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Crisis management: the Brazilian Volleyball Confederation case

Gestão de crise: o caso da Confederação Brasileira de Vôlei

Gestión de crisis: el caso de la Confederación Brasileña de Voleibol

 

MSc. Sport Management

Coventry University

(United Kingdom)

Carlos Eugenio Zardini Filho

carlos.zardini@gmail.com

 

 

 

 

Abstract

          Since the ancient Greece, institutions have been facing different kind of crises. In the sport environment, crises have been receiving more importance in reason of the media attention and due to the recent commercial appeal of the sports. This paper explains the case of the Brazilian national volleyball governing body, the CBV, when accused of corruption and other illegal practices in Brazil. In this way, the main goal of the article is to analyse the actions taken by CBV in the light of the crisis management theory. The trigger was in the beginning of 2014 when the ESPN published a corruption scheme involving the top managers of the CBV during the Graça’s presidency, including the CEO, about illegal and unethical commissions received from the new sponsorship deal with the Banco do Brasil (Globo Esporte, 2014a). Firstly, the new management team that took over changed CBV in terms of human resources, mainly the top managers. Not to mention, all the other responses were taking using PR platforms, like press conferences and official statement through the Confederation’s website. Secondly, a new fast and transparent posture of CBV was implemented. As a whole, CBV was able to overcome the crisis context in the short-term. The new transparent approach was a crucial turning point to recovery the public financial resources and credibility from the main stakeholders. In this sense, it seems like the relation with the media has changed significantly, not only considering the internal organization of CBV, but also thanks to the new Chief of the Press Office and the consistent, clear and direct messages transmitted during the crisis. Nevertheless, the PR strategy implemented had a negative aspect that can make difficult, in the long-run, the process of totally rebuild the good reputation of CBV. The social medias should have been used to spread the actions taken to the fans and athletes, during and after the crisis, demonstrating commitment with them.

          Keywords: Crisis management. CBV. Public relations.

 

Resumo

          Desde a Grécia antiga, instituições têm enfrentado diferentes tipos de crises. No ambiente esportivo, crises estão recebendo mais importância em razão da atenção dada pela mídia e devido ao recente apelo comercial do esporte. Este artigo explica o caso da Confederação Brasileira de Vôlei, a CBV, quando acusada de corrupção e outras práticas ilegais no Brasil. Neste sentido, o objetivo principal desse artigo é analisar as ações tomadas pela CBV à luz da teoria de gerenciamento de crise. O início aconteceu em 2014, quando o canal ESPN publicou um esquema de corrupção envolvendo os principais gerentes da CBV durante a presidência de Ary Graça, incluindo o CEO, com alegações de comissões ilegais e antiéticas recebidas em um novo acordo de patrocínio com o Banco do Brasil (Globo Esporte, 2014a). Primeiramente, a nova equipe de gestão que assumiu a administração da entidade a mudou em termos de recursos humanos, principalmente quanto aos principais gestores. Além disso, todas as outras respostas utilizaram plataformas de RP, como conferências de imprensa e declarações por meio do site da Confederação. Ademais, foi implementada uma nova postura, mais ágil e transparente. Como um todo, a CBV foi capaz de superar o contexto de crise no curto prazo. A nova abordagem foi crucial para a recuperação dos recursos públicos, bloqueados durante a crise, e da credibilidade junto aos principais stakeholders. Nesse sentido, a relação com a mídia mudou significativamente, não só considerando a organização interna da CBV, mas também graças ao novo diretor de imprensa, com mensagens consistentes, claras e diretas transmitidas durante a crise. No entanto, a estratégia de RP implementada teve um aspecto negativo que pode dificultar, a longo prazo, o processo de reconstrução total da boa reputação da CBV. As redes sociais deveriam ter sido usadas para difundir as ações adotadas para os fãs e atletas, durante e após a crise, demonstrando compromisso com eles.

          Unitermos: Gerenciamento de crise. CBV. Relações públicas.

