Introduction to Case Study

Structure Group presentation Individual assignment during tutorial sessions on 01/12/14 & 02/12/14 and on 08/12/14 & 09/12/14 5% Individual assignment to be submitted on 05/01/15 20%

Presentation 5-6 slides 5-10 minutes All group members or nominate one or two group members to present

Individual assignment Deadline: Monday, 5th January 2015 Word limit: 1,500 words (+/- 10%) Weighting: 20%

Case study Identify an organisation facing a crisis or involved in a public controversy (e.g., an accident, a product safety/health hazard, a scandal, an environmental disaster, or a major structural re-organisation, such as privatisation or demutualisation) and investigate how the organisation reacted to it by means of information releases (e.g., press releases, annual report, corporate social responsibility report, etc.). Use a variety of accounting theories to explain the organisation’s response to the event.

Aspects to think about What is a crisis? Define ‘crisis’ using relevant literature What kind of crisis is the organisation facing? Breitsohl (2010): Scandals (e.g., fraud, bribery, insider trading price fixing) Accidents (e.g., plane crash, industrial accident) Product safety and health incidents (e.g., product defects and associated recalls, and production-related pollution) Who is effected by the crisis? Customers, shareholders, general public, etc.

An example: Louis Vuitton crisis https://www.youtube.com/watch?v=pHGqqjQFAjA

Aspects to think about How does the organisation respond to the crisis? Which communication vehicles do they use? (e.g., press releases, annual reports, CEO speech, etc.) What strategies do they use? E.g., apology, excuse, blame and fire CEO?

Identifying a case – How to find it? Google search with key words ‘scandal’, ‘accident’, ‘incident’

Assignment requirements You need to demonstrate the ability to identify a good case You need to demonstrate your understanding of the accounting theory(ies) you choose to explain the corporate responses made following the accident/incident/scandal You need to demonstrate the ability to analyse the corporate responses using an appropriate way of analysing the corporate texts

Assignment requirements You need to follow the structure outlined in the assignment document You are expected to read around the subject and will be rewarded, if you refer to journal articles or other authoritative sources of information (journal articles, books and book chapters, NOT websites) to support your argument References in the references section should be mentioned in the text and vice versa

Presentation - Content 2. The case Context Background information about the case What company? When? What happened? Who was affected? How did the media report the case? 3. Data CSR report, annual report, number of press releases? 4. Methodology What verbal strategies are you focusing on in your analysis?

Group presentation & individual assignment Collecting your data Analyse organisation’s reaction to the incident  crisis communication → search for corporate documents Annual Reports Interim Reports Press Releases CSR Reports ... Download them from company website NOT financial statements NOT newspaper articles or media websites (e.g., BBC)

Collecting your data - Example: Horse meat scandal Group presentation & individual assignment Collecting your data - Example: Horse meat scandal Tesco website: http://www.tescoplc.com/index.asp?pageid=21 Check date of disaster e.g., Horse meat scandal 15 January 2013 Press releases 15 January 2013-present Less recent scandals also check Annual Report & CSR report

Make a list of all data analysed - Example: Horse meat scandal Group presentation & individual assignment Make a list of all data analysed - Example: Horse meat scandal

Methodology – How to analyse the corporate documents Group presentation & individual assignment Methodology – How to analyse the corporate documents Content analysis of corporate narrative documents Focus on verbal strategies used to refer to the accident/incident/scandal E.g. apologies, excuses, etc. The Co-operative Bank crisis which involved the exposure of a £1.5bn capital hole by an independent review. The Co-operative Bank's (CEO’s) response to the review https://www.youtube.com/watch?v=YdTCayDLhHU

Group presentation & individual assignment Benoit (1997: 179)

Group presentation & individual assignment Cornelissen (2014) In a crisis verbal strategies depend on whether the organisation views itself as having: A low level of responsibility for the crisis E.g., denial, excuse, downplay, etc. A high level of responsibility for the crisis Apology, compensation, repentance (asking for forgiveness) See table with full list of strategies on blackboard

Structure of written assignment

Applying the methodology to the data Individual assignment only Applying the methodology to the data

Findings Are your findings in line with theoretical predictions? Individual assignment only Findings Report on what you find in your the application of your methodology E.g., Tesco uses press releases and advertisements in major UK newspapers to apologise to customers Compare your findings to those of prior studies E.g., Tesco’s strategy of apologising to customers is similar to that of other consumer firms facing product safety issues Are your findings in line with theoretical predictions? Stakeholder theory predicts that firms respond mainly to their primary stakeholders, i.e., for Tesco these are its customers

What theories do I use to explain the company response to the crisis? Individual assignment What theories do I use to explain the company response to the crisis? Systems-oriented oriented theories (Deegan & Unerman, Chapter, Chapter 8; Rankin et al., Chapter 5, pp. 141-147. Stakeholder theory (also Mitchell et al., 1997) Legitimacy theory Institutional theory Positive Accounting Theory (political cost hypothesis) Also: Benoit’s (1997) image restoration theory

Examples of case studies Beelitz, A. and Merkl-Davies, D.M. (2012), ‘Using discourse to restore organisational legitimacy: ‘CEO-speak’ after an incident in a German nuclear power plant’, Journal of Business Ethics, 108 (1): 101-120. Breitsohl, H. (2009), ‘Organizational Crises and Reactions from a Legitimacy Perspective – Results from Two Multiple-case Studies’, Schumpeter Discussion Paper 2009-007. Wuppertal. Cho, C.H. (2007), ‘Legitimation Strategies Used in Response to Environmental Disaster: a French Case Study of Total S.A.’s Erika and AZF Incidents’, Working paper. Linsley, P., and Kajüter, P.M. (2008), ‘Restoring reputation and repairing legitimacy. A case study of impression management in response to a major risk event at Allied Irish Banks plc’, International Journal of Financial Services Management, 3(1): 65-82.

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