Impression management and legitimacy strategies: The BP case

Titolo Rivista FINANCIAL REPORTING
Autori/Curatori Giovanna Michelon
Anno di pubblicazione 2013 Fascicolo 2012/4
Lingua Inglese Numero pagine 30 P. 35-64 Dimensione file 599 KB
DOI 10.3280/FR2012-004004
Il DOI è il codice a barre della proprietà intellettuale: per saperne di più clicca qui

Qui sotto puoi vedere in anteprima la prima pagina di questo articolo.

Se questo articolo ti interessa, lo puoi acquistare (e scaricare in formato pdf) seguendo le facili indicazioni per acquistare il download credit. Acquista Download Credits per scaricare questo Articolo in formato PDF

Anteprima articolo

FrancoAngeli è membro della Publishers International Linking Association, Inc (PILA)associazione indipendente e non profit per facilitare (attraverso i servizi tecnologici implementati da CrossRef.org) l’accesso degli studiosi ai contenuti digitali nelle pubblicazioni professionali e scientifiche

The aim of this paper is to study if and how impression management varies during different phases of the legitimation process, in particular during the legitimacy building and legitimacy repairing phases (Suchman, 1995). We aim at understanding whether and how the disclosure tone adopted by a company in the two different moments is diverse and thus functional to the intrinsic objective of the each phase. The empirical analysis focuses on the case of British Petroleum Plc. We investigated the impression management practices undertaken by the company both during the preparation of the rebranding operation, i.e. a situation in which the company is trying to build legitimacy; and during the happenings of two legitimacy crises, like the explosion of the refinery in Texas City and the oil spill in the Gulf of Mexico. The evidence appears in line with the theoretical prediction of legitimacy theory. Results show that while the company tends to privilege image enhancement techniques during the legitimacy-building phase, it uses more obfuscation techniques when managing a legitimacy-repairing process. Moreover, the analysis suggests that the company makes more extensive use of impression management techniques in the disclosures addressed to shareholders, investors and other market operators than in the disclosures addressed to the wide range of other stakeholders.

Keywords:Impression management, disclosure tone, legitimacy building, legitimacy crisis.

