Sheri L. Erickson's scientific contributions

This case study analyzes Countrywide Financial's responses to its recent financial crisis and illustrates the use of communication theory and image restoration strategies by utilizing several crisis response frameworks. The study uses a critical analysis methodology to examine the communication strategies employed by Countrywide, a large mortgage lending company in order to attempt to restore its image. The authors look at excerpts from media stories, carefully examine the language used by company representatives in response to the banking crisis, and categorize the corporate communications into various strategies as defined in the crisis communication literature. Countrywide faced several crisis situations during the period of this study, including the subprime mortgage crisis, public criticism of its CEO's executive compensation package, allegations of insider trading, and financial difficulties. Corporate responses are critical in determining what amount of damage is done to the firm's image during a crisis. Countrywide responded to these situations most often using the strategies of image bolstering, reducing the credibility of its accuser, and minimizing the crisis (Benoit, 1995). Through these communications, the company attempted to appear well established and untarnished. It also criticized the media, the courts, and the regulators in an attempt to reduce their credibility. Countrywide made no deliberate attempt to admit fault or to take measures to prevent the problem from reoccurring.

Image management is essential to corporations, particularly during crisis situations. The ongoing financial crisis in the United States has led to the failure of several banking firms. Because systemic economic problems may result from the loss of confidence in the banking system, effective use of crisis management and image restoration strategies by the banking industry is particularly important. This paper discusses the importance of corporate reputation management, illustrates the use of communication theory to analyze corporate responses to crisis, and analyzes Citibank's responses to the company's recent financial crisis using two crisis response frameworks, Coombs' Situational Crisis Communication Theory (2007) and Benoit's Image Restoration Typology (1995). Findings indicate that in general, Citigroup responded to negative events in an effective manner (Coombs, 2007; Benoit, 1995) and in such a way to reduce the damaging effects of the crisis. In many instances, Citi used corrective action strategies, in which management indicated ways to solve problems and to prevent the crisis from happening again.