Telling a success story through the president’s letter

Abstract

Purpose This paper aims to explore the role of storytelling and impression management (IM) through the president’s letter in legitimizing the practices of an electricity company with regard to controversial issues during a period of change. Design/methodology/approach Drawing on a qualitative case study, this paper examines annual report letters from 1995 to 2013 using a methodological interpretative approach. Findings By promoting a success story using IM, the presidents give sense to particular actions related with controversial issues and attempt to influence expectations on strategic changes. The findings demonstrate that organizational actors use the flexibility of the president’s letter to tell the story and emphasize its self-laudatory nature. The study highlights that storytelling in these documents can be used to alleviate the tensions created by the inherent contradictions of social structures. Practical implications This research is useful for regulatory authorities, users of annual reports and academic researchers, making them attentive of the narratives companies may adopt to protect their legitimacy. The findings shed light on the need to evaluate the credibility of accountability mechanisms and can help stakeholders to develop a more critical view of the president’s letter. Originality/value This paper makes a contribution to research on communication issues by expanding literature on accounting and organizational storytelling. By demonstrating how presidents use sensegiving as a means of legitimacy-claiming, this study adds to the literature on legitimating accounts. In doing so, this paper bridges the gap between theories about organizational legitimacy, storytelling and IM. To sum up, the findings serve as an incremental step toward understanding the nature of accountability reporting.

Narrative Styles and Institutional Isomorphism in South African CEOs' Shareholder Letters

“…As the need to obtain legitimacy through managing impressions becomes the norm, normative institutional isomorphism ensues. Corporate narrative reporting can therefore be used by companies to manage perceptions and thus maintain legitimacy (Ben-Amar & Belgacem, 2018;Bozzolan, Cho & Michelon, 2015;Martins et al, 2019;Melloni, Caglio & Perego, 2017).…”

“…Impression management theory holds that managers use reports to convey selective information and in a manner that benefits the organisation and themselves, even if not necessarily to the benefit of stakeholders (Allee & DeAngelis, 2015;Arena et al, 2015;Asay et al, 2018b;Bozzolan et al, 2015;Cho, Roberts & Patten, 2010;Martins et al, 2019;Leung et al, 2015;Sydserff & Weetman, 2002;Yuthas et al, 2002). As Cho et al (2010, p. 432) state, "[…] the more firm performance differs from a desired benchmark, the more management is motivated to manage impressions, and the more likely it is that narrative disclosure will be affected by a self-serving bias.…”

Managing Corporate Social and Environmental Disclosure: An Accountability vs. Impression Management Framework

“…The literature suggests that an organization can be perceived as legitimate because it acts in accordance with social expectations, or because it successfully manipulates public expectations and perceptions about the organization [6][7][8]. Organizations use IM to maintain an appearance of compliance with social values and expectations [3,9,10]. Like most cultural processes, the management of legitimacy relies heavily on communicationin this case, communication between the organization and its stakeholders [7].…”

“…Like most cultural processes, the management of legitimacy relies heavily on communicationin this case, communication between the organization and its stakeholders [7]. IM has been adopted and applied to explain the response of organizations dealing with challenges to legitimacy [1,9,11]. But theorists argued that "legitimacy is a continually unfolding process in which different scenarios can be identified at different points in time" [6] (p. 4).…”

“…Social situations requiring accountability from an actor foster IM [1,9,13,14]. The literature demonstrates that IM commonly occurs in corporate social reporting [15,16].…”