Elizabeth Dougall Thesis

THE ECOLOGY OF PUBLIC OPINION ENVIRONMENTS AND THE
EVOLUTION OF ORGANISATION-ACTIVIST RELATIONSHIPS: A
COMPARATIVE CASE STUDY OF AUSTRALIAS MAJOR BANKS, 1981-2001
Elizabeth Kathleen Dougall (M.A., Comm.)
A thesis submitted for the degree of
Doctor of Philosophy
School of Advertising, Marketing and Public Relations
Faculty of Business
Queensland University of Technology
January, 2005
ii
KEYWORDS
Public opinion environment, organisation-activist relationships, issues management,
public relations, relationship management, organisational population.

iii
ABSTRACT
The premise that the continued existence of organisations in a democracy
depends on both the tacit and the explicit approval and opinions of their many publics
is fundamental to public relations theory. Furthermore, the challenge of coping with
the potential constraints and opportunities of public opinion as an aspect of the
organisational environment is essential to contemporary public relations practice.
While the term public opinion environment appears intermittently in scholarly and
trade publications, the dimensions and characteristics of this aspect of organisational
environments remain largely unspecified.
This thesis explores two challengesthe first is to conceptualise and measure
variation in an important aspect of contemporary organisational environments, the
public opinion environment, and the second is to investigate the influence of that
environment on the critical and often highly exposed relationships between
organisations and activist publics. In suggesting a relationship between variation in
the environment and the evolutionary pathways of organisational relationships, the
perspective underpinning this thesis is both ecological and evolutionary. Ecological
analyses of organisations assume that members of a population are affected similarly
by environmental change and share a common dependence on the material and social
environment. Consistent with this perspective, this thesis explores the public opinion
environment and the organisation-activist relationships therein longitudinally at the
population level of analysis. The focal organisational population is Australias major
banks, and the period of interest extends from 1981 to 2001.
An evolutionary model of organisation-activist relationships (EOAR) is
developed, and the propositions derived from this model are explored using a
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comparative case study approach. These propositions anticipate and specify
associations between variations in dimensions of the public opinion environment of
an organisational population and the evolution of organisation-activist relationships in
the population. Central to understanding the public opinion environment of an
organisational population are the issues around which activist publics organise, public
opinion develops, and organisation-activist relationships emerge. Then, the public
opinion environment is conceptualised as a set of issues that concern Australias
major banks and their publics. Variations in this issue set, are described using four
dimensions: stability (turnover of issues), complexity (the number of issues in the
issue set), intensity (volume of media coverage), and direction (favourability of media
coverage for the focal population). To explore the propositions of the EOAR model, I
have analysed the variations in these four dimensions in relation to the evolution of
organisation-activist relationships. To observe and describe this evolution, I have
located the state of these relationships on a conflict continuum using relationship-
signalling statements made by organisations and activists and published by the media.
Three cases studies from the same organisational population, Australias major
banks, are compared over three different but consecutive seven-year periods from
1981 to 2001. The case studies involved the extensive review of industry reports,
submissions and other documents from several government inquiries, and scholarly
articles, as well as the content analysis of more than 6, 500 newspaper articles
published during each of the three case study periods.
The findings of this comparative case study suggest that variations in some
dimensions of the public opinion environment of an organisational population are
associated with the evolutionary ecology of organisation-activist relationships in that
population. However, the associations are more complex than was anticipated by the
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original propositions of the EOAR model; thus refinements to the model are advanced
for further investigation.
A primary contribution of this study is that it provides the theoretical
apparatus and tools to systematically explore, interpret, and measure variation in the
issues comprising the public opinion environment and to track the evolving
organisation-activist relationships organised around those issues. Because the
population level of analysis and a longitudinal lens are applied, this conceptualisation
of the public opinion environment effectively captures and specifies the overlapping
and persistent nature of issues. The evidence of this study suggests that when issues
have emerged in the public opinion environment at the population level of analysis,
they are likely to persist as a hub around which publics organise, providing a focus for
discussions and debates for years to come. This persistence, issue-set inertia, has
important implications for organisational relationships. Given these conditions,
organisations can monitor and manage their responses to issues. However, it is
navely optimistic at best to accept the contention of issues management consultants
and other pundits that organisations can manage the issues themselves. Furthermore,
the findings of this study call into question the value of advice that encourages
organisations to deal with issues by seeking to avoid engaging with their activist
publics and by downplaying the issues in the media.

