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Article
Publication date: 28 June 2019

Felice Matozza, Anna Maria Biscotti and Elisabetta Mafrolla

This paper aims to examine whether firms in polluting industries improve their environmental performance to effectively repair their financial reputation in the aftermath…

Abstract

Purpose

This paper aims to examine whether firms in polluting industries improve their environmental performance to effectively repair their financial reputation in the aftermath of an accounting restatement – a financial reputation-damaging event.

Design/methodology/approach

The authors test their hypotheses using multiple regression analysis of a sample of firms listed in International Financial Reporting Standards (IFRS)-adopting countries. They use a comparative empirical design in which a sample of firms that underwent a restatement (henceforth, restating firms) are compared with control groups of pair- and multiple-matched firms that did not undergo restatements (non-restating firms).

Findings

The study finds that restating firms have higher environmental performance in the aftermath of restatement events. Additionally, the authors demonstrate that this environmentally based reputation repair positively influences the financial reputation of the firms, as measured by analyst coverage and recommendations and which previously decreased because of the restatement event.

Practical implications

Because environmental levers are a substantial contextual factor in polluting industries, shifting the stakeholder debate to firms’ environmental commitment can improve financial stakeholders’ opinions and favour the repair of the multifaceted reputation of the financially damaged firm.

Social implications

With a worldwide growing attention to environment there is a critical need for understanding how polluting firms integrate sustainability and financial reputation. We demostrate that polluting firms recover from a financial failure pursuing their environmental performance.

Originality/value

Contributing to the behavioural theory of reputation repair and in line with the legitimacy perspective in environmental disclosure research, this paper shows that polluting firms recover from a loss to their financial reputation by diverting stakeholders’ attention towards the environmental field, thus restoring their financial reputation, as financial analysts value environmental performance improvement – a substantial contextual factor of polluting firms’ reputation repair process.

Details

Sustainability Accounting, Management and Policy Journal, vol. 10 no. 5
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 2 February 2015

Andrea Pérez

The purpose of this paper is to provide a literature review of the underdeveloped stream of research that analyses corporate reputation as an outcome of corporate social…

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Abstract

Purpose

The purpose of this paper is to provide a literature review of the underdeveloped stream of research that analyses corporate reputation as an outcome of corporate social responsibility (CSR) reporting.

Design/methodology/approach

The author systematically reviews the theoretical and empirical literature on the CSR reporting-reputation relationship, identify several gaps in the body of knowledge and provide new lines of study to develop this relevant stream of research.

Findings

The literature review demonstrates that CSR reporting is especially useful to generate corporate reputation. The justification for this idea is provided by as many as five theoretical approaches, while the management of corporate transparency, information quantity and information quality is shown to be crucial to the success of CSR reporting.

Originality/value

The value of the paper resides in making the rather underdeveloped, heterogeneous and inconclusive literature on the CSR reporting-reputation link more accessible to CSR reporting scholars and practitioners. At the same time, suggestions are provided for future research that would contribute to improving the knowledge on the relationship between CSR reporting and corporate reputation.

Details

Corporate Communications: An International Journal, vol. 20 no. 1
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 12 October 2010

W. Timothy Coombs, Finn Frandsen, Sherry J. Holladay and Winni Johansen

The purpose of this paper is to provide context for and a preview of the content for the special issue on corporate apologia.

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Abstract

Purpose

The purpose of this paper is to provide context for and a preview of the content for the special issue on corporate apologia.

Design/methodology/approach

The methodology is a review of literature relevant to crisis communication and the role of apologia within this body of literature.

Findings

Apologia, a rhetoric of self‐defense, has a strong connection in the creation and development of crisis communication. Current research is moving beyond the parameters of apologia but it remains a strong influence on the field. Future crisis communication research needs to explore further the role of emotion if crisis communication and the implications of international crisis communication. The various contributions the articles in the special issue provide for crisis communication are reviewed as a means of previewing the special issue.

Practical implications

The paper provides lessons that crisis managers can apply when they need to communicate during a crisis.

Originality/value

The paper provides insights into the development of crisis communication and the role of apologia in that development.

Details

Corporate Communications: An International Journal, vol. 15 no. 4
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 8 October 2018

Nengzhi (Chris) Yao, Jiuchang Wei, Weiwei Zhu and Alexander Bondar

The conclusions on the importance of corporate response timing to a crisis have remained inconsistent. Some studies suggest that active response may reduce negative…

Abstract

Purpose

The conclusions on the importance of corporate response timing to a crisis have remained inconsistent. Some studies suggest that active response may reduce negative impacts, whereas managers argue that issuing official response frustrates stakeholders and thus decreases the firm value. The purpose of this paper is to investigate the role of external media in the response timing strategy and the consequent stock market reaction.

