AN EXPLORATORY STUDY OF CHINESE SOCIAL MEDIA RESPONSES TO TESLA’S SAFETY FAILURES: DO COMMUNICATION STRATEGIES LEAD TO REPUTATIONAL HARM? By Jiawei Wang A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of Media and Information—Master of Arts 2021 ABSTRACT AN EXPLORATORY STUDY OF CHINESE SOCIAL MEDIA RESPONSES TO TESLA’S SAFETY FAILURES: DO COMMUNICATION STRATEGIES LEAD TO REPUTATIONAL HARM? By Jiawei Wang Social media has brought new challenges to multinational enterprises. Local users can praise a product and possibly increase brand reputation, they can ask questions about reliability, or they can criticize a company and potentially harm reputation. Cultural differences may impact expected responses from companies, especially if they are dealing with safety failures of their products. Globally operating companies have to be aware of local norms in facing a crisis, especially if they come from different cultural backgrounds. This research explores social media reactions to one international company, Tesla, and their response to news reported about product failures. Using content analysis and purposeful sampling from China’s Sina Blog (similar to Twitter), comments and responses were gathered on the topic of Tesla’s security crisis for one month. The results show that despite initial negativity in social media response, in the long run, strategies such as ignoring and refusing to apologize may help the company restore some of the lost reputation. ACKNOWLEDGEMENTS I would like to express my gratitude for the help given by Dr. Ruth Shillair during my undergraduate and graduate studies, which inspired me to find my field and major of interest. When guiding and helping me to finish my first research thesis, Dr. Ruth Shillair also showed her enthusiasm, patience, professional standards, and encouragement to me. I am also very grateful to Dr. David Ewoldsen and Dr. Johannes M Bauer for their valuable comments and improvement suggestions. Thank you again for your great help. They are not only existing in my master's period but will lead me to continue my academic research in the future. iii TABLE OF CONTENTS LIST OF TABLES..................................................................................................................... v LIST OF FIGURES .................................................................................................................. vi INTRODUCTION ..................................................................................................................... 1 RESEARCH QUESTIONS AND HYPOTHESES ................................................................... 6 LITERATURE REVIEW .......................................................................................................... 8 Crisis Response Strategy.................................................................................................... 8 Cultural Differences in Corporate Management ..............................................................13 Effect of Digital Marketing on Corporate Reputation Management ............................... 15 Follow up News to Incident of Tesla ............................................................................... 17 Relevance to The Case of Tesla ....................................................................................... 17 METHOD................................................................................................................................. 20 Content Analysis .............................................................................................................. 20 Process of Collecting Data ............................................................................................... 21 Definitions of P/N and D/IN ............................................................................................ 23 Examples of Each Case.................................................................................................... 24 ANALYSIS..............................................................................................................................26 DISCUSSION .......................................................................................................................... 28 LIMITATIONS OF THE STUDY........................................................................................... 30 FUTURE RESEARCH ............................................................................................................ 31 REFERENCES ........................................................................................................................ 32 iv LIST OF TABLES Table 1: Example of each case·How to code comments ........................................................ 25 Table 2: Percentage of each case ............................................................................................. 26 v LIST OF FIGURES Figure 1: Research methods timeline......................................................................................... 7 Figure 2: Sina blog Hot Search history engine ........................................................................ 21 Figure 3: Example topic of Hot Search list.............................................................................. 22 Figure 4: Posts below topic of Hot Search............................................................................... 23 vi INTRODUCTION Even top enterprises risk that product problems arise. They may have broad repercussions of if safety or other failures lead to an image crisis of the whole brand. How a company responds to these failures, and how it communicates those responses, will impact its future liability and consumer perceptions (Forman & Argenti, 2005). A company has many potential strategies to choose from to respond to these failures. The following are some of the most common: ⚫ Admit fault and discuss improvements to safety. ⚫ Don’t admit fault and discuss improvements to safety. ⚫ No comment. ⚫ Discuss improvements to safety. ⚫ Shift blame to users [e.g., “they misused the product”] ⚫ Shift blame to user claim we have a safe product. ⚫ A combination of the above (Laufer & Coombs, 2006). Academic research suggests that the harm and crisis of products can bring special challenges to companies and enterprises in this era of mass communication (Laufer & Coombs, 2006). Therefore, how to choose an appropriate strategy to effectively deal with a product crisis and maintain corporate reputation should be an indispensable public relations skill for any enterprise. At the same time, the research also shows that if the enterprises in crisis are facing serious reputation threats, the damage can be minimized through the right public relations strategy, such as saying the right words at the right time (Gotsi & Wilson, 2001). Mastering excellent communication skills is crucial to the success of enterprises, especially for some emerging new industries. Also, it is very important for the public to obtain and improve their trust and acceptance of new technology (Bansal et al., 2016). Good communication skills and 1 strategies can effectively convince target customers (Forman & Argenti, 2005). Tesla is by far the most popular and well-known electric vehicle manufacturer. As an industry pioneer in new electric vehicles, its emergence has promoted the process of new energy development. Tesla sold nearly 500,000 vehicles worldwide in 2020, and its sales exceeded that of any other electric vehicle manufacturer in the world (Dean, 2021). However, after several safety accidents, will its previously established reputation be affected to some extent? The company was founded by Mark Tarpenning and Martin Eberhard in July 2003, named Tesla in order to remember famous physicist Nicolas Tesla. A year later, Elon Musk joined Tesla and started its first financing (Reed, 2020). Under the leadership of Musk, after 16 years of development, Tesla has now become the world's leading electric vehicle enterprise, its new model launch, and business development have been widely noticed (Klebnikov, 