Comparing and Contrasting For profit and Nonprofit Crisis Communication Response using 
W. T. Coombs’s Situational Crisis Communication Theory

by
Miranda Dotson

A thesis presented to the Honors College of Middle Tennessee State University in partial fulfilment of the requirements for graduation from the University Honors College

Comparing and Contrasting For profit and Nonprofit Crisis Communication Response using 
W. T. Coombs’s Situational Crisis Communication Theory

Miranda Dotson

	APPROVED:
	
	______________________________
	Dr. Sharon Seaton Smith, Advisor
	Communication Studies and Organizational
 	Communication

	______________________________
	Dr. Janis Brickey
	Department of Human Sciences

	______________________________
	Dr. Philip Phillips
	University Honors College Associate Dean

Dedication Page
I dedicate this thesis to:

My mother who has unfailingly championed me for all my life during my pursuits with love and support. I did it Mama!
	My father is supported my early education and life.
My stepfather who has supported me in my pursuit of higher education both financially and emotionally.
My family and friends who have supported me on my journey, particularly Jarra, Kiara, Yorkie, Bekka, Jensen, Aaliyah, and Rachel who have helped me overcome my insecurities.
The staff of Columbia State Community College and Trio Student Support, particularly Joan Cook, Greg Mewbourn, and James Smith who recommended me to and helped me get in the Honors College.
The faculty of the Jones College of Business, particularly Dr. Gregory Nagel and Dr. Jean Wilson who taught me as much emotional and personality growth as they did knowledge in the classroom.
The staff of the Honors College who have not only been immensely supportive in my studies as a student, but have also been amazing co-workers who made working a joy. Thank you!
Last but certainly not least, my thesis advisor who supported me academically and went above and beyond to support show me that I can actually write a thesis!

Table of Contents
List of Tables …………………………………………………………………………… 1
Definition of Terms …………………………………………………………………….. 2
Abstract …………………………………………………………………………………. 3
Chapter 1 Situational Crisis Communication Theory ...………………………………… 4
1.1	Introduction …………………………………………………………………. 4
1.2	Thesis Statement and Question ……………………………………………… 6
Chapter 2 ………………..……………………………………………………………….. 7
	2.1 Review of Literature..….…………………………………………………….. 7
	2.2 Crisis Management   ………………………………………………………… 7
	2.3 Reputation …………………………………………………………….……... 7
	2.4 Ethics ...……………………………………………………………………… 8
	2.5 Attribution Theory …………………………………………………………... 8
	2.6 Neoinstitutionalism ………………………………………………………….. 9
	2.7 Situation Crisis Communication Theory ……………………………………. 9
	2.8 Crisis Response Strategies ………………………………………………..... 14
Chapter 3 ……………………………………………………………………………...... 18
	3.1 Wounded Warrior Project Case Study ………………………...…………… 18
	3.2 Wounded Warrior Project Stakeholders …………………………………… 19
	3.3 Relationship History ……..………………………………………………… 19
	3.4 Crisis Overview ……………………………………………………………. 21
	3.5 WWP Crisis Response …………………………………………………….. 23
	3.6 Application of SCCT ……………………………………………………… 24
Chapter 4 ………………………………………………………………………………. 26
	4.1 Epipen Case Study ………………………………………………..……….. 26
	4.2 Mylan Stakeholders ………………………………………………….…….. 27
	4.3 Relationship History ……………………………………………………….. 27
	4.4 Crisis History …………………….………………………………………… 28
	4.5 Crisis Overview ……………………………………………………………. 28
	4.6 Crisis Response ……………………………………………………………. 30
	4.7 Application of SCCT ………………………………………………………. 31
Chapter 5 ……………………………….………………………………………………. 33
5.1 Conclusion …………………………………………………………………. 33
References ……………………………………………………………………………… 36

List of Tables
Table 1. 13 Crisis Types Used in the Study in 2002…………………………….. 10
Table 2. Crisis Clusters in 2006…………………………………………………. 12
Table 3. Crisis Response Strategies by Response Option……………………….. 16
Table 4. Stakeholders of Wounded Warrior Project affected by the crisis……… 18
Table 5. Stakeholders of Mylan affected by the crisis…………………………... 25

Definition of Terms
Crisis - in relation to crisis management, is defined as a significant threat to operations or reputations that can have negative consequences if not handled properly (Coombs, 2014).
Crisis Communication – is defined as “what organizational representatives say to publics after a crisis” (Coombs, Chandler, & Holladay, 1995).
Crisis Management - is defined as a process designed to prevent or lessen the damage a crisis can inflict on an organization and its stakeholders (Coombs, 2014).
Crisis Response Strategy (CRS) – communicative resources used to protect an organization’s reputation during a crisis (Coombs, 2006).
Nonprofit Organization (NONPROFIT) - is defined by Cornell University Law School as a group organized for purposes other than generating profit and in which no part of the organization's income is distributed to its members, directors, or officers (2007).
Situational Crisis Communication Theory (SCCT) - is defined as a theory-based, empirically tested method for selecting crisis response strategies (Coombs, 2007). 
Stakeholder - is defined as any group that can affect or be affected by the behavior of an 
organization (Coombs, 2007).

Abstract
	Crises have the potential to ruin an organization.  Every organization will eventually have to deal with a situation that is considered a “crisis” at least one time.  Once in the throes of a crisis, an organization must act quickly to limit the amount of reputational damage inflicted by the crisis.  Organizations must choose a crisis response strategy, such as the ones in Coomb’s Situational Crisis Communications Theory (SCCT) to attempt to salvage its reputational assets.  This thesis explores the applicability of SCCT to a nonprofit and a for profit organization for comparison.
	This thesis explores the Wounded Warrior Project’s financial communication crisis in 2016 and Mylan’s Epipen communication crisis in 2016.  Media reports and organizational responses were analyzed for compliance to SCCT guidelines then compared.  Neither organization followed SCCT completely, but SCCT was found to be applicable.  This thesis found several obstacles organizations might have in using SCCT.  More research into the use of SCCT is recommended.

