work

revolves largely around the action level where the type of situational crisis affecting

a single organisation predicts the selection of an appropriate sequence of strategies

based on stakeholder perceptions of responsibility. These actions are motivated to

restore organisational reputations or legitimacy, considering the immediate context

for single organisations. At the context level, other crisis communication authors

have established frameworks to view crisis events as change inducing events that

have the potential to transform organisations and industries (Seeger, 1986, 2002;

Seeger et al., 1998; Seeger, Sellnow, & Ulmer, 2001; Seeger et al., 2005).

Punctuated equilibrium theory connects the role of crises as change-inducing

events and the role that communication plays within this space. This provides a way

to resolve the central research problem, thereby filling a gap in understanding of the

nature of crisis communication during transformative change. By focusing on the

context and action levels, punctuated equilibrium theory makes significant the role

and power of crisis communication based on the context within which it occurs.

Much of the crisis communication literature occurs with a focus on one

organisation in the short term. The qualitative case study tradition in crisis

communication selects a crisis event, diagnoses the crisis type, and accounts for the

focal organisation‘s actions or crisis response strategies during the crisis. The


31

sampling focus on the immediate crisis responses of single organisations has

perpetuated this incrementalist perspective of change in crisis communication

research. However, crises and public relations have longer-term impacts that reach

beyond the crisis event and focal organisation. Studying crisis events and post-crisis

communication for a significant period of time beyond the crisis event will shed light

not only on the actions of focal organisations but other organisations and institutions

that are affected when situational crisis events become change-inducing events. The

longitudinal focus is supported by methodological perspectives inherent in

punctuated equilibrium theory.

The research also has the potential to contribute back to punctuated

equilibrium theory. Although punctuated equilibrium theory accounts for

organisational communication during periods of stability and transformative change,

empirical studies of punctuated equilibrium theory in organisational theory report on

substantive strategies such as executive succession, changes to organisational

structures and products. The focus on crisis communication in this thesis enables an

opportunity to build knowledge and understanding around the role of symbolic

strategies during punctuations of equilibrium.

Overall, this research uses punctuated equilibrium theory as a theoretical

framework to explain changes in crisis communication and the crisis context across

multiple organisations and extended time frames. The thesis aims to: 1) explore the

adequacy of existing typologies of crisis communication under conditions of

transformative change, and 2) explore the ways multiple organisations communicate

within this context.


32

1.4 Research setting

This thesis is set in the pharmaceutical industry in the United States and

examines the actions and communications of three companies: Merck & Co (known

as Merck), Pfizer, and Novartis. The trigger event for change in this industry was a

voluntary product recall crisis initiated by Merck in relation to Vioxx, a COX-2 pain

relief medication that was one of the organisation‘s top selling pain relief drugs from

2002 to its withdrawal in 2004. Vioxx was recalled by Merck on 30 September 2004

after clinical trials showed it caused heart attacks and strokes, and in some cases,

these were fatal. The crisis event was covered extensively by the mass media in the

United States, drawing attention to Merck‘s decision-making, stock valuations and,

at a broader level, drug safety issues. It was listed as one of Newsweek‘s top product

recall crisis events ("Prominent product recalls in recent history," 2010, February

13).

Based on its significant role in triggering transformative change, Merck was

the primary organisation studied in this thesis. The secondary organisations are

Pfizer and Novartis, which also produced COX-2 drugs. Of these two secondary

organisations, Pfizer was more significantly affected than Novartis as Pfizer faced a

product recall event for one of its drugs, Bextra. Based on media coverage, the thesis

focuses mostly on Merck and Pfizer. The time frame for study is from August 2004

to December 2008. The beginning time allows some exploration of the industry

before the crisis event and the end time signals the finalisation of litigation for Merck

and Pfizer.


33

1.5 Methodology

To explore changes in crisis communication and the crisis context, when

crisis events trigger transformative change across multiple organisations over

extended time frames, this thesis employs a qualitative research approach that is

guided by process theory and methods. A qualitative approach enables the

identification of changes in the crisis communication of multiple organisations as a

situational crisis develops to punctuate equilibrium. The time frame of the thesis is

four years and it captures the actions of three organisations within a context of

transformative change that is triggered by a product recall. The use of a longitudinal

and qualitative approach is consistent with punctuated equilibrium studies where

authors have developed organisational histories in order to map changes to strategy

and structure over time (Romanelli & Tushman, 1994). This approach builds on

existing crisis communication studies by extending the time frame of study and the

number of organisations under investigation.

Because this thesis is concerned with employing the perspective of

punctuated equilibrium to explore implications of transformative change on crisis

communication, process theory offers a way to study how and why change unfolds

in organisations over time by weaving context and action (Langley, 2007; Pettigrew,

1992; Van de Ven & Poole, 2005). Following process theory, this thesis integrates

alternative templates and narratives to guide the sensemaking of process data and

theory (Allison, 1971; Allison & Zelikow, 1999; Langley, 1999). The thesis

comprises of three narratives, each based on an alternative template of crisis

communication or strategic responses to institutional pressures such as crises. The

templates are based on the work of Coombs (2006b) who developed a typology of


34

crisis response strategies using quantitative methods, Allen and Caillouet (1994) who

developed a typology of impression management strategies that organisations can

use in response to crisis events, and Oliver (1991) who developed a typology of

strategic responses to institutional pressures and thus offers a way to consider

organisational agency over its environment. Each narrative connects action and

context to give meaning to the crisis responses of corporate actors.

Consistent with qualitative approaches in punctuated equilibrium and crisis

communication, data were collected from 1,071 print media articles, 91 news

releases or company statements, and 15 annual reports from three organisations from

August 2004 to December 2008 inclusive. The media articles or releases provided

the bulk of the data with annual reports used as a secondary source of evidence to

add further understanding or verification of data analysed in media resources. The

mass media are a recognised source of evaluating the legitimacy of organisational

actions (Trullen & Stevenson, 2006) with newspaper stories being linked to strong

stakeholder recall of information (Deephouse & Carter, 2005). The newspapers

selected for this thesis are The New York Times, Washington Post, and The Wall

Street Journal. These sources were purposively selected based on their high

circulation and their content influence on other media outlets.

Data were analysed in three stages. In the first stage, all incidents and events

were identified during an initial reading of media articles and organisational

documents. These events provided a framework for the construction of each

narrative. In this second stage of analysis, narratives were constructed to tell detailed

stories from raw data of crisis and strategic responses offered through each


35

alternative template. Following Allison (1971), each template provided a unique

theoretical lens through which to construct narratives and explain changes in crisis

communication. In the third and final stage of analysis, patterns of crisis response

strategies were matched to an ideal-type sequence based on the work of Siggelkow

(2002) who applied changes in organisational evolution to five sequence maps for

change: patching, thickening, coasting, misfits, and trimming. This analysis allows

for the examination of the primary and secondary crisis response strategies enacted

by organisations, and enhances the evidence built through each narrative.

The need for three alternative templates was evident when the findings from

each narrative were compared. Although the timeline of events was consistent across

alternative templates, each narrative emphasised different factors and required re-

interpretations of the same events. The comparative analysis involved the zooming in

and out (Nicolini, 2009) of the alternative templates, that is zooming in to take a

micro view of looking at the crisis from the perspective of Merck through Coombs‘

(2006b) framework, and moving up to Allen and Caillouet‘s (1994) framework that

considered how other organisational actors added pressure to Merck‘s responses, and

finally zooming out to a macro perspective through Oliver‘s (1991) framework that

allowed for the consideration of how Merck, Pfizer and Novartis operated. In doing

this, the thesis identified the importance of using the three theories in order to

understand and explain crisis communication during transformative change. The next

section of this chapter sets out the key definitions that guide the thesis.


36

1.6 Definitions of Key Terms

To ensure consistency in interpretation, the definitions for key terms used

throughout the thesis are presented here.

Corporate or organisational actors

Corporate or organisational actors refer to the multiple organisations that are

involved in the crisis events either in a direct or indirect capacity.

Complex crisis event

A complex crisis event is defined as a crisis that is not able to be resolved by

the corporate actors or organisations in the short-term. Unlike situational crisis

events, complex crisis events are likely to involve multiple corporate actors or

organisations and contain a series of linked crisis events. Complex crisis events are

likely to become focusing events for transformative change.

Crisis context

Crisis context refers to the environmental conditions within which crisis

responses or symbolic or substantive strategies are enacted. The crisis context

provides time-specific information that refers to the conditions under which

corporate actions occur. The context provides a framework to give meaning to

actions. In this thesis, crisis context considers both the organisation-centric context

of existing research and emergent context during transformative change.


37

Crisis response strategies

Crisis response strategies is a generic term used to represent the range of

typologies for crisis responses provided by crisis communication researchers. These

strategies represent the action level of punctuated equilibrium theory.

Equilibrium

Equilibrium refers to the long period of stability for organisations (Gersick,

1991; Romanelli & Tushman, 1994). During equilibrium or gradual moving

equilibrium (Grunig, 2000), an organisation or industry maintains rules and

structures. Within the context of this thesis, equilibrium is signalled by the lack of

media attention to an organisation or industry.

Focusing event

A focusing event draws organisational, industry and policy sector attention to

an issue and creates a need for change (Birkland, 1998; Jones & Baumgartner, 2005;

Wood, 2006). Focusing events reduce rapidly the legitimacy of existing structures,

arrangements, and organisational practices. Focusing events produce a foundation

for new ideas by heightening public attention to critical issues (Givel, 2006). In this

study, a focusing event is depicted when the situational crisis event of a product

recall gains sustained media and industry attention.

Punctuated equilibrium theory

In this thesis, punctuated equilibrium theory is used to provide a framework

for long periods of stability marked by short periods of transformative or radical


38

change (Gersick, 1991; Romanelli & Tushman, 1994). Punctuated equilibrium

theory provides a map for change processes that form the basis of this thesis.

Punctuation

Drawing on punctuated equilibrium theory in organisational and public

policy research, a punctuation is frame-breaking or transformative change that

occurs in response to or in anticipation of ―industry discontinuities‖ (Tushman,

Newman et al., 1986, p. 36). A punctuation alters the bases of competition and

legitimacy for organisations (Tushman, Newman et al., 1986), obliterates the

boundaries between industries and alters performance outcomes (Meyer et al. as

cited in Haveman et al, 2001). In this thesis, a punctuation is evidenced by sustained

media attention to an organisation or event (Murphy, 2000).

Substantive strategy

Substantive strategy refers to actions that relate to real change in

organisational goals, structures or processes in order to meet performance

expectations, conform to values and norms, or attempt to change institutional

procedures (Ashforth & Gibbs, 1990). These strategies also represent the action level

of punctuated equilibrium theory. Some crisis response strategies such as corrective

actions like a product recall are considered substantive strategies.

Symbolic strategy

Symbolic strategy refers to those actions that focus on communicating the

appearance of organisations to the environment (Ashforth & Gibbs, 1990). Symbolic

actions are part of the myth making ceremonies used by organisations to legitimate


39

themselves (Brown, 1994). These strategies also represent the action level of

punctuated equilibrium theory. Some crisis response strategies that are

communication-based such as denials or apologies are considered symbolic

strategies.

Situational crisis event

A situational crisis event is categorised based on a crisis type that is resolved

in the short-term. In crisis management and communication literatures, there are a

range of crisis events from natural disasters to product tampering, technical

accidents, human accidents and organisational misdeeds (Coombs, 2004; Coombs &

Holladay, 2002). In this thesis, the situational crisis event refers to Merck‘s product

withdrawal.

Transformative change

Transformative change is linked to the punctuation of equilibrium and refers

to the process of change that disrupts equilibrium and after which a new equilibrium

emerges. This process provides an indication of the context for the crisis

communication and action strategies enacted by corporate actors. In this thesis,

transformative change is evidenced by the withdrawal of Vioxx, signalling a change

in market conditions, and resulting in regulatory changes in the pharmaceutical

industry.

1.7 Limitations and Scope of Research

Several limitations to this research are acknowledged. Firstly, resources

constrained the nature of the investigation, data collection, and analysis. Ideally, and


40

like the work of Meyer and colleagues (see A.D. Meyer, Brooks, & Goes, 1990),

being serendipitously placed within an organisation as it was undergoing crisis

would have been a preferred way to study change in crisis communication. However,

one of the pragmatic considerations in this area of research is that punctuations of

equilibrium are most easily identified in hindsight. Therefore, while it may have

been possible to participate in an organisation undergoing crisis, a task that could

occur within a short time frame, knowing whether the crisis would transform it

would be difficult to predict and have significant pragmatic limitations for the

researcher. Further, access to key organisational decision-makers including the Chief

Executive Officer, General Counsel, and Chief Research Officer may also be limited

during times of crisis.

Although consistent with existing research in the public relations and

management literatures, one of the limitations of data sources such as print media

articles and organisational documents is validity or the major difficulties of

achieving member-checking. For example, the use of these secondary sources

precludes access to organisational leaders to confirm approaches to crisis handling

methodology or the organisational knowledge of an impending punctuation of

equilibrium. Primary research could have been conducted following the completion

of the alternative narratives in 2010. However, this would have occurred more than

five years after the initial crisis event. The limitations of both archival and informant

measures are not new to the literature. Several authors identify concern over

divergence between informant and archival measures of the environment (Boyd,

Dess, & Rasheed, 1993; Doty, Bhattacharya, Wheatley, & Sutcliffe, 2006; Neuman,

2006; Ventresca & Mohr, 2002), suggesting studies avoid this situation by choosing


41

only one type of measure (Doty, et al., 2006). One of the causes for divergence is

perceptual bias of informant measures (Boyd, Dess, & Rasheed, 1993; Doty et al.,

2006; Ventresca & Mohr, 2002).

A related challenge is found in the research and writing process where media

framing of stories and strong writing or individual bias can hide causal theories or

leave some elements implicit (Neuman, 2006). In part, these limitations were treated

by using and comparing both media articles and organisational documents and

alternative templates and actively scrutinising the data against multiple sources and

interpretations, and seeking out the differences in interpretation across these

templates. By producing three narratives to explain crisis communication during

change events and subjecting findings to competing yet inherently consistent claims

and interpretations, the thesis has sought to build strong arguments to support the

emerging theory as did Kvale (as cited in Hesse-Biber and Leavy, 2006).

Further limitations relate to the sampling decisions behind this thesis. These

decisions limit the thesis to transformative change triggered by crisis events for

which the primary organisation was responsible, and a focus on three large

organisations within one industry and during one punctuation of equilibrium. In part,

this limitation is explained by the significance of the data required to investigate

punctuated equilibrium. That is, these conditions were selected precisely because of

the multiple linked crisis events affecting multiple organisations because this thesis

was concerned principally with crisis communication during transformative change.

In doing so, the generalisability of the thesis may be limited to crises, crisis

communication, and transformative change under similar conditions. Process


42

research often navigates the challenge of context and generalisation (Sminia, 2009),

yet by linking the findings to the crisis communication literature, this thesis and its

conceptual model can also be applied to other industry contexts and crisis events.

The thesis has been motivated by Van de Ven and Poole‘s (2005) recommendation

for versatile process explanations that can be adapted to fit different cases at

different times.

1.8 Outline of Thesis

The thesis is presented across five chapters. This chapter introduced the

research problem and established the theoretical and practical justification for the

focus on crisis communication among multiple organisations during transformative

change. Chapter Two presents a review of the literatures of crisis communication

and punctuated equilibrium theory in order to present the research questions that

drive this thesis. In light of these research questions, Chapter Three establishes the

philosophy of the methodology and outlines the research process behind this thesis

by describing the techniques to collect, analyse, and interpret data. Chapter Four

presents the findings of the thesis and includes three narratives that offer alternative

descriptions and explanations for the transformative crisis. Following the narratives

developed using Coombs (2006b), Allen and Caillouet (1994), and Oliver (1991),

the chapter illustrates these strategies through a series of visual maps. To conclude

Chapter Four, the narratives and visual maps are used to compare alternative

templates and summarise differences in interpretation. Chapter Five concludes the

thesis and is comprised of a conceptual model to explain crisis communication and

the crisis context during transformative change and provide an overview of the

contributions of this thesis to theory and practice.


43

1.9 Conclusion

This chapter has presented an overview of the research problem area and set

out the research questions that emerge from the problem. Following from the

justification of the research, Chapter Two will explicate the key literature relating to

crisis communication and punctuated equilibrium.


44

CHAPTER TWO

Literature Review

The literature review provided in this chapter forms the basis for the

theoretical framework and research questions that guide the methodological choices

for this thesis. The chapter presents a discussion and critique of the literature in three

sections. In section 2.1, existing crisis communication research is reviewed in order

to identify the theoretical challenges and opportunities for research that extends

crisis communication during times of transformative change. Next, section 2.2

provides a framework to address the theoretical challenges of existing research by

defining and establishing the relevance of punctuated equilibrium theory. Section 2.3

draws upon sections 2.1 and 2.2 to outline a theoretical framework for crisis

communication during transformative change. Finally, section 2.4 identifies the

research questions that emerge from these literatures.

2.1 Crisis Communication Research

In this section, I review the case for employing punctuated equilibrium theory

as a framework for change in crisis communication research and public relations

theory. This argument is developed over three sections. Firstly, I consider the

rationales behind existing crisis communication research that dominates the public

relations literature. I argue that existing research has provided a rich set of typologies

of crisis response strategies and decision-making models that aim to resolve

effectively or repair organisational image, legitimacy and reputation for single

organisations. I argue that existing research limits ongoing theoretical development

and the practical usefulness of crisis communication research to short-term and

outcomes-driven research.


45

Secondly, I establish an area of crisis communication research that provides

an alternative platform for viewing crises (and as a result crisis communication) as

events that induce transformative change. I argue that this stream of research

provides support for the introduction and integration of punctuated equilibrium

theory into crisis communication research. I draw together gaps and opportunities in

the existing crisis communication programs to establish the rationale for research in

the context of transformative change. Finally, I examine the use of organisational

theories of change in public relations and crisis communication research and use

these arguments to integrate punctuated equilibrium theory to these literatures.

2.1.1 Rationales of Existing Crisis Communication Research

Scholarship in crisis communication has developed through qualitative and

quantitative programs of research and multiple theoretical frameworks. The iconic

assumption for theory and practice in existing crisis communication research is that

crisis events can be ―influenced, contained and controlled in structured, predictable,

and rational ways‖ (Seeger et al., 1998, p. 248). This claim is verified by the types of

crises and organisations studied under this domain and the use of cross-sectional

research design. In all focal cases, organisations survived the crisis and in some

cases have flourished. In this way, the research and typologies assume that crises are

within an organisation‘s sphere of influence. As a result, the rationale for existing

research is to resolve effectively crises and restore organisational outcomes such as

image, legitimacy, or reputation. Theoretically, this work limits the view of crisis

communication to situational and controllable events, failing to account for or


46

explain crises that affect multiple organisations in ways that preclude the restoration

of the status quo.

After defining crisis and crisis communication, the qualitative and

quantitative programs of research will be reviewed to identify challenges to ongoing

theoretical development.

2.1.1.1 Defining Crisis and Crisis Communication

A crisis is most commonly defined in the literature as a single damaging

event or series of events that affect an organisation and its environment (Pearson &

Clair, 1998; Turner, 1976). According to Coombs (2007), a crisis is the ―perception

of an unpredictable event that threatens important expectancies of stakeholders and

can seriously impact an organisation‘s performance and generate negative outcomes‖

(p. 2-3). Some of these outcomes include physical and financial damage as well as a

loss of organisational reputation, legitimacy or viability depending on the

perceptions of critical stakeholders (Pearson & Clair, 1998). There are many types of

crises from unpredictable and uncontrollable natural disasters to industrial crises that

are preventable, controllable or unexpected (Coombs, 2007b; Fearn-Banks, 2002;

Mitroff, 2004; Shrivastava, Mitroff, Miller, & Miglani, 1988).

This thesis focuses on organisational or industrial crises and as such

prioritises crisis management over disaster management, defined as the distinctive

process involving government agencies as related to national or community disasters

(Jaques, 2007). The type of crisis affects the definition for crisis and also the

management of the crisis event. For example, industrial crises and natural disasters


47

affect different types of organisations and at different times (Shrivastava, Mitroff,

Miller, & Miglani, 1988). Unlike natural disasters, industrial crises have a prolonged

impact on organisations and societies and cannot be dealt with at the level of the

single organisation. An annual report on crisis events identified that the majority of

crises each year are industrial crisis events as opposed to natural disasters (Institute

for Crisis Management, 2009). Despite the position of Shrivastava et al. (1988) and

the high occurrence of industrial crises, existing crisis communication research

defines crises as those events that affect single organisations in relatively short-term

time frames.

Crisis communication is enacted by organisations to manage and resolve

crisis events. Crisis communication is an established area of scholarship and practice

in public relations and an essential part of crisis management (Craig, Olaniran,

Scholl, & Williams, 2006; Seeger et al., 1998). Crisis communication involves the

communication and relationship management approaches that organisational

members enact to prevent, manage and resolve crisis events (Pearson & Clair, 1998;

Penrose, 2000). As a result, crisis communication can be divided into two types: 1)

communication that provides information about how stakeholders should respond to

the physical and psychological effects of the crisis, and 2) post-crisis reputation

management that aims to restore faith in the organisation and its business operations

(Coombs, 2007b, 2009). The post-crisis communication phase focuses on the use of

communication to close the crisis (Coombs, 2009) and restore organisational

outcomes including image, reputation, and legitimacy. Organisational image is

defined as ―the way an organisation presents itself to its publics‖ (Bromley, 2000, p.

241). Organisational reputation is defined as the aggregation of a single


48

stakeholder‘s perceptions of the extent to which an organisation‘s actions align with

the expectations of multiple stakeholders (Wartick, 2002). Legitimacy is defined as

stakeholder perceptions that an organisation is desirable, proper and appropriate

(Suchman, 1995), enjoys support (Waeraas, 2007), and has a right to continue

operations (Massey, 2004).

Post-crisis communication is the focus of the majority of crisis

communication research. Given its important link to organisational outcomes, this

thesis shares this emphasis on the post-crisis communication strategies of

organisations. The next two sections outline the crisis response typologies or range

of crisis response frameworks that have been developed and refined in the existing

literature.

2.1.1.2 Crisis Response Typologies using Qualitative Research

The qualitative tradition in existing crisis communication research is based

on a series of studies of naturally occurring messages used by organisations in crisis

situations. In this tradition, authors have used rhetoric and corporate apologia

(Hearit, 1995), corporate impression management (Allen & Caillouet, 1994), and

discourse and image restoration theory (Benoit, 1997) to study mainly short-term

crisis events. Based on these perspectives, authors developed typologies of crisis

responses to restore legitimacy (Allen & Caillouet, 1994; Hearit, 1995) and image

(Benoit, 1997).

Qualitative crisis communication researchers studied crises that were

naturally occurring in business and society including natural disasters, product


49

tampering, and organisational misconduct. The case study approach adopted by these

researchers enabled the translation of rich organisational messages during crises into

typologies of crisis response strategies, for example Benoit‘s (1991) image

restoration strategies, and Hearit‘s (1994) corporate apologia.

Although limited to two studies within the discipline, Allen and Caillouet

established a significant theoretical perspective on crisis communication (Allen &

Caillouet, 1994; Caillouet & Allen, 1996). The authors used impression management

to study organisational messages to improve and regain legitimacy (Allen &

Caillouet, 1994). Impression management is defined as organisational actions that

aim to influence stakeholder perceptions of an organisation (Elsbach, Sutton, &

Principe, 1998). Allen and Caillouet (1994) developed a typology of naturally

occurring message strategies that are based on the use of communication to shape

stakeholder attitudes about organisational legitimacy (Allen & Caillouet, 1994).

Allen and Caillouet (1994) also gave attention to the link between strategies and

institutionalisation. The value of these authors‘ research is the theoretical links

drawn between impression management and institutional theory, a perspective that

emphasises how organisations operate within an institutional environment governed

by logics and myths that influence, constrain, and sustain organisational behaviour

(Scott, 2001; Suddaby & Greenwood, 2005), around a legitimacy crisis. Through

these connections, Allen and Caillouet (1994) defined communication as a shaping

mechanism that organisations could draw on during crisis events. The strength of

this idea remains largely undeveloped within crisis communication research.


50

Continuing the legitimacy framework, Hearit (1994, 1995) has contributed to

the field, limiting his research to those organisations charged with wrongdoing. The

theoretical rationale behind Hearit‘s work is corporate apologia, adapted from

individual apologia, where organisations issue apologia or defences to counter

charges of wrongdoing (Hearit, 1994, 1995; Hobbs, 1995; Ice, 1991). Because of the

focus on organisations charged with wrongdoing, for Hearit (1995), a crisis is a

―generally predictable series of events‖ (Hearit & Courtright, 2003, p. 83).

Organisations respond to threats by seeking to ―exert terminological influence in

order to symbolically ‗resolve‘ the crisis by argumentatively altering perceptions in a

manner favourable to organisational interests‖ (Hearit & Courtright, 2003, p. 83).

The contribution of Hearit‘s work to the field lies initially in his definition of

corporate apologia as distinct to individual apologia. This initial contribution was

later succeeded by a claim that the communicative agendas of crises and crisis

players rendered objectified decision-making strategies put forward by others in the

field as irrelevant. In essence, Hearit and Courtright (2003) argued that the outcomes

of crises were not always able to be predicted, and this limits an organisation‘s

ability to prepare for crisis communication.

Still ongoing in the literature, Benoit‘s crisis communication research also led

to the development of a typology of image restoration strategies that organisations

could use to repair or restore images under attack (Benoit, 1997). Benoit‘s (1997)

strategies draw on discourse theory and provide public relations practitioners with

the means to ―deploy texts‖ in discursive struggles (Motion & Leitch, 1996, p. 298).

The resultant image restoration strategies integrate self-defence strategies (Ware &


51

Linkugel, 1973) and undergo constant refinement (see Brinson & Benoit, 1996). The

theory of image restoration discourse brings together the notions of responsibility

and perceived offensiveness of the act to identify five categories of messages or

strategies that enabled organisations to redress allegations or suspicions of

wrongdoing (Benoit, 1997). This theory is based on the use of communication to

explain organisational behaviour during crises and has been applied in subsequent

organisational and political studies (Benoit, 1995, 1997, 2000, 2004, 2006; Benoit

&Brinson, 1994; Benoit & Dorries, 1996; Benoit & Pang, 2008; Blaney, Benoit, &

Brazeal, 2002; Brinson & Benoit, 1996, 1999).

In addition to these research articles, crisis communication text books suggest

other crisis communication options including a narrative approach (Heath, 2004;

Heath & Palenchar, 2009). Although most of Heath‘s work is located within issues

and risk management, Heath (2004) defines a crisis as a break in a routine business

narrative, requiring the organisation to construct a narrative to account for the crisis

and its resolution. A crisis narrative provides organisations with the opportunity to

draw on rhetorical strategies to tell the truth, respond to stakeholders, and resolve the

event by exerting control over the circumstances and events (Heath, 2004; Heath &

Palenchar, 2009). In this thesis, Heath‘s work is integrated into the practical

implications and further research.

The journal publications of Allen and Caillouet, Hearit, and Benoit are

summarised in Table 2.1. The table identifies the theoretical rationale for the work

and outlines the key areas of research, the typology of crisis response strategies and a

list of key organisations and events studied. The list of case studies is limited to


52

those selected for study by the authors whose decisions were guided by theoretical

frameworks and used to create typologies.

Table 2.1

Qualitative Crisis Communication Case Studies

Research

approach

Conceptual focus Typology of crisis

responses

Case organisations, crisis types

and time frames

Impression

management

(Allen &

Caillouet)

Restore

organisational

legitimacy;

recognise that

organisational

communication is

constrained by

institutional

environment

Excuses,

justifications,

ingratiation,

intimidation,

apology,

denouncements,

factual distortion

Refuse/reuse facility, legitimacy

crisis, 1 year

Refuse/reuse facility, identity

crisis, N/A (time not identified by

researchers)

Corporate

apologia

(Hearit)

As discourse

restore social

claims to

legitimacy; defend

organisational

actions; distance

organisation from

wrongdoing;

provide counter-

apologia

Persuasive accounts;

statement of regret;

disassociation

through

opinion/knowledge,

individual/group, or

act/essence

strategies; counter

apologia; direct

challenge

Audi, accidental/consumer-based

product failure, 8 years

GM, rumours, 4 months

Intel, accidental/product failure, 3

months

Merrill Lynch, intentional/tainted

advice on equities, 4 months

Johnson Controls,

intentional/safety of foetus, N/A

(time not identified by

researchers)

Image

restoration

(Benoit)

Restore

organisational

image; redress

allegations or

suspicions of

wrongdoing;

explain

organisational

behaviour

Denial, evasion of

responsibility,

reduction of

offensiveness,

corrective action,

mortification

AT&T, product failure, one

month

Texaco, allegations of racism, one

month

Firestone, product recall, 11

months

Sears, fraud, approx. 7 months

Dow Corning, product recall, 9

months

Source: Allen and Caillouet, 1994; Benoit, 1997; Hearit, 1994

As illustrated in Table 2.1, most of the crises studied in the qualitative

tradition were industrial crises that were within the control of organisations or

individuals. The majority of crisis types related to product recalls or failures. In some

cases, the theoretical rationale limited the selection of crisis types to that of


53

organisational wrongdoing (see Hearit, 1994,1995) The time frame of these crisis

studies averages just over one year with the majority of crises occurring over a

shorter duration and only one study drawing on eight years of data.

Over time, research has shifted from the generation and refinement of crisis

response typologies to the evaluation of the effectiveness of these typologies. A

detailed review of the case studies produced by these authors provides insight into

what was determined as effective crisis communication. For example, Benoit and

colleagues have continuously sought to evaluate the appropriateness of an

organisation‘s use of image restoration strategies and undertake research that tracks

communication over a series of phases in the crisis cycle (Benoit, 1995, 1997, 2000,

2004, 2006; Benoit & Brinson, 1994; Benoit & Dorries, 1996; Benoit & Pang, 2008;

Blaney, Benoit, & Brazeal, 2002; Brinson & Benoit, 1996, 1999).

The case studies also demonstrated that an organisation‘s crisis response

strategies changed over time based on organisational evaluations of effectiveness

(Benoit & Brinson, 1994; Blaney, Benoit, & Brazeal, 2002; Brinson & Benoit, 1999;

Hearit & Courtright, 2003). For example, in the Texaco case study of racism, the

organisation‘s crisis communication and actions evolved gradually over time as the

organisation acknowledged the problem, investigated the crisis, expressed empathy

to employees, and settled litigation (Brinson & Benoit, 1999). Other case studies

suggest that changes to crisis communication strategies occurred as organisational

decision-makers learnt more information about the role of employees during crisis

(Benoit & Brinson, 1994). Overall, the case studies suggest that effective crisis

communication should be immediate (Blaney, Benoit, & Brazeal, 2002) and the


54

starting crisis response should acknowledge the organisation‘s responsibility and

how past mistakes have led to the current crisis event (Benoit, 1995; Brinson &

Benoit, 1996; Hearit & Courtright, 2003).

Although the selection of crisis events illustrated in Table 2.1 were adequate

to develop and refine crisis response typologies, their ongoing role reveals two

limitations. Firstly, the crisis response typologies and judgements of effectiveness

are based on an evaluation of practitioner actions (Seeger et al., 1998). Although this

is useful to develop typologies, it has the potential to limit ongoing theory

development. Secondly, the short time frame of study of these crisis events limits our

understanding of the role of crisis communication and change to that which occurs in

the immediate to short-term, that is through situational crisis events. However, Allen

and Caillouet (1994) and Hearit (2003) argue that the theoretical relevance for crisis

communication is its ability to reflect, create, or shape meaning, construction and

resolution of crisis events. The theoretical consideration given to legitimacy holds

much promise for research with longer time frames and ongoing theoretical

development in this field. Despite the significance of these typologies, some claim

that resultant research has focused on what organisations have done and should do

better in certain crisis situations (Seeger, Sellnow, & Ulmer, 2001) rather than on the

theoretical contribution of the respective rationales to crisis communication research.

2.1.1.3 Crisis Response Typologies using Quantitative Research

The work of Coombs and colleagues arguably leads crisis communication

research in the public relations literature. Coombs and colleagues adapted the

typologies of Allen and Caillouet (1994) and Benoit (1995) to develop a decision-


55

making model for crisis managers known as situational crisis communication theory.

Situational crisis communication theory was developed using a quantitative

methodology, and overcomes some of the generalisability concerns of qualitative

case study research. Although qualitative studies sought to study the effectiveness of

crisis typologies in naturally occurring crisis events, situational crisis communication

theory offers crisis managers decision-making tools (Coombs, 2009) to guide

organisational communication during a range of crisis events. Coombs and Holladay

(2002) identified the most appropriate mix of the crisis response strategies to restore

reputation based on the organisation‘s situational and historical factors.

Crisis response strategies are enacted by organisations to shape attributions of

crisis, to change stakeholder perceptions of the focal organisation, and to reduce the

negative effects of crisis (Coombs, 1995, 2007c). Each crisis response is built around

perceived acceptance of responsibility for a crisis. Coombs‘ crisis response strategies

undergo constant refinement over time, and range from defensive to accommodative

and sit within three primary postures of deny, diminish, and rebuild. In addition,

supplementary bolster responses can be used to supplement these primary postures,

as illustrated in Table 2.2.


56

Table 2.2

Coombs’ Crisis Response Typology

Posture Crisis response strategy definition

Deny Attack on the accuser

Denial

Scapegoat

Diminish Excuse

Justification

Rebuild Compensation

Apology

Bolster

(supporting

strategies)

Reminder

Ingratiation

Victimisation

Source: Coombs, 2006b, 2007c

Through a series of experiments, research in situational crisis communication

theory established that crisis response strategies should be selected according to

situational factors, organisational crisis histories, perceived reputational threat, crisis

type, and attribution or blame assumed by stakeholders (Coombs, 1998, 2004a;

Coombs & Holladay, 2002). An assessment of these factors would lead crisis

managers to an appropriate crisis response posture: deny, diminish, rebuild. Where

necessary, organisations can also draw on bolster strategies. Situational crisis

communication theory argues that, if one posture of responses does not improve

reputational outcomes, then crisis managers should move to the next posture in order

to resolve the crisis. In this way, organisational responses can start at the deny level

and move up to the diminish level and so on. The aim is to close the crisis (Coombs,

2009). In some cases, crises remain lingering concerns for organisations, leaving

stakeholders to continue questioning the organisation‘s reputation. For example,

litigation and legislation contribute to ongoing reputational concerns for

organisations, leaving victims to seek closure only when the organisation is punished

for its actions (Coombs, 2009).


57

In creating situational crisis communication theory, Coombs (1998)

translated the rich qualitative tradition of typologies of crisis responses into

quantitative studies that examine the effectiveness of typologies on organisational

reputation (Coombs, 1998, 2004b; Coombs & Holladay, 1996). This move reduced

the focus on the theoretical rationales of legitimacy and image restoration that were

identified in qualitative crisis communication research with reputational outcomes.

At the same time, situational crisis communication theory retains a focus on crisis

response strategies that occur to single organisations within immediate to short-term

time frames and in response to situational crisis events. As a result, the practical

utility of situational crisis communication theory is significant. In essence, through

his evaluation of crisis response typologies and integration of historical and

organisational context, Coombs has developed a strong model to support the

decision-making of crisis communication managers. In his own words, this line of

research is described as providing ―prescriptive guidelines‖ that are based on the

crisis situation as the drivers of post-crisis communication (Coombs, 2009, p. 249).

2.1.2 Alternative Views: Crisis Communication Research and Change

One of the ways to extend theory and scholarship in crisis communication is

to refine that understanding by exploring the approaches taken by other crisis

communication researchers who define crises in different ways (Sellnow & Seeger,

2001). Alternative views in the literature use punctuated equilibrium, chaos and

complexity theories (see Section 2.1.3 for definitions) to achieve this task (Gilpin &

Murphy, 2006; Murphy, 1996, 2000, 2007; Seeger, 2002; Seeger et al., 1998). Under

these perspectives, a crisis is viewed as having the potential for radical change by


58

disrupting the status quo (Seeger et al., 2005; Sellnow & Seeger, 2001). That is,

crises hold the potential to display emergent properties that may go beyond an

organisation‘s management (Smith, 2006) and result in the permanent redefinition of

an organisation (Murphy, 1996).

Compared to the work of Benoit and Coombs, this alternative perspective

argues that the public relations function is unlikely to be able to influence an

organisation‘s future because the process is complex and may not be known or

knowable (Murphy, 2000, 2007; Seeger et al., 2005; Sellnow & Seeger, 2001). In

taking this view, punctuated equilibrium theory, chaos and complexity theories

present process-based research as an alternative to crisis communication research

(Gilpin & Murphy, 2006; Jaques, 2007). This argument is developed over two

sections that show how chaos and complexity theorists question the value of crisis

management yet at the same time reinforce the value of long-term research.

Where crisis communication research that is outcomes-based seeks to

manage a crisis by restoring organisational legitimacy, image and reputation to the

status quo, chaos and complexity theories see crisis decision-making models as less

relevant. This claim is based on two assumptions. Firstly, crises have the potential to

challenge and shift the deep structures or contexts that guide organisational

relationships, making organisational outcomes unknowable (Seeger et al., 2001).

Under these conditions, existing or historic crisis decision-making models are likely

to be inadequate (Sellnow & Seeger, 2001). For example, in the study by Sellnow

and Seeger (2001) of a community‘s response to flooding, historic success with

flood containment was a barrier to adaptation. Alternative and ultimately more


59

effective methods to flood containment were only made possible when the

inadequacies of historic methods were demonstrated in this case in dramatic and

costly ways (Sellnow & Seeger, 2001). Secondly, crisis events shift over time also

affecting the ability to predict outcomes (Gilpin & Murphy, 2006). Formalised

planning using crisis decision-making models may not take into account the range of

factors that can aggravate or cause shifts in crises (Gilpin & Murphy, 2006).

Rather than using typologies of crisis responses, chaos theorists argue for

organisations to set a new agenda for organisational relationships through a

discourse of renewal that is communicated immediately after a crisis and becomes

part of ongoing planning (Ulmer, Seeger, & Sellnow, 2007; Ulmer, Sellnow, &

Seeger, 2007). A discourse of renewal is values-based and focuses on how an

organisation can rebuild after a crisis (Seeger et al., 2005). Renewal discourse is not

strategic but provisional in nature, offering a natural and immediate response to

crisis (Ulmer, Seeger et al., 2007). Renewal discourse has been used to show how

communication following a crisis shapes change by defining organisational activities

in terms of future goals (Seeger et al., 2005). For example, Seeger et al. (2005)

suggests that an organisation‘s ability to:

...survive, rebuild and even renew themselves will depend on the ability to learn

from these events, create a new sense of normal and constitute compelling and

meaningful discourses that promote cooperation, support and renewal. This

discourse of renewal creates an opportunity after a crisis to fundamentally reorder

the organisation down to its core purpose. Crises, in these cases, create not only

severe devastation but a unique opportunity for systemic change and fundamental

reinvention (Seeger et al., 2005, p. 92).


60

Renewal is viewed by Coombs (2009) as an extension of accommodation

strategies that positions the future as the central communicating force. Given this

perspective and the characteristics of the discourse, renewal works only in certain

types of crises (Ulmer, Seeger et al., 2007). Renewal discourse is considered most

effective in crises that are based on natural disasters rather than on crises that are

within the control of organisations (Ulmer, Seeger et al., 2007). Natural disasters and

industrial crises follow different paths with the worst effects of the latter continuing

for some time after the event itself (Shrivastava et al., 1988). In this way, industrial

crises require crisis communication and actions that exceed the renewal framework.

Industrial crises have a prolonged impact on organisations (Shrivastava et al.,

1988). As a result, an organisation‘s crisis communication choices become essential

not only to restoring reputations in the short-term but also to ongoing organisational

legitimacy. Legitimacy is a complex but essential requirement for organisations that

need to maintain support from their environments (Seeger et al., 1998).

Organisations that offer crisis communication strategies that are insufficient to

environmental expectations guarantee their place on the public agenda until

stakeholders are satisfied with their actions (Seeger et al., 1998). As a result, to

survive, organisations must be willing to change, often in dramatic ways, their crisis

communication approaches (Seeger et al., 2001).

The role of time plays an essential role in extending scholarship in crisis

communication. According to Seeger (2002), extending time frames and broadening

the scale of investigation has the potential to reveal ―a more comprehensive role‖ for

public relations (p. 336). The extended time frame also suits the view of crisis and


61

crisis communication as part of an ongoing process of organisational and industry

renewal as opposed to a stand-alone, one-time strategic response (Sellnow & Seeger,

2001). In taking this view, the crisis communication literature supports the

investigation of crises that are complex, non-linear, unpredictable, and hold the

potential for transformative change.

2.1.2.1 New Directions in Crisis Communication Research

The discussion presented suggests the crisis communication literature has

developed in several ways. Qualitative work around typologies (Allen & Caillouet,

1994; Benoit, 1997; Hearit, 2001) has been translated into crisis decision-making

models that incorporate organisational context of crisis and relationship history as

well as the nature of the crisis event in order to provide a sequence of tailored crisis

responses designed to repair and restore organisational reputation (Coombs, 2006b).

Essentially, this line of research studies crisis as an event that affects an

organisation‘s immediate future and as a result, requires the organisation to respond

in ways that satisfy stakeholder needs. This view is based on the logic where an

action (crisis response) produces an intended effect (restoration of crisis and

restoration of image or reputation). This position is clearly established within the

crisis communication literature with ongoing work evaluating the different

conditions that affect these situational or stand-alone crises (Sellnow & Seeger,

2001) and related crisis responses. While research continues (Jin, 2010; McDonald,

Sparks, & Glendon, 2010), authors have previously recognised the need for ongoing

theory development (Coombs, 2006; Hearit & Courtright, 2003).


62

At the same time, the literature has incorporated alternative

conceptualisations: a crisis holds the potential for transformative change or

fundamental disruptions in organisations and industries (Gilpin & Murphy, 2006;

Gilpin & Murphy, 2008; Murphy, 1996, 2000; Seeger et al., 2005). Under this

perspective, standard actions (crisis responses) are seen as ill-equipped to deal with

complex change that occurs both within and in addition to the organisational context

(Gilpin & Murphy, 2006). At an early stage in a crisis, an organisation may have the

ability to influence events and environmental responses to events (Murphy, 1996).

However, once the crisis moves beyond a certain point of escalation, an organisation

may lose its capacity to influence communication and reactions (Murphy, 1996).

Indeed, modern and complex crises often move outside of the organisational domain

(Boin & 't Hart, 2003; Shrivastava et al., 1988). Although researchers who follow

this perspective put forward renewal discourse as a communication response, its

value is limited to disaster-based crisis events (Ulmer, Seeger et al., 2007).

In summarising the discussion so far, it is clear that the crisis communication

theorists support the need for extending theory development in crisis communication

within two domains of crisis: as a manageable event and as a complex and

unpredictable event. While there is a strong understanding of what crisis

communication looks like under the first domain (see S. Kim et al., 2009), there is

limited research about communication under transformative conditions. Across both

domains, researchers are calling for studies that treat theory (Coombs, 2006),

examine the interdependencies of crises (Seeger et al., 1998), the variation in crisis

response (Seeger, 2002), and the deep structures behind public relations responses


63

(Seeger et al., 2001), and adopt methodological diversity (Avery, Lariscy, Kim, &

Hocke, 2010).

To advance and reinvigorate the field, a new rationale for crisis

communication research is required. To date, existing research does not provide

empirical evidence to understand the role of communication beyond short-term crisis

responses provided by single organisations. As a result, beyond renewal discourse

that is limited to natural disasters or crisis events outside of an organisation‘s

control, there is little evidence to describe or explain crisis communication when

change is transformative, complex, and affects multiple organisations. To advance

the field, an organising theory is required to account for a range of levels of context

and action as factors of crisis communication. To date, these factors have rarely been

treated in the crisis communication and public relations literatures. One perspective

that considers these factors is based on the investigation of change in organisations,

and is punctuated equilibrium theory.

2.1.3 Punctuated Equilibrium and Public Relations

In this discussion, I argue that punctuated equilibrium theory offers a new

rationale for crisis communication when change is transformative rather than only

gradual or incremental. The selection of punctuated equilibrium theory is based on

an extensive review of organisational change theories. While it is beyond the scope

of this thesis to provide an extensive literature review on organisational change

theories, this section will provide a brief overview of the theories that were

considered for study. These theories, identified from public relations and

management literatures include systems theory, complexity and chaos theories, and


64

punctuated equilibrium theory. The following paragraphs present a definition of the

theories, their approach to change, leading to a discussion that supports the selection

of punctuated equilibrium theory.

Systems theory has long dominated international text books as a primary

organising theory for public relations (Cutlip, Center, & Broom, 2006; Grunig, 1992;

Mehta & Xavier, 2009, Pieczka, 2006, Spicer, 1997). A system is defined as a ―set of

interacting units that endures through time within an established boundary by

responding and adjusting to change pressures from the environment to achieve and

maintain goal stages‖ (Cutlip, Center, & Broom, 2006, p. 176). While there are

multiple systems approaches, a common element is the concept of equilibrium or

balance (Pieczka, 2006) where organisations seek fit with their environments. As a

result, the crucial and focal task for public relations is to monitor the organisation-

environment relationship (Everett, 2001) with alignment and consensus as central

outcomes to effective public relations (Spicer, 1997). Through systems theory,

public relations researchers have drawn on the notion of a ―moving equilibrium‖

(Grunig, 2000; Spicer, 1997) and as a result see change as being constant,

incremental, and necessary to maintain stability (Broom, 2006; Grunig, 1992, 2006).

Because of its focus on incremental change and the primacy of the

organisation, systems theory was not selected for this thesis. A systems view of crisis

communication would offer limited ability to extend existing crisis communication

research. As noted in the literature, systems theory has led research to focus

primarily on the organisation‘s actions and influence over the environment at the

expense of contextual factors such as the power and influence of an organisation‘s


65

environment (Curtin & Gaither, 2005). A consequence of this focus is that systems

theory fails in scope to consider and analyse the deep structures that guide

organisational behaviour and organisational change (Creedon as cited in Spicer,

1997). It is precisely these deep structures that are of interest in this thesis as they are

essentially linked to change and the actions of multiple organisations. Advancement

of the concept of change beyond incremental approaches is required for the crisis

communication literature and public relations discipline.

As identified in section 2.1.2, the crisis communication literature introduced

chaos and complexity theories and punctuated equilibrium theory as perspectives

that provide new ways to understand and explain crises that are complex and affect

multiple organisations simultaneously. These theories are analytically significant

because they provide an alternative to the incremental change approach that

dominates the existing crisis communication literature and is seen in systems

approaches.

Complexity theory is defined as the study of ―how the interaction of elements

in a system produces surprising, emergent behaviour that can be understood through

formal models even if those models cannot necessarily predict how a given system

will evolve‖ (Anderson, Meyer, Eisenhardt, Carley, & Pettigrew, 1999, p. 233).

Under complexity theory, organisations operate at the edge of chaos as part of

systems that may never achieve stability or equilibrium (Dooley & Van de Ven,

1999. Complexity theory encourages systems to absorb complexity and the

investigate possibilities for change through complex organisational relationships

with potential adaptations to new levels of complexity (Murphy, 2007). In crisis


66

communication, complexity theory has renewed interest around change (Gilpin &

Murphy, 2006; Murphy, 2000, 2007). Although it remains largely conceptual,

complexity theory sees crisis management as obsolete, instead encouraging expert

and skilful improvisation (Gilpin & Murphy, 2006). In organisational studies on

innovation, complexity theory sees change as a continuous force (Brown &

Eisenhardt, 1997).

Chaos theory sees a system as a series of complex and non-linear interactions

that when the unexpected happens lead to re-emergence of a higher order through

natural processes of self-organisation (Seeger, 2002). When a system‘s direction,

character, or structure is fundamentally disrupted and departs from the previous path,

the system is undergoing bifurcation (Seeger, 2002). Chaos in the form of a

bifurcation may be necessary precursor to high level system order. Order re-emerges

out of chaos by self-organisation. Self-organisation is seen as a quasi-evolutionary

adaptive force, leading systems to higher levels of complexity and order following

the collapse or bifurcation of a lower order system (Seeger, 2002). Some believe that

the onset of bifurcations can be predicted (Murphy, 1996). In crisis communication,

chaos theory overcomes some of the linear approaches (Jaques, 2007), but has

mostly been used to study organisational communication following natural disasters

or crisis events that were outside of the organisation‘s control.

Despite offering a new perspective on stability and linearity in crisis

communication, complexity and chaos theories were not selected for this study for

several reasons. First, as considered in the crisis communication literature, the

theories emphasise the characteristics and unpredictable nature of the crisis context


67

over crisis actions. For example, complexity theory suggests that crisis management

is less about crisis response strategies and more about managerial skill and resilience

(Gilpin & Murphy, 2006). Despite providing instructions for complex crisis contexts,

a process approach sees both context and action as inseparable elements. Second, as

demonstrated in crisis research that follows chaos theory, the types of crises studied

are linked mainly to natural disasters such as floods or catastrophic crises that are

outside organisational control including terrorist attacks. The scope of this thesis is

to examine industrial or organisational crises. Third, the theories of complexity and

chaos are part of the existing crisis communication literature. By studying a new

approach to change such as punctuated equilibrium theory, the thesis has the

opportunity to contribute new understanding to crisis communication and public

relations.

Organisations, change, the crisis context, and an organisation‘s crisis

responses can be translated as central components to the theory of punctuated

equilibrium as treated within the organisational sciences. Punctuated equilibrium

theory offers a bridge between crisis communication research that aims to preserve

equilibrium or stability through incremental adjustments (crisis responses) that

restore reputations, legitimacy, and image, and research that views crisis as a trigger

for challenging equilibrium and leading to transformative change.

In the organisational sciences, punctuated equilibrium theory has become an

established theory to describe change in organisations and industries. It offers a way

to understand radical changes to patterns of incremental adjustments in

organisational evolution in order to account for change at the macro level and change


68

within organisations (Gersick, 1991; Romanelli & Tushman, 1994; Tushman &

Romanelli, 1985; Tushman, Virany et al., 1986).

Punctuated equilibrium theory was introduced into the public relations

literature as a way to consider complexity, uncertainty and non-linear change during

crises (Murphy, 2000). Murphy (2000) argued that for public relations, a punctuation

of equilibrium was signalled by a crisis event. Using the Intel chip and NASA crises,

Murphy (2000) argued that crisis events initiated a ―period of confusion in media

coverage‖ that was followed by the emergence of new bases for reputation and

image (p. 453). The process and outcomes of re-emergence are unpredictable and

managers may be unable to forecast media response and reputational impact that are

central to re-emergence (Murphy, 2000).

Since Murphy‘s article in 2000, there has been limited integration of

punctuated equilibrium theory in the public relations literature. However, in a

general sense, punctuated equilibrium theory is positioned alongside chaos and

complexity theories as a way to overcome the notion of controllability that is a

feature of most crisis communication research (Gilpin & Murphy, 2006; Jaques,

2007, 2009; Seeger, 2002). Given the extension of research beyond existing views of

crisis communication is supported within the literature (Bechler, 2004; Gilpin &

Murphy, 2006), there is significant opportunity for punctuated equilibrium theory to

reinvigorate the theoretical development in crisis communication. This thesis

provides an opportunity to extend and continue work that draws together punctuated

equilibrium theory as a lens to examine the process of crisis communication.


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The use of punctuated equilibrium theory in crisis communication research

also holds significance for public relations. Punctuated equilibrium theory offers a

broader conceptualisation of change to that which has become historically embedded

in public relations theory and practice. Punctuated equilibrium theory has the

potential to widen the concept of change beyond its existing treatment as incremental

change and adjustment. From this broad application as a new theoretical context for

considering change in public relations, punctuated equilibrium theory holds specific

relevance to the area of crisis communication.

In this thesis, I employ punctuated equilibrium theory as a framework to

describe and explain change in crisis communication as crisis events trigger

transformative change affecting multiple organisations and actors across extended

time frames. At the context level, punctuated equilibrium theory provides a

framework to structure the analysis of the process of transformative change initiated

by crisis events (Gersick, 1991). At the action level, punctuated equilibrium theory

provides an indication of the organisational strategies that are used under stable and

turbulent times (Tushman, Newman et al., 1986; Tushman & Romanelli, 1985;

Tushman, Virany et al., 1986), offering a connection between punctuated

equilibrium and crisis communication. Punctuated equilibrium theory accommodates

multiple organisations, multiple crises, and extended time frames. These factors are

essential to the ongoing theory development in crisis communication research. In the

following section 2.2, punctuated equilibrium theory and its role in defining context

and action is investigated in greater depth.


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2.2 Punctuated Equilibrium Theory

In this section, I examine the literature related to punctuated equilibrium

theory. The literature review is built in four stages. First, I establish the origins of

punctuated equilibrium theory in evolutionary biology and draw links between this

conceptualisation and the treatment of punctuated equilibrium theory in

organisational sciences. Second, drawing on the treatment of punctuated equilibrium

within the organisational literature, I describe the context level of punctuated

equilibrium theory that considers the deep structures that ensure long periods of

stability as well as the triggers for transformative change. Third, and also within the

organisational sciences, I establish the action level of punctuated equilibrium theory

by describing the symbolic and substantive strategies that organisations can enact

under conditions of stability and transformative change. Finally, I set out the

alignment between punctuated equilibrium theory and crisis communication as a way

of establishing the theoretical basis for this thesis.

2.2.1 Origins of Punctuated Equilibrium Theory

Punctuated equilibrium theory originated in evolutionary biology as an

alternative explanation to Darwin‘s theory of evolution. Gould and Eldredge, both

palaeontologists, critically examined accepted theories of evolution as gradualism

(Ruse, 1989) against near-complete fossil records. The result of their analysis was

punctuated equilibrium theory. In this work, they argued that change occurs not in a

gradual manner but in rapid bursts of transformation (see Gould, 2002; Gould &

Eldredge, 1993; Ruse, 1989, 2000). Although the punctuated equilibrium theory was

the source of much controversy in its initial presentation to evolutionary biology, it


71

has developed to become an accepted part of the discipline‘s theory base (Ruse,

1989, 2000).

Following a similar path to evolutionary and ecological theory in biology,

punctuated equilibrium theory was translated as a perspective in the organisational

and political sciences as a means to understand change. The ideal-typical nature of

punctuated equilibrium, seen in its empirical identification and treatment of time,

change and stability, provides an objective basis to guide thinking (McIntosh, 1977)

and encourage transferability of key concepts from evolutionary studies to

organisational studies. In the remainder of this thesis, I specifically continue to refer

to punctuated equilibrium theory in reference to its treatment and role within the

organisational sciences.

Since the late 1980s, punctuated equilibrium has become an established

theory for change or transformation in organisations and industries (Gersick, 1991;

Romanelli & Tushman, 1994; Tushman, Newman et al., 1986; Tushman

&Romanelli, 1985; Tushman, Virany et al., 1986). In the organisational sciences, the

overall thesis of punctuated equilibrium theory is that organisational change occurs

through patterns of long periods of stability that are punctuated by ―short bursts of

revolutionary change‖ (Romanelli & Tushman, 1994, p. 1141). Punctuated

equilibrium theory considers periods of both stability and transformative change and

the internal and external forces that historically shape change and impact

organisational decision-making (Tushman & Romanelli, 1985). This thesis is

elaborated explicitly in the following excerpt:


72

Organisations evolve through convergent periods punctuated by reorientations

which demark and set bearings for the next convergent period. Convergent periods

refer to relatively long time spans of incremental change and adaptation. Convergent

periods may or may not be associated with effective performance. Reorientations are

relatively short periods of discontinuous change where strategy, power, structure and

controls are fundamentally transformed toward a new co-alignment (Tushman &

Romanelli, 1985, p. 171).

Punctuated equilibrium has emerged as a way to reconcile or bridge

(Haveman, Russo, & Meyer, 2001) opposite views of existing change theories. As a

general theory, punctuated equilibrium integrates key elements from ecological

models that emphasise change across populations (Hannan & Freeman, 1989),

adaptation theories that emphasise incremental change as organisations adjust to

dynamic environments, and transformational models that focus on metamorphic

change (Tushman & Romanelli, 1985).

Punctuated equilibrium theory offers a way to understand radical changes to

adaptation patterns in organisational evolution, accounting for change at the macro

level of the environment which houses the deep structures that guide organisational

behaviour that operates at the micro level through an organisation‘s substantive and

symbolic actions (Tushman & Romanelli, 1985). Punctuated equilibrium theory

connects the context for transformative change and actions of organisations during

transformative change. The context and action levels of punctuated equilibrium

theory will be explored as they provide an important way to connect crisis

communication and action to transformative change.


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2.2.2 Context: Macro Level of Punctuated Equilibrium Theory

At the context level, punctuated equilibrium theory describes deep structure

as the key component of the long periods of stability and short bursts of

transformative change. Taking a long-term view, punctuated equilibrium theory

provides information about the deep structures behind stability and equilibrium, the

punctuations that dismantle existing deep structures, and the renewal of equilibrium

(Gersick, 1991). These phases will be examined in order to provide a context for

organisational actions that form part of the micro level of punctuated equilibrium

theory.

Punctuated equilibrium theory provides a theoretical explanation of

equilibrium as the conditions or deep structures of organisational systems (Gersick,

1991). A deep structure is ―the set of fundamental ‗choices‘ a system has made of the

basic parts into which its units will be organised and the basic activity patterns that

will maintain its existence‖ (Gersick, 1991, p. 14). In essence, deep structures form

the basis of organisational practice and persist for long periods of time before and

after punctuations.