2020). Elon Musk, the chief executive, claimed that he is devoted to make almost everyone afford a Tesla (Schroeder, 2017). He also pointed out that Tesla's desire is to make the global transition to sustainable energy faster (Tesla, 2021). Now the main business of Tesla is manufacturing and selling pure electric vehicles with high-performance. And solar power generation and energy storage products are secondary business of Tesla. In June 2012, Tesla began to deliver the medium and large luxury car Model S. Due to its high performance, all-wheel drive, dual motor and autopilot options, model S has become a popular model and won the praise and favor of consumers (Reed, 2020). With the delivery of Model S, the revenue of Tesla increased significantly and made its first profit in the first quarter of 2013 (Kerr, 2013). In September 2015, Tesla began to deliver Model X. Model X is a medium and large luxury SUV, mainly to seize the SUV market. In November 2016, Tesla acquired a company named SolarCity which produce generation system of solar power for daily use at home. They sell some civil products such as solar panels and solar roofs. So, Tesla also became the only one vertically integrated sustainable energy company in the world (Tesla, 2016). 2 As an international enterprise, Tesla has also taken a fancy to China. China is the second largest new energy vehicle market in the world because the government has been vigorously promoting the popularity of electric vehicles (BBC, 2021). In May 2018, Tesla was registered and established in Shanghai, China. In October 2019, the Shanghai factory has started trial production. In December 2019, the domestic Model 3 was listed in the new energy vehicle promotion and application directory and purchase tax free directory of the Ministry of industry and information technology. On January 7, 2020, the first domestic Model 3 was officially delivered. Meanwhile, Musk announced that the Model Y project was officially launched (Bloomberg, 2020). The localization of Tesla Model 3 and Model Y will make an impact on the market of new energy vehicles in China and contribute to the growth of Tesla's vehicle sales (Global Times, 2020). With the rapid development of Tesla, the company also faces great challenges. The first is the safety problem. Recently, the media all over China have repeatedly revealed accidents caused by brake failure of Tesla vehicles. Chinese social media is filled with discussions of these accidents and questions arise as to serious threats the safety of customers and have affected the reputation and image of Tesla. A second contested issue is the price of Tesla in the Chinese market. Take the imported and domestic Tesla Model 3 as an example. The cheapest option of the new domestic Tesla Model 3, which is delivered from the Shanghai factory, is about $39,000 after being subsidized, which is more than 30% cheaper than the same model car imported from the United States. That is to say, the first car owners who bought an imported Tesla in the early days will have their assets depreciated significantly (Kawakami, 2020). The last point is about the negative impact of Tesla CEO Musk's remarks. In March 2021, Musk tweeted that future car owners can use bitcoin to buy Tesla, and that customers outside the United States can also use bitcoin to pay later this year (BBC, 2021). But just two months later, Musk said on social media that the company had stopped accepting bitcoin to buy its vehicles 3 because of concerns about the increase in fossil fuel use in bitcoin mining. Due to the sudden change of Musk's decision, the price of virtual cryptocurrency temporarily plummeted, which attracted opposition and doubt from all walks of life (Cellan-Jones, 2021). At the same time, it brought another storm of social media attention to the company's integrity. Most importantly, Tesla has a great challenge in trying to address perceptions of the safety of their products. Consumers' rights protection and opposition activities have tried to alert others to safety issues using different platforms and methods. On the opening day of the Shanghai auto show on April 19, 2021, a female car owner Ms. Zhang, wearing a white shirt sleeve with a red word "brake failure", stood on the stage of Tesla's car, shouting that Tesla's brake failed. The woman's emotional excitement led to numerous crowds watching, and her actions were recorded to online platforms to spread madly. The video has been viewed more than 150 million times on Sina Blog in a few hours (Li, 2021). Although this performance- based rights protection is not reasonable and legal, it is undeniable that this method fully shows the anger and helplessness of car owners, and has also received great attention from the society, also forced Tesla to respond publicly under the pressure of public opinion (Global Times, 2021, April 20). Under such pressure, it is very essential for Tesla to respond to and deal with the accident to keep its reputation. Tesla was dissatisfied by some Chinese netizens in early 2021 (Global Times, 2021, April 20). Because in its statement on consumer complaints, Tesla said that if the problem lies in the quality of Tesla's products, Tesla will be punished. The implication is that Tesla's frequent accidents are caused by human incorrect operation and poor environment. This has led many netizens to think that Tesla's response is very arrogant (Global Times, 2021, April 20). As the global vice president of Tesla, Tao Lin, former vice president of Tesla China, is mainly responsible for affairs, public relations, market, and brand of China. Facing Tesla vehicles out of control for many times, Tesla official account responded in Sina Blog that the 4 vehicle out of control is not a quality problem of vehicles, but caused by the slippery ground, most of the water on the ground, and the driver's mis-operation (Voice of China, 2021). In addition, facing the unreasonable right protections of female car owners at Shanghai Auto Show, Tao Lin also directly expressed that she did not compromise such unreasonable demands (Global Times, 2021, April 20b). In conclusion, Tesla's public relations response to the continuous accidents was arrogant and refused to apologize. 5 RESEARCH QUESTIONS AND HYPOTHESES Most of the Tesla incidents in the United States and other countries are serious life- threatening accidents. These accidents are mainly caused by self-driving or spontaneous combustion of batteries. But the main accident in China is the brake failure of Tesla vehicles. Most of these accidents occurred in roads and parking lots. Although these accidents caused different degrees of collision, they did not cause casualties of passengers in the vehicle. But one after another, the brake failure incidents make Chinese consumers have serious doubts about the safety of Tesla vehicles. Tesla has also made relevant responses to the constant criticism from the media and public opinion. Their main strategy on social platforms in the Chinese market is to refuse to admit fault and shift blame to users. However, Tesla's continued denial of quality problems and concealment of driving records triggered a more intense reaction in the Chinese market. Therefore, in this research, I will examine Tesla, an international new electric vehicle company with high popularity and several high-profile accidents. In China, these accidents and the company’s official position on responsibility for these safety failures are discussed widely on social media. I conduct in-depth research of user comments in social media to examine how the Tesla response is impacting their corporate reputation in China. At the same time, I also put forward the research question: Does Tesla's crisis non-response strategy for safety issues harm its reputation? I hypothesize that as Tesla continues to ignore comments about safety issues and news reports about accidents that negative comments will far surpass any supportive comments. I set a defined time frame to examine comments posted on the Chinese social media channels Sina Blog for one month. And