Media pressure and social and environmental reporting of British Telecom: A spectacular perspective Petros Vourvachis, Sumohon Matilal and Lynne Oats Dr Petros Vourvachis* Prof Lynne Oats University of Exeter University of Exeter Business School Business School Streatham Court Streatham Court Rennes Drive, Exeter Rennes Drive, Exeter EX4 4PU EX4 4PU United Kingdom United Kingdom Tel: +44 (0)1392 724 480 Tel: +44 (0) 1392 726 267 E-mail: P.Vourvachis@exeter.ac.uk E-mail: L.M.Oats@exeter.ac.uk Dr Sumohon Matilal University of Exeter Business School Streatham Court Rennes Drive, Exeter EX4 4PU United Kingdom Tel: +44 (0)1392 725930 E-mail: S.Matilal@exeter.ac.uk * corresponding author 1 Abstract This paper investigates the Social and Environmental Reporting (SER) practices of British Telecom (BT) and particularly adds to the literature examining the relationship of media pressure and SER. It extends Media Agenda Setting Theory and content analysis based research by using Guy Debord’s (1983) work on the Society of the Spectacle (Oakland CA: AK Press) and focusing on the manifest as well as the latent communication content of the examined sources. BT’s considered communications include annual reports, SER publications and press releases, whilst considered related media sources are newspaper articles, televised communications and archived internet sources, over a 17 year period. Despite their purportedly objective nature, both media and BT’s communications are found to be carefully crafted narratives, which through multiple revisions and edits are shaped into apparently ‘linear’ events. Although the public would only read the provided information as a description of the events, Debord’s frame assists in revealing how symbols can be manipulated and information flow can be controlled (by structuring and scheduling the emission, volume and rate of communication flow) through an iterative interaction process between organisations and media, in an attempt to negotiate meaning. In this case, control of information involves inter alia concealment or downplay of news, as well as justifications and indirect references to issues raised by the media, in order to manage discontent particularly associated with job losses and poor customer service. Concepts such as ‘stakeholder interests’ and ‘sustainability’ seem to be particularly susceptible to manipulation. 2 Introduction This paper investigates the Social and Environmental Reporting (SER) practices of British Telecom (BT). BT is a UK-based telecommunications services company and one of the largest in the world, with operations in over 170 countries. The paper particularly adds to the literature examining the relationship of media pressure and SER. It uses Guy Debord’s (1983) work on the Society of the Spectacle and focuses on the manifest as well as the latent communication content of the examined sources. Most previous examinations of the relationship of media pressure and SER employ a Media Agenda Setting Theory (MAST) perspective and are confined in using content analysis (see e.g. Brown and Deegan, 1998; Patten, 2002; Islam and Deegan, 2010; Islam and Islam, 2011). According to MAST, increased media attention would lead to increased community concern for a particular issue, and the media are thus “not seen as mirroring public priorities; rather, they are seen as shaping them” (Brown and Deegan, 1998, p. 25). Studies employing MAST arguments however tend to ignore the importance of other stakeholders influencing corporate SER decisions and particularly the potential of organisations manipulating or shaping community perceptions. Organisations could either do so directly, through their respective communication channels, or indirectly, by controlling the information exchanged and topics discussed and essentially setting the terms in their ongoing dialogue with media and effectively silencing them. Likewise, the very diverse nature of, and underlying intentions behind, media coverage of organisational social and environmental activities seem to have also been downplayed by MAST studies. This study aims to provide a critical understanding of the relationship between media coverage of corporate social and environmental impacts and SER by considering a wide array of sources. BT’s considered communications include annual reports, SER publications and press releases, whilst considered related media sources are newspaper articles, televised communications and archived internet sources, over a 17 year period. For BT, similarly to a number of other major global telecommunication organisations, this was a very intense period, characterised by domestic privatisation and downsizing, with hundreds of thousands of employees losing their job in the UK and with thousands of jobs being shifted overseas. The paper therefore particularly focuses on BT’s interactions with media over its social practices, and offers some insights into how the company managed its deregulation process, which could be potentially transferable to other settings, given the wider telecommunication deregulation observed around the world over the last at least half a century (Huurdeman, 2003). 