Chapter 1 Situational Crisis Communication Theory
1.1 Introduction
At some point, almost all organizations have to deal with at least one crisis that will threaten the organization in several different ways.  Crises can have financial, legal, and environmental consequences that have the possibility to devastate an organization.  Until about 20 years ago, most crisis research was centered in the pre-planning stage of crisis management, which was restricting research to the structural components of crisis response while failing to properly address the potential usefulness of analyzing crisis communication (Coombs, 1995: Coombs & Holladay, 1996).  William T. Coombs held that crisis response strategies should match the crisis type and so created the Situational Crisis Communication Theory (SCCT).  While crisis planning is undoubtedly important, crisis managers should have an empirically based method of choosing a crisis response that matches the crisis type.  
There has been much research into how and when SCCT could be applied to a for profit organization’s crisis response strategy.  While the tests of SCCT have shown the theory to have promise for profit organizations, there is a gap in the research.  Very little research has been considered whether SCCT is applicable to Nonprofit Organizations.  Fussell Sisco, stated that there has been very little research into crisis communications for nonprofit organizations when researching SCCT’s possibilities for use in a Red Cross crisis (2012).  According to the Bureau of Labor Statistics of the U.S. Department of Labor, as of 2012, nonprofits accounted for 11,426,870 jobs, which is 10.3% of private sector of employment (2014).  With such a large sector of employment derived from nonprofits, more research is needed into public relations crisis response.  Fussell Sisco has also specified that for nonprofits, “communication after a crisis is essential to restoring a positive reputation and, perhaps, ultimately the continued success of such an organization” (2012). 

1.2 Thesis Statement and Question
This thesis seeks to bring about a greater understanding of the Situational Crisis Communication Theory, from development to application, and to create a greater understanding of similarities and difference in crisis communication response between for profit and nonprofit organizations.
Could the Situational Crisis Communication Theory be useful in determining the type of crisis response to use during a crisis involving a large nonprofit organization such as the Wounded Warrior Project, in the same way it can be useful to large for profit organizations, such as Mylan?
In this study, the SCCT will be applied to two crisis situations, one in a for profit organization and one in a nonprofit organization. By thoroughly analyzing news reports covering both crises and responses, this study will address the following research questions: 
1. How useful, overall, is the SCCT in dealing with the two crisis? 
2. What specific SCCT strategies seem to work best for each organization? 
3. Could application of the SCCT to crisis situations, especially in nonprofit organizations, help the organization deal more effectively with crises?

Chapter 2
2.1 Review of Literature
2.2 Crisis Management
	It is helpful to know a breakdown of the anatomy of a crisis and how it relates to crisis communication and crisis management. “Crisis management can be divided into three phases: (1) pre-crisis, (2) crisis response, and (3) post-crisis” (Coombs, 2014). The pre-crisis phase is when crisis managers are planning what to do should a crisis occur (Coombs, 2014).  This is the phase in which crisis managers can prevent a crisis from happening (Coombs, 2014).  The best crisis is no crisis; therefore, an important part of crisis management is preventing the crisis from happening (Coombs, 1999). However, it is not always possible to prevent a crisis from occurring, which is why SCCT was created to help crisis managers with the next phase of a crisis management, crisis response.  “The crisis response phase is when management must actually respond to a crisis” (Coombs, 2014).  The majority of the SCCT theory happens during the phase.  “The post-crisis phase looks for ways to better prepare for the next crisis and fulfills commitments made during the crisis phase including follow-up information” (Coombs, 2014).  
2.3 Reputation
	SCCT places a premium on reputational assets.  “SCCT assumes that an organization’s reputation, that is, how the organization is perceived by its publics, is a valued resource that is threatened by crisis” (Coombs & Holladay, 2002).  When reputational assets are threatened, the organization must respond.  “An organization’s communicative response to a crisis can serve to limit and even repair the reputational damage” (Coombs & Holladay, 2002).  Limiting the amount of reputational damage is paramount in crisis communication.  “Reputations are widely recognized as a valuable, intangible asset” (Coombs & Holladay, 2006).  
2.4 Ethics
	Reputation in an organization is important ,but it should never take precedence over the safety of people and animals.  Coombs has stated several times that before reputation is considered information about safety should be given without hesitation before reputational concerns are addressed (Coombs, 1999; Coombs & Holladay, 2002).  SCCT argues that if a crisis has victims (people/animals that have been/can be harmed by a crisis) must be the first concern of an organization (Coombs 2007, 2014).  Organizations must provide victims of a crisis with instructional information telling stakeholders how to protect themselves and provide care response to help stake holders deal with the crisis psychologically (Coombs 2007, 2014).
2.5 Attribution Theory
	The basis for Situational Crisis Communication Theory can be found in Attribution Theory.  According to Attribution Theory, based on the three dimensions of locus, stability, and controllability, people make judgements about the cause or causes of an event (Coombs, 1995). Locus, meaning locus of control, is the extent to which people believe themselves to be in control of a situation, whether the locus is internal or external to an actor (Coombs, 1995).  Stability refers to extent to which the cause of the event varies over time (Coombs, 1995).  Stability assesses if the event's cause happens frequently (stable) or infrequently (unstable) (Coombs & Holladay, 1996).  Controllability refers to the amount of control the actor has over the cause of the event (Coombs, 1995).  
	Attribution Theory is the basis for explaining the relationship between crisis situations and crisis response strategies (Coombs, 1995).  Coombs used Attribution Theory as a basis for creating SCCT as a guide for understanding human behavior.  “Attribution Theory posits that people look for the causes of events, especially unexpected and negative events” (Coombs, 2007).  Using the knowledge of Attribution Theory, Coombs created SCCT to give crisis managers the ability to choose a crisis response strategy based on the three dimensions in which people place blame. 
2.6 Neoinstitutionalism
	The relationship between crisis response strategies and crisis type can be found in Neoinstitutionalism.  “Neoinstitutionalism is predicated on the concept of organizational legitimacy” (Coombs & Holladay, 1996).  Legitimacy is granted to organizations that conform to the expectations and societal norms determined by the stakeholders (Coombs & Holladay, 1996).  A crisis challenges stakeholders’ perceptions to the organization’s legitimacy (Coombs & Holladay, 1996).  Challenges to the organization’s legitimacy require organizations to shift focus from the violation of societal norms to repair the damage (Coombs & Holladay, 1996).  Strategic communication from the organization in the form of crisis response strategies can attempt to show the challenge to be invalid, or failing that, try to show the stakeholders a more positive view of the organization and a milder view of the crisis (Coombs & Holladay, 1996). 
2.7 Situation Crisis Communication Theory
	Traditionally, scholars have recommended highly accommodative crisis response strategies with full apologies; however, universally applying these highly accommodative strategies is problematic due to legal and financial liabilities that occur since apologies often requiring organizations to accept responsibility or admit guilt during a crisis (Coombs & Holladay, 2002).  “SCCT posits that by understanding the crisis situation, the crisis manager can determine which crisis response strategy or strategies will maximize reputational protection” without exposing the organization to unnecessary liabilities (Coombs, 2007).  In order to find the appropriate crisis response(s), crisis managers must first assess reputational threat (Coombs, 2014).  Assessing reputational threat is a two-step process (Coombs, 2014).
The first step is to assess what level of reputational threat is present in the crisis.  The amount of damage a crisis can do to an organization’s reputation is the threat (Coombs, 2007).  The reputational threat to an organization in a crisis situation is shaped by three factors: (1) initial crisis responsibility, (2) crisis history, and (3) relationship history (Coombs, 2007).  
Crisis responsibility is “how much stakeholder attribute the cause of the crisis to the organization” (Coombs, 2006).  Crisis type is the “frame that the publics use to interpret the crisis” (Coombs & Holladay, 2002).  Coombs and Holladay identified 13 basic crises based on a study which evaluated “crisis types based on attributions of crisis responsibility” (Coombs, 2014). 