I used content analysis to code the postings, looked for trends of comments to Tesla’s response, and evaluated it using corporate reputation 6 management theories as a framework for understand. The research timeline is illustrated in Figure 1. Figure 1: Research methods timeline 7 LITERATURE REVIEW Crisis Response Strategy Corporate response involves coming up with effective mitigation measures in response to crises to help in restoring brand reputation. When a corporation encounters threats, such as accidents, scandals, potential safety hazards or consumers are not satisfied with products and services, they will have a negative comment on the brand. The corporation can take some strategic actions, such as apology, compensation, and other measures to improve the situation (Lee & Song, 2010). There are also some actions that a corporation might consider include: sampling clients views, comparing competitive power, and establishing new policies. A manager must have critical and analytical skills to observe a situation and finding a meaningful approach from them. An organization in a crisis often faces a lot of reputational threats. If an organization is more vulnerable to crisis, the greater damage it causes to the company's reputation. One of the fundamental methods of solving such problems is through correcting the public relations strategy according to situation crisis communication theory when the reputational threat of crisis is mild. Organization may offer sufficient information to limit the level of reputational damage. Under these circumstances, timing of make decisions and actions is very important. The process of self-disclosure of a crisis, it helps an organization to be fully responsible through a comprehensive crisis response strategy (Clays & Cauberghe, 2011). An organization should provide the stakeholders with objective information based on what has happened instead of keeping silent when things are not going well. In the case when an organization decides to still thunder, it is not a necessity to offer reputational restoring crisis response strategy like apology (Clays & Cauberghe, 2011). The importance of timing helps information discloses and provides content of crisis communication strategies. 8 Through the effects of lawsuits, public audience could see the reputational harm of an organization. Consumers in the social media are potential consumers of the product. In case of reputational damage, they tend to run away from the product. Companies should consider the corporate reputation and characteristics of consumers, such as their gender, age, and nationality, into a thinking process to help determine different type of strategies. Immediately after understanding how the consumers response to the crisis, they should formulate efficient strategies on how to respond to such problems. There are four main strategies to solve the product harm crises (Laufer & Coombs, 2006). The strategies include denial, forced compliance, voluntary compliance, and super effort. Denial is only for correcting misunderstandings about responsibility. It will declare that its products are not threatened. Forced compliance usually further damages the company's reputation because the government forces the company to take remedial measures, such as recall. Voluntary compliance can help companies remove risks and show their concern for consumers. It is a common measure to deal with product harm crisis. Super effort includes voluntary compliance, compensation, and extensive publicity activities to show the company's sincerity and determination to improve (Laufer & Coombs, 2006). Role of the corporate communication functions is significant for formulating the strategic implementation methods of the company. In long run, they participate enhancing the company’s brand as well as its reputation. Through a wide range of IT applications and scientific communication methods, the company can obtain a leading position in formulating strategies to promote enterprise growth and resilience (Forman & Argenti, 2005). Through technology-oriented communication, the company can directly affect its image to their target audience. The emergence of the Internet provides space for some online complaints, which can be made in case of product problems. Through those social media platforms, consumers can easily 9 give their opinions and comment on various products and services of the company. However, few people pay attention to the impact of online complaints on potential consumer behavior (Lee & Song, 2010). Factors such as vividness and consensus heavily facilitated the consumers’ cognition of institutional attribution of its negative impact. And it has changed the consumers’ evaluation of companies (Lee & Song, 2010). Therefore, a company should find a way to help respond online complaints instead of conventional response strategies such as apologizing, compensating ,shifting blame or taking no actions, etc. Strategy as a concept is well known in terms of the management theory. In recent time the concept of corporate communication has become widespread and has specifically received public attention. Incorporation of strategic management theory has helped in differentiation of corporate, operational, and functional strategy. In essence, it has helped in providing focus and direction to the functioning of corporate communication. It acts as a framework through which all the communication plans are implemented and executed (Steyn, 2003). It makes the company's communication methods more binding, especially in the company's management process, by providing a link between the strategic issues faced by the organization and the specific communication plan. Corporate communication as a strategy originates from the result of the strategic thinking by top managers and executive in making strategic decisions. Such activities help in engagement of the stakeholders and interested people from third parties. Reputation is an indispensable attribute for the success of any organization. An organization that is persistently in crisis will most likely suffer from reputational harm. Correcting such a problem requires company to use a combination of different public relations strategies. One of the ways is to say the right thing at the right time in the desirable moment. However, to correct such reputation harms, it is important for the organization to evaluate the level in which the crisis affects the success of the organization. If they are mild, it means that the organization could come up with various convenient approaches that it could use to mitigate 10 such harms. If the crisis is severe, in order to relieve tension, the company will inevitably incorporate high-risk strategies such as apology into its communication mandate. However, making a choice between a crisis response strategy has never been easy. Public relations department sometimes might find it very challenging to convince the management and the legal department to choose a better approach (Schweitzer et al., 2015). Sometimes, some organizations do not see the need of respond to crisis and might consider it as a tiny mistake. But the lack of effective management to crisis could be the beginning of the organizations downfall and may lead to a decline of profits. One of the reasons why organizations do not issue apologies spontaneously is because when they do so, they will face litigation risk and consequently suffer from very heavy losses in all aspects (Schweitzer et al., 2015). On the other hand, if organizations use sympathy and compensation as a way of apology, it is likely to attract the attention of stakeholders. They might think that the organization is significantly reputable and would encourage the public members to invest on it. Self-disclosing approach in crisis management may be equally effective. It offers appropriate ways to deal with crisis by limiting the damages caused. Using crisis timing strategies might further help in limiting the state of deterioration. Resultantly, crisis management is very important for success of every