Deep structure shapes and manages participation (McDonough, 2000) based

on rules or logics that determine how an organisation or system obtains resources

from its environment (Gersick, 1991). The deep structure is seen or made real

through legitimation, explanation and rationalisation (McDonough, 2000; Tushman

& Romanelli, 1985). During equilibrium periods, organisations signal compliance to

the logics of the deep structure that guides the system (Tushman & Romanelli,

1985). At the same time, organisations manage environmental shifts through


74

convergent change or incremental adjustments that occur in line with existing deep

structure (Gersick, 1991; Tushman, Newman et al., 1986).

Organisations that successfully manage convergence or incremental

adjustments are likely to develop internal forces for stability known as organisational

inertia (Tushman, Newman et al., 1986). Organisational inertia, the resistance to

change, grows over time in response to deep structures that reinforce existing

practices (Tushman & Romanelli, 1985). When deep structure is coupled with

―structural and socially-anchored inertia‖ an organisation develops a resistance to all

but incremental or convergent change (Tushman & Romanelli, 1985, p. 190). Thus,

organisational inertia acts to maintain a system‘s equilibrium (Gersick, 1991). While

deep structure and organisational inertia preserve equilibrium and therefore stability,

they may also impact negatively on organisational performance. Organisations that

remain the same despite new competitive conditions or new criteria for performance

may find that their inertia leads to decreased performance (Tushman & Romanelli,

1985).

Despite the reluctance of organisations to undergo transformational change

(Sabherwal, Hirschheim, & Goles, 2001), the ―mutual interdependence‖ among the

parts of systems open them up to internal and external sources of disruption that

threaten a system‘s ability to obtain resources (Gersick, 1991, p. 21). Triggers for

transformative change include product lifecycles or class evolution (Tushman &

Romanelli, 1985; Tushman, Virany et al., 1986), market forces (D'Aunno, Succi, &

Alexander, 2000; Kraatz & Zajac, 1996), the organisation‘s internal environment

(Gersick, 1991; Tushman & Romanelli, 1985; Tushman, Virany et al., 1986), and


75

sustained low performance (Sabherwal et al., 2001). While these forces are unlikely

to be the direct cause of transformative change, they can certainly provide the kinetic

energy for transformative change (Gersick, 1991, p. 22). As a result, these forces and

the momentum behind them draw attention from multiple players and create a need

for solutions that often go beyond existing deep structures and institutional

arrangements (Gersick, 1991; Hoffman & Ocasio, 2001; John, 2003).

Establishing the boundaries between equilibrium and punctuations can be

difficult (Poole & Van de Ven, 1989). Although a crisis event that disrupts existing

arrangements is a clear boundary, other problems can develop gradually (Poole &

Van de Ven, 1989). According to Van de Ven and Poole (1988), the punctuation

process itself remains an area whose description is underdeveloped in organisational

sciences.

The triggers or focusing events represent the nucleus that is required before

transformative change can take over the system (Gersick, 1991). The events that

trigger change can be ―inconsequential‖ at first (A.D. Meyer et al., 1990). Change is

triggered when focusing events both bring attention to key issues and create a

mandate for change by reducing the legitimacy or acceptance of support of existing

structures or arrangements (Jones & Baumgartner, 2005). The nature of change

depends on the dimensions of conflict. Four dimensions singularly and collectively

shape conflict and influence the level of change: scope of conflict, visibility,

intensity, and direction (Heck, 2004). Transformative change and reorientations

occur when conflict produces ―radical disruptions‖ to convergent patterns of

organisational behaviour (Tushman & Romanelli, 1985, p. 197). In doing so, deep


76

structures are dismantled and the system is temporarily disorganised before

subsystems recreate deep structures bound by new logics and rules (Gersick, 1991).

Punctuated periods can relocate or obliterate boundaries between industries,

change rules of competition and alter performance outcomes (Meyer et al. as cited in

Haveman et al., 2001). Such environmental changes force organisations to accept

and respond to transformative change through organisational reorientations.

Organisational transformation is synonymous with revolutionary change that occurs

swiftly and affects all parts of the organisation and potentially its environment

(Greenwood & Hinings, 1996; McNulty & Ferlie, 2004). A punctuation is a frame-

breaking change that occurs in response to or in anticipation of ―industry

discontinuities‖ (Tushman, Newman et al., 1986, p. 36).

Transformative change occurs when social, legal, political and technological

conditions shift, public opinion changes or activism increases (Givel, 2006;

Tushman, Newman et al., 1986). Change in these areas alters the bases of

competition and legitimacy for organisations (Tushman, Newman et al., 1986),

obliterates the boundaries between industries and alters performance outcomes

(Meyer et al. as cited in Haveman et al, 2001). Change occurs not out of the

instability produced by the conflict between environmental shifts and organisational

practices (Givel, 2006) but through public attention to crisis events (Givel, 2006) and

competing ideas that undermine and reduce the legitimacy of existing ideas

(McDonough, 2000). Radical change bypasses an ―organisation‘s resources and

capabilities because adaptations are not consistent with or complementary to existing

infrastructure, knowledge, markets or processes‖ (Street & Gallupe, 2009, p. 723).


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The outcome of punctuated equilibrium is a new equilibrium period that is

guided by a renewed deep structure (Gersick, 1991; McDonough, 2000; Siggelkow,

2002). Although this new period may not steer the system towards improvement

(Gersick, 1991), it represents a unique point of difference in an organisation and

system‘s development.

In summary, the contextual level of punctuated equilibrium theory holds deep

structure as the key to either long periods of stability or short periods of

transformative change. When companies are stable, deep structure not only

establishes the rules behind organisational practice but generates organisational

inertia. Under transformative change, deep structures come under question, opening

up opportunities for change and the development of new deep structures to guide the

next period of equilibrium. This contextual framework for change is significant to

understanding transformative change at the action level, which is reviewed next in

section 2.2.3.

2.2.3 Action: Micro Level of Punctuated Equilibrium Theory

The context-level discussion of punctuated equilibrium theory provides a

framework to explain organisational actions during periods of equilibrium and

periods of punctuation. Organisational actions refer to the substantive and symbolic

strategies enacted by organisations. The type of action, in this case substantive or

symbolic strategy, depends upon the organisation‘s position in the change cycle.


78

During periods of stability, organisational actions are designed to be

consistent with the rules and logics of the deep structures that govern organisational

systems (Gersick, 1991; Siggelkow, 2002). Under stability, organisational actions

are designed to reinforce deep structures (Gersick, 1991; McDonough, 2000;

Tushman & Romanelli, 1985). Two types of incremental or convergent change are

considered to be used during periods of stability in order to achieve fit among

strategy, structure, people and processes: fine-tuning and incremental adjustments

(Tushman, Newman et al., 1986). Fine-tuning allows an organisation to maximise

and defend its mission. Incremental adjustments are those that occur in response to

minor shifts in the environment. These incremental adjustments are largely the

responsibility of middle managers (Tushman, Newman et al., 1986) and occur

outside of the public domain. They are designed to adapt the organisation to its

environment without transforming the organisation (Tushman, Newman et al., 1986).

See Table 2.3 for details of strategies for convergent change.

Table 2.3

Strategies for Convergent Change

Macro strategy Strategies for convergent change

Fine-tuning

strategies Refining policies, methods and procedures

Creating specialised units and linking mechanisms to permit

increased volume and increased attention to unit quality and cost

Developing personnel especially suited to the present strategy –

through improved selection and training, and tailoring reward

systems to match strategic thrusts

Fostering individual and group commitments to the company

mission and to the excellence of one‘s own department

Promoting confidence in the accepted norms, beliefs, and myths

Clarifying established roles, power, status, dependencies, and

allocation mechanism.

Incremental

adjustment

strategies

Expanding in sales territory

Shifting emphasis among products in product line

Improving processing technology in production

Source: Tushman, Newman et al., 1986, p. 34


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During periods of stability, these substantive strategies are complemented by

symbolic strategies. Symbolic strategies aim to re-emphasise missions and values

and are delivered by organisational leaders such as the chief executive officer or

general counsel (Tushman, Newman et al., 1986). Organisational leaders use

symbolic strategies to signal compliance with existing deep structures (Tushman &

Romanelli, 1985) in order to legitimise, justify and rationalise organisational actions

(Gersick, 1991; McDonough, 2000; Tushman & Romanelli, 1985). Specifically,

organisational leaders are responsible for managing ―symbols, settings, and values to

further support, justify and make more meaningful the firm‘s strategic orientation‖

(Tushman & Romanelli, 1985, p. 196).

In comparison to periods of equilibrium or stability, punctuation periods

bring about significant changes in organisational strategy, power, structures and

control systems (Tushman, Newman et al., 1986; Tushman & Romanelli, 1985).

According to McNulty and Ferlie (2004), a transformation occurs as sharp and

simultaneous shifts in strategy, power, structure, and control. The process of

reorientation leads organisations to shift existing structures, systems and values into

the organisation‘s past or history to make way for the organisation‘s future

(Tushman & Romanelli, 1985). At the same time as the organisation makes room for

change, it must simultaneously bypass its own inertia and also prepare for potential

liabilities of newness or the survival risk organisations face at their time of creation

and during points of significant change (Amburgey, Kelly, & Barnett, 1993; Singh,

Tucker, & House, 1986).


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During punctuations and reorientations, organisational leaders enact major

substantive as well as symbolic decisions (Tushman & Romanelli, 1985). Some of

the decisions involved in frame-breaking change include the reformation of

organisational missions and values, the re-negotiation of power and status and the

employment of new executives (Tushman, Newman et al., 1986). These activities

often occur simultaneously. As a result, they have the potential to create high levels

of uncertainty among system members (Gersick, 1991; Tushman & Romanelli,

1985). The range of transformative change strategies is outlined in Table 2.4.

Table 2.4

Strategies for Transformative Change

Categories for

change

Strategies for change

Strategy Introduction of new lines

Abandonment of new lines

Entrance to new market

Abandonment of market

Structure Reorganisation of firm, change to core structural

form

Changes in titles of senior executives

Power distribution Dramatic resources shift

High turnover of executives

New additions to team reflected in a shift in

functional orientation

Changes in ratio of expenditures

CEO change Internal promotion

Externally sourcing

Source: Romanelli & Tushman, 1994; Tushman, Newman et al., 1986, p. 37-38

Research also supports the need for swift responses. Organisations are likely

to adopt new practices even when there is a temporary inconsistency with existing

policy (Alexander & D'Aunno, 1990). In doing so, the organisation not only

demonstrates its acceptance of and commitment to change but its actions may also

contribute to the new equilibrium (A.D. Meyer et al., 1990). Meyer et al. (1990)


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argue that managers who operate during transformative change take on the role of

entrepreneurs ―reinventing both their organisations and their environments‖ (p. 108).

In addition to the strategies outlined in Table 2.6, organisational leaders can

manage uncertainty by drawing on symbolic strategies to inspire confidence and

enthusiasm for new direction (Tushman, Newman et al., 1986). In punctuated

equilibrium theory, less is known about symbolic strategies than substantive

strategies during transformative change or punctuations of equilibrium. In a study of

regulatory punctuations, symbolic actions were found to be the first response and

occurred immediately after punctuations while substantive actions took time to

formulate and implement (Haveman et al., 2001).

By providing an alternative view to change and considering context and

actions, punctuated equilibrium theory offers the opportunity to extend existing crisis

communication research. Yet, the theory is not without its critics. Although

punctuated equilibrium theory contains both incremental and transformative or

revolutionary change, some authors have offered a third type that they believe better

captures and explains organisational change. In their study of innovation in the

computing industry, Brown and Eisenhardt (1997) drew on grounded theory to put

forward continuous change as a type of change that sits in between incremental and

transformative change. Continuous change sees change as frequent, relentless and

endemic to the organisation (Brown & Eisenhardt, 1997). Researchers also argue

that a punctuation of equilibrium may not emerge from a single punctuation but

involve multiple part change (Sastry, 1997). Further, from a practical perspective,

Sastry (1997) argued that organisations may fail after transformative change. These


82

perspectives have been considered in the selection of punctuated equilibrium theory

as the organising theory for this thesis.

In summary, this section has provided an overview of punctuated equilibrium

theory and its treatment in organisational sciences. The discussion of the context and

action levels associated with punctuated equilibrium theory provides insight into the

processes of transformative change. During times of stability and turbulence, the

structural context for change depicted through deep structures influences the patterns

of actions seen as substantive and symbolic strategies. These patterns indicate the

level of change with organisational systems. The implications of this process for

change in relation to crisis communication and public relations are summarised in

the next section.

2.2.4 Conclusions and Implications for Study

In section 2.2, I argued that the scholarship of crisis communication limits

ongoing theoretical development and practical utility of the research to outcomes-

driven work. Existing research provides crisis response typologies and guidelines for

crisis communication decision-making for single organisations that are involved in

short-term or situational crisis events. Under this framework, crisis communication

is used to restore organisational reputation, image or legitimacy and return the

organisation to the status quo. Yet this existing scholarship presents a challenge to

ongoing theoretical development for crises that involve multiple organisations and

occur within the context of transformative change. At the same time, some authors in

the public relations literature provide support for viewing crises, and as a result,

crisis communication, as triggers for transformative change. In doing so, these


83

authors provide opportunities for theoretical development and empirical studies to

fill the gap in crisis communication and public relations scholarship.

In considering the theoretical challenges of existing research and the

theoretical opportunities in the literature, there is the opportunity to investigate crisis

communication during transformative change. In section 2.2, I introduced punctuated

equilibrium theory as a guiding framework to the investigation of crisis

communication and change. With some support in the public relations literature

(Murphy, 2000), punctuated equilibrium theory provides a way to consider the

context of crises and the actions of organisations, seen as crisis communication

responses, under conditions of equilibrium and punctuations of equilibrium.

Punctuated equilibrium theory specifically identifies the ideal mix between

substantive and symbolic strategies during these conditions. In doing so, punctuated

equilibrium theory provides a platform to link crisis response strategies found in

crisis communication and public relations practice with punctuated equilibrium

theory. Based on these indications from the literature, I develop a framework to

guide this thesis in section 2.3.

2.3 Synthesising Context and Action through Punctuated Equilibrium Theory

In section 2.1.1, existing crisis communication research was discussed in

terms of its contribution to resolving situational or short-term crisis events that

affected single organisations. The role of crisis communication was to restore

organisational image, reputation, or legitimacy. This literature review has established

that the role of crisis communication during times when crisis events moved beyond

situational events and affected multiple organisations in potentially transformative


84

ways is empirically absent. In section 2.2, punctuated equilibrium theory with its

acceptance within the public relations literature, provides a framework that supports

the role of crisis events as triggers for transformative change and the role of crisis

management and communication during this process.

Based on the review of these literatures, it is noted that punctuated

equilibrium theory provides a framework through which to structure and study

transformative change and its role in crisis communication. This section sets out to

draw together crisis communication and punctuated equilibrium theory in order to

establish essential components of a process model that supports this integration.

Based on the extensive research around crisis communication during

situational crisis events as well as the support for crisis events as potential triggers

for transformative change, punctuated equilibrium theory provides a bridge to

connect both the context of transformative change and the organisational actions that

occur within this context. The contextual processes of punctuated equilibrium and

crisis are intertwined with the action level of organisations and crisis

communication. In this way, context influences action, and action influences context

(see Figure 2.1).


85

Figure 2.1 The relationship between context and action levels of punctuated

equilibrium theory and crisis communication, demonstrating how both action and

context influence each other.

This chapter section provides information about the elements of the processes

for change and in doing so, establishes the platform for the development of a

conceptual model (see Chapter 5) that connects both the context and action levels of

transformative change and crisis communication. This chapter section is set out in

three stages. Firstly, in section 2.3.1, the context levels of punctuated equilibrium

and crisis communication research will be synthesised to establish the context for

change and crisis. Secondly, in section 2.3.2, the action levels of punctuated

equilibrium and crisis communication will be explored to bring together existing

crisis response typologies with strategies for change. Finally, section 2.3.3

synthesises punctuated equilibrium theory and crisis communication.

2.3.1 Context in Punctuated Equilibrium and Crisis Communication

This section reports on the contextual processes of punctuated equilibrium

theory and crisis communication and management. The literature reviews of crisis

communication and punctuated equilibrium theory identify a number of elements

related to context. It is important to study context because according to Pettigrew

(1992), context and action are interwoven into history. As a result, in order to

Context of punctuated equilibrium

process and crisis communication

Actions of punctuated equilibrium

process and crisis communication


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explain actions, one must understand context (Pettigrew, 1992). Studies of change

should be aware of the ―enabling and constraining influences‖ of contexts on actions

(Pettigrew, 1992). To define context, this thesis draws on the foundational work of

Pettigrew (1992) and establishes context as the environment within which the

organisation is located. From a change perspective, shifts at the contextual level of

organisational systems affect change at the action level of organisations.

2.3.1.1 Punctuated Equilibrium Theory and Context

Within the perspective of punctuated equilibrium theory, contextual change is

seen through the phases of alternating periods of long stability and periods of short-

term transformative change. These periods are influenced by organisational systems

and triggers for change that come from either internal or external factors. Punctuated

equilibrium theory can be described as a ―path of development‖ (Siggelkow, 2002, p.

154) or model of insight formation (Gersick, 1991). In this way, punctuated

equilibrium theory focuses on the processes of change and demonstrates how change

occurs over time.

As a process model, punctuated equilibrium theory‘s context for change

includes the trigger for punctuation, which may involve a crisis event or another

internal or external factor, the punctuation period, where the trigger event gains

attention and leads to the emergence of multiple and linked crisis events, and the

new equilibrium period, where the system achieves new standards and deep

structures. At the same time, the emphasis of punctuated equilibrium theory is on the

processes of insight formation as there is no one pre-determined path for change and

no ability to predict the future (Gersick, 1991). Each organisation or system‘s change


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processes are individualised. At this level, little is known empirically about how

organisations respond to punctuations in their environments (Haveman et al., 2001).

One way to study this is through the communication practices of organisations

during punctuations.

2.3.1.2 Crisis Communication and Context

Under existing crisis communication research, the crisis context has been

treated largely at an organisational level that includes the perceptions of crisis

stakeholders and actors, and a consideration of an organisation‘s crisis history and

level of responsibility for the crisis event. These contextual factors influence

guidelines for crisis communication (Allen & Caillouet, 1994; Benoit, 1997, 2000,

2004; Coombs, 1998, 2004a, 2006b, 2007a, 2007c, 2009). When a situational crisis

event occurs, Coombs (2004, 2006) argues that an organisation‘s responses or

actions are influenced by stakeholders‘ perceptions of an organisation‘s

responsibility for the crisis event. It is this organisation-centric context that is used to

influence crisis management and crisis communication with the aim for the

prevention of the crisis event (Fearn-Banks, 2002; Fink, 1986; Hale, Dulek, & Hale,

2005).

Crises involve multiple stakeholders who are critical to an organisation‘s

crisis management. Crisis plans will consider employees, shareholders, media,

customers, governments, and local communities in their planning with the type of

crisis determining the prioritisation of stakeholders (Coombs, 2007b; Fearn-Banks,

2002; Marra, 2004). Stakeholders become involved in crises in many ways and at all

stages of the crisis. Stakeholders can cause crises, communicate about crisis events,


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and mitigate the effects of crises (Shrivastava et al., 1988). Stakeholders can be

directly affected by a crisis event such as a product recall; they can make decisions

that affect the focal organisation or government, and in some cases can demand to

become involved in the post-crisis management process (Allen & Caillouet, 1994;

Sen & Egelhoff, 1991). In these instances, organisations should find ways of

including stakeholders even at the expense of efficiency (Sen & Egelhoff, 1991).

As a crisis unfolds, stakeholder perceptions about the crisis and the

organisations or governments involved define the meaning of the crisis itself. That

is, although an organisation may seek to define a crisis event as a product recall or

workplace violence, stakeholders integrate their own meanings of the crisis. As a

result, a crisis is a socially constructed term that gains meaning from the

participation of multiple actors including the focal organisation or government,

media and other stakeholders (Hearit & Courtright, 2003). This involvement has the

potential to extend the time frame of crisis and increase the complexity of the crisis

context.

Depending on the type of crisis, stakeholders can communicate about it in

different ways. Stakeholders can be cooperative and collaborative or encourage

conflict and disunity (Seeger, 2002). Allen and Caillouet (1994) see an organisation

as being part of a ―web of complex relationships‖ (p. 44) where stakeholders‘ actions

can add pressures on the focal organisation. Their study of a reuse-recycle facility

that faced repeated challenges for its environmental record investigated how the

messages of other organisations or agencies involved in the crisis influenced the

communication of the reuse-recycle facility (Allen & Caillouet, 1994). By examining


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the target of the focal organisation‘s messages, Allen and Caillouet (1994) observed

that the majority of messages were directed to the media, government, and regulatory

bodies.

The existing literature suggests that stakeholder actions will influence the

focal organisation‘s communication choices during and after the crisis event (Seeger,

2002). In some cases, organisations will adapt their messages to suit each

stakeholder or audience (Allen & Caillouet, 1994). Each party seeks to frame the

crisis in ways that are favourable to their interests and over time the meaning of the

crisis shifts based on the role of stakeholders (Hearit & Courtright, 2003).

Existing crisis communication research recognises the role and influence of

stakeholders on an organisation‘s crisis management, yet its consideration is limited

to an organisation-centric context, that is the influence on the focal organisation.

However, research in the organisational literature suggests that industrial crises

extend beyond organisational phenomena and have fundamental trans-organisational

causes that mean their resolution cannot be achieved at the organisational level alone

(Shrivastava et al., 1988). Indeed, ―organisations do not operate in a social vacuum‖

(Brouillette & Quarantelli, 1969, p. 44). As a result, it is important to consider the

linkages between organisations (Miner, Amburgey, & Stearns, 1990). Punctuated

equilibrium theory provides a broader consideration of the context for change than

what is seen in the existing crisis communication and public relations literatures and

in doing so offers a way to extend scholarship.


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2.3.2 Action Level: Crisis Response Typologies during Equilibrium and

Punctuations

This section reports on the action levels of punctuated equilibrium theory and

crisis communication. The literature reviews of crisis communication and punctuated

equilibrium theory identify a number of elements related to the substantive and

symbolic actions that can be enacted by organisations. Action and context are

intricately connected parts of process models for change and crisis communication in

this thesis.

2.3.2.1 Punctuated Equilibrium Theory and Organisational Actions

Under punctuated equilibrium theory, organisational actions refer to

substantive and symbolic strategies. These strategies are enacted in different ways

depending on whether the organisation is operating under equilibrium or

punctuations of equilibrium (Siggelkow, 2002). Section 2.2.3 provides an account of

the actions of punctuated equilibrium theory and describes the incremental or fine-

tuning strategies that are enacted during the long periods of equilibrium as well as

the multiple strategies that are enacted during punctuations of equilibrium.

As established in section 2.2.3, organisational studies using punctuated

equilibrium theory have focused predominantly on the substantive strategies enacted

during punctuations of equilibrium. Although there is some sense of the role of

symbolic strategies, there is limited empirical evidence around this. As a result, by

studying crisis communication as symbolic strategies undertaken by organisations

during punctuations of equilibrium, this thesis responds to an opportunity in the

literature.


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2.3.2.2 Crisis Communication and Organisational Actions

Within crisis communication, the actions of organisations that undergo and

resolve crisis events that occur during long periods of stability are clearly established

through the crisis response typologies presented in the public relations literature.

However, the role and type of crisis communication during transformative change is

empirically absent in crisis communication research. Following the principles of

punctuated equilibrium theory, these properties are essential to describe and

understand specifically because they have the potential to reinforce, punctuate, and

reset equilibrium and thus influence crisis communication.

Organisations can prevent and manage crises by drawing on symbolic and

substantive strategies ('t Hart, 1993). As identified earlier in this chapter, the crisis

communication literature offers several typologies of crisis communication to

understand how organisations respond during crisis events. These typologies have

largely been applied to studies of single organisations experiencing situational or

short-term crisis events. Although the rationale for these typologies is grounded in

stability and the restoration of reputation and legitimacy, they provide useful starting

points to define crisis response strategies and map changes in these strategies over

time.

Sections 2.3.2.3 and 2.3.2.4 of this chapter are presented in two stages.

Firstly, the crisis response typologies of Coombs (2006b) and Allen and Caillouet

(1994) will be reviewed and justified. Secondly, because these typologies are

grounded in short-term or situational crisis events and do not consider transformative


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change, Oliver‘s (1991) strategic response typology will be presented to provide a

way to graft existing crisis response typologies to a typology that considers change.

Oliver‘s (1991) typology is introduced because existing scholars posit that standard

crisis communication typologies may not be adequate under transformative change

(Seeger et al., 2005). As a result, this thesis must integrate existing crisis

communication typologies with typologies that consider change.

2.3.2.3 Existing Crisis Response Typologies

Linked to the action level of punctuated equilibrium theory, the two

typologies selected from the crisis communication literature were developed by

Coombs (2006b) and Allen and Caillouet (1994). Sections 2.1.1 and 2.1.2 provide a

detailed overview of the range of existing crisis response typologies. Based on this

review, the typologies developed by Coombs (2006b) and Allen and Caillouet

(1994) were selected based on the following criteria: 1) clear framework of

organisational actions and communication choices, and 2) different analytical

considerations for crisis context. These criteria relate directly to process theory and

research and align with punctuated equilibrium theory.

Coombs‘ (2006b) typology was selected because it was created based on the

typologies of Benoit and Allen and Caillouet (1994) to offer a range of crisis

response strategies from deny to diminish to repair. Coombs‘ (2006b) crisis response

strategies build on these authors‘ typologies by integrating both symbolic and

substantive strategies such as compassion and corrective action that aim to treat the

cause of the crisis. In comparison, Allen and Caillouet‘s (1994) typology considers

only the symbolic or communication responses of organisations in crisis. Coombs‘


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(2006, 2007c) crisis response strategies can be used to answer and resolve concerns

about an organisation‘s responsibility for a crisis event. The strategies range from

accommodative to defensive and sit within three primary postures in addition to the

supplementary bolster strategy, as illustrated in Table 2.5.

Table 2.5

Coombs’ Crisis Response Typology

Posture Crisis response strategy definition

Deny Attack the accuser

Crisis manager confronts the person or group claiming something is wrong with

the organisation

Denial

Crisis manager asserts there is no crisis

Scapegoat

Crisis manager blames some person or group outside of organisation for the

crisis

Diminish Excuse

Crisis manager minimises organisational responsibility by denying intent to do

harm and/or claiming inability to control the events that triggered the crisis.

Justification

Crisis manager minimises the perceived damage caused by the crisis

Rebuild Compensation

Crisis manager offers money or other gifts to victims.

Apology

Crisis manager indicates the organisation takes full responsibility for the crisis

and asks stakeholders for forgiveness

Bolster Reminder

Crisis manager tells stakeholders about the past good works of the organisation

Ingratiation

Crisis manager praises stakeholders and/or reminds them of past good works by

the organisation

Victimisation

Crisis managers remind stakeholders that the organisation is a victim of the

crisis too.


Crisis response strategies shape attributions of crisis, change perceptions of

the focal organisation, and reduce negative effects of crisis (Coombs, 1995, 2007c).

Coombs‘ (2006b) typology considers the crisis context through the lenses of

organisational responsibility for the crisis, the crisis type, and the organisation‘s


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reputational and crisis history. For example, each response is built around perceived

acceptance of responsibility for a crisis. As crisis response strategies become more

accommodative, they show greater concern for victims, and stakeholders perceive

the organisation is taking greater responsibility for the crisis (Coombs & Holladay,

2004). The deny posture represents the defensive end of the continuum and the

rebuild posture represents the accommodative end of the continuum. Bolster

strategies can be used at any point in the crisis.

Allen and Caillouet‘s (1994) typology was also selected for this thesis. The

authors used impression management as a basis for developing a typology of

strategies and institutional theory as a way to explain how these strategies could

potentially shape and restore organisational legitimacy (Allen & Caillouet, 1994). To

build the link between impression management and institutional theory, Allen and

Caillouet (1994) developed a typology of message strategies and also examined the

target of each strategy. In this way, the study could understand both the complexity

of communication and institutional constraints on organisational messages. By

integrating institutional theory, Allen and Caillouet (1994) examined messages as

occurring within the context of a ―complex web of relationships‖ among a focal

corporate actor and other agents (Allen & Caillouet, 1994). In devising this typology,

the authors paid attention to how strategies related to institutionalisation within an

organisational field (Allen & Caillouet, 1994). That is, how an organisation

communicated its conformity and gained audience approval in order to enhance its

legitimacy (Allen & Caillouet, 1994). In doing so, Allen and Caillouet‘s (1994)

typology provides an insight into the crisis context that is analytically different to

Coombs‘ (2006b) typology.


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The resultant typology includes those strategies that admit fault and

communicate through excuses, justifications or apology; those that aim to convince

stakeholders of legitimacy through ingratiation; and those that aim to intimidate,

denounce or claim factual distortion (Allen & Caillouet, 1994). The strategies are

illustrated in Table 2.6.


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Table 2.6

Allen and Caillouet’s Crisis Response Typology

Strategy Definition

Excuse An organisation attempts to negate responsibility for an event

Denial of intention

consequences were unforeseeable

organisation was unaware of action and decision effects

effects were accidental or result of mistake

Denial of volition

event could not be controlled or be expected to be controlled

Denial of agency

organisation did not make a decision or perform a particular behaviour

or performed a similar response but did not produce the act in question

Justification Organisation accepts responsibility for the effect but does not accept

responsibility for the negative actions associated with it

Denial of injury

organisation admits an event occurred but asserts it was permissible

since no one was hurt or the act‘s consequences were trifling.

Denial of victim

the action was permissible since the victim deserved the injury

Condemnation of condemner

organisation admits act but asserts act was irrelevant because others

commit these and worse acts

Negative events misinterpreted

Ingratiation The organisation attempts to gain audience approval

Self-enhancing communication

organisation attempts to persuade target of organisation‘s positive

qualities, traits, motives, and/or intentions

Role model

organisation suggests that it serves as an exemplar

Social responsibility

organisation accepts social responsibility

Other-enhancing communication

Organisation seeks approval by praise, approbation, and flattery

toward the target

Organisation seeks opinion conformity

Organisation expresses similarity of beliefs, values, and attitudes

directly associated with liking

Intimidation Organisation conveys an organisational identity of danger and potency.

Often used in conjunction with threats

Apology Organisation admits the organisation‘s guilt and requests punishment.

Denouncement Statements indicate a particular external person or group is at fault.

Factual

distortion

Statements offered in regard to an event are taken out of context or untrue.

Source: Allen & Caillouet, 1994


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The strategies identified in Table 2.6 detail the range of messages that

organisational actors can communicate to restore or reinforce legitimacy. Allen and

Caillouet‘s (1994) typology is limited to messages only whereas Coombs‘

framework considered both communication and action. Unlike Coombs‘ (2006b)

situational crisis communication theory, Allen and Caillouet‘s (1994) typology does

not offer a set of prescriptive guidelines for strategy use. Allen and Caillouet‘s

(1994) work was more formative, leading to the development of a typology of

message strategies connected by a web of relationships among actors. One of the

ways that Allen and Caillouet‘s (1994) strategies achieve legitimacy is by

demonstrating conformity. Organisations demonstrate conformity to show that their

practices are consistent with industry norms. This is one way to restore stability or

the status quo.

Despite the ongoing use of Allen and Caillouet‘s (1994) work in Coombs‘

research, there are some elements lost in interpretation. By focusing on crisis

response strategies, Coombs‘ work has often not considered Allen and Caillouet‘s

(1994) emphasis on the way corporate actors become entangled in defining and

resolving the crisis. This thesis returns to a focus on the notion of the ―web of

complex relationships‖ (Allen & Caillouet, 1994, p. 44). Allen and Caillouet (1994)

take into account that legitimacy pressures can come simultaneously from multiple

stakeholders who have been affected by the actions of one organisation. Following

this network logic, one organisation‘s crisis can also both draw pressure from and

increase pressure on multiple, linked organisations. As a result, Allen and Caillouet‘s

(1994) study of impression management strategies also provides another way to

study crisis communication: to examine how the messages of other organisations or


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agencies pressure the communication of the focal organisation in crisis. As a result

of these additional pressures, the focal organisation may have had a greater

requirement to communicate externally that its actions were legitimate (Allen &

Caillouet, 1994).

2.3.2.4 Integrating Change into Existing Crisis Response Typologies

Although the work of Coombs (2006b) and Allen and Caillouet (1994)

provide an understanding of how organisations communicate during situational or

short-term crisis events, their role under conditions of transformative change when

crisis events affect multiple organisations remains untested. In order to integrate

change, the management literature provides typologies that allow for the

incorporation of multiple players and the transformation of crisis events yet are

consistent with crisis response typologies.

Although it is beyond the scope of this thesis to provide an extensive review

of all documented typologies in the management literature, the two key typologies

considered were Oliver‘s (1991) strategic responses to institutional pressures and

Suchman‘s (1995) legitimation strategies. Both typologies were considered because

they: 1) shared the outcome of legitimacy with crisis response typologies, 2) adopted

a strategic focus on institutional elements, and 3) considered change by relating a

strategy alternative to conformity or manipulation of the environment. However,

Oliver‘s (1991) typology was ultimately selected for this thesis. Suchman‘s (1995)

legitimacy strategies examine the challenges of gaining, maintaining and repairing

legitimacy based on three types of legitimacy, pragmatic, moral, and cognitive.

Although Suchman‘s (1991) typology has been used to analyse the James Hardie


99

crisis (Patel & Xavier, 2005), its focus on the challenges and types of legitimacy

limits its applicability to a study that focuses largely on regulative legitimacy. As a

result, Oliver‘s (1991) framework was selected.

Drawing on both resource dependence and institutional theories, Oliver

(1991) developed a typology of an organisation‘s strategic responses to institutional

pressures towards conformity. The typology aimed to contribute to understanding

how organisational behaviour can sit on a continuum of conformity to resistance in

response to institutional pressures and expectations. Like Allen and Caillouet (1994),

Oliver‘s (1991) typology is also linked to organisational legitimacy.

Oliver (1991) identifies five strategic responses to institutional pressures:

acquiesce, compromise, avoid, defy, and manipulate. These strategies sit on a

continuum ranging from passive conformity to active resistance (Oliver, 1991, p.

146). Conformity to existing definitions of legitimacy and taken-for-granted norms is

a common organisational response that achieves legitimacy and enhances survival

(Oliver, 1991; Rao, 1994; M. A. Zimmerman & Zeitz, 2002). Conformity is a

characteristic organisational response to uncertainty (Rao, Greve, & Davis, 2001)

and represents both an efficient use of resources and continued access to resources

(George, Chattopadhyay, Sitkin, & Barden, 2006). At the other end of the

continuum, organisations can alter existing definitions of legitimacy (Dowling &

Pfeffer, 1975) by introducing new criteria and measures to evaluate legitimacy and

performance (Oliver, 1991). Organisations can pursue non-conformance strategies in

order to gain control of their environment (George et al., 2006). The typology is

presented in Table 2.7.


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Table 2.7

Oliver’s Typology of Strategic Responses to Institutional Processes

Strategy Tactic Definition and example

Acquiesce Habit Follow invisible, taken-for-granted norms

Organisations reproduce roles such as teacher, student etc

Imitate Mimic institutional models

Organisations imitate successful behaviours of others

Comply Obey rules and accept norms

Organisations show compliance with institutional bodies to

enhance legitimacy and stability

Compromise Balance Balance the expectations of multiple constituents

Organisation seeks balance between stakeholders to achieve

parity among multiple interests

Pacify Placate and accommodate institutional elements

Organisations show partial conformity to institutional

expectations

Bargain Negotiate with institutional stakeholders

Organisation negotiates with government to reduce scope of

compliance with new policy

Avoid Conceal Disguise nonconformity

A ―window dressing‖ organisation will say it is doing things

to meet institutional norms; e.g. prepare for a site visit by

doing expected activities that are not part of the norm

Buffer Loosen institutional attachments

Organisations reduce opportunity for institutional

inspections by separating internal activities from external

investigation

Escape Change goals, activities, or domains

e.g. if government inspections on emission standards are

considered too tough, then organisation might change goals

so that it no longer emits or change territories

Defy Dismiss Ignore explicit norms or values

e.g. organisation ignores affirmative action policy because it

cannot see relevance or it will not get caught

Challenge Contest rules and requirements

e.g. schools are legitimate yet different forms of schools like

Montessori hold different definitions for effective education

Attack Assault the sources of institutional pressure

Organisation denounces institutional rules openly; e.g.

criticise mass media for misrepresenting public opinion

Manipulate Co-opt Import influential constituents

Organisation may recruit stakeholder onto organisational

board or to be opinion leader

Influence Shape values and criteria

Trade association aims to influence perceptions of its

industry and lobby government for change

Control Dominate institutional constituents and processes

Organisation dominates small advocacy group that‘s

opposed its products

Source: Oliver, 1991


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Following from Table 2.7, the acquiescence strategy is designed to show

conformance to institutional processes (Oliver, 1991). Under this strategy,

organisations can respond using a range of tactics termed habit, imitate, and comply.

Under the habit response, organisations will ―reproduce actions and practices‖ that

have become convention within the environment (Oliver, 1991, p. 152). Under the

imitate response, organisations will mimic the responses of successful and trusted

organisations (Oliver, 1991). Similarly, the comply response shows a ―conscious

obedience‖ and choice of an organisation to comply with institutional pressures

(Oliver, 1991, p. 152).

The compromise strategy operates within the spirit of conformance, yet offers

a degree of agency for organisations to select and promote their own interests. Under

this strategy, organisations can respond using a range of tactics titled balance, pacify

and bargain. Under the balance response, organisations can accommodate the

interests of a range of stakeholders and is particularly useful when stakeholders hold

conflicting positions (Oliver, 1991). A pacify response shows partial conformity to

institutional pressures from one or more stakeholders (Oliver, 1991). A bargain

response is a more active form of compromise where the organisation seeks some

concessions from stakeholders (Oliver, 1991).

The avoidance strategy is designed to ―circumvent‖ the basis for institutional

conformance (Oliver, 1991, p. 156) and is achieved by decoupling the activities that

cause conflict (Dowling & Pfeffer, 1975; J. W. Meyer & Rowan, 1977; Oliver,

1991). In this way, organisations shift focus on non-conforming actions by


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increasing focus on actions that have a strong base in legitimacy (Dowling & Pfeffer,

1975; J. W. Meyer & Rowan, 1977; Oliver, 1991). Under this strategy, organisations

can respond using a range of tactics titled conceal, buffer, and escape. The conceal

response sees organisations disguise non-conformance by communicating plans in

response to institutional pressures but with no intention of implementing them

(Oliver, 1991). Under the buffer response, organisations attempt to shield itself from

external scrutiny by decoupling or removing internal activities from external

inspection (Oliver, 1991). Under the escape response, organisations either exit the

domain or significantly change goals to avoid conformity (Oliver, 1991).

Unlike the other strategies, the defiance strategy represents an organisational

rejection of institutional pressures. Under this strategy, organisations can respond

using a range of tactics titled dismiss, challenge or attack. Under the dismiss

response, organisations ignore institutional rules, often when the basis or rationale

for these rules is unclear to the organisation (Oliver, 1991). The challenge response

represents a more ―active departure‖ from institutional rules where organisations

make a case for their non-conformity (Oliver, 1991, p. 156). Under the attack

response, organisations are aggressively defiant of institutional pressures (Oliver,

1991). In this way, organisations denounce institutional norms and those

stakeholders who hold them to these rules (Oliver, 1991).

The manipulation strategy occurs when organisations actively change

institutional pressures (Oliver, 1991). In this way, organisations take control of

institutional pressures to redefine norms (Oliver, 1991). Under this strategy,

organisations can respond using a range of tactics titled co-opt, influence or control.


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A co-opt response occurs when organisations persuade stakeholders to join an

organisation through its board or other decision-making body (Oliver, 1991). An

influence response is used when organisations seek to influence and change

perceptions around institutional practices and/or the standards by which legitimacy is

evaluated (Oliver, 1991). Under the control response, organisations establish power

over the stakeholders that are applying institutional pressure (Oliver, 1991).

2.3.2.5 Summary of Context and Actions and Implications for Study

In summary, this section has outlined the context and action levels of

punctuated equilibrium theory and existing crisis communication research.

Punctuated equilibrium theory provides an understanding of the context for periods

of equilibrium and punctuations for equilibrium. Further, punctuated equilibrium

theory maps the substantive strategies that are enacted by organisations during

punctuations. Less is known about the role of symbolic actions during punctuations

of equilibrium, presenting opportunities for this thesis.

In comparison, the crisis communication literature depicts organisational

factors such as crisis history, an organisation‘s level of responsibility for a crisis, and

stakeholders as the key contextual factors that influence crisis communication and

action. Two typologies of crisis response strategies were presented in line with this

approach. However, because existing research has focused largely on situational or

short-term crises, less is known about crisis contexts and communication under

transformative change. As a result, punctuated equilibrium theory provides a way to

extend the context level and the organisational literature provides typologies for

change to extend scholarship in crisis communication.


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2.3.3 Synthesising Punctuated Equilibrium Theory and Crisis

Communication

This thesis aims to extend existing research and scholarship by examining the

specifics of crisis communication within a punctuated equilibrium framework.

Existing research is outcomes-based where crisis communication typologies have

been developed in order to restore organisational reputations and legitimacy in the

most effective and efficient manner possible. Instead, following punctuated

equilibrium theory, this thesis aims to take a process-based approach to studying the

interplay between context and actions in crisis communication under transformative

change. In order to achieve this task, this chapter section establishes the key

components of context and action over time as a way of building the methodology

and conceptual model of the thesis (see Chapter 5).

This thesis deliberately focuses on the period of punctuation where

transformative change occurs. Guided by this emphasis, this section draws together

punctuated equilibrium theory and crisis communication by establishing a crisis

event as a trigger for a punctuation, the emergent crisis events, and the signals of

renewal of equilibrium. These stages are represented in Figure 2.2.


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Figure 2.2 The development of a crisis under punctuated equilibrium theory,

depicting how a situational crisis event becomes a focusing event that retains media

interest.

Through each of these stages, the thesis aligns punctuated equilibrium theory

and crisis communication, considering both context and action levels. The context

level is based on the conditions and phases required and associated with

transformative change. The action level is based on the symbolic and substantive

actions enacted by organisations that occur within this context. These stages are

mapped out in the remainder of this chapter section.

2.3.3.1 The Trigger for Punctuation

The first stage of the punctuated equilibrium process model of crisis

communication proposes a situational crisis event as a trigger for the punctuation of

equilibrium. A situational crisis event is a negative and unexpected event that

interrupts and potentially threatens the normal operating environment of

organisations (Coombs, 2007b; Fearn-Banks, 2002; Pearson & Clair, 1998). To

resolve this threat and manage uncertainty, organisations respond using crisis

management and communication techniques and strategies (Boin, 't Hart, Stern, &

Sudelius, 2006; Coombs, 2004a; Coombs & Holladay, 2006).

Situational crisis event

•Focal corporate actor draws on crisis response typologies

Focusing event

•Media act as selection mechanism

•Multiple corporate actors or institutions affected

Emergent crisis events

•Media continue to cover story

•Focal corporate actor draws on crisis response typologies

Signals of newequilibrium

•New standards of practice emerge and are tested by regulatory authorities and corporate actors


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Existing crisis communication literature within the public relations discipline

provides extensive insight into the ways organisations communicate in order to

resolve situational crisis events. The public relations literature puts forward an

escalating set of crisis communication responses that organisations can use to protect

their reputations. Coombs and Holladay (2004) identify three response postures

(deny, diminish, and repair) that organisations can use to select and adapt strategies

as crises shift in the short-term. These strategies account for the organisation‘s level

of responsibility for the crisis event and help facilitate organisational control of the

crisis. Within the context of a developing crisis, organisational communication can

move from a first-level denial posture to a diminish posture and so on if initial crisis

communication is not accepted by the environment in the short-term (Coombs &

Holladay, 2004).

Although the public relations literature provides a rich set of crisis response

strategies to guide communication during situational crisis events, existing research

is limited to conditions where organisations have the ability or potential to control or

influence the levels of complexity and uncertainty associated with the crisis event.

Essentially, under these conditions, the organisation hopes to be able to manage the

crisis and restore the status quo. However, as yet, existing crisis communication

literature provides no consideration of crisis communication that moves beyond the

repair posture option as noted in situational crisis communication theory (Coombs &

Holladay, 2004). Existing research in crisis communication provides limited insight

into the ways organisations communicate when crisis events move beyond the

control or influence of organisations to affect multiple organisations and interests.


107

Despite enacting standard crisis response strategies, organisations may

experience sustained questioning attention or focus as a result of their situational

crisis event and selection of crisis response strategies. A crisis can disturb the status

quo by casting a spotlight on organisational vulnerabilities and draw sustained

attention to stakeholder relationships (Clair & Dufresne, 2007). In doing so, a crisis

can trigger strong emotional reactions from stakeholders (Clair & Dufresne, 2007),

which in turn attract sustained media and public interest. This attention is likely to

affect organisational legitimacy (Smith & Sipika, 1993; Suchman, 1995) and shift a

situational crisis event to a more complex event or crisis or a series of crisis events.

Complex crisis events are less likely to be as spatially confined as their

situational counterparts (Boin & 't Hart, 2003). Complex crisis events can entangle

with other deep problems to have a prolonged impact on organisations, sectors or

industries (Boin & 't Hart, 2003). In this way, complex crises have the potential to

limit the effectiveness of standardised crisis response strategies.

Another characteristic of complex crisis events is that it is often difficult to

identify in real time. Events that trigger transformative change may initially appear

as ―inconsequential‖ (A.D. Meyer et al., 1990, p. 108). As a result, Meyer et al.

(1990) caution that their sudden onset may force action before the organisation fully

understands the consequences of such decisions. Research shows that organisational

actions during transformative change have the potential to create or be judged by the

new standards for equilibrium that follow (A.D. Meyer et al., 1990). Meyer et al.


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(1990) describe managers as being responsible for reinventing both organisations

and environments during punctuations.

The potential inadequacy of standard crisis response strategies (Seeger et al.,

2005) and difficulties associated with recognising the subtle shift from a situational

crisis event to a force that moves beyond an organisation‘s ability to control or

influence may hinder an organisation‘s ongoing reputation and viability. These two

conditions also have the potential to lead to the emergence of new properties related

to the original crisis event that draw from historical elements of organisational

systems. It is at this point that a departure is made from the public relations and crisis

communication literatures to the punctuated equilibrium theory literature that

provides more insight into both the context and actions of crisis events.

2.3.3.2 Punctuations: Focusing and Emergent Crisis Events

When the conditions are right, a situational crisis event that affects a single

organisation can develop into a focusing event that involves multiple organisations,

actors, and interests that operate across extended time frames. Once a situational

crisis event becomes a focusing event, a punctuation of equilibrium is imminent. The

public relations literature on crisis is focused largely on situational crisis events.

Although it recognises the transformative role of crisis, there is little insight given

into the development of complex crises and the role of crisis communication under

these conditions. Drawing from punctuated equilibrium theory in the public policy

literature, this section defines a focusing event and outlines the environmental

conditions required for the shift from crisis event to focusing event.


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A focusing event grows out of an incident of failure. While this failure on its

own is unlikely to be the direct cause of transformative change, it provides the

source of ―energy for revolutionary change‖ (Gersick, 1991, p. 22). A focusing event

draws organisational, industry and policy sector attention to an issue and creates a

need for new solutions that often go beyond existing deep structures and institutional

arrangements (Birkland, 1998; Wood, 2006). Once the event or incident gains

attention, it also gains momentum and can become an unstoppable force of change

(John, 2003) that may affect institutional arrangements (Hoffman & Ocasio, 2001).

Focusing events can take many shapes and involve different types of industry

and organisational actors (Hoffman & Ocasio, 2001). When a focusing event relates

to a matter that is high in the public interest or has the potential to trigger activism, it

becomes a matter requiring the attention of multiple players. Some of the key

stakeholders involved in focusing events include interest groups and activists,

government and regulatory leaders, policy entrepreneurs, mass media, or the general

public (Birkland, 1998; Givel, 2006).

Focusing events not only bring attention to key issues but create a mandate

for transformative change by reducing the legitimacy or acceptance of support of

existing structures or arrangements. Such events are usually time restricted and

―curtail in-depth deliberation‖ (Schrad, 2007, p. 457). In this climate, issues that

were once dormant can be re-framed and/or new ideas can be presented (Jones &

Baumgartner, 2005). Focusing events produce a foundation for alternative interests

by heightening public attention to critical issues (Givel, 2006). Alternative interests

have the potential to loosen the grip of organisational inertia (Haveman et al., 2001).


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The attention drawn by focusing events raises the salience of the issue and shifts

focus away from the content dimensions that support existing stability (Jones &

Baumgartner, 2005). In essence, focusing events create the potential for support for

new ideas and new practices to manage organisational-environmental relationships

or policy (John, 2003; McDonough, 2000).

The transition from a crisis event to a focusing event requires two essential

factors. Firstly, a crisis event remains ongoing when crisis response strategies or

crisis management decisions fail to preserve the status quo. This failure is

compounded when an organisation also lacks the ability to learn from its original

crisis responses and seek alternative paths (Lin, Zhao, Ismail, & Carley, 2006;

Moynihan, 2008). The second required factor for the development of a crisis event to

a focusing event is public attention (Alink, Boin, & 't Hart, 2001; Clair & Dufresne,

2007; Comfort, Sungu, Johnson, & Dunn, 2001; Wood, 2006).

For a crisis event to become a focusing event, it must be visible and

significant enough to receive attention from a range of stakeholders including the

elite industry actors and the mass media (Alink et al., 2001; Clair & Dufresne, 2007).

In the organisational studies literature, Hoffman and Ocasio (2001) sought to

determine the factors that influenced industry level attention on events. Through a

case analysis, they found that industry attention was given to those issues, situations

and activities that represented potential problems or opportunities for the industry

(Hoffman & Ocasio, 2001, p. 415). An industry actor‘s communication and

interaction with other actors created a specific selection force for events that

operated above the objective facts relating to the event (Hoffman & Ocasio, 2001).


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As a result, the power of actors‘ communications and interactions and perceptions of

events were significant in determining which events received greater attention and

therefore held the greatest potential for change.

The role of stakeholders and their connections is critical in focusing events.

Focusing events bring together multiple stakeholders who focus attention on

―existing but dormant problems‖ (Birkland, 1998, p. 55) with a view to voicing

concerns and correcting any policy failures. A focusing event gives stakeholders a

legitimate channel to voice ―latent feelings of discontent, suspicion or outrage‖ about

policy or sector performance (Alink et al., 2001, p. 298). Some of the stakeholders

involved include interest groups, government and policymakers, and the mass media

(Birkland, 1998; Shrivastava et al., 1988) and advocacy coalitions (Hoffman &

Ocasio, 2001).

The stakeholders identified above are key actors in society. While each group

has its own web of relationships (Allen & Caillouet, 1994), the public interest can

serve as a collective force for issue mobilisation. When public interest is high or has

the potential to become high, a focusing event will mobilise stakeholders and groups

(Birkland, 1998). Drawing on policy researchers (Baumgartner & Jones, 1991,

1993), John (2003) argues that ―once an idea gets attention, it will expand rapidly

and once that happens, it becomes unstoppable‖ (p. 489). Once an event becomes a

focus point or gathers industry attention, it has the potential for significant change to

institutional arrangements (Hoffman & Ocasio, 2001).


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The mass media plays a pivotal role in communicating crisis events to the

general public (Alink et al., 2001; Shrivastava et al., 1988). The media pressure

organisations or governments for immediate explanations and also scrutinise the

ways that organisations account for crisis events (Seeger et al., 1998). The mass

media‘s reporting of crisis and focusing events has the potential to shape perceptions

of and responses to such events. While the mass media attempts to provide detailed

coverage using available and often restricted information, there is potential for it to

extend the crisis event by ―giving rise to myths, false alarms and heightened

perceptions of harm‖ (Shrivastava et al., 1988, p. 291).The mass media creates high

visibility, which is required to turn the crisis event into a focusing event that acts as a

mechanism for change. The mass media integrates crisis stakeholders with other

indirectly related stakeholders to create a foundation for change (Clair & Dufresne,

2007; Comfort et al., 2001).

Crisis and focusing events also provide a foundation for the expression and

amplification of strong emotional reactions to a system‘s performance (Alink et al.,

2001, p. 298). A crisis and focusing event can highlight the ―emotional‖ life of an

organisation and can arouse intense emotional responses such as stress, fear, anxiety,

and apprehension from stakeholders and the public (Alink et al., 2001; Clair &

Dufresne, 2007; Seeger et al., 2005). Such an emotional response from stakeholders

has the potential for their rejection of the system or structures that caused the crisis

event (Seeger et al., 2005). As a result, organisations have to be prepared to manage

the emotional aspects associated with a crisis (Alink et al., 2001; Clair & Dufresne,

2007).


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A crisis that is highly publicised and politicised has the potential to suspend

equilibrium and relax the structural restraints of institutions (Boin et al., 2006).

Instability presents opportunities to ―agents of change‖ who leverage off the

(temporary or not) decrease in acceptance of the status quo to put forward claims and

proposals that may previously be perceived as unacceptable (Alink et al., 2001, p.

302). A crisis ―unfreezes‖ ways of thinking and allows for ―a radical break in the

changes of historical legacies‖ (Boin et al., 2006, p. 126). In this way, a crisis brings

together industry and policy actors and opinion leaders ―to realise that that traditional

structures and processes are no longer effective or appropriate‖ (p. 289). Within this

context, new alternatives surface (Alink et al., 2001).

2.3.3.3 Ongoing Crisis Events

A further consequence of ongoing interest in crisis and focusing events is the

potential for additional crisis events that are related to the original trigger events

(Shrivastava et al., 1988). Additional crisis incidents have the potential to ―extend

and deepen the crisis for involved organisations‖ (Shrivastava et al., 1988, p. 293).

When additional events emerge from the original event and are related to the event

or its attributes, they are emergent and linked.

Multiple and linked crisis events are an important consideration of the

punctuated equilibrium framework for crisis communication and the crisis context.

They signal ongoing instability at the same time as new parameters for legitimacy or

equilibrium are being negotiated. Despite acting as a signal for ongoing instability,

there is limited information on linked crisis events. In simulations of punctuated

equilibrium theory, a single shift in the environment has been shown to generate a


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―multiple-step‖ organisational revolution (Sastry, 1997, p. 266). While traditional

punctuated equilibrium studies are associated with studies of single punctuations,

there is the possibility for the theory to generate multiple punctuations (Sastry,

1997).

The public relations literature provides little insight into ongoing crisis

events. To fill this gap, the organisational and disaster management literature provide

some insight into ongoing crisis events or crisis chains (Ren, 2000; Shrivastava et

al., 1988). Industrial crises comprise interdependent events that can occur in

geographically dispersed locations and at different times (Shrivastava et al., 1988).

Drawing on the Bhopal crisis, Shrivastava et al. (1988) show how a crisis event that

occurred in India affected the chemical industry around the world over time. Linked

crises are described as parallel chains of events that are causally linked but may be

loosely coupled because they are triggered by different actions and agents

(Shrivastava et al., 1988). That is, while the chain of events can be linked back to a

prior crisis event, they are difficult to anticipate and may only indirectly affect future

crisis events (Shrivastava et al., 1988).

Further insight comes from the disaster prevention and management area.

Ren (2000) defines operationally linked crisis events as a series of crises that affect

one organisation:

A basic definition for linkage between crises is that a second or even third crisis

occurs before the impact of the first crisis has been completely resolved. The impact

of the first crisis…could be divided into: damage to the total integrity of society,


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local damage and loss within the impact area of the crisis, alterations to the normal

operational state of society, and taxing of recovery resources (Ren, 2000, p. 14).

In his proposed model to linked crisis events, Ren (2000) draws attention to

temporal grouping. Although the literature supports the potential for linked crisis

events (Shrivastava et al., 1988), Ren (2000) extends this and argues that the

temporal grouping of linked crisis events creates the potential for the emergence of

unique linkage properties that sit beyond the sum of individual crisis events.

Through this view, Ren (2000) argues that the response to the first crisis event may

positively affect subsequent crisis events for an organisation if it can recover social

integrity or legitimacy. However, the first crisis event may create ongoing

vulnerabilities for an organisation‘s additional crisis events by weakening structures

or draining resources (Ren, 2000).

Linked crisis events present several challenges to crisis managers. Set in the

disaster management and prevention area, Ren (2000) argues that the first challenge

is to determine the ‗unique effects‘ that link crisis events together. Once identified,

the organisation can enact an adaptive response to adjust operations in order to

decouple the ‗unique effects‘ of the crisis events (Ren, 2000). Another challenge

relates to the crisis managers themselves. According to Ren (2000), crisis response

personnel must ―free themselves from single crisis centred attitudes that could hinder

their ability even to emotionally accept the full nature of a multiple crisis event‖ (p.

17).

Although set in disaster prevention and management with a focus on crisis

events that affect a single organisation, Ren‘s (2000) conceptual work presents a


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useful addition to a punctuated equilibrium framework for crisis communication.

Linked crisis events capture not only the link between the original crisis event and

the focusing event but connect the cause of concern for the original crisis event to

other organisations who share the source of concern.

The consideration of multiple linked crisis events signals a unique

contribution to crisis communication research in the public relations literature.

According to Bechler (2004), the majority of the public relations literature treats a

crisis as an isolated event with a single cause or trigger. Such assumptions do not to

consider the ―systemic nature of organisational life‖ that involves the organising of

multiple individuals and organisations (Bechler, 2004, p. 67). Punctuations of

equilibrium turn attention to these conditions as brought about by focusing events

into new standards for equilibrium. The punctuation concludes when change brings

about new deep structures or conditions for equilibrium.

