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HTM student serving a customer at Taylor's Restaurant.

OSU examines how hospitality firms positioned their corporate narratives during the pandemic

Tuesday, November 2, 2021

Media Contact: Bailey Stacy | Marketing and Communications, Coordinator | 405-744-2700 | bailey.stacy@okstate.edu

The restaurant and food service industry lost more than $80 billion in sales in March and April 2020 and has suffered the most significant losses compared to any other industry, according to a survey conducted by the National Restaurant Association. In fact, the group determined six out of 10 restaurants closed due to the COVID-19 pandemic in 2020, resulting in more than 8 million employees being laid off or furloughed.

“The impact of the crisis on the U.S. travel industry is expected to be much more devastating than that of 9/11 and the Great Depression,” according to the U.S. Travel Association, which labeled the crisis as “the great travel depression.”

These alarming numbers had Dr. Jinyoung Im, a hospitality and tourism management assistant professor at Oklahoma State University who performed this research while at Penn State University; Dr. Li Miao, hospitality and tourism management professor at Oklahoma State University; and Dr. Haemi Kim, assistant professor of human nutrition and hospitality management at the University of Alabama, questioning theoretical frameworks, corporate narratives and their approach to COVID-19 and the impacts on the customers’ and employees’ perspectives on the hospitality industry’s response.

“Starting from that question, we chose [to analyze] the CEO letters,” Im said. “It is a very palpable storytelling device. Companies actively use CEO letters to address their future direction, mission and values to continuously communicate with their stakeholders.”

Analyzing the CEO letters of 57 hospitality companies included on the Fortune 500 list that were published in March and June 2020, researchers found the main rhetorical strategies and impression management tactics utilized were the rational approach, credible appeals, affective approach and defensive tactics. They also found these letters were used to establish their image and position the business in a desirable place as well to resolve challenges and convince readers.

“During the pandemic, we lost 1.7 million jobs in the restaurant industry,” Im said. “It was devastating. It was quite severe and had significant impacts, which resulted in unprecedented challenges.”

When there is tension between key stakeholders, such as employees, customers and management, companies try to use a rational approach to calm everyone while simultaneously promoting their organization’s image as accountable, caring or virtuous.

Their major message has two components: one is that companies are taking action for legal purposes or to align with their mission and values; the second approach is taking the action and announcing it to be honest and transparent, which is the main tactic used. Companies were challenged when some of their core values were being tested — for example, if they promote caring for their people and then lay off or furlough employees, directly negating their mission. Companies deploy the defense strategy to defend their mission, values and actions for survival.

Researchers found rational and credible appeals were the predominant approaches to their narrative strategies or actions with the COVID-19 pandemic. This approach focuses on stating the argument with supporting evidence, formulating language around the what and why of the decisions and attempting to mitigate potential negative reactions from key stakeholders. Hospitality companies aggressively use credible appeals to establish company integrity and convince the audience of their competence, saying things like “we can do this” and “we are taking care of our part.”

The affective approach, which focuses on readers’ values, encourages patrons to respond to information by following directions. Lastly, the denial or defense approach was used to deflect the consequences of the crisis by reiterating the businesses’ lack of control or blame in the outbreak and reminding their audience the companies are in the same position as everyone else and greatly impacted by the pandemic.

“It was interesting to see their strategy,” Im said. “Most of the letters promote intangible assets — for example, their organizational culture, power of mission, values, digital leadership or the resiliencies of their people. Those intangible assets were aggressively promoted to build their competent positions in the market.

“In addition to the theoretical and practical implications of this research, companies can also benchmark the study findings to establish their narrative strategy during a crisis.”


Story By: Bailey Stacy | bailey.stacy@okstate.edu 

Photo By: Phil Shockley

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