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The Management of Risk, Reputation and Legitimacy

  • Teacher(s):   P.Haack  
  • Course given in: English
  • ECTS Credits: 6 credits
  • Schedule: Spring Semester 2019-2020, 4.0h. course (weekly average)
  •  sessions
  • site web du cours course website
  • Related programmes:
    Master of Science (MSc) in Management, Orientation Marketing

    Master of Science (MSc) in Management, Orientation Business Analytics

    Master of Science (MSc) in Management, Orientation Strategy, Organization and Leadership

    Maîtrise universitaire ès Sciences en management, Orientation Behaviour, Economics and Evolution

    Master of Law (MLaw) in Law and Economics

 

Objectives

Key learning objectives of the course are (1) to get acquainted with the organization theory literature on social risk, reputation and legitimacy, (2) to understand the current legitimacy challenges of multinational firms and other global organizations, (3) to familiarize yourself with impression management strategies to deal with such challenges, and (4) to learn basic aspects of research design and research methodology.

Contents

The current organizational theory literature has mainly studied efficiency as a key competitive factor for multinational firms. However, recent corporate scandals (e.g., the corruption case at Siemens or the environmental disaster of BP in the Gulf of Mexico) illustrate that despite a favorable competitive position the social approval of multinational firms has been increasingly at risk. The aim of this lecture is to explore the various strategies that multinational companies use to maintain their social approval. Social approval assets have appeared in past research, such as legitimacy, reputation, celebrity, status, stigma, rankings, and certifications. Social approval can be linked to many consequences, such as performance, CEO pay, stock market rise, job attractiveness, general support, etc. The management of social approval is therefore of utmost importance for managers and business leaders.

In a first step, the lecture discusses the current organization theory literature on social risk, reputation and legitimacy. In a second step, this literature is used to identify a set of impression management strategies multinational firms and other organizations can draw on in a crisis in order to maintain or regain social approval. In a third step, students are introduced to content-analytical and experimental research methods. Students are asked to work in groups to carry out an empirical research project based on a content analysis or an experiment to examine the success of a specific impression management strategy.

This is a demanding course which is designed for students who are interested to work in the area of corporate communication, crisis communication, and/or corporate reputation management. Given its focus on research methods, the course will also prepare those students who are interested to pursue doctoral studies in management and organization studies. Finally, the course will also have an ethical component as perception and impression management strategies need to be carried out responsibly.

The course instructor will provide detailed information on the course content in the first session on February 20. There will be also a Moodle platform with relevant content.

The course is limited to 50 participants, and interested students should enroll in the course on the Moodle platform. Places will be assigned on a first-come-first-serve basis.

References

A Moodle course will be set up before the start of the first session. Basic literature on social approval (selection):

Bitektine, A. B. 2011. Towards a theory of social judgment of organizations: the case of legitimacy, reputation, and status. Academy of Management Review, 36, 151–179.

Bitektine, A. & Haack, P. 2015. The “macro” and the “micro” of legitimacy: towards a multi-Level theory of the legitimacy process. Academy of Management Review, 40, 49–75.

Bundy, J. & Pfarrer, M. 2015. A burden of responsibility: the role of social approval at the onset of a crisis. Academy Of Management Review, 40, 345-369.

Bundy J., Pfarrer, M., Short, C. E. & Coombs, T. 2017. Crises and crisis management: Integration, interpretation, and research development. Journal of Management, forthcoming.

Coombs, W. 2007. Protecting organization reputations during a crisis: The development and application of situational crisis communication theory. Corporate Reputation Review, 10(3): 163-176.

Elsbach, K. D. 2003. Organizational perception management. Research in Organizational Behavior, 125: 296-332.

Haack, P., Pfarrer, M. & Scherer, A. G. 2014. Legitimacy-as-feeling: how affect leads to vertical legitimacy spillovers in transnational governance. Journal of Management Studies, 51(4), 634-666.

Kostova, T. & Zaheer, S. 1999. Organizational legitimacy under conditions of complexity: the case of the multinational enterprise. Academy of Management Review, 24, 64–81.

Lamin, A. & Zaheer, S. 2012. Wall Street vs. Main Street: firm strategies for defending legitimacy and their impact on different stakeholders. Organization Science, 23, 47–66.

Lange, D., Lee, P. M., & Dai, Y. 2011. Organizational reputation: A review. Journal of Management, 37(1): 153-184.

Lange D. & Washburn N. 2012. Understanding attribution of corporate irresponsibility. Academy of Management Review, 37, 300–326.

Suchman, M. C. 1995. Managing legitimacy: strategic and institutional approaches. Academy of Management Review, 20, 571–610.

Suddaby, R., Bitektine, A. & Haack, P. 2017. Legitimacy. Academy of Management Annals, 11, 451–478.

Tost, L. P. 2011. An integrative model of legitimacy judgments. Academy of Management Review, 36, 686–710.

Pre-requisites

You should have a keen interest in crisis communication and the management of reputation/legitimacy in the context of organizational scandals. Knowledge of empirical research methods and general aspects of research design is an asset but does not constitute a requirement. Students are required to regularly read scientific articles in English. Students are also required to implement an empirical research project. Openness to non-mainstream viewpoints and “thinking outside the box” will help you to enjoy the course.

Evaluation

First attempt

Exam:
Without exam (cf. terms)  
Evaluation:

Course participants are asked to work together in groups to plan and carry out an empirical research project (experiment OR content analysis). The final grade for each individual student is composed of an online mid-term exam (30 percent), assignments (30 percent) and the group paper of 15 pages (40 percent). The paper needs to be handed in until June 24, 11:59:59 pm.

Retake

Exam:
Without exam (cf. terms)  
Evaluation:

Students have the right for a second attempt for each partial grade that is below 4 if (and only if) their overall grade for the course is below 4.

For the mid-term exam, the second attempt takes place right after the semester and takes the form of a new exam.

For the assignment, the second attempt takes place right after the semester and takes the form of a new assignment.

For the group paper, the second attempt takes place right after the semester. Students can improve the paper they initially submitted.



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