2.3.3.4 Implications for Research

In summary, focusing events bring industry and public attention to issues,

which in turn encourage the questioning of the deep structures that provide

equilibrium. When questioning of current equilibrium standards begins to have a

negative effect on existing systems and structures, a punctuation of equilibrium will

occur. The punctuation signals transformative change that engages multiple

organisational and industry actors. In relation to a punctuated equilibrium framework

for crisis communication, punctuations produce shifts in equilibrium standards and

additional crisis events that are linked to the original crisis event or focusing event.

As depicted in Figure 2.3, crisis events develop into focusing events when they gain


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high visibility through industry, media and public attention. Focusing events involve

not only multiple actors and levels of decision-making (especially in comparison to

those stakeholders involved in situational crisis events) but also lead to emergent

properties and linked crisis events. While these contextual processes are considered

in the punctuated equilibrium process framework, the communication actions of

organisations are yet unknown.

The contextual level shows that the transformation of a crisis event to a

focusing event and potentially to multiple linked crisis events gives crisis

communication researchers a greater ability to understand crisis response strategies

and their meaning (or lack of) in accounting for or driving change. One approach to

consider might be a renewed emphasis on both crisis response strategies that link

organisational accounts to broader system concerns. This approach will allow for an

investigation of how crisis response strategies work to shift arrangements for the

subsequent linked crisis events in industry settings.

The public relations and crisis communication literatures provide limited

guidance about the communication actions that occur when a crisis event transforms

into a focusing event and draws attention from multiple organisations within an

industry. Standard crisis response strategies may not be adequate to address crises

that transform into additional crisis events and, as a result, set in motion the

processes for new standards of equilibrium. Addressing this gap in the literature is

the concern of the next section of this chapter.


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2.4 Research Questions

Within the discipline of public relations, the synthesis of existing crisis

communication research and punctuated equilibrium theory provides a way to extend

and refine ongoing research in crisis communication beyond its application in

preserving the status quo. This thesis aims to contribute to the discipline by bridging

the existing communication actions of organisations during situational crisis events

with the process of transformative change as specified within punctuated equilibrium

theory. Together, these perspectives lead to the development of the central research

question. Because there is little empirical knowledge on this topic, and much of the

crisis communication and public relations literature is grounded in the area of

incremental change, the central research problem guiding this thesis is:


communication?

This thesis seeks to refine and extend existing theories and models of change

in crisis communication and public relations by considering the nature of crisis

communication during transformative change. Specifically, this discussion draws

from existing literature that suggests crisis communication is designed to repair or

restore organisational image, reputation, and legitimacy following situational crisis

events. Yet, at the same time, these situational crisis events have the potential to

trigger transformative change and bring about a series of emergent and linked

properties and events that are derived from the original crisis event. What is not clear

is how organisations communicate when crises shift from situational to more

complex and potentially multiple crisis events. The nature of communication actions

is arguably constrained or enabled by the contextual factors of change including the


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level of media interest and number of actors who become involved in the developing

crisis events.

The relationships among these fundamental components are parts of the

conceptual framework for describing crisis from the perspective of punctuated

equilibrium theory. A punctuated equilibrium process model of crisis must illustrate

how a crisis event that occurs to one organisation during a period of equilibrium

becomes a focusing event that literally draws attention from a much larger set of

organisational and industry actors than the initial crisis event. Although the focal

organisation may have some control over the initial escalation from crisis event to

focusing event, the nature of the crisis shifts in scale to engage multiple

organisations and actors and, consequently, create a larger emergent set of linked

crisis events. Under these terms, when equilibrium is punctuated, the organisation

loses its influence over the emergent properties the punctuation creates. During the

punctuation, organisational and industry actors debate and start to form solutions or

alternative conditions for equilibrium and legitimacy. These conditions then become

the basis for the deep structure of legitimacy that guides the next equilibrium period

for the system.

2.4.1 Guiding Research Questions

In order to explore the central research question, two guiding research

questions have been developed based on the integration of crisis communication and

punctuated equilibrium literatures at the levels of context and action.


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2.4.1.1 Communication Action

The existing literature in crisis communication provides a foundation from

which to draw the communication actions of organisations during situational crisis

events. There are multiple typologies of crisis response that act as decision-making

frameworks to guide a manager‘s choices depending on the type of crisis, the

organisation‘s level of responsibility for the crisis, and the organisation‘s history of

crisis (Benoit, 1997; Coombs, 1998, 2004a, 2007a, 2007c; Hearit & Courtright,

2003, 2004). While these typologies provide frameworks for understanding

organisational responses to situational and arguably controllable crisis events, little is

known about how these strategies change as crises become more complex.

Punctuated equilibrium theory usefully informs us that punctuations of

equilibrium bring about shifts in the balance between substantive and symbolic

decisions (Tushman & Romanelli, 1985). To manage the uncertainty brought about

by punctuations, punctuated equilibrium theory suggests that organisational leaders

draw on symbolic strategies to inspire confidence and enthusiasm for new direction

(Tushman, Newman et al., 1986) that are then followed by substantive actions

(Haveman et al., 2001). Despite an acceptance of change and the often-described

entrepreneur-style management of organisational responses during transformative

change (A.D. Meyer et al., 1990), we are left without empirical evidence to show

how an organisation‘s immediate and short-term responses to situational crisis

events shift as the crisis transforms to involve multiple organisations and interests.

To inform this gap in our understanding, the first research question derived from the

central research question is:


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In order to answer this question, I draw on the typologies of crisis response

from the crisis communication literature, and link this to the Oliver‘s (1991)

typology of strategic responses to institutional processes.

2.4.1.2 Linking Context and Communication Action

While it is imperative to identify the communication actions used during

punctuations, punctuated equilibrium theory suggests that these actions take meaning

from their context. In the crisis communication literature, Hearit (1995) argues that

during crises, organisations should not rely on standard communication but react to

or shape the ―communicative agenda of critics‖ (p. 3). In the context of situational

crisis events, various authors have shown how organisations have adapted crisis

responses on the basis of having their original strategies deemed ineffective based on

stakeholder responses (Benoit & Brinson, 1994; Brinson & Benoit, 1999; Hearit &

Courtright, 2003). However, once the crisis shifts beyond an organisation‘s control

or influence, the conditions that shape the selection of responses are less clear. This

leads to the second research question:



Answering this question requires a connection between the context and action

levels of crisis communication and punctuated equilibrium theory.


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2.4.1.3 Research Propositions

A set of propositions have emerged from the literature to guide the

development of the conceptual model of the thesis. The propositions are built around

the assumption that a situational crisis event is able to be managed or influenced and

ultimately resolved by an organisation. Under these conditions, organisations and

systems seek to preserve the status quo and make small adjustments in order to

maintain equilibrium within their environments. The following propositions emerge

as the system moves from situational crisis events towards complex crises that

trigger punctuations of equilibrium. Under these conditions, an organisation and the

practice of public relations may potentially lose its influence as meaning is led by the

nature of the transformative change and emergent properties within the system. As a

result, the following propositions can be derived from the literature:

A situational crisis event escalates to a focusing event when standard crisis

response strategies become inadequate, the number and intensity of organisational

and industry actors increases, and the visibility of the crisis is high in the mass

media.

Standard crisis response strategies are no longer effective when equilibrium

is punctuated.

Based on the problem of emergent properties, a crisis event has the potential

to directly or indirectly (through a focusing event) trigger additional crisis events that

affect multiple organisations within the industry.


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A crisis event that leads to changes in legitimacy/equilibrium achieves

stability when organisations and industry actors recreate conditions for legitimacy.

2.5 Conclusion

This chapter presents punctuated equilibrium theory as a framework through

which to build a conceptual process model (see Chapter 5) to extend and refine

existing crisis communication research. While existing crisis communication

research is oriented to the outcomes of organisational reputation, image or

legitimacy, this process model focuses on the crisis communication responses and

emergent crisis context in punctuated equilibrium theory.

The chapter is based on one central and two guiding research questions that

will be explored through the pharmaceutical industry in the United States. Three

organisations will be studied over a four year period in order to fully articulate the

shift from a situational crisis event to a complex crisis event that involved multiple

actors and interests and inspired additional and linked crisis events. The

methodology for these processes is outlined in Chapter Three.


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CHAPTER THREE

Methodology

In this chapter, I describe the framework that is required to address the

research questions of this thesis and consequently, extend and refine research in

crisis communication. To do this, I describe the research paradigm and then establish

the research process by defining the ways data were collected and analysed in

relation to the research questions.

The first section of this chapter describes the underlying rationale for the

methods employed in this thesis. The second section of the chapter then interpolates

this rationale into the qualitative approach and process method that are engaged to

answer the research question. Based on these perspectives, the research process is set

out by identifying the sample, data collection and data analysis approaches. The

chapter concludes by identifying the techniques to establish quality and rigour in the

research as well as the limitations, and ethical considerations that guide the thesis.

3.1 Justification for Research Paradigm

The research paradigm around which this thesis is organised is based on the

effort to align the foundational elements of ontology, epistemology, and

methodology (Guba & Lincoln, 2005). Following Van de Ven (2007) and Guba and

Lincoln (2008), the selection of the philosophy represents a choice that was based on

the researcher‘s motivations for reflective inquiry in the field of public relations and

supported strongly by the nature of the research problem. This thesis is based on a

critical realist paradigm which is aligned to the concepts of change and changing

entities as studied using process theory, an acceptance of existing approaches to


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crisis communication, and the possibilities for new knowledge and approaches in

crisis communication research and practice (see Van de Ven, 2007).

Critical realism takes the middle ground between positivism and relativism

(Moses & Knutsen, 2007; Van de Ven, 2007). Critical realism or scientific realism

emerged by blending the most attractive features of naturalist and constructivist

approaches (Moses & Knutsen, 2007). Critical realism provides a strong link to

studies of change (Van de Ven, 2007; Van de Ven & Poole, 2005). The resultant

approach is a process of change in organisations where change in crisis

communication strategies is observed through processes of events. These events are

based on punctuated equilibrium theory‘s patterns of long stability that are

punctuated by short periods of transformative change. The critical realism

perspective is supported by Van de Ven‘s (2007) principles that data are theory-

laden, that no form of inquiry can be value-free and impartial, that knowledge comes

from multiple perspectives, that robust knowledge is a product of theoretical and

methodological triangulation, and that models that better fit problems allow for an

evolutionary growth of knowledge (Van de Ven, 2007). The thesis assumes a critical

realist ontology that sees both the natural and social worlds as structured and

changing and a subjectivist epistemology that are translated into methodology using

process theory (Van de Ven, 2007). These perspectives are elaborated on in the

following paragraphs.

The ontological approach for this thesis is an objective one where reality

exists independent of our cognition (Moses & Knutsen, 2007; Van de Ven, 2007).

Yet, at the same time, critical realism also accepts the constructivist epistemology


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where there are multiple layers to reality and access to one meaning is complicated

(Chia, 1999; Guba & Lincoln, 2008; Moses & Knutsen, 2007). Embracing these dual

perspectives, the ontology for critical realism and this thesis follows Moses and

Knutsen (2007) who propose that the process of uncovering truth and meaning is

guided by scientific or naturalist approaches. That is, while there are scientific bases

for punctuated equilibrium theory and proven typologies for crisis response

strategies, there is more knowledge and meaning that need to be explored in relation

to crisis communication during transformative change. In this way, critical realism

offers the space to integrate both constructivist and scientific approaches (Moses &

Knutsen, 2007).

The epistemological approach for this thesis sees social life through a

subjectivist approach and interpretive lens. The interpretive approach lends itself to

an inductive approach to understanding and knowledge where meaning is achieved

through the link between context and action. In this way, the research approach

focuses more on identifying and understanding process than on causal explanations

(Cule & Robey, 2004; Lee, 1991). Based on the critical realist paradigm, the

remaining sections of this chapter set out the methodology that draws on qualitative

research design and process theory.

3.2 Methodology

The thesis aims to extend existing crisis communication research by

explicating the ways organisations communicate during transformative change. The

thesis adopts punctuated equilibrium theory as a lens to explore crisis

communication and actions within the context of transformative change. Qualitative


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research and process theory and research are particularly suitable to understanding

the context and actions related to crisis communication and punctuated equilibrium

theory. Their relevance to this thesis is established in the next two sections of this

report.

3.2.1 Qualitative Research

Qualitative research is suited to research problems that have not been

adequately studied in the literature (Berg, 2009). This thesis selects qualitative

research because there is a lack of prior research about the ways organisations

communicate when crises shift from situational to transformative crisis events.

Qualitative research provides the opportunity to both define and explain complex

strategies that organisations use to communicate during crisis events without having

to ―pre-specify‖ the variables involved or the relationships between them, a task that

is more common in quantitative research (Barr, 2004, p. 167). Even though there are

established typologies for crisis response strategies that are generally used by

organisations to resolve situational crisis events, qualitative research methods

provide an opportunity to discover new variables, linkages, and processes in strategy

research (Barr, 2004; Maxwell, 2005). In particular, qualitative research enables the

study of crisis communication and actions within the context of change which

contributes to the meaning of the data.

This feature of qualitative research is particularly important as it leads to

research findings that increase understanding and expand knowledge through rich

and thick descriptions of communication during transformative and complex crises


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(Berg, 2009). Qualitative research contributes to an understanding of context and

unanticipated factors or influences (Maxwell, 2005).

The use of a longitudinal and qualitative approach is also consistent with the

methodology of punctuated equilibrium studies. Research involving punctuated

equilibrium theory has traditionally been longitudinal in nature involving the content

analysis of business reports, regulatory submissions and the mass media in order to

identify changes in strategy and structure (Romanelli & Tushman, 1994; Tushman,

Virany et al., 1986). These authors have used qualitative research to develop

organisational histories to map changes to strategy, structure and power that were

translated into quantitative measures to examine organisational transformations and

the rate of change (Romanelli & Tushman, 1994).

Following existing punctuated equilibrium research, the first step is the

development of organisational histories (Gersick, 1988; Romanelli & Tushman,

1994; Virany, Tushman, & Romanelli, 1992). These histories provide a descriptive

account of organisations or groups that can be used as the basis for data analysis.

After developing histories, punctuated equilibrium theorists search for general

patterns by isolating main points from cases often using quantitative analysis

(Gersick, 1988). A major strength of qualitative research is its ability to uncover

processes in ways that quantitative research cannot (Maxwell, 2005). Consistent with

punctuated equilibrium theory, qualitative data capture evolutionary and

transformational dynamics (Patton, 2002).


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The use of qualitative research is also consistent with crisis response

strategies. Until the work of Coombs (1998), the majority of the crisis

communication research examined crisis response strategies using qualitative case

studies (Allen & Caillouet, 1994; Benoit, 1995, 2006; Benoit & Brinson, 1994;

Benoit & Dorries, 1996; Blaney et al., 2002; Brinson & Benoit, 1996, 1999; Hearit,

1994, 1995, 1996, 1997; Hearit & Brown, 2004; Hearit & Courtright, 2003, 2004).

These case studies provided efficient descriptions of the range of strategies available

to organisations and some understanding of the effectiveness of these strategies as

related to the particular elements of the case. Crisis communication research in the

qualitative case studies tradition allowed researchers to argue that appropriate crisis

response strategy varied from situation to situation (Benoit, 1995; Sen & Egelhoff,

1991). However, the majority of crisis communication studies focused on short-term

and situational crisis events.

Qualitative research is also a notable part of process theory (Langley, 1999,

2007; Van de Ven, 1992; Van de Ven & Poole, 1990; Webb & Pettigrew, 1999). A

major strength of qualitative research is its ability to identify the processes of

change. Critical to process theory, qualitative research provides an ability to access

and analyse data over extended time frames and the opportunity to consider and

account for context (Barr, 2004; Langley, 1999). The integration of context helps tell

more to the reader than quantitative measures of clearly defined relationships and

significance (Barr, 2004; Pettigrew, 1992). Qualitative data offer insight into the

―complex social processes that quantitative data cannot easily reveal‖ (Eisenhardt &

Graebner, 2007, p. 26).


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In summary, qualitative research provides a way to study crisis

communication and actions under transformative change. Qualitative research is

consistent with existing research in punctuated equilibrium theory and crisis

communication. Further, qualitative research enables the discovery of linkages

between crisis communication actions and the context of transformative change. This

is an essential requirement to the research problem.

3.2.2 Process Theory and Research

There are several ways to study change including process theory or variance

theory. This thesis adopts process theory as the way to study how and why change

unfolds in organisations over time (Cule & Robey, 2004; Langley, 2007; Pettigrew,

1992; Van de Ven & Poole, 2005). Studies under the process theory tradition bring

to light the events, sequences and activities that are essential components to change.

To explicate these events and activities, process theory takes an historical

developmental perspective that allows for the explication of context and action that

are interwoven during historical reporting (Pettigrew, 1992; Van de Ven, 1992).

Although variance theory offers a way to study change, it provides

explanations based on relationships among dependent and independent variables

(Mohr, 1982). Variance theories provide patterns of relationships, yet they provide

only a partial picture of the world that is without consideration of the role of time

and often within the assumption of an equilibrium state (Bromiley & Papenhausen,

2003; Langley, 2007; Meyer, Gaba, & Colwell, 2005). Process theory allows

researchers to uncover the processes of change and the ―temporal

interconnectedness‖ of these processes (Pettigrew, 1992, p. 9). In this way, process


131

theory focuses not only on the fact that change has occurred but also on the

processes that have contributed to the change itself. Scholars of change provide some

heuristics for continuing research (Meyer et al., 2005, p. 456). These heuristics are

based on multi-level, contextual, processual and emergent principles (Meyer et al.,

2005) that are shared by process theorists.

There are three types of process theory (Van de Ven, 1992). Process theory

can be used to explain causal relationships, to examine change in variables over

time, or to present a sequence of events that demonstrate how things change over

time (Van de Ven, 1992). This thesis adopts the third approach, which provides the

ability to observe processes in action and describe and explain how crises develop

and crisis communication changes over time (Pettigrew, 1992). Further, this third

view of process theory takes an historical developmental perspective, a stance which

aligns with the nature of the research design and the data of this thesis.

This thesis is concerned with studying the process of punctuated equilibrium

as it applies to crisis communication. This task requires a methodology that identifies

and examines the processes of change that have occurred over time (Sminia, 2009;

Van de Ven, 1992). Process theory provides a framework to identify sequences of

events and activities that can improve understanding about how crisis

communication changes over time (Van de Ven, 1992). When process theory is

translated to research design, it sets imperatives for the incorporation of time ordered

data and longitudinal research design (Pettigrew, 1992). Longitudinal research that

orders events and sequences in chronologies is critical for research questions that are

―posed in the language of becoming rather than of being‖ (Pettigrew, 1992, p. 5).


132

According to McNulty and Ferlie (2004), processual research case studies should

prioritise longitudinal factors over cross-sectional studies. Punctuated equilibrium is

part of the teleological and evolutionary family of processes (Van de Ven, 1992; Van

de Ven & Poole, 1995). The evolutionary family covers the long periods of stability

that are punctuated by teleological motors of change where organisational leaders

enact strategies to reorient organisations (Van de Ven & Poole, 1995).

Process-based research offers a way to advance existing research and

scholarship in crisis communication. Much of the existing literature is focused on

evaluating or reflecting on the effectiveness of crisis communication and actions in

relation to restoring reputations, legitimacy and the status-quo. Continuing with

outcomes-based research will limit ongoing theory development. In order to advance

crisis communication, researchers have called for methodological diversity in crisis

communication research (Avery et al., 2010). By using process theory, this thesis

responds to calls for diversity in methodology and offers a way to extend crisis

communication research.

Following Langley (1990) and Van de Ven and Poole (2005), the thesis

integrates two strategies to guide sensemaking of process data and theory. I develop

narratives that use alternative templates and chronology as central organising

devices. Narratives are developed to describe and explain a series or sequence of

events (Pentland, 1999). They comprise events, focal actors, a narrative voice, an

evaluative frame of reference (operationalised as an alternative template in this

thesis), and other indicators of content and context (Pentland, 1999). Although

sequences of events are an essential component to describing narratives, it is also


133

important to identify generative mechanisms in order to explain processes (Pentland,

1999). Pentland (1999) argues that generative mechanisms are identified by paying

attention to all aspects of the narrative and the structures that enable and constrain it.

While narratives provide a way to organise the data, alternative templates

provide a way to ground process data (Langley, 1999). Alternative templates are

used to propose several alternative interpretations of the same events (Allison, 1971).

In his book on the Cuban Missile Crisis, Allison (1971) used a qualitative approach

to explain decision-making using three theoretical templates or lenses: rational actor

model, organisational behaviour model, and governmental politics model. In this

thesis, I use alternative templates of communication responses to crises (Allen &

Caillouet, 1994; Coombs, 2006b) and strategic responses to institutional pressures

(Oliver, 1991) to identify and draw out patterns of crisis communication strategies

under transformative change.

These three alternative templates are used to construct three narratives. Each

narrative connects context and action to give meaning to the display of patterns in

crisis and strategic responses. By linking bare events to time and context, narratives

also allow for meaningful interpretation (Van de Ven & Poole, 2005). For example,

Pettigrew (1992) argues that researchers should be aware of the enabling and

constraining influences of contexts on strategy process and content. Narrative

approaches meet this task but, in keeping consistent with historical processes, they

enable researchers to find typical patterns in complex and unpredictable stories

(Abbott, 1990a; Pettigrew, 1992).


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While events are essential components to process theory and the narrative

approach to data organisation, they also present challenges to researchers. According

to Langley (1999), an event may have temporal precision but can also exist at

different levels. For example, the following can all be classified as events: a good

year for profits, a takeover, or the communication of a decision. Based on a research

program around event history analysis, Abbott (1984) provides some useful advice

to define events as theoretical constructs as opposed to the indicators of events that

are used to compose narratives. Such a distinction is required in order to build theory

around the role of a focusing event that shifts situational crises into transformative

crises. More detail around the process of defining events is provided in the data

analysis section of this chapter.

Process theory and research design are recognised as being inherently

complex (Abbott, 1984, 1990b; Langley, 1999, 2007; Pettigrew, 1992). Qualitative,

longitudinal studies under this approach require the researcher to negotiate the

positions of complexity and simplicity brought up during the analysis of significant

amounts of data (Eisenhardt, 1989). A balance between data reduction leading to

parsimony and data amplification demonstrating richness is required. This challenge

is clearly recognised in both punctuated equilibrium and process theories. To meet

this challenge, this thesis draws on the findings and insights provided by researchers

who have travelled this terrain before (Langley, 1999, 2007; Romanelli & Tushman,

1994; Tushman, Newman et al., 1986; Tushman & Romanelli, 1985; Webb &

Pettigrew, 1999).


135

3.3 Research Procedures

In this section, I outline the research procedures that guide the design of the

thesis. The section identifies the sample, data sources of media reports and

organisational documents that are used to provide evidence to support theory, the

management of these data using computer software, and the specific approaches to

data analysis.

3.3.1 Case Study Selection

Case studies can be used to provide description for, generate or test theory

(Eisenhardt, 1989; Eisenhardt & Graebner, 2007; Yin, 2003). This thesis adopts the

theoretical sampling technique in which cases are chosen for theoretical and not

statistical reasons (Eisenhardt, 1989; Miles & Huberman, 1994; Yin, 2003). The case

study is considered instrumental and is examined primarily to provide insight into

the crisis communication practices of organisations and ―redraw‖ a generalisation

(Stake, 2008, p. 123). These steps are important given the limited guidance from the

literature (Yin, 2003). Further, theoretical sampling allows the researcher to select

cases that both replicate theory (Eisenhardt, 1989), and provide polarity (Poole &

Van de Ven, 1989). A single case has been selected in light of recommendations

from the literature on qualitative research and the methodology of punctuated

equilibrium studies (Siggelkow, 2007).

Guided by this theoretical sampling, this thesis focuses on a single industry

case study that tracks three organisations. The three organisations were selected from

the same industry to allow for the comparison of organisations that are affected by

uniform change events (Fox-Wolfgramm, Boal, & Hunt, 1998). In punctuated


136

equilibrium studies, the selection of cases is critical in order to rule out alternative

explanations for patterns in organisational transformation (Romanelli & Tushman,

1994). Single industry studies also eliminate the influences of different types of

regulatory agencies, norms, and publics (Deephouse & Carter, 2005). At the same

time, single industry studies have the potential to limit results to the focal industry

and organisations (Deephouse & Carter, 2005).

The organisations to be studied are Merck and Co, Pfizer Pharmaceuticals,

and Novartis as part of the pharmaceutical industry with a specific focus on human

health. All organisations produced pain reliever COX-2 inhibitors that were the

subject of negative media attention for a sustained period of time. Merck was the

primary organisation as it was the company that caused the situational crisis event

and triggered transformative change affecting, in different ways, the secondary

organisations of Pfizer and Novartis. Of these two secondary organisations, Pfizer

was more significantly affected than Novartis as Pfizer faced a product recall event.

Based on media coverage, the thesis focuses mostly on Merck and Pfizer. The

selection of this sample defines limits for generalisability of findings to

transformative crisis events, in line with the research questions.

The nature of the crisis event is also significant, positioning Merck as the

primary or focal organisation. The Vioxx withdrawal was listed as one of

Newsweek‘s top product recalls in the United States ("Prominent product recalls in

recent history," 2010, February 13). Table 3.1 positions the Vioxx withdrawal with

similar prominence to the 2010 Toyota accelerator pedal crisis and the 2007 Mattel

product recalls. The Merck recall was selected as the crisis trigger for this study


137

based on its prominence in the mass media over a sustained period of time and also

because it triggered transformative change in the pharmaceutical industry.

Table 3.1

Top Product Recalls in the United States

Year Company Crisis description

1972 Volkswagen Recall of 3.7 million cars produced between 1949 and 1969

because of faulty windscreen wipers that hampered vision.

1978 Ford Pinto Withdrawal of Ford Pinto cars due to placement of petrol tank in

the car‘s rear causing cars to burst into flames when impacted

even at moderate speeds.

1982 Tylenol Recall of Tylenol after product tampering incident. Seven deaths.

1996 Ford Recall of 8.6 million cars and trucks after ignition switches

caught fire.

1998 General

Motors

Recall of one million cars after airbag deployment in non-crash

situations.

2000 Firestone Recall of Firestone tyres after treads separated from tyres

causing rollovers at high speeds. Two hundred deaths were

reported and thousands of injuries.

2004 Merck Vioxx recalled after causing strokes and cardiovascular risks in

patients.

2006 Dell Four million Dell lithium-ion batteries recalled after overheating

and catching fire.

2005,

2007

Guidant In 2005, 50,000 implantable defibrillators recalled due to

technical flaws causing two deaths. In 2007, 73,000 implantable

defibrillators recalled because of shorter than expected battery

life.

2007 Mattel Recall of nine million toys manufactured in China with lead

paint or magnets that children could swallow.

2007,

2009

Food scares Peanuts recalled by New Jersey operator and spinach recalled by

Californian distributor because of salmonella; New Jersey

distributor recalled ground beef because of E. Coli infection.

2009 Window

blinds

Fifty million Roman-style and roll-up window shades with loose

cords were recalled because infants‘ necks could become caught

on these, leading to strangulation. Eight deaths occurred before

the recall.

2009 to

2010

Toyota Four million cars recalled in 2009 due to flawed floor mats. In

2010, Toyota admitted mechanical problems were at fault,

recalling more cars.

Source: "Prominent product recalls in recent history," 2010, February 13


138

Further, some support for this case study exists in the public relations

literature with one study comparing the product launches of Celebrex and Vioxx

(Anderson, 2001). Anderson‘s (2001) study used seven media releases and 45 news

articles across a one year time frame to show that while Merck and Pfizer may have

influenced coverage of COX-2 drugs, the content of media stories was also

influenced by a variety of non-organisational spokespeople.

Given the longitudinal focus of this thesis, data were collected over a four

year period. This time frame captures the situational crisis event in September 2004

through to December 2008, two months after the settlement of litigation for Merck

and Pfizer. The longitudinal time frame is required in order to extend existing

approaches to crisis communication research beyond short-term and situational crisis

events. Longitudinal data are consistent with studies in punctuated equilibrium

theory (Romanelli & Tushman, 1994).

3.3.2 Sources of Evidence

Consistent with process and punctuated equilibrium theory and crisis

communication research and the focus of this thesis on organisational actions,

evidence for this thesis is collected from two primary data sources: 1) content

analysis of media articles about the crisis related to three pharmaceutical companies

affected by the product recall and the Food and Drug Administration, and 2) content

analysis of organisational documents such as news releases and annual reports

related to the crisis and subsequent events. These sources were selected to meet the

core requirements of process data: the identification of events, activities, or choices

ordered by time (Langley, 1999). Further, they enable the focus on organisational


139

actions and allow for the reconstruction of the process through archival analysis

(Van de Ven & Poole, 2005; Ventresca & Mohr, 2002). In addition to the primary

data sources of media articles and organisational documents, documents produced by

the FDA were accessed to verify the mass media‘s reporting of FDA actions. Other

secondary data sources available for research included patient and plaintiff

discussion forums. Although the researcher was aware of these forums, they were

rejected as data sources based on: 1) the thesis focus on organisational actions, 2)

ethical principles in relation to the type and nature of comments provided, and 3)

practical data management limitations.

Media coverage of the crisis and subsequent events and related organisational

documents are the major sources of data. These data sources are also consistent with

existing research in crisis communication and punctuated equilibrium theory. The

case study tradition in crisis communication has used media coverage and

organisational documents as the basis for the development and refinement of crisis

response typologies (Benoit & Brinson, 1994; Hearit, 1995). In punctuated

equilibrium theory research, authors have also used news archives and organisational

documents to provide insight into the processes of change (Haveman et al., 2001;

Romanelli & Tushman, 1994; Virany et al., 1992). Media coverage and historical

organisational documents are sources of data that are appropriate to the research

questions and theories that guide the thesis. Further support for the use of

organisational documents comes from authors who have constructed histories of

pharmaceutical organisations‘ decision-making over time (see Trullen & Stevenson,

2006).


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Building from this fit with guiding research questions and theories, media

coverage and organisational documents present other advantages for organisational

research. Documents are generally easily accessible, facilitating replication and

comparison (Boyd, Dess, & Rasheed, 1993; Neuman, 2003; Ventresca & Mohr,

2002). Another benefit of documents is that they provide an ability to describe the

constraining and enabling forces faced by all organisations within an industry. This

selection of media as a data source was driven by its ability to provide some

historical or retrospective information that was more objective than other sources

(Lamertz & Baum, 1998; Romanelli & Tushman, 1994). In this way, the data are

unobtrusive (Berg, 2009).

The challenge provided by the use of documents relates to the fact that the

data were often created with a different purpose or function than the research at hand

(Boyd et al., 1993; Stablein, 2006). As a result of historical data not coming ready-

made to fit the research purpose (Simonton, 2003), the researcher is responsible for

demonstrating how documents represent ―the empirical reality of interest‖ (Stablein,

2006, p. 361). Further, not all documents are equally valuable tools to reconstruct the

past (Tilly as cited in Neuman, 2003). While historical data are weak in internal

validity requiring researchers to draw causal inferences with care, they possess high

external validity with applicability beyond experimental research (Simonton, 2003).

Punctuated equilibrium researchers also found that in analysing media coverage, not

all companies were written about in equal terms, which resulted in some

organisations demonstrating less change on the basis of information available

(Romanelli & Tushman, 1994). The integration of organisational documents such as


141

media releases and annual reports alleviates some of these concerns by accounting

for the organisation‘s treatment of the issues at hand.

3.3.3 Media Reporting of Organisations

The media are an integral part of business with organisations and

organisational leaders using the mass media as a way to communicate strategy

decisions (Daft, Bettenhausen, & Tyler, 1993). The role of the media during crises is

further justification of this data source. Organisations rely on the mass media as a

channel of information dissemination to stakeholders during organisational crises

(Massey, 2001) with subsequent media attention stimulating greater corporate

disclosure (Deegan, Rankin, & Tobin, 2002). Organisational stakeholders also use

daily newspapers as a source of evaluating the legitimacy of organisational actions

(J. Johnson & Holub, 2003; Lamertz & Baum, 1998; Trullen & Stevenson, 2006)

with newspaper stories showing stronger stakeholder recall of organisational

information (Deephouse & Carter, 2005). Further, the frames used in news media

reports tend to be the frames that most stakeholders experience and adopt in their

understanding of the crisis (Coombs, 2007c). In this thesis, print media has been

selected as the primary means of data collection based on its ability to provide time

and space to the reporting of serious issues.

The newspapers selected for this thesis are based in the United States of

America. Newspapers from the USA were selected because the focal organisations

are based in or listed on the New York Stock Exchange. Further, a Factiva search for

articles revealed a limited number of articles from Australian sources. Newspaper

articles are collected from the following three newspapers: The New York Times, The


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Washington Post, and The Wall Street Journal. Although some studies have been

developed based on analysing articles from one newspaper (Bansal & Clelland,

2004), this thesis has drawn on specific criteria from public opinion and media

research to inform its data selection. These newspapers were purposively selected

based on their high circulation (Ansolabehere, Snowberg, & Snyder, 2005; Imrich,

Mullin, & Linz, 1995; Romer, Jamieson, & Jamieson, 2006; van Driel &

Richardson, 1988), a high degree of content influence on other mass media outlets

(Ansolabehere et al., 2005; Imrich et al., 1995; Lewis & Rose, 2002; van Driel &

Richardson, 1988), and their identification in national indices (Havic, 1997).

Data were collected using the Factiva data base across a four year period

from 1 August 2004 to 11 December 2008 using the following free text words:

Pfizer, Merck, and Novartis. These represent the three pharmaceutical companies

that were directly involved in or affected by the situational and subsequent crisis

events. This broad Factiva search produced 6,408 media articles. Once the articles

were downloaded, a further manual check by the researcher was conducted to ensure

the articles met the criteria for the thesis, that is, they related to the situational and

subsequent crisis events. As a result of this manual review, the original sample was

refined down to 1,071 media articles. The criteria for removal were based on

duplicate stories and news summaries (―Business and Finance‖ in The Wall Street

Journal or ―Business Digest‖ in The New York Times), and the removal of stories

that contained personal references to employees of these organisations such as

wedding announcements, referred to these companies‘ operations outside of the

pharmaceutical industry (e.g. Novartis‘ agribusiness operations), provided general


143

medical advice or public health news, or referred to events that were historical to the

time period of study.

Media articles were the dominant source of data because they provided, for

the most part, a daily chronology of incidents and events. Further, media articles

provided insight into the crisis communication and actions of three organisations and

other key actors involved in the situational and ongoing crisis. The yearly breakdown

of the articles for each year is illustrated in Table 3.2.

Table 3.2

Number of Media Articles per Year

Newspaper 2004

August to

December

2005 2006 2007 2008 Total

The New York

Times

106 135 76 41 27 384

The Washington

Post

49 42 15 9 6 121

The Wall Street

Journal

141 178 109 80 58 566

Total 296 355 200 130 91 1071

3.3.4 Organisational Documents

Organisational documents were also selected as sources of evidence for the

thesis. Annual reports and media releases were selected across the same time period

as the media reports, from August 2004 to December 2008. The number of media

releases or company statements is identified in Table 3.3. Annual reports or 10-K

reports for each of the three pharmaceutical organisations were collected. In total, 15

reports were collected for the time period. Organisational documents provide a

deeper insight into the messages and strategies of organisations that may be distorted

by media reporting. In this thesis, annual reports were used to understand


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organisations‘ summative annual communication about key events including product

recalls or litigation. In doing so, annual reports complemented the daily chronology

of media reports.

Table 3.3

Number of Media Releases per Year

Company 2004

August to

December

2005 2006 2007 2008 Total

Merck 2 4 36 19 11 72

Pfizer 7 7 0 0 3 17

Novartis 0 0 0 2 0 2

Total 9 11 36 21 14 91

3.3.5Additional documents

In addition to media reports and organisational documents produced by

Merck, Pfizer and Novartis, materials produced by the FDA were accessed in order

to verify and elucidate media reporting around complex events. These additional

resources were accessed from 2004 to 2007 and related to FDA updates on drug

evaluations, transcripts of press conferences, statements on FDA decisions related to

Celebrex, Vioxx, and other COX-2 drugs. Although these materials were accessed,

the focus of the thesis remained on the organisational actions of the three

pharmaceutical organisations.

3.3.6 Management of Data

Given the vast quantity of qualitative data from media and organisational

sources, I used computer assisted qualitative data analysis program NVivo8 (N8) and

manual coding to store, organise, and analyse the data. All data were retrieved from

either Factiva or organisational websites, converted to rich text files, and imported


145

into N8. Once the data set was determined (see Sections 3.4.3 and 3.4.4), I used N8

to reduce the data into evidence. This was a significant interpretive task (Richards &

Morse, 2007) and I used a journal to make note of the evidence behind coding

decisions.

The first stage of data treatment involved the recording of the source of the

articles and annual reports. Each article was saved with a unique numeric code in

consecutive order of publication, and then also coded based on the publication

source of either The Wall Street Journal, The New York Times, or the Washington

Post. Each media release and annual report was coded based on its source

organisation, Merck, Pfizer or Novartis and the year of publication from 2004 to

2008 inclusive. These processes enabled the easy navigation of the media and annual

report data during additional content analysis and the construction of the narratives.

3.4 Data Analysis

The data analysis process aims to explore the data, reduce the data, and

interpret the data in order to produce a research story and generate theory (Hesse-

Biber & Leavy, 2006). The data analysis process follows Hesse-Biber and Leavy‘s

(2006) structure to both explore the data by reading and reflecting on the material

supported by memos, and to reduce the data through coding that allows for the

identification of patterns. These steps are essential in order to develop a punctuated

equilibrium process model of crisis communication.

Following Trullen and Stevenson (2006), this thesis seeks to represent the

complexity and richness of the cases and also to use a formal logic to identify


146

patterns and allow for the analysis to be replicated and compared across contexts. To

this end, the data analysis processes alternate between the identification of data and

evidence to support the events and the alternative templates that provided the basis

for the construction of each narrative. Three distinct analytical steps are articulated

to achieve this result: 1) time-ordered displays, 2) narrative construction by

alternative templates, and 3) visual presentation of communication and strategic

responses to crises. Finally, to conclude, the process for comparing alternative

templates is set out.

3.4.1 Time Ordered Displays

Following Miles and Huberman (1994), critical incidents across each case

were established through an initial reading of mass media articles, and organisational

documents. These critical incidents, indicated by media reporting of organisational

decisions or actions, provided a framework from which to build the context required

for narrative construction. This first stage of analysis improved researcher familiarity

with the data (Eisenhardt, 1989), and was summarised through visual displays

(Langley, 1999; Miles & Huberman, 1994). Time ordered displays also assisted in

the identification of themes and patterns. Miles and Huberman (1994) argue that

displays help researchers see themes and patterns, as they cycle between these and

theory. These displays are also useful in developing rival hypotheses, an approach I

build on in the alternative templates section.

The time ordered display also assisted in the process of distinguishing an

incident from an event (Van de Ven & Poole, 1990). This step was required in order

to identify the conditions under which the situational crisis event shifted to become a


147

focusing event (Abbott, 1984). Further, this step was important in the construction of

the narratives. Focusing events symbolise poor performance, are evocative, and

receive media attention (Alink et al., 2001; Wood, 2006). In this way, focusing

events have the potential to expose vulnerabilities in organisations, industries, and

policy sectors. In a similar way, Van de Ven and Poole (1990) define an incident as

an empirical observation but an event as an indirect observation or a ―conceptual

construct‖ that is used to explain a pattern of incidents (p. 319). That is, an event can

be indicated by several incidents (Abbott, 1984; Van de Ven & Poole, 1990). One of

the challenges with this approach is selecting reliable and valid indicators of each

event (Van de Ven & Poole, 1990).

Some support to alleviate this challenge is provided in the management and

public policy literatures around process and punctuated equilibrium theories. In Van

de Ven and Poole‘s (1990) process research, an event was established through

qualitative analysis when it was significant enough to effect changes in the core

concepts being studied. This retrospective identification of an event is also supported

in the public policy literature where punctuated equilibrium has been used to explain

dramatic changes in public policy (Baumgartner & Jones, 1991, 1993; Jones &

Baumgartner, 2005; Jones, Baumgartner, & True, 1998; Jones, Sulikn, & Larsen,

2003; Jones, True, & Baumgartner, 1997). With a focus on public records and media

reports in particular, Baumgartner and Jones (1993), looked at focusing events as

those collections of incidents that resulted in long-lasting change and structural

changes. In addition, four criteria can be used to identify focusing events: they must

occur suddenly, be relatively rare, be large in scale, and become known to

policymakers and the public simultaneously (Birkland, 1998). Because focusing


148

events draw attention to a single issue (Wood, 2006), they can be retrospectively

identified by examining the shifts in organisational and industry contexts and

actions.

The process of refining and selecting critical events involved three phases.

First, a full reading of all media articles and annual reports occurred. During this

step, the key actions of the pharmaceutical companies as well as other key actors

including the Food and Drug Administration and medical researchers were noted.

Second, incident codes were created in N8 and media articles and annual reports

were mapped to each of these codes. Coding of media articles and organisational

documents to key incidents allows the drawing together of descriptive data (Richards

& Morse, 2007) and the later retrieval of data to link organisational actions to these

events. Table 3.4 provides a sample of the incident codes and also indicates the

number of articles that were coded to each incident code.

Table 3.4

Sample of Events Coded

Incident code Date start Date end No. of articles

Merck product recall 30 September 2004 7 February 2005 63

Pfizer‘s Bextra warning 5 October 2004 10 December 2005 14

Launch of Celebrex trial 18 October 2004 7 December 2004 8

Review of FDA actions 18 October 2004 13 November 2004 12

European review of Cox II 25 October 2004 1

Approval of Arcoxia 30 October 2004 1

Congressional inquiry 2 November 2004 26 December 2004 23

Third, because not all incidents received significant media attention (as

illustrated in Table 3.4), a further step was taken to reduce data to focus on the key

events. Following the existing literature, key events were identified from the full list


149

of incidents. Key events were identified based on both the number of articles

associated with each incident as well as each event‘s link to the original and

subsequent crisis events. Although the number of articles demonstrated the media‘s

significance of each organisational event or action and the time frame of coverage

related to each event, it was also important to demonstrate the context within which

these events were occurring. Following Langley (1999) and Miles and Huberman

(1994), the incidents were plotted visually in order to identify key events and crisis

actors involved. Table 3.5 provides a sample of the context of these events over time.


150

Table 3.5

Sample of Context of Events

Date FDA actions Merck actions Pfizer actions Novartis actions Industry actions Other actions

30 Sep to

4 Oct

Withdraws Vioxx Shows safety of

Celebrex

Experts praise

Merck‘s crisis

management

Expresses concern

for class effect

Expresses concern

for FDA‘s role

Merck share price falls

Legal challenges are

commenced

6 to 7

Oct

Releases study

showing Vioxx led to

27,000 heart attacks

Claim Topol‘s data

are flawed

Releases Topol

data on Vioxx

Vioxx patients switch to

other drugs

14 Oct Claims Arcoxia is

safer than Vioxx

Questions Merck‘s

Vioxx marketing

16 Oct Identifies that Bextra

may have risks

18 Oct Establishes new trial

for Celebrex

1 Nov (Lawyers) release internal

emails suggesting Merck‘s

knew of Vioxx‘s risks

10 to 26

Nov Denies

suppressing Vioxx

study and defends

decisions

Suggests 5 drugs

should be recalled

inc Bextra

Testifies, explains

Vioxx withdrawal

Expresses concern

over power and

responsibility of FDA

Congressional inquiries into

FDA handling of Vioxx are

held


151

Table 3.5 provides a sample of the incidents plotted visually across time and

across the organisational actors involved in the crisis events. This table provided a

way to reduce data from 52 incidents to nine key events that became the basis of

narrative construction: Vioxx withdrawal, Congressional Inquiry, FDA hearing,

withdrawal of Bextra, litigation, FDA policy changes, medical research correction,

recall of Prexige, and legal settlement. These events are elaborated in Chapter Four.

The selection of text for coding the conditions relevant to the incidents and

events in the case study are based on media analysis techniques and draw on process

and punctuated equilibrium theories. The key themes relating to the incidents were

identified based on media coverage (Boyle & Hoeschen, 2001). The themes were

also identified in relation to the sources presented in the article (Burch & Harry,

2004; Sumpter & Braddock, 2002). Only sources that were easily identified in the

story were included in the data analysis. Following Sumpter and Braddock (2002),

collective anonymous sources such as voters, jurors, or government officials were

excluded. In this case, a quote was defined as any direct or indirect opinion attributed

to an identifiable spokesperson in any article (Burch & Harry, 2004). Direct and

indirect quotes from the three focal organisations, Merck, Pfizer and Novartis, and

the FDA were coded.

The time-related aspects of these incidents are also captured in coding. In

previous studies that have used media articles as data sets for studying legitimacy,

authors have found that while criticisms and reactions towards organisations surface

quickly in media reporting, organisational endorsement and support persist long after


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the criticisms have faded (Elsbach & Sutton, 1992). This requires the researcher to

keep track of what time frames bound the incidents.

3.4.2 Narrative Construction by Alternative Templates

Following the time-ordered display of data, a narrative strategy was adopted

to construct detailed stories of crisis communication and change using three

alternative theoretical frameworks (Langley, 1999). Following Allison (1971), this

thesis constructs three narratives based on the following alternative templates:

Coombs‘ (2006b) crisis response strategies, Allen and Caillouet‘s (1994) corporate

impression management strategies, and Oliver‘s (1991) strategic responses to

institutional processes. Each template provided a unique theoretical lens through

which to construct narratives and explain crisis communication during

transformative change. This section will provide a review of the role of narratives in

process research followed by a detailed approach to the construction of each

narrative.

3.4.2.1 The Role of Narratives in Process Research

Alternative templates propose several alternative interpretations of the same

events based on different but coherent theories (Allison, 1971; Allison & Zelikow,

1999; Langley, 1999). Through the integrated use of narrative and alternative

templates as sensemaking strategies, this thesis aims to produce a more complete and

richer understanding of the ways organisations communicate during transformative

change. Such use of multiple procedures in archival research helps reduce sources of

error (Berg, 2009) and is supported as a process approach (Sminia, 2009). At the

same time, these dual perspectives shift between inductive reasoning through


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narrative construction to deductive reasoning through alternative templates (Langley,

1999). These processes are managed through the levels of coding.

The key elements of a narrative are a starting point of affairs, an action or

event, and the subsequent state of affairs (Czarniawska, 1998). Narratives are more

than a list of events in chronological order (Van de Ven & Poole, 2005). While

temporal order is an important way to ensure coherence of the sequences of events,

the power of a narrative is determined by the story being told (Czarniawska, 1998).

The story is built through associations or connections that are reinforced through the

voice of the narrator with the temporal indicators used to assist interpretations of

actions and context (Chase, 2008; Czarniawska, 1998; Van de Ven & Poole, 2005).

Narratives make meaning by shaping past experiences (Chase, 2008). Following

Chase (2008), the narrator shapes the story, shows how the story is enabled and

constrained by social resources, and situates the story by producing it both in a

particular setting and for a particular audience and purpose. Narratives play an

important role in process theory. According to Van de Ven and Poole (2005), stories

in process theory should include a time sequence, focal actors, a narrative voice, a

frame of reference, and context.

The use of narratives is consistent with the first step of data analysis

undertaken by punctuated equilibrium researchers (Romanelli & Tushman, 1994;

Virany et al., 1992). Romanelli and Tushman (1994) used coding teams to develop

annual historical narratives of organisations based on media reports and

organisational documents. These annual historical narratives were used to analyse

changes in core elements in order to build a theory for punctuated equilibrium in


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organisational settings (Romanelli & Tushman, 1994). Case studies are also common

to the qualitative research in crisis communication studies.

3.4.2.2 The Construction of Narratives in this Thesis

In this thesis, the process of narrative construction involved two stages.

Firstly, the theoretical emphases of each alternative template needed to be explicated

in order to establish the process for content analysis as the second step. Secondly, the

narratives were written based on the integration of the first and second steps and

reviewed against their templates and the audit trail taken during stage two. Each one

of these stages will be detailed. In this thesis, each alternative template was coded

and each narrative was written individually and discretely.

The first stage of the narrative construction process required the explication

of the theoretical emphases of each alternative template. The literature review

established three key typologies to study crisis communication and change. These

typologies and the rationales behind them became the theoretical lens behind each

alternative template. To guide the content analysis stage, the theoretical lens for each

template needed to be explicated. This is illustrated in Table 3.6.


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Table 3.6

Theoretical Emphasis of Alternative Templates

Alternative

template

Summary Action level Context level Build

Coombs Crisis response

hierarchy

developed to

restore

organisational

reputations after

crisis.

Crisis

response

typology

Organisation‘s

crisis history,

stakeholders‘

perceptions of

crisis

Allen and

Caillouet

Crisis

communication

messages tailored

to organisational

stakeholders and

developed to

restore

organisational

legitimacy.

Crisis

response

typology

Pressures for

accountability

imposed by

organisational

actors

Builds on

Coombs‘ (2006b)

work by

considering an

organisation‘s

links to

stakeholders

Oliver Strategic responses

to institutional

pressures to gain,

maintain or rebuild

organisational

legitimacy.

Strategic

responses to

institutional

pressures

Level of agency

of organisation

over environment

Builds on

Coombs‘ (2006b)

and Allen and

Caillouet‘s (1994)

work by

integrating an

organisation‘s

agency over

environment.

Table 3.6 sets out the action and context level for each alternative template

and also identifies how each template builds on the next. Each narrative was

constructed around the same data and events but because each template had unique

points of emphasis, it offered unique perspectives on organisational crisis

communication and processes under transformative change. As a result, the

alternative template strategy studied change through the lens of reputation and

legitimacy as set out by the alternative theoretical templates.

The second stage involved the translation of media reports and organisational

documents into a narrative. This was a complex task because the original documents


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of media articles, media releases and annual reports were written to tell their own

story at a particular time and to a particular audience. That is, a media article was

constructed by a journalist to report on a particular event and with a particular type

of reader in mind, in some cases reflecting the role of the media and bias of both the

journalist and newspaper. According to Czarniawska (1998), one way to integrate

text written by someone else is to draw inspiration from the original source or

reference. This approach focuses on using the information to suit the thesis and

references the work rather than representing the author (Czarniawska, 1998).

In this thesis, the data to support the construction of the narrative by

alternative templates was drawn from the integration or association of context and

action. Overall, the coding strategy aimed to connect coding categories and the data

they contain to support the narrative analysis and construction (Maxwell, 2005). This

process is illustrated in Figure 3.1.

Figure 3.1 Illustration of Data Analysis Process based on a series of steps involving

the identification of key incidents and the content analysis of alternative templates.

Data analysis process

Incident (from time ordered display)

Incident 1

Incident 2

Template 1

Conditions relating to incident 1, 2, and

so on

Strategies

Template 2

Conditions relating to incident 1, 2, and

so on

Strategies


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The narrative construction involved writing a description of each event,

coding of the alternative templates, and writing each narrative. Firstly, and central to

all templates, was a short description of each event (as identified in Section 3.4.1).

Each event was described along with the organisational actors that were involved in

the event itself. For example, the Congressional Inquiry description included a

summary of the key organisational actors and individuals who provided evidence at

this inquiry and the media‘s reporting of this information.

Secondly, coding categories for strategies were based on existing typologies

and are set out in Table 3.7. The macro codes as identified in Table 3.7 were used as

the primary coding device with sub-categories used to verify coding decisions. For

example, under Coombs‘ (2006b) alternative template, a statement was coded as a

diminish posture with sub-categories of excuse and justification used to verify the

decision. The process is supported by memos that act to capture decision-making and

facilitate thinking and analytical insights (Maxwell, 2005).

Table 3.7

Alternative Template Strategies

Alternative template 1 Alternative template 2 Alternative template 3

Coombs‘ (2006b) crisis

response strategies

Allen and Caillouet‘s (1994)

corporate impression

management strategies

Oliver‘s (1991) strategic

responses

Denial

Diminish

Rebuild

Bolster

Excuses

Justifications

Ingratiation

Intimidation

Apology

Denouncements

Factual distortion

Acquiesce

Compromise

Avoid

Defy

Manipulate


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The selection of text for coding alternative template strategies was based on

the techniques adopted by researchers in crisis communication. Following Allen and

Caillouet‘s (1994) crisis communication research, this thesis analysed organisational

crisis response strategies through document analysis. In their study, the majority of

organisational statements were found in mass media reports. Specifically, the

strategies are interpreted from organisational statements that express ―a complete

thought interpretable as a strategic act‖ (Allen & Caillouet, 1994, p. 50). Thus, the

unit of analysis is limited to an organisational statement.

The context of the organisational crisis communication or legitimacy

strategies was also considered with memos made in relation to two areas: 1) ongoing

crisis events, and 2) the multiple actors involved in the core and additional crisis

events. These memos were essential to the construction of each narrative because

they connected events, organisational actions, and context (Maxwell, 2005).

The third stage involved the writing of the narrative. In this thesis, each

narrative used chronology as an organising device in order to make meaningful the

events and actions that occurred in relation to the crisis and crisis communication

(Van de Ven & Poole, 2005). The story is developed around three focal

pharmaceutical organisations and the Food and Drug Administration as a key

protagonist in the crisis and subsequent events. Although each narrative was based

on the same set of events, each narrative was written discretely. That is, the content

analysis relating to Coombs‘ (2006b) crisis content and communication was

undertaken and the narrative constructed was based on that before the content


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analysis relating to Allen and Caillouet‘s (1994) alternative template was

undertaken, and so on.

According to Van de Ven and Poole (2005), narratives are value-based

because they carry some evaluation of actions even without intending to do so. In

this thesis, the evaluative frames of reference related to change and the processes

underlying change. The narratives were stories that were constructed following the

media and organisational reporting of the crisis events. The narratives described,

evaluated, and explained crisis communication and actions within the context of

change, with each template offering different levels of support for change.

The memos taken during the second stage of narrative construction were used

to inform both the writing of the narrative and its review. At the end of each

narrative, I reflected on the connections among events, organisational actions and

context bound within the theoretical emphasis of each alternative template. That is,

for the narrative based on Coombs (2006b), I identified the areas where situational

crisis communication theory did not provide an account for connections seen within

the data. Specifically, Coombs‘ (2006b) situational crisis communication theory

focuses on organisation-centric context for crisis and as such does not offer an

explanation for the role or actions of competitor organisations. These reflections

were critical to review the construction of each narrative and as a basis for

comparative analysis.


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3.4.3 Presentation of Patterns in Data

Although it is important to describe processes by telling the story, it is

equally important to identify patterns of sequences or events (Pettigrew, 1992).

These patterns in sequences and events allow process theories to provide

explanations in relation to outcomes (Langley, 1999). The process of discovering

patterns adds an explanatory emphasis to qualitative data (Babbie, 2004). Further,

patterns allow qualitative researchers to move from describing historical events

towards providing a more general interpretation of the research findings (Neuman,

2006). In this thesis, frequencies and processes are the two methods chosen to look

for and examine patterns (Babbie, 2004).

The patterns in crisis response strategies are matched to the ideal type

sequence of a punctuation of equilibrium. Punctuated equilibrium theory provides a

clear and transferable map for change that documents the phases of change and the

process and conditions for transformative change. According to Neuman (2006),

ideal types are models of social processes that provide pure standards against which

data can be compared. The ideal-typical nature of punctuated equilibrium is seen in

its empirical identification and its treatment of time, change and stability provide an

objective basis to guide thinking (McIntosh, 1977).In this thesis, ideal types are used

to contrast contexts where the processes of change, as specified in punctuated

equilibrium theory, are used to draw out the specifics of each organisation and

emphasise the impact of the unique context (Neuman, 2006). In this thesis, the ideal-

type sequence for punctuated equilibrium theory is drawn from Siggelkow‘s (2002)

research.


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The patterns of changes in crisis response strategies are presented in line with

the pattern maps developed by Siggelkow‘s (2002) research of an organisation‘s

evolution towards fit. After creating a chronology of organisational developments,

Siggelkow (2002), created a series of maps to display the core elements and changes

to these core elements over time. To present this analysis, Siggelkow (2002) needed

to explore the processes of change, which are described as patching, thickening,

coasting, misfits and trimming. Patching occurs through a process of adopting a new

core element and the subsequent reinforcement of this core element. Data to support

patching is found when media reports referred to the adoption of new strategies or

structures that contain elements that were interdependent with other core elements of

the organisation (Siggelkow, 2002). Thickening occurs when existing core elements

are reinforced and elaborated or redeveloped (Siggelkow, 2002, p. 145). In this way,

there is a thickening of interactions around an existing and central core element.

Coasting occurs when a core element is not reinforced over a selected period of time

(Siggelkow, 2002). Misfits occur when new core elements misfit or do not align with

existing core elements (Siggelkow, 2002). For example, when new products appear

that have attributes that are inconsistent with existing systems, this is considered a

misfit. And finally, trimming occurs when organisations delete existing core

elements (Siggelkow, 2002). This thesis creates maps to display changes in crisis

communication and strategies over the four year time frame of the thesis.

The data analysis required to achieve this involved the identification of

strategy change. Following Romanelli and Tushman (1994), strategy change was

identified whenever organisations introduce or abandon crisis response strategies.

This step involved the quantitative display of strategy change. A recent article has


162

proposed a way to operationalise the pace and scope of change in management

studies (Street & Gallupe, 2009). After analysing the literature on change, Street and

Gallupe (2009) put forward a method based on relative measures of change.