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TABLE OF CONTENTS
Contents Page
KEYWORDS........................................................................................................ ii
ABSTRACT.......................................................................................................... iii
TABLE OF CONTENTS...................................................................................... vi
LIST OF TABLES................................................................................................ xii
LIST OF FIGURES............................................................................................... xiii
STATEMENT OF ORIGINAL AUTHORSHIP................................................... xv
ACKNOWLEDGEMENTS xvi
CHAPTER 1.......................................................................................................... 1
Overview of the Study........................................................................................... 1
The Research Problem..................................................................... 2
The Studys Significance................................................................. 7
The Case Studies............................................................................. 12
Case Study 1: A New Era of Deregulation, 1981 to 1987..... 12
Case Study 2: Recession and Restructuring, 1988 to 1994... 14
Case Study 3: Reform and Revolt, 1995 to 2001.................. 17
Summary.......................................................................................... 19
CHAPTER 2.......................................................................................................... 21
Conceptualisation.................................................................................................. 22
Conceptualising the Public Opinion Environment of
Organisations................................................................................... 22
Public Opinion....................................................................... 22
Publics and Public Relations................................................. 22
Mass Media and Public Opinion........................................... 25
Issues..................................................................................... 28
The Public Opinion Environment.......................................... 29
The Ecological Perspective............................................................. 30
The Organisational Population.............................................. 33
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The Significance of the Ecological

Perspective............................................................................. 34
The Evolutionary Approach............................................................ 35
Evolutionary Processes.......................................................... 36
Variation....................................................................... 36
Selection....................................................................... 37
Retention....................................................................... 38
Transformation............................................................. 38
Evolutionary Processes and Organisation-Activist
Relationships......................................................................... 39
The Significance of the Evolutionary Perspective................. 39
Organisation-Activist Relationships................................................ 40
The Place of Relationships in Public Relations..................... 41
Organisation-Activist Relationships...................................... 45
Environments and Organisation-Activist Relationships........ 47
Relationship Structures and Processes.................................. 49
Structures...................................................................... 50
Processes....................................................................... 51
Expressions of Conflict as a Relationship Process....... 52
Organisations and Conflict........................................... 53
Conflict and Public Relations....................................... 54
The Core Assumptions.................................................................... 57
Research Questions.......................................................................... 60
CHAPTER 3.......................................................................................................... 62
The Evolutionary Model of Organisation-Activist Relationships (EOAR).......... 62
Propositions of the EOAR model.................................................... 64
Evolving Organisation-Activist
Relationships................................................................................... 65
The Public Opinion Environment Dimensions................................ 69
Stability and Organisational Environments..................................... 71
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Stability and the Evolving Organisation-Activist

Relationship..................................................................................... 71
Complexity and Organisational Environments................................ 74
Complexity and the Evolving Organisation-Activist
Relationship..................................................................................... 75
Intensity and Organisational Environments.................................... 76
Intensity and the Evolving Organisation-Activist
77
Relationship.....................................................................................
Direction and Organisational Environments................................... 78
Direction and the Evolving Organisation-Activist
Relationship..................................................................................... 79
CHAPTER 4.......................................................................................................... 83
Methodology.......................................................................................................... 83
Methodological Rationale................................................................ 83
The Rationale for an Exploratory Methodology.................... 84
The Rationale for a Longitudinal Methodology.................... 85
Method............................................................................................. 86
Comparative Case Method.................................................... 86
The timeframe............................................................... 88
The focal population..................................................... 90
Units of analysis........................................................... 91
Sources of evidence...................................................... 92
Collection procedures................................................... 94
Government and other reports as sources of evidence. 96
Newspaper coverage as sources of evidence................ 98
Describing the issue sets............................................... 98
Describing organisation-activist relationships.............. 104
Measurement................................................................................... 106
The Issue Set.......................................................................... 108
Issue-set stability.......................................................... 109
Issue-set complexity..................................................... 110
Issue-set intensity......................................................... 110
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Issue-set direction......................................................... 110

The Relationship State........................................................... 114
Analysis........................................................................................... 115
CHAPTER 5.......................................................................................................... 117