  1. Blacconiere G.W. and Patten D.M. (1994), Environmental disclosures, regulatory costs, and changes in firm value, Journal of Accounting and economics 18(3), pp. 355-377 DOI: 10.1016/0165-4101(94)90026-4
  2. Brennan N.M., Guillamon-Saorin E. and Pierce A. (2009), Impression management: developing and illustrating a scheme of analysis for narrative disclosures – a methodological note, Accounting, Auditing and Accountability Journal, 22 (5), pp. 789-832 DOI: 10.1108/09513570910966379
  3. Cho C.H. (2009), Legitimation strategies used in response to environmental disaster: a French case study of Total S.A.’s Erika and AZF incidents, European Accounting Review, 18(1), pp. 33-62 DOI: 10.1080/09638180802579616
  4. Cho C.H., Michelon G. and Patten D.M. (2012), Enhancement and obfuscation through the use of graphs in sustainability reports: an international comparison, Sustainability Accounting, Management and Policy Journal, 3(1), forthcoming
  5. Cho C.H., Roberts R.W. and Patten D.M. (2010), The language of US corporate environmental disclosure, Accounting, Organization and Society, 35(4), pp. 431-443 DOI: 10.1016/j.aos.2009.10.002
  6. Cuellar Fernàndez B., Furtes Callén Y. and Laìnez Gadea J.A. (2011), Stock price reaction to non-financial news in European technologies companies, European Accounting Review, 20(1), pp. 81-111 DOI: 10.1080/09638180903384650
  7. Darrel W. and Schwartz B.N. (1997), Environmental disclosures and public policy pressure, Journal of Accounting and Public Policy, 16 (2), pp. 125-154 DOI: 10.1016/S0278-4254(96)00015-4
  8. Davis A. and Tama-Sweet I. (2008), Managers’ use of pessimistic tone across alternative disclosure outlets: Earnings press releases versus MD&A. Conference on Financial Economics and Accounting, University of Texas at Austin, Austin.
  9. Davis K.A., Piger, J.M. and Sedor L.M. (2007), Beyond the numbers: an analysis of optimistic and pessimistic language in earnings press releases, SSRN Working paper
  10. Deegan C. (2002), The legitimizing effect of social and environmental disclosures: a theoretical foundation, Accounting, Auditing and Accountability Journal, 15 (3), pp. 282- 311 DOI: 10.1108/09513570210435852
  11. Deegan C., Rankin M. and Tobin J. (2002), An examination of the corporate social and environmental disclosures of BHO from 1983-1997. A test of legitimacy theory, Accounting, Auditing and Accountability Journal, 15 (3), pp. 312-343 DOI: 10.1108/09513570210435861
  12. Deegan C., Rankin M. and Voght P. (2000), Firms’ disclosure reactions to major social incidents: Australian evidence, Accounting Forum, 24 (1), pp. 101-130 DOI: 10.1111/1467-6303.00031
  13. Deegan C. and Rankin M. (1996), Do Australian companies report environmental news objectively? An analysis of environmental disclosures by firms prosecuted successfully by the Environmental Protection Authority, Accounting, Auditing and Accountability Journal, 9(2), pp. 50-67 DOI: 10.1108/09513579610116358
  14. Deephouse D.L. (1999), To be different, or to be the same? It’s a question (and theory) of strategic balance, Strategic Management Journal, 20, pp. 147-166 DOI: 10.1002/(SICI)1097-0266(199902)20:2<47::AID-SMJ11>3.0.CO;2-Q
  15. Deephouse D.L. (2000), Media reputation as a strategic resource: an integration of mass communication and resource-based theories, Journal of Management, 26(6), pp. 1091- 1112 DOI: 10.1177/014920630002600602
  16. Deephouse D.L. and Carter S.M. (2005), An examination of differences between organizational legitimacy and organizational reputation, Journal of Management Studies, 42(2), pp. 329-60 DOI: 10.1111/J.1467-6486.2005.00499.X
  17. Dowling J. and Pfeffer J. (1975), Organizational legitimacy: social values and organizational behavior, Pacific Sociological Review, 18 (1), pp. 122-136 DOI: 10.2307/1388226
  18. Elsbach K.D. (1994), Managing organizational legitimacy in the California cattle industry: the construction and effectiveness of verbal accounts, Administrative Science Quaterly, 39, pp. 67-88 DOI: 10.2307/2393494
  19. Elsbach K.D. and Sutton R.I. (1992), Acquiring organizational legitimacy through illegitimate actions: a marriage of institutional and impression management theories, The Academy of Management Journal, 35(4), pp. 699-738 DOI: 10.2307/256313
  20. Fombrun C. (1996), Reputation: realizing value from the corporate image. (Boston: Harvard Business School Press).
  21. Hagg I. and Hedlund G. (1979), Case studies in accounting research, Accounting, Organizations and Society, 4(1/2), pp. 135-143 DOI: 10.1016/0361-3682(79)90013-8
  22. Hart R.P. (2000), DICTION 5.0: The Text Analysis Program. (Thousand Oaks, CA: Sage- Scolari).
  23. Henry E. (2008), Are investors influenced by how earnings press releases are written?, Journal of Business Communication, 45 (4), pp. 367-407 DOI: 10.1177/0021943608319388
  24. Hooghiemstra R. (2000), Corporate communication and impression management – new perspectives why companies engage in corporate social reporting, Journal of Business Ethics, 27, pp. 55-68 DOI: 10.1023/A:1006400707757
  25. Jones M.J. and Shoemaker P.A. (1994), Accounting narratives: A review of empirical studies of content and readability, Journal of Accounting Literature, 13, pp. 142-184.
  26. Kelley H. (1967), Attribution theory in social psychology. In Nebraska Symposium on Motivation, ed. D. Levine, 192-241. (Lincoln (NE): University of Nebraska Press).
  27. Koonce L. and Mercer M. (2005), Using psychology theories in archival financial accounting research, Journal of accounting literature, 24, pp. 175-214.