 

Resumen

          Desde la antigua Grecia, las instituciones se han enfrentado a diferentes tipos de crisis. En el ámbito deportivo, las crisis son cada vez más relevantes debido a la atención prestada por los medios de comunicación y debido al reciente apoyo comercial al deporte. En este artículo se explica el caso de la Confederación Brasileña de Voleibol, CBV, cuando se le acusa de corrupción y otras prácticas ilegales en Brasil. En este sentido, el objetivo principal de este trabajo fue analizar las acciones tomadas por el BCV a la luz de la teoría de la gestión de crisis. El comienzo tuvo lugar en 2014, cuando ESPN publicó un esquema de corrupción que involucra a los principales gestores de la CBV durante la presidencia de Ary Graça, entre ellos el director general, con los datos de las comisiones ilegales y poco éticas recibidas en un nuevo acuerdo de patrocinio con el Banco do Brasil (Globo Esporte 2014a). En primer lugar, el nuevo equipo de gestión que se hizo cargo de la gestión de la entidad cambió en lo que hace a los recursos humanos, especialmente a los principales gestores. Por otra parte, todas las demás respuestas utilizaron plataformas de RP, como conferencias de prensa y declaraciones de la página web de la Confederación. Además, fue implementada una nueva modalidad, más ágil y transparente. En su conjunto, la CBV fue capaz de superar el contexto de crisis a corto plazo. El nuevo enfoque fue crucial para la recuperación de los fondos públicos bloqueados durante la crisis, y la credibilidad con los principales interesados. En este sentido, la relación con los medios de comunicación ha cambiado significativamente, no sólo teniendo en cuenta la organización interna de la CBV, sino también gracias a la nueva directora de la prensa, con mensajes coherentes, claros y directos transmitidos durante la crisis. Sin embargo, la estrategia de relaciones públicas implementadas tuvo un aspecto negativo que pueda obstaculizar, a largo plazo, el proceso de reconstrucción total de la buena reputación de la CBV. Las redes sociales deberían haber sido utilizados para difundir las acciones tomadas por los aficionados y atletas durante y después de la crisis, lo que demuestra compromiso con ellos.

          Palabras clave: Gestión de crisis. CBV. Relaciones públicas.

 

Reception: 12/01/2016 - Acceptance: 14/03/2017

 

1st Review: 27/02/2017 - 2nd Review: 11/03/2017

 
Lecturas: Educación Física y Deportes, Revista Digital. Buenos Aires, Año 21, Nº 226, Marzo de 2017. http://www.efdeportes.com/

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Introduction

    Since the ancient Greece, institutions have been facing different kind of crises. In the sport environment, crises have been receiving more importance in reason of the media attention and due to the recent commercial appeal of the sports. This paper explains the case of the Brazilian national volleyball governing body, the CBV, when accused of corruption and other illegal practices in Brazil. In addition, the crisis is described emphasizing the relation with the media and public relations strategies implemented. In this way, the main goal of the article is to analyse the actions taken by CBV in the light of the crisis management theory.

    Firstly, the sport organization is contextualized in terms of management history and financial status. In the sequence, the crisis is presented with the immediate consequences. After that, the actions taken are explained, with a proper analysis and conclusion.

The CBV

Administrative history

    The Confederação Brasileira de Voleibol – CBV (Brazilian Volleyball Confederation), launched in 1954 (CBV, 2015a), is the national governing body responsible for regulating and develop the sport throughout the country. According to the CBV’s official website (CBV, 2015a), the entity has passed by 3 different administrative eras, starting with the former president Carlos Arthur Nuzman (current Brazilian Olympic Committee president) - 1975 to 1996, who has implemented marketing and public relations (PR) tools in order to make the volleyball popular in Brazil. His successor, Ary Graça Filho (1997 to 2014), has brought to the CBV a new model of management, leading the institution as an undertaking and achieving the best results of the sport, including a huge and modern training center and several Olympic and World Champion medals.