Results................................................................................................................... 117
The Public Opinion Environment of Australias Major Banks
An Overview.................................................................................... 118
The Issue Sets........................................................................ 141
The issues: 1981 - 1987................................................ 141
The issues: 1988 - 1994................................................ 141
The issues: 1995 - 2001................................................ 142
Summary of the issue sets............................................ 143
Bank-Activist Relationships An Overview....................... 144
Bank-activist relationships: 1981 - 1987...................... 151
The EOAR Model: Exploring the Propositions............................... 156
Stability and Evolving Bank-Activist Relationships............. 158
Issue-set stability: 1981 - 1987..................................... 158
Stability and evolving bank-activist relationships
Comparisons and conclusions...................................... 159
Complexity and Evolving Bank-Activist Relationships........ 162
Complexity: 1981 - 1987.............................................. 162
Complexity: 1988 - 1994.............................................. 163
Complexity: 1995 - 2001.............................................. 164
Complexity and evolving bank-activist
relationshipsComparisons and
conclusions................................................................... 165
Complexity of Activist Relationships.................................... 167
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Complexity of activist relationships: 1981 - 1987........ 167

Complexity of activist relationshipsComparisons
and conclusions............................................................. 168
Intensity and Evolving Bank-Activist Relationships............. 171
Issue-set intensity: 1981 - 1987.................................... 171
Issue-set intensity: 1988 - 1994................................... 171
Issue-set intensity: 1995 - 2001. ................................ 172
Intensity and evolving bank-activist relationships
Direction and Evolving Bank-Activist Relationships............ 174
Issue-set direction: 1981 - 1987.................................... 175
Direction and evolving bank-activist relationships
Summary of Results............................................................... 179
CHAPTER 6.......................................................................................................... 182

Discussion.............................................................................................................. 182
Overview of Major Findings........................................................... 182
The Public Opinion Environment of an Organisational
Population.............................................................................. 182
Organisation-Activist Relationships...................................... 187
Refining the EOAR Model.............................................................. 192
The Stability Proposition....................................................... 196
The Complexity Proposition.................................................. 198
The Intensity Proposition....................................................... 202
The Direction Proposition..................................................... 204
Conclusions and Implications.......................................................... 208
The Research Questions........................................................ 208
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Limitations............................................................................. 215
Further Research.................................................................... 219
REFERENCES...................................................................................................... 224
APPENDICES....................................................................................................... 251
A Coding Instructions for the Issue Sets................................... 251
B Coding InstructionsThe Issues........................................... 256
C Coding instructions for Bank and Activist Statements......... 264
D Activist Publics Mentioned in Articles.................................. 268
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LIST OF TABLES
Table 3.1 The Conflict ContinuumConcept Summary and Indicators... 68
Table 3.2 Dimensions of the Public Opinion Environment........................ 81
Table 4.1 Operationalising and Measuring Dimensions of the Public
Opinion Environment.................................................................. 112
Table 5.1 FrequenciesNewspapers, 1981 - 2001..................................... 120
Table 5.2 The Issues for Australias Major Banks, 1981 - 2001................. 121
Table 5.3 Prominence of the BanksA Comparison of the Frequencies,
Percentages, and Rankings of Bank Mentions in Articles ......... 146
Table 5.4 Prominence of Activist PublicsA Comparison of the
Frequencies, Percentages, and Rankings of Activist Mentions
in Articles.................................................................................... 147
Table 5.5 Frequencies of Conflict, Cooperative, or Neutral Statements
Banks and Activists, 1981 1987............................................... 152
Table 5.6 Frequencies of Conflict, Cooperative, or Neutral Statements:
Table 5.7 Frequencies of Conflict, Cooperative, or Neutral Statements:

