Emerald | Corporate Communications: An International Journal

The corporate communication process between listed companies and financial analysts: A focus on trends and challenges

Susanne Arvidsson — 2012-04-27 00:00:00.0

Abstract

Purpose – The purpose of the paper is to analyse the views of management teams regarding different aspects related to the corporate communication process with financial analysts. The focus is the following aspects: incentive for communication; sources of information; and frequency and initiator of communication. Design/methodology/approach – The data is based on a comprehensive questionnaire survey addressed to investor-relation managers (IRMs) at the largest companies listed on the Stockholm Stock Exchange. Findings – The study confirms an increasing frequency of corporate communication, a short-term orientation, more demand for direct contacts, and embracing of new communication tools. The findings reveal that quite a few challenges lie ahead in shaping the efficient corporate communication process of tomorrow. The most critical relate to the risk of opportunity costs due to lost management opportunities caused by increased demand from stock-market actors for communication time with management teams and to perceived risks with, for example, increased accessibility, information leakage and misinterpretations due to the introduction of new electronic communication tools. Practical implications – Given the delicate nature of the above challenges, they need to be taken on promptly by management teams, policy makers and financial market regulators if the corporate communication process is to function efficiently and facilitate decreased information asymmetry and uphold an efficient allocation of resources on the stock market. Originality/value – The study is motivated by the changed conditions for corporate communication (e.g. increased globalisation, new electronic ways to communicate, importance of non-financial drivers), paired with a lack of recent studies. Furthermore, herein not only one aspect is being analysed but several, and from a management-team perspective, which is a perspective often neglected for the sophisticated-user perspective.

The management's reaction to new mandatory risk disclosure: A longitudinal study on Italian listed companies

Giulio Greco — 2012-04-27 00:00:00.0

Abstract

Purpose – This paper aims to study the effect of new regulatory requirements on disclosure through a longitudinal study. The empirical setting is offered by the risk reporting in the management commentaries of Italian listed companies. In this setting there is an evolution from a voluntary disclosure environment toward a regulated one, with the gradual introduction of new reporting requirements. Design/methodology/approach – This paper uses the content analysis method to investigate the narrative risk disclosure. Non-parametric statistics are used to test the hypotheses. Findings – It is found that even when new mandatory disclosure is introduced, managers exploit discretion and do not change their disclosure policy, continuing to withhold relevant information to external users. Before and after the introduction of new regulation, managers' behaviour appears in line with self-interest to protect themselves from litigation and competitive costs, as well as from possible decreases in the firm's value. Originality/value – The study provides a longitudinal study, covering changes from a voluntary disclosure environment to a regulated one. The paper provides evidence that the management incentives do not change in the presence of new disclosure regulation.

Investor relations beyond financials: Non-financial factors and capital market image building

Christian Hoffmann, Christian Fieseler — 2012-04-27 00:00:00.0

Abstract

Purpose – In this paper, the authors aim to identify a range of non-financial factors that play a role in the formation of a company's image, and ultimately its valuation, on capital markets. By identifying and highlighting their relative importance to the perceptions of equity analysts, the authors seek to show that investor relations are best understood as a strategic communication function rather than a mere purveyor of pure financials. Design/methodology/approach – The findings are based on a two-tiered approach, relying on qualitative interview data collected among 42 equity analysts and a subsequent exploratory factor analysis performed on data obtained from a survey among 134 buy- and sell-side analysts. Findings – The authors argue that equity analysts consider the following eight categories of non-financial information when forming an impression of a company: the stakeholder relations of an organization, its corporate governance, its corporate social responsibility, its reputation and brand, the quality of its management, and its strategic consistency. One of the most important factors, however, is the quality of a company's communication, which underscores the strategic role that the investor relations function should play in fostering positive capital market relations. Research limitations/implications – Being explorative in nature, the categories and scales proposed need further validation. Furthermore, in future research, it would be worthwhile to explore not only the role of non-financials in image formation but also the interplay between financials and non-financials in image formation. Practical implications – Investor relations professionals should consider the factors presented in this study in their work in order to ensure that they cater to the actual information needs of capital market participants. The consideration of non-financial factors enhances the quality of financial communications. It also enriches the understanding of the strategic communication tasks of the investor relations department. Originality/value – This paper describes an empirical analysis of the management of corporate relationships with financial audiences, a stakeholder group increasingly focused on by communications research. It represents a contribution to the further establishment of investor relations as a strategic communication function.

