Academic journal article The Journal of Business Communication

The Influence of Negative Newspaper Publicity on Corporate Image in the Netherlands

Academic journal article The Journal of Business Communication

The Influence of Negative Newspaper Publicity on Corporate Image in the Netherlands

Article excerpt

In the Netherlands, a debate on the effects of negative publicity on a person's or company's image was started by the decision of the Dutch Public Prosecutor's office to adopt a new policy in its dealings with the press. In the past, the office was very passive in informing the press about charges, while the new policy implied that the Public Prosecutor's office would spread such information actively. Dutch lawyers protested against this new policy, fearing that the general public would condemn the accused person or company regardless of the legal outcome. Would publishing suspicions and charges in newspapers result in severe and lasting damage to the accused's image? In this paper, we present an experiment that addresses exactly that question.

A company's image is a valuable asset and can be as important as its financial performance (Argenti, 1994). A positive corporate image is crucial in gaining sales or contracts, employees, and shareholders (Rossiter & Percy, 1987). The company's perceived trustworthiness, competence, and attractiveness especially influence such decisions (O'Keefe, 1990). Clearly it is better to throw in one's lot with a trustworthy (or competent, or attractive) company than with an untrustworthy (or incompetent, or unattractive) one. A corporate image is at least partly determined by the media (Argenti, 1994). The chances of receiving negative publicity from the media are much higher than the chances of receiving positive press attention because of their preference for bad news (see e.g., Dennis & Merrill, 1996; Ericson, Baranek, & Chan, 1987; Hartley, 1982).

The literature on crisis communication has shown how much negative publicity can hurt companies. In her analysis of the Exxon Valdez disaster, Tyler (1992) found that Exxon's communication strategies increased the damage to the company's image instead of minimizing it. Benoit and Czerwinski (1997) showed that USAir's responses to negative publicity in the Times were also less than adequate. Such findings have generated interest in the ways in which companies deal with crises (e.g., Paul & Strbiak, 1997; Ross & Benson, 1995). The assumption is that negative publicity damages the company's image severely. Amin (1996) studied the successes and failures of corporations' efforts to protect themselves from defamation through legal measures. To our knowledge, however, no study has been conducted to show just how much damage results or how long that damage lasts.

Therefore, our first research question is

RQ 1. How serious is the damage to a company's image caused by negative publicity?

We studied publicity of the DA's allegations of illegal actions. Negative publicity can also focus on a company's alleged negligence, deliberate fraud, or deliberate callousness. We investigated publicity about the DA's allegations because such publicity will become more frequent as a result of the new DA's press policy. As the medium for the negative publicity, we chose a newspaper article. In the Netherlands, newspapers are still a dominant form of news. In approximately 75% of all Dutch households, a newspaper is read (Bakker & Scholten, 1997). The Netherlands is fourth on the list of "most newspaper-reading countries"; the percentage of newspaper readers in the Netherlands is almost twice as high as that in the United States (Bakker & Scholten, 1997). Dutch newspapers have a large audience, and the impact of their articles is strong. Therefore, negative publicity in newspapers has a high damage potential in the Netherlands.

A second question concerns the effects of the manner of reporting.

RQ 2. What is the effect of the manner of reporting on the corporate image of a company?

Truly objective reporting is impossible; the point of view of the journalist always colors reporting, to a greater or lesser extent (Renkema, 1984). For example, when the district attorney's office charges a company with fraud, journalists can convey the seriousness of the allegation in varying ways: They could suggest that it is possible, probable, or (almost) certain that the company has committed fraud. …

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