Following Greenwood and Hinings (1996), the authors created operational measures

for pace or the rate of change and scope or the level of change. That is, continuous

change is frequent and incremental whereas episodic change, where punctuated

equilibrium falls, is considered infrequent, noncumulative and dramatic (Street &

Gallupe, 2009).

The pace of change was measured by the length of time preceding the

previous change event. That is, ―if the temporal length of a prior continuous change

period is at least more than double the length of a subsequent episodic change period

then the change could be considered being episodic‖ (Street & Gallupe, 2009, p.

726). The scope of change is measured by identifying change processes and putting

into practice a means for measurement (Street & Gallupe, 2009, p. 726). According

to Street and Gallupe (2009), a change in one element is considered convergent and

change in two or more elements is considered radical. The authors identified some

limitations in applying this technique for measuring the scope and pace of change to

a study on changes in organisational identity because previous research had not

categorised it under any of the above change categories (Street & Gallupe, 2009).

In this thesis, I mapped the crisis communication and action strategies as

depicted by Coombs (2006b), Allen and Caillouet (1994), and Oliver (1991) across

time. This visual display of strategies enabled a sense of how strategies were used in

combination and how and when strategies were replaced.


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3.4.4 Comparisons of Alternative Templates

The final step in data analysis was to summarise the similarities and

differences in interpretation presented by each alternative template. Following

Eisenhardt (1989), this thesis aimed to search for cross-case or template patterns. In

doing so, this thesis adopts the process used by Allison and Zelikow (1999) in their

analysis of the Cuban missile crisis. This analytical step is achieved by zooming in

and out (Nicolini, 2009) of the alternative templates to take a micro perspective and

focus on single organisations and zooming out to take a macro perspective to study

multiple organisations. This enabled the examination of new insights into crisis

communication, change and the linkages between them. Because each template

offers a different perspective on the crisis, it was important to consider and aggregate

these views to create a complete understanding of crisis communication under

transformative change.

This was achieved by focusing on the differences across the alternative

templates, as established in Table 3.6. Coombs‘ (2006b) situational crisis

communication theory focuses on the organisational context as an influence on crisis

communication and action. In comparison, Allen and Caillouet (1994) consider how

an organisation‘s complex web of relationships influences crisis communication and

action. And Oliver‘s (1991) approach opens up the ability to examine how multiple

organisations respond to shared institutional pressures such as crisis events and

regulatory change.


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By zooming in to the micro level and zooming out to the macro level of the

alternative templates, two analytical components emerged to consider context and

action. The differences across the templates were considered in relation to the

persistence of crisis communication and the role of secondary organisations. The

components of persistence and the role of secondary organisations were essential to

process theory and enabled the development of a conceptual model for this thesis.

3.5 Quality of Research

The quality of the research approach is based on measures taken to strengthen

validity and the quality and reliability of inferences from the research findings.

Following Maxwell (2005), validity is not a product but a goal and that is secured

through evidence and not methods. In this thesis, validity is integrated into research

processes that translate data into evidence through the consideration of validity

threats. By considering the ways that the research interpretations might be wrong,

and providing alternative explanations for the data, the thesis can focus on the goal

of validity.

From a process theory perspective, the generalisation of the findings is often

a complex and difficult task (Van de Ven & Poole, 2005). Because the development

of process explanations and the identification of patterns in process data is a difficult

undertaking, studies in this tradition have tended to limit the number of cases for

study, which also limits the generalisability of the conclusions of process research

(Van de Ven & Poole, 2005). However, even with this natural limitation, one way to

contribute to validity goals is to evaluate the versatility of the explanation (Van de

Ven & Poole, 2005). A versatile process explanation has the ability to ―stretch or


165

shrink to fit specific cases that may differ in their tempo and time span‖ (Van de Ven

& Poole, 2005, p. 1384). Because punctuated equilibrium theory is seen as a

versatile process that can fit to both natural and social sciences, its contribution to

the theory development of crisis communication has the potential to strengthen the

versatility of the theory and the generalisability of crisis communication strategies

across multiple situations, organisations, and industries.

A further contribution relates to the use of alternative templates strategy for

data analysis (see Jick, 1979). In this way, the data are scrutinised against multiple

interpretations. By producing multiple narratives to explain crisis communication

during change events, internal validity is strengthened (Yin, 2003). By following the

process of subjecting findings to competing yet inherently consistent claims and

interpretations, the thesis has the potential to build strong arguments to support the

emerging theory (Kvale as cited in Hesse-Biber & Leavy, 2006). By constantly

comparing data against multiple theories and iterating towards a theory that can more

closely fit the data, the thesis has greater potential to yield empirically valid theory

(Eisenhardt, 1989).

However, one of the expected challenges of an alternative template strategy

is that it does not always result in one central explanation for sequences, events, and

actions (Allison, 1971; Langley, 1999). If there are incompatible elements, it may be

difficult to combine the alternative templates into one explanation. Poole and Van de

Ven (1989) suggest some approaches to address paradox and tension in theories.

Theorists can use these tensions to identify which side of a tension anchors their

work and expand on this by drawing on and addressing the criticisms offered by


166

other competing theories (Alvesson & Karreman, 2007; Poole & Van de Ven, 1989).

Conflicting literatures ―present an opportunity, allowing researchers to be more

creative and reflective to show deeper insight into both the emergent theory, (and)

conflicting literature‖ (Eisenhardt, 1989, p. 544). In this thesis, the areas of build

offered by each alternative template facilitate this process and also allow for the

identification of generative mechanisms (Pentland, 1999).

Reliability is defined as the demonstration ―that the operations of a study can

be repeated with the same results‖ (Yin, 2003, p. 34). In line with a clear

conceptualisation of constructs, case study protocol guides the collection and

extraction of data and a case study database is developed to ensure repeatability and

the achievement of similar outcomes. The reliability of content analysis must be

ensured by researchers (Babbie, 2004; Berg, 2004; Krippendorff, 1980). Reliability

problems can come out of ambiguity of word meanings, categories, and coding rules

but can be avoided through consistent decision-making (Weber, 2004). Following

Weber (2004), there are three types of reliability that can be integrated into content

analysis. Firstly, it is important to look at stability which occurs when more than one

instance of the same content is coded by the same coder. This is likely to occur in

relation to the coding of crisis response and legitimation strategies as they can be

equally relevant to each alternative template but produce different meanings and

interpretations. Secondly, reproducibility where the same results are produced by

multiple coders. And finally, accuracy where the classification of text corresponds to

a clear standard or norm (Weber, 2004).


167

As a result of these reliability types, a set of coding instructions were

developed following the operational definitions. The efficacy of these definitions

was tested initially through a test-retest method. Efficacy was also tested with a

second researcher to strengthen the clarity of definitions and reliability. The

reliability score was tested using this formula specified by dividing the number of

agreements by the total number of agreements and disagreements (Miles &

Huberman, 1994). Reliability for this thesis was 88 percent.

3.6 Limitations of the Research

As established in Chapter One, several limitations to this research are

acknowledged. Firstly, resources constrained the nature of the investigation, data

collection, and analysis. Ideally, and like the work of Meyer and colleagues (see

A.D. Meyer, Brooks, & Goes, 1990), being serendipitously placed within an

organisation as it was undergoing crisis would have been a preferred way to study

change in crisis communication. However, one of the pragmatic considerations in

this area of research is that punctuations of equilibrium are most easily identified in

hindsight. Therefore, while it may have been possible to participate in an

organisation undergoing crisis, a task that could occur within a short time frame,

knowing whether the crisis would transform it would be difficult to predict and have

significant pragmatic limitations for the researcher. Further, access to key

organisational decision-makers including the Chief Executive Officer, General

Counsel, and Chief Research Officer may also be limited during times of crisis.




168

articles and organisational documents is validity or the major difficulties of

achieving member-checking. For example, the use of these secondary sources

precludes access to organisational leaders to confirm approaches to crisis handling

methodology or the organisational knowledge of an impending punctuation of

equilibrium. Primary research could have been conducted following the completion

of the alternative narratives in 2010. However, this would have occurred more than

five years after the initial crisis event. The limitations of both archival and informant

measures are not new to the literature. Several authors identify concern over

divergence between informant and archival measures of the environment (Boyd,

Dess, & Rasheed, 1993; Doty, Bhattacharya, Wheatley, & Sutcliffe, 2006; Neuman,

2006; Ventresca & Mohr, 2002), suggesting studies avoid this situation by choosing

only one type of measure (Doty, et al., 2006). One of the causes for divergence is

perceptual bias of informant measures (Boyd, Dess, & Rasheed, 1993; Doty et al.,

2006; Ventresca & Mohr, 2002).


framing of stories and strong writing or individual bias can hide causal theories or

leave some elements implicit (Neuman, 2006). In part, these limitations were treated

by using and comparing both media articles and organisational documents and

alternative templates and actively scrutinising the data against multiple sources and

interpretations, and seeking out the differences in interpretation across these

templates. By producing three narratives to explain crisis communication during

change events and subjecting findings to competing yet inherently consistent claims

and interpretations, the thesis has sought to build strong arguments to support the

emerging theory as did Kvale (as cited in Hesse-Biber and Leavy, 2006).


169


decisions limit the thesis to transformative change triggered by crisis events for

which the primary organisation was responsible, and a focus on three large

organisations within one industry and during one punctuation of equilibrium. In part,

this limitation is explained by the significance of the data required to investigate

punctuated equilibrium. That is, these conditions were selected precisely because of

the multiple linked crisis events affecting multiple organisations because this thesis

was concerned principally with crisis communication during transformative change.

In doing so, the generalisability of the thesis may be limited to crises, crisis

communication, and transformative change under similar conditions. Process

research often navigates the challenge of context and generalisation (Sminia, 2009),

yet by linking the findings to the crisis communication literature, this thesis and its

conceptual model can also be applied to other industry contexts and crisis events.

The thesis has been motivated by Van de Ven and Poole‘s (2005) recommendation

for versatile process explanations that can be adapted to fit different cases at

different times.

3.7 Ethical Consideration

The research process follows the policy set out by Queensland University of

Technology (QUT). Under QUT‘s ethics policy, ethics approval is required only for

projects or studies involving humans. As a result of this policy and because this

research is based on media reports and organisational documents that are freely

available, there is no impact on human participants.


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3.8 Conclusion

To understand and explain changes in crisis communication, this thesis

employs a qualitative research and process theory. Three alternative templates that

offered different perspectives on crisis and organisational communication were used

to construct narratives that linked crisis communication to the context of

organisations and an industry undergoing transformative change. The next chapter

presents the three narratives and provides an analysis of key findings against the

research questions.


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CHAPTER FOUR

Results

''It's not as big as asbestos and it's not as big as tobacco but it's No. 3,''

said Richard G. Sullivan, a Mineola, N.Y., lawyer who represents

clients with lawsuits involving the three COX-2 drugs (Martinez,

2004, December 15).

This results chapter is comprised of three narratives that offer alternative

descriptions and explanations for crisis communication decisions of multiple

organisations across a four-year time frame. In section 4.1, I provide background

information about the three organisations in the case study followed by an overview

of the case study and punctuating event in section 4.2. These organisations and

events remain constant across all narratives. Next, I present three alternative

interpretations of the case study. Section 4.3 presents the narrative as influenced by

Coombs‘ (2006b) situational crisis communication theory. Section 4.4 presents the

narrative as influenced by Allen and Caillouet‘s (1994) work on organisational

messages during crisis. Section 4.5 presents the narrative as constructed using

Oliver‘s (1991) strategic responses to institutional processes that consider

organisational agency. The justification for this approach is built in Chapters Two

and Three.

In section 4.6, I use the narratives to illustrate crisis communication of the

organisations involved through a series of visual crisis communication maps. These

maps identify the changes in crisis communication over the time frame of this thesis.

Each map is analysed against Siggelkow‘s (2002) models for change, enabling a

response to the first research question about the persistence of and change in

corporate actors‘ symbolic and substantive strategies over time. In section 4.7, I


172

follow Allison and Zelikow‘s (1999) framework to sum up the differences in

interpretation presented by each narrative. This analysis establishes the importance

of the crisis context and the significance of observing crisis communication through

multiple templates, thus answering the second research question that guides this

thesis.

4.1 Background of Merck, Pfizer and Novartis

There are three pharmaceutical organisations at the centre of this thesis:

Merck & Co, Pfizer Inc, and Novartis AG (known in this thesis as Merck, Pfizer, and

Novartis). These organisations were selected because they all produce medicines in

the COX-2 inhibitors class of drugs that is the focus of the crisis events. Further,

each organisation was involved in the ongoing crisis events in different ways. Merck

was the primary organisation as it was the company that caused the situational crisis

event by withdrawing Vioxx. In doing so, Merck focused attention on the safety of

the COX-2 class of drugs, which affected the secondary organisations of Pfizer and

Novartis, and their products Bextra and Celebrex, and Prexige. Of these two

secondary organisations, Pfizer was more significantly affected than Novartis as

Pfizer faced a product recall event. Based on media coverage, the thesis focuses

mostly on Merck and Pfizer. All companies are listed on the New York Stock

Exchange. Merck and Pfizer are based in the United States and Novartis is based in

Switzerland, listed also on the Swiss Exchange. A short description of each one of

these organisations is provided in the next section.


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4.1.1 Merck & Co

Merck & Co (Merck) is a global research-driven pharmaceutical company

that produces a range of medicines to improve human and animal health (Factiva,

2009). This thesis is limited to Merck‘s human health division that is comprised of a

pharmaceutical and vaccine and infectious diseases segments. The pharmaceutical

division is responsible for approximately 80 percent of Merck‘s revenues

(DataMonitor, 2009). Merck is considered to be one of the largest pharmaceutical

companies in the world (DataMonitor, 2009). In 2008, Merck employed 55,200

people. Some of Merck‘s key products include Gardasil, a vaccine to prevent

cervical cancer, Vytorin, an anti-cholesterol medication, and Fosamax, a bone

resorption medication. Merck produced and marketed Vioxx from 1999 until its

withdrawal in September 2004.

In this thesis, Merck is the primary organisation. The majority of

organisational messages in the following narratives are delivered by organisational

leaders including the chief executive officer (CEO), general counsel, or chief of

research. During the time frame of this thesis, Merck had two CEOs. Until May

2005, the CEO of Merck was Raymond Gilmartin. Mr Gilmartin was replaced by Mr

Richard Clark. For the majority of the study, Merck‘s general counsel was Mr

Kenneth Frazier who was replaced by Mr Bruce Kuhlik in 2008. Merck‘s chief

research officer is Dr Peter Kim.

4.1.2 Pfizer Inc

Pfizer Inc (Pfizer) is the largest pharmaceutical company in the world and it

operates in more than 150 countries (DataMonitor, 2009). Pfizer comprises of


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segments in pharmaceutical and animal health (Factiva, 2009). As of 2008, Pfizer

employed 81,800 people (DataMonitor, 2009). This thesis is concerned with the

pharmaceutical division that includes a range of drugs for pain, cardiovascular and

respiratory diseases and other disorders. Some of the drugs produced and marketed

by Pfizer include Lipitor, a cholesterol-lowering medication, Zoloft an anti-

depressant, and Viagra for the treatment of erectile dysfunction. Pfizer produces and

markets Celebrex. Pfizer stopped marketing Bextra after its regulatory recall in

February 2005, following Merck‘s withdrawal of Vioxx in September 2004.

In this thesis, Pfizer is a secondary organisation, entangled in the process of

transformative change and the focus of a second product recall for the COX-2 class

of drugs. The majority of organisational messages in the following narratives are

delivered by organisational leaders such as the Chief Executive Officer (CEO).

During the study, Pfizer had two CEOs. Until August 2006, the CEO of Pfizer was

Mr Hank McKinnell. Mr McKinnell was replaced by Mr Jeffrey Kindler.

4.1.3 Novartis

Novartis AG (Novartis) is a Switzerland-based operation that produces and

markets pharmaceutical medicines through a range of subsidiaries (Factiva, 2009).

Novartis has portfolios in medicines, preventive vaccines and diagnostic tools,

generic pharmaceuticals and consumer health products (Factiva, 2009). This thesis is

limited to the pharmaceuticals portfolio that includes treatments for cardiovascular

and respiratory diseases, oncology, neuroscience, and other disease areas. In 2008,

the pharmaceutical division employed 53,632 associates (DataMonitor, 2009).


175

In this thesis, Novartis is a secondary organisation but receives significantly

less media coverage than Merck or Pfizer as its COX-2 Prexige was not approved for

sales or marketing in the US. The majority of organisational messages in the

following narratives are delivered by organisational leaders such as the chief

executive officer (CEO). Throughout the study, the Novartis CEO was Dr Daniel

Vasella.

4.2 Description of Key Events

Each narrative is constructed based on a series of events that affected the

pharmaceutical industry from 2004 to 2008. The events are described and analysed

in chronological order. These events show how a product withdrawal punctuated

equilibrium for Merck and the pharmaceutical industry, drawing sustained attention

from media, regulatory, legal and academic stakeholders until Merck closed the

crisis by settling claims filed by individuals acting alone or as part of class actions.

The timeline of events is set out in Table 4.1.

Table 4.1

Timeline of Key Events

Date Event

September 2004 Merck withdrew Vioxx from all markets

November 2004 Congress held inquiry

February 2005 FDA‘s advisory panel discussed COX-2 drugs

April 2005 Pfizer withdrew Bextra at FDA‘s request

July 2005 Litigation against Merck begins

Pharmaceutical industry sets new advertising guidelines

December 2005 New England Journal of Medicine retracts Vioxx article

January 2006 FDA issues new guidelines for drug development

February 2006 NEJM publishes correction to Vioxx article

June 2007 New regulations introduced by FDA

August 2007 Novartis recalls Prexige in Australia

November 2007 Merck announces plans to settle litigation for Vioxx

October 2008 Pfizer settles litigation for Bextra promotion


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4.2.1 Starting Points: Overview of Pharmaceutical Industry

In 2004, the pharmaceutical industry was recovering from a crisis. Anti-

depressants had been linked to increased suicides or suicidal tendencies in children.

The Food and Drug Administration (FDA) and the drug companies involved were

under fire from the media for not uncovering these effects earlier.

The pharmaceutical industry in USA is regulated by the FDA which is

overseen by Congress. In 1992, spurred by AIDS and a desperate desire for access to

new treatments, the FDA adopted a liberal approach to drug approvals. A

consequence of this move was less monitoring of approved drugs. The regulatory

move from 1992 would become the focus of much regulatory discussion from 2004

onwards—because of one decision about one drug.

In 2004, like almost any year before it, media and organisational reports in

the pharmaceutical industry were rich with discussions about disclosures for drug

trials, drug approvals, drug advertising campaigns for risky new products, and

conflicts of interest where so-called independent scientists held shares or interests in

pharmaceutical companies. This represented a more-or-less standard news cycle for

an industry that always had news and was always under regulatory and financial

spotlights. But a change like no other was on the way.

On 29 September 2004, Merck voluntarily withdrew one of its top-selling

medications. Vioxx was a pain relieving medication that was prescribed by doctors

all around the world. In the USA, more than 100 million prescriptions were written

for approximately two million patients who had taken the drug since its market


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introduction in 1999. Patients used Vioxx to relieve joint pain and arthritis among

other illnesses. In 2003, worldwide sales of Vioxx totalled US$2.5 billion.

Vioxx was one of several COX-2 medications on the market. Other popular

medications in this category were Celebrex and Bextra, both marketed by Pfizer, and

Prexige, which was marketed by Novartis. Prexige was yet to gain approval in the

US market but was softly marketed and available in Australian and European

markets in 2005 (Whelan, 2007, January 19). The COX-2 class of drugs was popular

among doctors and patients alike as it provided pain relief but without the

gastrointestinal side effects of previous generations of pain medications (COX-1).

Yet the high popularity of COX-2 drugs was to become one of its major downfalls.

The voluntary withdrawal of Vioxx punctuated equilibrium for Merck and

the pharmaceutical industry. Merck‘s actions to withdraw the product, and its

processes to preserve the product‘s status, shed light on an industry full of regulatory

holes. The withdrawal triggered a congressional inquiry, thousands of law suits, and

profound regulatory change. Alongside these changes, three pharmaceutical

companies also underwent changes in the way they communicated about the crisis

and subsequent events.

What follows in the next three narratives are different perspectives on a story

of crisis events, cover-ups, and renewal as the organisations and industry bodies pick

their way through a punctuated equilibrium and journey towards a new equilibrium.

These different perspectives or alternative templates are important because the


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synthesis of each narrative provides a more rounded contribution to crisis

communication research than could be achieved by any single alternative template.

4.3 Alternative Template 1: Restoring Reputations through Coombs’ Theory

This narrative of the Vioxx product withdrawal and subsequent crisis events

is constructed using Coombs‘ (2006b) situational crisis communication theory.

Situational crisis communication theory offers crisis managers ―prescriptive

guidelines‖ (Coombs, 2009, p. 249) for organisational communication during crisis

events. Coombs‘ (2006b) theory considers the situational and historical factors that

affect organisations in crisis and suggests appropriate crisis responses to restore

reputation. To achieve this, Coombs and colleagues developed a typology of crisis

response strategies or communication options that are available to organisations

undergoing crisis.

Crisis response strategies can be used to answer and resolve concerns about

an organisation‘s responsibility for a crisis event (Coombs, 2007c). The strategies

range from defensive to accommodative and sit within three primary postures of

denial, diminish, and rebuild. In addition, a supplementary bolster posture can be

used to support these primary strategies. The definitions for these strategies and

samples from the narrative are illustrated in Table 4.2.


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Table 4.2

Coombs’ Crisis Response Strategies

Posture Crisis response

strategy

Sample from narrative

Deny Seeks to prove no crisis exists or organisation is not responsible for has no

responsibility for crisis

Attempts to remove connection between the organisation and crisis

Attack the

accuser

Denial

Scapegoat

Merck said yesterday it was "vigilant in monitoring and

disclosing the cardiovascular safety of Vioxx" and that

the Lancet study wasn't based on new data nor was it as

comprehensive as the company's own analyses

(Hensley, Lublin, & Tesoriero, 2004, November 5).

A lawyer representing Merck said the internal e-mails

and marketing materials were "taken out of context"

and "do not accurately represent the conduct of Merck

and its employees" (Hensley, 2004, November 9).

Diminish Crisis is not as bad as people think; must have evidence to support

Reflects attribution theory; Crisis manager accepts a crisis occurred and that

his or her organisation is involved but tries to change the attributions

stakeholders make about a crisis in order to reduce reputational damage.

Excuse

Justification Merck acted responsibly: from researching Vioxx prior

to approval in clinical trials involving almost 10,000

patients to monitoring the medicine while it was on the

market to voluntarily withdrawing the medicine when it

did (Kaufman, 2005, August 20).

When Merck& Co. pulled its big-selling painkiller

Vioxx off the market in September, Chief Executive

Raymond Gilmartin said the company was "really

putting patient safety first." He said the study findings

prompting the withdrawal, which tied Vioxx to heart-

attack and stroke risk, were "unexpected" (Mathews &

Martinez, 2004, November 1).


180

Posture Crisis response

strategy

Sample from narrative

Rebuild Change perceptions of the organisation by presenting new information

about the company

Compensation

Apology

This is a good and responsible agreement that will

allow the company to concentrate even more fully on

its mission of discovering, developing and delivering

novel medicines and vaccines (Merck, 2007b).

Bolster Minimal opportunity for reputational development; best used to supplement

primary strategies and adjusting information

Reminder

Ingratiation

Victimisation

We were financially strong before this and we‘ll be

financially strong after (Martinez, Mathews, Lublin, &

Winslow, 2004, October 1).

Throughout Merck‘s history, it has been our rigorous

adherence to scientific investigation, openness and

integrity that has enabled us to bring new medicines to

people who need them (Merck, 2005d).


Crisis response strategies shape attributions of crisis, change perceptions of

the focal organisation, and reduce negative effects of crisis (Coombs, 1995, 2007c).

Each response is built around perceived acceptance of responsibility for a crisis. As

crisis response strategies become more accommodative, they show greater concern

for victims, and stakeholders perceive the organisation is taking greater

responsibility for the crisis (Coombs & Holladay, 2004). The deny posture represents

the defensive end of the continuum and the rebuild posture represents the

accommodative end of the continuum.

Crisis managers can select crisis response strategies based on a combination

of factors including organisational crisis histories, perceived reputational threat,

crisis type, and attribution or blame assumed by stakeholders (Coombs, 1998, 2004a;

Coombs & Holladay, 2002). An assessment of these factors would lead crisis

managers to an appropriate crisis response posture: deny, diminish, rebuild.


181

Application of the model suggests that, if one posture of responses does not improve

reputational outcomes, then crisis managers should move to the next posture in order

to resolve the crisis. In this way, organisational responses can start at the deny level

and move up to the diminish level and so on. This post-crisis communication phase

focuses on the use of communication to close the crisis (Coombs, 2009). In some

cases, crises remain lingering concerns for organisations, leaving stakeholders to

continue questioning the organisation‘s reputation.

This narrative provides an opportunity to examine organisational

communication during a series of crisis events, triggered by the voluntary

withdrawal of Vioxx by Merck. Traditionally, situational crisis communication

theory has focused on crisis response strategies that are used by a single organisation

to resolve the crisis situation or event (Coombs, 1998, 2004a, 2006b, 2007c).

Coombs‘ (2006b) crisis response strategies aim to restore reputation and stability

through communication. The narrative aims to demonstrate how Coombs‘ (2006b)

situational crisis communication theory explains the Merck crisis.

The first narrative is presented in chronological order of the key events that

triggered crisis communication. Merck‘s crisis response strategies started with a

diminish response posture and moved, eventually, to a rebuild posture. The sequence

of crisis response strategies is illustrated in Figure 4.1.


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Figure 4.1 Coombs‘ crisis response strategies depicted as diminish and denial

responses during the Vioxx withdrawal and litigation and shifting to the rebuild

posture during settlement.

4.3.1 Withdrawal of Vioxx

After spending five years communicating the benefits and advantages of

Vioxx and defending it against risks identified by the FDA and independent medical

researchers, on 30 September 2004, Merck took corrective action and initiated an

immediate, worldwide voluntary withdrawal of the drug. Up to its withdrawal,

Vioxx was a pain relief medication used by more than two million patients in the

USA alone. Merck‘s decision to voluntarily withdraw Vioxx represented an abrupt

change in strategy for Merck. By deciding to withdraw a medication from the

market, Merck lost millions in revenue and opened itself up to significant legal

liability. In return, Merck hoped this action would ensure its reputation remained

intact.

The Vioxx withdrawal was a corrective action that occurred in response to

new information from a clinical trial. The APPROVe clinical trial was established to

study the effects of Vioxx on pre-cancerous polyps with the intention of gaining

extended marketing approval. Although APPROVe was meant to provide Merck

with good news about Vioxx, it revealed a major risk in the drug. The APPROVe

•Diminish crisis posture

Vioxx withdrawal

•Diminish crisis posture

•Denial crisis posture

Vioxx litigation

•Rebuild crisis posture

Vioxx settlement


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trial found that compared to the placebo, patients who took Vioxx faced an increased

risk for confirmed cardiovascular events such as heart attack and stroke, beginning

after 18 months of treatment. Specifically, patients who took Vioxx were twice as

likely to have a heart attack or stroke as those on the placebo.

Under situational crisis communication theory, Merck‘s decision to withdraw

the drug represented a corrective action that was required to preserve the

organisation‘s reputation and status as a leading pharmaceutical firm (Coombs,

2006). By withdrawing the product, Merck assumed a level of responsibility for the

event. As a result of this assumed responsibility, the crisis communication

surrounding this withdrawal automatically started at the diminish posture. Under the

diminish posture, Merck demonstrated an acceptance of the crisis but also sought to

minimise any related reputational damage. According to Coombs (2006b), in order

to influence stakeholder attributions towards this kind of crisis event, organisations

must use evidence to support claims that minimise organisational responsibility or

damage during crisis events.

In withdrawing Vioxx, Merck explained it was motivated by ―the best

interest of science and patient safety‖ (Masters & Kaufman, 2004, October 18).

Merck used the messages identified in Table 4.3 to communicate the withdrawal of

Vioxx. These messages demonstrate how Merck prioritised crisis stakeholders

including patients, doctors, and investors.


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Table 4.3

Merck Statements during Vioxx Withdrawal

Date Statement Strategy type

30.09.04 ―We are taking this action because we believe it best serves the

interests of patients. Although we believe it would have been

possible to continue to market Vioxx with labelling that would

incorporate these new data, given the availability of alternative

therapies, and the questions raised by the data, we concluded

that a voluntary withdrawal is the responsible course to take‖

(Mr Raymond Gilmartin, CEO of Merck as cited in Merck,

2004b)

Diminish,

justification

30.09.04 ―Merck has always believed that prospective, randomized,

controlled clinical trials are the best way to evaluate the safety

of medicines. APPROVe is precisely this type of study – and it

has provided us with new data on the cardiovascular profile of

VIOXX. While the cause of these results is uncertain at this

time, they suggest an increased risk of confirmed cardiovascular

events beginning after 18 months of continuous therapy. While

we recognize that Vioxx benefited many patients, we believe

this action is appropriate.‖ (Dr Peter Kim, president of Merck

Research Laboratories as cited in Merck, 2004b)

Diminish,

justification

18.10.04 "It's not that we're unaware of the consequences, but it's a deep-

seated belief that if you do the right thing, rewards will follow‖

(Mr Raymond Gilmartin, CEO of Merck as cited in Masters &

Kaufman, 2004, October 18).

Diminish,

excuse

The messages in Table 4.3 demonstrate that Merck aimed to minimise the

damage of the crisis by explaining, initially, the action of product withdrawal in

terms of patient interest above all other positions. Further support for this

interpretation comes from Merck‘s annual report:

Merck conducts its business based on guiding principles of scientific excellence,

ethics and integrity, and, above all, putting patients first. These principles and values

have allowed Merck to play a leading role in discovering and developing medicines

and vaccines that preserve and improve human life. And they have shaped both the

manner in which we have responded to the challenges of the past year as well as our

ongoing efforts, on behalf of patients and shareholders alike, to position Merck for

future success and growth. The decision we announced on September 30, 2004 to


185

voluntarily withdraw Vioxx from the market reflects the depth and sincerity of

Merck‘s commitment to patients (Merck, 2004a).

Merck explained the withdrawal as being consistent with organisational

values and strategy that put patients first. In this way, Merck anchored the Vioxx

withdrawal in the organisation‘s past as a means to preserve the status quo. Although

Merck introduced uncertainty into the market by deciding to withdraw a product

rather than pursuing other equally legitimate options, its communication suggested

that the company was seeking to correct an issue and return the business to normal

operations. Essentially, Merck wanted to minimise the effects of the crisis and also

to limit ongoing discussion about the withdrawal. By achieving this, Merck hoped to

minimise reputational risk.

One of the ways in which Merck attempted to close discussion and the crisis

was to reinforce the method by which the findings came to light. By communicating

that clinical drug trials were the best way to evaluate drug safety, Merck was

establishing a sole basis for legitimacy, and one that was within the organisation‘s

control. In doing so, the company arguably aimed to close out or override other

researchers‘ findings, derived from alternative methods such as observational

studies, about Vioxx‘s safety from its market introduction in 2000 to its withdrawal

in 2004. These historical studies, undertaken by the FDA or other medical

researchers, had the potential to return to the media agenda and, in doing so, prolong

the crisis and cause further damage on Merck‘s reputation.


186

Another advantage of the move to establish the legitimacy of clinical trials

(over other methods) was that Merck could also claim that the APPROVe study

produced the first data about Vioxx‘s risks. To reinforce this message, the

organisation framed the APPROVe data as being ―unexpected‖ and that none of the

earlier Vioxx studies had demonstrated convincingly heart and stroke risk from the

drug (Mathews & Martinez, 2004, November 1). In accounting for the company‘s

past behaviours, Merck‘s CEO said, ―we were acting consistent with the data we

had‖ (Mathews & Martinez, 2004, November 1). This diminish, excuse strategy

became a consistent theme in Merck‘s responses as demonstrated in Table 4.4.

Table 4.4

Reinforcement of ‘Unexpectedness’ of Trial Results

Date Message Strategy

type

1.10.04 Janet Skidmore, a spokeswoman for Merck, said yesterday that

the latest study was the first clinical trial to show such results and

the company took immediate action upon receiving data (Meier,

2004, October 1).

Diminish,

excuse

18.10.04 "I was stunned," said Dr Kim who had expected positive results

[from the APPROVe trial] (Masters & Kaufman, 2004, October

18).

Diminish,

excuse

18.10.04 "The drug held up for three years. When you've been going this

long you don't expect this kind of phone call," Gilmartin

remembered in an interview soon after the drug was pulled

(Masters & Kaufman, 2004, October 18).

Diminish,

excuse

1.11.04 ―…we were acting consistent with the data we had‖ (Mathews &

Martinez, 2004, November 1).

Diminish,

excuse

14.11.04 ''We did our best to think of the most comprehensive study we

could have done. I'm sorry that I did not know four years ago

what I know now, but the data did not lead us there four years

ago'' (Berenson, Harris, Meier, & Pollack, 2004, November 14).

Diminish,

excuse

The strategies identified in Table 4.4 are diminish, excuse strategies. Merck

tried to minimise organisational responsibility for the crisis on the basis of timing.

That is, Merck had no intention of causing harm to its patients and could not have


187

foreseen four years ago what it faced now. In continuing this diminish crisis response

pattern, Merck also sought to frame messages to justify its actions preceding the

crisis event. Merck‘s key message about its past actions of Vioxx became: "Merck

acted responsibly and appropriately as it developed and marketed Vioxx...When

questions arose about the safety of Vioxx, Merck took steps to investigate and

address these issues" (Mathews & Martinez, 2004, November 1).

One of the consequences of Merck‘s decision to withdraw Vioxx was the

financial impact. The financial market reacted strongly to the withdrawal with shares

dropping $12.07 or 26.8 percent and reducing market value by $26.8 billion to $73.2

billion. Merck‘s decline was the fourth-largest drop in an industrial stock listed on

the Dow since 1993. Merck sought to reinforce the withdrawal decision by using the

bolster crisis response. These bolstering strategies aimed to increase confidence by

drawing on Merck‘s past deeds as well as indicating the future opportunities for the

organisation. The strategies to bolster the reputation of a company are used to

supplement primary strategies of deny, diminish, or rebuild. Table 4.5 illustrates

these messages.

Table 4.5

Merck Bolsters Financial Confidence

Date Message Strategy type

1.10.04 "We were financially strong before this and we'll be financially

strong after," Mr. Gilmartin said. He also pointed to several drugs

for diseases such as diabetes and obesity that Merck is developing

(Martinez et al., 2004, October 1).

Bolstering

1.10.04 "The action we are taking is without question what is best for

patients. That is always what is paramount for Merck," Lewent

said (Masters, 2004, October 1).

Bolstering


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Interestingly, the messages within the bolster response strategies focus on

historical deeds as well as focusing forward. Merck was trying to restore its

reputation by drawing links between its past, present, and future.

At this point, Merck may have hoped that its crisis response strategies that

focused on a select group of crisis stakeholders would have provided enough

information to close the crisis and restore its reputation. However, the crisis context

was moving outside of Coombs‘ (2006b) organisation-centric focus. The media

continued to report the Vioxx withdrawal, publishing opinions that criticised

Merck‘s historical actions towards Vioxx and the role of regulatory bodies. In

addition to this media-fuelled discussion, competitor organisations with similar

drugs started to advertise their products as being safe alternatives to Vioxx.

Together, the actions of the media and competitors added fuel to Merck‘s product

withdrawal crisis, seeing doubts emerge about Merck‘s actions and attributions of

responsibility shift. These factors continued to affect Merck‘s reputation.

4.3.2 Merck’s ongoing crisis

Since its market introduction in 2000, Vioxx had been the subject of some

debate in medical and scientific circles. As a result of this history, Merck‘s decision

to withdraw Vioxx provided stakeholders including medical researchers with a

foundation for ongoing scrutiny of the practices of Merck and other companies in the

pharmaceutical industry. By withdrawing Vioxx, Merck may have committed itself

to a course of action and communication that it could not manage without the

support of the industry. The Vioxx withdrawal sparked interest in Merck‘s historical

actions about Vioxx and while the company tried to reduce ongoing discussion and


189

close the book on Vioxx, the product withdrawal actually held Merck accountable to

greater misdeeds thus affecting its reputation beyond restorative means. In doing so,

this increased the complexity of the crisis context by increasing number of crisis

stakeholders to whom Merck was communicating.

Although Merck acted offensively by withdrawing Vioxx and had enough

evidence to support this withdrawal decision with crisis response strategies, it lacked

evidence to defend itself against the ongoing scrutiny. In effect, this lack of evidence

may have caused stakeholders to question the original communication messages

provided by Merck during the withdrawal of Vioxx.

What Merck viewed as an action to close the door on a drug and continue on

with its operations, others viewed as a decision that legitimised their beliefs that for

some time, Merck had acted in a socially irresponsible manner. What resulted was

ongoing discussion that was critical about Merck, its marketing strategies, its internal

communications, its conflict with academic and medical institutions and the FDA.

As well there was a new interest in the role of other pharmaceutical companies.

These discussions, which were reported extensively by the media, continued to fuel

the crisis beyond its situational start, and arguably turned perceived damage into real

damage for Merck‘s reputation.

4.3.2.1 Merck’s Marketing Strategies

Merck‘s historical actions about Vioxx play out as a battle between

marketing and science. There was no doubt that Vioxx was a successful drug for

Merck in terms of market share and sales. But questions emerged about whether


190

marketing had triumphed over science and whether Merck had continued promoting

a product that it knew to be unsafe (Pollack, 2004, November 14).

Merck had a significant marketing budget for Vioxx. In 2003, the year before

the withdrawal of Vioxx, Merck purchased $78.9 million of media time for Vioxx

advertisements, spending just over $45 million in 2004. In addition, experts

estimated that Merck spent $500 million in 2003 to promote the drug to physicians

through advertisements in medical journals, free samples, and visits by sales

representatives to prescribing physicians. Although consistent with industry norms,

the practices mean something totally different when they are communicated during a

crisis event and when the organisation responsible for these actions is under scrutiny.

The message was simple: Merck spent twice as much on marketing and

administration than it did on research and development (Angell & Relman, 2004,

December 28).

Merck responded to these claims by reinforcing its earlier diminish crisis

response. Merck argued that the company had acted responsibly and appropriately in

developing and marketing Vioxx (Pollack, 2004, November 14). What Merck lacked

during this time was evidence to support these claims, and retain the support and

positive perceptions of its key crisis stakeholders. As it turned out, more evidence

was forthcoming to support the views of Merck‘s opponents.

4.3.2.2 Merck’s Internal Communication

One month after the Vioxx withdrawal, evidence surfaced to support claims

that Merck knew about the risks of Vioxx well before the APPROVe trial results


191

were released in September 2004. Information about Merck‘s internal

communication emerged to build support for this alternative position and shift the

crisis from a situational product withdrawal to a complex crisis of legitimacy for

Merck.

Merck‘s internal documents emerged as part of the preparation for product

liability trials. These documents showed how Merck employees first viewed Vioxx.

A feature story in The Wall Street Journal detailed Merck‘s actions from 1997 to

2004. As illustrated in Table 4.6, Merck had doubts about Vioxx before its market

approval that were subsequently confirmed in future clinical trials. The Wall Street

Journal draws on the discrepancy between the VIGOR trial results in March 2000

and the related Merck press release. At around this time, Merck also went on the

offensive with university medical professors who argued that Merck was attempting

to ―suppress a discussion‖ about Vioxx data (Mathews & Martinez, 2004, November

1).


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Table 4.6

Merck’s Actions over Vioxx

Date Merck‘s actions

February 1997 Internal Merck e-mail warns that a proposed trial may show Vioxx

patients having more blood clots than those taking another medication

and ―kill [the] drug‖.

May 1999 FDA approves Vioxx for arthritis and other types of pain.

March 2000 Vigor trial results available inside Merck. They eventually show Vioxx

group has five times the rate of heart attacks as naproxen group.

March 9, 2000 Merck research chief says in internal e-mail that cardiovascular

problems "are clearly there" in Vigor trial and appear to be "mechanism

based."

April 2000 Merck press release says Vigor trial results are "consistent with" clot-

preventing effects of naproxen.

October 2000 Merck official threatens that a Stanford researcher will "flame out" if he

continues "anti-Vioxx" lectures.

September 2001 FDA sends Merck a warning letter, accusing it of misleading public

about Vioxx's cardiovascular safety.

April 2002 FDA approves a label change for Vioxx, showing data about potential

heart risk.

September 2004 Merck announces worldwide withdrawal of Vioxx.

Source: Mathews & Martinez, 2004, November 1

This article from The Wall Street Journal as detailed in Table 4.6 reinforced

the view that Vioxx was a contest of marketing and science. As these internal

documents were released to the market, Merck defended its past actions through a

diminish, justification response: ―We acted responsibly and appropriately as we

developed and marketed Vioxx. When questions arose about the safety of Vioxx,

Merck took steps to investigate and address these issues‖ (Berenson et al., 2004,

November 14). This crisis response strategy aimed to diminish the crisis by offering

justification for Merck‘s actions. This response was reinforced by Merck General

Counsel Kenneth Frazier who said, ―Merck wasn‘t dragging its feet. It‘s pretty hard

for me to imagine that you could have done this more quickly than we did‖.

In response to the allegations about Merck‘s actions towards medical

researchers, Merck provided the following defence: ―Merck is committed to open


193

and vigorous scientific debate‖ and ―never has had a policy of retaliating against

scientists‖ but ―has a right to defend its medicines against false claims‖ (Mathews &

Martinez, 2004, November 1). A further review of Merck‘s internal documents saw

responses from Merck as illustrated in Table 4.7.

Table 4.7

Internal Emails Explained

Incidents Internal emails Response from Merck‘s Ms

Wainwright

May,1999 Just before Vioxx was approved by the

FDA in May 1999, Dr. Scolnick

apparently lost his cool with an FDA

statistician, according to an e-mail sent

by a person working on behalf of

Merck to a Merck staffer. "I had her

very close to buying the Merck

position when Ed S. came up and

nearly strangled her and her

supervisor…that hurt badly," the e-

mail said.

Ms. Wainwright said the e-mail in

which someone wrote that Dr.

Scolnick "nearly strangled" an FDA

staffer was "hyperbole." She said the

e-mail referred to an FDA advisory-

committee meeting where the "debate

was heated, but neither Dr. Scolnick

nor any other Merck employee

engaged in any inappropriate

behaviour."

May,

2000

A year later, only weeks before getting

the results of the Vigor trial, Dr.

Scolnick in an e-mail asked a Merck

statistician to allow him to see the

results before he was officially

supposed to get access. He sent her a

copy of a Wall Street report that spoke

glowingly about the prospects for

Celebrex, and noted that "we are being

pounded by stories like this." He wrote

that "this situation cannot simply

follow the ‗book‘ ways of my

knowing," asked to speak to her

confidentially and assured her that he

was the only one who listened to his

voice mail.

"This is just another example of

documents being presented out of

context to advance the interest of the

parties who have started Vioxx

litigation," said Joan Wainwright, a

Merck spokeswoman. She said Dr.

Scolnick's e-mail to the Merck

statistician asking to see the clinical

data on Vioxx showed his eagerness to

see the information and that the

statistician appropriately reminded Dr.

Scolnick of the dates the data would

be available to Merck employees.

Source: Martinez & Mathews, 2004, November 18

As illustrated in Table 4.7, Merck responded using a denial posture. Merck

provided an alternative explanation for the internal emails and comments and

claimed the media and litigators were taking Merck comments out of context. The


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market did not believe Merck‘s position. The release and news discussion about

these internal documents led to a further decrease in share value. Merck lost $3.03 or

9.7 percent of its share price to close at $28.28.

4.3.2.3 Response of FDA

A week after the Vioxx withdrawal, a study by a researcher of the FDA

indicated that more than 27,000 heart attacks or deaths could have been avoided if

patients used Celebrex, a drug produced by competitor organisation Pfizer, instead of

Vioxx. This study was based on a sample of patient records and part of a study

conducted by FDA researcher Dr David Graham with Kaiser Permanente, a

prominent health maintenance organisation (HMO). Although Merck challenged the

methods of this study and reiterated its earlier claims that clinical trials were the only

legitimate source of data, the focus shifted quickly from praising Merck‘s decision to

withdraw Vioxx for patient safety, to questioning the delay in withdrawing the

product. Merck‘s opponents wanted to know why Merck delayed the withdrawal of

Vioxx and why the FDA did not act sooner.

The media also questioned the role of the FDA in monitoring Vioxx post

market approval. The FDA said its actions towards Vioxx were appropriate based on

the data available (FDA, 2004c). But the FDA relied on clinical trial data supplied by

Merck. FDA studies were often limited by funding constraints and tended to be

based more on studies of patient records. Both Merck and the FDA were held

responsible for their roles in relation to Vioxx and drug monitoring, respectively.

Although much of the discussion about Merck related to the Vioxx withdrawal, this


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event triggered a public discussion and focused attention to the issue of drug

monitoring and safety.

4.3.2.4. Vioxx and Coombs

In summary, from Coombs‘ (2006b) situational crisis communication theory

perspective, this second stage of the crisis introduced doubts about Merck‘s actions,

affecting Merck‘s reputation and legitimacy. The events detailed how the crisis

context was growing in complexity as the number of stakeholders who were both

evaluating and questioning Merck‘s crisis responses also increased. Media reports

questioned whether Merck delayed the withdrawal of Vioxx in order to put profits

ahead of patients. The evidence presented extended the original situational product

withdrawal crisis and created ongoing concerns for Merck. Further, although this

second stage continued the use of the diminish posture of crisis response strategies,

the success of this strategy was predicated on the provision of evidence to support

communication claims. This second stage of the case study provided more evidence

against Merck‘s original case thus moving the crisis beyond a restorative solution

(Coombs, 2006b).

4.3.3 Response to Senate Committee

In October and November 2004, two congressional committees (the Senate

Finance Committee and the House of Representatives Committee on Government

Reform) were convened to investigate the FDA‘s handling of Vioxx. Senator

Grassley, who chaired the Senate Finance Committee, was particularly concerned by

the ―cozy‖ relationship between the FDA and drug companies (Masters & Kaufman,

2004, October 18). According to Senator Grassley, "it looks like the FDA saw a lot


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of red flags from the beginning. The agency must address what looks like systemic

problems when it comes to putting public health and safety first and public relations

second" (Mathews, 2004, November 10). The FDA is a significant regulatory

agency, looking after products that account for 25 cents of every consumer dollar

(Miller, 2004, November 26). Although the focus of these hearings was on the

FDA‘s actions, pharmaceutical companies were also requested to account for their

actions. This ensured that media coverage extended to the Vioxx withdrawal.

The senate committees were charged to investigate the historical actions of

the FDA in relation to Vioxx in two questions. First, if COX-2s, the category name

for drugs like Vioxx, represented no significant improvement over earlier drugs, is it

irresponsible to introduce them to the market given their cardiovascular risks?

Second, did Merck know about heart risks earlier than the APPROVe trial results

that led to the Vioxx withdrawal (Mathews, 2004, November 10).

On 18 November 2004, Merck CEO Raymond Gilmartin presented prepared

testimony to the Senate Committee on Finance. Gilmartin‘s commentary was

summarised by Merck in the following way:

The Food and Drug Administration approved Vioxx only after Merck had

extensively studied the medicine.

Merck continued to extensively study Vioxx after it was approved for

marketing to gain more clinical information about the medicine.

Merck has promptly disclosed the results of numerous Merck-sponsored

studies to the FDA, physicians, the scientific community and the media and

participated in a balanced, scientific discussion of its risks and benefits.


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Until data from the APPROVe clinical trial became available in September,

the combined data from randomized controlled clinical trials showed no difference

in confirmed cardiovascular event rates between Vioxx and placebo and Vioxx and

NSAIDs other than naproxen.

While epidemiological studies have an important role to play, given their

inherent limitations, when both epidemiological studies and randomized controlled

clinical studies are available, the randomized controlled clinical trials are the most

persuasive evidence.

As soon as the data from the APPROVe study became available, Merck

acted quickly to withdraw the medicine from the market (Merck, 2004c).

These messages represented diminish, excuse crisis response strategies. In

these statements, Merck‘s CEO reinforced that the organisation had acted

appropriately in relation to Vioxx, made decisions using the right type of data, and

followed the requirements of the FDA. The diminish, excuse posture showed that

Merck historically handled Vioxx well but the unexpectedness of the APPROVe trial

results forced Merck to the drug. By using this diminish posture, Merck remained

consistent with earlier statements made during the Vioxx product withdrawal stage.

Merck also reinforced the ethical basis for its decision-making by reminding the

Senate committee of its history:

Merck believed wholeheartedly in Vioxx. I believed wholeheartedly in Vioxx. In

fact, my wife was a user of Vioxx until the day we withdrew it from the

marketplace. In conclusion, Mr. Chairman, throughout Merck‘s history, it has been

our rigorous adherence to scientific investigation, openness and integrity that has

enabled us to bring new medicines to people who need them. I am proud that we


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followed that same rigorous scientific process at every step of the way with Vioxx

(Merck, 2004c).

This bolstering strategy reminded the committee of the great achievements of

Merck, seeking to supplement crisis response strategies at the diminish level. The

media response to the statements of Mr Gilmartin, Merck‘s CEO, was positive

though some believed the senators treated him more lightly than he should expect

from litigators. The senators and media alike recognised the strong reputation of

Merck, indicating the effectiveness of the strategy choice (Berenson, 2004,

November 19). Merck‘s messages also aimed to deflect some of the criticism it

received from the release of internal documents by plaintiffs‘ lawyers. In addition,

Merck specified that it had followed the procedures of the FDA in seeking approval

for and monitoring the drug.

At the same time as senators showed support for Merck, the senate committee

criticised the FDA for failing to realise that, three years earlier, Vioxx was dangerous

(Harris, 2004, November 21b). The investigation process also brought to light that

the tools and practices used by the FDA to regulate drugs were insufficient. For

example, in 2001, FDA officials were forced to negotiate with Merck for one year

before being able to add cardiovascular risks to the Vioxx product label (FDA,

2004c). Although the FDA can recall a product, it is reluctant to do so until the risks

have been proven. The congressional hearings signalled a shift in responsibility away

from Merck and towards the FDA.


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From the perspective of Coombs‘ (2006b) situational crisis communication

theory, this testimony may have provided an option for Merck to shift blame to the

FDA. Merck chose not to take this path and the media articles and organisational

documents do not provide insight into this choice. Further, it is not clear that there is

evidence beyond Merck‘s prepared testimony to support this claim. Merck exited the

senate committee hearings with its reputation preserved in government and

regulatory circles, after receiving some reassurance that it had acted appropriately

and that the fault lay with the FDA‘s processes and resources.

Although these hearings provided an opportunity for Merck to reinforce the

appropriateness of its actions towards Vioxx, they also served to continue to ensure

Merck and Vioxx were high on media, regulatory, and public agendas. Merck had

yet one other committee hearing to get through before it could hope to exit the public

sphere, restore its reputation, and get on with business.

4.3.4 Reaction to the Bextra Withdrawal

Under fire from government and the media, the FDA convened a joint

meeting of the Arthritis and Drug Safety and Risk Management Advisory

Committees to review the benefits and risks of COX-2 medications in mid February,

2005 (FDA, 2005). The committee provided recommendations to the FDA which

would make the final decision on the future of COX-2 drugs. The review was

extensive and focused on clinical trial data and the views of patients, doctors, and

advocacy groups. The committee interviewed representatives from a range of

pharmaceutical companies that produced COX-2 drugs including Merck and Pfizer.


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Merck issued a statement in relation to the meeting, explaining that while it

could have continued to market Vioxx with labelling changes, the voluntary

withdrawal was the responsible choice (Merck, 2005c). Merck also said that as new

information became available, the cardiovascular risks observed in Vioxx may not be

unique to the drug but seen across the class of drugs (Merck, 2005c). These

statements are consistent with Merck‘s diminish, justification responses.

On 18 February 2005, the committee voted on the risk and benefit profile of

Vioxx, Celebrex, and Bextra, among others. The panel concluded that all COX-2

drugs carry risks and that the drugs should be used at the ―lowest safest dose‖

(Harris, 2005, February 18). The votes for the drugs were divided into abstained

votes and votes for and against the individual drugs, as illustrated in Table 4.8. All

drugs were supported by the advisory committee though Celebrex had a greater

support margin than Bextra or Vioxx.

Table 4.8

FDA Advisory Committee’s Votes on COX-2

Product For Against Abstained

Vioxx 17 15 0

Celebrex 31 1 0

Bextra 17 13 2

Source: FDA, 2005; Harris, 2005, February 19

The panel also raised concerns about the lack of legal clout of the FDA in

monitoring drugs post market approval (Harris, 2005, February 18). The panel

recommended strict restrictions be imposed including a ban on direct-to-consumer

advertising, blackbox warnings, and written warnings to patients about the risk of

cardiovascular events (Kaufman, 2005, February 19). The panel‘s recommendations


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triggered share price increases in Merck which surged $3.76 or 13 percent to close at

$32.61 and Pfizer which gained $1.74, or 6.9 percent, to finish at $26.80 (Kaufman,

2005, February 19).

In response to the advisory committee‘s recommendations, the FDA ordered

that Pfizer withdraw Bextra from the market and all drugs include a boxed warning

about potential cardiovascular risk (FDA, 2005; Pfizer, 2005a). At the same time,

Merck remained non-committal about returning Vioxx to the market. The company

said it would discuss the situation with the FDA but had no immediate plans to

return Vioxx to the market. Interestingly, because Coombs‘ (2006b) situational crisis

communication theory focuses on the crisis communication of single organisations,

it is unclear how Coombs (2006b) would consider linked crisis events involving

multiple organisations and account for Pfizer‘s actions and Merck‘s reactions.

The FDA‘s decision demonstrated a change in FDA practices. Media reports

summarised the FDA‘s new position as being cautious, signalling the emergence of

new practices (Appelbaum, 2005, April 13). Even the director of the FDA‘s office of

new drugs agreed that this represented a change in the agency‘s culture (Appelbaum,

2005, April 13).

4.3.5 Merck’s Defence against Litigation

From late April 2005, Merck entered a new phase of the crisis that continued

to challenge its reputation and extend the situational crisis: Vioxx product liability

trials. Merck‘s legal strategy was to defend each case individually. Merck believed

the burden of proof lay on the plaintiff‘s side. To win cases, plaintiffs and their


202

attorneys needed to prove that Vioxx caused heart attacks and strokes, both of which

Merck argued, were common in the general population (Martinez, 2005, July 18). A

second challenge for plaintiffs related to the period of drug consumption. Merck‘s

studies showed that Vioxx caused risks after 18 months of use.

These trials are significant to Merck and crisis communication because they

extended the crisis concern for Merck and thus challenged the organisation‘s ability

to close the crisis and restore reputation and legitimacy. As preparation for the legal

trials was underway, Merck launched an advertising campaign that aimed to restore

the organisation‘s reputation. Although the timing of this advertising was

deliberately selected to coincide with the Vioxx litigation, the level of media

reporting of the ensuing litigation may have limited the effectiveness of this

corporate advertising. The next sections of this chapter outline the key liability trials

faced by Merck.

4.3.5.1 Ernst Trial

The first case to be tried was filed by Carol Ernst whose husband Robert

Ernst died suddenly in his sleep in 2001. The clinical focus of the case was Ernst‘s

arrhythmia (irregular heart beat or abnormal heart rhythm). Merck claimed that

Vioxx had never been linked to arrhythmia, and it had properly disclosed risks to

doctors (Berenson, 2005, July 11), thus according to Merck, the plaintiff‘s case had

no basis. This trial ran from 15 July to 20 August 2005. The legal trials provided a

detailed investigation of Merck and Vioxx, thus keeping the crisis alive on both

public and legal agendas.


203

The plaintiff‘s lawyer was Mark Lanier whose strategy was to frame Merck‘s

actions as prioritising profits over safety, using internal documents as evidence

(Martinez, 2005, June 24). Merck‘s strategy was to reinforce that its actions were

responsible and appropriate during the development and marketing of Vioxx. The

jury decided against Merck and awarded $253 million to the plaintiff (Stewart, 2005,

August 24). The result led media editorial to question Merck‘s legal strategy,

claiming Merck‘s defence that Vioxx was not linked to arrhythmia was now

vulnerable:

I sympathize with Merck's lawyers, but they should have seen it coming. The series

of internal Merck documents casting doubt on the safety of Vioxx put Merck in the

vulnerable position of appearing to have ignored, suppressed or even covered up

data. Even if Merck had acted in accord with the highest medical standards then

prevailing, the contest between a grieving widow and a pharmaceutical giant earning

billions while seeming to discount evidence of heart attacks was never going to be

one Merck could expect to win (Stewart, 2005, August 24).

The strong media interest in the case continued to draw attention to Merck

and reduce the company‘s ability to restore its reputation. This loss of faith in the

company was more immediately demonstrated by a drop in Merck‘s share price. In

reaction to the case, Merck‘s stock fell almost 8 percent to close at $28.06.

Legal professors and doctors also responded to this trial, thus contributing to

ongoing media attention. A professor of law at the University of Chicago interpreted

the Vioxx trial verdict as a way to ―shut down the entire quest for new medical

therapies‖ (Epstein, 2005, August 22). He saw the trial as the start of a massive

financial imposition on not only Merck but the pharmaceutical industry (Epstein,


204

2005, August 22). In a letter to the editor, Dr Martin Thiel, a surgeon explained that

risks and benefits existed in all procedures. He said that ―a society [that] has come to

demand a complete absence of risk will cease to enjoy many of the blessings of

innovation and progress‖ (Thiel, 2005, September 2).

