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Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=wjht20 Download by: [ James Madison University] Date: 31 October 2016, At: 09:50 International Journal of Hospitality & Tourism Administration ISSN: 1525-6480 (Print) 1525-6499 (Online) Journal homepage: http://www.tandfonline.com/loi/wjht20 The Effect of Social Media on Reputation During a Crisis Event in the Cruise Line Industry Andreas M. Ryschka, Darla J. Domke-Damonte, J. Kay Keels & Ruediger Nagel To cite this article: Andreas M. Ryschka, Darla J. Domke-Damonte, J. Kay Keels & Ruediger Nagel (2016) The Effect of Social Media on Reputation During a Crisis Event in the Cruise Line Industry, International Journal of Hospitality & Tourism Administration, 17:2, 198-221, DOI: 10.1080/15256480.2015.1130671 To link to this article: http://dx.doi.org/10.1080/15256480.2015.1130671 Published online: 13 Apr 2016. Submit your article to this journal Article views: 228 View related articles View Crossmark data

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Page 1: The Effect of Social Media on Reputation During a Crisis ... › 2016 › ...The Effect of Social Media on Reputation During a Crisis Event in the Cruise Line Industry Andreas M. Ryschkaa,b,

Full Terms & Conditions of access and use can be found athttp://www.tandfonline.com/action/journalInformation?journalCode=wjht20

Download by: [ James Madison University] Date: 31 October 2016, At: 09:50

International Journal of Hospitality & TourismAdministration

ISSN: 1525-6480 (Print) 1525-6499 (Online) Journal homepage: http://www.tandfonline.com/loi/wjht20

The Effect of Social Media on Reputation During aCrisis Event in the Cruise Line Industry

Andreas M. Ryschka, Darla J. Domke-Damonte, J. Kay Keels & Ruediger Nagel

To cite this article: Andreas M. Ryschka, Darla J. Domke-Damonte, J. Kay Keels & RuedigerNagel (2016) The Effect of Social Media on Reputation During a Crisis Event in the Cruise LineIndustry, International Journal of Hospitality & Tourism Administration, 17:2, 198-221, DOI:10.1080/15256480.2015.1130671

To link to this article: http://dx.doi.org/10.1080/15256480.2015.1130671

Published online: 13 Apr 2016.

Submit your article to this journal

Article views: 228

View related articles

View Crossmark data

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The Effect of Social Media on Reputation During a CrisisEvent in the Cruise Line IndustryAndreas M. Ryschkaa,b, Darla J. Domke-Damontea, J. Kay Keelsa,and Ruediger Nagelb

aWall College of Business, Coastal Carolina University, Conway, South Carolina, USA; bUniversity ofApplied Sciences Mainz, Mainz, Germany

ABSTRACTThis research evaluates social media’s role in shaping perceptionsof reputation during crisis management in a cruise line setting.Data were collected from respondents in the United States andGermany (N = 334) to explore the influence of speed and clarity ofcorporate response, brand familiarity, and cultural values on theperception of corporate reputation of a cruise line experiencing acrisis. Results indicated that speed of response using social media,brand familiarity, and cultural values of the respondent affectedperceptions of corporate reputation of a cruise line after a crisis.

ARTICLE HISTORYReceived 9 November 2013Revised 26 December 2013Accepted 10 February 2014

KEYWORDSCorporate reputation; crisismanagement; cruise line;national culture; socialmedia

Crisis events in the tourism sector garner much attention, from the disaster ofthe Costa Concordia grounding close to the Italian island of Giglio in January2012 to the April 2013 bombing at the Boston Marathon. Such events arefollowed closely by individuals around the world, with Hill and KnowltonConsulting reporting that the Costa Concordia cruise ship grounding resultedin a vastly increased spread of social media amplification between January 13and 16, 2012, with more than 35,000 tweets, over 10,000 blog entries, over34,000 news mentions online, and more than 4,600 YouTube video mentions(Hogsdon, 2012)—a following that radiated around the world. Social mediawere also found to be responsible for disseminating sometimes confusing andinaccurate information (Petrecca, 2013). The inclusion of others outside thecompany in socially constructing the public image of the crisis means that theevent reality and its impacts need to be considered (Gergen, 1998), especiallyin the context of a intangible tourist experience (Young, 1999). The socialamplification of risk framework suggests that risk events such as crises haveimplications far beyond the physical harm that takes place, as individuals andgroups create interpretations of their meaning and impact (Pidgeon,Kasperson, & Slovic, 2003). Given that social media provides a newer andnot yet well understood venue within which such interpretations may form,proliferate, and perpetuate, it is important to consider how social media can

CONTACT Darla J. Domke-Damonte, PhD [email protected] Wall College of Business, CoastalCarolina University, Conway, SC 29528, USA.

INTERNATIONAL JOURNAL OF HOSPITALITY & TOURISM ADMINISTRATION2016, VOL. 17, NO. 2, 198–221http://dx.doi.org/10.1080/15256480.2015.1130671

© 2016 Taylor & Francis

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affect stakeholder perceptions of the tourism organization in the directaftermath of a crisis in a tourism setting and how this process can be bestmanaged before the crisis to avoid negative impacts on the organization.

Numerous such incidents in the past demonstrated that favorable reputationsbuilt over years or even decades can be significantly damaged within minutes asindividuals socially construct the reality of the company’s conditions based onwhat they observe, interpret, and further share through social media, such as thatof Nestle after its response to reactions on Facebook about its use of palm oil(Champoux, Durgee, & McGlynn, 2012). These situations show that socialnetworks are of great importance in crisis management, a fact that can modifythe requirements for effective preparation and successful handling of a crisis bytourism organizations. Additional knowledge could provide a clearer picture ofthe usefulness of social media and play a significant role in helping decisionmakers to navigate the rapidly changing media landscape to shape mosteffectively the resulting perceptions of their stakeholders (Veil, Buehner, &Palenchar, 2011).

