Communication strategies of foreign MNEs on the Russian market during geopolitical crisis of 2022
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STATEMENT OF A SUBSTANTIVE CHARACTER OF THE COURSE PAPER 2
INTRODUCTION. 4
CHAPTER 1. THEORETICAL BACKGROUND: INTRODUCTION OF THE CONCEPTS 6
Overview of the related literature 6
Situational Crisis Communication Theory 6
Theory of image restoration 11
Stakeholder Theory 13
Salience model 16
Review of existent studies 17
CHAPTER 2. RESEARCH METHODOLOGY 24
Research approach 24
Sample selection 24
Data collection 28
Data analysis 29
CHAPTER 3. CASE ANALYSIS AND EMPIRICAL FINDINGS 31
Nestle 31
Komatsu 38
Auchan 42
Xiaomi 45
Companies’ response reaction 46
CHAPTER 4. DISCUSSION OF FINDINGS 49
Case study’s findings 49
Theoretical contribution 56
Practical implications 57
Future research directions 57
CONCLUSION 59
BIBLIOGRAPHY 61
INTRODUCTION. 4
CHAPTER 1. THEORETICAL BACKGROUND: INTRODUCTION OF THE CONCEPTS 6
Overview of the related literature 6
Situational Crisis Communication Theory 6
Theory of image restoration 11
Stakeholder Theory 13
Salience model 16
Review of existent studies 17
CHAPTER 2. RESEARCH METHODOLOGY 24
Research approach 24
Sample selection 24
Data collection 28
Data analysis 29
CHAPTER 3. CASE ANALYSIS AND EMPIRICAL FINDINGS 31
Nestle 31
Komatsu 38
Auchan 42
Xiaomi 45
Companies’ response reaction 46
CHAPTER 4. DISCUSSION OF FINDINGS 49
Case study’s findings 49
Theoretical contribution 56
Practical implications 57
Future research directions 57
CONCLUSION 59
BIBLIOGRAPHY 61
Communication is a vital part of relationships between people, companies, institutions and even countries. As is commonly known, communication is the process of exchanging information between two parties, the sender, and the receiver. The essence of effective communication is transmitting the intended meaning of the sender and understanding of that meaning by the receiver. Therefore, in order to perform such kind of communication it is necessary to consider effective methods and strategies of communication.
Initially, communication was limited to documents and meetings. However, since the modern world and technology are evolving, as well as in given environmental and political constraints, this concept has changed significantly. Receivers no longer believe bold phrases. In a constant flow of information in news and social media, stakeholders advocate for facts, trust, and correct responses to various challenges. Therefore, it is necessary to make an emphasis on choosing an appropriate way of how to exchange (present) information, to make people understand and rely on the given data. Especially, it is highly needed during crises.
Given the current geopolitical conflict between Russia and Ukraine, almost every foreign enterprise found itself in a crisis. When the sanctions against Russia were imposed, many foreign MNEs had to leave Russian market that once has been very important since the new conditions were unfavorable to such an extent that the companies were no longer able to operate smoothly. Or given the reputational threat, the companies also left even if they had an opportunity to continue to work in Russia. Yet, there are still MNEs who decided to stay in Russia. It could be easily tracked how the moods of people - of stakeholders - have changed dramatically towards companies that decided not to leave. Some kind of ‘cancel culture’ has appeared where people question the responsibility issue: mostly in social media people post their discontents, blamings and encouragements to leave Russia, various websites are created with the purpose to increase awareness regarding the conflict and provoke the publicity to act. So, the organizational reputation is at risk from crises, which can also financially, emotionally, and physically hurt stakeholders, such as shareholders. Therefore, communication is a crucial strategy for ensuring that crisis events are kept to a minimum, as well as to protect a company's reputation and credibility.