These comments demonstrate recognition of risk and its role in all

medications, and not Vioxx alone, suggesting that the perceived injustice of the large

settlement to the plaintiff may affect or harm future practices in the pharmaceutical

industry. Merck‘s crisis communication strategy throughout the trials remained

consistent with its strategy before the trials. Despite changes in the crisis context, the

company remained steadfast in strategies that aimed to diminish perceived damage

and responsibility for the original and subsequent crisis events.

4.3.5.2 Humeston Trial

The second Vioxx trial began on 15 September and concluded on 4

November 2005. The plaintiff, Frederick Humeston, was suing Merck alleging that a

heart attack he had on 18 September 2001 was caused by Vioxx, which he had been

taking regularly for the two months prior to the heart attack (Davies, 2005, August

23).

In this second trial, Merck took a different approach with internal documents.

In opening arguments, Merck attorney Diane Sullivan said the ―company shouldn't

be held responsible for ‗stupid‘ comments made by some individuals‖ (Davies, 2005,

September 17). In this trial, Merck also simplified its messages about the science

behind Vioxx (Tesoriero, 2005, October 7). Dr Alice Reicin testified that Merck


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followed appropriate processes in seeking approval for Vioxx (Tesoriero, 2005,

October 12). She also explained some of her previous emails that expressed concern

about the safety of Vioxx (Tesoriero, 2005, October 18). Merck also sought to

counter the testimony of the plaintiff‘s medical witnesses (Tesoriero, 2005, October

21). For example, Merck called on a cardiologist Dr John Gaziano from Harvard

Medical School who said that short-term use of Vioxx did not cause heart attacks

(Tesoriero, 2005, October 27). Merck‘s defence was built around the FDA‘s

approval of Vioxx (Davies & Tesoriero, 2005, October 24).

The jury began deliberations to decide against two charges: 1) failure to

warn, and 2) consumer fraud. In the first charge, jurors had to decide whether Merck

failed to provide adequate warnings to doctors and that Vioxx was a contributing

case to the plaintiff‘s heart attack. In the second charge of consumer fraud, the jury

was expected to vote on whether Merck had engaged in inappropriate marketing

practices that misrepresented Vioxx‘s risks (Tesoriero & Davies, 2005, November

2).

The jury decided Merck was not legally responsible for the heart attack and

that Merck had properly warned doctors of Vioxx‘s risks. In response, shares

climbed 3.8 percent to close at $29.48. The jurors said they read the emails

completely and felt many of the ―inflammatory lines were taken out of context‖

(Tesoriero & Davies, 2005, November 4). The jury also unanimously found that

Merck did not violate the New Jersey Consumer Fraud Act in marketing the drug to

prescribing physicians. Although Merck adapted its legal strategy by changing the


206

way it explained internal documents, its crisis communication strategy again

remained consistent throughout this trial.

4.3.5.3 Other Trials

Although the first few trials drew strong media interest and produced many

articles, this reduced significantly over time. After Ernst and Humeston, Merck faced

several other Vioxx trials. These trials are summarised in Table 4.9. During these

subsequent trials, Merck‘s crisis communication remained mostly consistent. It

appears the media tired of the outcomes or of Merck‘s unchanged response to the

trials.


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Table 4.9

Vioxx Product Liability Trials in Media Reporting Order

Date Plaintiff and case details Outcome Number

of

articles

30.11.05

to

13.12.05

Federal trial for Richard Irvin, 53 years,

who died after taking Vioxx for 24 days;

Merck denied responsibility and said

heart disease was common in men like

Irvin

Mistrial. 16

10.01.06

to

31.01.06

Leonel Garza, 71 years, who died of a

heart attack after taking Vioxx for one

month; Merck said plaintiff had serious

cardiovascular problems and refutes

Vioxx use as Garza‘s physician denies

giving him a 30 day supply of Vioxx

Jury found for plaintiff,

awarding $7 million

compensation to

Garza‘s family. Merck

to appeal case.

10

07.03.06

to

12.04.06

Joint trial filed by Thomas Cona, 57 years

who had a heart attack caused by taking

Vioxx for 22 months. John McDarby, 71

years, who had a heart attack and broke

his hip; Merck claims both plaintiffs had

high cardiovascular risk and studied

Vioxx for seven years and complied with

FDA policy.

Jury found that Merck

failed to warn McDarby

and Cona but that

Vioxx was a factor only

in McDarby‘s case.

Jury ordered Merck to

pay McDarby $3

million and his wife

$1.5 million.

18

14.07.06 Doherty Merck failed to warn;

Vioxx did not cause

heart attack

2

31.08.06 Grossberg Jury found for Merck 1

18.08.06 Barnett Jury found for plaintiff,

awarding $51 million;

subsequently offered

$1.6 million or retrial

4

18.08.06 Humeston/Hermanns Jury found for

Humeston; Hermanns

case dismissed

5

14.11.06 Smith Jury found for Merck 3

16.11.06 Mason Jury found for Merck 3

14.12.06 Dedrick Jury found for Merck 1

16.12.06 Albright Jury found for Merck 1

19.01.07 Appell/Arrigale Mistrial 2

28.03.07 Schwaller Jury found for Merck 1

In summary, throughout all of the legal trials, Merck consistently

communicated four key points: 1) that it appropriately and responsibly developed

and marketed Vioxx, 2) that it would defend each case individually, 3) that there was

no reliable evidence to support the jury decision when it lost a case, and 4) that the


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jury‘s decision confirmed there is no evidence. Merck‘s communication strategy was

aligned with its legal strategy. During this time, there was minimal adjustment to

Merck‘s communication strategy. Instead, the organisation stuck very closely to its

key messages, changing them only when referring to a different plaintiff or legal

matter. Perhaps this communication strategy coupled with the media‘s fading interest

in reporting the trials served to remove the Vioxx crisis from the public interest.

Financial markets continued to be interested in trial outcomes, responding positively

when juries found in Merck‘s favour. The trials continued to keep Merck and Vioxx

in the media agenda, complicating and extending the original crisis and making it

even more difficult for Merck to restore its reputation.

4.3.6 Defence against Research Findings

Although Merck‘s communication choices remained consistent during legal

proceedings for Vioxx, it also faced some interesting challenges about its research

and publishing practices. This section of the chapter outlines some of the key

challenges faced by Merck and its responses.

4.3.6.1 Merck’s Defence against its Own Data

In early December 2005 and midway through the third trial (Irvin), editors of

the New England Journal of Medicine (NEJM) raised concerns about a research

article on Vioxx that was published by a range of authors including some of Merck‘s

employees. The NEJM editors claimed that Merck had withheld data about three

heart attacks from publication (Berenson, 2005, December 9). In response to these

claims, Merck issued a statement to emphasise that it promptly and appropriately

disclosed the results of VIGOR (Vioxx gastrointestinal outcomes research).


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According to Merck, the three heart attacks to which the NEJM editors referred,

were reported after the cut-off date of the article and were therefore not published in

the journal (Merck, 2005b). However, the additional information was presented to

the FDA, included in numerous press releases, and disclosed to physicians along

with the original NEJM article. Merck also said that the additional information did

not change the findings. In response to this allegation, Merck also wrote letters to

editors and published an open letter to the medical community:

Merck has always been committed to the highest standards of scientific integrity and

patient safety. Recent news articles have challenged whether Merck‘s actions with

regard to the VIOXX GI Outcomes Research (VIGOR) study have been consistent

with our standards. We want to assure you that our actions, when fully examined,

demonstrate our continued commitment to these standards. We would like to share

with you the facts on VIGOR...

...The recent news articles focus on two allegations...Neither allegation is

true.

...We hope this letter helps to address any questions you may have had. We

know that you and the scientific community expect Merck to adhere to the highest

scientific and ethical standards and we intend to continue to meet those expectations.

We value our relationship with you and look forward to our continuing collaboration

with you as we endeavour to introduce new medications that enrich patients‘ lives

(Merck, 2005a).

Merck researchers refused to submit the correction requested by the NEJM.

Merck‘s responses are outlined in Table 4.10.


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Table 4.10

Merck Responses to NEJM

Date Strategy Strategy type

09.12.05 Merck believes it is important to emphasise that the company promptly

and appropriately disclosed the results of the VIGOR study. Merck

correctly communicated about the benefits and possible risks of Vioxx

and extensively disclosed the VIGOR data to the scientific and

medical communities, and in the press (Merck, 2005b).

Diminish

justification

13.12.05 Mr Beck called the situation [NEJM] an ―enormous sideshow because

it did not affect the safety profile‖ of the drug…even if the additional

heart-attack information had been included in the New England

Journal article, the difference wouldn‘t have been scientifically

meaningful to prescribing physicians, he said (Tesoriero & Martinez,

2005, December 13).

Diminish,

excuse and

deny, attack

accuser

23.02.06 Our evaluation leads us to conclude that our original article followed

appropriate clinical trial principles. The original table never included

the three additional heart myocardial infarctions…and the data were

not deleted from the manuscript. There is no material difference in the

conclusions that arise from the addition of the events reported after the

pres-specified cut-off date. All of the authors stand by the original

article (Merck, 2006a).

Deny, attack

accuser

Merck‘s responses to the NEJM allegation integrated both denial and

diminish crisis response strategies. This represented one of the first times that Merck

used the deny posture. Denial strategies aim to remove any association between the

organisation and the event at hand. By denying the allegations of the NEJM, Merck

demonstrated that this was a distraction that took it away from ongoing concerns

with legal proceedings. Merck also reinforced its handling of Vioxx clinical trial data

as being appropriate and responsible.

4.3.6.2 Merck’s Defence against New Data

A series of studies published in May 2006, September 2006 and early July

2007 revealed new information about Vioxx, the nature of its risks and the timing of

these risk events. This new information challenged earlier assumptions about Vioxx.


211

On 3 May 2006, a study published in the Canadian Medical Association

Journal showed that seniors who took Vioxx faced the highest risk of heart attack

during the first two weeks of Vioxx consumption (Cherney & Tesoriero, 2006, May

3). The study looked at cardiovascular problems among almost 10,000 patients over

65 years of age who took Vioxx and Celebrex. Merck countered this news with a

statement that reinforced its view that observational studies were ―less scientifically

rigorous‖ than clinical trials (Cherney & Tesoriero, 2006, May 3). Plaintiff lawyers

were interested in the short-term effects of Vioxx but Merck argued that these data

would not change its legal strategy (Cherney & Tesoriero, 2006, May 3).

A few days later, Merck released new data from the APPROVe study that

originally triggered the Vioxx withdrawal in 2004. This follow-up analysis showed

that patients who took Vioxx were 1.64 times as likely to have a heart attack or

stroke during a subsequent year as when they were not taking Vioxx (Winslow,

Tesoriero, & Carreyrou, 2006, May 12). Again, Merck communicated that new data

would not change its legal strategy (Winslow et al., 2006, May 12). The study also

showed some support that the risk of Vioxx began within four months of

consumption (Tesoriero & Winslow, 2006, May 18). This news differed dramatically

from the 18-month time frame Merck had previously maintained and used as the

basis of arguments in legal proceedings where plaintiffs had consumed Vioxx for

shorter time frames (Tesoriero & Winslow, 2006, May 18). Merck explained the new

time frame information based on a statistical error in reporting (Berenson, 2006, May

31).


212

Merck said there was a seven percent chance that Vioxx had an equally high

risk of causing heart attacks both before and after the 18-month time frame. The

correction, according to Merck scientist Dr Kim ―doesn‘t change our conclusion; it

doesn‘t change the results‖ (Carreyrou, Winslow, & Tesoriero, 2006, May 31). Other

scientists argued that while this number might seem small, it is high enough to argue

that Merck‘s 18-month theory is unproven (Berenson, 2006, May 31). Merck‘s

lawyers remained confident in using the 18-month risk time frame in future trials

(Tesoriero, 2006, June 27).

In relation to Merck‘s revelation about its statistical error, the NEJM

published an unsigned correction to Merck‘s original study. The correction said key

results in the original publication were reached by a method different from what was

described in original article (Tesoriero, 2006, June 27). The correction said

references to 18-month time frames for safety should be deleted (Tesoriero, 2006,

June 27). Merck responded with an open letter and described how it informed NEJM

of the data analysis error (Merck, 2006e). (See section 4.3.6.1 for excerpts from open

letter to medical community.)

On 13 September 2006, two new studies about Vioxx were publicised

(Loftus, 2006, September 13). One study by researchers at Harvard Medical School,

published in the Journal of the American Medical Association, identified Vioxx with

kidney-related and arrhythmia risks (Loftus, 2006, September 13). Merck said that

the Harvard analysis addressed known renal risks associated with COX-2s and that

Vioxx‘s label included information about risks of oedema (swelling or accumulation

of fluid) and hypertension (high blood pressure) (Loftus, 2006, September 13).


213

Merck specifically noted concerns with observational analysis rather than clinical

trials (Merck, 2006f).

In July 2007, results from VICTOR, a study designed to investigate the effect

of Vioxx on colon cancer, showed that patients had increased heart risks soon after

taking the drug (Tesoriero, 2007, July 3). VICTOR was a study undertaken by

researchers at Oxford University and the trial was stopped when Vioxx was

withdrawn in 2004. The study showed heart attacks occurred within a 12 month time

frame and almost immediately after taking Vioxx (Tesoriero, 2007, July 3). Merck‘s

initial response to these data explained them as being inconsistent with data found in

other placebo studies (Tesoriero, 2007, July 3). In a subsequent company statement,

Merck said the VICTOR study results were limited by a premature study termination

and a small number of events (Merck, 2006g).

Despite receiving, over a sustained period of time, results that contradicted

Merck‘s earlier positions on Vioxx, the company continued to defend its original

positions and stay constant with its legal strategy. Evidence against Vioxx was

mounting but Merck was not shifting its approach. Although Merck persisted with its

original strategies for some time, this sequence of research evidence against Vioxx

did trigger a change in legal strategy for Merck.

4.3.7 Settlement of Litigation

Four months after the VICTOR trial and three years after the Vioxx

withdrawal in September 2004, Merck agreed to settle the 27,000 lawsuits filed in

relation to the drug. The settlement value was $4.85 billion, considered one of the


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largest amounts in civil litigation (Berenson, 2007, November 9). By this time,

Merck had established a strong track record in litigation, which served to encourage

plaintiffs to agree to Merck‘s settlement.

The settlement was good news for investors as Merck‘s legal fees were more

than $600 million each year (Berenson, 2007, November 9). The settlement was

individualised with each plaintiff receiving different settlement payments depending

on their injuries and the length of time they took Vioxx. The decision was explained

by Merck‘s CEO and general counsel in the following way:

This is a good and responsible agreement that will allow the Company to

concentrate even more fully on its mission of discovering, developing and delivering

novel medicines and vaccines. The agreement is structured to provide a significant

degree of certainty toward resolving the majority of the outstanding VIOXX product

liability claims in the United States for a fixed amount.

This agreement is the product of our defense strategy in the United States

during the past three years and is consistent with our commitment to defend each

claim individually through rigorous scientific scrutiny...Specific causation has been

a very difficult issue. This is an opportunity to end a long and difficult litigation that

has stretched on for more than three years (Merck, 2007b).

In response to the settlement, Merck‘s shares rose 2.1 percent to close at

$55.90 (Talley, 2007, November 10). Merck‘s executive team went on to reinforce

the opinion that it had implemented the right legal strategy and minimised business

disruption. The settlement decision is explained as allowing the company to

concentrate more fully on its mission (Merck, 2007a, 2007b). Merck‘s Ken Frazier

said that he viewed the decision to settle the trials not as a change in strategy but as a


215

responsible resolution to existing legal strategy (Merck, 2007b). However, from

Coombs‘ (2006b) point of view, this legal decision triggered an abrupt change in

crisis response strategy from a diminish to a rebuild posture.

As of 3 March 2008, more than 44,000 of the approximately 47,000

individuals who registered eligible injuries submitted materials for enrolment in

Merck settlement (Merck, 2008a). On 17 July 2008, Merck announced that

participation requirements for the settlement had been met (Merck, 2008b).

In addition to individual cases, Merck had come under investigation for its

sales and marketing practices of Vioxx (Tesoriero, 2008, February 1). Merck agreed

to pay $650 million to settle the lawsuits and probes into its sales and marketing

practices (Rubenstein & Johnson, 2008, February 8). According to Merck, the

settlements did not constitute an admission of liability or wrongdoing ("Merck to

settle U.S. claims for $671 million," 2008, February 8). Merck also paid $58 million

to settle claims filed by states across the US that it used deceptive advertising for

Vioxx (Kingsbury, 2008, May 21). Merck did not admit any wrongdoing under the

settlement, defending its marketing practices of Vioxx.

Merck‘s decision to settle lawsuits represented a way to draw to a close the

Vioxx crises. In communicating this action, Merck drew from the rebuild posture

that aims to change perceptions of the organisation by demonstrating full

responsibility for the crisis. When Merck offered to settle legal claims and sales and

marketing practices, it adopted a rebuild, compensation strategy.


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4.3.8 Summary of Coombs’ Template

According to Coombs‘ (2006b) situational crisis communication theory,

organisations should ascend crisis response postures, from deny to diminish to

rebuild, when the initial response fails to restore an organisation‘s reputation. After

starting with corrective action by withdrawing Vioxx, Merck took three years to

move from a diminish posture to a rebuild posture that eventually closed the door on

the Vioxx crisis and allowed Merck to focus its attention and communication on

other aspects of its business. Although Coombs (2006b) has demonstrated the

effectiveness of his crisis response strategies in relation to stakeholder perceptions of

reputation, his work is yet to consider how time and the complexity that comes with

it influences this process. This thesis provides some insight to address this gap.

Based on this template, it appears that neither a single response nor a

sustained response can restore organisational reputation or close a crisis that

represents a transformation and triggers regulatory change. Instead, organisations

may find themselves being tested by the same crisis incident over a sustained period

of time. Further, organisations may find that their past actions merge with current

debates, and influence perceptions of responsibility for events. For example, Merck‘s

historical actions towards Vioxx, seen in its internal emails and strong marketing of

the drug, were consistently used by lawyers to demonstrate that Merck knew about

the risks of Vioxx well before it withdrew the product.

This template also shows how other organisational actors can hijack the

organisation‘s framing of the crisis and complicate the crisis context. Litigation and

medical researchers provided both new interpretations and new data relating to


217

Vioxx marketing and Vioxx‘s efficacy. In response, Merck denied these claims thus

demonstrating a backtrack in crisis response postures from diminish to denial.

Merck‘s move to the rebuild posture occurred in March 2008 when the

company decided to settle ongoing Vioxx liabilities. As such, Merck‘s decision was

based on operational and communication concerns. Merck fought trial after trial

from 2005 onwards, initially facing more losses than wins. Although Coombs (2007)

advocates for the ascension from deny to diminish to rebuild postures, perhaps one

limitation in the timing of this process is the role of operational or non-

communication concerns. Some crisis events can be restored through clear

communication but in cases where the organisation accepts responsibility,

communication alone will rarely secure a return to reputation or the status quo. In

Merck‘s case, internal and operational decisions around the product liability trials

suggest a delicate balance in decision-making. For example, although the ongoing

litigation ensured Merck remained a focus of media reports for a sustained period of

time, achieving a track record of success in litigation may have been critical to

achieving success with a settlement of cases.

In summary, the Vioxx withdrawal and narrative represented a four-year

period of significant instability for Merck. Even as time passed, Merck persevered

with a diminish response strategy. Perhaps the organisation was hoping that

repetition of this message would yield a close to the crisis and a return to the status

quo. Yet, at the same time as it was persisting with these messages, the

pharmaceutical industry was undergoing tremendous regulatory change and the

effects of the Vioxx withdrawal on Merck were inadvertently caught up with that


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process. One way of interpreting Merck‘s persistence is by considering that the

organisation was seeking to have stakeholders associate the Vioxx withdrawal with

the company‘s past, and not its future. From 2004 to 2008, Merck itself went through

transformative change in organisational strategy by cutting workforces, changing

research and development strategies, and changing leadership.

The Coombs‘ (2006b) template provided a micro view of the crisis

communication and actions of the Merck as the primary organisation responsible for

withdrawing a top-selling drug and triggering transformative change in the

pharmaceutical industry. Next, narrative two provides a more macro view to

examine the crisis communication and actions of Merck and other corporate actors

that were caught in the web of change.


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4.4 Alternative Template 2: Restoring Legitimacy in Response to Accountability

Pressures


is constructed using Allen and Caillouet‘s (1994) typology of message strategies.

Allen and Caillouet (1994) developed this typology by examining ―naturally

occurring‖ message strategies used by an organisation undergoing a crisis that

threatened its legitimacy. The authors used impression management as a basis for

developing a typology of strategies as a way to explain how these strategies could

potentially shape organisational legitimacy (Allen & Caillouet, 1994).

Allen and Caillouet (1994) developed a typology of message strategies and

also examined the target of each strategy. In this way, the thesis could understand

both the complexity of communication and institutional constraints on organisational

messages. By integrating institutional theory, Allen and Caillouet (1994) examined

messages as occurring within the context of a ―complex web of relationships‖ among

a focal corporate actor and other agents (Allen & Caillouet, 1994). In devising this

typology, the authors paid attention to how strategies relate to institutionalisation

within an organisational field (Allen & Caillouet, 1994). That is, how an

organisation communicates its conformity and gains audience approval in order to

enhance its legitimacy (Allen & Caillouet, 1994).

The resultant typology includes a number of strategies: those that admit fault

and communicate through excuses, justifications or apology; those that aim to

convince stakeholders of legitimacy through ingratiation; and those that aim to


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intimidate, denounce or claim factual distortion (Allen & Caillouet, 1994). The

strategies and samples from the narrative are illustrated in Table 4.11.

Table 4.11

Allen and Caillouet’s Message Strategies

Strategy Definition Samples from study

Excuse An organisation attempts to negate responsibility for an event

Denial of intention

Denial of volition

Denial of agency

"We are comfortable that Merck's disclosures were

appropriate," said Tony Plohoros, a Merck

spokesman. "We believe our communications

adequately reflected our best understanding of the

data" (Martinez, 2004, October 5).

Justification Organisation accepts responsibility for the effect but does not accept

responsibility for the negative actions associated with it

Denial of injury

Denial of victim

Condemnation of

condemner

Misinterpretation of

negative events

―We are taking this action because we believe it

best serves the interests of patients,‖ said Raymond

V. Gilmartin, chairman, president and chief

executive officer of Merck. ―Although we believe

it would have been possible to continue to market

VIOXX with labeling that would incorporate these

new data, given the availability of alternative

therapies, and the questions raised by the data, we

concluded that a voluntary withdrawal is the

responsible course to take‖ (Merck, 2004b)

Ingratiation The organisation attempts to gain audience approval

Self-enhancing

communication

Role modelling

Social responsibility

Other-enhancing

communication

Opinion conformity

''Merck's future is both secure and promising'' ("As

another Vioxx trial nears, Merck vows to keep

fighting," 2005, September 10).

Intimidation No statements found.

Apology No statements found.

Denouncement No statements found.

Factual

distortion

Ted Mayer said the internal e-mails and marketing

materials were "taken out of context" and "do not

accurately represent the conduct of Merck and its

employees." People with access to a selection of

internal documents that tend to reflect poorly on

Merck permitted The Wall Street Journal to review

them, but Merck did not provide other documents

to furnish context, citing ongoing litigation

(Mathews & Martinez, 2004, November 1).

Source: Allen & Caillouet, 1994


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The strategies identified in Table 4.11 detail the range of messages that

organisational actors can communicate to restore or reinforce legitimacy after crisis.

Allen and Caillouet‘s (1994) typology is limited to communication messages such as

communicating denial whereas Coombs‘ (2006b) framework considered both

communication and action such as communicating denial and undertaking corrective

action such as a product withdrawal. Unlike Coombs‘ (2006b) situational crisis

communication theory, Allen and Caillouet‘s (1994) typology does not offer a set of

prescriptive guidelines for strategy use. However, Allen and Caillouet‘s (1994)

alternative template offers an opportunity to explore the notion of the ―web of

complex relationships‖ (p. 44). Allen and Caillouet (1994) take into account that

legitimacy pressures can come simultaneously from multiple stakeholders who have

been affected by the actions of one organisation. Following this network logic, one

organisation‘s crisis can both draw pressure from and increase pressure on multiple,

linked organisations. As a result, Allen and Caillouet‘s (1994) study of impression

management strategies also provides a new way to study crisis communication: to

examine how the messages of other organisations or agencies pressure the

communication of the focal organisation in crisis.

This alternative template offers the opportunity to reinvigorate a perspective

that was emphasised less in conducting Coombs‘ (1998) research. That is, although

Coombs‘ (1998) adapted Allen and Caillouet‘s (1994) message strategies, his

resultant situational crisis communication theory largely focuses on a single

organisation‘s outward communication to stakeholders.


222

This second narrative provides an opportunity to examine organisational

communication during a series of crisis events, triggered by the voluntary

withdrawal of Vioxx by Merck. It extends Allen and Caillouet‘s (1994) current work

that examines an organisation‘s message to other stakeholders, and goes beyond

Coombs‘ (2006b) situational crisis communication theory by focusing on the role

and communication of other organisations linked to the crisis. This narrative tells a

story about Merck‘s actions but also provides a space to look at how other linked

organisations either presented additional accountability pressures on Merck or were

forced by Merck‘s actions to face pressure on their own organisation‘s legitimacy.

The narrative is presented in chronological order of the key events that

triggered crisis communication. Drawing on Allen and Caillouet‘s (1994) model, it is

argued that Merck‘s message strategies were focused on a justification response that

remained constant throughout the duration of the thesis and was complemented by

ingratiation or factual distortion strategies. The sequence of crisis response

strategies is illustrated in Figure 4.2. There are some elements of this narrative that

are repeated from narrative one. All narratives share the same data set and sequence

of events but each narrative enables subtle emphases of different points.


223

Figure 4.2 Allen and Caillouet‘s Message Strategies demonstrating a justification

and ingratiation response during the Vioxx withdrawal and shifting to justification

and excuse response during Vioxx litigation and settlement.


Despite receiving regulatory counsel for an alternative strategy, on 30

September 2004, Merck broke new ground by initiating an immediate, worldwide

voluntary withdrawal of Vioxx, a pain relief medication used by more than two

million patients in the USA alone. The withdrawal occurred in response to new

information from a Merck-sponsored clinical trial. The APPROVe trial was

established to study the effects of Vioxx on pre-cancerous polyps with the intention

of gaining extended marketing approval and further legitimising the product. Instead,

the APPROVe trial found that, compared to the placebo, patients who took Vioxx

faced an increased relative risk for confirmed cardiovascular events such as heart

attack and stroke, beginning after 18 months of treatment (Merck, 2004b).

Although a number of drugs have been recalled or voluntarily withdrawn in

the pharmaceutical industry, Merck‘s voluntary withdrawal of Vioxx was at odds

with the FDA‘s advice to continue to market Vioxx but with a new drug label.

Although the FDA offered Merck the opportunity to continue to legitimately market

•Merck: Justification and Ingratiation

Vioxx withdrawal

•Merck: Justification and Excuse

Vioxx litigation

•Merck: Justification and Excuse

Vioxx settlement


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Vioxx, the company went against this advice because it deemed withdrawal a more

responsible course to take. In essence, Merck‘s decision to withdraw Vioxx did not

conform to industry practices and regulatory advice. As a result, Merck‘s crisis

communication strategies needed to build legitimacy for its decision and for the

company.

Merck communicated its decision to withdraw Vioxx using a justification

strategy (Allen & Caillouet, 1994). Following Allen and Caillouet (1994), a

justification strategy showed the organisation accepted responsibility but not for the

consequences associated with the withdrawal. Merck justified the withdrawal of

Vioxx by emphasising the unexpected trial results and reinforcing how the company

acted in a responsible and appropriate manner. Merck denied knowing anything

about the risks of Vioxx until the results of the APPROVe trial, which triggered the

product withdrawal in September 2004. Table 4.12 illustrates these messages.

Table 4.12

Merck Statements during Vioxx Withdrawal


30.09.04 The company‘s decision, which is effective immediately, is

based on new, three-year data from a prospective, randomized,

placebo-controlled clinical trial, the APPROVe (Adenomatous

Polyp Prevention on VIOXX) trial (Merck, 2004b).

Justification

1.10.04 Janet Skidmore, a spokeswoman for Merck, said yesterday that

the latest study was the first clinical trial to show such results

and the company took immediate action upon receiving data

(Meier, 2004, October 1).

Justification

18.10.04 "We were acting totally consistent with the data we had,"

Gilmartin said. "We undertook right away to ask the right

questions." The company was trying to get at cardiovascular

risk, he said, by initiating three clinical trials that would together

give important new information on the issue. Many doctors and

patients liked Vioxx's track record on gastrointestinal problems,

a major source of worry for arthritis patients (Masters &

Kaufman, 2004, October 18).

Excuse


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Merck‘s surprise at the data was complemented by a message that reinforced

the ethics of the organisation. In a press release announcing the Vioxx withdrawal,

Merck‘s CEO explained the withdrawal in terms of responsibility:

Although we believe it would have been possible to continue to market VIOXX with

labelling that would incorporate these new data, given the availability of alternative

therapies, and the questions raised by the data, we concluded that a voluntary

withdrawal is the responsible course to take (Merck, 2004b).

By communicating messages about newness of the data and reinforcing its

ethics, Merck was building a rationale to justify and legitimise its decision to

withdraw Vioxx. The rationale showed conformity with Merck‘s ongoing ethical

responsibilities at the same time as it justified the non-conforming strategy of

withdrawing Vioxx. Interestingly, though, at the time of the Vioxx withdrawal, and

to this day, doctors, patients, and journalists question why Merck chose this decision

over other viable decision alternatives. Regardless of this speculation, Merck

committed to an action and its communication supported that decision.

Merck sought to gain approval for its decision to withdraw Vioxx by drawing

on ingratiation strategies. Merck used ingratiation strategies to demonstrate that the

decision to withdraw Vioxx was socially responsible and would have a limited effect

on the organisation‘s bottom line. Some of the ingratiation strategies used by Merck

during the Vioxx withdrawal period are illustrated in Table 4.13.


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Table 4.13

Ingratiation Strategies Used by Merck during Vioxx Withdrawal


1.10.04 "The action we are taking is without question what is best for

patients. That is always what is paramount for Merck," Lewent

said (Masters, 2004, October 1).

Ingratiation

(socially

responsible)

6.11.04 "I think we still are the good drug company. We still have the

same ethics," Wainwright said. "Is [the negative publicity]

something I like to see every day? No, but it doesn't change the

fundamentals of the company" (Kaufman & Masters, 2004,

November 6).

Ingratiation

The majority of ingratiation strategies were designed to reassure financial

stakeholders of Merck‘s decision. The core message was that Merck had not changed

as a result of the Vioxx withdrawal. In this way, Merck was seeking to show

conformity to existing beliefs. Another way Merck demonstrated conformity was by

establishing that it followed FDA protocols with the development and marketing of

Vioxx.

A secondary justification strategy added support to Merck‘s decision to

withdraw Vioxx. Merck sought to build legitimacy around the means by which the

withdrawal decision was made. Merck established clinical trials as the sole

legitimate method for studying the benefits and risks of drugs. In its press release

communicating the Vioxx withdrawal, Merck said that it ―always believed that

prospective, randomized, controlled clinical trials are the best way to evaluate the

safety of medicines‖ (Merck, 2004b). By communicating that clinical drug trials are

the best way to evaluate drug safety, Merck both countered and defended its decision

against any studies of Vioxx that used methods other than clinical trials.


227

By establishing this basis for legitimacy, Merck had a strategic

communication response to current, historical and future events. Approximately one

month before the Vioxx withdrawal, on 26 August 2004, a FDA investigation using

patient data supplied by Kaiser Permanente, one of the largest health maintenance

organisations (HMO) in the United States, was released to the media. The study

showed that higher doses of Vioxx appeared to triple patients‘ risk of a heart attack

or death (Mathews & Hensley, 2004, August 26). Merck disagreed with the

conclusions of this study, stating that clinical trials ―are more authoritative‖ and that

population studies have ―inherent limitations that contribute to inconsistent results‖

(Mathews & Hensley, 2004, August 26). Because Merck had established clinical

trials as a decision-making requirement, it had in effect, dealt with the further

publicity given to existing and future research that was based on anything other than

clinical trials.

Up to this point, Merck‘s messaging around the Vioxx withdrawal reinforced

its decision and focused forward to reassure stakeholders of its financial strength and

ethical standards. What was perhaps unforeseen by Merck and other players in the

industry was the power of this event and the reactions of the actors. The ―complex

web of relationships with other organisations‖ served to both affirm and challenge

Merck‘s decision to withdraw Vioxx (Allen & Caillouet, 1994, p. 44). The Vioxx

withdrawal sparked a congressional inquiry and a review by the FDA, and created

opportunities for competitors—all actions that added multiple and complex pressures

on Merck. These pressures sustained the crisis and forced the need for ongoing

communication within complex and shifting environments. The complexity was

driven by an environment that was shifting in unpredictable and profound ways. As a


228

result, the conditions that linked corporate actors together in their web also shifted.

The next sections show how corporate actors that were once relied upon for support

themselves came under fire, offering uncertain protection. At the same time, other

organisational actors whose voices would rarely be heard in the public sphere gained

the opportunity to share their concerns via the mass media.

4.4.2 Responses to the Withdrawal of Vioxx

At the same time as Merck was trying to legitimise its decision to withdraw

Vioxx, it was inadvertently setting in motion a complex situation of rivalry and

opportunity forged by the group of corporate actors to which it is connected. The

Vioxx withdrawal provided actors such as medical researchers with the opportunity

to scrutinise the practices of Merck and its regulator, the FDA, and thus add

accountability pressures to challenge Merck‘s legitimacy. It also provided competitor

pharmaceutical organisations with the chance to enhance the legitimacy of their own

products. The web of actors is illustrated in Figure 4.3.

Figure 4.3 The Web of Actors, identifying the key groups or individuals whose

actions added pressure on Merck as it tried to resolve the crisis.

Merck

Patients

FDA

Congress

Researchers

Pfizer


229

Following Allen and Caillouet (1994), the web is observed to be complex,

including multiple links between corporate actors. This section examines how the

Vioxx withdrawal triggered responses from three groups: 1) Pfizer, 2) medical

researchers, and 3) Congress and the FDA. Although this section is structured by

each actors‘ responses, the timeline of these events is presented in Table 4.14.

Table 4.14

Timeline of Events

Date Event

30.09.04 Pfizer defends safety of Celebrex

18.10.04 Congressional committee underway

9.11.04 Pfizer issues warning about Bextra‘s skin condition and cardiac

risk

18.11.04 Merck CEO testifies at congress

19.11.04 FDA researcher identifies Bextra as being at risk at congress

10.12.04 FDA approves new label for Bextra adding warning about heart

risk for patients after bypass surgery and strengthening risk of

skin reactions

17.12.04 Pfizer announces trial data on Celebrex; trial shut down

20.12.04 Pfizer stops advertising Celebrex and amends communication

with doctors

4.4.2.1 Pfizer’s Reactions

Merck‘s withdrawal of Vioxx provided an immediate opportunity for

competitors. Pfizer produces two products in the same class of drugs, Celebrex and

Bextra. Approximately 27 million people around the world have received

prescriptions for Celebrex since its market introduction in 1998. Bextra represented

$1.29 billion in sales in 2004 or 2.4 percent of Pfizer‘s revenue.

In response to the Vioxx withdrawal, Pfizer immediately issued a press

release to confirm the safety of Celebrex based on data from three large and long-

term clinical trials. Pfizer also suggested Celebrex as a treatment alternative to Vioxx


230

and in doing so, reassured stakeholders of the availability of Celebrex supplies.

Pfizer expressed confidence in the ―long-term cardiovascular safety of Celebrex‖

(Pfizer, 2004b).

Pfizer‘s responses to the Vioxx withdrawal served to legitimise Celebrex, yet

at the same time increase pressure on Merck. In the same way that Merck used

clinical trials to justify its decision to withdraw Vioxx, Pfizer used clinical trials to

support the safety of Celebrex. Further, about three weeks after the Vioxx

withdrawal, Pfizer announced that it would start a new trial to test Celebrex for the

prevention of heart attacks (Hensley, 2004, October 18). This move cemented the

efficacy of Celebrex at the expense of Vioxx. It also put added pressure on Pfizer to

prove the safety of Celebrex.

Merck‘s actions also prompted Pfizer to provide, ahead of expected time

frames and procedures, medical guidance about Bextra. This advice noted that

Bextra caused a rare but serious skin reaction and an increase in cardiovascular

events in surgical settings (Bextra is not approved for use in this setting) (Pfizer,

2004c). Pfizer explained that it disclosed these risks to ―reinforce our commitment to

share information with physicians about our product‖ (Pfizer, 2004c). Pfizer also

explained that the Bextra news had no implications for Celebrex. As a result of these

disclosures, Pfizer presented itself as an organisation with appropriate disclosure and

one that conformed to stakeholder expectations.

For Pfizer, the Vioxx withdrawal provided a unique but potentially risky

platform from which to promote Celebrex and Bextra. The differences and


231

similarities between the message strategies used by Merck and Pfizer during this

phase are interesting. Merck accepted responsibility for the withdrawal of Vioxx and

used a justification strategy whereas Pfizer bore no responsibility for the crisis but

sought to defend its own products. The messages within these strategies saw Pfizer

use a similar rationale to Merck but as a way of supporting the safety profile and

reputation of Celebrex.

The communication relationship between Merck and Pfizer cannot be

explained solely by examining their choice of message strategy. To better understand

this relationship, we need to look at what connects both of them to other concerns.

When Merck withdrew Vioxx, the industry focus moved to the COX-2 class of

drugs. In this way, despite Pfizer‘s public assurances of the safety of Celebrex and

disclosure of risks of Bextra, the concern for COX-2 drugs had moved beyond the

level of one organisation to become a whole-of-industry issue. This move would

soon bring some unanticipated consequences for Pfizer.

4.4.2.2 Pressures on Merck

In the months following the withdrawal of Vioxx, medical researchers and

plaintiff lawyers seized the opportunity to hold Merck accountable for its past

actions regarding Vioxx. The actions and the actors behind them presented an

alternative view to Merck‘s claim of appropriate and responsible behaviour. The

opponents claimed Merck had known for some time about the risks of Vioxx.

Research scientists including Dr Graham from the FDA and Dr Topol from

the Cleveland Clinic claimed that the effects of Vioxx were known to Merck before


232

it withdrew its product (Kaufman & Masters, 2004, October 7). Both Graham and

Topol‘s studies, based on observational data, were published in the reputable New

England Journal of Medicine (NEJM). In response to these claims, Merck used a

factual distortion strategy to communicate that the claims put forward by these

medical researchers were untrue. These responses are illustrated in Table 4.15.

Merck‘s responses reinforce some of its earlier justification strategies about the

legitimacy of clinical trials over other methods.

Table 4.15

Merck’s Factual Distortion Responses to Medical Researchers


7.10.04 A company spokesperson said Topol's estimate "goes beyond

the data" and inaccurately extrapolates results from one study to

the entire universe of Vioxx users (Kaufman & Masters, 2004,

October 7).

Factual

distortion

18.11.04 Joan Wainwright, the Merck spokeswoman, said that the

separate study, because it was based on patient records and not

on an actual clinical trial, was inconclusive and had no bearing

on the decision to withdraw Vioxx (Meier, 2004, November

18).

Factual

distortion

7.12.04 A Merck spokesman said, "Observational studies on the risk of

cardiovascular events with Vioxx have had inconsistent results,

and this study only adds to that literature (Hensley, 2004,

December 7).

Factual

distortion

Lawyers for plaintiffs filing cases against Merck presented internal emails

exchanged during the development and marketing of Vioxx. The Wall Street Journal

published an article detailing these emails that suggested Merck knew about the risks

of Vioxx before seeking FDA approval (Mathews & Martinez, 2004, November 1).

In response to these claims, Merck also used a factual distortion message strategy to

communicate that the statements offered by these actors were taken out of context

(Allen & Caillouet, 1994). Table 4.16 illustrates some of these messages.


233

Table 4.16

Merck’s Factual Distortion Messages


1.11.04 Ted Mayer, a lawyer representing Merck, said the internal e-

mails and marketing materials were "taken out of context" and

"do not accurately represent the conduct of Merck and its

employees‖ (Mathews & Martinez, 2004, November 1).

Factual

distortion

2.11.04 ''Past experience of other companies in such situations suggests

that documents will be deliberately presented out of context to

advance the interest of the parties who have started Vioxx

litigation,'' Mr. Plohoros said in an e-mail message ("Senate

investigators interview lawyer who has sued Merck," 2004,

November 2).

Factual

distortion

By considering the messages and actions of other actors, alternative theories

about Merck‘s decision to withdraw Vioxx were suggested. As the crisis continued

to move beyond Merck‘s communication control or influence, it became an industry-

wide concern that also drew attention from the FDA and Congress. The more the

crisis moved out of Merck‘s control or sphere of influence, the greater became the

resources required to preserve Merck‘s legitimacy.

4.4.2.3 Spotlight on Regulators

As the crisis shifted to focus on industry-wide concerns, the FDA‘s role in

monitoring Vioxx was also questioned. Congressional committees were convened to

investigate the FDA‘s handling of Vioxx. In late October 2004, and almost one

month after the Vioxx withdrawal, the Senate Finance Committee and the House of

Representatives Committee on Government reform were convened to investigate the

FDA‘s handling of Vioxx. The committees were given the task to investigate the

historical actions of the FDA in relation to approving Vioxx when other COX-2s

were available, and monitoring Vioxx after it was approved.


234

The committees called on a number of stakeholders including the FDA, drug

company CEOs, plaintiff lawyers, and medical researchers. On 18 November 2004,

Merck CEO Raymond Gilmartin presented a prepared testimony to the Senate

Committee on Finance. Gilmartin‘s testimony provided an opportunity for Merck to

reinforce its decision to withdraw Vioxx and account for its historical actions

towards Vioxx. These messages were communicated using justification strategies to

explain the Vioxx withdrawal and excuse strategies to account for Merck‘s past

actions that were in compliance with FDA procedures. Gilmartin‘s statements were

supported by ingratiation strategies that explained the difficulty of the decision and

reinforced Merck‘s conduct and commitment to patient safety and scientific integrity

(Merck, 2004c). Senators recognised Merck‘s reputation and responded positively to

Gilmartin‘s testimony (Berenson, 2004, November 19).

The following day, Dr Graham, a safety officer at the FDA, described the

FDA as being ―incapable of stopping dangerous drugs from entering and staying on

the market‖ and criticised its handling of Vioxx as ―a profound regulatory failure‖

(Kaufman, 2004, November 19). Dr Graham testified that five drugs should either be

withdrawn or restricted because of their high risks. These drugs were Bextra, Crestor

(cholesterol), Meridia (weight-loss), Accutane (acne) and Serevent (asthma).

According to Dr Graham, Pfizer‘s Bextra carried similar risks to Merck‘s Vioxx

(Kaufman, 2004, November 19).

Dr Graham‘s statements were denied by both the FDA and Pfizer. The FDA‘s

deputy director disagreed with Dr Graham‘s statements (FDA, 2004b; Harris, 2004,

November 19). Pfizer denied any concerns with Bextra, saying the drug "has been


235

found safe and effective when used as indicated" (Kaufman, 2004, November 19).

Based on these comments as well as the additional risks of Bextra as disclosed by

Pfizer, prescriptions for the drug dropped (Pollack, 2004, December 1). Media

reports also suggested that Bextra was the next Vioxx and wondered how the FDA

would handle the emerging situation (Harris, 2004, November 21a).

After receiving testimony, the senate committee criticised the FDA for failing

to realise three years ago, that Vioxx was dangerous (Harris, 2004, November 21a).

The investigation process also brought to light that the tools and practices used by

the FDA to regulate drugs were insufficient. For example, in 2001, FDA officials

were forced to negotiate with Merck for one year before being able to add

cardiovascular risks to the Vioxx product label. Although the FDA can recall a

product, it is reluctant to do so until the risks have been proven.

The congressional hearings cast an industry-wide spotlight on the practices of

pharmaceutical organisations and the deficiencies of the regulatory body, the FDA.

Merck and Vioxx were caught up in a complex web of relationships and

communication that caused them to remain in the public sphere. So complex was this

web that one of Merck‘s commercial rivals, Pfizer, would see its actions come under

scrutiny. In this way, the source of pressure on Merck was also pressured by the

system. The stress for all actors caught up in the complex web was about to get even

more intense. More data would emerge about the cardiovascular risks of other COX-

2 drugs and pain relief medication.


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4.4.2.4 Pfizer under Threat

In the midst of an increasing focus on COX-2 drugs, on 17 December 2004,

Pfizer suspended a clinical trial, known as the APC cancer trial, because Celebrex

was shown to double or triple the risk of heart attacks, strokes or cardiovascular

deaths, depending on the dose ("New doubts about Celebrex," 2004, December 18).

At the same time, the preliminary analysis of a second Pfizer study, known as the

PreSAP cancer trial, showed no increase in cardiovascular risks (Pfizer, 2004e). Both

data came from two long-term cancer trials. The APC cancer trial studied Celebrex

at doses of 400mg to 800mg. In the USA, Celebrex is approved for use from 100mg

to 200mg for osteoarthritis and 200mg to 400mg for rheumatoid arthritis. In response

to these trials, Pfizer said it was ―taking immediate steps to fully understand the

results and rapidly communicate new information to regulators, physicians and

patients around the world‖ (Pfizer, 2004e).

In light of the growing complications in the web of corporate actors, the

FDA‘s response to this news was swift. Dr Crawford, the FDA‘s acting

commissioner, said that he had ―great concerns‖ about Celebrex and recommended

doctors switch Celebrex patients to other drugs (Harris, Stolberg, & Berenson, 2004,

December 18). The FDA asked Pfizer to stop advertising Celebrex and to modify the

messages used by its sales representatives with prescribing physicians (FDA, 2004a;

Hensley, Winslow, & Mathews, 2004, December 20). Media editorial writers

questioned why Pfizer did not withdraw Celebrex especially when Merck withdrew

Vioxx based on similar information ("New doubts about Celebrex," 2004, December

18). All eyes were on the FDA and Pfizer. Pfizer was forced to defend both the

results of the clinical trial and its decision to keep Celebrex on the market.


237

Pfizer justified its decision to retain Celebrex by referring to the efficacy of

drug and its potential for treating cancer (Hensley et al., 2004, December 20). At the

same time, it could not avoid comparison to Merck. In light of this comparison to

Merck, Pfizer‘s CEO offered this response:

Vioxx made us alert to this risk. We had early signals of cardiovascular risk with

Vioxx. We saw none of that in our data for Celebrex. This new information was

inconsistent with the great body of information we'd accumulated over 10 years.

And it was contradicted by a very large study analyzed by the same group of

specialists. But we still haven't received the data; It's somebody's summary of the

data. Only a handful of the people in the world have seen the full data (Hensley et

al., 2004, December 20).

Although Pfizer was hoping to excuse itself from the same situation faced by

Merck, the connection between Celebrex and Vioxx persisted. Media reports

included opinions from a range of stakeholders about the link between Celebrex and

Vioxx. Some of these opinions are illustrated in Table 4.17 where medical

researchers, prescribing doctors, and communication experts talk about the Merck

precedent and offer their views about how Pfizer should handle Celebrex.


238

Table 4.17

Comparisons between Celebrex and Vioxx

Date Statement

20.12.04 For the NCI study, "it looked very much like the Vioxx story," Dr. Pfeffer

said. "In our perspective, we felt that the [risk] was very comparable to that

seen with Vioxx." The level of risk increased with dosage (Hensley et al.,

2004, December 20).

21.12.04 The decision to keep Celebrex on the market may backfire in the court of

public opinion. "If their strategy is to minimize legal ramifications by keeping

the product on the market, that's a short-term gain that will have long-term

repercussions," says Paul Argenti, a professor specializing in corporate

communications and reputation management at Dartmouth College's Tuck

School of Business, and who has done consulting work for drug companies

(but not for Pfizer or Merck).

"Consumers aren't looking at this as a scientific problem anymore because the

science is confusing at best," Mr. Argenti says. "They see these drug

companies are taking advantage of people with expensive advertising and then

trying to rationalize about things that are emotional -- like the sense of danger.

Pfizer will be lumped together with Merck. Consumers can't tell the difference

between Vioxx and Celebrex and Bextra. They're now seen as equally bad"

(Martinez & Hensley, 2004, December 21).

23.12.04 Dr. Derman, the president of a large physician group affiliated with

Northwestern Memorial Hospital in Chicago, says his reading of the studies

that prompted Merck to pull Vioxx off the market this autumn raised big

concerns about the safety of Celebrex and Bextra. All are in the COX-2 class.

"I was concerned enough about it being a class effect that I did not switch

Vioxx patients to Celebrex" or Bextra, he says.

"Then, lo and behold, the information comes out on Celebrex, and it's concern

enough to say I would not use that product," Dr. Derman says. "I would be

shocked if it's not off the market soon." (Burton & Helliker, 2004, December

23).

Amidst the Celebrex-Vioxx debate, the cardiovascular results of yet another

study were released by the National Institutes of Health (NIH). The NIH study was

investigating the effects of pain relief medication on Alzheimer‘s disease, and

showed that patients who took Bayer‘s Aleve (naproxen) risked a 50 percent greater

rate of heart problems than those on the placebo (Harris, 2004, December 21). In

addition, Celebrex patients in the same trial saw no increase in heart events (Harris,

2004, December 21). The results of this study seemed to correlate with the majority


239

of research into Celebrex. In relation to this study, Pfizer‘s CEO issued the following

statement in a news release:

This is important new information that should be considered by doctors and patients

as they evaluate the various treatments for arthritis and pain.... Millions of people

simply can‘t get through their day without pain relief. That‘s why all the emerging

information about arthritis medicines—prescription and over-the-counter—must be

fully evaluated by the U.S. Food and Drug Administration and other regulatory

authorities.

Recently, preliminary information from three major long-term clinical trials

with Celebrex has become available. Because the early information from these trials

is inconsistent, physicians and patients are understandably confused. That‘s why the

full study results must be shared with the medical, scientific and regulatory experts

so that we have a more complete understanding of the risks and benefits of these

medicines (Pfizer, 2004d).

This message from Pfizer‘s CEO added weight to the important role of the

FDA in evaluating the range of medicines for treating pain, including Celebrex,

Bextra, and Vioxx. For their part, the FDA described the situation as being

―confusing‖ and recommended doctors and patients have conversations about each

drug‘s unique risks (Harris, 2004, December 21). Pfizer continued to reinforce the

role of the FDA and its planned hearing into COX-2 drugs (Burton, Mathews, &

Regaldo, 2004, December 24). In doing so, Pfizer shifted responsibility for decisions

about its drugs to the FDA and avoided having to engage in questions about why it

retained Celebrex on the market when Merck withdrew Vioxx.


240

The Vioxx withdrawal triggered a sequence of events among its web of

actors. For the most part, the web of corporate actors added further accountability

pressures on Merck, leading to a complex environment for communication. Merck‘s

response to a negative clinical trial set a precedent for the pharmaceutical industry.

When Pfizer faced a similar situation, though it was months after the Vioxx

withdrawal, it faced the same starting position but took different steps to Merck. This

sequence of events is illustrated in Figure 4.4. Each sequence started with the results

of clinical trials, yet the process and outcomes quite different.

Figure 4.4 Process charts for Vioxx and Celebrex, demonstrating how both drugs

had the same starting position around clinical trial results but made different

decisions.

Connecting the events in the industry context holds some explanations for the

different sequences illustrated in Figure 4. First, Pfizer‘s sequence of events was

dependent on Merck‘s sequence of events. If Vioxx was not withdrawn then Pfizer

would not be forced to defend its decision to retain Celebrex on the market. Second,

given that Vioxx was withdrawn from the market, it triggered not only

transformative change within the COX-2 market but questioned the legitimacy of

regulatory practices. The Vioxx withdrawal triggered instability within the

pharmaceutical industry. The Vioxx withdrawal also triggered discussions about

Vioxx clinical trial

Vioxx withdrawal

Crisis

Celebrex clinical trial

Celebrex stays on market

FDA responsibility


241

drug safety at consumer and regulatory levels. Obviously, these conversations

changed the dynamics of risk within the industry.

As a result of Merck‘s actions, Pfizer faced a more engaged web of corporate

actors that were focused on drug safety and monitoring issues. Pfizer‘s decisions and

sequence of events occurred within an unstable and uncertain industry. Merck

withdrew Vioxx knowing that there were other COX-2 medications on the market;

Pfizer was the producer of two of those alternative COX-2 medications. If Pfizer

decided to recall Celebrex, the consequences within the pharmaceutical industry

would be tremendous. Equally, Pfizer‘s decision to retain Celebrex did not receive

nearly as much media attention as Merck‘s decision to withdraw Vioxx (seven

articles related to the Celebrex data whereas 50 articles were published about the

Vioxx withdrawal). Unlike Merck, Pfizer could call on the legitimacy of the FDA to

protect or buffer its decision. However, Pfizer‘s actions towards Celebrex gave rise

to a greater need for an industry-wide decision about COX-2 drugs. The FDA‘s

hearing on this group of drugs was to be a significant public debate about the safety

of these drugs (FDA, 2005). The result of the hearing was to keep Merck in the

media and to lead to some dire consequences for Pfizer.

4.4.2.5 Discussion of Cox-2 Drug Safety

Within a context that was growing more complex over time, on 16 February

2005, the FDA convened a joint meeting of the Arthritis and Drug Safety and Risk

Management Advisory Committees to review the benefits and risks of COX-2

medications in mid February, 2005 (FDA, 2005). The committee provided

recommendations to the FDA, which would make the final decision about these


242

medications. The review was extensive and focused on clinical trial data and the

views of patients, doctors, and advocacy groups. This committee was convened to

add certainty and some sense of stability to a complex product sector (FDA, 2005).

At the committee meetings, drug manufacturers put forward different theories

for the cause of cardiovascular risks in COX-2 inhibitors but often with little

consensus (Mathews, 2005, February 17). Merck issued a statement, delivered by Dr

Kim, explaining that, while it could have continued to market Vioxx with labelling

changes, the voluntary withdrawal was the responsible choice (Merck, 2005c).

Merck also said that new medical information reported that the cardiovascular risks

may not be unique to Vioxx but seen across the COX-2 class of drugs (Merck,

2005c). Although these statements are consistent with Merck‘s justification

responses throughout the crisis, the company also drew on findings from Pfizer‘s

clinical trials to suggest a class effect.

Media reports suggested that Pfizer was accused of hiding data about

Celebrex and Bextra (Harris, 2005, February 17). Immediately after the Vioxx

withdrawal, Pfizer had said there was no evidence linking Celebrex and Bextra to

heart events. Since that time, however, Pfizer had disclosed studies that

demonstrated heart problems (Harris, 2005, February 17). The panel also found

inconsistencies in Pfizer‘s presentations with one panel member claiming the

presentation was misleading and biased towards positioning the company in a

beneficial light (Harris, 2005, February 17).


243

Pfizer maintained that the majority of studies showed that Celebrex and

Bextra were safe. However, when Pfizer representatives were asked if they would

recommend the drugs to a patient with high cardiovascular risk, a Pfizer scientist

declined to answer and an arthritis specialist from Stanford University who also

consults to Pfizer responded in the negative (Harris, 2005, February 17). This

exchange between Pfizer and the FDA advisory committee represented a marked

shift in the communication from Pfizer about Celebrex and Bextra. Pfizer was being

held accountable for its actions in a public environment, yet it offered little response

to the panel.

At the conclusion of the hearing, the chair of FDA advisory committee said

that COX-2 drugs raised ―extremely complex‖ issues with ―no black-and-white

answers‖ (Kaufman, 2005, February 19). The committee saw risks in Vioxx,

Celebrex, and Bextra (Harris, 2005, February 18). But some of those risks were

considered to be small or tolerable ("The experts‘ verdict on painkillers," 2005,

February 19). The panel was more comfortable with the safety of Celebrex than of

Vioxx and Bextra (Harris, 2005, February 19), and rejected Pfizer‘s insistence that

there was little evidence to show that Celebrex and Bextra caused heart problems

(Harris, 2005, February 19). The committee‘s concern about risk was shared by a

number of medical scientists, prescribing doctors, and patients.

On 18 February 2005, the committee voted on the risk and benefit profile of

Vioxx, Celebrex, and Bextra, among others. The panel concluded that Vioxx could

be returned to the market and Celebrex and Bextra should stay on the market as all

COX-2 drugs carried risks (Harris, 2005, February 18). In deciding this, the FDA


244

advisory committee provided the basis for a regulatory endorsement of COX-2

drugs. The panel identified the concern was that the patients who were at risk of

developing ulcers were also at risk of developing heart attacks (Harris, 2005,

February 18). (Refer to Table 4.8 FDA Advisory Committee‘s Votes on COX-2in

narrative one for the results.)

The panel also raised concerns about the lack of legal clout of the FDA in

monitoring drugs post market approval (Harris, 2005, February 18). As a result, the

panel recommended strict restrictions be imposed including a ban on direct-to-

consumer advertising, blackbox warnings, and written warnings to patients about the

risk of cardiovascular events (Kaufman, 2005, February 19).

At about the same time as the panel‘s recommendations were made public

through the media, Merck and Pfizer‘s annual reports for 2004 were also released.

Merck‘s annual report indicated that since it withdrew Vioxx, new data on

alternative drugs had emerged to suggest that cardiovascular risks pertained to the

entire class of drugs (Merck, 2004a). These messages remained consistent with those

used during the Vioxx withdrawal stage but also offered an alternative justification

for the decision to withdraw the drug: class effect.

The ―class effect‖ argument is precisely what Pfizer was trying to avoid.

