Accounting Theory
alhusiya
tutorial_3-case_study.pptx
Introduction to Case Study
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Structure
Group presentation
During tutorial sessions on 01/12/15 & 08/12/15
5%
Individual assignment
To be submitted on 18/12/15
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?
Who is effected by the crisis?
Customers, shareholders, general public, etc.
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1) Definition of crisis
An overwhelmingly negative event that presents a high level of risk, harm, and opportunity for further loss (Seeger et al., 2003)
Elements of an organizational crisis (Xu and Li, 2013):
Unexpectedness of the event
Limitations in response time
Severe consequence(s) (to specific stakeholders, the environment, society)
Threats to the fundamental value of an organization
2) What type of crisis is it ?
Breitsohl (2010):
Scandals
e.g. bribery, insider trading, price-fixing, or sexual harassment
Accidents
related to the production system, e.g. explosions, airplane crashes, or the sinking of ships
Product safety and health incidents
post-production effects and consumption-side harms, e.g. sabotage, product defects and associated recalls, and production-related pollution
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3) Who is affected by the crisis?
The environment? BP Deepwater Horizon, VW emissions scandal
The customers? Tesco horsemeat scandal
The investors Tesco accounting fraud
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Identifying a case – How to find it?
Google search with key words
‘scandal’, ‘accident’, ‘incident’
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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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Case study 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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Presentation
Format
Content
Data
Methodology
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Presentation - Format
Group presentation
5-6 slides
5-10 minutes
All group members or nominate one or two group members to present
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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)
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Collecting your data - Example: London Underground Restructuring Strategy
LU website:
https://tfl.gov.uk/
Choose data analysis period.
01/10/2014-31/10/2014
Less recent cases also check Annual Report & CSR report
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Make a list of all data analysed – Example: London Underground
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| Appendix I London Underground Press Releases by date and title | ||
| Press Release | Date | Title |
| PRLU1 | 10/01/2014 | RMT union urged not to threaten Londoners with disruption, but to work with LU to modernise the Tube 1 |
| PRLU2 | 14/01/2014 | Reminder that TFL’S new year fares come into effect on Sunday 19th January |
| PRLU3 | 23/01/2014 | TFL Ambassadors set to help Londoners beat totally unnecessary industrial action on the Tube |
| PRLU4 | 23/01/2014 | TFL sets out plans to keep capital moving during strikes over modernization of London Underground |
| PRLU5 | 31/01/2014 | Londoners back Mayor and LU’s vision for the future of the Tube |
| PRLU6 | 02/02/2014 | TFL confirms Underground services it intends to operate during strikes over Tube modernisation |
| PRLU7 | 04/02/2015 | Not too late to call strike off and continue talking’, LU’s boss says to unions. |
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.
Video statement of the CEO of Volkswagen:
https :// www.youtube.com/watch?v=wMPX98_H0ak
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Benoit (1997: 179)
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Cornelissen (2014)
In a crisis verbal strategies depend on whether the organisation views itself as having:
A low level of responsibility for the crisis
E.g., denial, excuse, downplay, etc.
A high level of responsibility for the crisis
Apology, compensation, repentance (asking for forgiveness)
See table with full list of strategies on blackboard
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Applying the methodology to the data
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“TfL sets out plans to keep capital moving during strikes over modernisation of London Underground (PRLU5)”
- Corrective Action
“RMT union urged not to threaten Londoners with disruption but to work with LU to modernise the Tube ” (PRLU1) - Shifting the blame
“with billions of pounds of investment to deliver more frequent, reliable and accessible services and enhanced stations, providing greater capacity to tackle increasing numbers of customers. ” (PRLU1) - Good intentions
Requirements of written assignment
Deadline, word limit & weighting
Follow the structure
Apply your chosen methodology to the data
Discuss your findings
Use relevant theories to explain the company response to the crisis
Background reading & referencing
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Individual assignment
Deadline: Friday, 18th December 2015
Word limit: 1,500 words (+/- 10%)
Weighting: 20%
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Structure of written assignment
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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
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Findings
Report on what you find in your the application of your methodology
E.g., London Underground uses press releases and advertisements in major UK newspapers to apologise to customers
Compare your findings to those of prior studies
E.g., London Underground’s strategy of shifting the blame 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
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Background reading and referencing
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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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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1. 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]
