Crisis Communication - case of H&M

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Crisis communication - case of H&M

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420226

Table of Contents Introduction ..................................................................................................................... 3 Problem statement ......................................................................................................... 4 Theoretical consideration .............................................................................................. 4 Analysis ........................................................................................................................... 6 Discussion ...................................................................................................................... 7 Conclusion .................................................................................................................... 10 Reference ...................................................................................................................... 11 Appendix 1 .................................................................................................................... 12 Appendix 2 .................................................................................................................... 13

420226 Introduction “Fashion” is one of the most important ways to express ourselves. It can show our identity and

personal tastes. People are purchasing and wearing various kinds of brands’ clothes. Among

these brands, some of them are categorized “Fast fashion”. Fast fashion is defined as a brand

that sells clothes at low-priced and produces them in short terms to catch a new trend (Sheridan

et al., 2006). There are quite many brands out there categorized fast fashion such as Forever21,

Primark, Zara, H&M, Mango. These brands have been spreading all around the world.

However, do people ever think about the supplier of the cheap clothes and how create these

clothes? As for me, I was not concerned about how and where the clothes created. Most of the

clothes in my closet are fast fashion brands. I had purchased their clothes only because they are

cheap until that accident happened.

In 2013, the factory called Rana Plaza collapsed in Dacca, Bangladesh on April 24th. Over

1,100 people died in this accident. This accident is one of the worst collapses of an apparel

factory in the history of the fashion industry (Clean Clothes Campaign).

H&M made the first movement to this accident. The company was the first brand which signed

Accord on Fire in Bangladesh. Hence, I will explore H&M’s strategic marketing in terms of

crisis communication and transparency.

Before looking into the case, first, I need a better understanding about H&M. H&M, Hennes &

Mauritz is Swedish clothing brand. H&M is the second largest fashion retailer next to Index,

owner of Zara (Milne, 2013). The store first opened in 1947, in Sweden. Now the company

has become global and it expanded over 4,000 stores in 62 markets. The company is the biggest

buyer of clothes from Bangladesh (Milne, 2013). In recent years, the brand has involved in

sustainable society such as an environmental problem or labour condition. The company run a

recycling clothes campaign and produce organic cotton clothes.

In this paper, I will explore that H&M marketing and how it changed through the accident in

Bangladesh. I will consider how ethical problem related to marketing in the fashion industry.

420226 Problem statement As I mentioned in the previous section, in recent years, the perspective of fast fashion has been

changing. Ethical concern and sustainability have been becoming significant issues in the

fashion industry.

It became conspicuous since Dhaka Rana Plaza collapsed in 2013. In the Rana Plaza, people

were working in several brands textile factories including Primark, Mango and so on. H&M

was not one of the brands, however, the accident influenced most of the fast fashion brands

including the brand. Since the accident occurs, ethical problem and sustainability for fast

fashion have become controversial. On April 24th, which the building collapsed, was

established as Fashion Revolution Day to remind of this accident and think about the future

supply chain of fashion retailers.

I will look further in terms of crisis communication and transparency. I will examine that how

H&M crisis communication strategy worked on the crisis occurred in Bangladesh, and how the

corporate social responsibility affected by this accident.

Theoretical consideration To look further the case of H&M, several theories can be applied.

First of all, Benoit (2014) described assumption of Image Repair Theory in his book. According

to him, the basic image repair situation is that “a person or organization accuses another of

wrongdoing, and the accused produces a message that attempts to repair that image.” He

mentioned that “communication is best conceptualized as a goal-directed activity.” And on of

the central goal is that maintaining a positive reputation. He suggested that image repair

strategy is organized into five categories; “denial, evasion of responsibility, reducing

offensiveness, corrective action, and mortification.” (Benoit, 2014)

Coombs (1998) also described crisis communication strategy. He suggested that seven different

stage definition of crisis communication strategy; attack the accuser, denial, excuse, justification,

ingratiation, collective action, and full apology.