Furthermore, the global cruise industry is estimated to be worth approxi-mately $36.2 billion USD, serving more than 20 million passengers in 2013(Cruise Market Watch, 2013). The cruise industry operates in a market definedby a limited number of companies due to the necessity of significant capitalinvestment into large ships with defined operating areas, but is also defined bycorporate brands and subsidiaries that extend across multiple geographic areas.As such, crises affecting one ship can have corporate-wide and industry-wideramifications globally, and so it is important for the cruise lines to recognize howsocial media responses to an incident in one operating area of the world mayaffect their potential to drive demand in other areas. As Douglas (1992, p. 32)noted, “it is futile to study risk perception without systematically taking thecultural bias into account.” Moreover, Pidgeon et al. (2003, p. 15) stated:

Risk experience can be properly assessed only through the interaction of thephysical harms attached to a risk event and the social and cultural processes thatshape interpretations of that event, secondary and tertiary consequences thatemerge, and the actions taken by managers and publics.

Therefore, the aim of this research was to evaluate empirically how aninternational cruise line’s utilization of social media during a period of crisisaffects the perception of potential consumers about the company’s reputationin different country settings. An experimental design that simulated corpo-rate responses in a fictitious scenario involving a crisis with a capsized cruiseship was used to analyze the effect on corporate reputation of speed ofresponse, clarity of information, and brand familiarity. Given the globalreach of both the cruise industry and the socially and culturally constructedinterpretations of what is portrayed through social media, we also sought tounderstand whether such responses would vary across national boundaries

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where cultural values differed. Given the range of social media platformspossible we focused our efforts on Facebook, the leading social networkingsite worldwide. Data were collected from two study groups—one in theUnited States and one in Germany—to identify whether response profileswould differ across national boundaries on the basis of cultural differences.

This study can provide a valuable contribution to the theoretical under-standing of the importance of elemental social media strategies that canpositively impact reputation during crisis settings. As the study evaluatesresponses from the key target groups using social media (the 18- to 29-year-old demographic, which is also at the early phase of the cruise industry’s coredemographic of 25+ years old; Cruise Lines Industry Association, 2011), thestudy’s results also offer meaningful insight into the potential expectations ofcommunication strategies of future cruisers. Moreover, the study provides aunique cross-cultural comparison opportunity in the context of an interna-tional tourism setting on the impacts of reputation through social media byconsidering how social construction of the risk response may be differentiallyconstructed based on cultural values.

Literature review

Crisis and crisis management

A crisis represents a single point in time that puts an organization’s reputa-tion at risk (Jordan-Meier, 2011), and is a major occurrence that “interruptsnormal business transactions and can sometimes threaten the existence of theorganization” (Fearn-Banks, 2010, p. 2). For this study, a crisis is defined as acritical event that violates stakeholder’s expectations and poses seriousthreats to an organization’s reputation. All crises have triggering eventsthat cause significant disruptions to a business, which often result in newsmedia coverage and which, in turn, create a situation in which the publicdesires more facts to form opinions.

The literature also suggests a number of classification systems for crises.Ulmer, Sellnow, and Seeger (2011) proposed a separation into the two cate-gories “intentionally caused crises” like terrorism or sabotage and “crisescaused by natural, uncontrollable factors” such as natural disasters or productfailures. Bernstein (2011) differentiated between three general groups: creep-ing crises, slow-burn crises, and sudden crises. Since causality can clearly affectthe type of responses and stakeholder integration efforts that are required in agiven situation, this study will focus on intentionally caused sudden crises.

The traditional crisis management literature is very well developed. Crisismanagement can simply be described as “the art of preventing or minimizingbusiness or organizational loss when threatened by a crisis” (Bernstein, 2011 p. 7).No organization, regardless of its age and size, is immune to crises, indicating that

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all companies need preparation and have a demand for crisis management(Coombs, 2012; Ulmer et al., 2011); however, no standard approach to crisismanagement that is applicable to every situation exists (Bernstein, 2011).Notably, organizations with a crisis management plan in place were foundto come out of a crisis with a more positive image than those without a plan(Fearn-Banks, 2010). All of the aforementioned issues collectively suggest that theessence of crisis management is to regain control over an unwanted situation tominimize chaos, negative publicity, and damage to an organization’s reputationthrough effective pre-emptive corporate action. Though crisis management hasbeen divided into several main phases (Bernstein, 2011; Coombs, 2012; González-Herrero & Smith, 2008), we focus here on the crisis response phase, given that thecommunication with stakeholders has the most impact on the perception ofcorporate reputation compared to other stages, as evidenced by the Nestleincident (Champoux et al., 2012). Thus, this project will focus on the responseby stakeholders to social media communications derived from a sudden,intentionally caused crisis.

Cultural theory helps to frame how such response through social mediamay offer interesting venues for research and further insight. Contradictingearlier theories of risk response as a series of consistent costs and benefits ofengagement through rational choice theory (Starr, 1969), Douglas (1992)advanced cultural theory to suggest that risk response is subject to theinterpretations of different cultural norms, such that events may be perceivedas transgressing specific socially accepted practices in some settings more sothan in others. Tansey and O’Riordan (1999) also noted that socially con-structed realities may differ from culture to culture. The social amplificationof risk framework (Pidgeon et al., 2003) brings together various componentsof risk interpretation and response based on classical communications theoryto consider how various social agents receive, interpret, co-create, and passon risk signals from events that they observe or encounter. Collectively, theseadvances in theory development reinforce the importance of considering howcultural differences may affect socially constructed responses to crisis, and totheir secondary and tertiary outcomes such as long-standing perceptionsabout reputation (Pidgeon et al., 2003).

Reputation management

Reputation is a valuable asset, affecting financial performance and competitiveadvantage, representing “a value judgment about the attributes of a company”(Larkin, 2003, p. 1). According to Coombs (2012), corporate reputation isbased on stakeholders’ evaluation of an organization’s ability to meet theirneeds. Reputation management is the handling of relationships betweenan organization and its stakeholders. Thus, threats to the relationshipstakeholders have with an organization indicate dangers to reputation.

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Strong corporate reputations denote a high degree of appeal, helping compa-nies to increase customer satisfaction, trust, and loyalty; attract top employees;and provide support in times of crisis (Wiedmann & Buxel, 2005). Differentmodels for appropriate reputation management processes after a crisisexist, including the four-element model by Gillingham and Noizet (2007),the seven-element model suggested by Blanchard (2011), and the networkedcrisis communication model discussed by Utz, Schultz, and Glocka (2013).