xiii
LIST OF FIGURES
Figure 3.1 The Evolutionary Model of Organisation-Activist
Relationships ............................................................................... 63
Figure 4.1 Data Collection, Measurement, and Analysis ............................. 107
Figure 5.1 Overview of the Issue Set, 1981 - 2001....................................... 140
Figure 5.2 Bank-Activist Relationships on the Conflict Continuum............ 150
Figure 5.3 Frequencies of Bank Statements, 1981 - 2001............................. 155
Figure 5.4 Comparison of Bank and Activist Conflict Statements, 1981 -
2001.............................................................................................. 156
Figure 5.5 Issue-set Stability, 1981 - 2001.................................................... 160
Figure 5.6 Issue-set Stability and Frequencies of Bank and Activist
Statements..................................................................................... 162
Figure 5.7 Issue-set Complexity, 1981 - 2001............................................... 163
Figure 5.8 Complexity of Activist Relationships, 1981 - 2001..................... 169
Figure 5.9 Complexity of Activist Relationships.......................................... 170
Figure 5.10 Issue-set Intensity, 1981 - 2001.................................................... 173
Figure 5.11 Issue-set Intensity and Bank-Activist Relationships ................... 174
Figure 5.12 Issue-set Direction, 1981 - 2001................................................... 177
Figure 5.13 Issue-set Direction and Bank-Activist Relationships ................. 178
Figure 6.1 The Evolutionary Model of Organisation-Activist
Relationships................................................................................ 193
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Figure 6.2 Summary of FindingsEvolutionary Model of Organisation-
Activist Relationships ............................................................... 195
Figure 6.3 The Revised Evolutionary Model of Organisation-Activist
Relationships ............................................................................... 207

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STATEMENT OF ORIGINAL AUTHORSHIP
The work contained in this thesis has not been previously submitted for a degree or
diploma at any other higher education institution. To the best of my knowledge and
belief, the thesis contains no material previously published or written by another
person except where due reference is made.
Signed:
Date:
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ACKNOWLEDGEMENTS
I welcome this opportunity to formally acknowledge the encouragement and
assistance of an important group of people. I must first thank my supervisor Dr. Jim
Everett for his intellectual leadership and for challenging me to move beyond the
comfortable mainstream to expand the theoretical horizons of my chosen discipline. I
am eternally grateful for Dr. Pat Curtins rigorous and always-eloquent critique,
generously and efficiently provided when it was most needed. I must also thank Dr.
Cathy Zimmer for lending her expertise in organisational sociology and statistics, and
for her tireless enthusiasm and optimism. In addition to the many hours of editing and
organizational assistance she so selflessly provided, I must also thank Dr. Lois
Boynton for being a true friend and enduring my incessant whining with empathy and
humour. Thanks also to Jane Lewis for her conscientious data gathering assistance
and excellent supervision of printing and production issues that were impossible for
me to manage from North Carolina. There are others, too many to mention
individually, who have taken time from their busy schedules to discuss this research
with me. I thank them all for their contributions.
On the home front, my parents and extended family were wonderfully
supportive and tolerant of their testy and impatient daughter and sibling. I thank them
all for the many ways in which they have helped me through the more gruelling stages
of this journey. I thank my lovely young sons, Mitchell and Jock, for their many hugs
and sweet words of encouragement. Most especially, I thank my much-loved husband
Malcolm, who has been tirelessly supportive and endured this marathon graciously,
always helping to preserve my sense of humour and perspective. Its been an
adventure for us all and the best is yet to come!