3 This is a work in progress report as more data is scheduled to be collected and only a fraction of the collected data have been considered so far, but we are confident that by the time of the conference the project will be at a much more advanced stage, close to completion, and will present a worthy contribution to the programme. The next sections outline the literature review and conceptual framework arguments utilised. The methods’ section follows whilst the subsequent findings and discussion section reviews the preliminary findings. Literature review Most extant research papers exploring the organisational social and environmental reporting interactions with media seem to employ MAST as theoretical perspective. MAST has received considerable attention in the social and environmental accounting literature (see e.g. Brown and Deegan, 1998; Esrock and Leichty, 1998; Deegan et al., 2000; Deegan et al., 2002; Patten, 2002; Tilling, 2004), where it is argued that a relationship exists between the relative emphasis given by the media to various topics and the degree of importance these topics have for the general public (Zéghal and Ahmed, 1990; Ader, 1995): Increased media attention is believed to lead to increased community concern for a particular issue … the media are not seen as mirroring public priorities; rather, they are seen as shaping them (Brown and Deegan, 1998, p. 25). MAST, therefore, considers media to be the single most important stakeholder to set the agenda in the organisation-society interplay. It can be considered to be a ‘hand in glove’ compatriot with legitimacy theory (Woodward et al., 2001). Organisations, whenever they feel that their legitimacy is threatened from the increased media attention, are expected to respond with increased social and environmental disclosures; MAST, hence, advances a reactive, externally driven and certainly not altruistic corporate stance towards SER. Despite the significant empirical evidence supporting this view (see e.g. Ader, 1993; Deegan et al., 2000; Deegan et al., 2002; Patten, 2002) though, its main disadvantage is that it disregards the importance of other key-players in shaping public concern and, consequently, their effect on SER. As Brown and Deegan (1998) admit, “the media is not as effective in some industries as others in shaping community expectations…also, there is a possibility that dominant players in some industries had strategically planned the timing and format of their environmental disclosures in a bid to manipulate or shape community perceptions and concerns…rather than simply reacting to changes in community concerns” (p. 33). This suggests that a more critical perspective may apply, considering both reactive and proactive 4 organisational stances. Furthermore, Patten (2002) also acknowledges a number of caveats in his analysis, most notably that, “it is always possible that the relations noted in this study are due not to the variable of interest, but rather to an omitted, related factor” (p.169) – a problem that arguably most quantitative types of analyses face. A number of papers have further examined media as part of an attempt to explain SER but without considering this to be the prime objective. These papers have predominantly employed legitimacy theory and have employed more sophisticated quantitative analyses in greater proportions than the aforementioned MAST literature. The research objectives of these papers are quite diverse as the below table illustrates. Research paper Research theme Explicit theory used Aerts and Cormier (2009) environmental disclosure and Legitimacy theory press releases Branco and Rodriguess determinants of disclosure (2008) Legitimacy theory and public pressure theory Campbell and Beck (2004) websites and allegations Chen et al. (2013) environmental Legitimacy theory liability - disclosure Coetzee and van Staden mining accidents Legitimacy theory, MAST (2011) and stakeholder theory Cormier et al. (2004) management’s perceptions Legitimacy theory stakeholder theory Dawkins & Fraas (2011) climate change disclosure Harris (2001) ethical decision making Neu et al. (1998) impression management Rupley et al. (2012) governance, media Legitimacy theory Legitimacy theory and - disclosure quality Savage et al. (2000) environmental reporting in Legitimacy theory Canada Thomas (2012) governance at state-owned - enterprises Tilling and Tilt (2010) SER in Rothmans’ 1956- Legitimacy theory 1999 reports 5 and Table 1 SER studies examining media as secondary objective There are therefore theoretical and methodological limitations associated with the extant literature exploring the relationship of media with SER, whether this being the prime or a secondary objective. At the theoretical level, most investigations employ social and political frameworks without considering critical interpretations. Importantly, the possibility that organisations proactively attempt to control the information exchanged and topics discussed and essentially setting the terms in their ongoing dialogue