1. Introduction
1.4 Public anxieties against new technologies
There are many recorded cases of public anxiety when new technologies are launched. For example, there were concerns over risks of radiation leakage into the kitchen when the microwave oven was introduced in the USA (Hoban (2002)). The nuclear accident at Three Mile Island (TMI) in April 1979 saw a dramatic decrease in the percentage of people who had been in favor of or uncertain about continued construction of reactors, while the number opposed increased (Rankin W.L. et al., 1981). More such examples are given in Chapter 2 of this thesis.
This uncertainty and fear of new technologies offer an opportunity for the media to present the stories on such topics in the way they believe is most attractive for their readers, and which can be against the concerned firm and the technology. For example, Slovic (1987) argues that people’s deep anxieties about nuclear weapons are linked to the reality of extensive unfavorable media coverage. Thus, the reporting of news by the media when a new and uncertain technology is launched offers a good platform to study the dynamics of media bias.
14 1.5 Theoretical contribution of this research
As indicated earlier, this dissertation aims to build on a large literature in social sciences which has identified systematic biases in the reporting of news (Baker, 1994; Petrova, 2008;
Sutter, 2002).
The focus of this thesis is on identifying the possible reasons for media bias against firms/technologies in the business environment. Two specific reasons are explored and thus answers are sought to these two questions. If institutions are the ‘rules of the game’ and determine the direction of economic and social activities in a society (North 1990, 1992), can institutions, which shape the norms and beliefs of consumers, influence media firms to adapt their offerings to these belief systems through media bias? Secondly, can media bias come from the media firms themselves, as part of a strategy to differentiate their news stories and in order to remain competitive in the marketplace?
The direction of this research is thus two-fold: 1) analyse the theoretical reasons behind the above two questions; and 2) to test the two reasons empirically in order to understand if the above scenarios may exist as part of the nonmarket environment of media firms.
Institutional economics, till recently, has been used essentially to explain the micro-phenomena of an organization. Lammers and Barbour (2006) say that organizational communication researchers should pay more attention to the institutional context of organizations. Both formal and informal institutions (legislative, administrative and regulatory agencies, private regulation, judicial, international, nongovernmental as defined by Baron (2006)) may thus play a role in shaping the news content of the media. An attempt to enhance this aspect of management science is an important contribution of this research.
15 The other key theoretical contribution of the research relates to improving the understanding of the strategic options of a firm with respect to the choice between flexibility and commitment of supply-side resources. Firms have a choice in making commitments of these resources, but will then have to face certain limitations regarding the possible loss of credibility as explained in Chapter 4 of this thesis. Using the data on GM foods coverage by European newspapers, this research identifies the strategic options available to different types of newspapers.
1.6 Empirical field: GM foods in Europe
In order to explore the two research questions above, data on the media coverage of GM foods in Europe is used in this research. While there have been many new technology launches in the recent past which have been seen by the consumer as ‘sensitive’ and
‘potentially dangerous’, the case of GM foods is quite special from consumer acceptance point of view. While this new type of foods has been relatively accepted by some societies, there has been a varied level of rejection of these foods by many other societies, and this variation is rather unique in the acceptance/rejection of new technologies by consumers.
In the case of Monsanto and its genetically-modified Roundup Ready soybean seeds, the FDA endorsement helped in the United States, but an organization with similar public trust did not exist in Europe (Diermeier (2011)) and the media was probably also active in increasing this risk perception in Europe. According to Hoban (2002), most of what consumers learn about any innovation comes through the filter of the mass media, which have a tendency to feature sensational news stories. The possible media bias against the launch of this new technology in Europe is explored in the current research, and it is used as the empirical base for analysis and interpretation of media bias in management research.
16 A content analysis was carried out covering 3991 articles on GM foods which appeared across 46 European (38) and non-European (8) newspapers in 17 different countries over a 6-year period (Jan 2005 - Dec 2010). As this research also examines the role of institutions in this bias, a multi-country sample was required. According to Vogel (2012), a majority of consumers in the USA do not perceive GM foods to be risky. Further, the American press has not covered the topic of GM foods extensively with the exception of a few "spikes" in coverage revolving around specific events (McInerney et al., 2004, Hebden et al., 2005).
