Academic journal article Australasian Accounting Business & Finance Journal

Repairing Organisational Legitimacy: The Case of the New Zealand Police

Academic journal article Australasian Accounting Business & Finance Journal

Repairing Organisational Legitimacy: The Case of the New Zealand Police

Article excerpt

Abstract

This paper illustrates how the New Zealand Police use non-financial annual report disclosures in response to adverse media publicity. This longitudinal case study spans the reporting periods ending 30 June 2000 through to 30 June 2007. It involves a detailed examination of the narrative disclosures and images contained in the annual reports, including the Commissioner's Overview and the Outcome Reports during this time. Three controversial items covered by the media were traced through the annual reports to establish whether the New Zealand Police use image repair discourse supplemented by semiotics in non-financial annual report disclosures to repair organisational legitimacy.

The analysis found that non-financial disclosures together with image repair discourse strategies were used by the New Zealand Police, a public sector agency, to repair organisational legitimacy. This paper provides a valuable contribution to researchers and practitioners as it extends the understanding of how public sector agencies use non-financial annual report disclosures.

Keywords: Image repair; Police; Legitimacy; Accountability; Non-financial reporting; Public sector.

JEL Classification: M40, H83, D73.

Effective police accountability is a cornerstone of democracy and the rule of law, and how complaints against the police are handled is crucial to public perceptions of that accountability. This means that any perceived failure in the handling of complaints can severely undermine public confidence in the New Zealand Police (Bazley 2007, p33).

1. Introduction

The extent of stakeholder support for an organisation determines its legitimacy. The object of this study is to establish whether the New Zealand Police, a public sector agency, uses the reputation management techniques image repair discourse in non-financial annual report disclosures in response to adverse media publicity.

A recent New Zealand survey highlights a long-term trend of declining trust in institutions (UMR Research Limited 2007). This is a concern for the New Zealand Police as its legitimacy is dependent on the public approval of their actions and behaviour, as well as their ability to secure and maintain public confidence and trust. Obtaining public approval is consistent with the principle attributed to Sir Robert Peel who argued that "To recognise always that the power of police to fulfil their functions and duties is dependent on public approval of their existence, actions and behaviour, and on their ability to secure and maintain public respect" (New Zealand Police 2007). Public approval is crucial because as the New Zealand Police explain "The public is the main source of information for reducing and preventing crime" (New Zealand Police 2005, p26). Public trust then enhances police effectiveness and its legitimacy (Sunshine & Tyler 2003; Goldsmith 2005).

Although a number of papers have examined non-financial annual report disclosures made by management in response to unfavourable media publicity (Brown & Deegan 1998; O'Donovan 1999; Deegan, Rankin & Voght 2000; Deegan, Rankin & Tobin 2002; Ogden & Clarke 2005) the use of these forms of disclosures by public sector agencies remains relatively unexplored (Samkin & Schneider 2010 is an exception). Furthermore, limited literature exists on the use of image repair discourse by organisations within their annual report to repair organisation legitimacy. Additionally the application of semiotics to annual reports is also limited (Breton 2009 is an exception). This paper extends the literature on how public sector agencies use image repair discourse techniques within their annual reports.

The paper is structured as follows. The following section reviews organisational legitimacy, and then the theoretical framework of image repair discourse is considered. Section 4 provides a description of semiotic analysis. This is followed by a brief background of the New Zealand Police which highlights the responsibilities and public expectations of the organisation. …

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