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Avow or Avoid?: The Public Communication Strategies of Enron and WorldCom
Unformatted Document Text:  Avow or Avoid? 8 serious. If a crisis is part of a pattern of past problems, perceptions of responsibility by the organization are intensified. If the crisis involves a financial scandal that results in corporate restructuring, rebuilding investor confidence begins with a communication strategy. Mercer (2002) suggests that determining and implementing a communication strategy should be one of the first priorities after the legal strategy has been decided on. Research questions The literature suggests three research questions: RQ1: Is there evidence of cooperation between legal and public relations counsel? RQ2: Is there a dominant communication strategy in evidence? RQ3: Are the dominant organizational messages successfully transmitted via the mass media? Methodology The goal of this research was to determine the tone of media relations from the two crisis-embroiled organizations and the tone of coverage that surrounded organizational release of information. Fitzpatrick and Rubin’s (1995) taxonomies of standard public relations and standard legal responses were used as a model for the analysis. The first three months after public announcement of the two organizations’ financial crises were selected for analysis. This decision was based on the fact that in those first three months both institutions announced SEC investigation/involvement, changes in executive management and bankruptcy restructuring. This created a dataset of public statements from October, November and December 2001 for Enron and June, July and August 2002 for WorldCom.

Authors: Reber, Bryan. and Gower, Karla.
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Avow or Avoid?
8
serious. If a crisis is part of a pattern of past problems, perceptions of responsibility by the
organization are intensified.
If the crisis involves a financial scandal that results in corporate restructuring, rebuilding
investor confidence begins with a communication strategy. Mercer (2002) suggests that
determining and implementing a communication strategy should be one of the first priorities after
the legal strategy has been decided on.
Research questions
The literature suggests three research questions:
RQ1: Is there evidence of cooperation between legal and public relations counsel?
RQ2: Is there a dominant communication strategy in evidence?
RQ3: Are the dominant organizational messages successfully transmitted via the mass
media?
Methodology
The goal of this research was to determine the tone of media relations from the two
crisis-embroiled organizations and the tone of coverage that surrounded organizational release of
information. Fitzpatrick and Rubin’s (1995) taxonomies of standard public relations and
standard legal responses were used as a model for the analysis.
The first three months after public announcement of the two organizations’ financial
crises were selected for analysis. This decision was based on the fact that in those first three
months both institutions announced SEC investigation/involvement, changes in executive
management and bankruptcy restructuring. This created a dataset of public statements from
October, November and December 2001 for Enron and June, July and August 2002 for
WorldCom.


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