Business and the Media

·                     News media is a source of information for those in the nonmarket environment of business
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    • Plays role in setting a firm’s nonmarket agenda
    • Alerts players outside the firm to the firm’s issues and activities
    • Can be used as part of a nonmarket strategy, though ideally media stays neutral
·                     Managers must assess the issues news media is likely to cover
    • Coverage and treatment of issues governed by intrinsic audience interest (AI) and societal significance (SS)
    • Extensive coverage likely on topics that are both high in audience interest and societal significance*
    • Sample topics:
      • High AI/High SS: Health Risks, Individual Rights*
      • Low AI/Low SS: Most Business Issues
      • High AI/Low SS: Weather, Sports
      • Low AI/High SS: Poverty, Politics
·                     On many issues, business is the best and lowest cost source of information for the media
    • Opportunity for managers to cultivate relationships with journalists who cover business on a regular basis
    • Managers should be aware of nonmarket issues and be prepared to address them
·                     Business issues tend to be too complex for television and the general media to cover
    • Given the media’s incentive to report on stories with intrinsic audience interest, complex issues are sometimes oversimplified and over dramatized
·                     Media is guided by professional standards, but a tension exists between those standards and corporate and individual incentives
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    • Companies motivated by profit considerations
      • Subscription and advertising revenues depend on audience size
    • Journalists motivated by professional recognition
      • Need to be published/air in order to receive recognition; pressure to present newsworthy stories
·                     Discipline for the news media comes in three forms:
    • Professional standards
    • Self-imposed controls established by media organizations
    • Lawsuits
      • Defamation suits: difficult and costly to win
      • New York Times vs. Sullivan: media well protected in cases of lawsuits involving public figures; public figure must prove intention of malice
·                     News media is a principal source of information in a democracy
    • Principal role is to transmit information, not draw conclusions/advocate a position