They both mentioned that one goal of crisis management is to repair and protect the corporate

420226 image.

In terms of corporate social responsibility (CSR), Carroll’s (1991) four pyramids theory of CSR

can be applied. He suggested that it consists of four components including “economic

responsibilities, legal responsibilities, ethical responsibilities, and philanthropic responsibilities.”

The basic element of CSR can be defined economic responsibilities. As for the basis of

business, the corporate must be profitable. At the next level, the business must obey the law

because “the law is society’s codification” to justify one’s behaviour is right or wrong. Based

on these responsibilities, the company must cover the ethical responsibilities which minimize

harm to their stakeholders and take right and fair action to society. At last, “business is expected

to be a good corporate citizen.”

I will also focus on transparency. Farrell (2016) defined transparency as “information and

sharing information that may be welcomed or uncomfortable.”

Christensen (2002) mentioned extended strategy of transparency. He mentioned that internal

and external stakeholders not only expected to have unlimited access to corporate information

but also need to access responsible strategies of companies in contemporary business.

Furthermore, with the advent of technologies, especially the internet, the corporates are expected

to contribute to transparency themselves by sharing significant information with their

surroundings.

Dach and Allmendinger (2014) described in their article about corporate sustainability

communication. They investigated that web-based corporate sustainability communication.

They suggested key factors of effective web-based corporate sustainability communication

which includes accessibility, usability and website design, general website content, industry-

specific sustainability issues and content, sustainability commitment, sustainable development

agenda, contact, feedback dialogue, and sustainability report.

In next context, I will analyse H&M crisis and corporate communication by applying these

theories.

420226 Analysis In a case of Bangladeshi factory collapsed in 2013, I will analyse the respond of H&M and how

the react was effective in terms of crisis communication.

H&M established a comment after the factory collapse in Bangladesh (appendix1), the first they

commented: “our thoughts go to the ones affected by the tragic accident.” On the one hand, it

can be seen as a mortification which expresses regrets (Benoit, 2014). On the other hand, it is

not a clear sentence for showing apology or mortification, but in this case, H&M was not directly

related to this accident. Despite that fact, H&M mentioned about that crisis and protect the

company’s image which is concerned about the ethical problem of the fashion industry. This

action proved that the accident made a huge impact on fast fashion retailers.

The next, they asserted that H&M clothing was not produced in the building. They denied that

they are not involved in Rana Plaza collapse. They mentioned that “the fact that this wasn’t any

of our supplier’s factories doesn’t mean that we are not engaging in the process of contributing to

constructing solutions.” Therefore, the company emphasized that cooperation with stakeholders

would be important to find long-lasting improvements. It can be described as a collective action

(Benoit,2014; Coombs, 1998). H&M tried not to repeat this accident and prove that the company

seeks to repair its damaged image from the crisis. In addition to that, the action that it improves

accused’s reputation through cooperating with stakeholders can be described as bolstering

(Benoit,2014).

In terms of corporate social responsibility, H&M releases the financial report including the six-

month report, annual report, and latest report on the website. According to the three-month report

(1 December 2015 to 29 February 2016), the sales of H&M group’s increased nine percent in local

currencies in the first quarter. It is the basis of business which maintains profitable operating and

a strong competitive position (Carroll, 1991). Furthermore, the company can be seen as having

ethical and philanthropic responsibilities. H&M also releases sustainability and H&M foundation

which is independent organization working for long-lasting positive change for people and

communities. The company shows that they are involved in ethical problems. The firm is

expected to act ethically or morally by its stakeholders, H&M comprehends their desire and it

proves that the company tries to improve its supplier’s working conditions (Carroll, 1991). H&M

also shows the evidence of their action to release the information of “conscious actions highlights

420226 2015.”