  28. Kostova T. and Zaheer S. (1999), Organizational legitimacy under conditions of complexity: the case of the multinational enterprise, The Academy of Managemetn Review, 24(1), pp. 64-81 DOI: 10.5465/AMR.1999.1580441
  29. Krippendorff K. (2004), Content analysis: An introduction to its Methodology. (London: SAGE Publications), pp. 18-26.
  30. Maat H.P. (2007). How promotional language in press releases is dealt with by journalists: Genre mixing or genre conflict, Journal of Business Communication, 44, pp. 59-96, DOI: 10.1177/0021943606295780
  31. Merkl-Davies D.M. and Brennan N.M. (2007), Discretionary disclosure strategies in corporate narratives: incremental information or impression management?, Journal of Accounting Literature, 26, pp. 116-194
  32. Merkl-Davies D.M., Brennan N.M. and McLeay S.J. (2011), Impression management and retrospective sense-making in corporate narratives: a social psychology perspective. Accounting, Auditing and Accountability Journal, 24 (3), pp. 315-344 DOI: 10.1108/09513571111124036
  33. Merkl-Davies D.M. and Brennan N.M. (2011), A conceptual framework for impression management: new insights from psychology, sociology and critical perspectives, Accounting and Business Research, 41(5), pp. 415-437
  34. Meyer J.W. and Rowan B. (1977), Institutionalized organizations: formal structure as myth and ceremony, The American Journal of Sociology, 83(2), pp. 340-363 DOI: 10.1086/226550
  35. Michelon G. (2011), Sustainability disclosure and reputation: a comparative study, Corporate Reputation Review, 14(2), pp. 79-96 DOI: 10.1057/crr.2011.10
  36. Morris R. (1994), Computerized content analysis in management research: A demonstration of advantages & limitations, Journal of Management, 20, pp. 903-931 DOI: 10.1177/014920639402000410
  37. Neu D., Warsame H. and Pedwell K. (1998), Managing public impressions: environmental disclosure in annual reports, Accounting, Organizations and Society, 23(3), pp. 265-282 DOI: 10.1016/S0361-3682(97)00008-1
  38. Neuendorf K.A. (2002), The content analysis guidebook. (London: SAGE Publications).
  39. Ogden S. and Clarke J. (2005), Customer disclosures, impression management and the construction of legitimacy: corporate news in the UK privatized water industry, Acconting, Auditing and Accountability Journal, 18 (3), pp. 313-345 DOI: 10.1108/09513570510600729
  40. Oliver C. (1991), Strategic responses to institutional pressures, The Academy of Management Review, 16(1), pp. 145-179 DOI: 10.5465/AMR.1991.4279002
  41. Parson T. (1960), Structure and process in modern society. (Glencoe (IL): Free Press).
  42. Patten D.M. (1991), Exposure, legitimacy, and social disclosure, Journal of Accounting and Public Policy, 10 (4), pp. 297-308 DOI: 10.1016/0278-4254(91)90003-3
  43. Patten D.M. (1992), Intra-industry environmental disclosures in response to the Alaskan oil spill: A note on legitimacy theory, Accounting, Organizations and Society, 17(5), pp. 471-475 DOI: 10.1016/0361-3682(92)90042-Q
  44. Pfeffer J. and Salancik G.R. (1978), The external control of organizations: a resource dependence perspective. (New York (NY): Harper & Rob Publishers).
  45. Powell P.J. and Di Maggio W.W. (1991), The new institutionalism in organizational analysis. (Chicago (IL): University of Chicago Press).
  46. Rindova V.P., Pollock T.G. and Hayward M.L. (2006), Celebrity firms: the social construction of market popularity, Academy of Management Review, 31(1), pp. 50-71 DOI: 10.5465/AMR.2006.19379624
  47. Rindova V.P., Petkova A.P. and Kotha S. (2007), Standing out: how new firms in emerging markets build reputation, Strategic Organization, 5(1), pp. 31-70 DOI: 10.1177/1476127006074389
  48. Roberts P.W. and Dowling G.R. (2002), Corporate reputation and sustained superior financial performance, Strategic Management Journal, 23(12), pp. 1077-93 DOI: 10.1002/smj.274
  49. Ryan B., Scapens R.B. and Theobold M. (2002), Research Method and Methodology in Finance and Accounting. (London: Thomson Learning).
  50. Sharfaman M.P. and Fernando C.S. (2008), Environmental risk management and the cost of capital, Strategic Management Journal, 29, pp. 569-592 DOI: 10.1002/smj.678
  51. Skjerseth J.B. and Skodvin T. (2001), Climate change and the oil industry: common problems, different strategies, Global Environmental Politics, 1(4), pp. 43-64 DOI: 10.1162/152638001317146363
  52. Scott W.R. (1995), Institutions and Organizations. (London: Sage, CA).
  53. Smith M. and Taffler R. (2000), The chairman’s statement: A content analysis of discretionary narrative disclosures, Accounting, Auditing and Accountability Journal, 13 (5), pp. 624-646 DOI: 10.1108/09513570010353738
  54. Suchman M.C. (1995), Managing legitimacy: strategic and institutional approach, Academy of Management Review, 20 (3), pp. 571-610 DOI: 10.5465/AMR.1995.9508080331
  55. Sydserff R. and Weetman P. (2002), Development in content analyisis: a transitivity index and DICTION scores, Accounting, Auditing and Accountability Journal, 15(4), pp. 523-545 DOI: 10.1108/09513570210440586
  56. Warsame H., Neu D. and Simmons C.V. (2002), Responding to “discrediting” events: annual report disclosure responses, Accounting and the Public Interest, 2, pp. 22-40 DOI: 10.2308/api.2002.2.1.22
  57. Westphal J. and Zajac E. (1998), The symbolic management of stockholders: corporate governance reforms and shareholder reactions, Administrative Science Quarterly, 43, pp. 127-153 DOI: 10.2307/2393592
  58. Yin R.K. (2009), Case Study Research: Design and Methods. 4th ed. Sage, CA.
  59. Yuthas K., Rogers R. and Dillard J.F. (2002), Communicative action and corporate annual reports, Journal of Business Ethics, 41 (1-2), pp. 141-157 DOI: 10.1023/A:1021314626311

