Professional Documents
Culture Documents
1. Introduction
Corporate social behaviour has become an
important aspect of business society. Not only are
the press and society increasingly paying attention to it, the number of companies reporting on
their social and environmental achievements has
Reggy Hooghiemstra is a doctoral candidate in international
financial accounting at the Erasmus University
Rotterdam. In addition, he is a research associate in
corporate governance at the University of Groningen.
Reggy Hooghiemstra
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2. Legitimacy theory
Of the theoretical frameworks employed to
analyse corporate social reporting, viz. decision
usefulness studies, economic theory studies, and
the social and political economy studies (e.g.
Gray et al., 1995, 1996; Hackston and Milne,
1996) the latter is particularly relevant in the
context of this paper. Within that category,
several theoretical frameworks are used, viz. the
political economy, the stakeholder theory, and
the legitimacy theory which may be viewed as
overlapping perspectives (Gray et al., 1995,
1996). Of these, legitimacy theory is the most
widely used framework to explain disclosures
with regard to the environmental and social
behaviour of organisations (Gray et al., 1995; for
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4. Impression management
4.2. Impression management strategies
4.1. Definition
As indicated before, organisations can try to
influence peoples perceptions of the company by
using self-presentational devices. Self-presentation or impression management is a field of study
Negative,
accounting
Addresses
responsibility
Entitlements
Excuses
Addresses
consequences
Enhancements
Justifications
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confronted with a boycott (to which many customers responded) in, e.g. The Netherlands,
Germany and the United Kingdom (and as a
consequence Shell experienced a drop in sales),
but also the politicians outside the United
Kingdom put question marks with Shells
decision, though being formally and governmentally approved.
In order to counter these effects, and possibly
to try to influence peoples perceptions, Shell
responded somewhat stubbornly (but in conformity to their identity; see Dutton and Dukerich,
1990): they remained that the sinking of the
Brent Spar was the best solution, and tried to
substantiate this by placing adds in national newspapers in which they referred to independent
research, and they said that Greenpeace made
false accusations (for which Greenpeace afterwards made apologies). Typically, Shell in its
initial reactions and even after its climbdown
stressed that it had followed the rules, as may be
clear from the following quotation from The
Financial Times (21 June 1995):
Shells decision to abandon its plans for the Brent
Spar is a deeply humiliating climbdown for a
company which prides itself on its high environmental standards and thoroughness.
Mr Chris Fay, the chairman of Shell UK,
normally an ebullient man, looked downcast and
dismayed last night as he broke the news in the
glare of television lights. But even in defeat, Shell
found it difficult to accept that it had made a
catastrophic misjudgement. Deep-sea disposal was
still the option favoured by years of independent
study, Mr Fay insisted, and everything had been
done exactly according to the book.
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6. Discussion
From the preceding discussion on the application
of corporate communication to corporate social
reporting it is clear that there are commonalties
and differences with the current framework. The
most obvious commonality is that both the corporate communication as well as, e.g. the legitimacy perspective view corporate social reporting
as a means to influence peoples perceptions.
Whereas under the current framework corporate social reporting is aimed at providing information to legitimise companys actions, corporate
social reporting from a corporate communication
perspective is aimed at protecting or enhancing
its image or reputation. Moreover, from the corporate communication perspective it also can be
argued that corporate social reporting can contribute in creating a competitive advantage:
creating a positive image may imply that people
are to a greater extent prepared to do business
with the company and buy its products.
The application of the corporate communication concepts to Shells handling of the Brent
Spar shows that Shells early responses, placing an
emphasis on rationality and compliance to regulations, were not very successful. Indeed, this way
of responding seemed to worsen Shells image
(and that of the whole oil sector too): media
coverage of Shell in Germany, the Netherlands,
and the United Kingdom was very negative as
research of Oegema et al. (1998) has indicated.
However, this way of communicating or self-presentation (buffering) was in conformity with
its identity (Dutton and Dukerich, 1991) and
seems natural to large companies that possess
an important resource (Meznar and Nigh, 1995).
Having learned from its experiences and because
a companys reputation can be its most valuable
asset, but when it is damaged it becomes the
albatross around the corporate neck (Projecting
the values in Shell World, April 1999 on
media.shell.com), Shell not only changed its
communication strategy to bridging but, in
addition, placed a large emphasis on ethical standards. In doing so, Shell changed its identity,
indicating that business is not a question of
profits or principles but that both are important. This new image of a company that highly
values principles and strives at more openness and
transparency became apparent through several
initiatives, e.g. a stakeholder dialogue on its
business principles and the publication of a value
reports since 1998. Although Shells intentions
may be pure, it also seems that these initiatives
were in fact aimed at influencing peoples
thoughts about Shell and its place in society and,
hence, its reputation.
Concerning the possibilities for future research
the Shell-case could be very interesting: especially studies whether, and if so, to what extent
the publication of its ethical report has contributed to create a more positive image may
be very useful. Such research may validate the
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