With regards to that, my research question will be the following: ‘How do foreign MNEs, continuing operating on a Russian market in current political constraints, shape their communication strategies with stakeholders? ’ and, therefore, and the goal of this bachelor thesis is to identify which 4
communication strategies foreign MNEs, operating on Russian market under sanctions, use, and to understand the choice of a particular agenda in communication style (pattern) of the MNEs in crisis circumstances. The work encompasses the problem of communication between foreign MNEs and their stakeholders in the crisis constraint, and it is accomplished in the form of multiple case study.
In line with goal of the thesis, the research object is foreign multinational enterprises, while the research subject is communication strategies of MNEs with an ongoing presence in Russia. The analysis will be conducted through studying the particular cases - enterprises, for which the issue of communication is highly relevant nowadays. The study is performed in an explorative, or qualitative manner, since the main question is to understand the contexts of building communication strategies by companies given the current geopolitical crisis constraint. Qualitative research is necessary to study the topic in depth and underline valuable insights. Since mostly my study is connected to working with texts, as a method was chosen content analysis, as well as thematic analysis. Regarding the data collection, it is necessary to understand how the communication is addressed by the companies. Therefore, the data will be gathered through the exploring of official statements, press releases, official social media, and other sources of information of the selected enterprises for this research.
To achieve the outlined goal, the following objectives are taken into the consideration:
1. To review theoretical approaches connected to the communication strategies of MNEs and crisis management
2. To decide on the theoretical framework
3. To develop the research design:
• To select cases for the analysis
• To collect data for empirical research:
• To analyze the data
4. To conduct the research
5. To draw conclusions about communication strategies used
6. To propose a set of practical implications for MNEs when shaping the communication with stakeholders during crisis.
Initially, communication was limited to documents and meetings. However, since the modern world and technology are evolving, as well as in given environmental and political constraints, this concept has changed significantly. Receivers no longer believe bold phrases. In a constant flow of information in news and social media, stakeholders advocate for facts, trust, and correct responses to various challenges. Therefore, it is necessary to make an emphasis on choosing an appropriate way of how to exchange (present) information, to make people understand and rely on the given data. Especially, it is highly needed during crises.
Given the current geopolitical conflict between Russia and Ukraine, almost every foreign enterprise found itself in a crisis. When the sanctions against Russia were imposed, many foreign MNEs had to leave Russian market that once has been very important since the new conditions were unfavorable to such an extent that the companies were no longer able to operate smoothly. Or given the reputational threat, the companies also left even if they had an opportunity to continue to work in Russia. Yet, there are still MNEs who decided to stay in Russia. It could be easily tracked how the moods of people - of stakeholders - have changed dramatically towards companies that decided not to leave. Some kind of ‘cancel culture’ has appeared where people question the responsibility issue: mostly in social media people post their discontents, blamings and encouragements to leave Russia, various websites are created with the purpose to increase awareness regarding the conflict and provoke the publicity to act. So, the organizational reputation is at risk from crises, which can also financially, emotionally, and physically hurt stakeholders, such as shareholders. Therefore, communication is a crucial strategy for ensuring that crisis events are kept to a minimum, as well as to protect a company's reputation and credibility.
With regards to that, my research question will be the following: ‘How do foreign MNEs, continuing operating on a Russian market in current political constraints, shape their communication strategies with stakeholders? ’ and, therefore, and the goal of this bachelor thesis is to identify which 4
communication strategies foreign MNEs, operating on Russian market under sanctions, use, and to understand the choice of a particular agenda in communication style (pattern) of the MNEs in crisis circumstances. The work encompasses the problem of communication between foreign MNEs and their stakeholders in the crisis constraint, and it is accomplished in the form of multiple case study.
In line with goal of the thesis, the research object is foreign multinational enterprises, while the research subject is communication strategies of MNEs with an ongoing presence in Russia. The analysis will be conducted through studying the particular cases - enterprises, for which the issue of communication is highly relevant nowadays. The study is performed in an explorative, or qualitative manner, since the main question is to understand the contexts of building communication strategies by companies given the current geopolitical crisis constraint. Qualitative research is necessary to study the topic in depth and underline valuable insights. Since mostly my study is connected to working with texts, as a method was chosen content analysis, as well as thematic analysis. Regarding the data collection, it is necessary to understand how the communication is addressed by the companies. Therefore, the data will be gathered through the exploring of official statements, press releases, official social media, and other sources of information of the selected enterprises for this research.
