Corporate Disclosures Reaction to an Incident - the case of BP

Abstract

Communicating with stakeholders is an important task for corporations to receive the stakeholders’ support. This importance is evidenced through the emergence of different types of disclosures, for instance, the recent adoption of corporate social responsibility report. In addition, an unstable business environment and sensitive industry furthers companies’ attention on disseminating information to stakeholders, especially in the case of accident or crisis. Therefore, the purpose of this thesis is to investigate the reaction of a company’s disclosures when it faces an unforeseen event. This research was conducted by using the case of British Petroleum with the oil spill in the Gulf of Mexico. To examine how BP’s disclosure practices reacted upon the incident, both qualitative and quantitative content analysis approaches were employed. The investigation areas were the extent of BP’s disclosures and strategies used in its disclosures. Results show that BP’s disclosures reacted in the way to legitimate its operation. BP intensively employed disclosures, which significantly increased after the oil spill, to communicate with stakeholders and. Also, BP used different disclosure strategies in different sources to target specific stakeholder groups. To gain its legitimacy purposes, BP used Association strategy to maintain and Compliance to repair and regain operational license.