Table 1. 13 Crisis Types Used in the Study in 2002 (Coombs and Holladay 2002: 170-171)

1.	Rumor: circulation of false information designed to harm an organization. Snapple facing a rumor that the ship on the label of its iced tea drink is a slave ship and that Snapple gives money to the Ku Klux Klan was used as the case.
2.	Natural disaster: a naturally occurring even (an act of God) that damages an organization. A bank in Homestead, Florida slowly reestablishing operations after Hurricane Andrew was used as the case.
3.	Malevolence/product tampering: damage by an external agent against an organization. The Sudafed tampering in Washington that killed two people was used as the case.
4.	Workplace violence: an attack by an employee or former employee on current employees on the job. A shooting at the Radisson Bay Harbor Hotel Florida in which an employee shot five coworkers was used as the case.
5.	Challenge: confrontation by disgruntled stakeholders claiming an organization is operating in an inappropriate manner. The American Family Association’s (AFA) picketing of Waldenbooks was used as the case. The AFA maintained that Waldenbooks was a pornography peddler because it carried Playboy and art books containing nudity. AFA wanted all of these materials removed from the shelves of Waldenbooks.
6.	Technical breakdown accident: an industrial accident caused by technology or equipment failure. The rapturing of an oil storage tank owned by Ashland Oil was used as the case. The rupture was caused by flaws in the steel that went unnoticed during normal inspections. The case notes that Ashland had no way of knowing about the flaws.
7.	Technical breakdown product recall: the recall of a product because of the technology or equipment failure. A recall of 70,000 television set by Sharp was used as the case. The televisions became a fire hazard over time as a faulty connector wore out. The faculty connector, provided by a supplier, was not discovered until the overheating problem emerged years later.
8.	Megadamage: a technical breakdown accident that produces significant environmental damage. A 210,000-gallon oil spill in Galveston, Texas by Buffalo-Marine Services, Inc. was used as the case. One oil slick was over 5 miles long, and the spill posed a threat to sea birds living in nearby wetlands. The environmental damage dominates the interpretation of the crisis, not the fact that it is a technical breakdown accident.
9.	Human breakdown accident: an industrial accident caused by human error. The explosion of a chemical storage tank at a Ford truck plant was used as the case. Worker accidently hooked up ta line delivering phosphoric acid to a tank holding sodium nitrate. The two solutions formed nitrous oxide and the pressure from the reaction blew the top off the tank, releasing a gas cloud. Even if the environmental human breakdown aspect of the accident becomes the defining feature of the crisis.
10.	Human breakdown product recall: a product recall caused by human error. A hamburger recall by Hudson Foods was used as the case. The beef became contaminated by E. coli when plant employees mistakenly placed contaminated beef back into the grinding process over a 3-day period. Their actions prompted the large product recall.
11.	Organizational misdeeds with no injuries (to external stakeholders): management knowingly deceives stakeholders but without causing injury. Chrysler disconnecting odometers on test cars but not telling the buyer about the process was used as the case. Customers did not know the real mileage on the test cars not they know the cars had been driven hard test miles.
12.	Organizational misdeed management misconduct: management knowingly violates laws or regulations. Astra Pharmaceutical’s three top managers being found guilty of gross sexual harassment of female sales representatives was used as the case.
13.	Organizational misdeeds with injuries (to external stakeholders): managers knowingly place stakeholders at risk and some are injured. Morton Feedmills letting dog food be delivered that they knew contained small amounts of monensin, a poultry medication, was used as the case. Monensin is toxic to dogs. An investigative report found that managers allowed the shipment to occur, resulting in the nonfatal poisoning a number of dogs.

Stakeholder perceptions of the organization’s crisis responsibility have been proven to increase as the attributions of personal control intensify (Coombs, 1998; Coombs & Holladay, 2002).  “The Crisis Responsibility – Organizational Reputation Proposition [sic] states that as stakeholders attribute greater crisis responsibility to the organization, their perceptions of the organizational reputation will decline” (Coombs, 2007).  This link was verified by studies performed by Coombs and Holladay in 1996 and 2001 giving more validity to SCCT (Coombs, 2007).
	Based on the amount of crisis responsibility generated by each crisis type, SCCT groups crisis types into three crisis clusters (Coombs, 2006).  “The assumption is that crises in the same cluster will have underlying similarities that allow crisis managers to have one crisis plan that can be applied to a group of crises” (Coombs, 2006).  The following table identifies and explains the types of crisis clusters.