with media and effectively silencing them is largely ignored. Furthermore, the diverse motivations behind media decisions for e.g. favourable or not coverage of organisational social and environmental activities seem to have also not be explored at length. At the methodological level, most papers seem to focus on content analysis and most frequently of annual reports without comprehensively considering a wider variety of media and organisational communications. This paper therefore contributes to the literature examining the relationship of media pressure and SER by using Guy Debord’s (1983) work on the Society of the Spectacle and by examining a wide array of sources and focusing on the manifest as well as the latent communication content of the examined sources. The paper further considers tabloid in addition to broadsheet media articles, in order to ensure the widest possible coverage. However the paper further contributes to the relevant literature by focusing on an organisation that is ‘relatively innocent of explicit sin’. In general it would be expected that media are not as effective in some industries as others in shaping community expectations. Most previous studies have looked at industries such as oil, energy and mining or at companies that have a long ‘guilty’ past such as Nike. By focusing on an organisation that is ‘relatively innocent’ the paper therefore further explores whether similar observations can be made as regards the relationship of media with SER. Conceptual framework In brief, Debord (1983) argues that ‘modern society is a society of the spectacle’. As he explains (paraphrasing Marx’s opening to Capital): In societies where modern conditions of production prevail, all of life presents itself as an immense accumulation of spectacles. Everything that was directly lived has moved away into a representation. He further suggests that “we are now at the stage of the spectacle where it dominates the mediascape, politics, and more and more domains of everyday life”. The society of the 6 spectacle is still a commodity society, ultimately rooted in the production but reorganised at a higher and more abstract level (Best and Kellner, 1997). ‘Spectacle’ is a complex term that “unifies and explains a great diversity of apparent phenomena” (Debord, 1983, §10). In one sense, it refers to a media and consumer society, organized around the consumption of images, commodities and spectacles. However, “the concept also refers to the vast institutional and technical apparatus of contemporary capitalism, to all the means and methods power employs, outside of direct force, which subject individuals to societal manipulation, while obscuring the nature and effects of capitalism’s power and deprivations” Best and Kellner, 1997, p. 84). Debord builds on earlier expressed Marxian views to highlight that the advanced abstraction of the spectacle brings in its wake a new stage of deprivation. Marx spoke of the degradation of being into having, in which creative praxis is reduced to the mere possession of an object, and in which need for the other is reduced to greed of the self. Debord speaks of a further reduction, the transformation of having into appearing, where the material object gives way to its semiotic representation and draws “its immediate prestige and ultimate function” (§17) as image, in which look, style and appearance function as signs of social prestige. Within this abstract system, “it is the appearance of the commodity that is more decisive that its actual use value, and the symbolic packaging of commodities – be they cars or presidents – generates an image industry and new commodity aesthetics” (Best and Kellner, 1997, p. 85). In Debord’s work, therefore, the role of media is central, as media culture continues to arbitrate social and political issues, deciding what is real, important and vital. As he particularly notes, “media rumors acquire instantly – or at worst after three or four repetitions – the indisputable status of age-old historical evidence… when the spectacle stops talking about something for three days, it is as if it did not exist”. In an SER context, and particularly when considering the relationship of media with the organisations, how e.g. organisations act over their social and environmental responsibilities seems to be no longer as important as how they seem to be acting - an argument which is also largely supported by the reviewed above legitimacy and MAST- focused studies. Debord nevertheless further argues that “In the new millennium, media culture is more important than ever in serving as a force of socialization, providing models of… socially approved and disapproved behavior… and appropriate role models”. These models may increasingly involve SER, which then becomes part of the spectacle. As Debord notes “anyone can join the spectacle, in order publicly to adopt, or sometimes secretly practice, an entirely different activity from whatever specialism first made their name”. SER can then become a particularly prosperous field for media involvement and ultimate 7 control. In a