To achieve the outlined goal, the following objectives are taken into the consideration:
1. To review theoretical approaches connected to the communication strategies of MNEs and crisis management
2. To decide on the theoretical framework
3. To develop the research design:
• To select cases for the analysis
• To collect data for empirical research:
• To analyze the data
4. To conduct the research
5. To draw conclusions about communication strategies used
6. To propose a set of practical implications for MNEs when shaping the communication with stakeholders during crisis.
This paper was conducted in a form of multiple case study and touched the topic of communication strategies of foreign MNEs that decided not to withdraw from Russia and continue to operate during geopolitical crisis 2022. The topic itself was thought to be a relevant one since such kind of crisis we are having now has never happened before. There is little to no research done in this sphere, the crisis continues, every day providing new difficulties and rules of the game. So, more than a year ago companies faced an unknown and found themselves in tough conditions. Especially those, who operated and operate on Russian market and doing business with Russia. Therefore, in terms of communication, for me it was interesting to track and analyze the responses of MNEs to the crisis, what they say to their stakeholders. The goal of the paper was firstly to identify which communication strategies foreign MNEs, operating on Russian market under sanctions, use, and based on them and to understand the choice of a particular agenda in communication style (pattern) of the MNE in crisis circumstances.
In order to meet all the stated in this paper objectives and goals, it was necessary to conduct a thorough examination of the theoretical materials and approaches connected to my field of research. This step allowed me to decide on the scientific background of the work and to choose relevant theoretical framework. So, the literature review helped to get a better understanding of the concepts that were further used during the analysis, as well as I was able to create my own framework (steps) for identifying the communication strategy of the company. Later on, the research design was outlined in the research methodology chapter. It included the description of the research’s manner, content and discourse analysis and other analysis tools. Further, the sample of firms for the analysis was comprised. Since the research object of the paper is foreign MNEs, the four international giants were chosen: Nestld, Auchan, Komatsu and Xiaomi. In order to reach desired outcomes of the research, we tracked communication of the firms through the messages and documents they released to the audiences. Further, all the gained material was studied by using the content and thematic analysis and supporting software tools. This allowed us to get the full picture and the essence of each message, as well as messages’ unique and common feature. With respect to the first aim of the work, we were able to form a conclusion about the strategy used by every company and identify the stakeholders they were addressing.
Moving on the explanation of research outcomes, research shed light on the communication patterns and strategies employed by multinational enterprises (MNEs) operating in the Russian market 59
during a geopolitical conflict and facing sanctions and boycotts. The research found that companies utilized a mix of diminish and reinforce strategies in their communication efforts to minimize pressure, protect their reputation, and explain their decision to stay in Russia. The messages in general were crafted as responses to the crisis and addressed various stakeholders, including employees, consumers, shareholders, and the international public. The international public emerged in the end as the most salient stakeholder, possessing power, legitimacy, and urgency, which made their opinion and actions influential in shaping the companies' all communication patterns.
The study also highlighted the importance of effective and consistent communication during crises, emphasizing the need for clear and timely transmission of information to stakeholders. Companies that remained silent or failed to adequately address the crisis risked increased tensions and misunderstandings. Furthermore, the research emphasized the significance of considering the reactions of the salient audience when developing communication strategies.
Also, the findings contribute to theoretical perspectives such as the Situational Crisis Communication Theory and the Salience Stakeholder Model. The research provided practical evidence supporting the alignment of crisis type and organizational goals with specific response strategies. It also identified the international public as a key stakeholder, influencing the choice of communication agenda in companies' interactions with stakeholders. The study fills a gap in the literature regarding the factors influencing communication strategies during geopolitical conflicts. The implications of this research highlight the need for companies to prioritize stakeholder communication, particularly with the international public, in order to mitigate negative attributions and potential consequences. It emphasizes the importance of conveying values, commitments, and social agendas to employees and consumers, who have legitimate stakes in the company's decisions but may have limited power to influence them. The research suggests that a comprehensive understanding of stakeholder salience and effective communication can help companies navigate crises successfully.