organization. It gives the client ideas that the organization concerned is very reputable and they should have belief in it. Corporate reputation results from the opinions of the public. It’s also the consumer's view of a company. In the 21st century, theory corporate reputation is significantly impacted by media channels, and it has so far played integral role in the process (Cabral, 2016). This is one of the ways for enterprises to develop competitive advantage. The media coverage of any company reflects the performance index of such an organization (Cabral, 2016). For instance, if the media reports that the annual income of an enterprise increases very rapidly or the enterprise's high-profile development and expansion. Then investors in the stock market will 11 feel that they have received a signal that this investment looks profitable. However, if the media reports some negative news about huge debts or risk of bankruptcy, investors will feel that they should withdraw from investment immediately to reduce their losses. The aspect contributes effectively on how the consumers carryout their purchase decisions (Bruhn et al., 2012). Organizations that are praised on social media are most likely to do well because the communication on social media strongly will affect brand image strongly. Even if their products are not necessarily the best in their area, they will still receive public supporting (Bruhn et al., 2012). And this may prompt to improve their level of both products and service. Such factors significantly play a role in the era of social media. Most organizations that perform well have traces in social media. Most of the social media focuses on the organizations that are doing well (Cabral, 2016). With this available information, consumers will be in a good state. They can identify and distinguish between reputable companies from other discredited companies. At the same time, large companies have also generated a huge number of potential customers. This has led to an increase in the number of people paying attention to them over time. Because the emergence of social media has introduced new brand communication channels, such as the discussion and brand-based content that disseminated by users (Bruhn et al., 2012). Therefore, the model of corporate reputational dynamics has both positive and the negative implications. First, firms that do exceptionally well in the market are most likely to generate more news, that gives them a comparative advantage over other organizations. As a result, they would always attract more consumers than averagely performing organizations. As Warren Buffett, a world-famous investor, said that “it takes twenty years to build a reputation and five minutes to ruin it.” (Cabral, 2016) The reason behind that is because excellent companies are always under intensive scrutiny. Rival companies and other organizations are closely monitoring each other. And all they need to find out a problem or anything that may bring 12 public opinion to their competitors. People are always not concerned about the good news. A reputable company has already consolidated its name in the market and such pieces of information no longer attract social media. However, bad news always moves very fast and may harm the reputation of the company very quickly (Acemoglu et al., 2010). In fact, social media plays an integral role in the reputation of many companies. Most platforms focus on the marketability of the products, and that increase the profitability of such companies in the market. Just as bad news spreads quickly, so do the good news. When a company receives attention from different media, it will generate potential customers it deserves. This has the same significance for achieving greater success and leading position in the industry. Cultural Differences in Corporate Management An international enterprise, while managing transnational business, also needs to face the challenges brought by the cultural differences of different countries. In different cultural background, the same crisis response strategy may have different effects. For example, in many Asian cultures, people usually view an apology as a regular ritual behavior. Therefore, consumers will be more inclined to respond with substantial compensation (e.g., buying their products again). Therefore, when western companies use strategies to face reputation crisis, the results of sympathy, apology and compensation are almost the same (Austin & Jin, 2022). This is why enterprises need to master the cultures and customs of different regions, rather than simply re-use the habitual strategies from their own countries. Similarly, the differences between Eastern and Western cultures lead to different strategies of company to deal with the same crisis. Differing from the western crisis response strategy, established Chinese companies are very concerned about face. Therefore, they will try their best to save the face and cover up disgraceful things by using its relationship (Austin & Jin, 2022). The three strategies most commonly used by Chinese enterprises are to rely on stronger authority, obtain third-party endorsement and create new topics (Hu & Pang, 2017). By relying 13 on stronger authority, those companies often keep silent and wait to help resolve their crises. For example, when some state-owned enterprises are in crisis, the government takes over and starts follow-up measures, including holding a press conference, forcing making a public apology, giving compensation and so on. However, such behavior has received more and more criticism from the public in recent years. Therefore, these enterprises have also made some improvements, such as taking the initiative to apologize on social media or accept media interviews. Although Chinese companies often apologize, they rarely discuss how to compensate or the specific amount of compensation (Hu & Pang, 2017). Obtaining third-party endorsement is also one of the main strategies used by Chinese companies. By actively seeking the support of a third party and obtaining appraisal results and reports, the company can restore its reputation to a certain extent. Creating new topics is the last strategy commonly used by Chinese companies to reduce the impact of public opinion and crisis on themselves by shifting topics and attracting public attention (Hu & Pang, 2017). However, companies from the West are more willing to maintain their brand quality and attribute the problem to the improper operation of users. Managing cultural differences would allow the employees from different culture and nations to use their expertise fully. But it will make good use of these differences to achieve the unified goals of the organization. This is because multinational corporations may provide different products and services in different countries. And these products and services are operated by local departments with unique culture. How to hire suitable employees and attract local talents is very important for the development of the company under new environment. The two most important roles are country business unit manager and corporate diplomats. They are responsible for linking the local culture with the culture brought by the company (Hofstede, 1994). 