landscape where “contemporary events… retreat into a remote and fabulous realm of unverifiable stories, uncheckable statistics, unlikely explanations and untenable reasoning… There are only the media’s professionals to give an answer, with a few respectful rectifications or demonstrations”. More specifically, “the public needs the media to tell them how important in issue the environment is as individuals do not gain knowledge of this from real world cues”. Relevant media expects would be employed to influence public’s judgements over organisation’s social and environmental impacts. “Whenever individuals lose the capacity to see things for themselves, the expert is there to offer an absolute reassurance… the most useful expect, of course, is the one who can lie”. Organisations would then be expected to be particularly careful on managing their relations with media, given that “the ability to falsify (of those who control all information) is unlimited… to be known outside spectacular relations is already to be known as an enemy of the society”. Best and Kellner (1997) particularly note that we are now in a new stage of spectacle, which they term ‘the interactive spectacle’, that involves an implosion of subject and object, and the creation of new cultural spaces and forms and new subjects. Earlier theorisations suggested that the media and technology were powerful control mechanisms keeping individuals passive and serialized, watching and consuming, rather than acting and doing. The subject of this new stage of spectacle, by contrast, is more active and new technologies like the computer, multimedia, and virtual reality devices are more interactive. Given also the lack of standardisation of SER, a ‘spectacular interaction’ would be therefore expected to take place, whereby both the media and the organisations would be expected to have their own agenda, very different to what is openly shared, and attempt to influence general public’s opinions of the organisation’s social and environmental impacts. Methods A longitudinal case study research design has been adopted, combining content analysis with a qualitative approach focusing on discourse. As Denscombe (2003) points out, “the decision to use a case study approach is a strategic decision that relates to the scale and scope of an investigation, and it does not, at least in principle, dictate which method or methods must be used” (p. 32). Indeed, it seems that in SER a number of studies adopting case study designs involve the use of either qualitative analysis or quantitative (content or statistical) analysis. Despite the fact that, under any analysis conditions, there is a general concern over the case studies’ basis for generalisation (see, e.g. the concerns expressed by Guthrie and Parker, 1989; Deegan et al., 2002), “case studies, like experiments, are generalisable to theoretical 8 propositions and not to populations or universes… the goal is to do a ‘generalising’ and not a particularising” (Yin, 1994, p.10). the longitudinal design further assists the examination, as it involves a detailed and intensive analysis of single organisation and ‘how a situation changes over time’ (Bryman and Bell, 2007, p.64; see also., Campbell et al., 2003; Deegan et al., 2002; Deegan and Gordon, 1996; O’Dwyer and Gray, 1998; Guthrie and Parker, 1989; Hogner, 1982, for similar designs). Content analysis was employed to code social and environmental information in annual reports and newspaper articles over a 17 year period (1996 to 2012). The disclosure topic as well as the positive vs. negative categorisation was employed similarly to a number of other studies (e.g. Deegan and Gordon, 1996; Deegan et al., 2000; 2002; Patten and Crampton, 2004; Aerts and Cormier, 2009; Islam and Deegan, 2010. As a recording unit of analyses sentences were employed, as this provides “complete, reliable and meaningful data for further analysis” (Milne and Adler, 1999, p. 243). In addition to this quantitative content analysis approach, so as to focus on the manifest content of information, qualitative analysis was also employed, in an attempt to investigate the latent content. This allowed to additionally consider a wider array of data, such as social and environmental reports, press releases, relevant information in social media, other media coverage (including broadsheets and tabloids) and other archival information (similarly to e.g. Makela and Nasi, 2010). This largely followed Buhr and Reiter (2006), which implicitly draws on Yin’s (2003) ‘pattern matching’ and ‘explanation building’ discourse analysis techniques. It thus involves ‘scanning’ the text for relevant information, supportive or not, of the presented theoretical arguments, to use as input for further theoretical refinements, in an attempt to explain all the data. Findings and discussion Figure 1 below summarises the findings from content analysis. A relatively high correlation of total SER with total number of media articles (and particularly broadsheets) is noted although the correlation (perhaps not unexpectedly) appears to be lower than previous studies examining interactions of organisations coming from more ‘sinful’ industries. Similarly to these studies, most annual report sentences appear to be positive, and most media articles appear to be negative. 