Pfizer‘s annual report describes Celebrex and Bextra as ―thoroughly tested

medicines‖ (Pfizer, 2004a). Pfizer also makes the point that decisions should be

made in real-world situations and not only in the context of clinical trial data:


245

Clearly, decisions about medicines must be made in real-world situations. Placebos

don‘t control pain. All the medicines used to relieve pain carry both risks and

benefits. No medicine, not even aspirin, is entirely risk-free. To make sense of what

you see and hear, consult the expert—your doctor—who knows your unique medical

situation, and can advise you on all your treatment options (Pfizer, 2004a).

This message represents a subtle shift in the evidence that Pfizer has used to

defend Celebrex and Bextra. During the Vioxx withdrawal phase, Pfizer used

clinical trials to justify the safety of Celebrex and Bextra. But after receiving some

inconsistent findings for Celebrex, Pfizer had adapted its message. Novartis made no

comment about this situation in its 2004 Annual Report.

4.4.2.6 Withdrawal of Bextra

In response to the advisory committee‘s recommendations, the FDA ruled

that the COX-2 drugs carried a class effect of cardiovascular risk. The FDA ordered

that all drugs include a boxed warning about potential cardiovascular risk (Pfizer,

2005a) and that Pfizer withdraw Bextra from the market. Although Bextra‘s

cardiovascular risk could not be differentiated from other drugs, it carried an

additional risk of rare but serious skin reactions. This additional risk was the basis of

the FDA‘s request for Bextra‘s withdrawal (Pfizer, 2005a). European regulators also

requested the suspension of Bextra in their markets.

Although Pfizer ―respectfully disagreed‖ with the FDA‘s position on Bextra‘s

risk/benefit profile, it suspended sales of Bextra (FDA, 2005; Pfizer, 2005a). The

FDA‘s request for Bextra‘s withdrawal was unexpected and investors believed that

due to Pfizer's performance, its reputation would be hurt as much as its profits: ―the


246

forced withdrawal of Bextra is another blot on its image at a moment when Pfizer is

already suffering from stagnant sales and slumping profits‖ (Berenson, 2005, April).

Pfizer‘s communication about the Bextra withdrawal and the media reporting of it

was substantially less than Merck‘s communication about Vioxx and resultant media

coverage. The different outcomes can be explained by the context of the decision—

regulatory auspices—and that Pfizer still had Celebrex on the market.

The FDA‘s request for Pfizer to withdraw Bextra demonstrated a change in

practice. Media reports summarised the FDA‘s new position as being cautious

(Appelbaum, 2005, April 13). Even the director of the FDA‘s office of new drugs

agreed this represented a change in the agency‘s culture where caution is now ―in‖

and patient‘s rights are ―out‖ (Appelbaum, 2005, April 13).

4.4.2.7 FDA Actions Trigger Response from Web of Actors

The FDA hearing on COX-2s and its conclusions about drug withdrawals,

advertising, and the disclosure of risk also affected the web of actors. At the same

time as Bextra was withdrawn from the market, Merck remained non-committal

about returning Vioxx to the market. For Novartis, though yet to gain regulatory

approval for its COX-2 drug Prexige, there was recognition of a more conservative

approach to drug regulation (Whalen & Greil, 2005, January 21). For Pfizer, changes

to the Celebrex label that includes warnings for cardiovascular and gastrointestinal

effects were finalised on 1 August 2005 at the same time as the drug was approved

for a new use in patients with ankylosing spondylitis, a debilitating form of arthritis

(Martinez, 2005, August 1).


247

In light of the FDA changes, the editor of the NEJM called for even greater

disclosure from pharmaceutical companies about clinical trials (R. Zimmerman &

Tomsho, 2005, May 26). Companies like Pfizer and Merck had started to disclose

clinical trial results on an online registry operated by the National Institutes of

Health (www.clinicaltrials.gov), yet NEJM editor Dr Jeffrey Drazen said these

disclosures were insufficient (R. Zimmerman & Tomsho, 2005, May 26). A coalition

of medical editors said they would refuse to publish results of trials that do not

comply with international transparency standards ("Hiding the data on drug trials,"

2005, June 1).

The Vioxx and Bextra withdrawals also led public health officials to increase

pressure on the pharmaceutical industry to limit drug advertising (Davies, Steinberg,

& Goldfarb, 2005, July 5). Senate majority leader Bill Frist, a former heart surgeon,

argued that drug advertising fuelled drug spending and called for drug advertising to

begin two years after drug approval and with the FDA‘s consent (Davies et al., 2005,

July 5). In response to Congress, the Pharmaceutical Research and Manufacturers of

America (PhRMA) which represents drug companies across the USA, introduced a

set of voluntary guidelines for drug advertising. The guidelines recommended that

firms submit advertising to the FDA and that risk and safety information was clearly

communicated (Dooren, 2005, August 3). Pfizer identified itself as one of the first

companies to support PhRMA‘s principles on direct-to-consumer advertising (Pfizer,

2005c). The company announced that the fundamental changes will make Pfizer

advertisements more effective at communicating risk and benefits and reinforce the

doctor-patient relationship (Pfizer, 2005b).


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In summary, the Vioxx withdrawal triggered a sequence of events that served

to increase public scrutiny of the practices of pharmaceutical companies and their

regulatory bodies. The withdrawal became much more than a manageable, short-

term crisis event. Instead, a product recall crisis triggered change across the

pharmaceutical industry. As transformative regulatory change unfolded, taken-for-

granted industry norms and expectations shifted, constraining organisational

behaviour.

4.4.3 Defence against Litigation

Soon after the FDA started to show change in its actions towards COX-2

drugs, a new phase of the crisis began: product litigation. From late April 2005,

Vioxx and Merck were returned to the media spotlight. Merck‘s legal strategy was to

defend each case individually, believing that the burden of proof lay with the

plaintiff. This section examines the major and minor trials, according to media

coverage.

4.4.3.1 Vioxx Trials with Strong Media Coverage

Merck faced a number of product liability trials in quick succession. During

these trials, Merck denied legal liability for Vioxx and continued to reinforce the

messages it communicated to justify the withdrawal of Vioxx. (For a complete list of

trials, see Table 4.9.)


249

Throughout the legal trials, Merck‘s messages remained consistent with its

strategies before the trials. Despite some changes in the environment, the company

continuously justified its decision to withdraw Vioxx and explained that it acted

appropriately during the development and marketing of Vioxx. Although Merck took

responsibility for the withdrawal, it did not take responsibility for the legal and other

consequences associated with Vioxx.

While these trials occurred in the courtroom, Merck continued to be trialled

in the court of public opinion by members of the web of actors. During the third

legal trial, filed by Irvin, Merck was forced to account for challenges from the New

England Journal of Medicine (NEJM) that called into question the credibility of one

of Merck‘s critical witnesses, Dr Alise Reicin. The editors of the NEJM raised

questions about the scientific integrity of a Vioxx article written by Dr Reicin. The

NEJM editors claimed that Merck had withheld data about three heart attacks from

publication. In response to these claims, Merck issued a statement to emphasise that

it promptly and appropriately disclosed the results of VIGOR (Vioxx gastrointestinal

outcomes research).

More critically, Merck said that the additional data would not change the

research findings. Merck also wrote letters to editors and published an open letter to

the medical community, drawing on ingratiation strategies that reminded readers of

Merck‘s ethical standards (Merck, 2005a). (See section 4.3.6.1 for excerpt of open

letter to medical community.) Merck denied any agency in relation to this matter and

Merck researchers refused to submit the correction requested by the NEJM. Merck‘s


250

responses to the NEJM allegation integrated excuse and ingratiation strategies,

representing one of the first times that Merck used the excuse message.

Although media reporting soon returned to Vioxx product liability trials, the

FDA weighed into the litigation debate. On 14 January 2006, the FDA announced

plans for a policy change where federally approved medication labels have the

potential to pre-empt state law and help protect drug companies against litigation

("FDA issues new rules For drug labels," 2006, January 19). The policy is written

into a FDA drug labelling rule that is designed to make it easier for physicians and

patients to get clear information about drugs ("FDA issues new rules for drug

labels," 2006, January 19). The biggest change to the labels is a new summary, titled

‗Highlights‘ that will summarise key risks and benefits ("FDA issues new rules for

drug labels," 2006, January 19). With this new label, the FDA believes that people

who are injured by the drugs will not be able to sue drug companies successfully in

state courts (Kaufman, 2006, January 19). This proposed policy was later used by

Merck to file for the dismissal of a case. However, Merck‘s attempt was rejected

(McConnaughey, 2007, July 4).

In summary, the media reporting about the Vioxx product liability trials ran

from April 2005 to August 2007. While the first few trials drew strong media interest

and produced many articles, the number of articles reduced significantly over time.

Merck‘s communication remained consistent. Merck‘s messages emphasised that the

company acted appropriately and responsibly in the development and marketing of

Vioxx and when explaining the jury‘s decisions. Merck‘s legal strategy also


251

remained consistent as the organisation consistently insisted that it would defend

each case individually.

4.4.4 Defence against New Data

As product liability trials continued, Merck and its historical claims about

Vioxx came under fire as study after study presented more evidence to support the

risks of the drug. Merck continued to face challenges brought about by research and

publishing practices. New research triggered increasing pressure from medical

editors who called for greater disclosure and accountability from the organisation.

This section will examine the communication of Merck and the increasing pressure

from its web of actors in response to new data about Vioxx.

A series of studies published in May 2006, September 2006 and early July

2007 revealed new information about Vioxx, the nature of its risks and the timing of

these risk events. This new information challenged earlier assumptions about Vioxx.

The new data and Merck‘s responses are summarised in Table 4.18.


252

Table 4.18

Merck’s Responses to New Data on Vioxx

Date New Vioxx research Merck‘s response

03.05.06 Study in Canadian Medical

Association Journal showed seniors

who took Vioxx faced highest risk

of heart attack during first two

weeks of consumption (Cherney &

Tesoriero, 2006, May 3).

Merck countered this news with a

statement that reinforced its view that

observational studies were ―less

scientifically rigorous‖ than clinical trials.

Merck said these findings would not

change its legal strategy (Cherney &

Tesoriero, 2006, May 3).

12.05.06 Merck released new data from

APPROVe, the clinical research

trial that triggered the Vioxx

withdrawal in 2004. The follow-up

analysis showed that patients who

took Vioxx were 1.64 times more

likely to have a stroke or heart

attack than patients who were on

the placebo (Winslow et al., 2006,

May 12). The study also showed

some support for the effects of

Vioxx being seen within four

months of consumption (Tesoriero

& Winslow, 2006, May 18).

Merck said that new data would not

change its legal strategy (Winslow et al.,

2006, May 12). Merck explained the new

time frame information was based on a

statistical error in reporting (Berenson,

2006, May 31). Merck said there was a

seven percent chance that Vioxx had an

equally high risk of causing heart attacks

both before and after the 18 month time

frame. The correction, according to Merck

scientist Dr Kim ―doesn‘t change our

conclusion; it doesn‘t change the results‖

(Carreyrou et al., 2006, May 31).

13.09.06 A Vioxx study by researchers from

Harvard Medical School and

published in the Journal of the

American Medical Association

identified Vioxx with kidney-

related and arrhythmia risks

(Loftus, 2006, September 13).

Merck said Harvard analysis addressed the

known renal risks associated with COX-2s

and that Vioxx‘s label included

information about risks of oedema and

hypertension (Loftus, 2006, September

13). Merck specifically noted concerns

with observational analysis rather than

clinical trials (Merck, 2006f).


253

Date New Vioxx research Merck‘s response

13.09.06 Research out of Australia has

shown that cardiovascular risks

such as arrhythmia began soon

after treatment (Loftus, 2006,

September 13). This study was

based on observational research.

Merck claims its findings are incompatible

with clinical trial data (Merck, 2006f).

03.07.07 Results from VICTOR, a study

designed to investigate the effect of

Vioxx on colon cancer, showed that

patients had increased heart risks

soon after taking the drug

(Tesoriero, 2007, July 3). VICTOR

was a study undertaken by

researchers at Oxford University

and the trial was stopped when

Vioxx was withdrawn in 2004. The

study showed heart attacks

occurred within a 12 month time

frame and almost immediately after

taking Vioxx (Tesoriero, 2007, July

3).

Merck‘s initial response to these data

explained them as being inconsistent with

data found in other placebo studies

(Tesoriero, 2007, July 3). In a subsequent

company statement, Merck said the

VICTOR study results were limited by a

premature study termination and a small

number of events (Merck, 2006g).

Across more than one year, new data was released continually on Vioxx,

including that received from Merck-sponsored trials like APPROVe and VICTOR.

The data presented new perspectives on Vioxx‘s risks, which differed from Merck‘s

original positions when it withdrew the drug. The main point of difference related to

the time frame of Vioxx risks. Merck sponsored clinical trials presented evidence of

short-term risks in Vioxx. This news differed dramatically from the 18-month time

frame Merck had previously maintained and used as the basis of arguments in legal

proceedings where plaintiffs had consumed Vioxx for shorter time frames (Tesoriero

& Winslow, 2006, May 18). In response to the new evidence, Merck accepted this

new information, and acknowledged it had made statistical errors in calculating this

finding but, at the same time, argued there was no difference in the conclusions that

could be drawn from the research. Merck‘s lawyers remained confident in using the

18-month risk time frame in future trials (Tesoriero, 2006, June 27).


254

Not everyone agreed with Merck‘s analysis. Other scientists argued that

while the number (7 percent) might seem small, it was high enough to argue that

Merck‘s 18-month theory is unproven (Berenson, 2006, May 31). In relation to

Merck‘s revelation about the statistical errors it had made, the NEJM published an

unsigned correction to Merck‘s original study. The correction said that key results in

the original publication were reached by a different method than what was described

in original article (Tesoriero, 2006, June 27). The correction said references to 18-

month time frames for safety should be deleted (Tesoriero, 2006, June 27). Merck

responded with an open letter and described how it informed NEJM of the data

analysis error (Merck, 2006e).

The NEJM‘s actions added accountability pressures on Merck who continued

to frame new data on Vioxx in a way that supported Merck‘s original arguments

about the 18-month time frame and the value of clinical trials over other

methodologies. Merck remained defiant, persisting with its original crisis

communication strategies that sought to justify Merck‘s historical decisions around

Vioxx.

4.4.5 Changes to Legislation

In the three years after the Vioxx withdrawal, and while Merck was

defending itself against product liability lawsuits and new data on Vioxx, the FDA

was also under fire and in the midst of transformative change. The FDA responded

to independent reports, changed the way it responded to the environment, and

ultimately was subjected to legislative change brought about by Congress. Each one


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of these events is described here in order to show the significance of the regulatory

changes within the pharmaceutical industry.

The Vioxx withdrawal crisis opened up the opportunity for change in the

pharmaceutical industry. Soon after the recall, the FDA commissioned the Institute

of Medicine to evaluate drug safety. The findings of this report were presented on 23

September 2006 and described the FDA ―as rife with internal squabbles and hobbled

by underfinancing, poor management and outdated regulations‖ that together

affected its ―ability to ensure the safety of the nation‘s drug supply‖ (Harris, 2006,

September 23). As a result of its investigations, the Institute of Medicine proposed

the following recommendations to the FDA:

Newly approved drugs should display a black triangle on their labels for two

years to warn consumers that their safety is more uncertain than that of older drugs.

Drug advertisements should be restricted during this initial period.

The FDA should be given the authority to issue fines, injunctions and

withdrawals when drug makers fail—as they often do—to complete required safety

studies.

The FDA should thoroughly review the safety of drugs at least once every

five years.

The FDA commissioner should be appointed to a six-year term.

Drug makers should be required to post publicly the results of nearly all

human drug trials (Harris, 2006, September 23).

Some four months later, in early 2007, the FDA announced a number of

policy changes designed to ―ensure marketed drugs were as safe as advertised‖

(FDA, 2007a; Harris, 2007, January 31). These changes were motivated by the


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processes involved in the Vioxx and antidepressant crises in 2004, where the FDA

took years to acknowledge risks that were clear to medical researchers (Harris, 2007,

January 31). As a result of these experiences, the FDA introduced new processes

including a comprehensive assessment of drugs 18 months after market introduction,

the creation of an advisory panel to improve the way the FDA communicates risks,

and the tracking of real patients who consume drugs (FDA, 2007a; Harris, 2007,

January 31).

In September 2007, legislation was passed to expand the FDA‘s drug safety

role (Rubenstein, Tesoriero, & Mathews, 2007, September 21). The bill increased the

ability of the FDA to monitor drugs post approval and strengthened the ability of the

FDA to change drug labels, require safety studies, and limit distribution of drugs if

safety concerns arise (Rubenstein et al., 2007, September 21). These changes not

only meant new regulatory practices for the FDA but they have the potential to

protect drug companies from product liability litigation. That is a drug endorsed by

the FDA should avoid litigation.

In summary, the Vioxx withdrawal focused attention on the inadequacies of

the regulatory practices of the pharmaceutical industry, necessitating radical and new

solutions to the FDA‘s existing approach to drug safety. The visibility of the Vioxx

withdrawal transferred onto the FDA and the pharmaceutical industry. As a result,

drug safety became a highly publicised and politicised issue, drawing attention from

―agents of change‖ such as Senators Grassley and Kennedy to win support for new

practices (Alink et al., 2001; Boin et al., 2006). Although it may have taken three

years for regulatory change to come into effect, the newly legitimised changes to the


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FDA set in place long-lasting effects to the approval, marketing and monitoring of

drugs.

4.4.6 Settlement of Litigation

Within this climate of change, in November 2007, Merck decided to settle

27,000 Vioxx lawsuits. The settlement value was $4.85 billion, considered one of the

largest amounts in civil litigation (Berenson, 2007, November 9). By this time,

Merck had established a strong track record of success in litigation, encouraging

plaintiffs to join the settlement.

As well as attending to the needs of various stakeholders, the decision to

settle Vioxx liability removed uncertainty and closed the Vioxx crisis. Merck

communicated its decision to settle Vioxx cases using both justification and

ingratiation message strategies. The justification strategies continued to reinforce

Merck‘s responsible behaviour towards Vioxx, culminating in this settlement. Merck

also used this decision to justify its legal strategy, explaining that winning individual

cases set the precedent for the settlement. As a result, Merck viewed the decision to

settle cases as a continuation in legal strategy.

More significantly, though, Merck‘s justification messages shifted towards

the future. Merck‘s CEO and general counsel set up the company‘s return to its

mission to find and develop drugs. Merck‘s general counsel Bruce Kuhlik said in

regard to the settlement: ―We have done everything we can to close the doors‖ (C.

Johnson, 2007, November 10). Closing the trials also meant closing the extended

crisis that Merck started in 2004. To support the justification strategies, Merck also


258

used ingratiation strategies. These messages served to remind stakeholders that the

agreement added some certainty to Merck‘s future and freed it up to concentrate on

fulfilling its mission (Merck, 2007b).

As of 3 March 2008, more than 44,000 of the approximately 47,000

individuals who registered eligible injuries submitted materials for enrolment in

Merck settlement (Merck, 2008a). On 17 July 2008, Merck announced that

participation requirements for the settlement had been met (Merck, 2008b). This

signalled closure to the many individual suits filed against Merck. In addition to

individual cases, Merck was also under investigation for its sales and marketing

practices of Vioxx (Tesoriero, 2008, February 1). Merck agreed to pay $650 million

to settle the lawsuits and probes into its sales and marketing practices (Rubenstein &

Johnson, 2008, February 8). According to Merck, the settlements did not constitute

an admission of liability or wrongdoing ("Merck to settle U.S. claims for $671

million," 2008, February 8). Merck also paid $58 million to settle claims filed by

states across the US that it used deceptive advertising for Vioxx (Kingsbury, 2008,

May 21). Merck did not admit any wrongdoing under the settlement, defending its

marketing practices of Vioxx (Kingsbury, 2008, May 21).

4.4.7 Summary of Allen and Caillouet’s (1994) Template

Allen and Caillouet‘s (1994) approach to crisis communication integrates

impression management as the basis for crisis response strategies as a way to explain

how these strategies can reinforce or shape an organisation‘s legitimacy. Through

this practice, Allen and Caillouet‘s (1994) framework for crisis communication

considers both the organisation in crisis and the complex web of relationships


259

between this organisation and others caught up in the crisis. As a result of this

network of actors, the link between an organisation‘s decision and industry practices

or institutional norms becomes critical.

Following Allen and Caillouet (1994), this narrative explored the crisis

communication of Merck and the additional pressures imposed upon Merck by a

range of corporate actors including Pfizer and the FDA. The inclusion of the

complex web of relationships allowed this template to consider the crisis context

surrounding Merck‘s actions and communication. As a result, this narrative is told

not only from the perspective of Merck but also from that of the other actors

involved in the crisis. In so doing, the narrative shows how an organisational crisis

developed to an industry-wide event affecting multiple groups.

One of the interesting sequences of events uncovered by this narrative was

Merck and Pfizer‘s divergent responses to the same starting situation. Both Merck

and Pfizer received unexpected and inconsistent findings from a clinical trial into

Vioxx and Celebrex, respectively. Although Merck voluntarily withdrew Vioxx,

Pfizer retained Celebrex. One company accepted responsibility for the findings and

the other did not. We now know what happened to both organisations. However, this

narrative and its focus on a web of relationships force the consideration of the

relationships between primary and secondary organisations. In this case, Merck set

the precedent for product withdrawal that, in essence, became an expectation or

norm for that class of drugs. As a result, Pfizer was questioned by the media when it

did not withdraw Celebrex after a trial yielded negative results. Pfizer was the

secondary organisation caught up in the context of Merck‘s Vioxx withdrawal. At


260

the same time, the shifting regulatory context inspired by Merck became a source of

pressure relief for Pfizer. Pfizer responded to media scrutiny by yielding to the FDA

and its upcoming hearing, thus demonstrating alignment with regulatory actions.

This example suggests the importance of conformity to an organisation‘s

institutional environment. At an organisational level, ingratiation strategies were

used to demonstrate alignment between an organisation‘s actions and the industry‘s

regulatory standards or ethical principles that constrained organisational action and

communication. Yet, the true values of Merck and Pfizer‘s response choices become

clear when they are considered over time. At the beginning of the thesis, Merck‘s

Vioxx withdrawal represented a non-conformity strategy for the industry but in

justifying its decision, Merck potentially re-set the clock on industry expectations for

organisations that receive negative trial results. Later in the thesis, when Pfizer chose

not to withdraw Celebrex, while it may have contravened newly-formed industry and

media expectations, it was also operating within a renewed industry and regulatory

context. While this industry and regulatory context was under review, it served to

offer some protection over Pfizer‘s decision. As a result, Allen and Caillouet‘s

(1994) focus on ingratiation strategies that are designed to show organisational

conformity to standards or norms take centre stage in analysing change over time.

Merck later discovered the value of drawing on the experiences of its web of

corporate actors. Although Pfizer had initially been a source of pressure on Merck by

promoting the safety profile of Celebrex in response to the Vioxx withdrawal,

Pfizer‘s subsequent actions were also of benefit to Merck. As more information

became available about Celebrex, Bextra, and other COX-2 drugs, these additional


261

data offered the chance for Merck to claim ―class effect‖ rather than ―Vioxx effect‖.

Pfizer‘s results with Celebrex and Bextra provided additional information to allow

Merck to shift the perception about Vioxx from being a unique to a class effect

during the FDA advisory committee hearings. As such, this reduced the emphasis on

Merck and Vioxx.

Finally, Allen and Caillouet‘s (1994) template identified the complexity of

the communication environment for Merck and the other corporate actors that were

complicated in the ongoing crisis. A crisis event created this complexity but the

organisations‘ communication strategies served also to shape the complex context

for the pharmaceutical industry during the study.

4.5 Alternative Template 3: Building Legitimacy across Multiple Organisations

through Oliver’s Framework


is constructed using Oliver‘s (1991) typology of an organisation‘s strategic

responses to institutional pressures towards conformity. Drawing on both resource

dependence and institutional theories, Oliver (1991) developed this typology to

contribute to the understanding of how organisational behaviour can sit on a

continuum of conformity to resistance in response to institutional processes and

expectations. Oliver‘s (1991) typology provides a changed perspective on Coombs

(2006b) and Allen and Caillouet‘s (1994) alternative templates. By considering an

organisation‘s agency over its environment, which includes other organisational

actors such as regulatory bodies and competitors, Oliver (1991) provides a way to

graft existing crisis communication typologies onto a framework of change and


262

agency. In doing so, Oliver‘s (1991) work allows for the consideration of how

organisations use strategic responses to remain or become legitimate.

Oliver (1991) identifies five strategic responses to institutional processes:

acquiesce, compromise, avoid, defy, and manipulate. These strategies sit on a

continuum ranging from passive conformity to active resistance (Oliver, 1991, p.

146). Conformity to existing concepts of legitimacy and taken-for-granted norms is a

common organisational response that achieves legitimacy and enhances survival

(Oliver, 1991; Rao, 1994; M. A. Zimmerman & Zeitz, 2002). Conformity is a

characteristic organisational response to uncertainty (Rao et al., 2001) and represents

both an efficient use of resources and continued access to resources (George et al.,

2006). At the other end of the continuum, organisations can alter existing definitions

of legitimacy (Dowling & Pfeffer, 1975) by introducing new criteria and measures to

evaluate legitimacy and performance (Oliver, 1991). Organisations can pursue non-

conformance strategies in order to gain control of their environment (George et al.,

2006). The typology is presented in Table 4.19.


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Table 4.19

Oliver’s Strategic Responses to Institutional Processes

Strategies

and tactics

Example Examples from study

Acquiesce

Act through

habit

Imitate

Comply

Follow invisible,

taken-for-granted

norms

Mimic institutional

models

Obey rules and accept

norms

A Merck spokeswoman responded that clear

policies govern the company's sales and

marketing activities and that "those policies are

aimed at ensuring that our product

communications are fair and balanced and

consistent with FDA labeling" (Kaufman, 2005,

January 25).

Compromise

Balance

Pacify

Bargain

Balance the

expectations of

multiple constituents

Placate and

accommodate

institutional elements

Negotiate with

institutional

stakeholders

Pfizer respectfully disagrees with FDA‘s

position regarding the overall risk/benefit profile

of Bextra. However, in deference to the

agency‘s views, the company has agreed to

suspend sales of the medicine pending further

discussions with the FDA. Pfizer said it will

explore options with the agency under which the

company might be permitted to resume making

Bextra available to physicians and patients

(Pfizer, 2005a).

Avoid

Conceal

Buffer

Escape

Disguise

nonconformity

Loosen institutional

attachments

Change goals,

activities, or domains

No statements found.

Defy

Dismiss

Challenge

Attack

Ignore explicit norms

or values

Contest rules and

requirements

Assault the sources of

institutional pressure

In a statement yesterday, Merck called Topol's

commentary "flawed in many important

aspects." In particular, the company said Topol

had misrepresented Merck's efforts to get firm

information about heart and stroke risks linked

to Vioxx (Kaufman & Masters, 2004, October

7).

Manipulate

Co-opt

Influence

Control

Import influential

constituents

Shape values and

criteria

Dominate institutional

constituents and

processes

"There is no reliable scientific evidence that

shows Vioxx causes cardiac arrhythmias, which

an autopsy showed was the cause of Mr. Ernst's

death, along with coronary atherosclerosis"

(Jonathon Skidmore of Merck as cited in

Kaufman, 2005, August 20).

Source: Oliver, 1991


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Communication between an organisation and its environment is motivated by

a constant need to legitimise its actions (Girardelli, 2004). Metzler (2001a) suggests

that legitimacy is established, maintained, challenged and defended through such

dialogue. Organisational crises or controversies have provided a rich space for the

examination of legitimising accounts (Benoit & Brinson, 1994; Elsbach, 2001;

Elsbach & Sutton, 1992; Hearit, 1995). Organisations can manage controversies by

presenting justifications that refer to the institutional environment (Elsbach, 2001).

In this way, legitimacy is a strategic public relations process that involves the

justification of the organisation‘s existence to external audiences in order to create

and sustain a belief in its legitimacy (Waeraas, 2007).

This narrative is constructed based on the strategic responses of Merck,

Pfizer and Novartis to a range of institutional pressures. In some cases, the

organisation‘s actions themselves become the source of institutional pressure and in

other cases, their actions trigger additional institutional pressures. In this way, this

narrative sees the crisis as made up of a series of institutional pressures that affect

organisations in different ways, enabling a space to talk about the strategic roles of

multiple organisations in response to a range of institutional pressures. An

institutional pressure is defined as an event or force that acts to hold accountable

organisations to institutional norms (Oliver, 1991). Institutional pressures can come

from a range of organisational actors including the mass media, activist

organisations, and regulatory bodies. Institutional pressures provide an opportunity

for the joint negotiation of organisational legitimacy.


265

Across the time frame of the thesis, four pressures have been selected: the

Vioxx withdrawal and congressional committees, the FDA‘s hearing on COX-2

drugs, the pressures of medical journal editors on medical research, and the product

liability trials for Vioxx, Celebrex and Bextra. These pressures were selected as the

key events that triggered strategic responses from the corporate actors involved and

are illustrated in Figure 4.5. The pressures are linked to each other but represent a

range of different sources and in turn trigger a range of strategic responses from

Merck and Pfizer.

Figure 4.5 Institutional pressures of the withdrawal of Vioxx, actions of the FDA,

responses of journal editors, and defence of litigation.


September 2004 turned out to be a very unusual month for Merck. The

company received FDA approval to market Vioxx for juvenile arthritis and, a few

weeks later, new information about the risks of Vioxx, one of its best-selling drugs.

•Pfizer assures Celebrex and Bextra safety

•Congress committees into drug safety

Withdrawal of Vioxx

•COX-2 committee

•Bextra withdrawal

•New Celebrex label

•Changes to FDA

Actions of the FDA

•PhRMA proposes new guidelines

•Pfizer adopts guidelines

•Correction to Vioxx article

Response of Medical editors

• Individual trials

•Settlement

Defence of litigation


266

The Merck-sponsored APPROVe clinical trial that was established originally to

provide evidence for extended marketing approval of Vioxx instead revealed

information about the drug‘s cardiovascular risks. APPROVE‘s medical researchers

found that, compared to the placebo, patients taking Vioxx faced an increased

relative risk in cardiovascular events such as heart attacks and strokes beginning

after 18 months of treatment. After receiving this news, Merck‘s internal scientists

reviewed and subsequently agreed with the conclusions of APPROVe‘s medical

researchers. The new research findings challenged the scientific legitimacy of Vioxx,

a position that Merck had defended in the media since the drug‘s introduction to the

market in 1999. Merck‘s head of research, Dr Kim communicated these results to

Merck‘s CEO and executive team (Masters & Kaufman, 2004, October 18).

It took the company six days to decide its path: an immediate, worldwide,

and voluntarily withdrawal of Vioxx. But before Merck communicated its decision

publicly and to all relevant stakeholders, Merck communicated these findings to the

FDA. Upon learning about the risk profile of Vioxx, the FDA indicated it would

continue to support the listing of Vioxx if Merck updated its product label to reflect

the new risk. Despite receiving this counsel, Merck remained steadfast in its decision

to withdraw Vioxx—even when this decision was inconsistent with industry

practice.

In communicating its decision to withdraw Vioxx, Merck wanted to be seen

as an ethical company that made decisions in the interests of patients and science

over profits. In doing so, Merck took a compromise approach and aimed to balance

the multiple and potentially conflicting interests of patients, doctors, the FDA, and


267

Merck shareholders. Yet at the same time, Merck‘s media releases and statements

revealed that the company deemed it important to mention that the withdrawal

decision was one of several alternatives. This position is illustrated in the following

quote from a Merck media release:

We are taking this action because we believe it best serves the interests of patients....

Although we believe it would have been possible to continue to market VIOXX with

labelling that would incorporate these new data, given the availability of alternative

therapies, and the questions raised by the data, we concluded that a voluntary

withdrawal is the responsible course to take (Gilmartin, (Merck, 2004b).

This quote shows that Merck had choices that were more consistent with

institutional norms than product withdrawal. This rationale is used to support

Merck‘s standing as an ethical company that puts patient safety first.

Merck‘s strategy was consistently applied when it communicated the

implications of the Vioxx withdrawal to financial stakeholders. Both the CEO and

CFO said the decision to withdraw Vioxx was the most responsible option for the

company (Kaufman, 2004, October 1). Merck also sought to reassure financial

stakeholders by reinforcing existing beliefs or deep structures: "We were financially

strong before this and we'll be financially strong after," Mr. Gilmartin said. He also

pointed to several drugs for diseases such as diabetes and obesity that Merck is

developing‖ (Martinez et al., 2004, October 1). The core message was that Merck

had not changed as a result of the Vioxx withdrawal. In this way, Merck was seeking

to reinforce its conformance to legitimacy.


268

The mass media coverage of the Vioxx withdrawal was intense. In the first

week after the announcement of the withdrawal, more than 50 news articles were

published in the three sampled newspapers alone with 23 stories on the day

following the withdrawal. As a result of mass media coverage, the Vioxx withdrawal

itself became an institutional pressure for regulators, governments, and competitors.

This move gave consistent public focus to Merck and Vioxx, suspending the

legitimacy of both the organisation and the product.

Media coverage provided actors such as medical researchers with the

opportunity to scrutinise the practices of Merck and its regulator, the FDA. At the

same time as Merck was trying to seek support and legitimacy for its decision to

withdraw Vioxx, a number of the company‘s opponents used this opportunity to

publicly criticise Merck‘s historical actions towards Vioxx and draw attention to the

regulatory failures of the FDA. Independent medical researchers argued that Merck

had known about the risks of Vioxx long before the APPROVe trial results in

September 2004 and that the FDA failed the public for not acting on Vioxx earlier

(Kaufman & Masters, 2004, October 7). It was within this context that the Vioxx

withdrawal became an institutional pressure for other organisations and agencies that

were caught up in Merck‘s complicated web.

4.5.1.1 Pressure and Opportunities for Pfizer

Merck‘s decision to withdraw Vioxx was a competitor‘s dream come true. In

the highly aggressive world of pharmaceutical marketing, the removal of a drug from

market provided immediate opportunities for the drugs remaining in the COX-2

category. The day after Merck withdrew Vioxx, Pfizer immediately seized on the


269

marketing opportunity to promote Celebrex. Thus, Pfizer contributed to the growing

momentum of the Vioxx withdrawal as an institutional pressure.

On the same day as the Vioxx withdrawal, Pfizer issued a press release to

confirm the safety of Celebrex based on data from three large and long-term clinical

trials. Pfizer also suggested Celebrex as a treatment alternative to Vioxx. In doing so,

Pfizer adopted a compromise strategy, aiming to balance the debate about COX-2

and establish the importance of Pfizer products to patients, especially given the

removal of Vioxx from the market. In choosing the compromise strategy, which

represents the tactics of balance, pacify, and bargain, Pfizer reacted to Merck‘s

product withdrawal by actively demonstrating the efficacy of its products and

ongoing studies. In doing so, Pfizer moved beyond an acquiescence strategy that

shows passive compliance. At the same time as it sought to reassure its patients,

Pfizer also took the opportunity to establish the benefits of Celebrex and stress the

correctness of its practices as distinct from Merck‘s actions towards Vioxx. Some of

the messages used by Pfizer are illustrated in Table 4.20.

Table 4.20

Strategies Used by Pfizer in Response to the Vioxx Withdrawal


4.10.04 "We're even more confident today because the studies have

consistently not demonstrated any increased cardiovascular risk

with Celebrex," said Joe Feczko, Pfizer's president for drug

development, on Friday. "We have not been asked to stop or

change any aspect of the studies related to cardiovascular risk"

(Hensley, 2004, October 4).

Compromise

7.10.04 "It's hard to comprehend how two drugs in the same class could

be so different," Gandelman said. "But they are each in a

subclass of their own, and those different chemical structures

translate into a different safety profile" (Kaufman & Masters,

2004, October 7).

Compromise


270

Pfizer‘s responses to the Vioxx withdrawal served to legitimise Celebrex and

the quality of Pfizer‘s practices in the development and monitoring of its drugs.

Pfizer distanced itself from Merck‘s predicament by positioning Celebrex as being

free from the cardiovascular risks that were evident in Vioxx. Pfizer also seized the

opportunity to increase Celebrex advertising in the wake of the Vioxx withdrawal.

Merck‘s withdrawal of Vioxx had put COX-2s on the media agenda but

Pfizer was not about to let Merck‘s actions encroach its territory. To further cement

the legitimacy of Celebrex, four days after the Vioxx withdrawal, Pfizer announced a

large-scale clinical trial to investigate Celebrex‘s ability to prevent cardiovascular

events in patients with serious cardiovascular disease (Pfizer, 2004f).

In the wake of the Vioxx withdrawal, Pfizer focused its communication

efforts primarily on Celebrex but less information was forthcoming about the second

COX-2 drug in Pfizer‘s arsenal: Bextra. This lack of public communication about the

safety profile of Bextra was explained when Pfizer provided, ahead of its normal

schedule, medical guidance about Bextra. This advice noted that Bextra caused a rare

but serious skin reaction and an increase in cardiovascular events in surgical settings

(Bextra is not approved for use in this setting) (Pfizer, 2004c). Pfizer explained that

it disclosed these risks to ―reinforce our commitment to share information with

physicians about our product‖ (Pfizer, 2004c). Pfizer also explained that the Bextra

news had no implications for Celebrex, setting up the possibility for an avoidance

strategy to loosen the link between Bextra and Celebrex.


271

Pfizer disclosed this information about Bextra ahead of schedule based on the

media, public, and regulatory responses to Merck‘s withdrawal of Vioxx. One of the

criticisms of Merck‘s behaviour was its delay in communicating the risks of Vioxx.

Medical researchers claimed that Merck had known about the risks of Vioxx well

before it withdrew the product in 2004. This criticism of Merck‘s behaviour coupled

by the institutional pressures brought on by the Vioxx withdrawal prompted Pfizer to

provide advice on Bextra ahead of schedule.

Pfizer‘s drugs had legitimacy before the Vioxx withdrawal. Pfizer‘s

communication after the withdrawal served to take advantage of the situation

presented by Merck and reinforce the existing perception of the legitimacy of its

products as well as its conformity to institutional processes of regulation.

4.5.1.2 Pressure from Congress

As the Vioxx withdrawal continued to be a focusing point for media

reporting, it drew responses from a range of corporate actors. Although the actions of

competitor organisations were immediate, media discussion soon started to integrate

questions about drug safety and the responsibilities of regulators. One of the major

forces behind this perspective was Congress through the Senate Finance Committee

and the House of Representatives Committee on Government Reform. Senators

announced that they were extremely concerned by the FDA‘s handling of the Vioxx

withdrawal, which was preceded by the FDA‘s failure to respond swiftly to the anti-

depressants crisis. In essence, Senators were starting to see a pattern in the FDA‘s

handling of drug safety and were concerned that they were facing the same problem


272

with Vioxx as they had seen with anti-depressants. The FDA‘s actions around the

Vioxx withdrawal did not provide senators with much optimism.

When Merck first presented the APPROVe trial results to the FDA, the FDA

originally counselled Merck to retain Vioxx but introduce a stronger warning label

that cautioned doctors and consumers about the new risks of the drug. However,

once Merck insisted that it wanted to voluntarily withdraw the drug, the FDA

acquiesced to Merck‘s decision. A few days later when the Vioxx withdrawal

became public knowledge, the FDA publicly acknowledged and supported Merck‘s

decision and actions in withdrawing Vioxx. According to the FDA, Merck had acted

appropriately in the approval and monitoring of Vioxx. Yet, at the same time as

offering this perspective, the FDA admitted it had concerns with the COX-2 drug

category, resulting in the joint meeting of the Arthritis and Drug Safety and Risk

Management Advisory Committees (FDA, 2005). What we see during this short time

frame is a drug regulator, charged with protecting public health and ensuring drug

safety, willing to be led by the decisions of a pharmaceutical company charged with

the responsibilities of producing drugs to meet market needs and return profits.

Senators thought the FDA‘s relationship with drug companies was too ―cozy‖

(Masters & Kaufman, 2004, October 18). Within a month of the Vioxx withdrawal,

congressional committees were established to investigate the FDA‘s handling of

Vioxx. The committees were charged to investigate the historical actions of the FDA

in relation to approving Vioxx when other COX-2 drugs were available, and

monitoring Vioxx. As a result of this investigation, the Vioxx withdrawal became a


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source of institutional pressure on the FDA. The Vioxx withdrawal became a test

case for evaluating existing regulatory practices.

Although the focus of the committees was on the FDA‘s actions, it also

presented an opportunity for Merck to reinforce its decision as an ethical company

and restate its compromise strategy. Senators recognised Merck‘s reputation and

responded positively to Gilmartin‘s testimony (Berenson, 2004, November 19). In

doing so, the senators demonstrated acceptance of Merck‘s arguments and testimony,

offering an institutional buffer to other actors‘ criticisms of Merck.

Testimony from the FDA‘s Dr Graham accused the FDA of ―profound

regulatory failure‖ in its handling of Vioxx (Kaufman, 2004, November 19). Dr

Graham introduced doubt about the legitimacy of the FDA‘s support of Merck‘s

communication about Vioxx. For example, Merck had communicated that it had

appropriately developed and marketed Vioxx by following FDA protocols. Doubt in

the FDA‘s processes had the potential to reflect poorly on Merck.

Dr Graham also testified that five drugs should either be withdrawn or

restricted because of their high risks. One of these drugs was Bextra, which is one of

Pfizer‘s COX-2 drugs. According to Dr Graham, Pfizer‘s Bextra carried similar risks

to Merck‘s Vioxx (Kaufman, 2004, November 19). As a result of Bextra being

named in Dr Graham‘s list, Pfizer was forced to respond to that researcher‘s claims.

Pfizer denied any concerns with Bextra, saying the drug ―has been found safe and

effective when used as indicated‖ (Kaufman, 2004, November 19). Based on these

comments as well as the additional risks of Bextra as disclosed by Pfizer,


274

prescriptions for the drug dropped (Pollack, 2004, December 1). Media reports

suggested that Bextra was the next Vioxx and wondered how the FDA would handle

this emerging situation (Harris, 2004, November 21a).

The senate committee criticised the FDA for failing to realise three years

before that Vioxx was dangerous (Harris, 2004, November 21a). The Congressional

investigation process brought to light that the tools and practices used by the FDA to

regulate drugs were grossly insufficient. For example, in 2001, FDA officials

negotiated for one year with Merck before cardiovascular risks were added to the

Vioxx product label. Although the FDA possesses regulatory power to recall drugs,

the FDA‘s historical practices show that the regulator is reluctant to recall a drug

until the risks have been proven (Kaufman & Masters, 2004, November 18). In

essence, the FDA‘s regulatory power is stronger for drug approvals than for drug

safety. This critical realisation set in motion the processes of transformative

regulatory change in the pharmaceutical industry.

In summary, the congressional hearings cast an industry-wide spotlight on the

deficiencies of the regulatory body (FDA) and the practices of pharmaceutical

organisations. Grounds for instability in institutional processes emerged. Merck and

Vioxx remained in the public spotlight and Pfizer and its actions towards Celebrex

and Bextra came under greater scrutiny.

4.5.1.3 FDA Acts

Four months after the Vioxx withdrawal and in the midst of an increasing

media focus on drug safety, on 17 December 2004, Pfizer suspended a clinical trial,


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known as the APC cancer trial. The clinical trial was halted because Celebrex was

shown to double or triple the risk of heart attacks, strokes or cardiovascular deaths,

depending on the dose ("New doubts about Celebrex," 2004, December 18). At the

same time, the preliminary analysis of a second Pfizer study, known as PreSAP

cancer trial, showed no increase in cardiovascular risks (Pfizer, 2004e). Both data

came from two long-term clinical trials designed to investigate the efficacy of

Celebrex on cancer. Pfizer explained the results of the APC trial, which yielded the

high-risk results for Celebrex, as being inconsistent with existing research on

Celebrex. To explain these trials, Pfizer offered a compromise strategy to placate

those concerned by the data and to accommodate institutional factors such as FDA

processes. Pfizer said it was ―taking immediate steps to fully understand the results

and rapidly communicate new information to regulators, physicians and patients

around the world‖ (Pfizer, 2004e).

The FDA‘s response to Pfizer‘s news was swift—especially in comparison to

its handling of the Vioxx withdrawal. Dr Crawford, the FDA‘s acting commissioner,

acknowledged he held ―great concerns‖ about Celebrex and recommended doctors

switch patients to other drugs (Harris et al., 2004, December 18). The FDA asked

Pfizer to stop advertising Celebrex and to modify the messages used by its sales

representatives when meeting with prescribing physicians (FDA, 2004a; Hensley et

al., 2004, December 20). This signalled the emergence of new practices at the FDA.

Despite these efforts towards regulatory protection, media editorial

questioned why Pfizer did not withdraw Celebrex especially when Merck withdrew

Vioxx based on similar findings ("New doubts about Celebrex," 2004, December


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18). All eyes were on the FDA and Pfizer. Pfizer was forced to defend both the

results of the clinical trial and its decision to keep Celebrex on the market. Table

4.21 identifies Pfizer‘s messages.

Table 4.21

Pfizer Responses


18.12.04 Pfizer said that it had no plans to withdraw Celebrex and noted

that other studies of the drug had found no increased risk of

heart disease….The differing study results are ''confounding,''

said Dr. Joseph Feczko, president for development at Pfizer. He

added that regulators needed to analyze all studies of the drug

before making any decisions (Harris et al., 2004, December 18).

Compromise

19.12.04 ''We market all of our medicines consistent with regulation,''

said a spokeswoman for Pfizer. ''Doctors and patients are in the

best position to say which drugs are most appropriate for them''

(Meier, Kolata, Pollack, & Elliott, 2004, December 19).

Compromise

20.12.04 "For many patients, Celebrex is the best option or, in some

cases, the last option to live a normal life with the pain and

inflammation of arthritis," he said (Kaufman, 2004, December

20).

Compromise

20.12.04 "The most important thing is that we don't allow the confusion

and uncertainty to push us to a premature decision," said Mr.

McKinnell in an interview. "These are complicated medical and

scientific issues" (Hensley et al., 2004, December 20).

Compromise

21.12.04 A Pfizer spokeswoman said the new result [PreSAP cancer trial]

was "consistent with the data we've accumulated," and "it's

especially important" that the data from the earlier cancer trial

"be rigorously analyzed, so that they can be put into context"

(Mathews & Winslow, 2004, December 21).

Compromise

21.12.04 But Dr. Gail Cawkwell, who directs Pfizer's medical research on

Celebrex and Bextra, said many patients benefited from the

drugs. ''Celebrex still has some significant benefits over the

older medicines,'' she said. ''We've had a lot of support from

doctors saying they have patients who haven't responded to

anything else'' (Berenson, 2004, December 21).

Compromise

To support Celebrex and its decision to maintain the status quo, Pfizer drew

support from doctors and patients. Pfizer justified its decision to retain Celebrex

based on the efficacy of the drug and its potential for treating cancer (Hensley et al.,

2004, December 20). Through these strategies, Pfizer remained in control of its


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message and decision. However, the connection between Celebrex and Vioxx

persisted. Media reports included opinions from a range of stakeholders about the

link between Celebrex and Vioxx. (Refer to Table 4.17 Comparisons between

Celebrex and Vioxx in Narrative 2 for full details.)

Amidst the Celebrex-Vioxx debate, the cardiovascular results of yet another

study were released by the National Institutes of Health (NIH). The NIH study was

investigating the effects of pain relief medication on Alzheimer‘s disease, and this

study showed that patients who took Bayer‘s Aleve (naproxen) risked a 50 percent

greater rate of heart problems than those on the placebo (Harris, 2004, December

21). In addition, Celebrex patients in the same trial saw no increase in heart events

(Harris, 2004, December 21). The results of this study were similar to the majority of

research into Celebrex. In relation to this study, Pfizer‘s CEO issued the following

statement in a news release:

This is important new information that should be considered by doctors and patients

as they evaluate the various treatments for arthritis and pain.... Millions of people

simply can‘t get through their day without pain relief. That‘s why all the emerging

information about arthritis medicines—prescription and over-the-counter—must be

fully evaluated by the U.S. Food and Drug Administration and other regulatory

authorities.

Recently, preliminary information from three major long-term clinical trials

with Celebrex has become available. Because the early information from these trials

is inconsistent, physicians and patients are understandably confused. That‘s why the

full study results must be shared with the medical, scientific and regulatory experts

so that we have a more complete understanding of the risks and benefits of these

medicines (Pfizer, 2004d).


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This message reinforced the important role of doctor-patient consultations,

reinforcing Pfizer‘s earlier calls for support for the retention of Celebrex. The

message also invoked Pfizer‘s trump card: the FDA. Pfizer signalled the importance

of the FDA and its role in evaluating the safety of pain medications including

Celebrex, Bextra, and Vioxx. Pfizer continued to support the role of the FDA and its

planned hearing into COX-2 drugs (Burton et al., 2004, December 24). In doing so,

Pfizer shifted responsibility for decisions about its drugs to the FDA and avoided

having to engage in questions about why it retained Celebrex on the market when

Merck withdrew Vioxx. The buck stopped with the FDA, and not with Pfizer. For its

part, the FDA described the situation as being ―confusing‖ and recommended

doctors and patients have conversations about each drug‘s unique risks (Harris,

2004, December 21).

In summary, although Pfizer and Celebrex faced the same starting position of

a negative clinical trial result as Merck and Vioxx, the processes and outcomes were

quite different. Like Vioxx, a clinical trial designed to investigate the effects of

Celebrex on cancer, suggested that Celebrex could double or triple patients‘ risk for

cardiovascular events. Although both Merck and Pfizer suspended clinical trials,

Merck decided to withdraw Vioxx, arguably setting a precedent for industry practice.

Four months after the Vioxx withdrawal, Pfizer continued to market Celebrex.

Although Pfizer‘s decision was questioned in the media as illustrated in Table 26, it

received significantly less media attention than Merck‘s Vioxx withdrawal.


279

Following Oliver‘s (1991) framework for strategic responses, one

explanation for the different outcomes can be seen in the industry context, as

illustrated in Figure 4.6. The Vioxx withdrawal triggered instability in the

pharmaceutical industry, de-legitimising existing regulatory practices. As a result,

the withdrawal triggered discussions about drug safety at both consumer and

regulatory levels. These conversations, as played out in the mass media, influenced

the dynamics of risk within the industry. The industry was in a holding pattern,

knowing that change was to come but not knowing the extent of the change in

regulatory practices.

Figure 4.6 The differences in Vioxx and Celebrex are explained by the institutional

buffer of the FDA.

Pfizer‘s decision occurred within this context of change and uncertainty. At

the same time, the FDA needed to take control of the situation. The actions of the

FDA, which resulted from the Vioxx withdrawal, provided a buffer for Pfizer‘s

decisions. The FDA responded swiftly to Pfizer‘s release of information about

Celebrex (FDA, 2004a). This response from the FDA was remarkably different to

how it handled the Vioxx withdrawal. Further, Pfizer acted in compliance with the


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FDA‘s advice, allowing the company to call on the support of the FDA as a way to

buffer its decision. Merck was unable to do this because it acted outside of

regulatory advice, and was, as a result, forced to establish legitimacy for its decision

to withdraw Vioxx.

Pfizer‘s actions towards Celebrex gave greater rise to the need for an

industry-wide decision about COX-2 drugs. The FDA‘s hearing on this group of

drugs was to be a significant public debate about the safety of these drugs. The

hearing was to keep Merck in the media and public agenda and lead to some

negative consequences for Pfizer.

4.5.2 Influence of the FDA

When Merck withdrew Vioxx, discussion about COX-2 drugs went public.

With such a strong emphasis on drug safety in the COX-2 category, discussions

about the efficacy of these drugs were no longer limited to closed negotiations

between pharmaceutical companies and the FDA. In response to the Vioxx

withdrawal, the FDA convened a joint meeting of the Arthritis and Drug Safety and

Risk Management Advisory Committees to review the benefits and risks of COX-2

medications in mid-February, 2005 (FDA, 2005). From 16 to 18 February 2005, the

panel heard theories from a range of industry representatives before providing advice

to the FDA. The FDA would make the final decision about these medications.

The FDA committee heard a range of theories about COX-2 drugs. Using a

prepared statement, Merck‘s Chief Research Officer Dr Kim drew on recent

Celebrex data to suggest that Vioxx was not a unique drug and that the effect may be


281

present in the whole class of drugs. Merck said that the FDA‘s decision on COX-2

drugs would be taken into consideration. In this way, Merck opened the door ever-

so-slightly on Vioxx‘s return to the market with FDA support. Dr Kim also

reinforced that Merck‘s decision to withdraw Vioxx was the responsible choice

(Merck, 2005c).

In comparison, Pfizer maintained that the majority of studies showed that

Celebrex and Bextra were safe and argued against the presence of a class effect.

However, given recent research findings about Celebrex, not everything went

Pfizer‘s way. The FDA advisory panel accused Pfizer of not disclosing fully data

about Celebrex and Bextra (Harris, 2005, February 17) and also found

inconsistencies and bias in Pfizer‘s presentations (Harris, 2005, February 17).

Pfizer‘s responses, though minimal, showed a compromise strategy where the

company presented its theory about COX-2 drugs yet respected the regulatory

processes associated with the advisory panel. Following Oliver (1991), this choice

reflects a compromise strategy and the pacify tactic, where an organisation

accommodates institutional elements. Pfizer deferred to regulatory practice,

signalling acceptance to the processes and outcomes that may eventuate.

At the conclusion of the hearing, although the committee noted tolerable risks

in Vioxx, Celebrex, and Bextra (Harris, 2005, February 18), the panel recommended

that Vioxx be returned to the market and Celebrex and Bextra remain on the market.

The FDA advisory panel also raised concerns about the lack of power or influence of

the FDA in monitoring drugs post market approval (Harris, 2005, February 18).


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4.5.2.1 Influence of the FDA on Bextra

In response to the advisory committee‘s recommendations, the FDA ruled

that the COX-2 drugs carried a class effect of cardiovascular risk. The FDA ordered

that all drugs include a boxed warning about potential cardiovascular risk (FDA,

2005; Pfizer, 2005a) and that Pfizer withdraw Bextra from the market (FDA, 2005).

Although Bextra‘s cardiovascular risk could not be differentiated from other drugs, it

carried an additional risk of rare but serious skin reactions. This additional risk was

the basis of the FDA‘s request for Bextra‘s withdrawal (FDA, 2005; Pfizer, 2005a).

European regulators also requested the suspension of Bextra in their markets.

Although Pfizer ―respectfully disagreed‖ with the FDA‘s position on Bextra‘s

risk/benefit profile, it had no choice but to suspend sales of Bextra (Pfizer, 2005a).

This represented a compromise strategy where Pfizer gave in to the pressure but did

so under protest. That is, while Pfizer obeyed the FDA‘s request, its symbolic

communication showed much more than a passive acceptance of or conformity to the

FDA‘s decision. The FDA‘s decision also provides further support for the theory of

the Vioxx withdrawal acting as a pressure point. Though the FDA‘s decision came

some months after the Vioxx withdrawal cast attention on COX-2 drugs, the force of

it remained strong for some time. Novartis, though yet to gain approval to market its

COX-2 drug Prexige, noted the company would continue to work closely with the

FDA in the hope of soon gaining approval (Mathews & Hensley, 2004, April 8).

Although the FDA‘s request for Bextra‘s withdrawal was unexpected,

shareholders at least saw the regulatory-enforced withdrawal as having little long-

term effect on Pfizer‘s profits, which were already slumping (Berenson, 2005,


283

April). If it were Celebrex that was being recalled, more stakeholders would have

reacted to the decision. Although Pfizer continued to communicate support for

Bextra, media reporting of the Bextra withdrawal was substantially less than when

Merck withdrew Vioxx. A regulatory-forced withdrawal would usually have higher

news values than a voluntary withdrawal. The first suggests the need for a strong

regulatory hand, and the latter shows a responsible organisation. In this case, the

difference in reporting outcomes can be explained by the industry context. Although

Merck explained its voluntarily withdrawal of Vioxx as being based on responsible

and ethical practice, that was not necessarily believed by the stakeholders and

corporate actors caught up in this case. Further, the FDA‘s decision to withdraw

Bextra provided some regulatory auspice over Pfizer, which still had Celebrex on the

market.

The FDA‘s request for Pfizer to withdraw Bextra demonstrated a change in

practice for the FDA. Media reports summarised the FDA‘s new position as being

cautious (Appelbaum, 2005, April 13). Even the director of the FDA‘s office of new

drugs agreed this represented a change in the agency‘s culture where caution is now

―in‖ and patient‘s rights are ―out‖ (Appelbaum, 2005, April 13).

4.5.2.2 Changes to the FDA

Through a series of events, the Vioxx withdrawal triggered changes in the

regulatory practices governing the pharmaceutical industry. First, the FDA acted

swiftly when Pfizer presented new information about the risks associated with

Celebrex. The FDA recommended doctors consider alternative drugs and suspended

the advertising and marketing of the drug (FDA, 2005). Second, the FDA took


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stronger and more decisive action, exceeding the recommendations of its specially-

convened advisory panel on COX-2 drugs. In the past, the FDA normally follows the

recommendations of the panels it convenes to investigate drugs. Third, and most

recently, the FDA called for the withdrawal of Bextra as it provided no unique

benefits when compared with drugs that were available on the market. In the past,

the FDA‘s jurisdiction was largely limited to drug approvals but this decision

showed an increasing emphasis on drug safety.

These changes to FDA policy represented a punctuation in regulatory

processes in the pharmaceutical industry. The changes to the FDA are illustrated in

Table 4.22. These changes occurred alongside Vioxx product liability trials.