Positive dissimilarity attitudes in multicultural organizations: The role of language diversity and communication frequency

Jakob Lauring, Jan Selmer — 2012-04-27 00:00:00.0

Abstract

Purpose – The purpose of this study is to contribute to the field of diversity studies with novel insights on how language diversity and communication frequency influence dissimilarity attitudes. Design/methodology/approach – The authors examine language diversity and communication frequency as group-level antecedents for positive dissimilarity attitudes by use of questionnaire responses from 489 members of academic culturally diverse departments. Findings – The results showed that communication frequency has strong positive relationships with three variables depicting positive dissimilarity attitudes, namely openness to linguistic, visible and informational diversity. Contradicting our predictions, language diversity had positive associations with all variables portraying positive dissimilarity attitudes. The implications of these findings are discussed in detail. Originality/value – Few prior studies have dealt with the relations between language, communication and dissimilarity attitudes.

Inter-organisational post-crisis communication: Restoring stakeholder confidence in the UK oil industry safety regime following two helicopter incidents

Joanna McDonald, Isabella Crawford — 2012-04-27 00:00:00.0

Abstract

Purpose – This paper aims to analyse the post-crisis communication response of the UK oil industry both from a management and employee perspective following two major helicopter incidents in 2009. The purpose of this paper is to develop further understanding of the merits of a cross-industry post-crisis communication strategy for certain crisis types. Design/methodology/approach – This research is a single case study focusing on the Helicopter Task Group (HTG). Thirteen members of the HTG were interviewed and 250 questionnaires distributed to the workforce. Results were analysed against a literature review of current post-crisis communication theory. Findings – The study demonstrates that where a crisis is deemed to genuinely cross company boundaries, an inter-organisational approach to post-crisis communications is of mutual benefit to all stakeholders, providing certain conditions for dialogue are met. Research limitations/implications – This paper only focuses on one crisis event. Further research is required with other inter-organisational groups formed to lead a cross-industry response to a crisis. Practical implications – This case study provides a model for cross-industry pre-crisis planning and post-crisis renewal strategy where the aim is not to attribute blame, but to respond to a wider community of concerns and issues that are deemed to cross company and institutional boundaries. Originality/value – The research demonstrates that the process of rebuilding stakeholder relationships and renewal is possible prior to any formal attribution of blame or apology.

Causal linkages among relationship quality perception, attitude, and behavior intention in a membership organization

Eyun-Jung Ki, Linda C. Hon — 2012-04-27 00:00:00.0

Abstract

Purpose – This study was designed to test two models linking relationship perception, attitude, and behavior-based involvement in a membership organization. This study helps fill a gap in the relationship management literature by exploring the hierarchy of effects among a strategic public some of whom could be characterized as having low involvement. Design/methodology/approach – After a couple of pilot tests, a state-wide mail survey was conducted. As recommended by several studies, the mail survey for this study was included in a packet with a cover letter and a pre-addressed, pre-stamped return envelope mailed to 2,100 randomly selected current members of the organization. Of the 2,100 members who received questionnaires, 493 usable responses were collected, resulting in a 23.4 per cent response rate. Findings – For the four relationship quality dimensions used in this study – i.e. control mutuality, satisfaction, trust, and commitment – current members' perceptions of relationship trust and commitment positively influenced their attitudes toward the organization. More importantly, this study demonstrates that the public's perception of commitment can also directly engender supportive behavior toward the organization among members of a key public. Originality/value – This study was designed to empirically test two models that link relationship quality perceptions, attitude, and behavioral intentions with members in a membership organization based on their levels of involvement. By testing a model of standard sequential order (relationship perceptions ? attitude ? behavioral intentions), this study found that the originally tested model met the criteria. However, the model was revised based on the modification index and theoretical justification. A new path directly connecting commitment of the relationship quality outcomes to behavioral intentions was added.

Institutionalization of communication management: A theoretical framework

Christina Grandien, Catrin Johansson — 2012-04-27 00:00:00.0

Abstract

Purpose – Development and expansion of the communication management function in organizations has recently been discussed in relation to the concept of institutionalization. Empirical evidence has illustrated that the role of communication executives and communication managers varies between organizations, and could also be subjected to change within an organization. The purpose of this paper is to conceptualize institutionalization of communication management as a process. It aims to develop a theoretical framework that integrates important factors that influence and regulate this process. Design/methodology/approach – A literature review resulted in a number of factors potentially influencing the institutionalization process. These factors were attributed to three main theoretical areas and four different levels of analysis, using institutional theory as a guiding framework. The theoretical areas and analysis levels, were proposed to be mutually interdependent, and were compiled in a theoretical framework, illustrated in a model. Findings – The theoretical framework includes three main areas: organizational structure, social capital, and perceptions of the profession; and four levels of analysis: the societal, the organizational field, the organizational and the individual levels. Originality/value – This paper contributes to the study of institutionalization of communication management in organizations by providing a theoretical framework, which can be used to further investigate the development of the communication function and the role of communication executives and communication managers in organizations. By conceptualizing institutionalization of communication management as a process, and exploring and defining the important elements that influence and regulate this process, an important theoretical contribution to the field is made.

What is in a name?

2012-04-27 00:00:00.0