Media Literacy and Auditing Corporate Reputation

1. Media Literacy and Auditing Corporate Reputation Craig E Carroll The University of Texas at Austin

2. What is corporate reputation?

3. A Workable Definition • Corporate reputation refers to what the public perceives is salient about the firm or its characteristics (Fombrun, 1996).

4. Multi-Dimensional Nature of Reputation Emotional Appeal Vision & Leadership Products & Services Reputation Social Responsibility Financial Performance Workplace Environment

5. Why is Corporate Reputation important? • People invest companies based upon reputation. • People want to work for a company with a good reputation. • People buy products or services from companies based on their reputation. • People give “pause” and weigh incoming information against companies with good reputations.

6. The relationship between RQ and change in market value is not symmetrical: Note: Stock prices and share volumes were examined on September 1, 1999 and October 1, 2000.

8. How are ‘corporate reputations’ formed? • Direct Experience • The Mass Media

9. You cannot manage what you cannot measure….

10. Auditing Corporate Reputation vis-à-vis Media Monitoring • Gathering Stories —Companies monitor their media coverage via news aggregators such as Lexis-Nexis. Topical index terms include both company names and subject headings. • Building a Database of News —Each story in which the company is mentioned is streamed into a database; its position within the paper/magazine, publication name, date (plus time for broadcast), and the corresponding circulation or audience figure of the particular media are identified. • Developing Dictionaries and Rules —The rules through which stories are coded involve much more than a simple list of search words. Coders “train” the computer to recognize the complex ideas being tracked through a series of transparent tests and retests on random samples of stories. • Coding Stories — Once the dictionaries and rules are built and tested, each story is then scored for content that is relevant to any of the reputational attributes. These ideas are then summarized as they relate to each company mentioned in each story to identify the “tone” of writing about the company in each story.

11. Measuring Media Coverage • Prominence • Salience

12. The prominence of media coverage devoted to particular companies affects the salience of these companies and their attributes in the minds of the public. • Salience would occur in a number of ways: • which companies are thought about in the first place, how they are thought about (favorably or unfavorably), • which issues described in connection with the firm’s name best describe the firm’s reputation, • and whether the firm falls favorably or unfavorably in terms of these issues.

13. Well Above Average Well Above Average Average Average Well Below Average Comparative Media Performance Tone Frequency Frequency

14. Example: Emotional Appeal Sources: Magazines, Journals and Newspapers Company: SR Group Estimated Number of Articles: 65 Number of Articles Reviewed: 40

15. Competitor 4 Company Competitor 1 Competitor 2 Competitor 3 EmotionalAppeal Example: Summary Chart High Low

16. Competitor4 Company Competitor 1 Competitor2 Competitor3 Example Competitive Map High EmotionalAppeal Low Low High MediaExposure

17. Media exposure as a proxy for corporate reputation may not be as clear cut as a first glance may indicate.

18. 5 views of the media • 1: Reflects no distortion. • 2: Influenced by media workers’ socialization. • 3: Influenced by media routines. • 4: Influenced by social institutions (“the market” or “social responsibility”. • 5: Influenced by dominant ideologies.

19. Media Literacy • Since the media influence: • The images & opinions the public holds about major corporations • The measurements organizations use for gauging how the public currently respond, • it is important to understand the political and organizational forces that shape which stories get told.

20. Goals of Media Literacy • Media Literacy is concerned with individuals developing • informed and critical understanding of the nature of mass media, • the techniques used by them, • and the impact of these techniques.

21. Agenda-Setting Theory • “While the media may not be successful in telling us what to think, they are very successful in telling us what to think about.”

22. Mass media content is a socially created product, not a reflection of an objective reality. • Media content ≠ real world indicators. • Not everything “eligible” to be mass media content actually gets into the media.

23. But • Who sets the media’s agenda?

24. News Room Norms • The longer a journalist works for a news organization, the more socialized they are to the policies (stated & unstated) of the organization. • The more journalist follows the routines of their organization, the more likely their content is to be used. • On stories without established routines (in the early stages of an issue) individual journalistic discretion will be more influential than routines.

25. Routine & Public Events • Events that are congruent with media routines are more likely to be covered than events that are not. • News off the beaten path may go unreported. • Issues without good film/video footage may not be included in TV newscasts. • A press conference held just before a newspaper’s deadline is more likely to be included than one just after.

26. News values • Prominence/importance • Human interest • Conflict/controversy • The unusual • Timeliness • Proximity

27. “Information subsidies” • The growing dependence of mass media on press releases (and other PR efforts) by various organizations. • The “insider” syndrome where journalists face pressures to cooperate with official views, formula writing and standardization.

28. Journalistic “Balance” • Example: • A large, well-organized antiwar rally in Texas was given equal treatment with a much smaller, more disorganized pro-war demonstration.

29. Influences on the Media Agenda • Advertising & Media Circulation • Capitalist Values: The Media subscribes to dominant capitalist values which supports the Corporate Agenda (e.g., business, in general, is a good thing)

30. Corporate Ownership:Independent newspapers are both more favorable and more disfavorable (e.g.., more extreme) in their news coverage • Media Conglomerates:Companies with located within the media industry (e.g., General Electric, AOL-Time Warner, Disney) will receive more favorable treatment than non-media conglomerates.

31. Influences on the Media Agenda • Size:All other things being equal, larger (national) companies receive more media coverage than smaller (regional) companies. • Age:Older companies receive more media coverage than younger companies.

32. Regional Economies:The media write more favorably about companies/industries within the reach of their local economy than other similar companies outside the sphere of influence of the local economy.

33. Influences on the Media Agenda • West Coast/East Coast bias: Companies headquartered in on East or West Coast receive more (favorable?) news coverage than those HQ’ed elsewhere. • Diversity: All industries were to receive equal coverage, companies operating in multiple industries would receive more coverage than companies operating in singular industries. companies receive more media coverage than smaller (regional) companies.

34. Previous Reputation: Companies with better public reputations will receive more non-negative news coverage than companies with less favorable reputations. • Celebrity CEOs: The media are drawn to the Jack Welch’s of the corporate world.

35. Conclusions • Before “decoding” what impact media coverage has on corporate reputation, consumers need to be aware of: • What goes into the production of news. • The “interaction” between media and “organizational” forces