Research on Crisis Contagion - Global Impact
Associate Professor Dan Laufer's research uncovers strategies for pre-emptive communication and pro-active monitoring to mitigate the risk of crisis contagion.
Back in 2018, I published an article with Yijing Wang from Erasmus University in Business Horizons on the topic of Crisis Contagion (Laufer & Wang, 2018). At the time there was a considerable amount of research and understanding among scholars and practitioners on how crises impact an organization directly. However, we felt that much less attention was focused on how and why a crisis can spillover to other organizations not involved in the crisis directly. For example, in the aftermath of the Volkswagen emissions crisis there was much discussion about the impact of the crisis on Volkswagen and its reputation. Much less attention was focused on Volkswagen’s competitors in the industry. For example, how has the crisis impacted them? Will stakeholders believe that the emissions crisis is happening to BMW and General Motors, even though there is no evidence of wrongdoing at these companies? If crisis contagion is occurring, how should BMW and General Motors respond? Our article in 2018 examined crisis contagion involving competitors in an industry, as well as other situations where crisis contagion is likely to occur. A major risk factor for crisis contagion that we highlighted in our article was sharing a common category with the organization directly involved in the crisis. In addition to competitors in an industry, belonging to the same country of origin, sharing a similar organizational type and pursuing a similar positioning strategy can also increase the risk of Crisis Contagion.
After publishing our article on Crisis Contagion, we were pleasantly surprised to see that spillover crises were increasingly becoming an emerging topic of interest to the academic community, practitioners, and the news media around the world. Leading global universities invited us to discuss our research on Crisis Contagion including the University of Texas at Austin in the USA, Vienna University in Europe, QUT in Australia, Tianjin University in China, University of Economics Ho Chi Minh City in Vietnam and ITAM in Mexico to name a few. Practitioners also expressed interest in the topic, and we were invited to talk about our research on Crisis Contagion at events organized by the Public Relations Institute of Australia and PwC in New Zealand. Finally, the news media around the world expressed interest in the topic including the Wall Street Journal in the USA and the New Zealand Herald, the most widely read newspaper in New Zealand.
As a result of the interest in our work, we decided to organize a research seminar at Erasmus University on the topic of Spillover Crises in November 2022. The research seminar “The Spillover Effect of Crises: Understanding when and why crises spread from one organization to another” included keynote presentations by leading researchers from the fields of Marketing and Public Relations. During the research seminar Prof. Roland Rust, Prof. Shari Veil and Prof. Arvid Hoffmann talked about their research related to spillover crises from different perspectives. Prof. Roland Rust gave a presentation on the topic of “Real-Time Brand Reputation Tracking Using Social Media”. This topic is of great importance in assessing whether a spillover is occurring through the monitoring of social media. Prof. Shari Veil in her keynote presentation focused on the “Contextual Challenges of Spillover Crisis” which examined how factors such as competition in an industry can influence a spillover effect and a response by companies that are adversely impacted. Finally, Professor Arvid Hoffmann talked about the impact of spillover crises on investors, and how to mitigate the spillover effect in his keynote presentation “The Role of Advertising in Reducing Crisis Spillover Effects in Financial Markets”.
In addition to the keynote presentations, researchers from around the world discussed their research projects related to spillover crises during the research seminar at Erasmus University. There was a wide range of research projects discussed at the research seminar, including conceptual papers, spillover crises occurring within an industry, and the role of country of origin and spillover crises.
A special issue that I am currently co-editing with Yijing Wang in Public Relations Review, the leading journal in the field of Public Relations,is a natural extension from our research seminar at Erasmus University, and several of the articles in our special Issue were presented at the research seminar. The articles in this special issue represents a wealth of knowledge in an under-researched area of Crisis Communication that we hope will stimulate more research in the future.
It is great to see how an article that we published back in 2018 has made such a significant global impact. The article has also generated new research projects that have resulted in new publications in leading journals.