Since the focus was on examining the negative bias of the media against GM foods, it was decided not to include the USA as one of the countries to be studied. This decision to leave out the USA from the analysis may be challenged since the USA is an important processed food producer. But it is important to note that the limited and overall positive/neutral press coverage and the general acceptance of GM foods during the period of this research were the reasons for excluding the USA.
1.7 Measurement of media bias
One of the main challenges, but also one of its contributions, of the work done in this dissertation is the clear identification and empirical measurement of media bias. So, how is this media bias measured in this study?
If the reader, at the end of reading a headline and/or the article in a particular newspaper, is left with a negative feeling about the subject matter, we call the headline and/or article 'negatively biased'. A similar definition is used for a 'positively biased' headline/article.
On the other hand, if the reader after reading the headline and/or the article is just left with the 'facts and figures' with no specific negative or positive feeling towards the subject matter, we call the article 'neutral' or 'unbiased'. This sentiment is based on ‘themes’ generated towards the beginning of the evaluation process as shown in Table 2.4 of Chapter 2, which guide the reader/evaluator in this research to decide on the positive, negative or neutral orientation of the headline and/or article in question.
17 The final decision on a headline and/or an article is ‘positively biased’, negatively biased’ or
‘neutral’ is an iterative and complex mental process, and is left to the reader/evaluator although the themes do play a large role in the identification of this bias. Studies using similar methodologies are discussed and analysed in Chapter 2. This sentiment or feeling of the reader is used in this research as the proxy or the measurement tool of the bias implanted by the media.
The above overall framework of media bias in the business environment is used throughout this thesis, and without taking away the importance of other forces that influence media bias, this thesis focusses on two specific actors – the media firms and the institutions.
In principle, the sentiment that a reader may be left with after reading an article may differ from the bias of an article. For example, an article written about the modification in patterns of blood flow in the brain as a result of cell phone use would not necessarily be a biased story (not an unfair representation of the facts) since this is based on serious research.
However, since the overall scientific consensus on GMO research appears to be largely favourable, we assume that sentiment and bias are highly correlated in the special case of GMOs.23
1.8 Structure of the thesis
This thesis is composed of three main chapters. Each chapter can be seen as exploring one specific aspect of the relationships between firms and media bias. Chapter 2 is an examination of the literature to focus on the importance of media bias for business strategy, and provides the descriptive statistics of a content analysis of European newspaper articles on GM foods.
This analysis will be the first building block of our empirical identification of media bias. In effect, if the content analysis allows a clear identification of positive or negative spins in the news regarding GM foods, showing that there is a systematic bias in the articles is a more challenging task. In order to meet this challenge, we design a method that will be at the origin
2
http://www.forbes.com/sites/jonentine/2013/08/29/are-gmos-safe-global-independent-science-organizations-weigh-in/
3 http://www.psmag.com/navigation/health-and-behavior/scientific-debate-gm-foods-theyre-safe-66711/
18 of Chapter 3 and in which we will use the international nature of our sample. Chapter 3 provides an analysis of institutional factors as a possible driver of media bias, and uses this analysis to make a stronger claim about the existence of a media bias regarding the coverage of GM foods. The intuition here is that if the negative spin identified in Chapter 2 was not bias, then this negative spin would be randomly distributed across newspapers and countries. On the other hand, if the negative spin is driven by institutional factors, then it becomes close to what has been identified by previous literature on media biases as a political phenomenon. Chapter 3 indeed shows that institutional factors matter. Chapter 4 builds on this and provides an examination of how negative spin might be driven by newspapers’ characteristics, suggesting that media bias might indeed be related to these newspapers’ business strategy. It is hoped that these analyses will contribute to improving the understanding of media bias by the manager and thus enable the manager to better integrate this nonmarket factor into the overall business strategy of the firm.
