Doris M. Merkl-Davies

Impression Management and Retrospective Sense-Making in Corporate Narratives: A Social Psychology Perspective

Purpose - Prior accounting research views impression management predominantly though the lens of economics. Drawing on social psychology research, this paper seeks to provide a complementary perspective on corporate annual narrative reporting as characterised by conditions of “ Design/methodology/approach - A content analysis approach pioneered by psychology research is used, which is based on the psychological dimension of word use, to investigate the chairmens statements of 93 UK listed companies. Findings - Results suggest that firms do not use chairmens statements to create an impression at variance with an overall reading of the annual report. It was found that negative organisational outcomes prompt managers to engage in retrospective sense-making, rather than to present a public image of organisational performance inconsistent with the view internally held by management (self-presentational dissimulation). Further, managers of large firms use chairmens statements to portray an accurate (i.e. consistent with an overall reading of the annual report), albeit favourable, image of the firm and of organisational outcomes (i.e. impression management by means of enhancement). Originality/value - The approach makes it possible to investigate three complementary scenarios of managerial corporate annual reporting behaviour: self-presentational dissimulation, impression management by means of enhancement, and retrospective sense-making.

A conceptual framework of impression management: new insights from psychology, sociology and critical perspectives

In this paper we develop a conceptual framework, based on the concepts of rationality and motivation, which uses theories and empirical research from psychology/behavioural finance, sociology and critical accounting to systematise, advance and challenge research on impression management. The paper focuses on research that departs from economic concepts of impression management as opportunistic managerial discretionary disclosure behaviour resulting in reporting bias or ‘cheap talk’. Using alternative rationality assumptions, such as bounded rationality, irrationality, substantive rationality and the notion of rationality as a social construct, we conceptualise impression management in alternative ways as (1) self-serving bias, (2) symbolic management and (3) accounting rhetoric. This contributes to an enhanced understanding of impression management in a corporate reporting context.

Rhetoric and argument in social and environmental reporting: the Dirty Laundry case

Purpose - – The purpose of this paper is to explore the interactive element in social and environmental reporting during a controversy between business organisations and a stakeholder over environmental performance. Design/methodology/approach - – The paper adopts Aristotles triangular framework of the rhetorical situation to examine how the writer, the audience, and the purpose of communication interact in the choice of rhetorical strategies used to persuade others of the validity and legitimacy of a claim during a public controversy. The analysis focuses on the strategies (i.e. moves and their rhetorical realisations) in the form of Findings - – All six firms interacting with Greenpeace in the form of press releases eventually conceded to Greenpeaces demand to eliminate hazardous chemicals from their supply chains. The paper attributes this to Greenpeaces ability to harness support from other key stakeholders and to use rhetoric effectively. Results show the extensive use of rhetoric by all parties. Originality/value - – The authors regard legitimacy construction as reliant on communication and as being achieved by organisations participating in a dialogue with stakeholders. For this purpose, the paper develops an analytical framework which situates environmental reporting in a specific rhetorical situation and links rhetoric, argument, and metaphor.

‘Metaphoring’ people out of this world: A Critical Discourse Analysis of a chairman's statement of a UK defence firm

Abstract We introduce Critical Discourse Analysis (CDA), an interdisciplinary approach to analysing written and spoken texts, which provides accounting researchers with a range of resources to analyse corporate narrative documents more systematically and in more detail from a linguistic perspective. CDA addresses how the content and the linguistic features of texts influence, and are in turn influenced, by the contexts of text production, distribution, reception and adaptation, and by the wider socio-economic context in which texts are embedded. We apply Fairclough’s (2003, 2006) Dialectic-Relational approach to the analysis of a chairman’s statement of a UK defence firm. The focus of analysis is on the grammatical devices used to represent organisational activities and outcomes in ways which obfuscate social agency (impersonalisation) and to evaluate social actors, entities, and social events (evaluation). We find that impersonalisation and evaluation are used strategically to guide organisational audiences’ interpretations of financial performance and to legitimise and normalise violence and destruction by depicting it in an abstract and sanitised manner.