Table 2. Crisis Clusters in 2006 (Coombs 2006: 244)
Crisis Clusters
Victim Cluster: In these crisis types the organization is also a victim of the crisis.
Natural disaster: Acts of nature that damage an organization sch as an earthquake.
Rumors: False and damaging information about an organization is being circulated.
Workplace violence: Current or former employee attacks current employees on-site.
Product Tamper/Malelence: External agent causes damage to an organization.
Accident Cluster: In these crisis types the organizational actions leading to the crisis were unintentional.
Challenges: Stakeholders laim an organization is operating in an inappropriate manner.
Megadamage: A techincal accident where the focus is on the environmental damge from the accident.
Technical breakdown accidents: A technology or equiptment failure causes an industrial accident.
Technical breakdown recalls: A technology or quiptment failure causes a product to be recalled.
Preventable Cluster: In these types of crisis types the organization knowingly placed people at risk, took inappropriate actions, or violated a law/regulation.
	Human breakdown accidents: Human error causes an industrial accident.
	Human breakdown recalls: Human error causes a product to be recalled.
Organizational misdeed with no injuries: Stakeholders are deceiived without injury.
Organizational misdeed management misconduct: Laws or regulations are violated by management.
Organizational misdeed with injuries Stakeholders are placed at risk by management and injuries occur.

The second step involves factors (2) crisis history and (3) relationship history.  Crisis history and relationship history are intensifying factors (Coombs, 2014).  If an organization has a history of similar crises or has a negative prior reputation, the reputational threat is intensified (Coombs, 2014).  The second intensifying factor, relationship history, refers to how respectable or deficient the organization has or is perceived to have treated their stakeholders before the crisis (Coombs, 2007).  “An unfavorable prior relational reputation suggests an organization shows little consideration for stakeholders across a number of domains, not just in this crisis” (Coombs, 2007).  If an unfavorable crisis history or relationship history is determined to be present by the crisis manager then the crisis cluster should move up from the cluster chosen during the initial crisis responsibility evaluation (Coombs, 2007).  “A victim crisis generates the same reputational threat as an accident crisis when there is a history of crises and / or an unfavorable prior relationship reputation” (Coombs, 2007).  According to studies performed by Coombs and Holladay in 2001 and 2004, an accident crisis will create the same reputational threat as an intentional crisis when intensifying factors are present (Coombs, 2007).
2.8 Crisis Response Strategies
	Crisis response strategies are a game plan of how crisis managers intend to deal with a crisis.  Crisis response strategies are what managers do and say after a crisis (Coombs, 2007).  There is no definitive list of crisis response strategies that will be perfect for any and all crises; however, a useful list of crisis response strategies can be crafted (Coombs, 2007).  “SCCT’s list of crisis response strategies is built around the perceived acceptance of responsibility for a crisis embodied in the response” (Coombs, 2007).  The more an organization is responsible for a crisis, the more accommodative the crisis response strategy must become (Coombs, 2007). 
	SCCT does not a set in stone group of crisis response strategies.  “Crisis response strategies are optional; crisis managers can choose which, if any, to use in a crisis situation” (Coombs, 2006).  Selecting the most appropriate crisis response stratgy(es) is the key to proecting reputational assets (Coombs, 2006). “The deny response option seeks to prove no crisis exists or that the organization has no responsibility for the crisis” (Coombs, 2006).  If there is no crisis then there can be no damage to an organization’s reputation (Coombs, 2006).  Scapegoating is another form of the denial response strategy.  Scapegoating blames someone else for the crisis (Coombs, 2006). 
	When using the diminish strategy, “the crisis manager accepts a crisis occurred and that his or her organization is involved but tries to change the attributions stakeholders make about a crisis in order to reduce the reputational damage from the crisis situation” (Coombs, 2006).  Crisis managers can either claim the crisis is not as dire as stakeholders believe or argue that the crisis is the result of outside influences to minimize organizational responsibility (Coombs, 2006).  The lower level of seriousness of the crisis must be true in order to reduce the attributed crisis responsbility stakerholder have placed on the organization (Coombs, 2006).  “If stakeholders attribute less crisis responsibility to the organization, the crisis will do less reputational damage” (Coombs, 2006).  According to Coombs and Holladay’s studies in 1996, 2001, and 2002, “the more responsibility stakeholders attribute to the organization the more the crisis response strategy must seem to accept responsibility for the crisis” (Coombs, 2006).  
	While the deny and diminish strategies reflect the attribution foundation of SCCT, the deal strategies reflect the Neoinstitutionalism foundation of SCCT (Coombs, 2006).  According to Neoinstitutionalism, organizations are expect by society to conform to societal norms and lose legitimancy when they do not (Coombs, Chandler, & Holladay, 1995).  “A crisis is frequently a violation of societal norms/expectations” (Coombs, 2006).  When organizations put people’s safety in danger, the organizations’ must work to restore legitimancy.  “As a crisis threatens organizational legitimacy, it simultaneously threatens to damage the organization’s reputation, how stakeholders perceive the organization” (Coombs, 2006).  “The deal response options can be treated as efforts to restore legitimacy by directly addressing how stakeholders perceive the organization-efforts to reshape its reputation” (Coombs, 2006).   
The following table is an easy reference of SCCT Crisis Response Strategies:

Table 3. Crisis Response Strategies by Response Option (Coombs 2006: 248)
Crisis Response Straties by Response
Deny Response Option
Attack the accuser: Crisis manager confronts the person or group claiming something is wrong with the organization. 
•	The organization said threatened to sue the people who claim a crisis occurred.
Denial: Crisis manager asserts that there is no crisis.
•	The organization said that no crisis event occurred.
Scapegoat: Crisis manager blames some person or group outside the organization for the crisis.
•	The organization blamed the supplier for the crisis.