14 Effect of Digital Marketing on Corporate Reputation Management Digital marketing has played an instrumental role in how the business as an independent entity could interact and communicate with their consumers. The uses of digital marketing approaches have been rising, especially in many industries in Chinese marketing. Any aspect of competitiveness from a business usually originates from the idea of tech revelation. The current tech revolution is based on social media and digital-driven approaches which so far has revolutionized the competitive field. The growth of e-marketing sector has become tremendous, especially through the introduction of e-business techniques (Medina et al., 2019). Although such factors are not decisive for the success, the company must show exceptional commitment and non-biased management coupled with effective communication strategies. The primary effect of digital marketing originates from diverse marketing strategies. Businesses can effectively use social media approaches to identify what products are popular in the market and provide consumers’ convenience. For market penetration strategy, the effect might work very effortlessly. For the case of market development and diversification, it is possible for companies to identify few things that the consumer’s needs (Medina et al., 2019). In addition, such an approach has made it easier for the company to identify some of the products that are preferred in the market by the same consumer. And marketing expansion usually takes place when new group of the clients are accessed. It might represent a fraction of consumers that have not yet bought any product from the company (Medina et al., 2019). The introductions of the internet together with digital approaches to marketing have made it easy for corporations to seize the global opportunities in other countries. At the same time, they may also better understand the local cultural differences and improve the service level provided locally. Brand switching is also another significant effect in tech development, when a product attracts consumers based on quality or pricing, they would always affect the consumer’s taste. 15 Such consumers would most likely choose the company where quality seems assured. Therefore, the digital media approach makes it easier for consumers and other suppliers to switch between brand and online shops (Medina et al., 2019). For international company, they could easily monitor what other competitors are doing and improve on them. This requires the corporate marketing director to focus on keeping consumers' attention and what they want and need to achieve. In doing so, companies can provide services that satisfy consumers more than their competitors. Lastly, relationship deepening could also have impact on the sales. The reason is that relationship deepening can help sell more products to customers who are used to traditionally shop in the store. That could be done through give online advertisements of products or services that are only present in the store. By making the transition from physical approaches to digital, the corporations would certainly make more profits. Improving the brand together with the services do not only attract the new consumers but also retains the old ones (Medina et al., 2019). Digital marketing approaches have made it quite easy for businesses to create interactive sessions with its clients. Clients are important asset for the success of any business. Through the feedback they provide, the company could be in a vital position to change its image. In addition, corporation can also take some methods to improve its overall image. Push media is usually regarded as the traditional method of communication, and the information must be regulated from the brand then to the consumer (Medina et al., 2019). On the other hand, through the digital media, which is known as pull media, consumers are responsible for when and what they will see in social media. Therefore, the marketing director has less control of the information published on those sites. As a result, the marketing director would be forced to use pushing media to help change the overall image of the corporation seen by people (Medina et al., 2019). 16 Digital branding methods have shown remarkable effects more than traditional approaches. Despite such revelations, it still has a few challenges. One of such problems may involve complexity in diverse systems. Whatever kind of digital method used, consistency is important, what is published online needs to be the same offline too (Medina et al., 2019). Follow up News to Incident of Tesla In a report in the Financial Times on April 21, 2021, Tesla incident and its arrogant response have received many open letters from China's official news agency and even China's Central Commission for Political and Legal Affairs this year. They pointed out that Tesla's popularity in the Chinese market comes from the trust of consumers. As the letter says, “but arrogance, let alone a lack of respect for China’s market and consumers, cannot be the response to that faith.” Under such circumstances, Tesla finally made an official apology on Chinese social media and announced it had set up a team to handle the case and help with government investigation (Shepherd, 2021). The Global Times also reminded foreign enterprises in its report on April 21 that they should not only abide by Chinese laws and regulations, but also respect Chinese consumers. That's what the original report says “China will continue to open up its market to foreign businesses, but that does not mean foreign companies will be offered any privilege. That is also true for Tesla. The company has enjoyed sufficient support and widespread popularity in China but that does not give it the right to treat consumers disrespectfully and arrogantly.” (Global Times, 2021, April 21) Relevance to The Case of Tesla From the above highlighted scenarios, obviously, communication plays a significant role in the company’s overall fortune, success, and dominance. In terms of implementing a strategy and building a reputation, it is very important. The serious collision involving the Model S 17 made the company lose its reputation (Cava, 2016). Through involvement of the employees and collaborative approaches it would be possible to help in fixing problems that has reduced the public interest on the products autonomous vehicles. Employees play an important role in the success of any organization, they are the key agents that can either support or derail any strategic measure implemented by the company. They have the direct connection to the clients, and that makes it easy to understand them better more than the company itself. Also, if a company is very close to the public and got desirable feedback from them, it will rarely receive backlash from the public, and number of lawsuits would be minimal. The company lacks personnel who can sample consumers before they get out of control and propose a comprehensive approach to avoid further escalation. Reputation is very significant for the success of any organization. Building it is one thing but how to protect it is another. When a company enjoys positive reputation, it should strive to maintain it over its subjects. The persistent crashes are attracting heavy lawsuits interfering with self-driven cars making them lose credibility (Coca-Vila, 2018). In most cases, the more the company relies on reputation for the investors to make a purchase or an investment decision, the more it is more likely to consolidate its reputation. In other words, it means that success breeds success (Cabral, 2015). However, if the reputation is broken, that is the beginning of the struggle from the company. For e very long time, the reputation of Tesla as an electric car manufacture was never in doubt. Persistent autopilot problems like crashes have since intensified complaints from the members of the public and changing their perception on the products (Heilweil, 2020). Its downfall has increased the ability of the local companies to innovate and improve following loss of trust from Tesla. Besides, the continued uproar forced the government to intervene and that put intense scrutiny on the organization’s processes. The persistent sermons are not serving the company, and they are contributing to a further state of deterioration. 