Understanding crisis response

How do crises and their impact on society evolve and how does it differ across individuals, companies and governments? Our framework comes from both theories across a wide variety of disciplines (psychology, management and strategy, and public policy), and from in-depth interviews of senior executives from a variety of industries:

First, an emerging crisis produces collective stress, which increases with its uncertainty, speed of onset, scale, scope, and duration). This triggers a meaning violation, such as the social restrictions imposed by COVID-19. Key to making sense of the crisis is the nature and consistency of how it is communicated. Norms and identities, and resources are key to sense making.

Meaning making leads some to “accommodate” by revising their familiar meaning framework to make it consistent with the crisis and engage in what we refer to as a compliant response (e.g., adopt a mindset that views COVID-19 as a serious situation that requires restricting social interactions). Others may show reactance (e.g., adopt a mindset that COVID-19 is not that serious and there is no reason to curtail social interactions).

As the crisis develops and more information becomes available, responses may change. Beyond the choice of responses between those that are more compliant or more reactant, some responses may morph from a unilateral response to a more multilateral response. For example, early in the pandemic, families isolated themselves and firms and governments made individual decisions. Over time, families and friends formed ‘pods’ (e.g., to coordinate grocery shopping); hotel companies collaborated with educational institutions and airlines with providers of meeting space rentals; neighboring states in the U.S. coordinated their lock-downs and travel guidelines. Coordination can, and indeed should, also occur between individuals, firms, and governments.

The meaning making response (e.g., compliance or reactance) of the various social actors has feedback effects on the scale, scope, and duration of the crisis. For example, different countries responded differently to COVID-19 so that some (e.g., China, Vietnam, South Korea, New Zealand) were able to contain the scale and scope more than others (e.g., U.S., Brazil). The crisis and the type of sense-making and response by various social actors affect many aspects of life during the crisis with consequences for marketers. These span the spectrum from changes in individual and firm needs and resources to changes in how products and services are purchased and consumed; from finding ways to interact and conduct business within the firm and between firms to dealing with pressures on the supply chain; from the ability and willingness of customers to pay for specific products and services whose value may have increased during the crisis to the ability and willingness of firms to charge for them.

After a crisis abates, social systems transition into a post-crisis phase, which represents the emergence of a ‘next normal’ for individuals, firms, and governments. Which of the changes that occurred during the crisis will persist and at what level, and which ones will revert back, depends not just on whether and how needs change but also on the intervening processes at work, many of which may be at odds with one another. We use these intervening processes to discuss the potential longer-term implications of the marketing-relevant changes that occur during a crisis from the perspective of technology, customers, organizations, and policy makers.

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