Design/methodology/approach

Based on 130 corporate crises that befell publicly listed firms in China from 2007 to 2014, this paper uses the Baidu News Search Engine and Chinese Lexical Analysis System to construct the variables of the media characteristics. A structural equation model is established to test the hypotheses.

Findings

The results of this paper suggest that media coverage drives response timing after a crisis. Although an official response is a burden for firms, the timing strategy has multidimensional benefits including effectively alleviating negative effects (defined as buffering effects) and repairing the market (defined as restoring effects). Moreover, the buffering effects of response timing are stronger when completeness of response is low.

Originality/value

This study mainly contributes to crisis communication literature by introducing the role of media in prompting managers to make timing decisions. The findings of this study provide empirical support for the importance of timing response strategy.

Details

Baltic Journal of Management, vol. 14 no. 1
Type: Research Article
ISSN: 1746-5265

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Article
Publication date: 5 October 2018

Bradley Rudkin, Danson Kimani, Subhan Ullah, Rizwan Ahmed and Syed Umar Farooq

This paper investigates the legitimacy tactics used in the annual reports of UK listed companies in the aftermath of major corporate scandals.

Abstract

Purpose

This paper investigates the legitimacy tactics used in the annual reports of UK listed companies in the aftermath of major corporate scandals.

Design/methodology/approach

We carried out a content analysis of annual reports of 19 companies that have been involved in corporate scandals with a view to understand how firms communicate negative scandals affecting them.

Findings

The findings reveal that firms use a wide range of legitimisation strategies in the manner that contribute to shape disclosure communications concerning negative incidents. For instance, some firms may offset the negativity linked to an incident by rendering such explanations amidst positive information.

Originality/value

Contrary to earlier studies conducted on accounting scandals, the authors incorporated extensive corporate scandals such as human rights violations, controversies concerning child labour, environmental scandals, corruption, financial embezzlement and tax evasion.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 1
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 4 August 2021

Binh Bui, Mohamed Chelli and Muhammad Nurul Houqe

The purpose of this paper is to investigate the impact of climate change rating organisations on rated firms, to understand whether disclosure ratings can facilitate…

Abstract

Purpose

The purpose of this paper is to investigate the impact of climate change rating organisations on rated firms, to understand whether disclosure ratings can facilitate enhanced emissions performance.

Design/methodology/approach

This study uses 1,848 cross-country firm-year observations from organisations that responded to the carbon disclosure project (the rater) between 2011 and 2015 and, hence, were rated for their disclosure. Drawing on the ideology of numbers, this paper hypothesises that the disciplinary power of ratings will result in rated firms improving their subsequent disclosure scores. Following the environmentally-friendly ideology, this study hypothesises that poorly-rated firms will adopt decoupling behaviour, by improving their climate change disclosure scores without reducing the intensity of their greenhouse gas (GHG) emissions.

Findings

The results indicate that climate change disclosure ratings pressure poorly-rated firms to improve their disclosure scores in subsequent years, yet these firms are not inclined to lower their GHG emissions. Further, the direct publication of firms’ GHG emissions intensity can exert some restricted disciplinary impact on rated firms, as the more polluting firms tend to improve their subsequent climate change performance compared with those having lower emissions levels.

Practical implications

This paper argues that the ability of corporate sustainability rating schemes to influence corporate behaviour comprehensively is limited and should be used with caution.

Originality/value

This paper sheds new light on the ideological dynamics at play between the rater and the rated, while highlighting new aspects of the power-rating nexus in the climate change arena.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

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Book part
Publication date: 11 October 2017

Augustine Pang, Ratna Damayanti and Eugene Yong-Sheng Woon

In 2015, Malaysia’s investment vehicle, 1Malaysia Development Berhad (1MDB), came under international scrutiny after it amassed a debt of US$11 billion (10.3 billion…

Abstract

In 2015, Malaysia’s investment vehicle, 1Malaysia Development Berhad (1MDB), came under international scrutiny after it amassed a debt of US$11 billion (10.3 billion) (Wright & Clark, 2015), which it had difficulty repaying. More disturbingly, investigators found that US$700 million (658 million) was transferred into the personal bank account of Malaysia’s prime minister, Najib Razak, founder and chairman of 1MDB’s advisory board (Wright & Clark, 2015). Najib was also accused of embezzling state money (Reuters, 2015) and damaging the image of the country (“Najib tried to bribe me”, 2015). This chapter aims to examine the strategies used by the Malaysian prime minister to repair his image in the 1MDB scandal, the effectiveness of these strategies, and how these impacted Malaysia’s public diplomacy efforts in restoring the country’s image and reputation. Findings showed that the prime minister denied wrongdoing, and simultaneously bolstered his position and promised to turn 1MDB around. In contrast to the current explication of Benoit and Pang’s (2008) image repair strategies, Najib’s way of attacking the accusers sheds light into how image repair strategies may be operationalized in the Asian context. A new image repair strategy – diversion – is proposed to be added to the existing framework.

