Hackgate, Leveson and News Corp: Spinning out of control?
Hackgate, Leveson & News Corp Spinning out of control? MAC301
Overview• Media culture• Corporate communications• Misleading the public• Enron• #hackgate
Media-based society• ‘Those who controlled the language controlled society and could bring humankind to slavery or to freedom… Those who controlled the press controlled the ideology and the social order.’ – Altschull, 1995: 206
Media-based society• The mass-media is seen by pluralists as for the most part representing the diverse range of views in society, and fairly autonomous from the state, with individual operatives and journalists enjoying a fair degree of freedom. The relationship between the government, the media and public opinion is seen as essential to the operation of any fair democracy – Saeed and Laverty, 2006
The Rise of Corporate Communication• The twentieth century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power and the growth of corporate propaganda as a means of protecting corporate power against democracy – Alex Carey, Taking the Risk of out of Democracy in New Internationalist July 1999: 18/19
News Corp ownership?• “Rupert Murdoch argued strongly for a war with Iraq in an interview this week. Which might explain why his 175 editors around the world are backing it too...” – Roy Greenslade (2003, Guardian.co.uk)
Industry definition• Henslowe argues that PR is concerned with „ the different ways of establishing and maintaining a sound two-way communication ‟ between its clients and everything outside of the organisation. This includes stakeholders, the public and perhaps more importantly, the media. – (Henslowe, 2003:3)
Industry definition• Cottle writes that the industry is „ the deliberate management of public image and information in pursuit of organisational interests’ – (Cottle, 2003:3)
Agenda Setting: PR• Wilcox (2003) refers to this as the ‘technician’s mentality’, which means that PR practitioners are solely concerned about how the message is communicated, and not about the content of the messages. This argument can be supported by a survey published in the PR Week in May 2000. The findings showed that 25 % of PR executives admitted lying, 39 % said they exaggerated the truth, 44% was unsure about the ethics of tasks they would be asked to perform and 62% believed they compromised in their work – http://www.prwatch.org/prwissues/2000Q2/liars.html
Truthfulness• “We would argue that telling partial truths is inherent to PR practice”• “But … such is the transparency of internet- mediated discourse … the pragmatic response has to be openness” – Philips and Young (2009:227)
PR Tactics: Crisis Management• Prof. William Benoit suggests the following: A. Denial B. Evade Responsibility C. Reduce offensiveness D. Transcendence E. Offer apology• In Dennis Wilcox, 2006, Public Relations: Strategies and Tactics
Why does this matter?• Corporate entities mislead the public (the market) all the time – eg keeping new product development secret has been part of Apple’s strategy for a decade• They use strategic communications to do so – Eg high profile public announcements• The vast majority of the time they are not breaking any laws• Occasionally, however, a line is crossed…
Enron• US energy company rose to prominence in 1990s• Stock value rose far above normal market rates• By 2001 Enron stock was valued at $83 with a market capitalization of > $60 billion• Rated the most innovative large company in America in Fortune
Enron• Enrons nontransparent financial statements did not clearly depict its operations and finances• Enrons auditor, Arthur Andersen, was accused of applying reckless standards in its audits owing to a conflict of interest over the significant consulting fees generated by Enron
Enron• Biggest corporate collapse ever at the time (Oct 2001)• Exploited accounting loopholes• Hid billions of debt in failed deals• Arthur Anderson found guilty of destroying documents
Toxic brand• Arthur Anderson split into 2: – Accountancy – Consultancy• Rebranded consultancy firm as Accenture – largest in the world
From Enron to News Corp• When the watchdog role of the press is compromised by accusations of illegal practices, how should the company in question respond?
And on it goes…• BBC Radio 4 The Media Show (14/3/2012)• James Murdochs written to the Commons committee investigating phone hacking at the News of the World, reasserting that he has not misled Parliament while sharing responsibility for not uncovering wrongdoing earlier…
And on it goes…• BBC Radio 4 The Media Show (14/3/2012)• Why has he written this now, without being asked and what hangs on the committees delayed report?• Dan Sabbagh – “This is a man fighting for his professional reputation”
Questions?1. How open or truthful have News Corp been in relation to the phone hacking scandal?2. To what extent did News Corp fail to take appropriate action? How and when should it have done so?3. How can News Corp recover from this crisis? What strategies should they employ in the short term and the long term?4. Was the closure of the News of the World a cynical decision based on reputation/brand management?5. Have News Corp managed to regain control of the situation?