    During Graças’ era, in 1999, the CBV received from the Fédération Internationale de Volleyball - FIVB (International Volleyball Federation) the award of “the most successful” volleyball federation, considering the years of 97/98/99 (CBV, 2015a). Likewise, in 2003, the Brazilian sport organization got the ISO 9001:2000 certificate, for its excellence in sport management (CBV, 2015b). All the triumphs inside and outside the court have led Graça to the presidency of the FIVB in 2012 (FIVB, 2012). Given this fact, Graça left his vice-president, Walter Pitombo, as the interim president of the CBV, when in 2014, Pitombo assumed definitively the presidency of the Confederation (Globo Esporte, 2014a).

Financial status

    The great success of the CBV has been fuelled by public resources, direct or indirectly, through transfers from the Ministry of Sport - ME (federal government), national lottery funding (based on Agnello/Piva law) and from the historical sponsor Banco do Brasil - BB (a private bank controlled by the federal government). Even the famous national center of training was built using public resources (Cruz, 2014a).

    Taking the recent years to demonstrate how significant the public money is to CBV, for instance, in 2013, the institution received from the ME R$ 41 m, around 7 m pounds (Castro, 2014b). Furthermore, considering the impact of the sponsorship related to the BB, for example in 2013, the total investment on the CBV was almost R$ 26 m (Lance, 2014). As a whole, taking into consideration the official financial report (CBV, 2014), in 2013, the CBV had approximately R$ 130 m in incomes, which more than 43% of them came from public aid. Finally, based also on the analysis provided by Somoggi (2014), inferring that since 2002 this percentage hasn’t been changing significantly, it seems like the Confederation needs considerably and has been relying on this kind of public resources for a long time.

The crisis

The trigger

    The trigger of the crisis was in the beginning of 2014 when the sport channel ESPN published a corruption scheme involving the top managers of the CBV during the Graça’s presidency, including the CEO, about illegal and unethical commissions received from the new sponsorship deal with Banco do Brasil (Globo Esporte, 2014a). This first revelation pointed out that more than R$ 10 m were misappropriated by managers of the CBV as a result of sponsorship contracts (Veja, 2014).

    After that disclosure, a series of new allegations and findings were brought by the media (especially the ESPN) and by the Brazilian Office of the Comptroller General – CGU, which is the federal institution responsible for ensuring the correct use of public resources. According to Castro (2014a), the illegal practices were also related to consultancies hired and paid without measures of assessment or without any prove that the proper service was done, supposed experts being hired without proved qualifications, companies correlated to relatives of the CBV’s managers being hired for important events, tax invoices and receipts with generic descriptions and companies being created (by CBV managers) days before the new BB contract to receive illegal commission.

    At the same time, the CGU has affirmed that 13 contracts were legally irregulars (Conde, 2015), emphasising yet that more than R$ 30 m were irregularly forwarded to the companies of the accused CEO (Silva, 2014), bid-rigging practices (Silva, 2014), payments to relatives of the proper president Graça (Globo Esporte, 2014b) and performance bonus not being correctly distributed to athletes (Downie, 2014), which generated a list of requirements and recommendations to the CBV.

Immediate consequences and ramifications

    Firstly, the accused CEO has resigned after the ESPN’s publication (Silva, 2014). Not only the now ex-CEO but also the president Ary Graça, in 2014, totally resigned his position at CBV, assuming exclusively the roles of FIVB, which made the interim Walter Pitombo the current president of the Confederation (Globo Esporte, 2014a). In addition, the BB has suspended its payments to CBV until the entity implement initiatives indicated by CGU (Conde, 2015). The Ministry of Sport, through official statements, has said that it would revise the existent funding contracts (Conde, 2015). Later, the Ministry has required some explanations and adjustments (Ottoni, 2014), also blocking financial transfers that had been agreed before the crisis (Cruz, 2014b).

