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Avow or Avoid?: The Public Communication Strategies of Enron and WorldCom
Unformatted Document Text:  Avow or Avoid? 9 Press releases and public statements that were posted on the web sites of the two organizations (www.enron.com and www.worldcom.com) were analyzed. Those related to SEC investigations, organizational restructuring or bankruptcy were selected for analysis. This process produced 16 company statements for Enron and 16 for WorldCom. News coverage of the same time periods (October through December 2001 for Enron and June through August 2002 for WorldCom) was gathered via Lexis-Nexis Academic Universe. News coverage that fell into the three categories – investigation, reorganization or bankruptcy – with attributions to Enron or WorldCom or company personnel were selected for analysis. This winnowing process produced 23 press accounts for Enron and 24 for WorldCom. The analysis of texts was done through an adaptation of the constant comparative method for inductive data analysis (Lincoln & Guba, 1985). Themes and insights were noted as texts were read and re-read. Such a comparative method allows themes to emerge and illuminates notable exceptions to the themes. Findings Enron Announcement of SEC investigation On October 22, 2001, Enron announced via a news release that the Securities and Exchange Commission had requested voluntary information from the company regarding certain related-party transactions (Enron announces, Oct. 22, 2001). That news release was followed two days later by a second release announcing that Jeff McMahon would take over as chief financial officer of the company (Enron names Jeff McMahon, Oct. 24, 2001). McMahon would be replacing Andrew Fastow who “will be on a leave of absence from the company.” Enron’s organizational rhetoric in this initial phase employed a mix of legal and public relations tactics. In traditional public relations fashion, they welcomed the SEC’s request for information. “We will cooperate fully with the SEC and look forward to the opportunity to put

Authors: Reber, Bryan. and Gower, Karla.
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Avow or Avoid?
9
Press releases and public statements that were posted on the web sites of the two
organizations (www.enron.com and www.worldcom.com) were analyzed. Those related to SEC
investigations, organizational restructuring or bankruptcy were selected for analysis. This
process produced 16 company statements for Enron and 16 for WorldCom.
News coverage of the same time periods (October through December 2001 for Enron and
June through August 2002 for WorldCom) was gathered via Lexis-Nexis Academic Universe.
News coverage that fell into the three categories – investigation, reorganization or bankruptcy –
with attributions to Enron or WorldCom or company personnel were selected for analysis. This
winnowing process produced 23 press accounts for Enron and 24 for WorldCom.
The analysis of texts was done through an adaptation of the constant comparative method
for inductive data analysis (Lincoln & Guba, 1985).
Themes and insights were noted as texts were read and re-read. Such a comparative
method allows themes to emerge and illuminates notable exceptions to the themes.

Findings

Enron
Announcement of SEC investigation
On October 22, 2001, Enron announced via a news release that the Securities and
Exchange Commission had requested voluntary information from the company regarding certain
related-party transactions (Enron announces, Oct. 22, 2001). That news release was followed
two days later by a second release announcing that Jeff McMahon would take over as chief
financial officer of the company (Enron names Jeff McMahon, Oct. 24, 2001). McMahon would
be replacing Andrew Fastow who “will be on a leave of absence from the company.”
Enron’s organizational rhetoric in this initial phase employed a mix of legal and public
relations tactics. In traditional public relations fashion, they welcomed the SEC’s request for
information. “We will cooperate fully with the SEC and look forward to the opportunity to put


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