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Table 4.22

Changes to FDA policy and decision-making

Date FDA change

14 January

2006

FDA changed the format of drug labels to make it easier for doctors and

patients to understand drug risks ("FDA issues new rules For drug labels,"

2006, January 19). As part of this policy, the FDA argued that federally

approved medication labels hold the potential to pre-empt state law and help

protect drug companies against litigation ("FDA issues new rules For drug

labels," 2006, January 19). With this new label, the FDA believes that people

who were injured by the drugs should not be allowed to sue drug companies

in state courts (Kaufman, 2006, January 19).

17 March

2006

FDA announced new guidelines for preliminary phases of drug development

to get better information about drugs from the beginning of the process

(Mathews & Winslow, 2006, January 12). The FDA announced an agreement

among eight major pharmaceutical companies that would allow them to share

test results early in drug development. The FDA hopes that this will produce

safer medicines and allow for the earlier detection of drug safety concerns

("Drug makers agree to share test data ", 2006, March 17).

23

September

2006

Results of FDA-commissioned drug safety report conducted by the Institute

of Medicine presented. The report described the FDA ―as rife with internal

squabbles and hobbled by underfinancing, poor management and outdated

regulations‖ that together affected its ―ability to ensure the safety of the

nation‘s drug supply‖ (Harris, 2006, September 23). The Institute of

Medicine recommended the FDA change labelling system and restrict

advertising for new drugs, have more power to monitor and censure

pharmaceutical companies, and review drugs every five years (Harris, 2006,

September 23).

31 January

2007

The FDA announced a number of policy changes designed to ―ensure

marketed drugs were as safe as advertised‖ (FDA, 2007a; Harris, 2007,

January 31). The FDA changes included a comprehensive assessment of

drugs 18 months after market introduction, the creation of an advisory panel

to improve the way the FDA communicates risks, and the tracking of real

patients who consume drugs (FDA, 2007a; Harris, 2007, January 31).

4 April 2007 FDA rejected Merck‘s application for Arcoxia, a drug similar to Vioxx,

based on safety risks and because it did not fill an unmet need in patients

(FDA, 2007b; Dooren, 2007, April 11).

21

September

2007

The Food and Drug Administration Amendment Act (FDAAA) was signed

into law, giving stronger provisions to the FDA for drug safety. The key

principles of the act included:

Power to require post-marketing studies, change drug labels, and

restrict distribution

Injection of $225 million over five years for drug safety

Elevation of drug-safety‘s organisational status

Modernisation of adverse event reporting system and access to large

government or private databases on drug reactions (W. B. Schultz,

2007).


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The FDA Amendment Act represented a profound change in regulatory

processes by emphasising the role and importance of drug safety. The previous

policy of the FDA was introduced in 1992 and designed to expedite the drug

approval process, in an era of the increased prominence of AIDS-related medication.

Although the FDA decreased the time taken to approve drugs, the consequence of

this outcome was the ability to monitor and take action against drug companies. The

actions of the FDA towards drug safety are clearly seen in its decision to encourage

strongly Pfizer‘s withdrawal of Bextra.

But not everyone was happy with or recognised the changes would take

immediate effect. Merck was one of the first pharmaceutical companies to get a real

sense of the new FDA. Arguably, Merck was continuing to operate within the

expectations and experiences of the old framework of the FDA. In April 2007,

Merck was notified by the FDA that its approval for a new COX-2 drug Arcoxia was

denied (FDA, 2007b). The media reported the FDA‘s decision to deny Arcoxia

market approval was based on the grounds that other drug alternatives were already

available on the market.

Media opinion pieces argued that the FDA‘s decision had the potential to

deny patients a much-needed range of drugs as the matching of drug to patient

requires more not less choice (Gottlieb, 2007, April 17). Other reports suggested the

FDA was operating beyond its role by evaluating not only the safety and

effectiveness of potential drugs but also whether the drug is better than what is

already available (Henderson & Hooper, 2007, May 17). In a letter to the editor, the


287

FDA responded to these claims, arguing its decision was made based on the safety

risks of Arcoxia (Galson, 2007, May 26).

In August 2007, Novartis recalled its COX-2 drug, Prexige, from the

Australian market following requests from the Therapeutic Goods Administration

(the Australian drug regulator). Prexige had caused two deaths and liver transplants

in two patients (―Novartis pulls drug in Australia,‖ 2007, August 14). Although the

media coverage was minimal in the US, the recall in Australia meant Novartis CEO

Daniel Vasella did not expect Prexige to be approved for sale in the US (Greil, 2007,

September 13). As anticipated, the FDA rejected Novartis‘s Prexige application. In

November 2007, Prexige sales and marketing were suspended in the UK and

Germany following a review by the European regulatory group (Novartis, 2007b). In

its annual report, Novartis indicated that Merck‘s recall of Vioxx had led to an

increased regulatory focus on product safety and efficacy. This new focus made the

drug approvals process more challenging and more expensive for pharmaceutical

companies (Novartis, 2007a).

The new FDA approach was catching on. As illustrated above, chief

executive officers of Novartis and also of Wyeth identified stricter safety standards

at the FDA and the challenge of winning FDA approval for its drugs (Novartis,

2007a; Whalen & Mijuk, 2007, October 19). The FDA denied this perception,

arguing that there had been ―no systematic changes in how it evaluates new drug

applications‖ (Loftus, 2007, November 7). The response from Novartis represented

one of the very few times the organisation engaged in communication about changes

to the FDA.


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4.5.3 Changes to Medical Reporting

Returning to the time before changes to the FDA started to take effect, Merck

and other pharmaceutical companies were facing another kind of pressure. This time,

the pressure came from a coalition of medical editors. On 26 May 2005, led by the

New England Journal of Medicine‘s (NEJM) Dr Jeffrey Drazen, a coalition of

medical editors called for greater disclosure of clinical trials from drug companies

(R. Zimmerman & Tomsho, 2005, May 26). Companies like Pfizer, Merck and Eli

Lily had started to disclose clinical trial results on a government website, yet NEJM

editor Dr Jeffrey Drazen said the current level of disclosures was insufficient (R.

Zimmerman & Tomsho, 2005, May 26). The coalition of medical editors said they

would refuse to publish results of trials that do not comply with international

transparency standards ("Hiding the data on drug trials," 2005, June 1).

The context of changing environmental conditions and expectations enabled

the coalition of medical editors to make public its concerns. That is, while medical

editors had aired their concerns to the academic community, the media‘s agenda for

Vioxx provided an opportunity for medical editors to share their concerns in

mainstream media. The group of medical editors communicated in public settings

how pharmaceutical companies used journal articles as evidence to support the

efficacy of drugs during sales meetings with prescribing physicians. In doing so, this

added pressure on the pharmaceutical industry to disclose research and marketing

processes.


289

Both Pfizer and Merck responded to the allegations of the coalition of

medical editors. Pfizer argued that it had complied with the ―spirit and letter‖ of the

government website and other industry commitments (LaMattina, 2005, June 15).

Merck responded in a similar tone (P. S. Kim, 2005, June 8). These responses

represented a defy strategy where the company openly argued against the claims of

the medical editors.

The NEJM continued to pressure Merck. In December 2005 and during a

Vioxx product liability trial, the NEJM raised concerns about the scientific integrity

of a Vioxx article written by a Merck researcher. (A full description of this event is

detailed in Section 4.3.6.1.) Merck rigorously defended its actions and wrote letters

to the editors of mass media publications, and published an open letter to the medical

community. In doing so, Merck reminded readers of Merck‘s ethical standards.

Merck researchers refused to submit the correction requested by the NEJM. Merck‘s

responses to the NEJM allegation again adopted a defy strategy.

In May 2006, Merck released new data from the APPROVe study that

triggered the Vioxx withdrawal in 2004. This follow-up analysis showed that

patients who took Vioxx were 1.64 times as likely to have a heart attack or stroke

during a subsequent year as when they were not taking Vioxx (Winslow et al., 2006,

May 12). The study also showed some support that the risk of Vioxx began within

four months of consumption (Tesoriero & Winslow, 2006, May 18). This news

differed dramatically from the 18-month time frame Merck had previously

maintained and used as the basis of arguments in legal proceedings where plaintiffs

had consumed Vioxx for shorter time frames (Tesoriero & Winslow, 2006, May 18).


290

Merck explained that the new time frame information was based on a statistical error

in reporting (Berenson, 2006, May 31).

Merck responded using a compromise strategy. Although Merck corrected

the statistical error in the study, it argued that this process did not change the

findings of the study. Merck said there was a seven percent chance that Vioxx had an

equally high risk of causing heart attacks both before and after the 18-month time

frame. The correction, according to Merck scientist Dr Kim ―doesn‘t change our

conclusion; it doesn‘t change the results‖ (Carreyrou et al., 2006, May 31). Other

scientists argued that while this number might seem small, it was high enough to

argue that Merck‘s 18-month theory is unproven (Berenson, 2006, May 31). Merck‘s

lawyers remained confident in using the 18-month risk time frame in future trials

(Tesoriero, 2006, June 27).

On 27 June 2006, the NEJM published a correction to Merck‘s original study.

The unsigned correction said key results in the original publication were reached by

a different method than what was described in original article (Tesoriero, 2006, June

27). The correction said references to 18-month time frames for safety should be

deleted (Tesoriero, 2006, June 27). Merck responded with an open letter and

described how it informed NEJM of the data analysis error (Merck, 2006e).

In July 2007, results from VICTOR, a study designed to investigate the effect

of Vioxx on colon cancer, showed that patients had increased heart risks soon after

taking the drug (Tesoriero, 2007, July 3). VICTOR was a study undertaken by

researchers at Oxford University and the trial was stopped when Vioxx was


291

withdrawn in 2004. The study showed heart attacks occurred within a 12 month time

frame and almost immediately after taking Vioxx (Tesoriero, 2007, July 3). Merck‘s

initial response to these data explained them as being inconsistent with data found in

other placebo studies (Tesoriero, 2007, July 3). In a subsequent company statement,

Merck said the VICTOR study results were limited by a premature study termination

and a small number of events (Merck, 2006g).

Merck was scrambling to sustain as legitimate and believable its claims that

Vioxx‘s risks were present only after 18 months of consistent use. This message was

the foundation of its legal trials. Further, although these negotiations were reported

in the mass media, they largely related to a specific stakeholder group: prescribing

physicians. Further, pharmaceutical companies use academic journal articles as

evidence to support the effectiveness of the drugs they are marketing to doctors. It

also seemed that the company was going full circle. Merck decided to withdraw

Vioxx based on the results of a clinical trial. Merck had argued the risks of Vioxx

were seen after 18 months of use, as confirmed by a clinical trial. Merck had set up

clinical trials as the only legitimate source of information about drug safety and

effectiveness. Yet, these clinical trials are only considered legitimate themselves

when their findings are peer reviewed and published in highly-regarded medical

journals. This relationship is critical not only to Vioxx but to every current and

future drug produced by Merck. Without the endorsement from medical editors,

Merck risked losing a necessary part of its legitimacy into the future.


292

4.5.4 Litigation

From late April 2005, at around the same time as medical editors were

pressuring the pharmaceutical industry, product litigation for Vioxx started against

Merck. The legal system was a pressure for Merck that went on from early 2005 to

late 2007. The pressure point of litigation was championed by plaintiff lawyers who

added personality and flamboyance to the trials in an effort to gain the upper hand

for their clients. During the course of litigation, Merck‘s legal strategy was to defend

each case individually, believing that the burden of proof lay with the plaintiff and

Merck‘s data established that Vioxx needed to be consumed for 18 months before

effects were present. This chapter section discusses liability trials culminating in a

settlement agreement.

4.5.4.1 Liability trials

Merck used both the time frame and ‗burden of proof‘ as criteria for what

was deemed a defensible trial. This approach represents a manipulate strategy where

Merck sought actively to redefine expectations for a valid trial. In this way, Merck

was demonstrating power over the institutional pressure of the liability trials. Merck

also established that it was prepared to defend cases for a very long time (Berenson,

2005, July 11), demonstrating further conviction behind the manipulate strategy.

Merck faced a number of product liability trials in quick succession. During

these trials, Merck denied legal liability for Vioxx and continued to reinforce its

manipulate strategy by drawing links between plaintiff‗s death or injury and illnesses

amongst the general population (Berenson, 2005, July 13). These claims were

justified by drawing on scientific evidence (Kaufman, 2005, August 20). (See section


293

4.5.4.1 for a Table of trials.) Media reporting about the Vioxx product liability trials

ran from April 2005 to August 2007. When Merck lost a trial, the company

continued to employ a manipulate strategy in order to set and reinforce its belief that

the plaintiff‘s case did not meet the standards of law or provide evidence to link

Vioxx with the cause of death (Kaufman, 2005, August 20). Merck‘s messaging

during these trials aimed to de-legitimise the plaintiff‘s cases. These statements,

represented in Table 4.23, also represent manipulate strategies.


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Table 4.23

Vioxx Product Liability Trials in Media Reporting Order

Date Plaintiff Messages

15.07.05

to

20.08.05

Robert Ernst ''We believe the plaintiff did not meet the standard set by Texas

law to prove Vioxx caused Mr. Ernst's death,'' Mr. Skidmore said

(Berenson, 2005, August 20).

Merck, based in Whitehouse Station, N.J., said it was

"disappointed" in the jury's decision and vowed to appeal. In a

statement Saturday, Kenneth C. Frazier, Merck's senior vice

president and general counsel, said the plaintiff's case was

"fundamentally flawed" and that the company has "strong points

to raise on appeal" (Tesoriero, Brat, McWilliams, & Martinez,

2005, August 22).

15.09.05

to

04.11.05

Frederick

Humeston

But Mr. Frazier, Merck's general counsel, said the company

believed that jurors needed to know the truth about Mr.

Humeston's history of work-related complaints and stress.

''It is never our goal to attack anybody on the witness stand or

anywhere else, but there is an awful lot at stake in these cases,''

Mr. Frazier said. ''We're entitled to cross-examine people''

(Berenson, 2005, November 4).

30.11.05

to

13.12.05

Richard

Irvin The jury's decision confirms that there is no medical or scientific

evidence showing short-term use of VIOXX increases the risk of

heart attack and contributed in any way to the unfortunate death

of Richard Irvin," said Philip Beck, of the law firm of Bartlit

Beck, Merck's lead trial lawyer in the case. "Mr. Irvin only took

VIOXX for less than a month. He suffered multiple long-standing

risk factors for a heart attack including partially clogged arteries.

Mr. Irvin would have suffered a heart attack when he did,

whether he was taking VIOXX or not"(Merck, 2006d).

10.01.06

to

31.01.06

Leonel

Garza There is simply no reliable scientific evidence that VIOXX

caused Leonel Garza Sr.'s heart attack," said Richard L.

Josephson of Baker Botts, LLP, lead attorney for Merck's defense

team in the case. "It is also clear that that Merck provided to the

U.S. Food and Drug Administration all required information

about VIOXX. There was no evidence that Merck acted with

gross neglect and under Texas law that means punitive damages

should not have been awarded" (Merck, 2006c).

07.03.06

to

12.04.06

Thomas

Cona and

John

McDarby

"The jury heard irrelevant and prejudicial information from the

plaintiffs' attorneys about Merck and an appeal will be our next

step," said Kenneth C. Frazier, senior vice president and general

counsel of Merck. "The evidence is that Merck acted ethically

and in a responsible manner - from researching VIOXX prior to

approval in clinical trials involving almost 10,000 patients - to

monitoring and studying the medicine while it was on the market

- to voluntarily withdrawing the medicine when we did" (Merck,

2006b).


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Throughout the Vioxx litigation, Merck continued to draw on manipulate

strategy to reinforce its success in proving its case for plaintiffs who took Vioxx for

both the short and long-term (Loftus & Tesoriero, 2006, July 14). Merck‘s messages

remained consistent with the company insisting that it had appropriately and

responsibly developed and marketed Vioxx and that plaintiffs provided no evidence

to link Vioxx directly to their medical conditions. Thus, Merck consistently applied a

manipulate strategy that aimed to set and reinforce criteria for what made a

defensible case. The manipulate strategy during these product liability trials set the

platform for Merck to settle all claims.

4.5.4.2 Legal settlement

On 9 November 2007, three years after the Vioxx withdrawal, Merck agreed

to settle the 27,000 lawsuits filed in relation to the drug. Merck‘s decision to settle

Vioxx cases represented a continuation of the manipulate strategy. This persistence

with the strategy is justified by a comment made by Merck‘s Ken Frazier, former

general counsel. Mr Frazier said the decision to settle was not a change in strategy

but a responsible resolution to existing strategy (Merck, 2007c). Through Oliver‘s

(1991) lens and retrospective analysis, Merck‘s legal strategy can be viewed as a

continuation of the manipulate strategy. The decision was explained by Merck‘s

CEO and general counsel in the following way:

This agreement is the product of our defense strategy in the United States during the

past three years and is consistent with our commitment to defend each claim

individually through rigorous scientific scrutiny...Specific causation has been a very


296

difficult issue. This is an opportunity to end a long and difficult litigation that has

stretched on for more than three years (Merck, 2007b).

By considering these messages from Merck‘s executive team and the

manipulate strategy used throughout the Vioxx litigation, it is clear to see that all

along Merck was redefining expectations for a legitimate and valid legal trial. Merck

had been successful in establishing power over the pressure of litigation.

Litigation was the final pressure faced by Merck. Merck‘s strategic response

demonstrated active resistance against this type of pressure, especially when

compared to its responses to other pressures. Merck was facing Vioxx litigation well

before it withdrew Vioxx. Perhaps this knowledge helped Merck develop a legal

strategy that would lead to the mass settlement of claims.

4.5.5 Summary of Oliver’s Template

In this template, Merck started out as a company that withdrew a drug that

had high sales when clinical research confirmed its cardiovascular risks. By taking

this action, Merck was seen as a company that prioritised patients and sacrificed

profits. Although the contest between science, profits and ethics alone makes for an

interesting narrative, the withdrawal of Vioxx became a pressure on competitors and

the regulatory authority in the pharmaceutical industry. In this way, the purpose and

significance of an organisational action is determined by the outcomes of that action.

In Merck‘s case, the act of withdrawing a product became much more than an

organisational adjustment. The Vioxx withdrawal triggered sustained media interest

not only in the actions of Merck but in the safety of drugs and the effectiveness of


297

the FDA in protecting consumers. Without the Vioxx withdrawal, there would have

been no impetus to investigate the COX-2 class of drugs or transform regulatory

practices. Vioxx started the conversation about risk and safety that would be played

out over the duration of the study.

As the Vioxx withdrawal became a pressure for regulatory reform, three

other pressures emerged for Merck and other companies. The second pressure was

changes to the FDA. At the next opportunity for regulatory response after the Vioxx

withdrawal, the FDA tested out new approaches. When Pfizer announced one of its

clinical trials showed high risks in patients taking Celebrex, the FDA responded

swiftly by calling for a ban on advertising and for doctors to consider alternative

treatments. Pharmaceutical companies‘ responses to the new FDA remained

grounded in their past experiences with the agency.

It took some time for Merck, Pfizer and other stakeholders to learn about the

new FDA and shift their expectations of its new approaches to regulation. For

example, Merck and others were concerned by the FDA‘s decision to not approve

Arcoxia, Merck‘s replacement COX-2. According to the FDA, Arcoxia was not

approved because other similar drugs were available on the market. Yet at the same

time as Merck and others were becoming aware of changes in FDA, other

pharmaceutical companies expected difficulties with drug approvals. For example,

Novartis communicated to the market that it did not expect the FDA to approve its

COX-2 drug, Prexige.


298

The third pressure faced largely by Merck was from journal editors. A

coalition of medical journal editors called for new practices in academic research.

The coalition wanted greater disclosure of the clinical trials undertaken by

pharmaceutical companies, requiring this before agreeing to publish any related

articles. The NEJM was particularly strong in its attacks on Merck, choosing to

publicise concerns about the integrity of a Vioxx article in the middle of a Vioxx

liability trial. Although Merck defied the validity of the NEJM‘s claims, the journal

continued in its efforts to preserve the integrity of publications in the journal.

The final pressure for Merck saw the company move to a more active form of

resistance. During Vioxx litigation, Merck set and continued to employ a strategy for

a defensible trial, resulting in a mass settlement of 27,000 individual suits. The

Merck settlement was portrayed in the mass media as a victory for the organisation

given the overwhelming support from plaintiffs.

What each of these accounts of pressures shows is that each pressure resulted

in different strategic responses from Merck and other affected organisations.

Although each pressure came from a different source, each was linked to the others

in a path-dependent sequence initiated by the Vioxx withdrawal. That is, the Vioxx

withdrawal became a trigger for regulatory change, the focus for medical journal

editors, and one of the key bases for litigation. Further, the processes of a changing

regulatory system presented a new type of context for organisational decision-

making and actions as illustrated in the summary of the second institutional trigger.

Based on these sequences of pressure points, what becomes interesting is the way the

primary organisation of Merck was affected in comparison to secondary


299

organisations including Pfizer. Oliver‘s (1991) framework allowed for the analysis

of the integration of the strategic responses of multiple organisations that were

affected by the same pressures. As a result, this narrative enables the direct

comparison of strategies used by Merck and Pfizer.

Merck and Pfizer produced COX-2 drugs but their experiences with each of

these drugs after the Vioxx withdrawal were remarkably different. Section 4.5.1.3 of

Oliver‘s (1991) template provides an overview of some of the different processes

and outcomes for Merck and Pfizer. Regulatory support and buffer was available to

Pfizer but not to Merck. When Merck withdrew Vioxx, it did so against the original

counsel of the FDA. As a result, Merck was primarily responsible to legitimise the

Vioxx withdrawal. In comparison, Pfizer‘s actions around Celebrex and Bextra

occurred within the shadow of the Vioxx withdrawal and a more responsive FDA.

As a result of the FDA‘s involvement, Pfizer was buffered from media speculation.

That being said, both Merck and Pfizer lost sales and profits when Vioxx and Bextra,

respectively were withdrawn from the market but Pfizer retained Celebrex. There

may be some similarities in the financial cost of the withdrawals but there were

strong differences in the media‘s treatment of the decisions of primary organisations

that affected the actions and practices of secondary organisations.

4.6 Summary and Analysis of Crisis Communication Responses

This thesis is interested in understanding the interplay between actions and

context in organisations that are involved in crises that transformed the

pharmaceutical industry. The narratives provided three different contexts within

which to understand the crisis communication and actions of organisations under the


300

templates of Coombs (2006b), Allen and Caillouet (1994), and Oliver (1991). In

order to enable the analysis of the interplay between actions and context in section

4.7, this section provides a set of visual maps to display the crisis communication or

strategic responses of the organisations involved in the Vioxx withdrawal and

subsequent events.

The visual maps are set out following Siggelkow‘s (2002) research.

Siggelkow (2002) used pattern maps to illustrate organisational change, including

punctuated equilibrium, by identifying when an organisation adopted, rejected,

reinforced, and elaborated core elements over time. To present this analysis,

Siggelkow (2002) identified five processes of change: patching, thickening, coasting,

misfits (failing to fit), and trimming: Patching refers to the process of adopting a

new core element and the subsequent reinforcement; thickening refers to the process

of reinforcing and elaborating core element; coasting refers to the process of not

reinforcing an element over a selected period of time; misfits (failing to fit) refers to

a process where new core elements do not align with existing core elements; and

trimming refers to a process where organisations delete existing core elements

(Siggelkow, 2002).

Punctuated equilibrium theory is illustrated when most or all core elements

change (Siggelkow, 2002). In this thesis, the punctuation event is defined as the

withdrawal of Vioxx, which changed the market environment, triggering

transformative change in regulatory practices that affect the industry.


301

The purpose of the visual maps is to depict the changes or persistence in

crisis communication (Allen & Caillouet, 1994; Coombs, 2006b) or strategic

responses (Oliver, 1991) across the study time frame. This illustration enables the

identification of interaction among the crisis communication or strategic response

strategies.

4.6.1 Visual Maps using Coombs’ Narrative

The Coombs‘ (2006b) template provides a rich set of crisis response

strategies that sit at the communication and action level for organisations. The

context for the Coombs‘ (2006b) narrative focuses on restoring the focal

organisation‘s reputation by examining the direct influence of the environment on

Merck‘s decisions. The visual map for Merck using Coombs‘ (2006b) template is

illustrated in Figure 4.7.


302

1. Vioxx on market 2. Vioxx withdrawal from market 3. Diminish strategy posture used to explain Vioxx withdrawal 4. Rebuild strategy posture used to explain settlement of litigation 5. Deny strategy posture used intermittently throughout crisis

Pre-crisis Crisis Inquiries Litigation Settlement of litigation

4

3

3 3

1

2

1

4 4

5

5

5

Figure 4.7Visual map of Merck‘s strategies using Coombs‘ template, demonstrating a change in strategies over time.

Key

Elaboration of strategy

3 3

Introduction of strategy

Strategy continues


303

The visual map illustrates two changes in strategies: 1) when Merck

withdrew Vioxx from the market signalled by the shift from strategy one to strategy

two, and 2) when Merck decided to settle litigation signalled by the shift from

strategy three (diminish) to strategy four (rebuild). Strategy five (deny) was used

intermittently throughout the crisis time frame.

The path of Merck‘s selection of crisis response strategies shows a strong

focus on the diminish category. Merck‘s strategy choices show a thickening

(Siggelkow, 2002) over time or the elaboration and reinforcement of the diminish

posture of crisis response from the start of the crisis up to the end of 2007. The

decision to settle the Vioxx litigation represented a patching strategy (Siggelkow,

2002) where the rebuild strategy took over from the diminish strategy. The rebuild

strategy occurred when Merck decided to settle cases. Merck also drew on the deny

response strategy from time to time. Only the primary crisis response postures were

considered in this diagram and as a result, the bolster responses were not integrated.

The visual mapping of the Coombs‘ (2006b) template shows persistence in

Merck‘s diminish crisis response strategy. The organisation continued to enact a

diminish strategy to reduce the significance of the crisis for a prolonged period of

time. This suggests that the organisation‘s communication choices were grounded in

inertia. Another factor that contributed to an extended diminish strategy was the

timing of Vioxx litigation. From Coombs‘ (2006b) perspective, Merck‘s persistence

with this strategy delayed the resolution of the crisis, and as a result the ability to

restore Merck‘s reputation. In essence, Merck‘s reputation was suspended for a

number of years as the organisation resisted environmental pressures and change. As


304

well as the constant use of the diminish crisis response, Merck enacted a deny

response from time to time during the crisis, signalling a coasting process

(Siggelkow, 2002). Merck generally drew on denial-based crisis communication in

response to research findings about Vioxx or allegations of scientific misconduct

from journal editors. However, both deny and diminish crisis response strategies

were ineffective in closing the crisis as significant as the Vioxx withdrawal had

become. The action to settle cases was the trigger for the closure of the crisis for

Merck.

4.6.2 Visual Maps using Allen and Caillouet’s Narrative

The Allen and Caillouet (1994) template provides a typology upon which to

examine the communication and legitimation strategies used by organisations in

crisis. In this thesis, Allen and Caillouet‘s (1994) template has been used to

understand the crisis communication strategies used by Merck as it handled a crisis

event and faced accountability pressures and challenges from its complex web of

corporate actors. As such, the context for this template is the pharmaceutical industry

where several corporate actors including competitors and regulators become

intricately involved in the Vioxx withdrawal and add pressure on Merck as it seeks

to restore legitimacy. The visual map for Merck using Allen and Caillouet‘s (1994)

template is illustrated in Figure 4.8.


305

1. Excuse strategy used to explain Vioxx withdrawal 2. Justification strategy used to explain Vioxx withdrawal 3. Ingratiation strategy used to build confidence in Merck 4. Factual distortion strategy used intermittently throughout crisis

Crisis Inquiries Litigation Settlement of litigation

15

1 1 1 1

2 2 2 2 2

3 3

4 4 4 4

Figure 4.8Visual map of Merck‘s strategies using Allen and Caillouet‘s template, demonstrating a change in strategies over time.

Key


3 3


Strategy continues


306

The visual map depicts the crisis communication adopted by Merck after the

Vioxx withdrawal. The visual mapping of Allen and Caillouet‘s (1994) template

shows dominance and persistence in the justification response. Merck also drew

heavily on excuse, ingratiation and factual distortion strategies during the four-year

study. It is also important to note that most strategies continued to be drawn on from

time to time. All strategies adopted patching or coasting processes over time

(Siggelkow, 2002). These observations are elaborated in the next few paragraphs.

Under Allen and Caillouet‘s (1994) template, Merck‘s crisis communication

focused most significantly on a justification strategy where the company accepted

responsibility for Vioxx but not for the consequences of the drug during its time on

the market. Throughout the case study, Merck‘s justification response developed

from explaining why the company withdrew Vioxx to explaining why the company

was rigorously defending itself during litigation. This visual map also shows that

Merck did not rely on one crisis response strategy but integrated other strategies

across the time frame of the thesis.

Although the justification response was the most consistent strategy used by

Merck, the company drew on excuse, ingratiation and factual distortion strategies to

build a stronger rationale and respond to the transforming environment. The

withdrawal of Vioxx triggered responses from a number of corporate actors

including Pfizer, the FDA, and independent medical researchers. These responses

added further pressure on Merck, requiring the organisation to engage an excuse

crisis response strategy to demonstrate that the company had appropriately

developed and marketed the drug prior to its withdrawal. From time to time, and


307

largely in response to the claims of medical researchers, Merck also used a factual

distortion strategy to show that the allegations of scientific misconduct were untrue

or that internal emails were taken out of context.

For Merck, an organisation under a significant amount of pressure that

oscillated over time, it is interesting to note a drop in ingratiation strategies during

the course of Vioxx litigation. According to Allen and Caillouet (1994), ingratiation

strategies are used to remind stakeholders of previous good deeds of the organisation

and as a way of showing conformity with the institutional environment. Ingratiation

strategies were used most during the first year after the Vioxx withdrawal but were

less prevalent in the latter part of the thesis.

In summary, Merck used a justification strategy as the pillar of its

explanation of the Vioxx withdrawal but engaged other strategies in response to

accountability pressures added by its web of corporate actors.

4.6.3 Visual Maps using Oliver’s Narrative

The visual map for Oliver‘s (1991) strategic responses to pressures is

developed to display the strategic responses of both Merck and Pfizer. Oliver‘s (199)

alternative template provided a typology of strategic responses that could be applied

to multiple organisations. This thesis has analysed the strategic responses of both

Merck as the primary organisation in the crisis and Pfizer as a secondary

organisation. The context for this template relates to change and the level of

organisational agency over the environment. The visual map for Merck and Pfizer

using Oliver‘s (1991) template is illustrated in Figure 4.9.


308

1. Compromise strategy adopted during Vioxx

withdrawal by Merck and Pfizer 2. Defiance strategy adopted by Merck and Pfizer 3. Manipulate strategy adopted by Merck during litigation

Figure 4.9 Visual map of Merck‘s strategies using Oliver‘s template, demonstrating a change in strategies over time.

Vioxx recall Research Litigation Settlement of litigation

Key


1 1


Strategy of Merck

1

Strategy of Pfizer

1

2 2

1 1 1 1 1 1

1 1 1 1 1 1 1 1 1 1

2

3 3


309

This visual map depicts the strategic responses of Merck and Pfizer over time

and also shows the differences in the responses of both organisations. In the initial

stages of the crisis, Merck drew on a range of strategic responses seeking initially to

legitimise the Vioxx withdrawal. However, once the legal trials began, Merck

enacted and patched (Siggelkow, 2002) a manipulate strategy to clearly establish the

basis of a legitimate trial. This strategy led to the settlement of litigation. In

comparison, Pfizer drew largely on a compromise strategy, which was patched

(Siggelkow, 2002) throughout the time frame of the thesis. Pfizer compromised

around a series of regulatory decisions including the suspension of Celebrex

advertising and the recall of Bextra. Although a compromise strategy may have

affected Pfizer‘s bottom line, this strategic response enabled Pfizer to be protected or

covered under the auspices of a regulatory framework. As such, this visual map

suggests that secondary organisations like Pfizer are potentially more likely to

display conformity to organisational environments.

Although the strategic responses of Novartis were studied as part of this

thesis, the number of these responses was limited because its COX-2 drug Prexige

did not have regulatory approval in the US. However, Novartis was a keen observer

of the interactions among Merck, Pfizer, and the FDA. As a result of these

interactions, and as demonstrated in its 2005 Annual Report, Novartis was acutely

aware of the changing regulatory conditions and cautious behaviour of the FDA in

approving drugs:

The withdrawal of the painkiller Vioxx by the US company that discovered and

marketed the drug along with withdrawals of other medicines in recent years—has

ignited a heated debate about drug safety.


310

―There is no doubt that the news around Vioxx has led to more conservative

attitudes toward new therapies as well as existing medicines,‖ Dr Vasella says.

The voluntary withdrawal of Vioxx—a medicine in the category of

painkillers called COX-2 inhibitors—posed a strategic dilemma for Novartis which

has a COX-2 inhibitor of its own, Prexige, in registration in a number of markets....

...―We believe Prexige is an excellent alternative for the right patients—who

are at risk for GI bleeds and who are free of any cardiovascular risks.‖(Novartis,

2005).

Several years later, and after Prexige was recalled in Australia in August

2007, the FDA issued Novartis with a ―not approvable‖ notification in relation to

Prexige (Novartis, 2007a). In explaining this decision in their annual report, the

company noted the ―setbacks‖ faced in recent years in relation to both gaining

approval for and continuing to keep drugs on the market (Novartis, 2007a).

4.7 Comparison of Alternative Templates

The narratives presented in this chapter tell three different stories about crisis

communication. Each story is told through a different lens or template, allowing us

to zoom in to the micro level and zoom out to the macro level to understand the

crisis communication choices of primary and secondary organisations involved in

crisis events that transform industry practices. The process of zooming in (micro

perspective to focus on single organisations) and zooming out (macro perspective to

study multiple organisations) (Nicolini, 2009) to and from the alternative templates

reveals new insights about crisis communication, change, and the relationships

among multiple organisations. Figure 4.10 illustrates this approach.


311

Figure 4.10 Zooming in and out of alternative templates, demonstrating the micro

focus of Coombs‘ template on organisational strategies and the macro focus of

Oliver‘s template on multiple organisations and institutional processes.

The templates not only describe the events and crisis communication

approaches of the primary and secondary organisations but draw out explanations

about why organisations communicated during sequences of events. Although the

timeline of events is consistent throughout, each alternative template, from Coombs

(2006b) to Allen and Caillouet (1994) to Oliver (1991), emphasises different factors

and required re-interpretations of the same events. In this section, I will elaborate on

the similarities and differences across each alternative template by zooming in and

out and identifying their bases for explaining key events. This process demonstrates

the importance of using three alternative templates to understand and explain how

multiple organisations communicate during crisis events that transform the

pharmaceutical industry.

Zooming out

Zooming in

•Template 3: Oliver

•Active engagement across organisations

•Primary and secondary organisations

•Template 2: Allen & Caillouet

•Web of actors pressure focal organisation

•Template 1: Coombs

•Focal organisation’s crisis communication

•Primary organisation only


312

4.7.1 Three Different Stories of and Drivers for Crisis Communication

The templates in this chapter have given us the ability to view the Vioxx

withdrawal and ongoing crisis events through a powerful lens. The lens can be

adjusted to zoom in (Nicolini, 2009) on the detailed actions of Merck, zoom out

(Nicolini, 2009) to focus on both Merck and its surroundings, and zoom out to pick

up the interactions between Merck and the corporate actors caught up in the event.

Based on the positioning of this lens, different types of evidence come into the

picture frame to guide our explanations of the moving images before us. Each

template recognises certain information in order to both describe and explain what

happened over of the course of the thesis (Allison & Zelikow, 1999). In this section,

I elaborate on the bases of explanation for each template that become the causal

drivers for change in crisis communication.

The templates are driven by the frameworks and theories that sit behind each

template. Coombs‘ (2006b) template is based on situational crisis communication

theory. This theory guides the decision-making of organisations in crisis by

considering the situational and historical factors that affect organisations. Factors

such as the type of crisis, attributions of blame, and reputational threat determine the

type of crisis response required in order to restore an organisation‘s reputation. As a

result, for Coombs‘ (2006b) template, restoring organisational reputation is the

rationale for the selection of crisis response strategies for an organisation.

Allen and Caillouet‘s (1994) framework uses impression management as a

basis for a typology of message strategies and institutional theory as a way to explain

how these strategies could influence organisational legitimacy. The integration of


313

institutional theory allows Allen and Caillouet (1994) to examine organisations as

part of a ―complex web of relationships‖. In this way, an organisation‘s legitimacy

can be influenced by an organisation‘s message and the actions and messages

enacted by its network of corporate actors. These corporate actors can place

additional accountability pressures on the focal organisation and thus affect its

ability to restore organisational legitimacy. As a result, the driver for Allen and

Caillouet‘s (1994) template, restoring legitimacy and responding to accountability

pressures from a network of corporate actors are the rationale for the selection of

message strategies for an organisation.

Oliver‘s (1991) framework is based on a typology of an organisation‘s

strategic responses to institutional pressures towards conformity. According to

Oliver (1991), organisations can respond to institutional processes on a continuum

with conformity to known standards on one end and the introduction of new

standards at the other. This framework provides an opportunity to build on Allen and

Caillouet‘s (1994) framework by examining and comparing the strategic responses

of multiple organisations. In this way, for Oliver‘s (1991) template, recognising

shifts in institutional practices (as a result of strategic responses to institutional

pressures) is the rationale for strategy selection. These rationales are set out in Figure

4.11.


314

Figure 4.11 Drivers for change in strategies across alternative templates.

Based on these different yet linked rationales for change in crisis

communication, the next section of this chapter will summarise the differences in

interpretation across each template and narrative.

4.7.2 Differences in Interpretation

The rationales for change in crisis communication and strategic responses are

based on the theories behind each template. Each theory selects as important a

different context that ranges from a micro to macro perspective. It is this context that

influences the level of zoom (Nicolini, 2009) with which to view the organisations,

crisis and related events. As a result of the zoom, each template focuses on and

describes different events and offers different ways to explain crisis communication

and strategic response. The differences in interpretation across the templates relate to

both action and context as central components in process theory. These two

components will be explicated in this section of the chapter.

Zooming into Coombs‘ (2006b) framework enables a very detailed micro

view of the crisis decisions and communication of the primary organisation, Merck.

In this way, Coombs (2006b) enables a focus on the action level of the crisis. In the

Coombs

Restoring reputation

Allen & Caillouet

Responding to accountability

pressures

Oliver

Recognising shifts in

institutional practices


315

months leading up to the Vioxx withdrawal, nothing in the media hinted at the crisis

about to befall Merck. By all media accounts, there were no brewing reputational

concerns and Vioxx seemed on track after being approved by the FDA for juvenile

arthritis. But 20 days after this approval, Merck took corrective action to withdraw

Vioxx from the market. This decision was taken to preserve and protect Merck‘s

reputation. The company realised it would need to build a solid rationale for this

unexpected decision, and hoped that through the combination of corrective action

and supportive crisis communication, the company could return to business-as-usual.

The Vioxx withdrawal seemed straightforward enough: company receives data that

show high risks and withdraws product to prevent risks. To explain this choice,

Merck framed the Vioxx withdrawal as being in the best interests of patients and

science, and reinforced the ethics and values of the organisation. The company set up

processes for the collection and reimbursement of unused Vioxx pills. Merck was

practising textbook crisis management and communication and yet, the crisis

continued.

Through Coombs‘ (2006b) lens, one of the reasons for the continuing crisis

related to Merck‘s historical decision-making around Vioxx. Inertia may have locked

Merck into this response pattern. Medical researchers and plaintiff lawyers

introduced to the media a range of internal emails and internal marketing materials

that suggest Merck knew of the risks associated with Vioxx and was training staff to

combat these concerns. As a result of this evidence, Merck was forced to adopt a

dual strategy that explained the Vioxx withdrawal and accounted for its past actions

in developing and marketing the drug. Merck‘s historical decisions around Vioxx


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became a major downfall for the company, and later in the case, the main

justification for plaintiffs‘ cases.

As the crisis started to shift from being a straightforward product recall to a

crisis that touched the very heart of social responsibility, Merck‘s crisis responses

remained constant. They were driven by the need to minimise the perceived damage

of the Vioxx withdrawal, restore Merck‘s reputation and protect Merck from a

potentially transforming environment. Despite a congressional inquiry into the

FDA‘s handling of Vioxx, a FDA advisory hearing on COX-2 drugs, and relentless

media attention during Vioxx litigation, there seemed to be no tipping point for

change in Merck‘s crisis response strategies. The company seemed locked into a

strategy choice in the hope that the transforming situation was losing momentum and

business would return to normal. Certainly, for periods of time, Vioxx was not on the

media‘s agenda but the media stories did not completely go away. Within this

climate, Merck‘s crisis communication served to suspend its reputation rather than

restore it.

The company finally closed the crisis when it decided to settle litigation.

Based on this operational decision, Merck moved from a diminish posture to the

rebuild posture. Although Merck may have been driven to restore its reputation early

on in the crisis, it is clear that its crisis communication decisions were constrained by

operational concerns including legal strategy.

By following Coombs‘ (2006b) approach and understanding the crisis

history, nature of relationships with stakeholders, and crisis type, Merck could not


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have anticipated the level of media interest and rolling nature of the crisis. By

following Coombs‘ (2006b) framework alone, Merck‘s crisis communication

decision-making was caught up in a process of returning its reputation to the status

quo. In this way, organisational inertia acted as a powerful force against change. This

approach would not suffice for an ongoing crisis event. Coombs‘ (2006b) framework

focuses on the immediate organisational context, precluding how the actions of other

organisations could influence or be influenced by Merck‘s crisis communication

actions and messages.

Allen and Caillouet‘s (1994) framework shares strong similarities with

Coombs‘ (2006b) approach yet offers a new perspectives to guide the re-

interpretation of Merck‘s choice of crisis communication. Where Coombs‘ (2006b)

crisis context is based on crisis type, crisis history and perceived responsibility,

Allen and Caillouet‘s (1994) framework allows for a zoom out to understand the

complex web of corporate actors. For Merck, this translated into a complex

communication environment that was reconstituted over time by the actions of both

Merck and other corporate actors.

To manage this complex crisis context, the Allen and Caillouet (1994)

narrative shows that Merck adopted a dominant message strategy around

justification. This primary message is supported by secondary messages including

excuses, ingratiation, and factual distortion. These messages came into play to help

Merck deal with the additional accountability pressures introduced by its web of

corporate actors.


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Although the actions of corporate actors served primarily to add

accountability pressures to Merck, they also created a complex crisis context for all

actors in the pharmaceutical industry. In this way, the actions of other organisations

sustained the crisis for Merck and the industry. This position was emphasised when

Pfizer decided to retain Celebrex on the market despite receiving high risk results

from a clinical trial, as detailed in section 4.4.2.4 of this chapter. As a result, Pfizer

was not only a source of accountability pressure for Merck but was also caught up as

an unexpected target of Merck‘s Vioxx withdrawal. The web of actors was indeed

complex but this narrative emphasised that emergent conditions created new

environmental conditions for all actors.

Zooming out to an even broader macro perspective, Oliver‘s (1991) template

builds on Allen and Caillouet‘s (1994) framework by providing a lens with which to

see the agency and power of each of the organisations. Although Oliver‘s (1991)

strategic responses to institutional pressures are less about the communication

strategies, they clearly represent the level of power an organisation is seeking to

influence over an environment or the level of conformity the organisation is seeking

to gain within an environment. Through Oliver‘s (1991) lens, the thesis must

deliberately focus on the environment, and in this case, an environment that is

undergoing transformative change. As a result, it is evident that the FDA‘s role is

highly significant.

In the lead up to the Vioxx withdrawal, the principal drugs under the

spotlight were anti-depressants. The FDA and related pharmaceutical companies

were under intense media scrutiny for failing to act faster on the link between anti-


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depressants and suicidal tendencies in young people. Although this is not related

directly to Merck‘s decision to withdraw Vioxx, it is arguably an invisible or cloaked

force for change in the pharmaceutical industry. The anti-depressant crisis was the

crisis that created unstable environmental conditions for Merck. Oliver‘s (1991)

perspective on institutional pressures enables the understanding of the industry

context within which individual organisations enact strategic responses. If Merck

factored in the anti-depressant crisis, that is the industry context within which it was

operating, it may have changed its decision from a Vioxx withdrawal to an action

that was more consistent with the FDA‘s practices. This may have been a way to

unlock the power of inertia.

As a result of a climate where the FDA was under siege, the Vioxx

withdrawal became a more significant event. A macro perspective shows that the

Vioxx withdrawal was caught up in a sequence of events for transformative

regulatory change. Yet while the pharmaceutical industry was in the midst of change,

the FDA continued to provide an institutional buffer to organisations that complied

with its processes and practices. For example, Pfizer drew on the institutional

protection of the FDA to protect its decision to retain Celebrex despite receiving

negative trial results. Yet, at the same time, it was also clear to see that the

organisations were less resilient in dealing with changing conditions as a new

regulatory equilibrium was established, evidenced by ongoing compromise strategy.

One of the implications that can be drawn from this position is that conforming to

institutional norms may not be the ideal response for organisations that are part of an

industry undergoing transformative change.


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Oliver‘s (1991) narrative frame also allowed the researcher to identify the

strength of opposition against Merck as the primary organisation caught up in the

crisis. Although Pfizer was also facing lawsuits against Bextra and Celebrex, the

media‘s focus was overwhelmingly on Merck and Vioxx litigation. Although Pfizer

was accountable to the plaintiffs who filed these suits, it was not held publicly

accountable by the media. As a result, there are some advantages in being the

secondary organisation involved in an ongoing and linked crisis.

Each lens offers a different way to define the crisis, the organisations

involved, and the context that relates to the crisis communication and strategic

responses. As a result, each narrative provides a different explanation or driver for

change. Coombs‘ (2006b) framework is driven by an immediate organisation-centric

context defined by the crisis history, relationship status, and type of crisis, and the

need to restore reputations and return to business. Allen and Caillouet‘s (1994)

framework is driven by the web of corporate actors who contribute to the complex

communication environment for Merck, affecting its ability to regain legitimacy.

Oliver‘s (1991) framework is driven by institutional pressures that result from a

changing environment, drawing out and constraining an organisation‘s ability to

conform to changing environmental conditions. Each one of these models is

complementary and there is a need for all three lenses in order to fully understand

and explain the crisis communication of multiple organisations that are intricately

intertwined in a four-year crisis.


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4.8 Conclusion

This chapter presents three narratives that offer alternative descriptions and

explanations for the crisis communication decisions of multiple organisations across

a four-year time frame. Specifically, the study examines a period of punctuation

triggered by a situational crisis event, and the beginnings of the return to equilibrium

for the pharmaceutical industry. As demonstrated in the narratives, constructed based

on an analysis of media coverage and organisational documents, an organisation‘s

crisis communication choices are based on the deep structures and conditions that

guide the existing period of equilibrium. That is, an organisation does not

immediately know the change-inducing potential of a crisis event.

Each narrative integrates crisis communication and actions with the context

of transformative change. Time and the crisis context influence the meaning of an

organisation‘s messages during the punctuation of equilibrium. The first narrative,

guided by Coombs‘ (2006b) situational crisis communication theory focuses on the

crisis communication and actions of Merck, the primary organisation. This narrative

depicts how Merck continually sought to restore its reputation following the Vioxx

withdrawal by consistently reinforcing a diminish message. However, by doing so,

Merck‘s actions served to suspend its reputation more than restore it.

The second narrative, guided by Allen and Caillouet‘s (1994) crisis messages

enables a broader look at the organisational context within which the crisis was

unfolding. Through this second lens, the narrative is based on the growing

complexity of links between organisations caught up in an ongoing crisis. Through

this lens, the crisis considers how other organisational actors added accountability


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pressures on Merck in a way that reinforced the complex web that linked corporate

actors (Allen & Caillouet, 1994). Because this occurred within a context of

transformative change, the nature of the links between these organisations shifted,

thus complicating the communication choices for Merck. The third narrative, guided

by Oliver‘s (1991) strategic responses to institutional pressures enabled an even

broader view of the context of transformative change. Through this lens, the

narrative depicted the level of organisational agency over its changing environment.

In showing this, Oliver‘s (1991) lens tells a story about the role of multiple

organisations caught up in a series of linked crisis events.

Although each narrative depicts crisis communication and action and change,

a deeper understanding and explanation for these choices occurs by comparing and

synthesising the differences in interpretation across all three lenses. This process is

also built around the action and context components of process theory, emphasising

the persistence of crisis communication and the features of the crisis context under

transformative change. These findings are critical to the next chapter.

Chapter Five presents the conclusions and implications of this thesis. The

contributions of this thesis to existing crisis communication research as well as

scholarship in public relations are established. The implications for practice are also

identified as well as suggestions for further research in this area.


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CHAPTER FIVE

Conclusions and implications

―Conceptual models not only fix the mesh of the nets that the analyst

drags through the material in order to explain a particular action; they

also direct the analysis to cast nets in select ponds, at certain depths, in

order to catch the fish he [sic] is after‖ (Allison & Zelikow, 1999, p.4)

This final chapter presents conclusions about the research problem and

questions, builds a conceptual model based on these conclusions, and draws

implications for theory and practice. The overall research problem guiding this thesis

asks:


communication?

This research problem places the thesis in the discipline area of public

relations with a specific focus on crisis communication. The guiding theory behind

this thesis is punctuated equilibrium theory and process research methods are used to

study change.

Chapter One introduced the context for this thesis and explained how today‘s

complex problems mandate the need for new types of theoretical and practical

solutions in crisis communication. The chapter also provided a rationale for a study

that explores transformative change, representing a shift from public relations and

crisis communication research that treats change predominantly as a series of

incremental adjustments. Following from this justification, Chapter Two elaborated

the theoretical framework for this thesis by reviewing punctuated equilibrium theory

and drawing out two research questions that consider both crisis communication and

the context of the crises during transformative change:


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Guided by these research questions, Chapter Three justified the research

paradigm for the thesis and set out the process methods to answer the research

questions.

The thesis used an alternative template strategy to construct three narratives

of the crisis events that were part of the pharmaceutical industry for four years.

Chapter Four consisted of these three narratives and provided a comparative analysis

of these narratives. First, Chapter Four presented three narratives told through the

theoretical frameworks of Coombs (2006b), Allen and Caillouet (1994), and Oliver

(1991). Next, Chapter Four provided a visual map of crisis communication strategies

used by the primary and secondary organisations involved in the case study. The

chapter concluded with a comparative analysis across the templates to draw out the

importance of context, the role of multiple organisations, and transformative change.

In this final chapter, I conclude the thesis by resolving the research questions.

In section 5.1, I summarise the major findings of the thesis. Next, in section 5.2, I

present conclusions about the research questions, which form the basis of section 5.3

where I present conclusions about the research problem and develop a conceptual

model based on the conclusions. In section 5.4, I present the implications for theory


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and establish the contributions of this thesis to punctuated equilibrium theory, public

relations and crisis communication research. In section 5.5, I establish the

contributions to crisis communication and public relations practice. Sections 5.6 and

5.7 identify the limitations of the thesis and establish future research opportunities.

Section 5.8 concludes this thesis.

5.1 Summary of Findings and Theoretical Implications

This thesis adopted punctuated equilibrium theory as a theoretical framework

to explain differences in crisis communication as crisis events trigger transformative

change across an industry. This thesis builds on existing research that has focused on

crisis communication enacted by single organisations to manage a crisis and restore

organisational legitimacy and reputations. By studying complex crisis events and

crisis communication within the context of transformative change, this thesis

contributes a new understanding and rationale for crisis communication research.

The thesis explains the crisis communication processes of multiple organisations,

demonstrating the role of primary and secondary organisations within the context of

transformative regulatory change. Consequently, the findings of this thesis provide

new knowledge about crisis communication and the crisis context.

Punctuated equilibrium theory provides an essential lens through which to

explore the research problem (Murphy, 2000). Punctuated equilibrium theory

provides an opportunity to examine existing crisis response typologies within the

context of transformative change. By synthesising existing crisis response typologies

with Oliver‘s (1991) work, this study has shown how crisis communication becomes

not only a device for restoring reputation or legitimacy but goes to the heart of


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change. That is, by examining crisis communication in a longitudinal study, and

considering the actions of multiple organisations, crisis communication is shown to

be closely linked to the dismantling of the old equilibrium and the development of

conditions for the new period of equilibrium.

The intricate links between crisis communication and punctuations of

equilibrium are demonstrated by the roles and relationships among the primary and

secondary organisations. This thesis demonstrates how primary and secondary

organisations caught up in the crisis can contribute to or be supported or abandoned

by this transformative context. Specifically, the findings of this thesis add new

knowledge to crisis communication and public relations by examining the role of

buffers and ongoing contests of legitimacy triggered by corporate actors and the role

of crisis communication during transformative change.

Overall, this thesis has built on existing research in crisis communication by

offering transformative change as another perspective for change and providing

insight into the role of primary and secondary organisations during crisis and

transformative change. As well, this thesis sees crisis communication not only as the

means by which to restore reputations and organisational legitimacy and resolve

crisis events, but also as a mechanism that conducts the processes for change during

a punctuation of equilibrium.

5.2 Conclusions about Research Questions

This section builds on the implications for change presented in section 5.1 by

discussing the insights and drawing conclusions for the two research questions that


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guided this thesis. The conclusions about the research questions draw together both

the context of change and organisational actions.

5.2.1 Research Question One: Persistence of and Changes in Crisis

Communication and Action

This research question provides a way to examine the crisis communication

and actions of multiple organisations within the context of transformative change.

Further, it provides an opportunity to explore how existing crisis response typologies

(Allen & Caillouet, 1994; Coombs, 2006b), designed primarily to respond to

situational or short-term crisis events, operate within a context of transformative

change. By understanding how crisis response strategies operate within the context

of transformative change, this thesis provides insights into the role of

communication as part of the change process especially when strategies are enacted

by multiple organisational actors that operate within this context. The conclusions

about research question one are summarised in Table 5.1.


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Table 5.1

Conclusions and Contributions of Research Question One

Research question Conclusions Contributions to theory

What symbolic

and substantive

strategies persist

and change as

crises develop

from situational

events to

transformative and

multiple linked

events?

Symbolic crisis

communication strategies

persist to support

substantive action in

organisation‘s immediate

past

Symbolic crisis


persist to prepare for

substantive action in

organisation‘s future

Introduces a focus on process-

based research around change as

an alternative to the effectiveness

rationale that dominates existing

crisis communication literature.

Extends existing knowledge on

crisis response typologies by

showing how they can move from

restoring reputations to shaping

meaning around change by

layering current crisis response

typologies with Oliver‘s (1991)

strategic response typology.

Crisis under

transformative change

comprises rolling events

that take on both central

and peripheral events over

time and integrate

multiple corporate actors

into crisis events.

Symbolic crisis


adapt to local contests of

legitimacy

Introduces new definition for

crisis under transformative change

that enables understanding of

crisis communication of multiple

organisations over time

Extends existing knowledge

around the relationship between

reputation and legitimacy as

drivers for crisis communication

by showing how threats can be

localised to one product.

Sheds new light into the nature

and path of crisis communication

during transformative change.

Discussion about these conclusions is divided into two sections. Section

5.2.1.1 provides insight into the use of symbolic crisis communication to both

support and prepare for substantive strategies. Next, section 5.2.1.2 shows how

under transformative change, crises operate as both core and peripheral crisis events,

requiring organisations to adopt symbolic strategies to counter localised challenges

to organisational legitimacy. The conclusions about the relationship between

symbolic and substantive strategies go to the heart of change and are summarised at

the end of this section in 5.2.1.3.


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5.2.1.1 Symbolic Strategies Prepare for and Support Substantive Strategies

The first contributions related to research question one are based on the

introduction of time and process and result in an alternative dynamic to existing

crisis communication research and public relations theory. These contributions are

based on the conclusions of the thesis around the role of symbolic crisis

communication strategies. The thesis found that symbolic crisis communication

strategies contribute to the process of change by both preparing for and supporting

substantive strategies. The connection between symbolic and substantive strategies is

examined by considering all three narratives. By studying crises over a longitudinal

time frame, and not only as short-term or situational events, the path of crisis

communication and action takes on new meaning. The theoretical insights of

integrating time and process into an analysis of crisis and change can be seen in

relation to an additional role for crisis communication.

By adopting punctuated equilibrium theory, this thesis considers the role of

crisis communication and action within the context of transformative change and

over an extended period of time. As such, the focus of this thesis is not on the

effectiveness of crisis response strategies (as is the rationale of existing crisis

communication research) but on the process of crisis communication and change

over time. As a result of considering time and process models, this thesis both

confirms and extends existing research crisis communication and public relations in

three ways.

Firstly, the findings of this thesis confirm existing research that regards crisis

communication as a means to support an organisation‘s substantive decisions


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(Coombs, 2004a, 2006b, 2007a). That is, as the focal organisation, Merck, enacted

crisis communication to explain the crisis, caused by its withdrawal of Vioxx.

Specifically, Merck used symbolic strategies or crisis responses to demonstrate how

its substantive decision to withdraw Vioxx was consistent with organisational

practice and ethics.

Secondly, by considering time, the thesis extends existing research to show

how the purpose of crisis communication changes as the crisis event punctuates

equilibrium. During a punctuation of equilibrium, a crisis becomes more complex,

drawing in multiple actors and signalling the need for changes in the pharmaceutical

industry. The findings of this thesis both confirm existing knowledge around crisis

communication and extend it. Consistent with existing literature, this thesis showed

that the focal organisation‘s crisis response strategies escalated from diminish to deal

responses. Yet because this shift in strategy was three years in the making, the

organisation was not engaging in traditional crisis decision-making guidelines that

relate to timely adjustments based on reputational impact (Coombs, 2006b, 2007c).