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CHAPTER 1
Overview of the Study
A pioneer of the practice of public relations, Arthur W. Page, was credited
with arguing, more than half a century ago, that in a democracy all business begins
with the publics permission and exists by public approval (Newsom, Van Slyke Turk,
& Kruckeberg, 2000). Organisations must convince their publics that their ventures
are appropriate given existing norms and laws (Aldrich, 1999). In so doing, they seek
to be accepted by stakeholders, the general public, opinion leaders, and government
officials, and to achieve legitimacy. In her book, Researching the Public Opinion
Environment, Devereaux Ferguson (2000) argued that corporations and governments
alike must face the challenge of coping with a volatile public opinion environment
(p. ix). However, the nature of the organisational public opinion environment, its
dimensions and characteristics, remains largely unspecified.
The contention that the economic and social stability of an organisation of any
type depends on the attitudes and opinions of multiple publics; in other words, the
public opinion environment is fundamental to public relations practice and
scholarship (Newsom, et al., 2000). On closer examination, this implicitly ecological
concept appears opaque and invites a range of questions. What are the properties of
this public opinion environment, and how can its composition be captured? In what
ways does the public opinion environment change over time, and how can that change
be characterised? Do organisations face the public opinion environment alone or as
collectives with similar limitations and constraints? Given the emphasis now placed
on re-casting and understanding public relations as relationship management (Broom,
Casey, & Ritchey, 1997, 2000; Ferguson, 1984; J.E. Grunig, 2001; Ledingham &
2
Bruning, 2000b), what are the impacts of this volatile public opinion environment
for organisation-public relationships?
This thesis conceptualises and explores an important dimension of
contemporary organisational environments, the public opinion environment, alongside
the critical and often highly exposed relationships between organisations and activist
publics. The challenge that inspires and guides this research is three-fold: to build a
theoretical apparatus that conceptualises and captures important dimensions of the
public opinion environment of organisations, to explore the public opinion
environment across organisations in a population that share and are similarly
constrained by that environment, and to specify associations between the public
opinion environment and the evolution of organisation-activist relationships in that
population.
The Research Problem
This thesis emerges from the contention that the public opinion environment is
an important environmental sector that similarly affects and constrains an
organisational population, and it investigates the problem of whether variations in the
dimensions of that environment are associated with the ways in which organisation-
activist relationships in a population evolve, and if so, whether those associations can
be specified. The central research problem organising this study is articulated in the
following question: Does variation in the public opinion environment of an
organisational population over time influence the evolutionary ecology of
organisation-activist relationships in that population? To investigate the research
problem, I have proposed an evolutionary model of organisation-activist relationships
(EOAR). The propositions derived from this model are explored using a comparative
case study approach.

3
A cornerstone of contemporary public relations theory, and of this thesis, is
the view that public relations is the study of relationships between an organisation and
its social environment. In this context, the role of public relations is to help the
organisation continuously adapt to its social environment (Cutlip, Center, & Broom,
1994; Everett, 2001; Wilcox, Phillip, & Warren, 1998). This ecological perspective
was first described by Cutlip and Center (1952), and since then systems theory has
provided a central framework for theory building in public relations (Broom et al.,
2000; Cutlip, Center, & Broom, 2000; Everett, 2001; L.A. Grunig, 1992b).
Ecological approaches to public relations demand the purposeful sensing of the
environment to anticipate and detect changes that affect organisational relationships
with publics (Cutlip et al., 2000, p. 243). Ecological perspectives are important to
public relations theory because public relations practitioners help regulate the actions
of an organisation by monitoring signals from outside the organisation (Schneider,
1985, p. 63). Similarly, Cheney and Vibbert (1987) argued that in public relations,
the "proper stance toward the environment must continually be reassessed (p. 178).
Pavlik (1987) also argued that the field of public relations would benefit from
research that increases attention to the structure of organisational environments and
that focuses on the relationship component of public relations.
Contemporary perspectives of public relations also cast it as a management
function, at the core of which is the organisation-public relationship. Most modern
definitions follow J.E. Grunig and Hunts (1984) description of the practice of public
relations as establishing, managing, and sustaining mutually beneficial relationships
between an organisation and its publics. While the environment has figured in the
emerging body of organisation-public relationship literature (Broom et al., 1997,
2000; J.E. Grunig & Huang, 2000; Huang, 1997, 2001; Bruning & Ledingham, 1999;
4
Ledingham & Bruning, 2000a, 2000b), thus far research has focused on explaining
and testing the concept of relationships and assessing the impacts of public relations
strategies on an organisations relationships with its publics. The role of the social
environment in influencing organisational relationships has yet to be extended
theoretically and empirically in public relations or in the broader domain of
organisational sociology (Hall, 2002).
In explicitly linking the environment with organisational relationship
outcomes, Heath (1997) argued that it was nave to limit scrutiny only to the
relationships between one company and one group of activists (p.155). The issues
in the public opinion environment should therefore not be limited to contested
positions between one organisation and one activist group (Heath, 1997, p.156)
but should extend to multiple publics and, frequently, multiple organisations in an
industry or other collectives. Just as organisations are embedded within populations
of like organisations (Aldrich, 1999), so too are the relationships organisations have
with their publics, including their activist publics. In seeking to explore how the
public opinion environment varies over time and how that variation is associated with
the evolution of organisation-activist relationships, this thesis applies the population
level of analysis. This concept is absent from ecological models of public relations,
but is central to bio-ecology and, more importantly for this discussion, to the
evolutionary and ecological perspectives of organisational sociology. According to
evolutionary and ecological perspectives, a population of organisations has a unitary
character if its members are affected similarly by changes in the environment
(Hannan & Freeman, 1989, p. 45). Organisations within a population are bound to a
common environmental setting. Ecological analysis assumes that organisational
populations can be identified in such a way that member organisations exhibit very
5
similar environmental dependencies (Hannan & Freeman, 1989, p. 45). The
population concept is evident in public relations literature and research but is typically
articulated in terms of industries and other organisational collectives.
With relationship management at the nexus of contemporary public relations
practice, the relationships organisations have with their activist publics are important
for both public relations practitioners and scholars (Coombs, 1998; Dozier & Lauzen,
2000; J.E. Grunig, 1997; Heath, 1998; Holtzhausen, 2000). Activism is particularly
important because public relations would lose much of its value to organisations
without the existence of activists (J.E. Grunig & L.A. Grunig, 1997). However,
Dozier and Lauzen claimed that organisation-activist relationships are typically
studied by public relations scholars from the perspective of organisations with
pockets deep enough to hire professional public relations practitioners (2000, p. 8).
The research agenda in public relations focuses not on understanding activists as
important and potentially powerful publics that have a valid stake in organisations,
but rather on the management of activist publics as a function of enhancing and
extending organisational power and control (Dozier & Lauzen, 2000; Karlberg, 1996).
The approach to understanding activists as organisational problems, has been
extensively criticised as organisation-centric (Dozier & Lauzen, 2000; Karlberg,
1996) and rife with functionalist assumptions (Botan & Taylor, 2004, p. 654).
Central to this thesis is the contention that activists, together with other important but
excluded publics, are not adequately accommodated within established public
relations theory and research agendas, and organisation-activist relationships are an
important but neglected subset of organisation-public relationships (Dozier & Lauzen,
2000; Holtzhausen, 2000; Karlberg, 1996).

