Corporate scandals as denial of reputation

Abstract

Scandals can cause serious damage to the reputations of corporations, as the recent example of the Volkswagen case has once again demonstrated. The media play an important role in the emergence and dissemination of corporate scandals. They are the source from which people typically learn about the wrongdoings of corporations, and they constitute the arena wherein people evaluate, criticise and discuss the behaviour of corporations. Corporate scandals and the media are hence in a symbiotic relationship. Without the publicity fostered by the media, there is no scandal, since the wrongdoings of a corporation can only be referred to as a scandal when they become known. Yet, scandals also influence the headlines and the value of news for the media, and they are thus assets for publishers seeking to sell their newspapers. Furthermore, scandals represent the events by which the watchdog function of the media becomes evident. The role of the media in corporate scandals has therefore attracted significant research interest in various disciplines. The literature mostly includes research on firms and their management, although more recently there has also been a focus on other types of corporations, such as higher education institutions or sport organisations.