Diminish Response Option

Excuse: Crisis manager minimizes organizational responsibility by denying intent to do harm and/or claiming inability to control the events that triggered the crisis.
•	The organization said it did not intend for the crisis to occur and that accidents happen as part of the operation of any organization.
Justification: Crisis manager minimizes the perceived damage caused by the        crisis.
•	The organization said the damage and injuries from the crisis were very minor.

Deal Response Option

Ingratiation: Crisis manager praises stakeholders and/or reminds them of the past good works by the organization.
•	The organization thanked stakeholders for their help and reminded stakeholders of the organization’s past effort to help the community and to improve the environment.
Concern: Crisis manager expresses concern for the victims.
•	The organization expressed concern for the victim.
Compassion: Crisis manager offers money or other gifts to the victims.
•	The organization offered money and products as compensation.
Regret: Crisis manager indicates the organization feels bag about the crisis.
•	The organization said it felt bad about that the crisis incident occurred.
Apology: Crisis manager indicates the organization takes full responsibility for the crisis and asked stakeholders to forgive the mistake. 
•	The organization publicly accepted full responsibility for the crisis and asked stakeholders to forgive the mistake.

Chapter 3
3.1 Wounded Warrior Project Case Study
The Wounded Warrior Project is a charity that serves to improve the lives of this generation’s injured American veterans.  The Wounded Warrior Project (WWP) has tax-exempt 501(C)(3) status, making it officially a nonprofit organization recognized by the US Government (WWP Official Website, n.d.).  Originally, WWP was a subdivision of the United Spinal Association (Herbert, 2004).   WWP was registered as incorporated on February 23, 2005 (2013/2014 Directory, 2013).  The Veterans Affairs Secretary granted WWP accreditation as a Veterans Service Organization on September 10, 2008 (2013/2014 Directory, 2013).  
WWP is one of the nation’s most recognizable service programs for veterans.  As of January 1, 2016, WWP had 97,743 alumni and 22,042 members (WWP Official Website “Who We Serve,” n.d.).  The charity has offices located in 15 cities around the country that handle a variety of service for WWP and veterans.  Currently, WWP has approximately 500 employees (Philipps, 2016a).
	 WWP has a number of programs designed to help returning wounded servicemen.  WWP is dedicated to helping wounded servicemen and women attain mental wellness and provide several programs to assist with mental health (WWP Official Website, Programs, n.d.).  WWP provides a number of programs devoted to physical health and wellness aimed at improving quality of life for their alumni (WWP Official Website, Programs, n.d.).  Benefits, education and employment of returning service is of great concern for WWP, and they devote several programs to those areas (WWP Official Website, Programs, n.d.).  WWP has several programs dedicated to helping returning servicemen connect with one another and ensure their voices are heard in their local and national government (WWP Official Website, Programs, n.d.).
3.2 Wounded Warrior Project Stakeholders
	Stakeholders are any group that can affect or be affected by the behavior of an 
organization (Coombs, 2007).  Stakeholders can be categorized as internal or external to the organization.  Internal stakeholders are stakeholders within the organization. External stakeholders are stakeholders outside the organization.
Table 4. Stakeholders of Wounded Warrior Project affected by the crisis
Stakeholders of Wounded Warrior Project affected by the crisis
  Internal Stakeholders		Volunteers
Donors
Board Members
Staff Members

   External Stakeholders		Beneficiaries
Other Charities
Media
Local and National Government
Communities

3.3 Relationship History
	The relationship history of an organization is important as relationship is one of two intensifying factors in SCCT used to determine the type of response crisis that managers should use to respond to a crisis.  The presence of intensifying factors means crisis managers should move up a level in crisis response (Coombs, 2014).  Relationship history can be difficult to assess, particularly for people who are external to the organization who do not have access to information like satisfaction survey results, employee complaints, or internal documentation of government inspections.  External researchers must use evidence found in media reports and public documents to assess an organization’s relationship history.
	One indicator of the relationship history between donors and WWP is financial reports.  Between 2005/2006 and 2015, contributions increased from $5,414,498 to $372,546,000 (WWP 2005/2006 Annual Report, 2006; WWP 2015 Annual Report, 2015).  In the approximately 10-year period, donor contributions increased by over $367 million.  The increase logically indicates a positive overall relationship history between donors and WWP.
	Even before the crisis, existing evidence suggested employee relations at WWP were contentious.  WWP had filed lawsuits against two former employees who are also veterans (Gardner, 2016).  Whether or not WWP were legally or even morally correct in suing the former employees is not the issue.  The law suits filed before the crisis broke could to worsen the organization’s reputation further.  Therefore, the lawsuits were something the crisis managers should have considered.
	WWP had also filed lawsuits against another smaller charity for veterans.  In 2015, WWP sued two small veterans’ charity groups for “unfair competition” (Mather, 2015).  Keystone Wounded Warriors in Pennsylvania was sued by WWP who claimed Keystone’s logo and name was too similar to WWP’s logo and name (McCambridge, 2015).  Several other small charity groups claim WWP is a “bully” trying to squash other charities (McCambridge, 2015).  While the lawsuits were not widely reported, the lawsuits are still part of WWP’s relationship history that could diminish its reputation in the event of a crisis.
3.4 Crisis Overview
Late January 2016 was a rough time for the Wounded Warrior Project.  The news of possible mishandling of donor money was reported.  Both The New York Times and CBS News published information of the scandal.  They levied claims that the Wounded Warrior Project had inappropriately spent donor funds, among other charges.  CBS News interviewed over 40 current and former employees who expressed concerns (Reid & Janisch, 2016b).  The claims were backed by information from former and current employees, the charity’s own tax returns, and information from charity watchdog groups.
Of great concern to journalists and employees alike was WWP’s apparent inappropriate spending.  CBS News reported, WWP was spending about 60% of donated funds on veterans while other charities, like Disabled American Veterans Charitable Service Trust and Fisher House, spent over 90% of their donated funds on veterans (Reid & Janisch, 2016b).  “According to the charity's tax forms, spending on conferences and meetings went from $1.7 million in 2010, to $26 million in 2014. That's about the same amount the group spends on combat stress recovery, its top program” (Reid & Janisch, 2016b). The New York Times stated, WWP has spent more lavishly than would appear appropriate for a charity on dinners, conferences, travel and hotel stays, sometimes spending as much as $500 a night per hotel room for minor business meetings in the last year (Philipps, 2016).  
	Another issue brought up in the reports was the working culture at WWP.  Most of the former employees who spoke out about toxic work environments are veterans themselves.  William Chick, a former supervisor for five years for WWP and disabled veteran, claims he was fired two days after being coerced to fire another employee for a fist fight (Philipps, 2016).  Renee Humphrey was terminated so quickly she claimed that her credit card and work phone were cut off during the event she had been leading (Philipps, 2016).  
	Concerns were also raised about the diminishing quality of WWP programs.  Employees assert that arbitrary performance metrics were put into place as donation money poured in (Philipps, 2016).  Former employees claim they no longer had the time to set up meaningful events since the number of events to be created was so high (Philipps, 2016).  “By the time I left, we were just throwing guys in jobs to check off a box and hit the numbers,” stated former employee Dan Lessard (Philipps, 2016).  Employees felt WWP cared more about fundraising than helping veterans (Reid & Janisch, 2016a).  In addition to programming concerns were about how WWP was reporting its outcomes.
	WWP claims that 80% of their donated funds goes to helping veteran programs; however, articles for CBS News and The New York Times claim that WWP arrived at that figure through questionable reporting practices (Philipps, 2016; Reid & Janisch, 2016c).  The articles stated that the reason WWP was able to report 80% of their donated income was used for veteran programs instead of the 60% charity watchdog groups had come up with was because WWP was including shipping and postage costs, direct response advertising, and promotional items as part of their veteran programming costs (Philipps, 2016; Reid & Janisch, 2016c).  Other charities do not include those items in their programming costs and still have better numbers than WWP (Reid & Janisch, 2016c).
	 