In the cruise industry, the importance of reputation was asserted by Meng,Liang, and Yang (2011), who found that cruise image has a positive influenceon tourists’ perceived value and satisfaction and an indirect effect on post-purchase behavioral intention. Satisfaction, which has been found to createan emotional bond with a brand that can result in higher consumer loyalty,increases repurchase intention and consumers’ recommendations to others.High satisfaction and positive image increase repurchase intention (CruiseLines Industry Association, 2011; Meng et al., 2011). Social media enableothers outside of a company to shape customer opinion especially duringcrisis events which may significantly affect the reputation for the firm duringcrisis (Blanchard, 2011; Champoux et al., 2012).

Speed of social media utilization in managing corporate reputation aftera crisis

Social media impacts the location and manner of initial facts about a crisisand increases the speed of information exchange, resulting in lightning-fastcommunication (Jordan-Meier, 2011) and enabling real-time interpretationand further proliferation of socially constructed realities by publics around theworld. The vast majority of Americans (92%) access news on multiple plat-forms and in many formats on a typical day, and 37% of Internet userscontribute to the creation of news by commenting on news or publishingtheir own opinions via social media, making the news a socially derivedexperience (Pew Research, 2010). Such citizen journalists are of great impor-tance in the process of sharing initial facts about a crisis, as was evidenced inthe case of the crash of US Airways Flight 1549 into New York’s Hudson River(Jordan-Meier, 2011), the Nestle Facebook crisis (Champoux, et al., 2012), andthe Costa Concordia grounding in 2011 to which criticism surfaced over boththe delay of posting of information and active involvement in the situation bythe CEO Mickey Arison (Walker, 2012). However, those close to breakingnews can also quickly spread misinformation to a global audience (Jordan-Meier, 2011). The clear implication for companies is that they cannot relysolely on traditional media in the diffusion and management ofinformation about a crisis. Consequently, the time companies have to issue aresponse perceived as appropriate is significantly compressed (Coombs, 2012;

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Fearn-Banks, 2010; González-Herrero & Smith, 2008), such that two daysmay appear inordinately long (Veil, Sellnow, & Petrun, 2011).

The significance of a quick response is exemplified by the criticism lodgedagainst Dominos (pizza restaurant) following the posting by employees of aYouTube video showing disregard for company rules and hygiene standards inthe preparation of customer orders (Veil, Sellnow, & Petrun, 2011). When thecompany delayed its response in the first 48 hours, speculations aboundedabout its credibility and crisis management capacity (Veil et al., 2011). As anexample, the response by Royal Caribbean Cruise Lines to a propulsionproblem that reduced the speed at which the ship could travel was reportedin a press release denoting the company’s acknowledgement of the problem onNovember 4, 2013 (Kramer, 2013), but via social media by consumers onCruise Critic in a string beginning two weeks earlier (Kramer, 2013), withnotations clearly showing that Royal Caribbean was communicating issuesabout the mechanical issue via Facebook in the interim and informing pas-sengers about their cruise itinerary to offset any risks to reputation. Thus, thespeed of response via social media is hypothesized as a major factor indetermining the effects on corporate reputation of a crisis event. We expecttherefore that a fast initial response via social media by the organization facingthe crisis will be associated with a more positively perceived reputation of theorganization. The following hypothesis is therefore proposed:

H1: The faster the speed of a corporate response via social media to a crisisevent, the more positive the perceived reputation of the organization facingthe crisis.

Clarity of information in social media utilization in crisis management

The crises experienced by two U.S. airlines are examples of the importance ofproviding a clear response in the tourism sector. United Airlines’ incompletehandling of a crisis triggered by isolated damage to the guitars of musician DavidCarroll and his band, Sons of Maxwell, resulted in massive media attention,reputation threats, and the viral complaint video, entitled “United BreaksGuitars” (Dave Carroll Music, 2009). References to this well-documentedevent were found in many academic writings (e.g., Deighton & Kornfeld,2011; Jordan-Meier, 2011; Safko, 2012). This example underscores the centralimportance of clarity and transparency of a corporate response to a crisis viasocial media. By the time the carrier sought to clarify its actions, its reputationwas already damaged. United Airlines failed to provide the right facts andignored smoldering issues, which led to negative publicity and “very publicand pointed lessons on how not to handle a crisis” (Jordan-Meier, 2011, p. 6).Proactive approaches focused on clarity, such as that used by Delta Airlines todeal with confusion on baggage charges for returning U.S. military service

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members, had positive impacts on that company’s reputation (Jacquette, 2011;Pawlowski, 2011). Delta’s experience demonstrates the positive reputationalbenefits of enhanced clarity in communicating through social media. Theanalysis of these incidents clearly illustrates the contention that the clarity ofthe information shared through social media affects perceptions of reputation.

That user-generated content related to both United’s and Delta’s crises canstill be found on the Internet supports the idea that issuing clear, sincerestatements is an essential ingredient in the reduction of misinformation. Assuch, it was expected that companies that issued clear statements with relevantsupporting details via social media would realize higher perceptions of theirreputations after crisis events. In the cruise industry this clarity of informationduring a crisis event seems particularly important because passengers on boardthe affected ship who have access to social media can then receive a commonmessage, which is reinforced by the crew onboard the ship. Such an occurrencehas several positive benefits. It can promote trust and goodwill, it helps familiesof those on the ship to better understand the conditions and circumstancestheir loved ones are facing, and passengers who are about to depart onupcoming cruises with the same company have more accurate information.Furthermore, the clearer the information provided by the company itself,the less subject such information points are to supposition and individuallyco-created realities through social media. Carnival’s extensive informationalupdate provided a 374-word Facebook posting within hours of the CarnivalTriumph engine room fire on February 10, 2013 (Carnival Cruise Lines, 2013).Thus, the following hypothesis was developed:

H2: The clearer and more complete the information released through socialmedia after a crisis, the more positive the perception of corporate reputation.

