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Home > Business Strategy Best Practice > Managing Reputational Risk: Business Journalism

Business Strategy Best Practice

Managing Reputational Risk: Business Journalism

by Jonathan Silberstein-Loeb

Executive Summary

  • How credible commitments can help to mitigate reputational risk.

  • Establishing credible commitment, and trust, requires a better understanding of the incentives of journalists, as well as the perceptions of business, both of which are explored in this chapter.

  • The consequences of these differing incentives for building trust between journalists and businesses and for company strategy are explored in the final section.

Introduction

It is taken as given that journalism affects corporate reputation. To understand better how journalism about businesses is written and what can be done to contend with the reputational risk that it may present, this chapter seeks to explain how business practitioners and business journalists perceive each other and interact. It is the central argument of this chapter that establishing mechanisms for credible commitment helps to mitigate reputational risk. As there is no formal mechanism for establishing credible commitment between business representatives and business journalists, doing so depends on their respective incentives and corresponding informal constraints, such as career advancement and the loss of reputation. Insofar as journalists must have sources, and sources must communicate with their stakeholders, journalists and corporate decision-makers rely equally on each other, and therefore may be hostages of one another in instances of repeated interaction. The implicit recognition that both parties are beholden to each other may be the most effective mechanism of credible commitment. Behavior that demonstrates an awareness of this codependence helps to establish trust, which is central to effective media relations.1 Trusting relationships facilitate an understanding of the incentives that undergird credible commitments, which helps to make them reinforcing. Recognizing the importance of credible commitments has clear consequences for the way in which companies develop communication strategies.

Much of what follows is predicated on the preliminary results of an international study of business journalism and corporate reputation that the Oxford University Centre for Corporate Reputation is conducting. This chapter relies on evidence gathered as part of this study in more than 80 informal, off-the-record interviews conducted in England with journalists from major national dailies that publish business sections and with business leaders (see Appendix 1).

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Further reading

Book:

  • Weaver, David H., and G. Cleveland Wilhoit. The American Journalist in the 1990s: U.S. News People at the End of an Era. Mawah, NJ: Lawrence Elbaum Associates, 1996.

Articles:

  • Charron, Jean. “Relations between journalists and public relations practitioners: Cooperation, conflict and negotiation.” Canadian Journal of Communication 14:2 (1989): 41–54. Online at: tinyurl.com/6fg78qd [PDF].
  • Davis, Aeron. “Public relations, news production and changing patterns of source access in the British national media.” Media, Culture & Society 22:1 (January 2000): 39–59. Online at: dx.doi.org/10.1177/016344300022001003
  • Davis, Aeron. “Public relations, business news and the reproduction of corporate elite power.” Journalism 1:3 (December 2000): 282–304. Online at: dx.doi.org/10.1177/146488490000100301

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