All in all, this research provides valuable insights into the communication patterns and strategies of MNEs operating in the Russian market during a geopolitical conflict. By understanding and addressing the concerns and expectations of various stakeholders, particularly the international public, companies can maintain their reputation, mitigate negative perceptions, and navigate through challenging circumstances. Further research can explore the evolving nature of negativity and stakeholder attributions over time, as well as the effectiveness of chosen communication strategies and agendas.
In order to meet all the stated in this paper objectives and goals, it was necessary to conduct a thorough examination of the theoretical materials and approaches connected to my field of research. This step allowed me to decide on the scientific background of the work and to choose relevant theoretical framework. So, the literature review helped to get a better understanding of the concepts that were further used during the analysis, as well as I was able to create my own framework (steps) for identifying the communication strategy of the company. Later on, the research design was outlined in the research methodology chapter. It included the description of the research’s manner, content and discourse analysis and other analysis tools. Further, the sample of firms for the analysis was comprised. Since the research object of the paper is foreign MNEs, the four international giants were chosen: Nestld, Auchan, Komatsu and Xiaomi. In order to reach desired outcomes of the research, we tracked communication of the firms through the messages and documents they released to the audiences. Further, all the gained material was studied by using the content and thematic analysis and supporting software tools. This allowed us to get the full picture and the essence of each message, as well as messages’ unique and common feature. With respect to the first aim of the work, we were able to form a conclusion about the strategy used by every company and identify the stakeholders they were addressing.
Moving on the explanation of research outcomes, research shed light on the communication patterns and strategies employed by multinational enterprises (MNEs) operating in the Russian market 59
during a geopolitical conflict and facing sanctions and boycotts. The research found that companies utilized a mix of diminish and reinforce strategies in their communication efforts to minimize pressure, protect their reputation, and explain their decision to stay in Russia. The messages in general were crafted as responses to the crisis and addressed various stakeholders, including employees, consumers, shareholders, and the international public. The international public emerged in the end as the most salient stakeholder, possessing power, legitimacy, and urgency, which made their opinion and actions influential in shaping the companies' all communication patterns.
The study also highlighted the importance of effective and consistent communication during crises, emphasizing the need for clear and timely transmission of information to stakeholders. Companies that remained silent or failed to adequately address the crisis risked increased tensions and misunderstandings. Furthermore, the research emphasized the significance of considering the reactions of the salient audience when developing communication strategies.
Also, the findings contribute to theoretical perspectives such as the Situational Crisis Communication Theory and the Salience Stakeholder Model. The research provided practical evidence supporting the alignment of crisis type and organizational goals with specific response strategies. It also identified the international public as a key stakeholder, influencing the choice of communication agenda in companies' interactions with stakeholders. The study fills a gap in the literature regarding the factors influencing communication strategies during geopolitical conflicts. The implications of this research highlight the need for companies to prioritize stakeholder communication, particularly with the international public, in order to mitigate negative attributions and potential consequences. It emphasizes the importance of conveying values, commitments, and social agendas to employees and consumers, who have legitimate stakes in the company's decisions but may have limited power to influence them. The research suggests that a comprehensive understanding of stakeholder salience and effective communication can help companies navigate crises successfully.
All in all, this research provides valuable insights into the communication patterns and strategies of MNEs operating in the Russian market during a geopolitical conflict. By understanding and addressing the concerns and expectations of various stakeholders, particularly the international public, companies can maintain their reputation, mitigate negative perceptions, and navigate through challenging circumstances. Further research can explore the evolving nature of negativity and stakeholder attributions over time, as well as the effectiveness of chosen communication strategies and agendas.