    Besides that, important personalities and stakeholders have started to publically state their concerns and disapprovals around the scenario and against the irregular activities, like the famous national coaches Bernardinho and José Roberto Guimarães (Globo Esporte, 2014a). In the meantime, notably using social media, sport events and TV programs, current and former volleyball athletes (including Olympic champions) have begun several protests against the Confederation (Vecchioli, 2014; Lajolo, 2014; Oliveira, 2015; Lopes & Capelo, 2014).

Actions taken

    In order to face the crisis and assume a position, the CBV has taken several responses that can be clustered in different areas.

Human resources

    As soon as he has become aware of the negative facts and misbehaviors, the new president invited 2 new managers to be part of the institution, Radamés Latari and Renan dal Zotto, two prestigious personalities in the volleyball’s world (Cruz, 2014a). With the responsibility for leading the managers, Neuri Barbieri (63 years old) was brought as well, with his 32 years of experience as president of a regional volleyball federation (Brum, 2014). Recently, in 2015, the Confederation gained a new CEO, Ricardo Trade, who is known as a conciliator and experienced manager (Aleixo & Costa, 2015). In complementation, the CBV has replaced the previous Chief of the Press Office by a journalist, which happened simultaneously with a new transparent manner to face the facts (Cruz, 2014b), which is described below.

New approach, changes and media

    Until his resignation, the former president Graça publically asserted that he hasn’t paid any commission related to the contracts with Banco do Brasil (Globo Esporte, 2014a). In addition, he also has attacked the accusers, calling them cowards and envious (UOL 2014). Later, after quit his place at CBV, the same Graça denied that his decision did have any regards with the allegations of corruption (Andersen, 2014). However, the new presidency has changed the speech and the main message, by a closer and more crystal clear approach towards the media, creating a turning point around the PR strategy adopted. Indeed, that fact was highlighted by the journalists, as explained by Cruz (2014b), who posted after a press conference that questions around the allegations were unexpectedly treated clear and objectively by the CBV.

    First, through an official statement posted on its official website, CBV has admitted that the entity had received a first report from CGU containing allegations against Graça’s administration (Silva, 2014). Neuri, during his first press conference, has also shown the document to the journalists (Cruz, 2014b). Not to mention, in the same event, Renan Dal Zotto declared that the new CBV managers didn’t want to take reputational risks anymore (Cruz, 2014b).

    Moreover, the president Pitombo has used a sportive award ceremony to debate the crisis, in the presence of athletes, managers, coaches and the main media vehicles in Brazil, highlighting the new management model to be implemented on CBV, which would be planned by a famous consultancy company in the country, and also confirming meetings with BB to fix the issues mentioned by CGU (Cidade Verde, 2014). Equally important, the CBV has made clear to the iconic coaches José Roberto Guimarães and Bernardinho all the procedures adopted, receiving their support to change old administrative practices (Globo Esporte, 2014c). Another turning point, in the middle of the crisis, Neuri Barbosa in a press conference stated that CBV would sue all the ex-managers listed in CGU initial report, emphasizing those who had received inappropriate commissions (Conde, 2015). Therefore, as a consequence of the final CGU report, the Confederation has hired a famous law office in order to pursue and recover the values misappropriated by the ex-managers (Silva, 2014; Downie, 2014).

    In a different perspective, in line with Silva (2014), CBV released a new pronouncement claimed that the entity, even before the final report from CGU, had already implemented some internal reforms, like:

  1. An external audit company to analyze the finances of the years previous to Pitombo’s era;

  2. Cancelling old contracts with unethical points and delivering to the federal authorities documents in regards to previous accountabilities;

  3. Since April 2014, monthly, CBV has started to issue financial reports and publish them on the official website; and

  4. New tendering methods to select suppliers and a permanent internal audit unit.

    In an official statement after BB sponsorship has been blocked, the Confederation has put emphasis on possible negative effects of the bank decision on the preparation of the national teams to the Olympic Games in 2016 (Globo Esporte, 2014c). About the Ministry of Sport, during a press conference, Renan Dal Zotto has acknowledged that the federal department had made requests and CBV had already complied with them, especially revising contracts and looking for the guilty ones (Ottoni, 2014).