As I mentioned in the previous paragraph, H&M show their action to maintain and improve their

supplier’s working conditions on their website. As Dach and Allmendinger (2014) described

web-based corporate sustainability communication, the website can access quickly and easily. In

addition to that, they provide sustainability reports and shows their commitment to sustainability

vision or missions. Consumers can quickly access their sustainability report from their website

(see Appendix 2). H&M has shown that their sustainability action not only on their website but

also their own YouTube channel.

There is a fact that H&M is behind schedule in correcting the dangers faced by the Bangladeshi

workers who producing its clothing (Clean Clothes Campaign). It says that according to the

report published by the Clean Clothes Campaign (CCC), International Labor Rights Forum

(ILRF), Maquila Solidarity Network (MSN), and Worker Rights Consortium (WRC), H&M

factory delayed to renovate fireproof doors, the removal of locking or sliding doors from fire

exits and enclosure of stairwell. H&M released a comment to this fact on the website. It

confirmed that there were delays to work for renovation of the factory. It clarified that there

were some reasons to delay including problems of deliveries.

Discussion Based on the analysis on the previous section, I will discuss H&M strategy of crisis

communication, corporate social responsibility, and corporate sustainability communication.

After the Rana Plaza collapsed, the company established a comment to stakeholders despite

clothing of H&M was not produced in the factory. As can be seen from this action, an image of

H&M became negative through this accident and the company tried to repair their negative

image by following crisis communication strategies. In addition to that, it can be said that

consumers have become aware and concerned about the issue of the supply chain of fast fashion

retailers. If consumers did not care about that issues, they started to think about whether or not

they should buy cheap clothing because of this accident. H&M tried to repair their image by

showing its mortification and desire not to repeat this accident, and it should be well evaluated as

a quick response and accurate action for the crisis. H&M attempted to maintain its corporate

420226 image and it can be seen from the fact that the company first signed Accord on Fire in

Bangladesh.

Furthermore, the company proved that it would be working with its stakeholders including

suppliers, consumers, and institutions such as NGOs. The comment appealed to not only

consumers but also stakeholders.

It showed its responsibilities to society and suppliers which mentioned in a sentence that “we do

not allow any residential building for garments industry, and to ensure building and fire safety in

Bangladesh H&M took a decision in 2009 that we do not allow any shared buildings.” It

showed the company have its own responsibility to the suppliers.

In addition to that, the company shows its negative information to the customers, in terms of the

perspective of the corporation, it attempts to repair its negative image and maintain positive

perspectives. From the perspective of customers, it can be seen as keeping its transparency.

The company announced not only its positive information but also a negative one. But we

should not forget about the fact that there was a delay for renovating factory and considered

about its suppliers and whether or not their safety is certainly protected. We, the customers,

cannot know contemporary working condition in Bangladesh. Hence, the company has a

responsibility to open its information about working condition there. And the customers have a

responsibility to access the information which the company provided. In addition to that,

consumers have to think about whether or not its information is true. The company gives the

negative information, however, it tries to prevent to fall down its negative images. Therefore,

the customer should not trust every information the company provided. To keep the positive

image is important for the company and it still show it attempts to show its transparency. For

the consumers, they have to select the right information.

H&M attempts to show their action to make it possible to a sustainable society and they have

involved environment problem and also improving labour condition. The company proves those

actions through their website and their YouTube channel. In their YouTube channel, they

uploaded the video about sustainability and their conscious action. On the one hand, the

company seems to improve their corporate social responsibility. Furthermore, it attempts to

show its transparency and its action to resolve ethical problems. On the other hand, however,

420226 when you search H&M on the internet, the first page you will see is shopping clothing page. It

shows that party dress or “must-have shorts” which costs only 79.95 kroners. If customers who

are seriously concerned about sustainability or labour condition of H&M might look at their

website and click on “About H&M” placed on the below of the website. In contrast, the

customers who want to buy cheap clothing and do not really care about environment or

sustainability, they will never be aware of the problems and keep purchasing the cheap clothing.