3.5 WWP Crisis Response
	The day after the first articles of possible misconduct were published, WWP on its official Facebook page demanded a retraction of all claims made in CBS’s articles (2016).  WWP claimed to have attempted contact with CBS to “set the record straight” (Ortiz, 2016).  The organization denied any financial misdeeds, and accused CBS of false, even absurd, reporting (Ortiz, 2016).  WWP placed itself in SCCT’s “deny response” option and used “attack the accuser” response strategy.  It also used ingratiation to remind stakeholders of all the beneficial the organization had done.
	By February 1, 2016, WWP had changed its strategy, according to CBS News (2016a).  WWP had released a press statement asserting its commitment to an independent third party investigation “to conduct a thorough financial and policy review of the concerns” (CBS News, 2016a).  While this statement does not reflect their move to a new crisis cluster, WWP was no longer attacking the accuser or denying a problem might exist, although it still used ingratiation.  
	On March 10, 2016, the results of the independent investigation were released.  The independent third party had interviewed former employees and reviewed financial records (WWP Official Website, 2016).  They claim the reports of financial abuse were completely false (WWP Official Website, 2016).  However, it also concluded certain policies, controls, and procedures needed to be updated (WWP Official Website, 2016).  Travel expenses would be more strictly controlled and employees would undergo better training (WWP Official Website, 2016).  New leadership would be found and the organization’s CEO Steve Nardizzi and COO Al Giordano were no longer employed by the organization (WWP Official Website, 2016).  
	WWP had employed some ingratiation in the response to the independent study; however, it began again with denial and attack and added scapegoats of sorts by firing the CEO and COO.  Throughout the crisis and responses, although WWP changed its strategy somewhat, it tended to choose the deny response option.
3.6 Application of SCCT
	According to SCCT, the first step is to assess reputational threat.  WWP could assess the reputational threat by first identifying the initial crisis responsibility.  Crisis responsibility is “how much stakeholder attribute the cause of the crisis to the organization (Coombs, 2006).  According to the previously stated 13 crisis types, WWP’s crisis would be a challenge type crisis.  WWP was confronted by reports of inappropriate behavior by stakeholders.  
	Next, WWP would figure out which crisis cluster its crisis matched then identify any intensifying factors that might move them to the next highest level.  WWP does have some negative in its history, known or unknown to the public, that could result in even worse reputational damage.  They have filed lawsuits against former employees and other charities, both of which could reflect negatively on the organization.  Should WWP determine that it had enough reputational history to impact it negatively, it could move its crisis into the next highest cluster, the preventable cluster, which is when management knowingly took inappropriate actions. 
	Once WWP had identified a cluster, a crisis response strategy could be chosen.  WWP used the deal responses during this crisis.  If WWP had determined its crisis belonged in the accidental cluster, the crisis response strategies it chose would been appropriate for this particular crisis.  However, future crises would be impacted by the current crisis, so WWP would use crisis response strategies from the diminish response.  If it had determined their relationship history constituted more potential reputational damage, it would have moved from deny response options to diminish, or even deal, response options. 

Chapter 4 
4.1 Epipen Case Study
	Mylan is a pharmaceutical organization.  In 1965, it received its first FDA approval to produce its first medicine in White Sulphur Springs, West Virgina (“About Us | Mylan,” n.d.).  Since 1965, the organization has grown from a small company to an organization with over 2,700 products in 165 countries and a workforce of over 40,000 employees (“About Us | Mylan,” n.d.).  Heather Bresch is the Chief Executive Officer and Executive Director of Mylan (“Leadership | Mylan,” n.d.).  
Mylan is the producer of Epipen and Epipen, Jr. (“Brand Name Medicines | Mylan,” n.d.).  Epipen is an auto-injection system used to deliver a synthetic version of adrenaline called epinephrine (“About EpiPen® [epinephrine injection, USP] Auto-Injector,” n.d.).  Epipen uses the auto-injection system to deliver epinephrine to anyone experiencing anaphylaxis (“About EpiPen® [epinephrine injection, USP] Auto-Injector,” n.d.).  Anaphylaxis is a potentially life-threatening allergic reaction (“About EpiPen® [epinephrine injection, USP] Auto-Injector,” n.d.).  Epipen comes in two varieties, Epipen and Epipen Jr. (“About EpiPen® [epinephrine injection, USP] Auto-Injector,” n.d.).  
	Administering epinephrine shots without the auto-injection system can be dangerous (Swetlitz, 2016).  Epinephrine injections without the use of the auto-injection system found in Epipen require the use of syringes (Swetlitz, 2016).  The Food Allergy Research & Education chief medical officer, Dr. James Baker, Jr., stated “Anyone using this approach would require extensive medical training to do it effectively and safely, without contamination or accidental intravenous injection” (Swetlitz, 2016).