18 In understanding the corporate communication strategies, it is vital for the practitioners to understand some of the societal issues that the organization is facing and carefully respond to them. Many consumers look at how the company handles its matters and decided on how they could engage the company in the future. The company needed to understand that community values are very important to the success of any institution. Many drivers almost die after serious accidents or are very worried about future safety. If they died due to negligence from the company, it would have received a huge backlash. The government would take a serious action and punishment against the manufactures. Understanding the needs of the consumers in the place where they live is very important. And coming up with effective strategies to offset any kind of emerging problem that may interfere or derail the success of the organization. Communication is everything in business, how the consumers are influenced determines their urge to buy products. Businesses need to keep in touch with their consumers from time to time understanding the problems their facing, what they need, and the aspects they could improve. Tesla may ignore that part. It thought that just by mere innovations and incorporation of the latest approaches that would be enough to conquer Chinese market. 19 METHOD Content Analysis In this research, I used purposeful sampling in mainstream Chinese social media platforms Sina blog. Its main forms are picture, text, and video to disseminate information. Also, there will be many comments from netizens. In every post, these comments will be automatically listed according to the popularity of “likes”. I will use the comments in the post as my research sample to collect people's attitudes and ideas about Tesla. April 2021 will be chosen as the timeline for researching data in this case which is after Tesla made a response and the most intense public opinion response. Sina blog was selected as the main platform because it is one of the most popular social media in China (Austin & Jin, 2022). It is also considered to be China's Twitter. At the same time, Sina blog has the largest number of users and the widest population distribution. Compared with other platforms, such as TikTok, Baidu Tieba and Zhihu, Sina Blog's audience contains a very large diversity, including age, region, education level, industry and so on. As an outstanding product of the short video generation, more users of TikTok are young people. Baidu Tieba appeared earlier, and its main groups are post-80s users. As a professional Q&A community, Zhihu's users are mainly elites in various industries, and have a deep understanding and cognition of specified aspects. Since there is no entry threshold, Sina Blog, as the mainstream social media platform most commonly used by Chinese netizens, will have more universality to collect research sample. In addition, compared with American users, Chinese users are more interested in expressing their opinions on social media. They also reacted more strongly to the crisis and public opinion on the Internet. Although the Chinese are generally considered silent, however, the emergence of social media provides a platform for Chinese people to express and vent their anger freely without worrying too much (Austin & Jin, 2022). 20 Process of Collecting Data Firstly, I used Sina Blog hot search history engine to search for the keyword Tesla (see Figure 2). In this way, I could get all the topics about Tesla that appeared on the list so far. This is because Sina Blog itself only displays the current hot search and does not provide records in the part. Then I selected the time period in April this year, which is the hottest time for Tesla news and discussion on the Internet as there were several high-profile accidents. Figure 2: Sina blog Hot Search history engine The style of the topic in hot list is a text title with a pound sign (see Figure 3). There are many related posts in each topic. Due to the large number of posts, it is impossible to collect all of them completely. 21 Figure 3: Example topic of Hot Search list Although they all have the same topic, some posts are very popular, and some don't even get any comments (see Figure 4). Therefore, I will select the two best posts as samples according to the number of likes and comments. In addition, in order to record useful comments efficiently, not every comment will be collected. I only collected the top five percent of high- quality comments automatically sorted by the system in each post. Another rule is that in the top five percent, only comments with likes are collected. By doing so, it can avoid useless data and comments from hired or paid supports, advertisements, and robots. Then I used both qualitative analysis (focused on interpreting and understanding) and quantitative (focused on counting and measuring) to collect comments. Finally, I analyzed the intention of the comments, collected and classified them with attributes: Positive/Negative, Direct/Indirect in Excel table. 22 Figure 4: Posts below topic of Hot Search Definitions of P/N and D/IN Before we analyze the data, we need to have a clear concept and explanation of the content. The first is the most important attribute of comment. Comments are defined by two attributes, they are positive/negative and direct/indirect. The positive/negative judgment criteria are based on whether it is helpful to Tesla, regardless of the tone and rhetoric used by the commentator. Direct/indirect judgment depends on the object of the comment. If the target is Tesla itself, including its products, services, attitudes, etc., it is direct. If not, it is defined as indirect. At the same time, the two criteria of positive/negative and direct/indirect can sum up all comments 23 into four combinations. They are positive/direct, positive/indirect, negative/direct, and negative/indirect. In addition, neutral and irrelevant comments will not be recorded. Examples of Each Case 1. positive/direct These comments really like and support Tesla. Most of them in my samples are Tesla owners, who appreciate the quality of the products. Therefore, they usually express their views directly, such as "I have driven Tesla for many years, and I think its quality is very good." 2. positive/indirect The comments provided by these people are useful to Tesla, but they do not really support Tesla. For example, they think it's conspiracy theory or competitor's deliberate hype. Their purpose is to comment on social injustice or immoral social phenomena. Although this indirectly helps Tesla's position, they don't care about Tesla itself, whether it's right or wrong. Common examples in this case include "The woman defending her rights must have been instructed by Tesla's competitors to do so" and "These unscrupulous media over report the news about Tesla". In the case of neutral or ambiguous comments, the comments were carefully examined to determine which category fit them best. 3. negative/direct This kind of people do not like Tesla directly. They think Tesla has quality problems, poor after-sales service, etc. Therefore, they will make some very direct hate speech, such as "I will never purchase for such a brand that does not respect consumers!" 4. negative/indirect 24 These comments are relatively few. Although they did not take the initiative to mention the product quality of Tesla, they are only concerned about some social phenomena and problems. However, different from the second one, they default that Tesla has quality or after- sales problems in their comments. On this basis, they will discuss other issues. For example, a comment is “It’s very difficult for Chinese consumers to protect their rights. We must make ourselves like this (It refers to the female consumers who protect their rights excessively at the auto show) to attract social and Tesla’s attention!” Examples of coding is in Table 1. Table 1: Example of each case·How to code comments Types of comments Example comments Frequency, n·(%) “I have driven Tesla for Positive/direct many years, and I think its 155·(9%) quality is very good. ” “The woman defending her rights must have been Positive/indirect 464·(26%) instructed by Tesla's competitors to do so." “I will never purchase for Negative/direct such a brand that does not 892·(51%) respect consumers!” “It’s very difficult for Chinese consumers to protect their rights. We must Negative/indirect 252·(14%) make ourselves like this to attract social and Tesla’s attention!” 