Importance of a strong brand in social media utilization in crisismanagement

A strong brand is particularly important especially in crises, as organizationswith well-known brands have a more favorable basis for positive perceptionsafter a crisis compared to unknown companies (Elliot & Percy, 2007; Heding,Knudtzen, & Bjerre, 2008). Alsop (2006, p. 17) noted, “If a crisis strikes orprofit shrinks, reputation suffers less and rebounds more quickly.” Moreover,clearly established brand names carry with them embedded meanings ofadherence to institutional norms of safety and security, thus generatingstronger barriers to any potentially negative socially constructed realities inresponse to a crisis event involving the company. Thus, a well-known brandis presumed to have positive effects on the perception of reputation after acrisis. Raising the positive awareness of the company’s brand is critical in thecruise market because only 24% of U.S. citizens and far fewer of those in

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other countries have taken a cruise, but growth projections show increasedinterest among new cruisers in the upcoming years (European CruiseCouncil, 2013). The resulting hypothesis was developed to identify whetherbrand familiarity would impact corporate reputation after a crisis event.

H3: Prior brand familiarity will have a significant impact on the perceptionof corporate reputation following a crisis.

The relevance of culture to the perceptions of reputation following a crisis

Given that social media contribute to a more interconnected world than inthe past, crises have become more global in impact, and they therefore offerthe opportunity for those from multiple cultural and social settings to besimultaneously involved in the real-time observation, interpretation, andperpetuation of the “reality” of the risk event, its seriousness, and its impactthrough social media. Individuals who learn about these crises are nested intheir own cultural settings, thus co-created meanings through social mediamay be misinterpreted (Vallaster & Von Wallpach, 2013). Kos, Norlander,and Rudwall (2012) found differences in expectations about social mediausage and control of brand in their study of social media managers incompanies in the United States, Japan, and Germany. Culture can affectcrisis response given that people’s expectations and interactions can differbased on their cultural values. In her development of cultural theory and itsconsideration of risk, Douglas (1992) noted that more individualistic socie-ties are more likely to respond to crises with escalating involvement withoutgreat consideration to the impact on others and thus be more likely to passon information, weigh, evaluate, and act on it without verification, whilethose from more group-oriented cultures might be more likely to spend timeweighing that information before engaging or acting. Given that crisesinvolving global companies may be inclusive of opinions, insights, and“truths” passed on by citizens from many cultural backgrounds, it isimportant to consider how values differences may affect risk interpretationand co-creation of the social media realities that come into play after a crisisevent. Values ultimately become evident in behavior that may affect purchas-ing decisions, trust, mobility, the sharing of information, and the representa-tion of facts, among other behaviors (Hofstede, 2001). Hofstede (2001)identified five key value dimensions which a society’s culture imprintsupon its members, including individualism/collectivism, power distance,uncertainty avoidance, and masculinity/femininity. Later work in HongKong led to the addition of a long-term/short-term orientation dimension,and further integration with analysis from the World Values Survey led tothe addition of a sixth dimension, indulgence versus self-restraint (Hofstede,Hofstede, & Minkow, 2010).

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Only a very limited number of studies making such comparisons regardingcultural differences in crisis response were identified. Low, Varughese, andPang (2011) found that Taiwanese and U.S. governments differed in theirapproaches to image repair strategies following natural disaster crises in thetwo countries, and these authors attributed the differences, in part, todifferences in power distance and uncertainty avoidance values dimensionswithin the respective countries. Gerecke and House (2013) found differencesin performance through financial crises were tied, in part, to the culturalbackgrounds of the banks’ top management teams. Schroeder, Pennington-Gray, Donohoe, and Kiousis (2013) noted that the impact of social media intourism crises is a very new area of research as they explored the drivers forsocial media usage among tourists from five countries.

Operations within the cruise industry occur globally with key markets inthe Caribbean and Mediterranean and top markets of origin in NorthAmerica (60.5%) and Europe (27%) (European Cruise Council, 2013). Inaddition, significant growth is projected for upcoming years. Thus it isimportant to review how culture may specifically influence the perceptionof responses to and social media behavior in crisis events across differentnational settings. In comparing both leading cruise source markets and socialmedia users, citizens of the United Kingdom and Germany became majorpotential markets to compare with the United States. Germans are thefastest-growing European origin market for the cruise industry representing23% of European source markets in 2012 and are predicted to overtake theleading United Kingdom source market within the next few years (EuropeanCruise Council, 2013). Moreover, we were interested in whether culturalvalue differences affected the way in which respondents would interpret theutilization of social media, and the United Kingdom had minimal differencesfrom the United States, while Germany differed substantially from the UnitedStates in both Individualism and Uncertainty Avoidance (Hofstede, 2001).Thus, given that Germany is expected to become the largest of the Europeancruise source market in the next few years while the United States is alreadythe largest of the cruise origin markets, that Germany and the United Statesboth use Facebook more than any other social networking site, and that thereare already empirically validated cultural values differences between the twocountries, we focused on these two country markets for our comparison ofthe cultural impact on perceptions of reputation in response to a company’sutilization of social media during a crisis.

On the values dimension of individualism/collectivism, the United Statesscored 91 while Germany scored 67 (Hofstede, 2001). In individualisticcultures, people primarily take care of their immediate families, are proactivein approaching others for information and are accustomed to interactionwith strangers. Those who score higher on the Individualism dimension areexpected to be self-reliant and to display initiative in business (Hofstede,

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2012a).The differences in individualism scores suggest that Americans mightbe more likely to share online content, consistent with the expectations ofcultural theory (Douglas, 1992). It also suggests that Americans may usesocial media to a greater extent to voice individual opinions by commentingon initial facts. Translated to social media setting, this observation impliesthe likely use of a direct approach to seeking and sharing news, particularlyin the United States. Higher Individualism presumes Americans to be morelikely to voice individual opinions and to have a greater tendency to shareand comment on web content after a crisis. Thus, Hypothesis 4a wasproposed:

H4a: Higher Individualism will be associated with greater sharing of onlinecontent and use of social media to comment on initial information or to reactto a corporate announcement after a crisis.

