Organizational Perception Management

Kimberly D. Elsbach

• Publisher: Psychology Press
• Year: 2014
• Print ISBN: 9780805847963
• eBook ISBN: 9781317579854
• Topic: Business
• Subtopic: Management
• Index: Business

This book summarizes the research findings from the relatively new domain of study called "organizational perception management" (OPM). While perception management has been studied at the individual level since the 1960's, organization-level perception management was first examined in the 1980's in the context of corporate annual reports that focused on organizational standard and performance. Since then, empirical studies have expanded the domain of organizational perception management to include the management of organizational identities, as well as the strategic management of specialized organizational images for specific audiences.

The goals of Organizational Perception Management are to:
*summarize and organize this evolving literature to provide a complete and comprehensive definition of OPM events and tactics;
*illustrate OPM events and tactics in specific, real-world contexts; and
*identify a set of research themes that may stimulate further research on OPM.

This text is grounded primarily in empirical research on OPM, including qualitative field research, and uses current research and case studies to illustrate the application and effectiveness of OPM in context. As such, it will appeal to students, scholars, and practitioners of organizational management.

1

Overview

In 1997, the United States Internal Revenue Service (IRS) announced that it was changing. In a series of advertisements, broadcast through TV, radio, and newspapers, the organization that Americans loved to hate—the one that Newsweek once dubbed “The Infernal Revenue Service” (Sloan, 1998, p. 12)—claimed that it was becoming a new, kinder, gentler organization that aimed to serve the public in a more user-friendly manner. The impetus for the change was the passage of the IRS reform bill, signed by President Bill Clinton, which shifted the burden of proof in tax disputes from the taxpayer to the IRS and outlined 28 new taxpayer rights including the right of taxpayers to sue the IRS for negligence (Brazaitis, 1997). Journalists speculated that Clinton was influenced by an opinion poll that showed 81% of Americans believed that the IRS had “too much power” (Brazaitis, 1997, p. 16A) and 69% believed that the IRS “frequently abuses its power” (Haga, 1998, p. 1B).

One of the first moves made by the IRS to change its image was to sponsor “problem-solving days” in 33 cities across the United States (Lakamp, 1997). Wearing buttons that read “We Work for You,” IRS employees helped taxpayers to sort out problems with tax returns from the current year and from years past. Understanding the image the IRS had with most taxpayers, one IRS worker noted, “We want people not to be afraid of us” (Brelis, 1997, p. B1). Another said, “I don’t think we can ever get people to love us. Hopefully we can get them to respect us.… You’re going to see a kinder and gentler IRS” (Wiseman et al., 1997, p. 3A).

Reaction from taxpayers was generally positive. Although not everybody had their problems solved, most admitted that they felt better after their encounters with the IRS. Some even expressed surprise at how “nice” the IRS folks could be. “It was wonderful,” one said, and another noted, “I’ve never seen so many polite IRS people” (Brelis, 1997, p. B1). In one instance, a taxpayer who ended up having to pay more than he thought said he was, nevertheless, happy and noted, “They were fair. They didn’t say pay it all now or you’re dead. That’s why I’m smiling” (Wiseman et al., 1997, p. 3A).

In the months to come, the IRS continued to implement changes, including a media campaign, in attempts to counter its bad-guy image. Although some of the reforms may have been window dressing, most observers believed that the IRS was really changing and believed its image management slogans, which emphasized “service, integrity, and fairness” as its missions (Crenshaw, 2001, p. H2). In fact, the campaign worked so well that by 2001 the IRS reported that it had a new problem—catching all the new tax cheats that were attempting to prey on the new, historically low audit rates. It seems that the new perception taxpayers had of the IRS was not only that of a nicer organization but also that of a more vulnerable one. In the end, the lesson for organizations may be that, when it comes to perception management, nothing is simple or straightforward.

EXTANT RESEARCH ON ORGANIZATIONAL PERCEPTION MANAGEMENT

The phenomenon of organizational perception management is hardly new. The efforts of organizational spokespersons to protect and manage positive images, identities, or reputations of their organizations can be found in historical accounts of the Roman Catholic Church and of the universities of ancient Greece. The same perception management problems that plagued these early organizations (e.g., threats of illegitimacy due to changes in social norms, face-saving following scandals or accidents) continue to plague organizations today. During the past 25 years, as the study of social science has evolved, these types of issues have been studied by organizational scholars in attempts to understand how perception management tactics affect the views and support of organizations by critical audiences (i.e., those audiences on which the organization depends for support). This volume provides an overview of this research and presents a framework that defines the primary components of organizational perception management as well as the effective use of organizational perception management in several common contexts. In this chapter, I provide an overview of the study of organizational perception management and an outline of the chapters to follow.

DOMINANT THEMES IN CURRENT RESEARCH

Over the last two decades, research on organizational perception management has focused on three dominant themes: timing, goals, and tactics. An examination of progress in these three areas suggests that effective organizational perception management is contextually defined and may be best understood through examinations of perception management case studies in situ.

