The Nut-Rage Case: A Legitimacy Challenge Against Korean Air Master’s Thesis Seho Rim (289193) Aalto University School of Business MSc program in Corporate Communication 2018 i Author Seho Rim Title of thesis The Nut-Rage Case: Legitimacy Challenge to Korean Air Degree Master of Science in Economics and Business Administration Degree programme Corporate Communication Thesis advisor(s) Kirsi Eräranta Year of approval 2018 Number of pages 93 Language English Abstract The importance of legitimacy, in both academic and business contexts, has been growing gradually, as stakeholders focus less on just the goods and services they purchase; legitimacy becomes standalone selling factor to many individuals, which numerous organizations including multi- national corporation cannot ignore. This thesis paper aims to comprehend the complex process of legitimacy defense involving multi- stakeholders, with contributions to the existing organization studies on legitimacy by researching how the media challenges and delegitimizes defensive corporate accounts deployed to control public sentiment. The primary objective of this thesis paper is to identify the delegitimization strategies employed by the Korean media to challenge Korean Air’s countermeasures after the nut-rage incident that occurred on 5th December 2014. Based on previous research conducted, notably that of van Leeuwen and Wodak (1999) and Vaara et al. (2006), categorization and analysis of Korean media articles, and corporate defensive accounts was conducted. Then critical discourse analysis (CDA) was adopted a key analysis tool, for developing an understanding of the delegitimization process. Using these two strategies, the strategic media texts and the subsequent corporate defensive accounts were categorized into four sensemaking strategies: authorization, rationalization, moral evaluation and normalization (mythopoesis was exempted). An insight into the process of delegitimization is shown by the findings of this paper, indicating that normative legitimacy challenges were most prevalent, with a small proportion of pragmatic challenges however no cognitive legitimacy challenges were identified. The causes behind the distribution of these legitimacy challenges is then discussed in-depth. Why Korean Air’s countermeasures yielded outcomes which were far beyond what would have originally been expected is also discussed. Although the contextual background of this paper is rather unique, it is still able to provide practical outcomes for future research and organizational process. It sheds light on the unique forms of multinational corporations (MNCs) within Korea: Chaebol, and how their existence affects corporate culture and associated legitimacy challenges. The importance of the media is also highlighted, as their contribution in conducting legitimacy challenges is significant. Keywords : (Organizational) Delegitimization, Chaebol, Korea, media, communication, critical discourse analysis (CDA), corporate culture ii Table of Contents 1 Introduction .................................................................................................................... 1 1.1 Research goals and objectives ............................................................................... 4 1.2 Structure of the thesis ............................................................................................ 4 2 Theoretical framework ................................................................................................... 6 2.1 (Organizational) Legitimacy .................................................................................. 6 2.2 Types of legitimacy ............................................................................................... 8 2.2.1 Normative (moral) legitimacy: ..................................................................... 9 2.2.2 Pragmatic legitimacy: ................................................................................ 10 2.2.3 Cognitive legitimacy: ................................................................................ 12 2.3 “Chaebol” (The Korean Conglomerate) and corporate culture change in Korea: .. 12 3 Data and Method .......................................................................................................... 15 3.1 Summary of the nut-rage case ............................................................................. 15 3.1.1 The incident per se .................................................................................... 15 3.1.2 Korean Air’s official actions after the incident ........................................... 16 3.1.3 Korean Air’s ulterior actions after the incident ........................................... 17 3.2 Data and procedures ............................................................................................ 18 3.2.1 Korean Air and the owner family’s official statements ............................... 18 3.2.2 Korean media’s commentary of the case (to be done after review) ............. 19 3.2.3 Method: legitimation – Critical Discursive Analysis (CDA) ....................... 20 4 Findings ....................................................................................................................... 23 4.1 Delegitimization constructed through authorization ............................................. 23 4.1.1 Normative legitimacy – personal legitimacy .............................................. 24 4.1.2 Normative legitimacy – procedural legitimacy ........................................... 28 4.2 Delegitimization through rationalization.............................................................. 30 4.2.1 Normative legitimacy – consequential legitimacy ...................................... 31 4.2.2 Normative legitimacy –procedural legitimacy ............................................ 34 4.3 Legitimation through moral evaluation ................................................................ 37 4.3.1 Pragmatic exchange legitimacy and normative personal legitimacy ........... 38 4.3.2 Pragmatic exchange legitimacy .................................................................. 42 4.3.3 Normative personal legitimacy .................................................................. 45 iii 4.4 Legitimation through normalization .................................................................... 48 4.4.1 Normative consequential legitimacy .......................................................... 48 4.5 Legitimation through mythopoesis ...................................................................... 52 5 Discussion .................................................................................................................... 53 5.1 Prevalence of normative media texts and thus normative legitimacy challenges .. 53 5.1.1 Chaebol corporate culture and ‘Gapjil’ ...................................................... 53 5.1.2 The principle factor preventing legitimacy: the owner family .................... 54 5.2 Less occurring delegitimization strategy and tools ............................................... 55 5.2.1 Relatively smaller portion of pragmatic legitimacy challenge .................... 55 5.2.2 Lack of cognitive legitimacy and mythopoesis ........................................... 55 5.3 Discrepancy between Korean Air’s expectations and actual results ...................... 56 5.3.1 Different perspective on degree of seriousness ........................................... 57 5.3.2 Lack of concern toward victims’ pragmatic rights ...................................... 57 6 Conclusion ................................................................................................................... 59 6.1 Research summary .............................................................................................. 59 6.2 Practical implications .......................................................................................... 62 6.3 Limitations of the study ....................................................................................... 63 6.4 Suggestions for future research............................................................................ 64 7 References: .................................................................................................................. 66 Appendix ............................................................................................................................ 75 Appendix 1: Korean Air’s ‘statement of stance’ released to the media (2014 December 8th; translation added in the bracket right to the original statement) .............................. 75 Appendix 2 Public apology and question-and-answer from Cho Yang-ho, the chairman of Korean Air and Hanjin group at press conference. ................................................... 77 Appendix 3: Korean Air’s apology advertisement in the major news (2014 December 16th; translation below the photo) ................................................................................. 79 Appendix 4: Kolon Industry Inc’s public apology distributed to Korean media ............ 81 Appendix 5: Partial collection of relevant Korean Aviation Safety and Security Act associated with this case, which particularly works against Cho Hyun-ah’s legitimacy defense. ....................................................................................................................... 83 Appendix 6: Partial Collection of relevant Korean Aviation Act ................................... 87 Appendix 7: Partial collection of relevant