On the cultural value dimension of uncertainty avoidance, the United Statesscored 46 while Germany scored 65, meaning that Germans tend more towarduncertainty avoidance than people from the United States (Hofstede, 2001). Thedifference in scores suggests that Americans are more tolerant of risk and havefewer rules to avoid uncertainty. They may also have greater openness towardsnew ideas and products, characteristics that represent an “uncertainty accepting”country (Hofstede, 2012a). Germany is characterized as an “uncertainty avoi-dant” nation, and details are important to create the desired certainty (Hofstede,2012b). Swaidan proposed a “direct relationship between uncertainty avoidanceand consumers’ positive perceptions of CSR [corporate social responsibility]”(Swaidan, 2011, p. 130). Consumers from countries with high uncertaintyavoidance, such as Germany, may follow ethical standards more strictly. Theymay be more supportive of corporate social responsibility activities and have ahigher sensitivity to moral issues. Moreover, according to cultural theory(Douglas, 1992), consumers in countries with high uncertainty avoidance mayperceive a narrower range of socially accepted actions by firms in general, thusincurring socially constructed judgments of breaches of said boundaries atpoints earlier than those from those from cultures lower on uncertainty avoid-ance. Thus, as a culture whose values are generally measured to be higher inuncertainty avoidance, Germans are expected to judge corporate misbehaviormore harshly and to have lower perceptions of corporate reputation after a crisis(Swaidan, 2011). Thus, the following hypothesis was proposed:

H4b: Higher uncertainty avoidance will be associated with lower perceptionsof corporate reputation after a crisis than will low uncertainty avoidance.

Applied to the social media context, differences in uncertainty avoidancemay also impact the perception of online content. Initial crisis facts are usually

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based on personal perceptions of particular eyewitnesses or represent anorganization’s published assessment. Thus, these facts engender uncertaintyand concerns about the risks of inaccurate information. The openness of socialmedia and anonymity of its users can lead to doubts about the accuracy of thefacts presented. Considering that “trust is tightly coupled to uncertainty”(Aras, Beckstein, Buchegger, Dittrich, Hubauer, Klan, König-Ries, &Wolfson, 2009, p. 2), those lower in uncertainty avoidance may be morecomfortable with unstructured situations, and therefore are expected to havemore confidence in user-generated content. A lower level of uncertaintyavoidance points towards greater acceptance of informal, unstructured factsand less concern about source credibility, resulting in less skepticism aboutonline content. Those higher in uncertainty avoidance are presumed to regardinitial information with more ambiguity and awareness of misinformationrisks. Higher mistrust indicates that content will be perceived as less trust-worthy, and thus those higher in uncertainty avoidance might be hesitant tocomment on facts posted to social media outlets because such action exposesthe user to comments of others who are often complete strangers without clearrecourse. Content can be forwarded without the creator’s control, which leadsto unpredictability. Thus clear guidelines about the use of uploaded contentand disclosed comments are expected to be of greater relevance to those withhigher uncertainty avoidance. Therefore, the following hypothesis is proposed:

H4c: User-generated content posted in social media in crisis settings will beperceived as being more reliable in cultures with low uncertainty avoidancethan in those with high uncertainty avoidance.

Methods

An experimental design was adopted to test these hypotheses by establishinga fictitious scenario of a sinking cruise ship and testing different simulatedresponses via social media by the cruise line in the wake of the crisis event.Response characteristics varied based on speed, clarity and familiarity. Testsubjects were individuals from two national settings that differed in uncer-tainty avoidance and individualism: the United States and Germany.

Frequently encountered issues in cross-cultural research include responseequivalence and timing of data collection (Sekaran & Bougie, 2009). Themethodwe chose to apply has many advantages with regard to the substantial interna-tional component of this project. Data were collected in both countries within atime span of less than 2 months, thus reducing comparability challenges.The limited lapse of time in data collection also minimized the possibility ofadditional crisis development in the international cruise industry broadlycirculated on media that might affect participant responses. Furthermore,large samples assigned to each of the treatment options and randomization of

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all respondents to treatment options with no knowledge of multiple treatmentsenabled greater confidence in the research findings (Sekaran & Bougie, 2009).

It is important in international research for survey questions to have thesame meaning to all respondents (Saunders, Lewis, & Thornhill, 2009). Inview of variations in English proficiency, the response instrument was trans-lated into German by a native speaker before conducting the experiment inGermany and then translated back to English for clarity checks. The back-translation technique “is the most widely employed method for reachingtranslation equivalence [. . .] in cross-cultural research. This procedure helpsto identify probable translations errors.” (Usunier, 1998, p. 51) Thus, it wasback-translated into English by another bilingual person and checked forcorrect use of language and grammar in both languages.

A total of 334 undergraduate business students served as subjects in the study,with 165 in the United States and 169 in Germany. Students were regarded asappropriate subjects to participate in a study related to social media, becausetheir age group far exceeds other generations in frequency of social media usage(Pew Research, 2009). Furthermore, the group’s proximity to the base demo-graphic for cruising of 25+ years of age (Cruise Lines Industry Association,2011) also made its inclusion as a potential stakeholder group credible.

Operationalization of key variables

To measure corporate reputation, the reputation scale developed earlier byPonzi, Fombrun, and Gardberg (2011) was adopted by adding an additionalstatement to ask whether respondents would choose the treatment cruise lineover others if they were booking a future cruise. Responses were measured ona Likert-style scale, ranging from 1–7. Dimensionality and reliability of thereputation scale as amended in the current study was evaluated. Principalcomponents analysis indicated one factor with an eigenvalue of 4.006 thatexplained 66.7% of the variance among the six variables. Unidimensionalityof the scale was verified by testing it on the individual German (n = 163;eigenvalue = 3.546; 59.9% of variance explained) and U.S. samples (n = 163;eigenvalue = 4.117; 68.6% of variance explained). Reliability analysis of theunidimensional scale indicated a Cronbach’s alpha of 0.858, well aboveacceptable levels for reliability of the scale. Thus, the responses to the sixitems were combined by adding them together to derive the corporatereputation measure.

Speed of response, denoting the amount of time elapsed before a cruiseline issued an initial response on social media after the crisis, was set up as anexperimental manipulation based on insights gained from empirical evidencein the literature review to develop two experimental treatments: “fast” meantthat the cruise line had issued a statement via social media within the firsttwo hours of the crisis and noted that updates would be provided within the

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next two hours, while “slow” meant that the initial statement issued notedthat the cruise line would provide additional updates the following day Thesocial media and crisis management literature, primarily Coombs (2012),Jordan-Meier (2011), Safko (2012) and Ulmer et al. (2011) clearly indicatedthat a statement has to be issued within the first few hours and that aresponse the next day was identified as too slow. Manipulation checks forthe variable to identify whether the response time was appropriate with thetwo types of responses manipulated showed a significant chi-square(χ2 = 25.27; df = 2, p < .001).