Analysis: crisis, actions and PR strategies

Crisis and PR

    Observing the excellent reputation of CBV before the ESPN revelation (considering its administrative model and sportive results), the concept of crisis is aligned with the scenario abovementioned, insofar as it is defined as an unpredictable event, with a low probability of occurring and a high impact or consequences, that affect also the stakeholders’ expectations, the organization operations, damaging the entity in terms of finances and reputation (Brown & Billings, 2013; Coombs, 2007; Nicholson, 2007). In another perspective, authors also could describe CBV case as a scandal, because of its disruption, media attention and individual focus characteristics (Nicholson, 2007). Important to bring in that, apart from being external, the crisis also has elements of a systemic one, which usually takes years to be overcome completely (Nicholson, 2007).

    In a different prism, taking the ideas of Hutton (1999), public relations are the actions that try to create or alter public opinion, aiming at a support for an activity, cause or institution. Based on this concept, PR was the main function activated by CBV to the communication with its stakeholders during the crisis. PR that has specific tools as social media, press release, press conferences and websites (Linton, 2005).

Responses / Strategies

    Taking into consideration the responses adopted during the crisis, the literature provides elements to analyze and understand them, insofar as they misuse can ruin the repair image initiatives (Rhee & Kim, 2012; Coombs, 2007). According to Coombs (2007), adjusting information and rebuild reputation strategies are the most effective measures to reduce negative effect of a crisis and to prevent negative behavior intentions. Around these strategies to face crisis and repair the Confederation image, the following table demonstrates actions taken (implicit or explicit) by CBV classifying them by the different concepts / strategies.

Table 1. CBV responses during the crisis

Strategy

CBV action / response

Source

1

Simple denial

Deny the allegations

The president Graça has denied the commissions and illegal practices

Benoit (1997)

2

Shift the Blame

Act performed by another

Communication emphasising the ex-managers

Benoit (1997)

3

Scapegoat

Blame a person outside of the organization for the crisis

Coombs (2007)

4

Problem recognition for solutions

Statements assuming the crisis and the internal issues

Rhee and Kim (2012)

5

Corrective Action

Plan to solve or prevent problems

Consultancy and audit companies hired, the announcement of a new administrative model and internal investigation

Benoit (1997)

6

Search for solutions

Rhee and Kim (2012)

7

Implementation of solutions

Internal reforms, a more transparent accountability, obey CGU recommendations and a new open and clear public relation process

Rhee and Kim (2012)

8

Attack the accuser

Reduce the credibility

of the accuser

The president Graça has called the accuser of cowards and envious

Coombs (2007)

9

Diversion

A frame is created to emphasize selected factors in favour of the organization, where the people who receive the message will focus their attentions on those factors, trying to transfer the attention of audience out of the main crisis.

Statements highlighting that Banco do Brasil sponsorship suspension decision would impact on the national teams preparation to the Olympic Games

Coombs (2007) and Bruce and Tini (2008)

Source: The author

    Important to realize that all the responses were taking using PR platforms, like press conferences and official statement through the Confederation’s website. Besides that, the strategies 1 and 8 of the table above were only used by the ex-president Graça. Essential also to visualized that the strategies 2 and 3 were also based on official releases that pointed out measures taken by the new managers, illustrating the old administrative “concepts” used by the previous ones which didn’t match with the new practices implemented (Brito, 2014).

PR organizational status

    Before the crisis, in 2011, the Press Office and the Institutional Relations department were connected directly with the Presidency of CBV. In 2014, however, the press department was transferred to the supervision of one of the top managers (Castro, 2014c). Currently, the frame is the same, but concentrating all the PR initiatives in just one top manager, the CEO (CBV, 2015c). Certainly, this change demonstrated a concern with the eventual political influence on PR strategies that may affect the relation with media, putting these demands in charge of the technical body.