1.9 References
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Baron D.P. (2006). Business and its Environment 5th Edition. Pearson Education Inc., Saddle River, New Jersey, USA
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19 Dyck A., Zingales L. (2004). Private benefits of control: an international comparison. Journal of Finance, American Finance Association. Vol.59, No.2, 2004, p 537-600.
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21 2. MEDIA BIAS OUTSIDE OF POLITICS: A STUDY ON THE REPORTING OF
GM FOODS IN EUROPE
ABSTRACT
There are at least two streams of literature that suggest that the media tend to bias negatively against firms and technologies. The first area includes studies on the role of stakeholders and activists, which show that activists seek to garner consensus against firms by using media as a key tool. The second stream involves a variety of studies on media bias which demonstrate that media generally bias against firms and events due to numerous supply and demand side factors as explained by Mullainathan and Shleifer (2005). When the media tend to bias large public debates, such as the acceptance of genetically-modified foods, this can lead to biased public opinions, which in turn will affect the firms involved in those technologies. This research sets out to study whether there has been any such bias in their news about genetically modified foods in Europe, and if so whether the bias has been positive or negative. The real contribution of this paper is the setting-up of a methodology to study media bias based on the identification of negative coverage of new technologies in press articles. Descriptive statistics of a detailed content analysis carried out on 3991 articles on genetically modified foods across 46 newspapers in 17 countries (nearly all being European) are presented to show the existence of negative media bias when new technologies are launched.
22 2.1 Introduction
The objective of this paper is to answer the following question: how has the media bias in Europe against the launch of GM foods evolved over time and is there a difference in media coverage across countries in Europe on this subject? From the limited number of studies which have examined the relationship between firm reputation and media (Wartick (1992), Deephouse (2000), Dyck et al. (2006), Gentzkow and Shapiro (2008), Bonardi and Keim (2005) and Fang and Peress (2009)), it is evident that media can play a strong role in defining and ruining the reputation of a firm. A manager thus has to understand the dynamics of media bias while designing the strategy of the firm. This is also supported by numerous studies in media bias which identify how the media has played a role in communicating corporate news not necessarily in a neutral manner.
This chapter has been structured as follows: I begin by explaining the overall consumer apprehensions about new technologies and place the reactions of European consumers to the launch of GM foods in this context. A literature review on the coverage of media bias on GM foods is presented, which is followed by an examination of media bias studies in the US which has been mainly about political bias by the media. The role of media bias in business strategy is then highlighted, and finally, the methodology and the results of a content analysis on media bias in Europe are presented.
2.2 Background on genetically modified (GM) foods in Europe
Genetically modified organisms (GMOs) are organisms, such as plants and animals, whose genetic characteristics are being modified artificially in order to give them a new property.
Food and feed which contain or consist of such GMOs, or are produced from GMOs, are called genetically modified (GM) food or feed and are currently available across the world.4 The United States remained by far the largest adopter of biotech seeds, with 165 million acres (66.8 million hectares) planted to GMO crops in 2010, up 4 percent from 2009.
Globally, farmers last year planted 433 million acres (175 million hectares) of genetically
4 http://ec.europa.eu/food/food/biotechnology/index_en.htm
23 modified (GMO) corn, soybeans, cotton and other crops. U.S.-based Monsanto and DuPont are world leaders in development of crops genetically altered to help farmers fight weeds, bugs and diseases. According to Clive James, Chairman of the International Service for the Acquisition of Agri-Biotech Applications, Europe largely remains a steady foe of biotech crops, though there are signs some European countries are softening, and "Europe is not lost but is by far the most difficult region to call in terms of future development”.5
Genetically modified foods have been approved for sale in the USA since over two decades and have also been more or less accepted by the general public, although there have been some recent but limited increase in the negative feelings towards this technology. Findings by Zhang et al. (2004) suggest that for the majority of American and Chinese consumers while their overall knowledge of GM food is low, their attitudes toward the technology are generally supportive.
But the situation is different in Europe. While a large and increasing percentage of
But the situation is different in Europe. While a large and increasing percentage of