An Examination of the Use of Strategic Ambiguity Within the Banking Industry Stephanie Tarbet Clemson University, [email protected]
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Clemson University TigerPrints All Theses Theses 5-2010 Communicating During an Economic Crisis: An Examination of the Use of Strategic Ambiguity Within the Banking Industry Stephanie Tarbet Clemson University, [email protected] Follow this and additional works at: https://tigerprints.clemson.edu/all_theses Part of the Communication Commons Recommended Citation Tarbet, Stephanie, "Communicating During an Economic Crisis: An Examination of the Use of Strategic Ambiguity Within the Banking Industry" (2010). All Theses. 784. https://tigerprints.clemson.edu/all_theses/784 This Thesis is brought to you for free and open access by the Theses at TigerPrints. It has been accepted for inclusion in All Theses by an authorized administrator of TigerPrints. For more information, please contact [email protected]. COMMUNICATING DURING AN ECONOMIC CRISIS: AN EXAMINATION OF THE USE OF STRATEGIC AMBIGUITY WITHIN THE BANKING INDUSTRY A Thesis Presented to the Graduate School of Clemson University In Partial Fulfillment of the Requirements for the Degree Master of Arts Professional Communication by Stephanie Williams Tarbet May 2010 Accepted by: Dr. Sean Williams, Committee Chair Dr. Summer Taylor Dr. Jan Holmevik ABSTRACT The current economic crisis has adversely affected companies and organizations throughout our nation and around the globe. One of the industries hit hardest by the unprecedented downturn was the banking industry. During these critical times, these companies have a responsibility to communicate information to stakeholders about the economy’s impact on financial results, operations, and future plans. The following research study describes how four major companies within the banking industry communicated with external stakeholder groups about the economic crisis. Specifically, I analyzed how these companies communicated with external stakeholder groups and whether their communications revealed instances of strategic ambiguity. Using Kathy Charmaz’ (2006) grounded theory model to expand upon Eric M. Eisenberg’s (1984) theoretical definition of strategic ambiguity, I examined how four large, national banks communicated externally about the financial crisis and how the sample of communications revealed instances of strategic ambiguity. ii DEDICATION The following thesis is dedicated to all of the important people who have helped me arrive at this point in my life. First of all, I would like to thank my amazing husband who has done everything imaginable to make this journey possible for me. I am forever grateful for your support and encouragement, and most of all, your endless love that was omnipresent throughout this process. I would also like to thank my parents who have always encouraged me to excel at everything I do in life. Your support has allowed me to reach this important milestone in my life and many others. Both of you set the example for me to follow to pursue higher education and obtain a master’s degree. I also dedicate this thesis to my sister and best friend who always followed in my footsteps growing up. However, now I am following in your footsteps since I am the last member of our immediate family to get a master’s degree. Thank you for showing me what it takes to achieve this level of distinction. Finally, I would like to thank my grandparents who have always provided words of encouragement and frequently tell me how proud they are of the things that I have accomplished. As you read this manuscript, I hope each of you know that this thesis would not have been possible had it not been for all of you. Thank you for your continued love and support; I am forever grateful. iii TABLE OF CONTENTS Page TITLE PAGE .................................................................................................................... i ABSTRACT ..................................................................................................................... ii DEDICATION ................................................................................................................ iii LIST OF TABLES .......................................................................................................... vi LIST OF FIGURES ....................................................................................................... vii CHAPTER I. INTRODUCTION ......................................................................................... 1 II. LITERATURE REVIEW .............................................................................. 4 Definition of Strategic Ambiguity ........................................................... 4 Stakeholder Theory ................................................................................ 11 Ethics of Strategic Ambiguity ................................................................ 12 III. METHODS .................................................................................................. 17 A Grounded Theory Approach .............................................................. 17 Data Collection ...................................................................................... 19 Coding .................................................................................................... 24 Initial Coding Phase ............................................................................... 27 Focused Coding Phase ........................................................................... 30 Strategic Ambiguity Matrix ................................................................... 31 IV. RESULTS .................................................................................................... 37 Initial Coding Results ............................................................................ 37 Focused Coding Results ......................................................................... 49 Strategic Ambiguity Results .................................................................. 57 iv Table of Contents (Continued) V. CONCLUSIONS ......................................................................................... 74 Overall Observations ............................................................................. 74 Similarities ............................................................................................. 76 Differences ............................................................................................. 80 Strategic Ambiguity Findings ................................................................ 83 VI. LIMITATIONS AND SUGGESTIONS FOR FUTURE RESEARCH....... 88 APPENDICES ............................................................................................................... 91 A: Initial Coding Data from Bank of America ................................................. 92 B: Initial Coding Categories ........................................................................... 162 C: Strategic Ambiguity Matrix ....................................................................... 164 D: Citi Group, Inc.’s Focused Coding Results ............................................... 165 E: Wachovia’s Focused Coding Results......................................................... 168 F: Wells Fargo’s Focused Coding Results ..................................................... 171 G: Completed Strategic Ambiguity Matrix..................................................... 174 H: Initial and Focused Coding Frequency ...................................................... 175 REFERENCES ............................................................................................................ 178 v LIST OF FIGURES Figure Page 1.1 Citi Group, Inc.’s Focused Coding Results ................................................. 51 vi CHAPTER ONE INTRODUCTION The economic crisis of 2008-2009 has adversely affected companies and organizations throughout our nation and around the globe. One of the industries hit hardest by the unprecedented downturn was the banking industry. This economic turmoil has forced companies within this sector to reassess and redefine organizational goals, values, and expectations. During these critical times, companies have a responsibility to communicate information to stakeholders about the economy’s impact on financial results, operations, and future plans. The following research study describes how four major companies within the banking industry communicated with external stakeholder groups about the economy’s impact on their day-to-day business and financial results. Specifically, I analyzed how these companies communicated with external stakeholder groups and whether their communications revealed instances of strategic ambiguity. In a time when clarity, transparency, and honesty are extremely important, it is necessary to examine in what ways these companies are communicating with their stakeholders. At one time it was believed that clear and open communication was the only way to communicate with stakeholder groups, but more recently, theorists (Barrett, 2005; Ceccarelli, 1998; Eisenberg, 1984; Kline et al., 2009; Moon & Hyun, 2009; Paul & Strbiak, 1997) have demonstrated that ambiguous communication may be beneficial in crisis situations. Today, more companies and organizations are using equivocal messages and strategic ambiguity to deliver information to audiences. Therefore, it is essential to characterize what strategic ambiguity looks like in practice within companies today. A description of how strategic ambiguity is used to communicate with stakeholder groups during an economic crisis