  • Graphical Reporting in Italian Annual Reports during the Financial Crisis: Impression Management or Incremental Information? Simone Aresu, in FINANCIAL REPORTING 1/2015 pp.77
    DOI: 10.3280/FR2015-001004
  • The frontstage-backstage of organizational identity and management control system: the tale of British Petroleum’s embarrassment in DWH Sameh Farhat Ammar, in Sustainability Accounting, Management and Policy Journal /2024 pp.265
    DOI: 10.1108/SAMPJ-11-2022-0584
  • GRI Application Levels and Disclosure on Specific Environmental Activities: An Empirical Investigation of Industry Membership and Geographical Region of Top European Companies Abeer Hassan, Colette Hunter, Ayodele Asekomeh, in Social and Environmental Accountability Journal /2013 pp.156
    DOI: 10.1080/0969160X.2013.840539
  • Antenarration et communication financière : leçons de l’opération Areva/UraMin Véronique Blum, Bernard Gumb, in Comptabilité Contrôle Audit /2016 pp.77
    DOI: 10.3917/cca.222.0077
  • Is risk reporting a possible link between financial and management accounting in private firms? Chiara Crovini, Giovanni Ossola, in FINANCIAL REPORTING 1/2021 pp.29
    DOI: 10.3280/FR2021-001002

Giovanna Michelon, Impression management and legitimacy strategies: The BP case in "FINANCIAL REPORTING" 4/2012, pp 35-64, DOI: 10.3280/FR2012-004004