Clarity of response was developed based on the importance of additionalfacts and further information being provided in a crisis situation, as notedprimarily by González-Herrero and Smith (2008) and Veil et al. (2011). Clarityof response was measured with two narratives: “clear,” which provided addi-tional facts related to the cruise ship and the evacuation—it specified the age,length, width of the ship, and facts related to the rescue efforts—versus“unclear,” which provided vague, unclear information about the crisis, includ-ing no information about the ship’s damage. Brand familiarity, referring to theamount of knowledge about a particular brand, was tested by reviewing theliterature to identify a globally operating cruise line that appealed especially tosport and entertainment, thus appealing to the younger generation. Pretestswere completed to assess familiarity with multiple cruise lines, including afictitious cruise line named Eternity Cruises. Eternity Cruises was created tocontrol for bias by eliminating any kind of familiarity and prior knowledge.RCL was selected after reviewing websites of globally operating cruise lines.RCL was found to attribute great importance to sport and entertainment(Royal Caribbean International, 2012), making it appealing to younger audi-ences. Manipulation checks indicated a significant difference (t = 11.225;df = 314; p < .001) in subjects’ reported familiarity with the two cruise linesused, validating the use of these two as one with high and one with lowfamiliarity.

Reliability of information presented through social media was measuredon a 5-point Likert-style scale to assess both general perceptions aboutreliability and specifically how reliable the simulated data were. A partici-pant’s response to the post and their likelihood to share it was than evaluatedthrough a 5-point Likert-type scale. The control variables age, gender, andprior cruise experience were included as they had the potential to influencethe perception of corporate reputation.

Data gathering and analysis

Respondents received a printed packet that was divided into a general sectionincluding basic demographic questions and social media usage, followed by anunfolding scenario of a fictitious cruise ship tragedy. Respondents were instructed

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not to return to previous pages once completed to avoid later questions beinginfluenced by prior answers. Various visual representations of a cruise line in crisiswere pretested among a small sample of German and U.S. student populationsusing semantic differentials to identify a picture that was universally perceived asone showing a crisis situation on a cruise ship. The experimental treatment beganwith the presentation to each respondent of the same picture of a sinking cruiseship along with a Facebook-style comment by a good friend named “Anna” whodirected the respondent to check out a link. Because a broad variety of socialmedia platforms are possible, it was important to identify a single platform tofocus upon, and so we chose the Facebook platform, because of its popularity asthe top social media platform in the United States and Germany (Solis, 2010). Allposts were printed in the distinctive Facebook font and featured the typicalbuttons “Like,” “Comment,” and “Share.” The initial post displayed Facebook’sunique logo to raise immediate recognition of the online network. The linkshowed a post written by a person sitting on a fishing boat near the sinkingship, stating:

My friends and I are on a little fishing boat a couple of miles off the coast. There’sa huge cruise ship sinking! Incredible!!! It keeps tipping further. Look at where it isnow!! Rescue boats are coming up on me, we can’t get any closer! The evacuationappears to be very chaotic, everyone seems to be in panic. I can hear passengerscrying, some are even jumping over board to get to the rescue boats. The onlything I can see is “Eternity Cruises” [or RCL] written on the ship. OMG!!

Respondents were then asked how trustworthy the information was andwhether they would share the posting with others.

On the next page, respondents were told, “Out of curiosity you keepchecking Facebook and find nothing published by [name of cruise line]about the incident.” Respondents were then told that they found an updateeither two hours later or one day later to support the speed of responsetreatment. In addition, the notice posted by the cruise line was either veryclear and detailed or vague and incomplete, showing the simulation forclarity of response. Finally, respondents were asked about what they thoughtabout the reputation of the cruise line.

Thus, a total of eight different treatment combinations were distributedrandomly to populations in both Germany and the United States. Theinformation remained in English throughout the survey, as it is more realisticthat initial facts were only provided in one language. Considering thatnonnative speakers may read an English statement differently from U.S.respondents, the German version included an extra question at the end. Itasked participants to rate their understanding of the items included. Nosignificant differences were noted systematically or statistically between allstudents involved. All data were entered into SPSS and correlations, analysesof variance and regression analyses were conducted.

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Results

Table 1 provides the correlations of all study variables. The average age ofparticipants was almost identical (22.87 in the United States vs. 22.53 years inGermany), and the samples were similar in size (United States: n = 165 vs.Germany: n = 169). Variations in the male–female ratio between the UnitedStates (67.9% male) and Germany (48.5% male) were recognized but werebeyond the researcher’s direct control. The study results point out that respon-dents from the United States had considerably more cruise experience thanthose from Germany (42.7% vs. 11.2%). A chi-square test showed significantvariations in prior personal experience between both study samples(χ2 = 42.01; df = 1; p < .001). Correlations indicated that those with priorcruise experience noted higher reputation scores (r = .227; p < .01) and weremore likely to share social media postings (r = .175; p < .01), that males foundsocial media postings more trustworthy (r = .119; p < .05), and that olderrespondents found social media postings more reliable (r = .102; p < .05).

The research confirms the importance of social media in communication andcorporate reputation after an intentionally caused, sudden crisis. The findingssupport Hypothesis 1, namely that a quick response has a positive influence onthe perception of corporate behavior and reputation of an organization.Manipulation checks confirmed that respondents associated the “fast” experi-mental condition with speedy response and the “slow” experimental conditionwith slower response (χ2 = 25.27; df = 2, p < .001). Overall regression results,shown in Table 2, also indicated that faster speed of response was associated withmore positive perceptions of corporate reputation (B = 1.557; p < .05), support-ing Hypothesis 1.