Relevance of the responses and PR tools

    As declared by Hopwood (2005), public relations are essential tools in the organizational communication, which the media and the internet play critical roles (Coombs, 2007). In this sense, not only the platforms seem to be adequate, but also the new transparent approach towards the media have helped the CBV to face the crisis. For these reasons, the fast and transparent posture of the CBV was relevant in the light of “speed is vital to avoid information vacuums that can be easily filled with misinformation” (Bruce & Tini, 2008).

    Since it is said that the media creates contexts and frames (Nicholson, 2007), new realities and outlooks can be constructed (Bruce & Tini, 2008). Therefore, the CBV introducing its own version of the fact through PR strategies and tools, showing the actions taken, could minimize some distortion of the facts. After all, supported by the Attribution Theory quoted by Coombs (2007), people search for elements that explain the causes of an event, making attributions, putting responsibilities based on acts performed, encouraged or permitted to occur (Benoit, 1997). Thus, the PR and administrative initiatives of CBV were valuable aiming at repairing its image and in order to get back the confidence of the stakeholders.

    Furthermore, CBV has concentrated it communication efforts around the website and promoting press conferences. Because of that, positives and negatives effects can be inferred. Initially, as defended by Bruce and Tini (2008), the use of websites introduces a controllable form of communication with the media, which the media releases (official statements) are ways of interactions (Nicholson, 2007), making easy the process of adjusting information. In terms of interaction, Nicholson (2007) argues that press conferences are also an effective tool, especially in significant and public concerns.

    On the other hand, it seems like the CBV had a minor concern with regards to the social medias. Even though having official accounts in the Facebook, Instagram and Twitter, observing these platforms since February 2014, there is no evidence - until December 2015 - that they have used it in an integrated public relation strategy to face the crisis and to rebuild reputation. In fact, the posts found had their emphasis on the competitions promoted and participated by CBV, with also idols endorsement (e.g.: birthdays) and athletes structured interviews. This negative aspect is confirmed by Coombs (2007), indicating that second-hand information from social media is critical in crises. Under those circumstances, it may be concluded that the audiences targeted during the crisis were the general media, BB, ME and CGU, but not the fans (the main users of social media). Possibly, this PR focus was implemented considering the financial importance of those audiences, whose relevance of the fans as consumers (generating income) is questionable analyzing CBV financial report.

Main Stakeholders aimed

    As observed by Rhee and Kim (2012), the process of repair the organization damaged reputation “is not independent of the process of restoring the stakeholders’ trust”, which has to be thought taking into consideration that each one has diverse interests and concerns (Benoit, 1997). Specifically, around the media, all CBV’s main steps were exposed in press conferences and media releases. Likewise, the Confederation has utilized the media to send indirect messages to other stakeholders, for instance, in a statement CBV has claimed that it had adopted all me CGU’s recommendations (Brito, 2014), a subject that was of interest of BB. As a result, the bank has returned the sponsorship, praising that the actions taken have brought more transparency about CBV’s management (Brito, 2015). Nowadays, the Confederation can count again on the public resources.

Conclusion

    As a whole, the CBV was able to overcome the crisis context in the short-term. The new transparent approach was a crucial turning point to recovery the public financial resources and credibility from the main stakeholders. In this sense, it seems like the relation with the media has significantly changed, not only considering the internal organization of CBV but also thanks to the new Chief of the Press Office and the consistent, clear and direct messages transmitted during the crisis.

    Nevertheless, the PR strategy implemented had a negative aspect that can make difficult, in the long-run, the process of totally rebuild the good reputation of CBV. The social medias should have been more used to spread the actions taken to the fans and athletes, during and after the crisis, demonstrating commitment with them. Certainly, these messages would also generate more credibility towards the targeted stakeholders, especially the media.

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EFDeportes.com, Revista Digital · Año 21 · N° 226 | Buenos Aires, Marzo de 2017
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