6
The application of the concept activist publics in preference to terms like
groups or organisations, is a significant distinction and deliberate choice.
Following Deweys (1927) definition of publics as a group of people who see they
have a common interest with respect to an organization and that endeavour to act
through suitable structures and thus to organize itself for oversight and regulation (p.
29), the perspective of this thesis is that publics are best understood as a process rather
than a reified entity (Botan & Soto, 1988; Botan & Taylor, 2004). Publics share
interpretations of events and actions in their environment. When these interpretations
lead to something the public wants addressed, an issue exists (Botan & Taylor, p.
655). Activist publics organise around issues and issues are created when one or
more human agents attaches significance to a situation or perceived problem (Crable
& Vibbert, 1985, p. 5). This perspective has more utility that the description of
activist groups as reified entities that emerge "outside" the organisation as a hostile
part of the organisational environment. Such a distinction is problematic and
redundant in many important contexts, particularly at the organisation-activist
relationship level. In other words, while the activist group is always an activist
public, the activist public is not always an activist group. For example, while an
employee union is clearly a separate organisation, the organisational employees they
represent, including those who might be actively seeking some measure of
organisational change are clearly internal to the organisation. For this reason, the
activist group as a hostile and important but significantly, external public in the
organisations environment is not a useful perspective at the organisation-activist
relationship level of analysis. The problem of distinguishing between who or what
belongs to the organisation and who or what is part of its environment is resolved by
conceptualising activists first and foremost, as publics that are active.