The viewers of H&M videos prove it; “H&M modern essentials selected by David Beckham

featuring Kevin Hart” is viewed 5,659,577 times, however, “H&M on Sustainable Fashion” is

viewed only 35,708 times. It cannot be certain evidence to prove the customers do not care

about sustainability or supplier, however, it shows that collaborating with celebrities or luxury

brands which means Balmain collaborated with H&M in 2015 and other brand which

collaborated with H&M are paid more attention by consumers. It also can be seen from its

advertisements. The company comments about supplier’s working condition or its commitment

to sustainability such as producing clothing made from organic cotton, but its advertisement is

still mainly focused on the clothing price or how luxury its clothing look. Advertisements using

celebrities or high-stated brads are beneficial to the perspectives of financial, however, it has to

be discussed in terms of ethical and philanthropic dimensions. I suggest that advertisements

which is focused on sustainability problems or ethical problems is effective in gaining attention

from customers who are concerned about such problems. It can be said that the effective way

for both company and customers.

I argue that there is a gap between customers who want to buy cheap clothing and the company

who attempts to improve its corporate social responsibilities and sustainable responsibilities. In

addition to that, there is a gap between suppliers who desire to improve their labour conditions

and the company who wants to provide cheap clothing. On the one hand, to fill these gaps, the

firm has a responsibility, on the other hand, customers also have a responsibility. Consumer

awareness which consumers tend to buy ethical clothing would lead the improving working

conditions in Bangladesh. It is important to improve the corporate social responsibilities for the

company, but without the demand for the information, it would not be improving in the future.

420226 Conclusion On the one hand, clothing produced by fast fashion brands are cheap, and reasonable quality.

On the other hand, we must concern about their supplier and how the clothing produced. In

addition to that, I believe that sustainability or the ethical problem will become a more

controversial issue. Consumers who purchase clothing have to think about the effect of the

clothes to environment or labour conditions. The company must be responsible their products.

They have to think about the effects of their products that influence the society. I found that the

company has a responsibility to produce clothing, but not only that but also the customers have a

responsibility to choose what they buy and what they wear. Fashion, clothing is the main way to

express ourselves and show our identity, but we have to think about how they produced and

make a right decision.

420226 Reference Benoit, W. L., (2014). Accounts, Excuses, and Apologies, SUNY Press

Carroll, A. B., (1991). The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons. 34(4), 39-48 Christensen, L. T., (2002), "Corporate communication: the challenge of transparency", Corporate Communications: An International Journal, 7 (3), pp. 162 - 168

Coombs, T. W. (1998). An Analytic Framework for Crisis Situations: Better Responses From a Better Understanding of the Situation, Journal of Public Relations Research, 10 (3), 177-191, DOI: 10.1207/s1532754xjprr1003_02

Dach, L., Allmendinger, K., (2014)., Sustainability in Corporate Communications and its Influence on Consumer Awareness and Perceptions: A study of H&M and Primark, Procedia – Social and Behavioral Science, 130, 409 - 418

Farrell, M. (2016) Transparency, Journal of Library Administration, 56 (4), 444-452, DOI: 10.1080/01930826.2016.1157426

Sheridan, M., Moore, C., Nobbs, K., (2006), "Fast fashion requires fast marketing", Journal of Fashion Marketing and Management: An International Journal, 10 (3). pp. 301 - 315

H&M fails to make fire and building safety repairs in Bangladesh. (2015, October 1). Retrieved from http://www.cleanclothes.org/news/press-releases/2015/10/01/h-m-fails-to-make-fire-and-building-safety-repairs-in-bangladesh

Milne, R. (2013, May 19). Retrieved from http://www.cleanclothes.org/news/press-releases/2015/10/01/h-m-fails-to-make-fire-and-building-safety-repairs-in-bangladesh

420226 Appendix 1

business-humanrights.org

420226 Appendix 2

about.hm.com