When companies are faced with external criticism, even the most experienced chief communications officer might be tempted to go on the offensive, to fight back. But new research conducted by academics at North Carolina State University suggests that such impulses should be resisted, because an aggressive stance in a crisis may be associated with a drop in the company’s stock price.

Alice Cheng (pictured), an associate professor of communication at NC State and co-author of the paper in question tracked 10 years of data and used big data analytic tools to capture shifts in how the companies involved and the public discussed a complex legal situation regarding a widely used herbicide.

Researchers examined how Monsanto and Bayer dealt with fallout from the controversy surrounding the herbicide Roundup, which was listed as a probable carcinogen in 2015. Monsanto produced Roundup, and was acquired by Bayer in 2018. The researchers analyzed more than 230,000 tweets and 334 news articles from 2012 to 2022 to see how the two companies talked about the crisis, as well as how media and the public discussed the issue.

Cheng says the team chose the Monsanto/Bayer crisis due to its prolonged duration—more than a decade—significant impact, and complexity. She and her team found interesting correlations between corporate messaging, public attitudes and stock price.

“It was not surprising to find that the company’s stance in public messaging evolved significantly over the course of 10 years—sometimes taking an aggressive stance, sometimes neutral, and sometimes accommodating to public concerns,” says Jaekuk Lee, co-author of the paper and a PhD student at the university.

“We found that when the company took an aggressive stance, this was often associated with the public taking an aggressive stance. And when the public took an aggressive stance, the company’s stock price declined significantly. In other words, aggressive attitudes on both sides were strongly correlated with subsequent declines in the company’s stock price.”

The evaluations of tonality were conducted using manual content analysis and supervised machine learning models. A team of coders went through a sample of statements and tweets from the dataset. If a company statement was dismissing concerns or if tweets were accusing the company of neglect, those were labeled as “aggressive.”

An "aggressive" stance from the companies involved, she said, included a range of negative reactions like denial, accuse, attack, or hat some might characterize as a "robust defense."

Says Cheng, “While the companies can’t control the public, they can control their own communications positions—which suggests being accommodating would be in the company’s best interest.”

As to whether the findings are specific to the Roundup case, or have wider implications, she said she confident “that the results of this wider case can be applied more broadly.

“Other factors, such as organization reputation pre-crisis, warrant examination in future multi-case comparisons. While stronger relationships may aid in preventing or managing crises, their efficacy depends on the circumstances. Aggressive stances may not always be effective, particularly if the company is required to take full responsibility for the situation.”

Cheng also says that the study “ties in nicely with the Contingent Organization-Public Relationships framework that we developed a few years ago.” COPR, she explains, focuses on the “dynamic and situational nature” of relationships between organizations and their stakeholders.

“For practitioners, COPR offers a framework for analyzing and adjusting communication strategies based on the current stance of both the organization and its stakeholders, thereby enhancing real-time strategic decision-making during crises.” COPR is a cost-effctive alternative to traditional methods of defining and measuring those relationships, such as survey research, she says, and using AI “could further extend the observation period of relationship dynamics.”

“AI tools now allow us to assess the sentiment of hundreds of thousands of social media posts in order to capture how a company’s stance shifts over time—as well as changes in how various public audiences relate to the company over time,” says Cheng/ "That would have been almost impossibly time-consuming using traditional techniques.”