7
In anticipating that variation in the public opinion environment of an
organisational population influences the evolutionary pathways of organisation-
activist relationships within that population, this thesis explores the contention that
such associations exist and are important to public relations theory and practice
(Pavlik, 1987, Broom et al., 1997, 2000; J.E. Grunig & Huang, 2000; Huang, 1997,
2001; Bruning & Ledingham, 1999; Ledingham & Bruning, 2000b) and addresses the
contention that activist publics are not adequately accommodated within established
public relations theory (Dozier & Lauzen, 2000; Holtzhausen, 2001; Karlberg, 1996).
Having provided a sense of the abiding problem driving this research, I will
discuss in the next sections of this chapter the significance of this study and introduce
the rationale and context for the three focal case studies. Then, in Chapter 2, I will
review the literature underpinning the theoretical framework of this research from
which the EOAR model emerged. The EOAR model is introduced and described in
Chapter 3, and the propositions of the model are specified and substantiated. The
research design rationale and strategy are presented in Chapter 4, and in Chapter 5 the
findings for each of the three cases are described and compared. In Chapter 6, the
major findings of this research and their implications for the literature are explored,
revisions to the EOAR model proposed, the limitations of this study reviewed, and
future research directions recommended.
The Studys Significance
The framework for contemporary organisation-public theory and research is
multi-disciplinary and has emerged from interpersonal communication,
psychotherapy, inter-organisational relationships, and systems theory (Broom et al.,
2000, Ledingham & Bruning, 2000b). Broom et al. (1997) argued that organisation-
public relationships form when parties have perceptions and expectations of each
8
other, when one or both parties need resources from the other, when one or both
parties perceive mutual threats from an uncertain environment, or when there are legal
or voluntary imperatives for an association. Further, organisation-public relationships
are the dynamic results of the exchanges and reciprocity that manifest as the
relationships develop and evolve, but they can be described at any given point in
time (Broom et al., 1997, p. 94).
Organisation-public relationships change in response to environmental
pressures, or, if they do not change, old relationships become dysfunctional because
the organisation acts and reacts in ways inappropriate to the new circumstances
(Cutlip et al., 2000, p. 231). While the associations between organisational
environments and their relationships with publics are critical, they are also under-
explored (Hall, 2002). A complete understanding of organisation-public relationships
is impossible without an adequate conceptualisation and eventual measurement of
environmental properties (Hall, 2002, p.223). Such research is difficult to accomplish
since it demands that environmental qualities and relationships be measured over time
(Hall, 2002, p. 222).
The environmental conditions in which organisation-public relationships exist
have attracted limited research and acknowledgement. While the emerging body of
organisation-public relationship literature signals the importance of the environmental
setting of relationships, it does little more (Broom et al., 1997, 2000; Bruning &
Ledingham, 1999; Ledingham & Bruning, 2000b; J.E. Grunig & Huang, 2000;
Huang, 2001; Pavlik, 1987). Typically, the objective of such research is to prescribe
better strategies to foster positive and profitable organisation-public relationships (J.E.
Grunig, 2001; J.E. Grunig & Huang, 2000; Huang, 2001; Ledingham & Bruning,
2000a, 2000b; Ledingham, Bruning & Wilson, 1999). Studies of evolutionary