Details

How Strategic Communication Shapes Value and Innovation in Society
Type: Book
ISBN: 978-1-78714-716-4

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Article
Publication date: 20 August 2019

Ihab Hanna Sawalha

The purpose of this paper is to discuss the effectiveness of image-repair strategies adopted by organizations to restore their public image and reputation following crisis…

Abstract

Purpose

The purpose of this paper is to discuss the effectiveness of image-repair strategies adopted by organizations to restore their public image and reputation following crisis situations, the lessons learned from these cases and the significance of contextual factors that are likely to affect image-repair efforts and strategies adopted.

Design/methodology/approach

Three cases have been reviewed in this paper: Weather, Jordan; Nestlé Waters, Jordan; and Victoria College School, Jordan. Information was obtained from published materials, such as YouTube commentaries, local newspapers and online news agents, primarily the Jordan Times, which is considered the number one daily in the country. The discussion of these cases is original and based on academic theory and literature.

Findings

Organizations differ in terms of the ways they respond to corporate crises and the strategies they are likely to adopt to restore/recover their reputation and public image.

Practical implications

Corporate reputation or public image is an asset that is built over time. Organizations within all industries seek to secure positive images in the minds of people. The image of an organization however can be threatened by crises. Trust and public image decline when stakeholders feel they have not been adequately informed in times of crises regarding the different attributes of the situation or how the organization is dealing with the crisis. Organizations have the choice to adopt one image-repair strategy at a time or a combination of strategies according to the requirements of the situation.

Originality/value

Image-repair strategies have been examined in American and European contexts but have, to the author’s knowledge, never been examined in the context of Arab organizations and more specifically in the context of Jordanian organizations. This paper therefore provides a new insight into how to apply these strategies in a unique and new context and will also motivate future research in this regard.

Details

Journal of Business Strategy, vol. 41 no. 6
Type: Research Article
ISSN: 0275-6668

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Book part
Publication date: 11 October 2017

Finn Frandsen, Winni Johansen and Heidi Houlberg Salomonsen

Based on the assumption that the identity and self-understanding of an academic discipline determines how it conceptualizes different domains of social reality, including…

Abstract

Based on the assumption that the identity and self-understanding of an academic discipline determines how it conceptualizes different domains of social reality, including how it imports and/or exports concepts from or to other disciplines, this chapter presents some of the findings of a major ongoing comparative and cross-disciplinary study of how five key concepts within the combined fields of crisis management and reputation management are applied in three different disciplinary contexts. In this chapter, however, the focus is on just one of these concepts: the concept of reputation.

Details

How Strategic Communication Shapes Value and Innovation in Society
Type: Book
ISBN: 978-1-78714-716-4

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Article
Publication date: 5 December 2018

Federica Casonato, Federica Farneti and John Dumay

To present the continuation of a case study by Beck et al. (2017) on an Australian bank (CBD) during the period 2004–2013 by examining whether integrated reporting affects…

Abstract

Purpose

To present the continuation of a case study by Beck et al. (2017) on an Australian bank (CBD) during the period 2004–2013 by examining whether integrated reporting affects relational capital and helps to repair an organisations’ reputation. Both studies examine how a bank rocked by a major scandal in 2004 has attempted to repair its legitimacy through integrated reporting (<IR>). The paper aims to discuss these issue.

Design/methodology/approach

This study is a post facto analysis based on the original research from Beck et al. (2017). The research process involved a case study approach with an analysis framed by impression management theory to investigate whether the information in CBD’s integrated reports is consistent with other information available to investors.

Findings

The authors find there is a gap between what CBD discloses in its integrated reports and what is publicly available in other media. CBD’s talk and actions are not aligned, and that asymmetry translates into a decline of trust in CBD. The bank’s integrated reports reveal how management discloses or withholds information to protect their own interests and at their own discretion. These conclusions indicate that the integrated reporting paradigm is being co-opted by IM strategies to improve legitimacy through trust, reputation and social capital.

Research limitations/implications

Future research needs to reach beyond the organisational boundaries and understand if <IR> adds value for society, or is just a new form of multicapitalism, being an ideology to help the rich become richer? The answers are important if we ever hope to see misconduct disappear from our corporations and for company reports to become documents bearing truth and not espouse rhetoric based on organisational hypocrisy.

Originality/value

The paper adds to the growing body of research investigating <IR> in practice to understand the impact of <IR> and whether it is a new and useful reporting tool or just another management fashion.

Details

Journal of Intellectual Capital, vol. 20 no. 1
Type: Research Article
ISSN: 1469-1930

Keywords

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