First, for example, organizational perception management includes an exploration of timing in dealing with organizational images, identities, and reputations. Typically coming to mind when we think of organizational perception management are news releases and media campaigns immediately following crises like the Exxon Valdez oil spill or the Union Carbide poisoning in Bhopal, India. Yet in recent years organizational researchers have begun to explore long-term perception management issues as well as perception management before and during focal events. Research on the symbolic use of annual reports (Bettman & Weitz, 1983; Staw, McKechnie, & Puffer, 1983), for example, demonstrates how organizations routinely manage perceptions of managerial competence and organizational legitimacy through strategic attributions of corporate successes or failures, despite the absence of any crisis event or emergency. Such attributions may be effective, in part, because of the seemingly official nature of annual reports. In other research, recent studies of anticipatory perception management (Elsbach, Sutton, & Principe, 1998) describe how organizations may pre-empt threats to organizational images by portraying the organizations in ways that motivate audiences to accept organizational actions without question prior to an expected controversy (e.g., an anticipated plant closing or voluntary recall of a defective product). In these cases, the prior track record of legitimate behavior by the organization is often critical to audiences’ acceptance of pre-emptive perception management.

Second, organizational researchers have begun to focus broadly on a number of different goals of perception management. In the Exxon and Union Carbide examples, the primary goal appears to be to repair temporarily damaged organizational images (e.g., images of legitimacy or competency). More recently, however, organizational researchers have focused on the management of more enduring organizational reputations (e.g., reputations for social responsibility) and identities (e.g., identities centered on style and design vs. efficiency and economy). For instance, research on business school members’ responses to the Business Week rankings (Elsbach & Kramer, 1996) shows the importance of central and distinctive organizational identity traits to members (e.g., being defined as a “research institute”). In other cases (Elsbach, 2001a), researchers have shown the value of general organizational reputations, such as organizational trustworthiness (e.g., consumer loyalty to a trusted automotive repair center that is part of a large department store chain), and the damage that can result from reputational threats (e.g., consumer distrust of the entire department store chain). The distinctive dimensions of organizational images, identities, and reputations suggests that managing these diverse perceptions requires equally distinctive goals.

Third, organizational research during the past several decades has focused on the tactics organizational spokespersons use to influence audiences’ perceptions of organizations. In recent years this research has looked beyond the use of official public relations communications, such as press releases and advertising campaigns, to a broader range of tactics for managing images, reputations, and identities. For example, research on the display of physical markers, such as the design of corporate buildings and public reception areas (Ornstein, 1986, 1992), reveals how these physical artifacts are often central means of communicating the organizations’ enduring reputations. In other cases, specific types of organizational actions (e.g., contributions to charity or accounting reports) have been shown to be useful in managing the reputation of a firm for social responsibility and financial soundness (Fombrun & Shanley, 1990). Finally, statements by CEOs and other leaders in response to public criticisms of organizations are now seen as a part of a longer term, negotiated perception management process that involves a dialogue between the press, institutional critics, the general public, and the organization (Sutton & Kramer, 1990). This form of perception management involves negotiation tactics as well as influence tactics to convince audiences to back the version of the story given by the organization.

Together, these three themes in organizational perception management research suggest that the task of managing perceptions of organizations is larger than merely responding to the rare organizational crisis. It involves managing day-to-day communications and organizational displays as well as preparing for future controversies or the return of old ones. Further, this research suggests that understanding the subtleties of organizational perception management requires a examination of perception management in context. The social and institutional environments in which organizations operate play critical roles in the processes and outcomes of organizational perception management actions.

OUTLINE OF THE BOOK

In this volume, my goals are to bring together these more recent and broad conceptions of timing, goals, and tactics of organizational perception management in an integrating framework, to illustrate that framework in the context of recent, real-world perception management events, and to use the framework as a starting point for extending our understanding of organizational perception management. To these ends, I divide the book into three parts: defining organizational perception management, illustrating organizational perception management in context, and exploring emerging issues in organizational perception management.

In Chapter 2, I define the construct of organizational perception management. This chapter serves to develop organizational perception management as an umbrella term that encompasses organizational image management, reputation management, and identity management. In defining organizational perception management, I focus on four dimensions of the construct: the specific perceptions of organizations that are managed, the symbolic actions that are used to manage perceptions, the spokespersons who carry out most of these symbolic acts, and the audiences that are the targets of organizational perception management. Further, I differentiate organizational perception management from individual-level perception management by explicating the strategic nature of organization-level perception management. I illustrate the construct of organizational perception management with a case study of the National Rifle Association.

In the next five chapters of the book, I illustrate the practice of organizational perception management in context. Chapter 3 provides an overview of these contexts based on two factors: when perception management takes place and why it is needed. Using these two factors, I describe six different contexts in which organizational perception management may occur. These include before, during, and after organizational controversies and before, during, and after organizational acclaim events (i.e., events that reflect positively on the organization). In Chapters 4 through 7, I examine these six contexts in detail and describe and illustrate effective organizational perception management for each.