25 ANALYSIS Table 2 shows the individual proportions of positive/negative, direct/indirect and the proportions after forming four different combinations. Among the 1,763 comments collected: 1,144 (65%) were negative and 619 (35%) were positive. 1,047 (59%) were direct and 716 (41%) were indirect. Table 2 shows the combination with the highest proportion is negative/direct were 892 (51%). The second is positive/indirect were 464 (26%). The third proportion were 252 (14%) for negative/indirect. The least is 155 (9%) for positive/direct. In my research sample, it indicates that nearly two-thirds of the comments have a negative comment on Tesla. This includes the evaluation of Tesla's products, after-sales, and response attitude. The remaining third of the comments expressed their support for Tesla's position. However, in these sample data, only 59% of the comments are discussing Tesla and its events, such as expressing views on accident liability and product quality. While 41% of the comments tend to discuss the contents that are not related to Tesla, such as social phenomena and market contradictions derived from the Tesla event. Table 2: Percentage of each case Types of comments Frequency n % For Tesla's reputation Positive 619 35 Negative 1144 65 Relationship with Tesla Direct 1047 59 Indirect 719 41 26 In chronological order, a total of 52 posts were collected from the earliest post on April 19 to the last post on April 29. In addition, I noticed that a lot of positive comments appeared starting from four posts in April 23. The number of positive comments in the four posts on April 23 was 158 (25.5%). Before April 23 there are only 104 positive comments (16.8%), while after April 23, it rapidly increased to 357 positive comments (57.6%). In the sample of 52 posts, the four posts of April 23 ranked 20th to 23rd. Although they are not in the precise middle, they are also very close to the median of 26th as listed by Hot Topics. 27 DISCUSSION At the beginning, the overall tone did not deviate from the theme. People paid more attention to the causes of car faults and expressed concern about Tesla's product safety. Immediately after Tesla made an official response, people pointed the contradiction to its attitude. At the same time, I also find that there are many comments that follow the trend to joke about this event. After frequent coverage of rights protection events, news about Tesla is on the hot search list of Sina Blog almost every day. Many comments began to show disgust with the relevant events, even though they had no position originally. During the subsequent escalation of rights protection events, there were many comments questioning rights activists. They generally believe that the defender of rights is unreasonable and deliberately ordered by others. With the continuous heat of Tesla incident, there were hundreds of reports about Tesla’s accidents on social media. The direction of comments changed again at this time. More and more people believe that the media only reported Tesla's accidents to attract attention and mislead the masses. In the end, the comments turned to the discussion of social phenomena. While collecting my data samples, I also found a phenomenon that too many similar behaviors will bring counterproductive results in social media platform. For example, in the initial security problems, people will blame Tesla. But with more and more Tesla accident news. Many people began to question why there are so many car accidents every day, but the media only reported about Tesla. And when more and more comments against Tesla appeared, many people began to question whether these comments were copied and pasted and paid by hostile companies. By collecting and analyzing the purposed sampling in April, Tesla's main strategy for the crisis is to refuse to admit faults, ignore complaints on social media and allow public opinion to spread freely. In the short term, this strategy appeared to have a serious negative impact on public opinion of Tesla in social media. However, with the negative development of public 28 opinion, people's concerns gradually began to shift. Due to the continuous explosion of negative reports, public opinion would question the authenticity of the media and whether someone deliberately hyped this event, etc. Therefore, in the long term, the strategy of ignoring complaints and refusing to apologize may help enterprises restore a certain reputation and transfer contradictions, but it must be accompanied by great challenges. This was quite surprising in how the commenters, over time turned against those who were criticizing Tesla. Thus, my original hypothesis was not supported. Tesla’s non-response to comments tended to benefit the company in the long run. However, these finding should be seen as preliminary findings and used with caution. More research should be done to establish if this is a robust, significant pattern. This strategy is not applicable to enterprises that are not strong enough. As an external enterprise, in addition to providing high-quality products, it also needs to learn crisis response strategies to adapt to the new environment and market. In addition, relying solely on product innovation is not enough. The company also needs to invest in public relations to improve or protect the company's reputation. And I also observed that many people had no prejudice against Tesla before, but a large number of negative news reports in a short time would cause people's extreme disgust. This is undoubtedly fatal to Tesla, which wants to transform more potential customers in the future. At the same time, it also proves the importance of controlling public opinion in the media. Allowing negative public opinion and free dissemination of reports are a great challenge to the company's reputation. 29 LIMITATIONS OF THE STUDY In this study, there are also several limitations that are inevitable. First, the sampled data are not fully representative. Many people may not express their views on Internet, or they choose other ways and places to share their views. Therefore, the study only analyzes the comments published on blogs. Second, in the process of research, it is found that many popular posts and comments have been modified or deleted. For example, some publishers have limited the permission to reply. In order to prevent negative comments, some user’s posts have been inaccessible when I entered again. In addition, not all posts and most replies have been counted. I chose an average of one or two high-quality posts in the topics on the popular list every day as the research data. And each post can only select the first small part of comments, which makes some later comments unable to be seen and included in the data. Finally, the long-term impact is not yet visible. 30 FUTURE RESEARCH During my research, I also found some interesting phenomena. Although the Tesla incident has brought a lot of negative reports and poor reputation on the Internet, relevant data show that Tesla's sales have increased greatly in recent years (Yu, 2021). I think the company's reputation is closely related to sales, but it does not depend entirely on reputation. For example, in the automotive industry, some luxury car brands have a poor reputation in China in recent years. This is because customers are told by the dealer that they need to pay extra money to be eligible to buy some specified models. These additional fees are not legal. But the dealer asked for these expenses in disguise and claimed that they were voluntary decoration expenses. However, sales were not affected, but increased, because consumers were willing to choose better brand influence rather than considering cost performance (Cao, 2020). And Tesla event has passed for nearly half a year, whether its sales increase or decrease. We can't get an absolutely accurate reason. Changes in sales may have many other events rather than a single reputation. The price reduction of domestic Tesla in Shanghai may be a potential reason. Another point is that this public opinion may not have an impact in the short term, but it may be a long-term effect, which has not yet been found. The second point is that Chinese netizens have the tendency of “follow the crowd” (Austin & Jin, 2022). When I collected samples of comments, I found that some humorous sentences that teased Tesla were copied frequently. Unlike those hired to forward negative messages, these accounts are real accounts. When I enter their home page, I will find that they have frequent interaction rather than blank new accounts. People want to get more attention on the Internet when copying some interesting content, such as praise and forwarding. This kind of negative ridicule was originally joking, but with the continuous spread, it may also produce more reputation crises. 