Hypothesis 2, stating that the clarity of response released after a crisis has apositive impact on the perception of the response, was perceived differentlythan expected. No significant difference in the mean responses between thetwo manipulations (F = 2.118; p = .147) was evident. The response to theunclear manipulation (3.02) was only marginally less than that for the clearmanipulation (3.17). Thus, the amount of information the author consideredto be unclear was not truly perceived as less clear. This outcome wasconfirmed in the regression analysis, in which there was no significantdifference between the clear versus unclear expressions by the firm(B = −1.08; p > .10). As such, it is unclear whether the lack of developmentof the manipulation check itself made the difference to the regression resultsor whether information provision, regardless of its extent, is appreciated bypotential customers, and therefore supportive of corporate reputation. In anycase, Hypothesis 2 was not supported in this study.

Analysis of individual slope coefficients suggested that age and gender didnot have a significant influence on the perception of corporate reputation.Only prior cruise experience was significantly associated with perceptions of

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Table1.

CorrelationTable.

Variables

MSD

Gender

Age

Previous

cruise

experience

Coun

try

Trust-

worthiness

ofsocial

media

(general)

Reliability

ofsocial

media

post

(specific)

Forwardthis

photoand

incident-related

inform

ationvia

text

ore-mail

Postandshare

available

inform

ation

abou

tcrisisby

social

media

Speedof

respon

seby

cruise

line

Clarity

ofrespon

seBrand

familiarity

Age

22.7

2.84

−0.22

Previous

cruise

experience

.27

.44

0.016

−0.12*

Coun

try

.51

.50

−0.20

**−0.06

−0.355**

Trustworthiness

ofsocialmedia

(general)

2.81

.84

.119*

.102*

0.023

−0.148**

Reliabilityof

socialmedia

post(specific)

2.53

1.05

0.021

.133**

.134**

−.237**

.206***

Forwardthis

photoand

incident-

related

inform

ationvia

text

ore-mail

1.67

.99

.021

.133**

.134**

−.237***

.158**

.269***

Postandshare

available

inform

ation

abou

tCrisisby

socialmedia

1.70

1.00

.10*

.141**

.175**

−.256***

.162**

.243***

.707***

Speedof

respon

seby

cruise

line

.53

.50

−.076

†−0.062

.081

†−0.025

−.002

.144**

0.026

−.027

Clarity

ofrespon

se.50

.50

−0.012

−0.052

−0.032

−0.006

.036

−0.057

−0.038

−.047

−0.012

Brandfamiliarity

.48

.50

−0.013

−0.016

0.054

−0.012

−.043

−0.041

0.045

.024

−0.016

−0.024

Repu

tatio

n19.02

6.04

.100*

−0.057

.227**

−0.375**

.216***

−0.013

.167**

.173**

.124*

−0.022

.322**

Note.

† p<.10.

*p<.05.

**p<.01.

***p

<.001.

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Table2.

Regression

Results

forEffect

ofSpeedof

CorporateRespon

se,C

larityof

Respon

se,and

NationalC

ulture

onCo

mpany

Repu

tatio

nAfterCrisisIncident

(N=314).

Variable

Mod

el1

Mod

el2

Mod

el3

Mod

el4

Mod

el5

Constant

18.896***(3.186)

24.533***(3.156)

22.419***(2.993)

21.127***(3.027)

21.212

(3.079)

Gender(0

=Female;1=Male)

1.486†

(.779)

530(.755)

.500

(.711)

.650

(.710)

.648

(.711)

Age

−.076

(.136)

−.173

(.130)

−.165

(.122)

−.149

(.122)

−.150

(.122)

Havetakenaprevious

cruise

3.522***

(.860)

1.659†

(.870)

1.361†

(.821)

1.245(.817)

1.239(.820)

Coun

try(1

=Germany;0=USA

)−4.808***

(.791)

−4.883***

(.745)

−4.830***

(.741

−4.831***

(.742)

Brandfamiliarity

with

cruise

line

4.320***

(.684)

4.339***(.679)

4.334***

(.681)

Speedof

corporaterespon

se(slow

vs.fast)

1.558*(.685)

1.557*(.686)

Clarity

ofrespon

se(clear

vs.u

nclear)

−1.08

(.681)

R20.065

0.164

0.26

0.272

0.272

Adj.R2

0.056

0.153

0.248

0.256

0.252

Sign

ificance

F=7.160***

15.234***

21.697***

19.186***

16.397***

Note.Standard

errorsarerepo

rted

inparentheses.

*p<.05.

**p<.01.

***p

<.001.†p<.10.

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reputation of the cruise line noted in the experiment (b = 3.522; p = < .001).Thus, participants who lack cruise experience had a lower corporatereputation score compared to those that had been on a cruise before. Theresult clearly indicates that product experience is important for developingcorporate reputation thus providing partial support of Hypothesis 3.Manipulation checks were done by all respondents to identify their priorbrand familiarity with RCL and Eternity Cruises, and a significant difference(t = 11.225; df = 314; p < .001) existed between the familiar and unfamiliarline. Those who experienced the simulation with the more familiar cruise lineRCL as the focal cruise line did have a much stronger perception of corporatereputation following the crisis event than did those who experienced thesimulation with the fictitious (and therefore less familiar) cruise line EternityCruises (b = 4.334; p < .001), thus reinforcing the role of prior brandfamiliarity in offsetting negative impacts on reputation that can come fromcrisis events, which supported Hypothesis 3.

The study also revealed partial support for the differences across thecountry samples consistent with those expected based on cultural differences.Differences were noted in the rate at which online content is shared. Theresult suggests that Americans were much more active in stating they wouldpost and share information about the simulated Facebook posting about thecruise incident (United StatesM = 1.96 vs. GermanyM = 1.44), F = 9.368,df = 330, p = .002, and that they would forward the posted photo andinformation via email or text (United StatesM = 1.91 vs. GermanyM = 1.44,F = 8.508, df = 330, p = .004, supporting Hypothesis 4a, which proposed thatparticipants in cultures with higher Individualism, such as the United States,are more likely to share online content. Applied to the context of crisismanagement, initial facts about a critical event are more likely to be sharedvia online networks primarily located in the United States. Companies willneed to be more proactive in their preparation for and response to crisis inorder to mitigate adverse consequences to corporate reputation in cultureslower in individualism.