In Chapter 4, I describe perception management following organizational crisis events. I describe common organizational crisis events, such as accidents, scandals, and product failures, as well as the effective use of verbal accounts and categorizations in responding to these crises. In addition, I outline three pitfalls of using perception management following organizational crisis, including threat rigidity, self-deception, and protesting too much. I illustrate these pitfalls through a case study of Sears Auto Centers and its response to the 1992 investigation of its Auto Centers

In Chapter 5, I describe organizational perception management during evolving controversies. These types of controversies are characterized by drawn-out change events or negotiations in which one or more organizational audiences disagrees with the direction of change. This chapter also includes descriptions of some of the effective perception management tactics that have been used in these contexts, including verbal accounts that demonstrate consideration and rationality and organizational categorizations that signal status and distinctiveness. I also present pitfalls of organizational perception during evolving controversies such as escalation behaviors and inconsistent behaviors. I conclude the chapter with an illustration of ineffective perception management by the Augusta National Golf Club and its evolving controversy over admitting women as members.

In Chapter 6, I describe how organizations may manage identities and reputations prior to anticipated controversies. Such anticipated controversies include upcoming performance reviews and the planned introduction of new identity statements or new core businesses. In response to these anticipated controversies, I describe how organizations may effectively protect their identities and reputations through anticipatory accounts and strategic renaming. I also describe some pitfalls of these tactics, such as defensive overcompensation and overweighting of low probability events. I illustrate the effective use of anticipatory perception management through the case of the automaker Porsche and its introduction of its sport utility vehicle, the Cayenne.

In Chapter 7, I focus on organizational perception management following acclaim events, such as being positively recognized by an industry analyst or evaluator or achieving a sought-after organizational goal. Following such positive events, I describe how organizations may make the most of their good fortune through perception management tactics such as exclusive self-categorizations, entitlings (i.e., claims of responsibility for the positive event), and the display of prominent physical markers. I also draw attention to some potential pitfalls of perception management following organizational acclaim events, including producing unrealistically high expectations of future performance and engaging in self-aggrandizement by organizational leaders. I illustrate the effective use of organizational perception management following an acclaim event with a case study of the pharmaceutical company Pfizer Inc. and its introduction of the impotence drug Viagra.

Finally, in the last section of the book, I explore some emerging issues in organizational perception management that may benefit from the application of the current framework of organizational perception management. Thus, in chapter 8, I focus on the increasingly discussed topic of corporate ethics by describing two emerging contexts in which organizational perception management is relevant: leadership behavior following organizational scandals and organizational identity issues concurrent with the launch of a non-normative social responsibility campaign. In discussing the issue of leadership following scandals, I use the recent case of the Catholic Church sex abuse scandal to illustrate some of the traps organizations can fall into if they attempt to project strong leadership images following scandals. I follow this case study with a discussion of some more effective uses of perception management for leaders who find themselves embroiled in organizational scandals. Next, in discussing the issue of social responsibility campaigns, I use the case of British Petroleum and its groundbreaking efforts to reduce greenhouse gas emissions during energy production to illustrate how organizations need to be mindful of their historic identities when undertaking a non-normative but ideological campaign. I describe how British Petroleum successfully managed its identity by using the strategy of optimal distinctiveness (Brewer, 1991) in its categorization tactics.

Overall, this volume presents the first comprehensive examination of perception management issues, tactics, and effects at the organizational level of analysis. Further, it incorporates scholarly research with real-world business cases to illustrate both the effective and the ineffective application of perception management in a variety of specific contexts. As such, the book is intended to promote the area of organizational perception management as a field of study in its own right, worthy of much future research.

I

Defining Organizational Perception Management

2

Defining Organizational Perception Management

In the waning months of 1996 the National Rifle Association (NRA) found itself at a low-point in terms of public perceptions and support. Over the previous 2 years, the nonprofit organization—incorporated in 1871 to provide firearms training and promote shooting sports—had been forced to end its high-profile assignment as the governing body for the Olympic sport of shooting (Longman, 1994), had lost almost 1 million dues-paying members (Broder, 1996), and had run up a debt of more than $40 million in its attempts to promote pro-gun legislation (Zremski, 1996). These events reflected growing criticism of the organization by mainstream gun owners.

Beginning in the early 1980s, the NRA began to shift its focus, almost completely, from its traditions of supporting sportsmen and hunters to supporting political battles over gun control (Zremski, 1996). The organization’s extreme political stance on gun control was embodied by NRA president, Wayne LaPierre. In late 1996, LaPierre claimed that the government agents who stormed the Waco, Texas compound of the Branch Davidian cult (whose members were protecting themselves with an arsenal of personally owned firearms) were no more than “jack-booted thugs” (Zremski, 1996, p. 1A). This remark led former president George H. W. Bush to tear up his NRA membership card publicly and eventually led LaPierre to step down from his position in the organization.

In light of these events, the activist group Handgun Control Inc., through its legislative director, suggested, in late 1996, that the NRA was in “very severe difficulty,” adding that “its pol...

Table of contents

• Cover Page
• Half Title page
• Series page
• Title Page
• Copyright Page
• Dedication
• Contents
• Series Foreword
• About the Author
• Preface
• 1 Overview
• I Defining Organizational Perception Management
• II Organizational Perception Management in Context
• III Emerging Issues in Organizational Perception Management
• References
• Author Index
• Subject Index