A Theoretical Framework of External Accounting Communication: Research Perspectives, Traditions and Theories

Purpose - The purpose of this paper is to provide a theoretical framework of external accounting communication in the form of a typology based on perspectives, traditions, and theories from the discipline of communication studies. The focus is accounting communication with external audiences via public written documents outside the audited financial statements, i.e., annual reports, press releases, CSR reports, websites, conference calls, etc. Design/methodology/approach - The theoretical framework is based on two broad research perspectives on accounting communication: (A) a functionalist-behavioural transmission perspective and (B) a symbolic-interpretive narrative perspective. Eight traditions of communication research are introduced which provide alternative ways of conceptualising accounting communication, namely (1) mathematical tradition, (2) socio-psychological tradition, (3) cybernetic/systems-oriented tradition, (4) semiotic tradition, (5) rhetorical tradition, (6) phenomenological tradition, (7) socio-cultural tradition, and (8) critical tradition. Exemplars of each tradition from prior accounting research, to the extent they have been adopted, are discussed. Finally, a typology is developed, which serves as a heuristic device for viewing similarities and differences between research traditions. Findings - Prior accounting studies predominantly focus on the role of discretionary disclosures in accounting communication in the functioning of the relationship between organisations and their audiences. Research is predominantly located in the mathematical, the socio-psychological, and the cybernetic/systems-oriented tradition. Accounting communication is primarily viewed as the transmission of messages about financial, environmental, and social information to external audiences. Prior research is mainly concerned with the communicator (e.g. CEO personality) and the message (e.g. intentions and effects of accounting communication). Research from alternative traditions is encouraged, which explores how organisations and their audiences engage in a dialogue and interactively create, sustain, and manage meaning concerning accounting and accountability issues. Originality/value - The paper identifies, organises, and synthesises research perspectives, traditions, and associated theories from the communication studies literature in the form of a typology. The paper concludes with an extensive agenda for future research on accounting communication.

Regulation and Enforcement of Financial Reporting in Austria

This paper provides an overview of financialreporting instruments and enforcementmechanisms in Austria, with special emphasis onthe role of the courts in this process. Formerresearch in this area has either focused on thecontent of judicial rulings and interpretationsof the law or on the interplay betweenregulation and creative accounting, whereasthis paper focuses on the involvement of courtsand administrative authorities in theregulation and enforcement process by means ofa statistical analysis of judicial rulings andinterpretations of the law in the case ofAustria between 1990 and 2003. TheAdministrative Court, in its role as thehighest court of appeal in all tax matters,emerges as by far the most active enforcementagent in Austria. This is a direct result offiscal authorities fulfilling the role of anenforcement agency of financial reportingregulations in Austria. Regulation andenforcement of financial reporting regulationsoccur less frequently in the civil and criminalcourts and emerge as a by-product of companylitigation issues. Almost fifty percent ofcases are not primarily concerned with theenforcement of accounting regulations, but withthe enforcement of filing regulations.

Do firms effectively communicate with financial stakeholders?: A conceptual model of corporate communication in a capital market context

We identify what constitutes effective communication between firms and their financial stakeholders in a capital market context and establish criteria against which effectiveness can be evaluated. To do this, we introduce the concept of connectivity from the communication studies literature. We conceptualise connectivity as comprising three components: textual connectivity, intertextual connectivity, and relational connectivity. Connectivity refers to the ability to connect different sections of a text (textual connectivity), to connect texts of different time periods or different genres (intertextual connectivity), and to connect firms with their audiences (relational connectivity). We then propose criteria for judging effective corporate communication in a capital market context. Finally, we assess how digital communication and social media provide opportunities for improving connectivity in corporate communication for a broader range of shareholders.

Impression Management, Myth Creation and Fabrication in Private Social and Environmental Reporting: Insights from Erving Goffman

This paper explores the nature of private social and environmental reporting (SER) using a Goffmanian lens based on interviews with 20 UK institutional investors. Private reporting refers to face-to-face meetings between institutional investors and their investee companies. The authors investigate whether private SER enhances accountability or whether it constitutes a superficial, myth-creating exercise. Drawing on Goffman’s dramaturgical metaphor, findings suggest that meetings ‘involve performance in an “empty theatre”, since both investors and investees are only concerned about the performance in the theatre “next door” which is where the money is being made’ (p. 206). The paper provides two important insights. First, impression management is expected by investors and is viewed as a characteristic feature of corporate communication. Quotes from interview transcripts indicate that it constitutes part of the ‘rules of the game’ (Bourdieu 1990): ‘They’re trying to put their company in a specific light, that’s what they do, that’s what they’re meant to do . . . Companies are there to send . . . an image to investors’ (p. 202). Second, private SER constitutes symbolic management (Ashforth and Gibbs 1990) in that both investors and investees use the process to appear to follow codes of best practice. However, is it not misguided to expect institutional investors to hold companies accountable for their social and environmental practices and performance, as their raison d’être is profit maximisation? Arguably only organisations which have no financial stake in companies or which pursue social and environmental, rather than financial goals have incentives to act as corporate ‘change agents’ (Creed, Scully, and Austin 2002). There is some research on interactions between NGOs and companies during conflicts over social and environmental performance (e.g. Deegan and Blomquist 2006; Brennan, Merkl-Davies, and Beelitz 2013). Future research needs to explore the role of such organisations in improving SER practices and performance.