9 4500 4000 3500 3000 2500 Newspaper articles (total) 2000 AR disclosure 1500 1000 500 0 2500 Broadsheets 2000 Tabloids 1500 1000 500 0 Figure 1 Media attention and annual report social and environmental disclosure Despite therefore looking at a ‘relatively innocent’ organisation it seems that there is still a strong correlation between BT’s SER and relative media coverage. It should be noted however that unlike previous studies, there is a stronger relationship between total SER and total media articles (as opposed to negative ones); and that the relationship seems to be stronger in the first years as opposed to the later ones. The spectacle therefore seems to be moving as there are evidently two periods of interest. From 1996 till around 2003 where BT seems to be more closely following and responding to any criticism raised by the media; and from there onward, where BT seems to be more proactive in their disclosure decisions. It should be noted that the broadsheets included in the sample are five times more than the tabloids (approximately 10 3,000 to 15,000) and show a much higher correlation, suggesting that BT is more closely following what is published in the broadsheet newspapers. A closer look at BT’s and media’s disclosure, as presented in following Figure 2, suggests that there are conflicting representations over BT’s social and environmental impacts and provides further support to Debord’s arguments that the spectacle constantly moves over issues such as social and environmental. Figure 2 Disclosure theme – BT (top) and media (bottom) Three main observations can be made. Firstly that the organisation does not have a clear view as regards its responsibilities (given that proportions of thematic disclosure change over time with no obvious pattern). Secondly, that the media also do not have a clear view as regards the companies responsibilities as they also change their emphasis over time to serve their own short-term interests. And thirdly, that although as the previous diagram illustrated the organisation is generally responding to the media pressure, particularly in the first years, this closer look illustrates that actually their perceived ‘responsibilities’ as reflected in the relevant disclosure are in conflict with the media’s perceptions i.e. the organisation does not respond to 11 the specific area of criticism, with the potential exception of the environment (which shows a higher correlation, perhaps representing a more straightforward reaction to a relevant ‘legitimacy threat). Instead it more frequently responds with customer and employee disclosure, whatever the criticism may be, perhaps in an attempt to ensure support from most critical stakeholders. A closer look at media coverage of BT’s responsibilities indeed suggests that media seem to be confused as to which the primary responsibility of BT is: – ‘BT software failure cuts off emergency services’ (The Guardian, 26 February 2000) – ‘Embarrassed BT runs out of credit’ (The Guardian, 17 February 2001) – ‘Wrestling with the hand dealt by BT’ (The Times, 7 April, 2003) – ‘Internet wrangle tarnishes BT figures’ (The Guardian, 12 November 2004) – ‘BT to shed a further 15,000 jobs as it cuts dividend and sinks into the red’ (The Times, 15 May 2009) – ‘Job cuts hit BT’s performance’ (The Daily Telegraph, 11 December 2010) Media primarily seem to emphasise the customer and employee aspects potentially due to that the environment has no voice, but also due to the company’s relatively smaller environmental impacts. Whilst the media emphasise BT’s poor profitability, they also quote union’s determination to oppose further cuts: BT suffered the indignity of being told by one of the world’s leading credit rating agencies, Standard & Poor’s, that since the group could not communicate how it is going to reduce its £30bn mountain of debt its credit quality is probably going to have to be downgraded again (The Guardian, 17 February 2001) Morale has been affected by BT’s huge programme of job cuts, which has resulted in 100,000 redundancies in the past five years (The Guardian, 5 April 1996) We are getting seriously fed up with the company. They gain no brownie points by cutting jobs when they should be growing their market share’ (The Guardian, 5 December 2001) … by also quoting the negative impacts of job cuts on customer service: BT has apologised to its corporate customers after drastic job cuts (35,000 jobs over the past three years) left the telecoms giant struggling to keep up with soaring demand for broadband (The Daily Telegraph, 11 December 2010) BT’s offshoring policies particularly highlighted the controversies over the organisation’s responsibilities: 12 ‘The… biggest union for BT workers in the UK, is campaigning against the offshoring policy, arguing that thousands of call centre and information technology jobs are at risk. BT should consult