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Introduction to Case Study

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Structure

• Group presentation– 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%

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Presentation

• 5-6 slides• 5-10 minutes• All group members or nominate one or two

group members to present

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Individual assignment

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

• Weighting: 20%

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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.

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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.

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An example: Louis Vuitton crisis

• https://www.youtube.com/watch?v=pHGqqjQFAjA

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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?

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Identifying a case – How to find it?

• Google search with key words– ‘scandal’, ‘accident’, ‘incident’

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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

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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

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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?

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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)

Group presentation & individual assignment

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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

Group presentation & individual assignment

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Make a list of all data analysed - Example: Horse meat scandal

Table 1: Tesco’s press releases relating to horse meat No. Date Headline 1 15/01/2013 Tesco comments on FSAI food survey 2 16/01/2013 An apology from Tesco 3 30/01/2013 Tesco statement on investigation into meat

contamination 4 11/02/2013 Meat testing: Statement from Tim Smith, Tesco

Group Technical Director 5 15/02/2013 Open letter from retailers 6 15/02/2013 Tesco comments on test results 7 22/02/2013 Update from Tim J Smith, Tesco Group

Technical Director 8 12/03/2013 Statement from Tim J Smith, Tesco Group

Technical Director

Group presentation & individual assignment

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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

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Benoit (1997: 179)Group presentation & individual assignment

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Cornelissen (2014)

• In a crisis verbal strategies depend on whether the organisation views itself as having:a) A low level of responsibility for the crisis

• E.g., denial, excuse, downplay, etc.

b) A high level of responsibility for the crisis• Apology, compensation, repentance (asking for

forgiveness)

• See table with full list of strategies on blackboard

Group presentation & individual assignment

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Structure of written assignment1. Introduction (individual assignment only)

Discussion of concepts and theories used to analyse the case [20 marks]

2. The case (group presentation and individual assignment)

2.1 Context

Background information about the case [10 marks]

3. Data (group presentation and individual assignment)

Description of corporate disclosure vehicles chosen for analysis (i.e., press

releases, annual reports, CSR reports, etc.) [10 marks]

4. Methodology (group presentation and individual assignment)

Discussion of the categories of analysis used to analyse the corporate texts

(e.g., text length, themes, impression management strategies, etc.) [15 marks]

5. Findings (individual assignment only)

Summary of findings of your analysis [35 marks]

6. Conclusion (individual assignment only)

Discussion of findings in context of theory and prior literature [10 marks]

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Applying the methodology to the dataTesco, PR Nr. 2 16 January, 2013 An apology from Tesco We apologise. You have probably read or heard that we have had a serious problem with three frozen beef burger products that we sell in stores in the UK and Ireland. The Food Safety Authority of Ireland (FSAI) has told us that a number of products they have recently tested from one of our suppliers contained horsemeat. While the FSAI has said that the products pose no risk to public health, we appreciate that, like us, our customers will find this absolutely unacceptable. The products in our stores were Tesco Everyday Value 8 x Frozen Beef Burgers (397g), Tesco 4 x Frozen Beef Quarter Pounders (454g) and a branded product, Flamehouse Frozen Chargrilled Quarter Pounders. We have immediately withdrawn from sale all products from the supplier in question, from all our stores and online. If you have any of these products at home, you can take them back to any of our stores at any time and get a full refund. You will not need a receipt and you can just bring back the packaging. We and our supplier have let you down and we apologise. If you have any concerns, you can find out how to contact us at the bottom of this page, or go to any of our customer service desks in-store, or ask to speak to your local Store Manager. So here’s our promise. We will find out exactly what happened and, when we do, we’ll come back and tell you. And we will work harder than ever with all our suppliers to make sure this never happens again. Contact Customer Service hotline: 0800 50 5555 Email: customer.service@tesco.co.uk, Twitter: @uktesco Facebook: facebook.com/tesco

Individual assignment only

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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

Individual assignment only

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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

Individual assignment

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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Finally …

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