4.2 Mylan Stakeholders
Table 5. Stakeholders of Mylan affected by the crisis
   Stakeholders of Mylan affected by the crisis
   Internal Stakeholders		Employees
					Board of Directors
					Executives
					Shareholders

   External Stakeholders		Consumers
Suppliers
Media
National Government
Public Pressure Groups
Competitors

4.3 Relationship History
	Mylan’s relationship history mostly affects its shareholders.  In 2009, Mylan CEO Robert Coury faced criticism for using organizational money to jet-set around the world and receive 20% pay raise despite earning a $181 million loss for Mylan (Edwards, 2009). Again, in 2012, Coury was criticized for using the organization’s jet, this time to fly his musician son around (Staton, 2018).  This time Mylan had had enough and Heather Bresch replaced Coury as CEO (Staton, 2012).
	By 2015, shareholders were starting to make waves about Mylan executives’ kickbacks (Helfand, 2015).  Mylan had given millions of dollars to top executives in tax liabilities when the organization moved to Europe (Helfand, 2015).  Shareholders had not been given such consideration and they were not happy about it (Helfand, 2015).

4.4 Crisis History
Part of Mylan’s crisis history revolves around its CEO Heather Bresch.  In the coming crisis, Bresh would be the face of Mylan and would speak for the organization. As such, her scandals would be considered Mylan’s scandal since she kept her position despite a scandal that would call into question her ethics.  In 2008, the Pittsburg Post-Gazette discovered that the then COO of Mylan had not earned her MBA and lacked 22 credits of the required 48 (Post-Gazette, 2008).  Bresch claimed she had worked out a deal substituting work experience for those credit hours (Post-Gazette, 2008). West Virginia University claimed no such deal was made but still they had given her an MBA (Post-Gazette, 2008).  Bresch’s MBA was rescinded by the university following the controversy (Post-Gazette, 2008). 
4.5 Crisis Overview
	News that Mylan had raised the price of the Epipen by 450 percent started hitting the internet as early as July 2016 (Swetlitz, 2016).  The news was first reported on medical sites as doctors were disturbed that patients were resorting to using syringes rather than pay for the Epipen (Swetlitz, 2016).  The price of a two-pack of Epipen in 2004 was around $100, but by 2016 the price was topping out at over $600 (Pearl, 2016).  The price raise came without a single dollar being spent on research and development for Epipen as Mylan does not actually manufacture Epipen itself, rather they market and sell Epipen (Pearl, 2016).  Compounding the appalling impression was the fact that Epipen is available in Europe for a fraction of the cost (Pearl, 2016).
	Doctors and Mylan alike urge people with severe food, insect, or such allergies to carry at least two Epipens at all times in case one malfunctions or an extra dose is needed (Peachman & Parker-Pope, 2016).  In fact, Mylan does not sell Epipen in single dose packs (“About EpiPen® (epinephrine injection, USP) Auto-Injector,” n.d.).  The recommendation is that families with a member who has severe food allergies have multiple Epipens in the car, in their bags, and at school (Peachman & Parker-Pope, 2016).  Epipen has a one-year expiration date so they have to be replaced annually (Peachman & Parker-Pope, 2016).  
	The people most affected by by the Epipen price hikes were families with no medical insurance or a high deductible (Peachman & Parker-Pope, 2016).  Even people with insurance that covered Epipen often paid co-pays as much as four times higher than a decade earlier (Peachman & Parker-Pope, 2016).  Families were soon facing the tough choice of being able to buy groceries or having a potential life-saving medicine for a loved one (Peachman & Parker-Pope, 2016).  Some families were choosing to gamble on expired Epipens because they could not afford new Epipens (Peachman & Parker-Pope, 2016).  
	As the scandal grew, a member of the United States government became involved (Peachman & Parker-Pope, 2016).  A Senate Judiciary Committee and the Federal Trade Commission was called by Senator Amy Klobuchar to investigate whether the rise in price for Epipen was in violation of any anti-competition laws (Peachman & Parker-Pope, 2016).  A recall in a competitor’s product had left Mylan with a near monopoly on the market just as they instituted the biggest increase in price yet (Popken, 2016).  United States Senator Richard Blumenthal joined Presidential hopefuls Hillary Clinton and Bernie Sanders in expressing outrage at the price hikes and demanded the price be lowered (Peachman & Parker-Pope, 2016).  
	As the story broke, CEO Bresch soon found herself in the center of an all new controversy.  News broke that Bresch was the daughter of Senator Joe Manchin of West Virginia made headlines just as the possibility that Bresch might be called to Capitol Hill to answer for price gouging accusations (Edney & House, 2016).  Several lawmakers also wanted to answers to accusations that taxpayers were paying for price increases since Mylan had pushed, successfully, for legislation that encouraged, possibly required, schools to use Epipen (Edney & House, 2016).  Mylan had spent $4 million in lobbying to push the legislation through Congress (Edney & House, 2016).  Bresch’s salary had also increased from $2.4 million to $18.9 million and Mylan’s annual sales increased from $200 million to over $1 billion during many of the price hikes (Pearl, 2016).
4.6 Crisis Response
	Mylan’s first response was to defend the price hike stating they had made improvements to Epipen and point out that there was a $100 coupon on their website (Popken, 2016).  Mylan then stated that the price hike is less significant when one considers that insurance pays for most of the cost (Pearl, 2016).  Bresch then tried to point out the lower prices in Europe and claimed the United States prices were necessary for research and development (Pearl, 2016). 
	When earlier attempts at damage control failed, Mylan issued a $300 coupon, in essence reducing the price of a 2-pack of Epipen by 50 percent to people on specific insurance plans (Pearl, 2016).  When public pressure continued to grow, Mylan offered a generic version of Epipen while raising the prices of other drugs they offered (Pearl, 2016).  Throughout the scandal, Bresch continued to blame the price hikes on Obamacare, stating the healthcare system in the United States was “broken” (Mangan & Balakrishnan, 2016).
4.7 Application of SCCT
	Mylan’s Epipen scandal would be considered organizational misconduct with injuries (Coombs & Holladay, 2002).  Even if no injuries beyond financial burden have been reported, the potential for injury is something Mylan would have to consider as the crisis was unfolding since its drug saves lives.  When accessing the initial crisis responsibility, Mylan was acting more like the crisis was a challenge or even not a crisis at all (Coombs, 2006).  The Epipen crisis would be placed in the preventable crisis cluster (Coombs, 2006).  Mylan placed the Epipen crisis in the accidental crisis cluster or no cluster (Coombs, 2006). 
	When positioning a crisis in a crisis cluster, relationship history and organizational history must be taken into account (Coombs, 2014).  Mylan had a history of financial scandals and had a unpleasant relationship with their shareholders.  Bresch had also had scandals that would become relevant to the crisis since her ethics were called into question.  Even with Mylan placing the crisis in the accidental cluster, the history of the organization would have moved Mylan to the preventable cluster where it belonged. 
	The responses Mylan made to the crisis were varied.  It denied there was a crisis by stating the coupons existed and that insurance covers most of the cost.  It also used scapegoating when blaming the United States’ healthcare system and Obamacare.  These responses lie in the diminish and deny crisis response options while preventable crisis cluster calls for a deal response option (Coombs, 2006).  Had Mylan chose to use SCCT they would have used the ingratiation, concern, compassion, regret, and/or apology response options (Coombs, 2006).  When the earlier attempts at crisis response failed Mylan did issue a $300 rebate, which falls into the Deal Crisis Response Strategy (Coombs, 2006).  Some of the responses made by Mylan are not accounted for by SCCT’s list of possible crisis responses.  Launching a generic version of the Epipen is not covered by SCCT and neither is Mylan’s excuses about the prices in Europe and the United States.