31 REFERENCES 32 REFERENCES About Tesla: Tesla. Tesla, Inc. (2021). https://www.tesla.com/about. Acemoglu, D., Ozdaglar, A., & ParandehGheibi, A. (2010). Spread of (mis)information in Social Networks. Games and Economic Behavior, 70(2), 194–227. https://doi.org/10.1016/j.geb.2010.01.005 Austin, L., & Jin, Y. (2022). Social Media and Crisis Communication. Routledge. Bansal, P., Kockelman, K. M., & Singh, A. (2016). Assessing public opinions of and interest in new vehicle technologies: An Austin perspective. Transportation Research Part C, 67, 1–14. doi: 10.1016/j.trc.2016.01.019 BBC. (2021, February 9). Chinese regulators throw spanner in Tesla's works. BBC News. https://www.bbc.com/news/business-55990821. BBC. (2021, March 24). Tesla cars can be bought in Bitcoin. BBC News. https://www.bbc.com/news/technology-56508568. Bloomberg. (2020, January 7). How Elon Musk Built a Tesla Factory in China in Less Than a Year. Fortune. https://fortune.com/2020/01/07/elon-musk-tesla-gigafactory-shanghai- china-ceremony/. Bruhn, M., Schoenmueller, V., & Schäfer, D. B. (2012). Are social media replacing traditional media in terms of brand equity creation? Management Research Review, 35(9), 770–790. https://doi.org/10.1108/01409171211255948 Cabral, L. (2015, May 19). Living up to expectations: corporate reputation and persistence of firm performance. Strategy Sci, 1 (1), 1–21. Cabral, L. (2016, August 6). Media exposure and corporate reputation. Research in economics, 70: 735-740 Cao, K. (2020, October 27). 长沙车市加价风潮再起（经济观察）[The trend of additional price increase in Changsha auto market is rising again]Retrieved November 11, 2021, from https://www.icswb.com/newspaper_article-detail-1742934.html. Cava, M. della. (2016, September 15). Tesla crash in China renews spotlight on Autopilot. USA Today. Retrieved September 25, 2021, from https://www.usatoday.com/story/tech/news/2016/09/14/tesla-crash-china-renews- spotlight-autopilot/90367426/. Cellan-Jone, R. (2021, May 25). Bitcoin Mining Council to report renewable energy usage. BBC News. https://www.bbc.com/news/technology-57240090. 33 Coca-Vila, I. (2018). Self-driving cars in dilemmatic situations: An approach based on the theory of justification in criminal law. Criminal Law and Philosophy, 12(1), 59–82. doi: 10.1007/s11572-017-9411-3 Clays, A.-S., & Cauberghe, V. (2012). Crisis response and crisis timing strategies, two sides of the same coin. Public Relations Review, 38(1). https://doi.org/10.1016/j.pubrev.2011.09.001 Dean, B. (2021, March 30). Tesla revenue and production statistics for 2021. Backlinko. Retrieved October 22, 2021, from https://backlinko.com/tesla-stats. Forman, J., & Argenti, P. A. (2005). How Corporate Communication Influences Strategy Implementation, Reputation and the Corporate Brand: An Exploratory Qualitative Study. Corporate Reputation Review, 8(3), 245–264. https://doi.org/10.1057/palgrave.crr.1540253 Global Times. (2021, April 21). GT Voice: Tesla blunder offers a lesson for foreign firms in China. Global Times. https://www.globaltimes.cn/page/202104/1221746.shtml. Global Times. (2021, April 20). Tesla's 'cocky' response over a high-profile consumer complaint draws ire in China. Global Times. https://www.globaltimes.cn/page/202104/1221535.shtml. Global Times. (2021, April 20b). Tesla has an obligation to face scrutiny from Chinese consumers: Commission. Global Times. https://www.globaltimes.cn/page/202104/1221538.shtml. Global Times. (2020, July 23). Tesla plans further localization of auto parts in China. Global Times. https://www.globaltimes.cn/content/1195417.shtml Heilweil, R. (2020). Tesla needs to fix its deadly Autopilot problem. Vox https://www.vox.com/recode/2020/2/26/21154502/tesla-autopilot-fatal-crashes Hofstede, G. (1994). The business of International Business is culture. International Business Review, 3(1), 1–14. https://doi.org/10.1016/0969-5931(94)90011-6 Hu, Y., & Pang, A. (2017). The indigenization of crisis response strategies in the context of China. Chinese Journal of Communication, 11(1), 105–128. https://doi.org/10.1080/17544750.2017.1305978 Kawakami, T. (2020, August 25). Tesla conquers China's EV market with taste of affordable luxury. Nikkei Asia. https://asia.nikkei.com/Spotlight/Electric-cars-in-China/Tesla- conquers-China-s-EV-market-with-taste-of-affordable- luxury#:~:text=Tesla%20has%20been%20working%20to,at%20the%20end%20of%202 013. Kerr, D. (2013, May 8). Tesla hits first profitable quarter ever. CNET. https://www.cnet.com/news/tesla-hits-first-profitable-quarter-ever/. 34 Klebnikov, S. (2020, December 15). Tesla Is Now The World's Most Valuable Car Company With A $208 Billion Valuation. Forbes. https://www.forbes.com/sites/sergeiklebnikov/2020/07/01/tesla-is-now-the-worlds- most-valuable-car-company-with-a-valuation-of-208-billion/?sh=1f5cbe6a5334. Laufer, D., & Coombs, W. T. (2006). How should a company respond to a product harm crisis? The role of corporate reputation and consumer-based cues. Business Horizons, 49(5), 379–385. https://doi.org/10.1016/j.bushor.2006.01.002 Lee, Y. L., & Song, S. (2010). An empirical investigation of electronic word-of-mouth: Informational motive and corporate response strategy. Computers in Human Behavior, 26(5), 1073–1080. https://doi.org/10.1016/j.chb.2010.03.009 Li, F. (2021, April 28). Tesla hits a bump at Shanghai auto show. Chinadaily.com.cn. http://www.chinadaily.com.cn/a/202104/28/WS60889aeba31024ad0babad55.html#:~:te xt=On%20April%2019%2C%20the%20opening,from%20visitors%20with%20open%2 0umbrellas. Medina, et al. (2019). How the digital age has changed the corporate communication: The Case of Digital Marketing in Fashion Business. The mainstream review on communication, 1(2) Reed, E. (2020, February 4). History of Tesla: Timeline and Facts. TheStreet. https://www.thestreet.com/technology/history-of-tesla-15088992. Schroeder, S. (2017, June 8). Elon Musk sees a future where everyone can own a Tesla. Mashable. https://mashable.com/article/elon-musk-future-cars. Schweitzer, M., Brooks, A. W., & Galinsky, A. D. (2015, September). The organizational apology. Harvard Business Review. Retrieved August 12, 2021, from https://hbr.org/2015/09/the-organizational-apology. Shepherd, C. (2021, April 21). Tesla apologises after Chinese state media attacks. Financial Times. Retrieved October 25, 2021, from https://www-ft- com.proxy.choate.edu/content/7aaebfb8-4bf2-4391-9537-439eb2ec7648. Steyn, B. (2003). From strategy to corporate communication strategy: A conceptualisation. Journal of Communication Management, 8(2), 168–183. https://doi.org/10.1108/13632540410807637 Tesla, Inc. (2016, August 1). Tesla and SolarCity to Combine. Tesla, Inc. https://www.tesla.com/blog/tesla-and-solarcity-combine. Tibken, S. (2018, November 13). Waymo CEO: Autonomous Cars won't ever be able to drive in all conditions. CNET. Retrieved October 25, 2021, from https://www.cnet.com/news/alphabet-google-waymo-ceo-john-krafcik-autonomous- cars-wont-ever-be-able-to-drive-in-all-conditions/. Voice of China (2021, March 16). 特斯拉又刹不住车了？！官方回应，网友炸了 [Tesla can't brake again?! Netizen's strong reaction for official response]. Huanqiu. https://society.huanqiu.com/article/42KP8ADgwgJ 35 Yu, Y. (2021, October 20). Tesla breaks earnings record as China boosts production and demand. Nikkei Asia. Retrieved November 11, 2021, from https://asia.nikkei.com/Spotlight/Electric-cars-in-China/Tesla-breaks-earnings-record- as-China-boosts-production-and-demand. 36