In this thesis, Merck, as the primary organisation, persisted for three years

with the messages behind the restorative response strategy (Coombs, 2006b) adopted

in the initial phases of the crisis. However, the restorative strategy had little benefit

in restoring Merck‘s reputation as the crisis continued well beyond that of a

situational crisis event. The short-term restoration logic may not always be an

appropriate rationale for crisis decision-making during transformative change.


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As demonstrated in this thesis, when a crisis acts as a trigger for punctuation,

an organisation‘s crisis communication may be caught between the old and new

periods of equilibrium. That is, an organisation‘s immediate crisis communication

choices are made to restore the organisation‘s reputation based on the deep structures

or inertia that are part of the old period of equilibrium. An organisation does not

immediately know that it is moving into a punctuation of equilibrium and as a result,

finds itself in between two periods of equilibrium.

Time and the crisis context have an influence on the meaning of an

organisation‘s messages. In the early stages of the crisis and punctuation, Merck‘s

crisis communication response sought to demonstrate alignment to the old

equilibrium period. Yet, as this equilibrium was punctuated, by grafting Oliver‘s

(1991) typology, Merck‘s messages around the appropriateness of its actions in

relation to the Vioxx withdrawal also established the foundations for defensible trials

in the public opinion environment. In this way, Merck could associate the same

messages with another substantive strategy thus setting up the company for a

successful mass settlement of trials related to Vioxx. In this way, the messages

behind the restorative strategies enacted by an organisation during its initial crisis

period contributed to the ongoing of process for change for the organisation as it

moved to settle and finally close the crisis.

Thirdly, this thesis provided insight into the nature of symbolic and

substantive strategies within the context of crisis and transformative change. This

represents an extension to existing crisis response typologies in the literature (Allen

& Caillouet, 1994; Benoit, 1997; Benoit & Pang, 2008; Coombs, 2006b; Seeger et


332

al., 2005). Layering the crisis communication and action responses of Coombs

(2006b), Allen and Caillouet (1994) with Oliver (1991), moves crisis communication

from being a static response to restore an organisation‘s reputation to becoming a

message that shapes legitimacy over time. This hierarchy is demonstrated in Figure

5.1.

Figure 5.1 Hierarchy of crisis communication strategies, demonstrating placement of

alternative templates on axes of agency over environment and continuum of

legitimacy and reputation outcomes.

Figure 5.1 illustrates the layering of the strategy typologies of Oliver (1991),

Allen and Caillouet (1994), and Coombs (2006b) across two axes, indicating

outcomes and integration of change and environment. The horizontal axis positions

each typology on a continuum that ranges from legitimacy to reputation outcomes.

Oliver (1991) and Allen and Caillouet‘s (1994) typologies are based on achieving

outcomes related to legitimacy and Coombs‘ (2006b) typology is based on achieving

reputation outcomes. The vertical axis positions each typology according to the

Oliver

Conform to or shape

environment

Achieve legitimacy

Allen and Caillouet

Attend to accountability

pressures

Restore legitimacy

Coombs

Resolve crisis

Restore reputation

Legitimacy Reputation

High agency Low agency


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integration of change and the environment. In this way, Oliver‘s (1991) typology sits

across both ranges whereas Coombs‘ (2006b) work sits at the low agency level,

demonstrating conformity to the environment and the restoration logic.

The theoretical insights of this hierarchy relate to the extension of the

existing rationale for crisis communication choices. While the existing literature

focuses on an effectiveness rationale, this thesis introduces an alternative perspective

around process theory. Based on this thesis, during transformative change, the role of

crisis communication is not to restore the status quo. Rather, it considers how crisis

communication strategies can shape change to achieve legitimacy under

transformative conditions.

In summary, resolving this research question generates theoretical

contributions related to crisis communication and extends the discipline area of

public relations. This thesis shows how symbolic crisis communication strategies

support substantive strategies that trigger transformative change in the

pharmaceutical industry. This finding confirms existing research on crisis

communication where organisations accept responsibility for a crisis and

communicate in order to restore stability and reputation. This thesis has also shown

how an organisation‘s persistence with crisis communication occurs because an

organisation is caught between two periods of equilibrium. Initially, an

organisation‘s crisis communication is used to return organisations to the old

equilibrium conditions. However, as the organisation realises that it is operating

within a context of transformative change, its messages can be used for another

purpose. Symbolic strategies used in initial crisis periods may also be precedents to


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substantive strategies of change. This finding extends existing research in crisis

communication. Instead of existing crisis communication that focuses on evaluating

the effectiveness of crisis responses in repairing image and reputation, this thesis

provides new knowledge to understand the persistence of crisis communication

within the context of a rolling crisis, suggesting that crisis communication decisions

are made with little regard for what is considered effective in existing studies.

5.2.1.2 Symbolic Strategies Adapt to Local Sites of Contested Legitimacy

The next contributions related to research question one are based on the

integration of time, process and multiple actors to existing crisis communication

research and public relations theory. These contributions are based on the

conclusions of the thesis around the adaptive role of symbolic crisis communication

strategies to local contests of legitimacy. The thesis found that, as the crisis changed

over time and grew in complexity, it drew in multiple crisis actors who either created

or were the focus of peripheral crisis events that related to the core and starting crisis

of the product withdrawal of Vioxx.

The integration of time, process and multiple actors was elucidated by

drawing comparisons across all narratives. In relation to research question one, this

thesis extends the existing crisis communication literature by: 1) re-defining crises as

rolling events that comprise both central and peripheral events over time, and 2)

explaining how multiple organisations respond to core and peripheral crisis events.

Studying the role and actions of multiple organisations over time sheds new light on

the nature and path of crisis communication during transformative change.


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In this thesis, punctuated equilibrium theory provides a way to renew interest

in the area of crisis definition. This has been achieved by drawing attention to the

multiple conditions, actors, and events that trigger the process of transformative

change, and by considering the implications for crisis communication. As such, the

thesis was not restricted by accepted definitions for crisis in the public relations

literature but considered crisis as it affects multiple organisations in different ways.

As a result of considering time, process, and multiple actors, this thesis

confirms and extends research in crisis communication and public relations in three

ways. Firstly, by studying a crisis event over an extended time frame, the path of the

crisis and the crisis actors that become involved in resolving it are identified and

their participation is clarified. In this thesis, the primary organisation generated the

core crisis event of a product withdrawal. While existing practice in case-based crisis

research would study the product withdrawal alone, this thesis tracked the path of the

crisis over four years. In this thesis, the product withdrawal crisis triggered a

punctuation of equilibrium and the emergence of the complex web of corporate

actors thereby generating peripheral crisis events for both the primary and secondary

organisations.

This finding confirms a study in the management literature that additional

crisis events extend crises beyond the organisation of origin (Shrivastava et al.,

1988). In the public relations literature, this contribution both confirms and builds on

existing literature that describes the role of other actors as adding pressures on the

focal organisation (Allen & Caillouet, 1994). This thesis shows that other actors such


336

as competitors not only add pressure to the primary organisation but can themselves

become targets of ongoing crisis events.

This thesis both confirms and extends Ren‘s (2000) conceptual paper on

linked crisis events set in the disaster management literature. The thesis confirms

Ren‘s (2000) work by demonstrating the temporal linkage of multiple crisis events

and extends Ren‘s (2000) work by considering linked crisis events that affect

multiple organisations. This thesis shows that it is not temporal grouping alone that

distinguishes linked crisis events. Instead, crisis events can be linked to multiple

organisations through a shared source of concern. In this thesis, the shared source of

concern was a legitimacy shadow cast by Merck‘s Vioxx that extended to other

drugs in the COX-2 class. As a result, competitor dynamics provide a means to link

crisis events.

Secondly, because the context of transformative change identifies linked and

peripheral crisis events, this thesis provides an opportunity to expand current

definitions of crisis events in the public relations literature. The existing literature

defines crises as an event that threatens organisational performance (Coombs,

2007b). Instead, this definition should acknowledge that crises can be part of a

process of transformative change that affects multiple organisations within an

industry sector. Further, and as part of this addition to the definition, crises have the

potential to diversify into core and peripheral events as illustrated in Figure 5.2.


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Figure 5.2 Crises as core and peripheral events, demonstrating how a core crisis

event triggers responses from crisis actors and creates peripheral crisis events.

As illustrated in Figure 5.2, the core crisis triggers both transformative

outcomes and peripheral crisis events that draw in multiple crisis actors including

competitors. For example, in this thesis, Merck‘s decision to withdraw Vioxx

triggered transformative change in industry regulations and peripheral crises for

Merck and secondary organisations like Pfizer. Linked to defining crises and the

process of transformative change that include core and peripheral events is the role

of multiple actors or agents. This thesis extends Ren‘s (2000) conceptual work

beyond temporal linkages to consider also the networked arrangements of crisis

actors. As a result, it is important to see crises not as the focus for primary

organisations but also as the domain of secondary organisations or competitors. In

seeing this, it is also important to consider the crisis or corporate actors who add

pressure on both primary and secondary organisations. That is, actors including

medical researchers or the FDA can emerge to operate in ways that trigger additional

crisis events.


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Thirdly, because this definition for rolling crisis consisting of core and

peripheral events emerges, it also has an impact on crisis communication. This thesis

extends Allen and Caillouet‘s (1994) research by examining how the messages of

secondary organisations added accountability pressures on the primary organisation

and also how the actions of the primary organisation added accountability pressures

on secondary organisations (Allen & Caillouet, 1994). These local contests of

legitimacy are treated more clearly in the second and third narratives that consider

the complex web of corporate actors and the simultaneous involvement of primary

and secondary organisations and regulatory authorities in the pharmaceutical

industry.

Adapting symbolic crisis communication strategies to suit different crisis

events is not new in the literature. The thesis confirms this as a dynamic for change

that is consistent with existing incremental approaches in crisis communication and

public relations. However, this thesis extends existing research by showing how the

relationship between primary and secondary organisations and their environment

also affects crisis communication under transformative change. Crisis

communication has traditionally been seen as messages delivered to reassure key

stakeholders of an organisation‘s actions in relation to a generally unexpected crisis

event. As a result, the focus of crisis communication and public relations research

has been on single organisations. By extending Allen and Caillouet‘s (1994) work,

this thesis has shed light on the complex relationships between primary and

secondary organisations caught up in and connected by transformative change in the

pharmaceutical industry.


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This thesis showed that at the same time an organisation was dealing with a

core crisis, peripheral crisis events can call up and debate an organisation‘s past

actions. These peripheral crisis events can be managed through incremental or

adaptive strategies. Looking solely at Allen and Caillouet‘s (1994) visual map, it is

clear to see that the primary organisation, Merck, remained consistent with a

justification strategy to manage its core crisis, yet integrated other crisis responses

when it needed to deal with issues peripheral to the ongoing crisis. For example,

Merck issued denials in relation to claims put forward by medical editors and

researchers throughout the four-year time frame.

In particular, the thesis sheds light on competitor dynamics. The competitor

dynamic between the primary and secondary organisations is critical because it is

this emergent relationship that drives change in crisis response strategies and this site

that shows the differences in the media treatment of Merck and Pfizer. Competitor

dynamics in crisis communication is new to the public relations literature, which has

focused predominantly on the role of communication between a single organisation

and its stakeholders. This finding is also new to punctuated equilibrium theory,

which has also traditionally focused on describing and explaining transformative

change within organisations.

In summary, resolving this research question generated theoretical

contributions related to crisis communication and public relations. Specifically, the

conclusions of research question one shows that the path of a crisis during

transformative change grows from a core crisis event to a series of linked peripheral


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crisis events that draw in multiple crisis actors as both the cause and focus of these

peripheral crisis events. In this way, the impact of a crisis becomes a legitimacy issue

for multiple crisis actors over time. These conclusions extend existing research in

crisis communication and public relations that focus on the crisis communication and

actions of a single organisation. As a result of these contributions, the definition for

crisis in the public relations literature takes on new elements in alignment with the

management literature. Further, the integration of time, process and multiple actors

provides a new context for examining the crisis communication and action during


5.2.2 Research Question Two: Uncovering the Features of Crisis Context

Research question two provides a way to examine the context within which

the crisis communication and actions persisted and changed over the duration of the

study. Through research question two, this thesis provided new insights into the

process of transformative change across multiple corporate actors. As a result, this

thesis extends existing research that focuses on the organisational context for crisis

with factors such as an organisation‘s crisis history, stakeholders‘ perceptions and

crisis type influencing the choice of crisis communication and actions (Coombs,

1998, 2004a, 2007a; Coombs & Holladay, 1996, 2006).

The core contribution of this thesis is process-based. As the basis for the old

equilibrium deteriorates and the new equilibrium emerges, this process of insight

formation buffers organisations caught up in the rolling peripheral crisis events. This

contribution is new to the crisis communication and public relations literatures and


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extends existing knowledge in punctuated equilibrium theory and the management

literature.

This thesis provides insight into the deep structures behind crisis

communication, thus extending the organisational context dominant in existing

research. Resolving research question two generates theoretical contributions related

to crisis communication and change within the public relations discipline, and are

summarised in Table 5.2.

Table 5.2

Conclusions and Contributions of Research Question Two

Research question Conclusions Contributions to theory

What features of

the crisis context

influence changes

in symbolic and

substantive

strategies?

Crisis path comprises

contests of legitimacy and

crisis actors extend attack

on primary organisation

Crisis path comprises

contests of legitimacy and

crisis actors buffer

secondary organisation

Model of insight formation: as

processes of change unfold, the

primary organisation sustains

public focus and crisis actors

emerge to protect secondary

organisations

Crisis actors can operate as

sources of buffers or ongoing

contests for primary and

secondary organisations

The conclusions about the research question follow. These conclusions

demonstrate the value of using the lens of punctuated equilibrium theory to view

crisis communication by outlining the process of transformative change.

5.2.2.1 Model of Insight Formation Creates an Emergent Context for Crisis

This thesis generates knowledge about the context for crisis communication

across extended time frames by demonstrating the role of multiple stakeholders and

the process of insight formation as an old equilibrium dissolves and a new


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equilibrium emerges. In doing this, this thesis extends existing research beyond

contextual elements that are largely organisation-centric, driven by situational factors

and stakeholder concerns (Coombs, 1998, 2004a, 2007a; Coombs & Holladay, 1996,

2006).

This thesis draws on punctuated equilibrium theory‘s model of insight

formation to build the emergent context for crises under transformative change. This

task is achieved by organising the actions and roles of corporate and crisis actors

within the process of insight formation into two functions: sources that buffer

organisations and sources that provide ongoing contests of legitimacy. In doing so,

the findings of this thesis both confirm existing research where corporate actors add

accountability pressures on focal organisations (Allen & Caillouet, 1994) and extend

existing research by demonstrating how the complex web of corporate actors can

shield or buffer organisations by shaping change and therefore influence the basis for

communication and action. In this thesis, the key actors involved in process of

insight formation are the FDA as the regulatory body and the mass media, which

provide a platform from which crisis actors can voice ongoing concerns. These

processes are discussed in the remainder of this chapter section.

By adopting punctuated equilibrium theory, this thesis has shown the

significance of the processes of regulatory change in the pharmaceutical industry.

Specifically, as the focus point of regulatory change, the FDA became a critical

agent in both shaping conditions for the new equilibrium and buffering or shielding

organisations involved in the crisis. Punctuated equilibrium theory is described as a

model of insight formation that tracks the dissolution of old deep structures and the


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formation of new conditions for equilibrium (Gersick, 1991). In this thesis, as the

processes of change unfold and new conditions for equilibrium emerge, they do so in

a way that buffers organisations. The process of insight formation in relation to

regulatory practices in the pharmaceutical industry is illustrated in Figure 5.3.

Figure 5.3 The process of regulatory insights related to the FDA, demonstrating how

the Vioxx withdrawal triggered government involvement and legislative change.

As illustrated in Figure 5.3, the Vioxx withdrawal triggered a punctuation of

equilibrium and set in play the process of reducing the legitimacy or support for

existing practices and creating a space for the emergence of new regulatory ideas

(John, 2003; Jones & Baumgartner, 2005; McDonough, 2000). The process of

insight formation confirms existing studies in punctuated equilibrium theory in

organisational and political sciences.

This thesis extends existing research in punctuated equilibrium theory by

demonstrating how the process of insight formation offers a level of protection or

buffer to organisations. Specifically, this thesis has shown that the buffer effect was

either imposed on or produced by the secondary organisation caught up in the crisis,

thereby extending the competitor dynamics. For example, while the FDA and

regulatory practices in the pharmaceutical industry were under review, the secondary

organisation, Pfizer, released clinical trial results that showed its COX-2 drug

Celebrex caused the same risks as were observed in Merck‘s Vioxx. In response to

this news, Pfizer deferred the outcome of Celebrex to the FDA.

Vioxx withdrawal

Congressional inquiry into

FDA

Incremental changes by FDA to test reactions

Legislative change to

FDA


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The buffering effect was predominantly experienced by the secondary

organisation, Pfizer. This buffering effect influenced Pfizer‘s strategy choice as

demonstrated in the Oliver (1991) narrative. The buffering effect or Pfizer‘s deferral

to the FDA, locked Pfizer into a compromise strategy. The compromise strategy was

Pfizer‘s dominant choice throughout the study time frame as it negotiated a changing

environment buffered by a changing FDA. In this way, although the secondary

organisation was protected from change, it was equally less able to effect change and

shape the emerging environmental context.

The buffering effect of the process of insight formation, and especially in

relation to how this plays out between primary and secondary organisations and

regulatory authorities, is new to the public relations and crisis communication

literature. By explicating the roles of stakeholders and actors within the context of

transformative change, this thesis provides new insights into the emergent crisis

context under transformative change and extended a literature that was focused on

crisis communication exchanges between single organisations and stakeholders. This

thesis has shown how multiple corporate and regulatory actors play active roles in

taking advantage of or shaping change, and the dynamic relationship between

primary and secondary organisations and regulatory authorities. In doing so, this

thesis has revealed a buffering effect, thus extending existing research in public

relations and crisis communication around the third-party endorsement strategy

commonly used in media effects and media relations through opinion leaders.


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The mass media also played a critical role in the emergent context of crisis

communication under transformative change. Specifically, through its reporting, the

mass media acted to both buffer and promote ongoing contests of legitimacy faced

by primary and secondary organisations. The mass media buffered Pfizer when it

found itself in the same position as Merck, facing negative clinical trial results for

Celebrex, its top-selling Cox-2. In comparison to the mass media‘s treatment of

Merck, Pfizer faced limited accountability pressures. Through narratives two and

three, which allow for the consideration of the ongoing crisis event beyond the

organisation of origin, this thesis shows that the media treats differently the primary

and secondary organisations caught up in linked crisis events.

In this thesis, the role of the media becomes even more critical when

comparing its treatment of primary and secondary organisations. As the primary

organisation that generated the core crisis event, Merck received sustained media

attention throughout the four-year study. Merck‘s actions to withdraw Vioxx on the

basis of one set of negative clinical trial data set a precedent for other organisations.

This precedent was enforced by the media. However, when the secondary

organisation of Pfizer faced negative trial data and did not withdraw its product, the

media drew this inconsistency to the publics‘ attention but with significantly less

attention to its original treatment of Merck.

At the same time as buffering Pfizer, the media also provided a public

platform for ongoing contests of legitimacy that were primarily aimed at Merck.

Because Vioxx, Merck and the FDA remained interesting to the media, opportunities


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emerged for medical editors to communicate in public settings, their ongoing

concerns about the practices of pharmaceutical organisations.

By organising the actions and roles of corporate and crisis actors within the

process of insight formation into buffering and contests, this thesis highlights the

terminology implications of crisis stakeholders. Traditionally, crisis stakeholders are

viewed as individuals, groups or organisations directly affected by a focal

organisation‘s decisions. Generally, crisis stakeholders are seen as those groups or

individuals who hold perceptions of the focal organisation in relation to the crisis

event (Coombs & Holladay, 2006). Instead, this thesis demonstrates how

stakeholders such as the media can operate as crisis actors that trigger additional,

peripheral crisis events. Further, this thesis demonstrates the networked linkages

between organisations and crisis actors in relation to buffering effects.

Overall, this thesis also extends crisis communication research and

punctuated equilibrium theory by providing knowledge into how the process of

insight formation operates across multiple organisations.

5.3 Conclusions about the Research Problem

The conclusions about the research questions demonstrate how the findings

of this thesis contribute to the public relations and crisis communication literatures

and connect to discuss overall conclusions about the research problem:


communication?


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This section brings together the action and context layers that were outlined

in section 5.2. It is important to explore action and context as inter-connected

concepts because, together, they create the processes to explain crisis communication

under transformative change. This section sets out how punctuated equilibrium

theory, as the theoretical framework behind this thesis, explains change in crisis

communication as crisis events trigger transformative change across multiple

organisations and extended time frames. To do so, this section integrates theories and

the extant literature established in Chapter Two and the findings presented in

Chapter Four and builds a conceptual model. The conceptual model for this thesis is

designed to draw together the three templates and build on punctuated equilibrium

theory by explaining the crisis communication of primary and secondary

organisations during the process of transformative change. The model is presented in

Figure 5.4.


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Figure 5.4 The process model of crisis communication under punctuations of equilibrium illustrates the organisation-centric context and the

emergent context for crisis under transformative change. The emergent context includes the buffers and contests that emerge based on the

processes of insight formation and media agendas.

Punctuated Equilibrium

Buffers

Secondary Organisation

Conformance strategy Restorative strategy

Primary Organisation

Contests

Crisis

Em

erg

ent C

onte

xt

Org

an

isatio

n-c

entric

co

nte

xt

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

– –

– –

– –


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The model depicted in Figure 5.4 connects crisis communication and actions to

the changing crisis context. The model illustrates two contextual levels for crisis: 1)

organisation-centric context for situational crisis events, and 2) emergent context for

crisis events that trigger transformative change. In a situational crisis event, an

organisation‘s strategy depends on the nature of the crisis and organisation-centric

contextual elements that are clearly established in the existing literature. When a

situational crisis triggers a punctuation of equilibrium, the primary organisation moves

from an organisation-centric context to an emerging context that draws in the

punctuation of equilibrium. This emergent context extends the organisation-centric

context to include features such as secondary organisations as well as the localised

contest of legitimacy and buffers from regulatory authorities. In this way, a crisis event

that triggers transformative change grows in complexity.

The crisis context influences the crisis communication and actions of

organisations. Existing literature provides clear guidance about crisis responses under

situational crisis events, depicted in this model as restorative strategy for the primary

organisation. Under transformative change, the emergent crisis context influences the

crisis communication decisions of both primary and secondary organisations. The

primary organisation, in this case responsible for the situational crisis event that

triggered the punctuation of equilibrium, must develop crisis responses to core and

peripheral crisis events. In this thesis, the primary organisation was shown to maintain a

consistent crisis response throughout the duration of the crisis as it prepared for the

return to equilibrium. At the same time, the primary organisation was shown to adapt to


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ongoing peripheral crisis events depicted as contests in the emergent context of the

model.

This model also depicts how a crisis event and punctuation can draw in

secondary organisations. A secondary organisation is one that is a direct competitor to

the primary organisation. The secondary organisation did not trigger the situational

crisis event but is directly affected by the punctuation of equilibrium. The secondary

organisation responds both to the situational crisis event and the punctuation of

equilibrium but in different ways. The secondary organisation responds to the situational

crisis event through a conformity strategy that seeks to reassure the environment of the

safety or validity of the organisation and its products. In doing so, the secondary

organisation becomes entangled with the process of insight formation that is occurring

within the emergent context where the existing equilibrium dissolves as the new

equilibrium emerges. This process of insight formation buffers the secondary

organisation from facing the sustained media attention attributed to the primary

organisation. At the same time, the process of insight formation and buffering effect

lock into place a conformity strategy where the secondary organisation‘s decisions

conform to the changing environment. In this way, while the primary organisation can

shape the new conditions of equilibrium, this thesis demonstrates that the secondary

organisation‘s strategy was primarily one of conformity.

In summary, this model extends existing models in crisis communication by

providing insight into the nature of the crisis context under transformative change


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conditions and identifying how this connects to the crisis communication and actions of

both primary and secondary organisations. Specifically, this conceptual model is

process-based, providing a path of the transformative change of crisis and actors. As

such, this thesis adds new knowledge to existing research that focuses on outcomes-

based models where effective crisis communication and actions are enacted based on the

premise of restoring organisational reputation and legitimacy, and returning

organisations to stability or the status quo. Further, existing contextual elements are

linear in nature, considering how context influences action in single causal links. Crisis

communication scholarship should move towards a more networked look at crisis and

crisis communication. As demonstrated in the conceptual model for this thesis, a

networked perspective on crisis shows how multiple crisis actors become involved as a

situational crisis event triggers transformative change. It is through this networked

perspective on crisis, demonstrated through the emergent context, that this thesis

contributes to theory development in crisis communication and public relations.

5.4 Implications for Theory

The conclusions about the research problem and questions present implications

for punctuated equilibrium theory and theories in public relations and management

disciplines. The advancement of theory in public relations requires the integration of

other discipline areas, which in turn can lead to the diffusion of public relations work

into other literatures (Broom, 2006). Punctuated equilibrium theory provides such an

opportunity for crisis communication and public relations research.


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The theoretical implications of this thesis are categorised based on their

contribution to public relations and organisational literatures. Based on the significance

of the organisational literature, the primary contribution of this thesis relates to the

interorganisational linkages or buffers that operate during transformative change.

Building to this contribution, this section will first present the following contributions to

public relations theory: 1) the integration of punctuated equilibrium theory as a

perspective on change in public relations and crisis communication research, 2) the

nature of crisis communication during punctuations of equilibrium leading to an

alternative rationale for crisis communication, and 3) the emergent context depicted by

the dynamics of primary and secondary organisations in punctuated equilibrium theory

and theories related to public relations.

Following Broom (2006), through the exploration of punctuated equilibrium

theory in the context of crisis communication, this thesis also contributes to the

management literature. As a result, the primary contribution of this thesis is the nature of

interorganisational linkages and buffers that operate during transformative change. A

second contribution to the management literature is the explication of the

communication actions of multiple organisations during transformative change.

5.4.1 Implications for Public Relations based on a New Theory for Change

This thesis extends public relations and crisis communication scholarship by

demonstrating the relevance of punctuated equilibrium theory as a framework for

change. Punctuated equilibrium theory contributes to the views of a number of public


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relations scholars who advocate for work that moves frameworks for change in public

relations beyond a preservation rationale where organisational adjustments occur to

maintain equilibrium and stability (Curtin & Gaither, 2005; Murphy, 2000; Sha, 2004;

Spicer, 1997). Limiting public relations to the role of conservation of organisational

inertia (Sha, 2004) constrains the theoretical development of the discipline.

By integrating punctuated equilibrium theory, this thesis has extended the

received view of change in the literature and offered a new rationale for public relations

theory. Under the received view, the systems and ecological theories and the excellence

studies see the central task for public relations as ―the effort to maximise the degree of

adaptation between the organisation and its social environment‖ (Everett, 2001, p. 313).

Symmetry is seen as a gradual, moving equilibrium that is negotiated between

organisations and publics (Grunig, 2000), leading to cross-sectional studies.

Instead, this thesis offers an alternative to incrementalist approaches,

demonstrating a process-driven view for public relations theory as insights and new

deep structures form over extended time frames affecting multiple organisations. In

doing so, the thesis achieves the task of connecting public relations scholarship to the

multiple types of change that populate the organisational literature.

This thesis specifically demonstrates the theoretical and empirical use of

punctuated equilibrium theory in the area of crisis communication, a key part of the

public relations discipline. The majority of existing crisis communication research is


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based on situational crisis events and restoring reputation and legitimacy outcomes

through the incremental use of crisis response strategies (Coombs, 1998, 2002, 2004a,

2006a, 2007b; Coombs & Holladay, 2002, 2004, 2006). However, a number of crisis

communication researchers have called for research that builds on the existing literature

(Gilpin & Murphy, 2006; Gilpin & Murphy, 2008; Murphy, 1996, 2000; Seeger, 2002;

Seeger et al., 2005). Murphy (2000) introduced punctuated equilibrium theory into the

public relations literature to demonstrate complex systems and is described as a ―period

of confusion in media coverage followed by the emergence of a new reputation for the

organisation that underwent the crisis‖ (Murphy, 2000, p. 453). This thesis provides an

empirical base for punctuated equilibrium and demonstrates that media attention is a

significant force behind the punctuation of equilibrium and it also articulates the process

of insight formation, the multiple actors involved, and closure of the crisis through dual

substantive and symbolic decisions.

This thesis integrates punctuated equilibrium theory and crisis communication

research, extending the existing rationale for incremental change. The thesis offers a

process-based rationale for crisis communication and public relations, linking both

context and action over extended time frames. This view differs from existing public

relations literature by viewing change as a transformative force, requiring multiple

organisations to communicate in new ways to achieve legitimacy within complex,

unstable, and unpredictable environments.


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5.4.2 Implications for Public Relations based on Crisis Communication

during Punctuations of Equilibrium

This thesis sheds light on the role of communication during punctuations of

equilibrium. In doing so, this thesis addresses a gap in the crisis communication

literature by providing new insights into the role of crisis communication across

extended time frames. Existing crisis communications research deals largely with short-

term or situational crisis events that use crisis responses to restore reputations or

legitimacy. This thesis has demonstrated how crisis communication operates outside of

the restoration and effectiveness logics when both the environment and deep structures

are changing. The theoretical contribution around crisis context is established in section

5.4.3 next.

Another theoretical contribution of this thesis is made based on the use of the

alternative template research strategy. By synthesising the interpretations across each

template, the thesis has contributed to ongoing theory development in a way that not

only confirms or extends knowledge about each template or typology but about the area

of crisis communication as a whole. This thesis is different to existing crisis

communication research in two ways. Firstly, although Coombs (1998) integrated Allen

and Caillouet‘s (1994) crisis typology into situational crisis communication theory, to

date, no one study has systematically analysed either a short-term crisis event or longer-

term crisis events using multiple typologies. Secondly, existing crisis communication

studies consider single outcomes such as reputation (Coombs, 2006b, 2007c, 2009;

Coombs & Holladay, 2002, 2006), image restoration (Benoit, 1995, 1997, 2004; Benoit


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& Pang, 2008), or legitimacy (Allen & Caillouet, 1994; Massey, 2001, 2004). Instead,

this thesis considers both reputation and legitimacy outcomes.

By synthesising the alternative templates, the thesis shows that crisis

communication under transformative change affects multiple organisations that can

passively conform to or actively shape their transforming environment. In doing so, the

thesis has responded to calls to advance the genre of crisis communication beyond

―objective phenomena‖ and standardised decision-based frameworks (Hearit &

Courtright, 2003, p. 80). Instead, the thesis has revealed insights into how multiple

actors engage in crisis communication within the context of transformative change that

is complex and unpredictable.

5.4.3 Implications for Public Relations based on the Emergent Context and

Competitor Dynamics

By exploring the actions of multiple organisations, the thesis contributes to a

greater understanding of the emergent crisis context under transformative change. In

doing so, the thesis has introduced new knowledge and perspectives to theories related

to public relations scholarship. Although the public relations literature has long

considered the importance of organisational environments (Broom, Casey, & Ritchey,

2000; Cutlip et al., 2006; Everett, 2001), it has largely studied these based on a single

organisation‘s relationship with a range of stakeholders (Bruning & Galloway, 2003;

Bruning & Ledingham, 2000; Ledingham & Bruning, 1998). Very few studies in the

public relations literature extend beyond this approach to consider competition for


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media coverage (Anderson, 2001), industry actors (F. Schultz & Raupp, 2010; Sen &

Egelhoff, 1991) or population level (Dougall, 2005). It is difficult to find studies in the

public relations literature that have treated specifically the competitive relationship

among organisations. The crisis communication literature is in a similar position with

research focused on the communication and actions of single organisations. While some

crisis communication studies argue that an organisation should consider multiple

stakeholders in crisis situations (Allen & Caillouet, 1994; Sen & Egelhoff, 1991), no

studies in crisis communication have considered the competitive dynamic.

This thesis has contributed new knowledge to scholarship in public relations and

crisis communication by demonstrating how crisis events trigger transformative change,

and how primary and secondary organisations, or competitors, respond differently. In

doing so, this thesis has extended the organisation-centric view of crisis context and

crisis communication and its perspectives beyond the relational framework to consider

networked connections among crisis actors. As a result of this thesis, an organisation‘s

crisis communication should consider the competitive forces and industry sector as key

components of change.


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5.4.4 Implications for Organisational Theory based on the Role of

Interorganisational Linkages and Buffers

Following Broom (2006), the contributions of this thesis extend beyond the

public relations literature, offering implications for organisational theory. As a result of

the significance of organisational theory, the primary contribution of this thesis relates

to the role of interorganisational linkages or buffers (see Section 5.2.2.1) adopted by

competitors during transformative change.

In the organisational studies, punctuated equilibrium theory has been used to

provide insight into the nature of competition during punctuations of equilibrium and

long periods of stability (Tushman, Newman et al., 1986; Tushman & Romanelli, 1985).

Punctuated equilibrium theory recognises that transformative change in macro-

environments and phases in product lifecycle (emergence to maturity) shift the basis of

competition in industry sectors (Tushman, Newman et al., 1986). Internal changes to

power, status and resources may also affect an organisation‘s basis for competition

(Tushman, Newman et al., 1986). Yet, the challenge for organisational leaders is to both

manage for stability and look out for and be prepared to take action in relation to

changes in competitive conditions related to transformative change (Tushman &

Romanelli, 1985). During punctuations of equilibrium, Tushman and Romanelli (1985)

argue that organisational inertia decreases and competitive vigilance increases. Despite

these predictions for competitive activity during punctuations, the empirical study by

Tushman and Romanelli (1994) does not report on the relationships among these

competitive organisations (Romanelli & Tushman, 1994).


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Through the buffering effect, this thesis extends studies in punctuated

equilibrium and organisational change by describing the relationship between primary

and secondary organisations and explaining this dynamic through punctuated

equilibrium theory‘s process of insight formation (Gersick, 1991). In the management

literature, Miner et al. (1990) proposed two types of buffers with resource buffers

insulating organisations‘ access to material resources, and legitimacy or institutional

buffers insulating organisations through legitimacy. However, because the study of

Miner et al. (1990) focused on resource buffering, this thesis has provided further

insight into how inter-organisational linkages can act as legitimacy or institutional

buffers to organisations during transformative change. This thesis provides ways to

respond to Lynn‘s (2005) calls for empirical studies to investigate the process and

outcomes of buffering strategies. Therefore, this thesis contributes to knowledge about

legitimacy-based buffers and their role across multiple organisations in the context of

crisis and transformative change.

5.4.5 Implications for Organisational Theory based on Communication

Actions during Transformative Change

A secondary contribution to the management literature relates to the extension of

knowledge of punctuated equilibrium theory. Existing studies in punctuated equilibrium

focus predominantly on the substantive decisions of organisational leaders during

punctuations of equilibrium and periods of long stability (Tushman, Newman et al.,

1986). In addition, the studies show that during punctuations, organisational leaders


360

make more substantive decisions than symbolic ones (Tushman, Newman et al., 1986)

but draw on symbolic strategies as their first response (Haveman et al., 2001).

In this thesis, the examination of crisis communication provides insight into the

role of communication as a symbolic strategy during punctuations of equilibrium. The

findings of this thesis both confirm and build on existing organisational studies. Firstly,

the thesis confirms that both symbolic and substantive actions are made during

punctuations. Secondly, the thesis shows that symbolic decisions are used not only to

manage the immediate uncertainty of the punctuation but also to prepare for future

substantive decisions such as litigation. In this way, an organisation‘s symbolic

decisions are used not only as a first response (Haveman et al., 2001) but as a way to set

criteria for the legitimacy of future organisational decisions that occur during the

process of insight formation.

In summary, the primary contribution of this thesis is the role of

interorganisational linkages or buffers during the process of transformative change. This

contribution is significant to the management literature, offering new insight into

legitimacy buffers, and thereby extending existing research that has focused

predominantly on resource buffers. This new knowledge is significant for both the

management and public relations literatures because it offers insight into the network of

linkages among multiple organisations and the change agent. In addition, this thesis

contributes to the public relations and crisis communication literature by introducing the

perspective of transformative change and process models for crisis communication. As a


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result, this thesis has also developed theory to guide future crisis communication

research.

5.5 Implications for Practice

The findings of this thesis have a number of implications for the practice of crisis

communication and public relations. The crisis communication literature has strong

practical utility (Seeger et al., 1998), offering guidelines for crisis communication and

actions based on a range of crisis situations. The core crisis event in this thesis is

categorised as a product recall and is one of Newsweek‘s top product recall crisis events

("Prominent product recalls in recent history," 2010, February 13). Yet with this

notoriety comes key implications for crisis communication and public relations practice.

These implications are elaborated in the following two sections: 1) crisis communication

decision-making for primary and secondary organisations, and 2) the integration of

change into crisis management. Although these recommendations are pertinent

particularly to the pharmaceutical industry as the setting for this thesis, at an abstract

level, these implications are significant contributions to current practice in crisis

communication and management.

5.5.1 Crisis Communication Decision-Making for Primary and Secondary

Organisations

This thesis provides several key points to consider when public relations

managers and crisis teams make decisions about crisis communication or responses as


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crises shift from situational crisis events to transform multiple organisations and

environments.

5.5.1.1 Guidelines for Strategy Selection

This thesis presents several guidelines to consider for crisis communication

under transformative change based on an analysis that used three strategy typologies

across multiple organisations. In doing so, the thesis reflects on how the strategies of

Coombs (2006b) and Allen and Caillouet (1994) and strategic responses of Oliver

(1991) worked within the context of transformative change. The thesis suggests that in

practice, the best public relations managers will synthesise existing templates, drawing

on contextual changes and depending on the organisation‘s position in the initial crisis

event.

For primary organisations, Coombs‘ (2006b) typology offers a strong starting

point for managing and communicating about crisis. However, as the crisis shifts

beyond a situational event, crisis managers should ―free themselves from single crisis

centred attitudes‖ (Ren, 2000). In doing so, primary organisations should reflect on

Allen and Caillouet‘s (1994) concept around the web of corporate actors, and draw on

Oliver‘s (1991) typology of strategic responses.

As the crisis shifts, the primary organisation should pay attention to the

responses from its web of corporate actors such as competitors, investors, and regulators

(Allen & Caillouet, 1994). The primary organisation is able to be more mindful of the


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actors involved in potential peripheral crisis events. Next, the primary organisation

should consider Oliver‘s (1991) typology to examine how they can use communication

to demonstrate conformity to starting equilibrium or shape criteria for future

equilibrium.

This thesis also elaborates on the actions of secondary organisations that are

direct competitors to the primary organisation. The practical implications for secondary

organisations suggest that it is important to reflect on communication choices. In this

thesis, Pfizer acted quickly to defend the safety of its drug, reinforcing its excellent

safety record. While it is important to communicate this information, it is equally

important for secondary organisations to consider how their communication may

contribute to ongoing concern for the crisis and for their organisation.

As secondary organisations become caught up in the transformative change

process, it is important that they use Allen and Caillouet‘s (1994) framework for

corporate actors to examine whether and how they are adding accountability pressures

on the primary organisations. The thesis also shows that if secondary organisations

experience crisis events similar to the primary organisation, these decisions may be

buffered by other actors. In this way, secondary organisations should use Allen and

Caillouet‘s (1994) framework to monitor corporate actors and look out for the focus of

the transformative change; this entity may offer buffering support. However, secondary

organisations should also be mindful of the consequence of this choice of action. That is,

although the buffering effect protects the secondary organisation from ongoing scrutiny,


364

it also potentially locks in a strategy choice of conformity, and limits the organisation‘s

agency and influence on the forming environment.

The guidelines for strategy choices for primary and secondary organisations are

illustrated in Table 5.3. Building on the process model of crisis communication that

integrates organisation-centric and emergent contexts (see Figure 5.4), this range of

macro strategies sits on a continuum of change and integrates the range of crisis

response options for organisations under punctuated equilibrium.

Table 5.3

Macro Strategies and Recommendations

Outcome Recommended use Link to existing crisis

response typology

Restoration (support

change)

This macro strategy is used by

organisations to support immediate

past substantive decisions that have

triggered a situational crisis event.

Draws on Coombs (2006b)

and Allen and Caillouet

(1994)

Determination (prepare

for change)


organisations to prepare for future

substantive decisions (that may yet be

undetermined) by reinforcing the

legitimacy of an organisation‘s actions,

and engaging in dialogue related to the

need for change.

Relates Coombs (2006b)

and Allen and Caillouet

(1994) to Oliver (1991)

Endorsement

(seek/offer protection

during change)


organisations (and generally secondary

organisations) that either seek or

provide a buffer to organisations

involved in the process of


Not treated in existing

crisis response literature.

As identified in Table 5.3, the response level of the process model of crisis

communication choices under punctuated equilibrium identifies three macro strategies

for primary and secondary organisations: restoration, determination and endorsement.


365

These macro strategies comprise the existing crisis communication literature as well and

are also developed from the findings of this thesis. The macro restoration category

includes existing adaptive approaches that are designed to restore stability, reputations

or legitimacy. From a change perspective, these strategies operate to support substantive

strategies. The macro determination category of strategies is used to prepare corporate

and regulatory actors for change, reflecting a shift from the situational crisis event to an

ongoing core crisis. The macro endorsement category of strategies is designed to protect

organisations during the change process. Although this thesis suggests endorsement

strategies are most relevant to secondary organisations, they could be used by primary

organisations.

The 2010, the BP oil spill crisis provides a recent application for the findings of

this thesis. Oil industry executives were questioned by Congress about their oil response

plans with companies like ExxonMobil, Chevron, Shell and ConocoPhillips saying that

they would have taken different actions to BP (Oil execs: BP did not meet standards,

USA Today, 16 June 2010). This setting demonstrates competitor dynamics related to a

crisis setting but also demonstrates a sense of what changes are required at an

organisational and an industry level for decision-making and risk.

Further, this thesis also demonstrated the important link between communication

and legal strategy of the primary organisation. As a result, this thesis reinforced the

value of good communication between public relations and legal counsel (Lerbinger,

2006). Legal challenges are won both in the court of law and court of public opinion


366

(Lerbinger, 2006). As a result, common ground between the two professions is that both

are important in crisis situations and both should be involved early (Martinelli & Briggs,

1998; Reber et al., 2001). Often during legal proceedings, companies are reluctant to

reveal too much information. During a crisis, most decisions about the release of

information are made collaboratively with the legal counsel in a leadership role

(Fitzpatrick, 1996; Fitzpatrick & Rubin, 1995; Martinelli & Briggs, 1998). This thesis

supports the importance of a collaborative relationship between public relations and

legal advisers.

5.5.1.2 Indicators of a Shift from Crisis Event to Focusing Event

The emergent crisis context provides important theoretical and practical

contributions to crisis communication. This thesis describes and explains how a

situational crisis event triggered transformational change in the pharmaceutical industry.

By considering the findings of this thesis and existing research on punctuated

equilibrium theory in policy studies, there are three elements that help differentiate

situational crisis events and focusing events: 1) conflict, 2) an unresolved crisis event,

and 3) sustained media and public attention (Alink et al., 2001; Birkland, 1998; Clair &

Dufresne, 2007; Givel, 2006; Heck, 2004; Wood, 2006). The interrelationships among

the dimensions shape the significance of the change.

Public relations managers for primary and secondary organisations involved in

crisis events should look out for these elements. In particular, organisations should

consider the visibility of the crisis event by keeping track of the amount of attention


367

received by stakeholders and the mass media. Some of the key stakeholders involved in

focusing events include interest groups and activists, government and regulatory leaders,

policy entrepreneurs, mass media, or the general public (Birkland, 1998; Givel, 2006).

In the policy literature, a focusing event is described as one that gives stakeholders a

channel through which they can voice concern or anger about policy performance (Alink

et al., 2001). Further, the mass media creates high visibility, integrating other

stakeholders to create a platform for change (Clair & Dufresne, 2007; Comfort et al.,

2001). For public relations managers, identifying the elements that signal a shift from a

situational crisis event to a focusing event provides a greater ability to select appropriate

crisis responses.

In summary, this thesis shows that the current decision-making logic for practice

in crisis communication needs to change. Existing practice is oriented around a position

where crisis managers deal with crisis events in order to restore reputations and stability.

This thesis demonstrates the importance of seeing crisis and crisis communication not

only as situational events but also as part of the process of transformative change. The

Vioxx withdrawal and other more recent crisis events including the BP oil rig crisis

demonstrate the sustained power of media attention, rendering the restoration logic as

untenable. Under transformative change, crises have networked qualities and draw in

multiple actors; these influence decision-making for primary and secondary

organisations. Under these conditions, organisations should refer to Table 5.3 and

consider crisis communication not only as a means to resolve the crisis event but also as

a process that goes to the heart of change.


368

5.5.2 Integration of Change in Crisis Management

Crisis management and planning are processes undertaken by organisations to

ensure crisis preparedness. One of the core aims of crisis planning is for the organisation

to control activities and perceptions that the organisation is acting in the stakeholder

interest (Heath & Palenchar, 2009).

A key feature of crisis plans are crisis scenarios that are developed based on an

organisation‘s vulnerabilities (Fearn-Banks, 2002; Mitroff, 2004; Sung, 2007). For

example, a pharmaceutical company would be likely to develop crisis scenarios related

to the production of pharmaceuticals, product tampering, product recalls, or product

withdrawals. In developing these plans, the pharmaceutical companies would examine

ways to exert control in order to influence favourable outcomes. The findings of this

thesis suggest that control may not always be achieved during transformative change. As

a result, when developing these crisis scenarios, public relations managers or consultants

should not only consider the starting conditions for a crisis event but they should

integrate the concept of transformative change into crisis plans. This can be achieved by

educating crisis teams about the importance of integrating sustained media attention and

linked crises into plans. That is, crisis scenarios should involve initial crisis events and

should consider crisis communication if crises become ongoing concerns for

organisations or industries. Because transformative change brings with it an emergent

and unpredictable context, it is also important to ensure crisis teams are skilful and able

to improvise and shift approaches as the organisation‘s environment changes.


369

In summary, retrospective studies like this one can make valuable contributions

to current practice in crisis communication. This year, 2010, has offered a number of

cases that signal the importance of crisis management from Toyota‘s crisis events at the

beginning of the year to BP‘s oil rig crisis in April. The BP crisis saw a congressional

inquiry into the practices of all big oil companies. During one session, senators

questioned the chief executive officers of multiple oil companies about their crisis

management plans and found that the companies had similar oil response plans to

Exxon‘s plan containing nine pages on oil removal and 40 pages on responding to media

enquiries (Schmidt, 2010, 16 June). In today‘s complex environments, crisis

management and communication cannot be considered as templates but as living

documents that are unique to each organisation and crisis situation. This thesis shows

how a situational crisis event can develop in unanticipated ways to affect multiple

organisations. As such, formulaic responses are not sufficient for crisis communication

practice.

Crises can take lives, cause injuries, and cost organisations millions in fines and

reputational impacts. This thesis offers some guidelines for crisis communication under

transformative change, yet, at the same time, recognises these practical implications

must be placed in the context of responsible business practice.


370

5.6 Limitations

As set out in Chapter Three, several limitations to this research are

acknowledged. Firstly, resources constrained the nature of the investigation, data

collection, and analysis. Ideally, and like the work of Meyer and colleagues (see A.D.

Meyer, Brooks, & Goes, 1990), being serendipitously placed within an organisation as it

was undergoing crisis would have been a preferred way to study change in crisis

communication. However, one of the pragmatic considerations in this area of research is

that punctuations of equilibrium are most easily identified in hindsight. Therefore, while

it may have been possible to participate in an organisation undergoing crisis, a task that

could occur within a short time frame, knowing whether the crisis would transform it

would be difficult to predict and have significant pragmatic limitations for the

researcher. Further, access to key organisational decision-makers including the Chief

Executive Officer, General Counsel, and Chief Research Officer may also be limited

during times of crisis.



articles and organisational documents is validity or the major difficulties of achieving

member-checking. For example, the use of these secondary sources precludes access to

organisational leaders to confirm approaches to crisis handling methodology or the

organisational knowledge of an impending punctuation of equilibrium. Primary research

could have been conducted following the completion of the alternative narratives in

2010. However, this would have occurred more than five years after the initial crisis


371

event. The limitations of both archival and informant measures are not new to the

literature. Several authors identify concern over divergence between informant and

archival measures of the environment (Boyd, Dess, & Rasheed, 1993; Doty,

Bhattacharya, Wheatley, & Sutcliffe, 2006; Neuman, 2006; Ventresca & Mohr, 2002),

suggesting studies avoid this situation by choosing only one type of measure (Doty, et

al., 2006). One of the causes for divergence is perceptual bias of informant measures

(Boyd, Dess, & Rasheed, 1993; Doty et al., 2006; Ventresca & Mohr, 2002).


framing of stories and strong writing or individual bias can hide causal theories or leave

some elements implicit (Neuman, 2006). In part, these limitations were treated by using

and comparing both media articles and organisational documents and alternative

templates and actively scrutinising the data against multiple sources and interpretations,

and seeking out the differences in interpretation across these templates. By producing

three narratives to explain crisis communication during change events and subjecting

findings to competing yet inherently consistent claims and interpretations, the thesis has

sought to build strong arguments to support the emerging theory as did Kvale (as cited

in Hesse-Biber and Leavy, 2006).


decisions limit the thesis to transformative change triggered by crisis events for which

the primary organisation was responsible, and a focus on three large organisations

within one industry and during one punctuation of equilibrium. In part, this limitation is


372

explained by the significance of the data required to investigate punctuated equilibrium.

That is, these conditions were selected precisely because of the multiple linked crisis

events affecting multiple organisations because this thesis was concerned principally

with crisis communication during transformative change. In doing so, the

generalisability of the thesis may be limited to crises, crisis communication, and

transformative change under similar conditions. Process research often navigates the

challenge of context and generalisation (Sminia, 2009), yet by linking the findings to the

crisis communication literature, this thesis and its conceptual model can also be applied

to other industry contexts and crisis events. The thesis has been motivated by Van de

Ven and Poole‘s (2005) recommendation for versatile process explanations that can be

adapted to fit different cases at different times.

5.7 Implications for Further Research

This thesis opens up opportunities for the continued investigation of crisis

communication and transformative change in public relations. Further research is

advocated: 1) into change in public relations and crisis communication, 2) about

indicators of the emergent crisis context, 3) through the introduction of power and

control and their role in the emergent crisis context, 4) using alternative methodology

and an issues management approach, 5) to confirm generalisability of study‘s findings,

and 6) in the area of organisational learning following both a crisis or transformative

change.


373

Firstly, through punctuated equilibrium theory, this thesis provides

transformative change and process models as a new rationale for change in crisis

communication and public relations. Punctuated equilibrium theory allows the view of

crisis communication not only as an element that adjusts an organisation to incremental

change in an environment but also as a process that goes to the heart of change. Further

research should examine punctuated equilibrium theory in both crisis and non-crisis

situations in order to build more knowledge around change and its role in public

relations scholarship. Further studies could examine different time frames for change

and how that influences crisis communication and public relations, accounting for some

of the limitations of the theory. These studies could take a longer time frame than that

adopted in this thesis in order to examine the process of transformative change and

communication from an old equilibrium to a punctuation of equilibrium, and to a new

equilibrium. In this way, by studying multiple crises and multiple time frames, research

will continue to build knowledge and theory relating to the influence of process and time

on crisis communication.

Secondly, further studies about the emergent crisis context should consider the

role of secondary organisations and connections with industry actors. This thesis

considers secondary organisations as direct competitors to the primary organisations but

there may be other types of dynamics or connections. However, it would be interesting

to examine the dynamic between corporate and industry actors in different emergent

situations. Further studies in this area would provide more information around the roles

of corporate actors involved in a complex crisis. Knowledge in this area would not only


374

extend existing research but have implications for the practice of crisis communication.

Public relations managers could draw on process theories to differentiate between

contexts that require adaptive and non-adaptive decisions. A recent study also shows

that the commitment of organisational leaders, such as chief executive officers, to the

status quo has an impact on organisational decisions and performance (McLelland,

Liang, & Barker III, 2009). Further studies in this area could also examine the decision-

making partnership between public relations managers and organisational leaders during


Thirdly, and linked to the emergent context, an area for further research relates to

the exploration of the role of power and control through a discourse perspective.

Organisational discourse refers to ―the structured collections of texts embodied in the

practices of talking and writing…that bring organisationally related objects into being as

these texts are produced, disseminated and consumed‖ (Grant, Hardy, Oswick, &

Putnam, 2008, p. 3). Organisations are created and sustained through discourse, which

occurs in multiple spheres at multiple levels (Monge & Poole, 2008). In crisis

communication, discourse theory is traditionally seen through the domain of rhetoric,

that is the use of discourse for strategic purposes (Grant et al., 2008). There is

opportunity to extend beyond the rhetorical application of image restoration by

exploring the notion of power and control in contrast to conflict reduction and resolution

(Motion, 2005; Motion & Leitch, 1996). Discourse production and transformation draw

insights into the construction of power relationships between organisational actors with

transformations involving the creation of new rules (Motion & Leitch, 2007, 2009).


375

Drawing on Foucault, Motion and Leitch (2007) talk about how ―change in

discourse…can be determined by mapping the displacement of boundaries, the new

positions and roles made available for speaking subjects in the discourse, new modes of

language, and new forms for circulating the discourse‖ (p. 264). Further studies that link

discourse theory, crisis communication and transformative change could provide insight

into the power relations that evolve and dissolve as new conditions and rules for

organisational legitimacy emerge.

A fourth area of further research comes from an alternative methodology, a

perspective that can be considered in multiple ways. First, researchers could be

embedded in crisis-prone organisations or industry sectors, examining the antecedents to

crisis such as issues management. The link between issues and crisis management is an

established part of the public relations literature with strong practical implications

(Heath & Palenchar, 2009; Jaques, 2007, 2009). Issues management helps organisations

identify issues in order to resolve them before they become crises (Regester & Larkin,

2008). Issues management is defined as an ―action oriented management function which

seeks to identify potential or emerging issues (legislative, regulatory, political, or social)

that may impact the organisation, and then mobilises and coordinates organisational

resources to strategically influence the development of those issues‖ (Wilson, 1990, p.

41). Issues management provides substantive managerial implications with recent

studies integrating framing theories (Darmon, Fitzpatrick, & Bronstein, 2008), and

discourse theory (de Brooks & Waymer, 2009). Issues management text books provide a

strong account of issue lifecycles, describing the changes to an issue as it progresses


376

from an emerging issue to a mature state (Regester & Larkin, 2008). In doing so, these

models describe the changes to the issues context as more stakeholders become involved

and regulators take interest (Regester & Larkin, 2008). Based on the findings of this

thesis and through the integration of network theory, there is opportunity to theoretically

advance the issues management literature and provide more predictive models. In doing

so, this approach could legitimately draw on data sources that considered both

traditional and social media and captured expert commentary relayed through other

channels (Heath & Gay, 1997) thus overcoming some of the sampling limitations of the

thesis. In this way, it would be useful to observe both issues management and crisis

communication in action and provide insight into the communication decision-making

in real-time supported by retrospective case studies (Leonard-Barton, 1990).

Another alternative methodology could relate to the adoption of a grounded

theory perspective. Grounded theory is a qualitative approach that was developed to

counter positivist research approaches that aimed to test theory. Grounded theory

offered a way to develop theory when little is known or a new perspective was required.

The approach develops theory by drawing and constantly analysing data from social

research (Glaser, 1994; Glaser & Strauss, 1967). In this way, grounded theory is an

emergent perspective (Charmaz, 2008), that may enable the development of alternative

and more appropriate typologies for crisis communication choices during transformative

change.


377

A fifth area of research could occur across multiple industries, organisational

types, and crisis events and would confirm the generalisability of the findings of this

thesis and its conceptual and practical models. This thesis examined a starting crisis

event that was preventable (Coombs, 1998, 2007b). This type of initial crisis event is

consistent with the majority of existing crisis communication research (S. Kim et al.,

2009), yet it would be interesting to examine transformative change under starting

conditions that were outside of the organisation‘s control. In this way, it would be useful

to examine how the work of Seeger and colleagues around the discourse of renewal may

contribute to crisis communication that goes to the heart of change. Further, this thesis

also examines crises faced by large and established organisations that are publicly listed.

It would be useful to examine crisis communication and transformative change affecting

smaller organisations or organisations in their early stages of development.

Finally, punctuated equilibrium theory is a process-based model of change.

However, in the organisational sciences literature, studies in punctuated equilibrium

have also considered the performance outcomes for organisations that undergo

transformative change (Sastry, 1997). In both punctuated equilibrium and crisis

communication, organisations can learn from crisis events through either first order

learning that involves incremental updates or second order learning that requires shifts

in core assumptions and decision-making logics (Virany et al., 1992). Given

organisational learning is central to both punctuated equilibrium theory and crisis

communication research, further studies could explore organisations and industries after

crisis events to examine the outcomes to the process of transformative change.


378

5.8 Conclusion

This thesis demonstrates the essential link between process-based research and

theory building in crisis communication. By adopting punctuated equilibrium theory to

study crisis communication under transformative change, this thesis highlights the

critical roles of time and the process of change. Through these factors, the thesis

generates new knowledge about the emergent crisis context and the roles of primary and

secondary organisations. These factors also contribute to a better understanding of

organisations‘ crisis communication and actions, demonstrating the value of

synthesising multiple crisis and strategic response typologies.

This study of crisis communication under transformative change represents an

important extension to existing scholarship in crisis communication and public relations.

In an era of complex challenges, the thesis provides new insights to guide ongoing

scholarship in and the practice of crisis communication.


379

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