Chapter 5
5.1 Conclusion
	The purpose of each case study was to determine if SCCT is applicable in the same way to a nonprofit organization as the theory is to a for profit organization and to gain a greater understanding of SCCT.  SCCT was found to be applicable to WWP’s crisis in much the same way SCCT was applied to Mylan’s crisis.  SCCT’s application did not change despite the differences in stakeholder expectations or crisis situations that exist between Mylan and WWP.  However, Mylan used a crisis response that was not found on the SCCT crisis response options.  The lack of an extensive and comprehensive guide of crisis response options hinders the applicability of SCCT. 
1. How useful overall is the SCCT in dealing with the two crises? 
	SCCT is based upon assumptions one would think obvious.  Whenever a crisis happens, stakeholders will look to the past to see if there are indications that the crisis could have been prevented.  The organization’s relationship history and past crisis are often discussed when a new crisis happens.  Still, neither of the two organizations chose a crisis response strategy that would be recommended by SCCT had the crisis managers been using SCCT. 
	SCCT could be useful if crisis managers understood the theory before the crisis.  Both nonprofit organizations and for profit organizations can use the steps provided in SCCT to pick a crisis response strategy that matches their crisis type.  SCCT would necessitate crisis managers be aware of the organization’s crisis history and relationship history.  This could potentially help organizations choose and implement a crisis strategy quicker and with greater effectiveness.
2. What specific SCCT strategies seem to work best for each organization? 
	This thesis was unable to verify the effectiveness of any crisis response strategy.  More research is needed in the crisis response strategies recommended by SCCT.  Neither organization seems to have chosen a strategy that satisfied its stakeholders.  Mylan had to increase its rebate amount then even create a new generic version of its Epipen (Pearl, 2016).  WWP’s responses were so awful that other veteran organizations felt the need to actively disassociate with the organization (White, 2016).  WWP did start receiving more positive press, however, when the organization fired its CEO and COO (Chuck, 2016).
3. Could application of the SCCT to crisis situations, especially in nonprofit organizations, help the organization deal more effectively with crises?
	One of the major concerns for SCCT is a lack of easy-to-read comprehensive materials about SCCT.  The writer of this thesis found it necessary to read 24 peer-reviewed journal articles in order to understand SCCT.  Still, not until actually attempting to apply the theory to a crisis was SCCT fully understood. Even some scholars have trouble understanding SCCT (Coombs, 2016). 
In 2016, the Journal of Public Relations Research published a meta-analysis of SCCT (Coombs, 2016).  In a paper reflecting on the meta-analysis, Coombs references a paper included in the meta-analysis as having missed the entire point of SCCT (Coombs, 2016).  He stated the paper had been published by another journal as well (Coombs, 2016).  This would mean that two peer-reviewed journals, one of which was publishing a special issue about SCCT, had published an article that completely misunderstood SCCT.  It might be too much to expect crisis managers to put the time and effort into understanding SCCT enough to use it when even experts misunderstand it.  
Future Research
	More empirical research is needed on the assumptions of the relationship between crisis responsibility and the need for a more intense crisis response strategy.  So far, most of the research performed has been conducted on small groups of people not related to any of the crises.  Almost all of the tests have been performed on small homogenous groups like college students and public relations workers.  Large groups of diverse people need to be surveyed during studies.  
	SCCT uses relationship history and crisis history as intensifying factors (Coombs, 2007).  The existence of prior similar crises affects an organization by giving the stakeholders the perception that the organization did not properly learn from their actions (Coombs, 2007).  During the course of research for this thesis, a new possible intensifying factor was revealed.  Several articles were written indicating charities that serviced veterans were being effected by WWP’s crisis.  Even greater still was the memory of William Aramony’s United Way crisis of lavish spending hanging over the WWP during WWP’s crisis.  The extent of how strong this connection of other similar crises in an organization’s industry history should be explored to see if this is a possible new intensifying factor for SCCT. 

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