unions before making decisions about job immigration. For BT to earn trust, its stakeholders should be given an opportunity to influence such decisions in advance’ (Financial Times, 8 March 2004) Although BT appear to have become more proactive over SER in the later examined years, their earlier commitment may have been initiated due to the considerable job losses and associated dissatisfaction at the time: British Telecom plans to become the first mainstream UK business to undergo a social audit... The move reflects growing pressure on business to act ethically.... (The Guardian, 25 November 1996) ‘BT Chairman, Sir Iain Vallance, said the moves were part of the company’s attempts to build its reputation, which is seen as a key competitive weapon in the tough telecom markets. Sir Ian said: “A good reputation is a very real asset for a business: it can improve a company’s competitiveness, with all the advantages that can bring. So it is not from altruistic motives that we have been active in these areas. It makes sound business sense.”' (The Guardian, 25 November 1996) A closer look at BT’s reporting further suggests that the organisation does not have a clear view as regards its responsibilities. At the same time that BT was defending restructuring and job losses, it was also emphasising the increase of temporary personnel as prerequisite of maintaining positive industrial relations: The number of BT’s employees has fallen substantially since 1991 ... At the same time, BT has increased its use of temporary contract personnel, where this has been cost effective.... BT expects this trend to continue where it is appropriate in the context of its overall resourcing strategy and the maintenance of positive industrial relations (BT Annual report, 1998, p.11). Despite the aforementioned claims, BT was further emphasising its commitment to employees: BT sees its relationship with its people as critical to the future and its employee relations agenda focuses on ensuring that employees feel valued, on managing change constructively, and on creating an environment and culture within which every employee can maximise his or her contribution (BT Annual report, 1997, p.11) BT did not disclose specific information on the hotly debated offshoring policy in its 2004 annual report, but instead provided general justifications, such as: The changing nature of the markets in which we operate, our focus on cost leadership and our investment in new services has impacted the shape of our permanent workforce (BT Annual report, 2004, p. 16) 13 BT also stressed the benefits of ‘flexible’ workforce to their customer care: We’ve made improvements in many areas...While we are largely on top of things now, lessons have been learnt in making sure that we get better forecasts from our communications provider customers and by having a greater flexibility in our resourcing’ (BT Annual report, 2011, p. 9) BT later attempts to promote its engagement with sustainability could further be interpreted as attempts to control the dialogue with media over its social and environmental responsibilities and effectively silence them: We were one of the first companies in the world to grasp the link between being sustainable and succeeding as a business. Now, we’re focusing on integrating sustainability into everything we do’ (BT Better future report, 2013, p. 6) Preliminary findings therefore suggest that Debord’s frame can be particularly useful in explaining the SER practices of BT. The spectacular framework highlights the controversial nature of SER, as neither the organisations nor media seem to agree on what the company’s social and environmental responsibilities are. The more thorough consideration of the collected evidence and the scheduled inclusion in the analysis of additional data is believed to make this contribution clearer. Despite their purportedly objective nature, both media and BT’s communications are found to be carefully crafted narratives, which through multiple revisions and edits are shaped into apparently ‘linear’ events. Although the public would only read the provided information as a description of the events, Debord’s frame assists in revealing how symbols can be manipulated and information flow can be controlled (by structuring and scheduling the emission, volume and rate of communication flow) through an iterative interaction process between organisations and media, in an attempt to negotiate meaning. As SER remains largely unregulated, it is neither practised systematically nor able to claim, “either universal recognition or universal definition” (Gray et al., 1995, p. 47). This leaves room for organisations, such as BT, to control information, in order to address criticism and portray favourable descriptions of relevant events. In this case, control of information involves inter alia concealment or downplay of news, as well as justifications and indirect references to issues raised by the media, in order to manage discontent particularly associated with job losses and poor customer service. 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