Hypothesis 4c was supported. Respondents from the United States, notedas having lower uncertainty avoidance than those in Germany, perceiveduser-generated content as more reliable and evaluated social media’s generaltrustworthiness as higher. Conversely, German respondents assessed thecredibility as lower and user-generated content as less reliable in generalterms (United StatesM = 3.09 vs. GermanyM = 2.54), F = 4.114, df = 330,p < .001, as well as in response to the specific simulated picture andinformation provided in the study manipulation (United StatesM = 2.72 vs.GermanyM = 2.41), F = 4.692, df = 330, p = .007. The greater preponderanceto use social media as a credible news source and the higher trustworthinessattributed to such media imply that issuing a response via these channels isparticularly important in the United States. Its use and impact in other

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countries, especially those lower in uncertainty avoidance, may have to bereevaluated given potential concerns with reliability of information deliveredthrough this channel.

The regression results also supported Hypothesis 4b, which posited thatcorporate reputation perceptions among those from Germany (where uncer-tainty avoidance has been found to be higher) were lower than among thosefrom the United States (B = −4.831; p < .001). Thus, further considerationmust be given by cruise lines to how to provide information effectively toinfluence corporate reputation perceptions in settings with different levels ofuncertainty avoidance. These results provided support for the contentions ofcultural theory in which risk assessment and response is affected by culturalvalues and their resulting social institutions.

Discussion

The objective of this article was to examine social media’s role in crisismanagement and more specifically, the perception of response strategiesemployed by cruise ship lines and how those perceptions might be influencedby cultural differences. The research underlines the tremendous popularity ofthe use of social media on both sides of the Atlantic Ocean, confirming itsgrowing importance as communication and crisis management tools. Socialmedia clearly has added a new dimension to crisis management and hasconfirmed the insufficiency of the traditional approach alone. In fact, theanalysis of selected incidents has shown that companies in different industrieshave first-hand experiences with social media’s power to threaten their reputa-tion. Speed of response was validated as being of great importance to theperception of reputation. This study underlines the necessity to issue initialfacts within the first few hours. Stakeholders have come to expect immediateresponses, as they have grown accustomed to real-time communication andinstant access to information. Crisis managers must be prepared to harnesssocial media’s power to issue a quick response and to correct misinformation.

The study did not support that clarity of the information provided wasassociated with higher reputation perceptions. It is unclear whether this out-come is due to flawed interpretations of the descriptions developed andvalidated through manipulation checks within the current study or due toconsumers’ relatively limited understanding of the broader corporate environ-ment and remains to be established in further research. The fact that additionaldetails specified in the clear statement were not perceived as significantlyclearer emphasizes the importance of providing initial information as soonas possible, even if supporting details are not yet available.

One of the most significant findings to emerge from the research is thatbrand familiarity has major impacts on the perception of reputation in acrisis. It stresses the importance of a strong brand to reduce adverse public

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perceptions. Even moderate knowledge was found to have a substantialimpact on the participants’ opinion of the organization. This finding indi-cates the great importance of ethical behavior in business as a prerequisite fora positive global reputation and less damaging impacts in times of crisis.

The research also showed that culture has significant impacts on interactionand the perception of a response in social networks, supporting the importanceof considering the social construction of the risk response framework(Douglas, 1992; Pidgeon et al., 2003) and furthering the work of Tansey andO’Riordan (1999) and Holst (2012). The global reach of social media serves as areminder that initial facts are regarded differently from different perspectives.Americans were found to be more active in accessing online tools to receivenews as well as commenting on first information. In fact, constant connectivityand instant access to information were established as more pronounced in theUnited States. The study suggests that social media is of greater relevance in thedissemination of crisis news in the United States. German participants, on theother hand, were rather passive in their sharing or commenting on contentand displayed greater mistrust towards social media. Moreover, Germanrespondents expressed lower perceptions of corporate reputation, thussupporting the need to further evaluate how differences in cultural valuesmay be explored to understand appropriate ways to develop and supportcorporate reputation issues through the use of social media and other optionsboth on an ongoing basis and during crisis.

In summary, the application of social media in these student samples hasprovided support for future studies that may explore how Facebook and othersocial media platforms influence how companies can navigate crisis settings. Italso gives some further support, at least in this narrow population, to thecontention noted in Kos et al. (2012) that differences exist in the perspectiveabout brand image control through social media usage in different countries.Nonetheless, these results must be evaluated with an awareness of a number oflimitations, as discussed in the subsequent section.

As reported, the research was conducted only with undergraduate students,representing a limitation to the generalizability of the results. Thus, theobserved perceptions of response strategies may not be representative of theentire society. Data were collected in a fictitious and controlled environment,thus limiting its application to the real world: a laboratory experiment cansimulate reality only to a certain extent. Respondents reading about a tragedymight perceive the situation differently when faced with it in real life. Thecurrent investigation was limited to the major dimensions of speed, clarity andbrand familiarity in view of sample size restrictions. Thus, the study wasnot designed to incorporate additional factors that could influence theperception of corporate behavior. Additionally, U.S. participants had morecruise experience and a greater knowledge about globally operating cruiselines. This experience factor could have impacted their perception of a cruise

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ship accident. The fact that the study was conducted in two languages couldalso introduce bias. Although the instrument was carefully translated andexplained, minor discrepancies in the meaning of words can impact responsecomparability. Finally, though numerous studies have used country-levelcomparisons to test differences in Hofstede’s value dimensions, there remainsdiscussion as to whether this application presents a level of analysis issue.

The research results suggest a number of avenues for further investigations.An additional study might explore whether the established causal relationshipsare valid and reliable for other populations. More research about the role ofclarity in the perception of corporate reputation would help to gain a deeperunderstanding on this factor. Additional studies would help establish a greaterdegree of accuracy on attributes contributing to differences in the perceptionof clarity. Furthermore, it would be very interesting to include additionalcultures in the research, as this could illuminate the role of cultural impactson the perception of a response to corporate reputation. The investigationcould also be carried out in the future to explore changes in social media usageand the perception of responses over time. The cruise industry, and broadertourism industry in general, represent the coming together of individuals fromaround the world who bring different cultural lenses through which theyinterpret and participate in social media. Consequently, further work remainsto be done to illustrate how managers can best plan and deliver effectiveapproaches for their myriad stakeholders.

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