9
processes in organisational relationships have been rare (Ring Smith & Van de Ven,
1994) and organisation-centric; in other words, they focus on the relationships
organisations want or choose to have, rather than on activist relationships (Karlberg,
1996). Therefore, little is currently known about the evolution of organisation-public
relationships, and even less is known about organisation-activist relationships.
Most public relations literature, as well as the wider body of organisational
theory and research, treats activist publics as important but hostile aspects of the
organisations environment that need be resisted and managed. The trade media have
followed this lead. A PR Week report discussing the growing trend for activist groups
with different interests to gather and share tactics is typical of this perspective
(Deatherage Green, 2003). The cross-pollination of activist interests across
environment, labour union, and other interests was described as a small but growing
problem for corporations (Deatherage Green, 2003, p. 9). While this may be a
useful perspective from which to prescribe strategic solutions to the activist-as-
problem, it has been less useful for developing insights about the organisation-
activist relationship (Dozier & Lauzen, 2000; Karlberg, 1996).
The value of the relationship perspective is given further weight in the context
of the more recent phenomenon of shareholder activism. A 2004 PR Week report
described the raft of well-publicised shareholder revolts that used PR and media
exposure to make clear who was boss (Lepper, 2004, p. 22). Casting activist publics
as important but fundamentally hostile and external publics existing outside the
organisation in some part of its amorphous environment creates a problematic and
often redundant distinction. Employees who are seeking some measure of
organisational change through their unions are clearly internal to the organisation.
Shareholders are similarly difficult to define if the only available labels are internal
10
or external. Distinguishing between who and what belongs to the organisation and
who is part of its environment is resolved by conceptualising activists first and
foremost as publics and by investigating the phenomenon of interest, organisation-
activist public relationships, rather than prescribing solutions to an organisations
activist problems.
By acknowledging the power of other organisations in the environment, the
ecological perspective counters and offers correctives to public relations research that
treats the individual organisation as an actor without a setting and other actors
(Cheney & Vibbert, 1987). This has given rise to a body of research that takes an
overly rationalistic view of organisations forcefully acting toward self-selected and
clearly articulated goals (p. 178). Cheney and Christensen (2001b) criticised
research that does not challenge the rationalist presumptions of organisations seeking
control of an environment that does not always or even frequently conform to such
expectations (p. 182).
This argument was advanced more precisely by Everett (2001) who contrasted
continuous adaptation, a central premise of contemporary public relations, with the
selection perspectives of organisational ecology and organisational evolution.
Selection models focus on organisational founding and mortality as the visible
outcomes of selection processes. In this approach, organisations are studied at the
population level of analysis and are successful if they persist over time. Successful
organisations are characterised by strong, inertial forces that limit the amount and
degree of change. Organisational ecologists contend that selection processes favour
organisations that have relatively inert structures and that successful organisations
adapt slowly or not at all (Carroll, 1988; Hannan & Freeman, 1989). The contention
that organisations are more likely to fail when undertaking fundamental change
11
contrasts starkly with the assumptions of continuous adaptation that prevail in the
ecological models of public relations (Everett, 2001). These models also fail to
accommodate the role of selection in describing the relationship between
organisational environments and the direction and implementation of the public
relations activities and strategies of organisations (Everett, 2001).
Recognising the importance of this area and its relative neglect, this thesis
explores the extent to which the volatile public opinion environment of
organisations influences evolving organisation-activist relationships. For managers to
plan and act strategically presupposes that they have some idea of how others in their
environment will act, and with this knowledge, they can help their organisations
distinguish systematic from random environmental changes (Frooman, 1999). In
addition to providing the level of analysis, the organisational population, the
ecological perspective challenges traditional approaches to public relations theory
building. This perspective provides a contrasting viewpoint from which to understand
the interplay between environments, organisations, and publics by focussing on the
specific associations between variations in one important sector, the public opinion
environment, and the evolving relationships that similarly constrained organisations
have with their activist publics. The ambition of this study is, therefore, to capture
some important properties of the public opinion environment of an organisational
population, to bring this aspect of the complex and multi-dimensional organisational
environment more sharply into focus, and thereby to enrich contemporary public
relations theory. This study also brings activists into the organisation-public
relationship research agenda, providing a new and important perspective from which
to analyse the strategic and often critical role of these relationships.

12
The Case Studies
The theoretical orientation of this study excludes a static or cross-sectional
research design and sets the imperative for a methodology that is simultaneously
exploratory and longitudinal. This study is exploratory because it addresses a
problem for which there is limited research or theory. This gap means that the major
concepts around which this study is organised, the public opinion environment of an
organisational population and the evolution of organisation-activist relationships,
have not been elaborated in any systematic and comprehensive manner. To
accommodate the timeframe imperatives of ecological and evolutionary research, a
longitudinal approach is specified.
To investigate the research problem, I have proposed an evolutionary model of
organisation-activist relationships (EOAR) and explored the propositions derived
from this model using a comparative case study approach. I have developed three
cases studies from the same organisational population, Australias national banks, and
compared over three different but consecutive seven-year periods from 1981 to 2001.
The case studies were conducted in two phases. The first phase required the extensive
review of reports, submissions and other documents from several major government
inquiries, industry reports, and scholarly articles, and the second phase involved
analysing more than 6, 500 newspaper articles published during each of the three case
study periods.
Case Study 1: A New Era of Deregulation, 1981 to 1987
In the last 100 years, Australian banking regulation has oscillated from
virtually free banking to a fully regulated system, and back (Thomson & Abbott,
2001). Deregulation, which began in the 1960s, accelerated after the Campbell
Inquiry in 1981 and was mostly complete by 1985 (S. Singh, 1992). The period from
13
1981 to the present day encompasses several crucial years preceding full deregulation:
the period of deregulation around the mid-1980s, and the post-deregulation years in
which the banking industry has continued to undergo change. In the 1970s, the major
Australian banks faced an ever-shrinking market share in the face of increasing
competition from nonbank financial institutions, such as building societies and credit
unions. These nonbanks were able to offer many of the same products and services
as their much larger bank competitors but had lower operating overheads, more
flexible structures and, importantly, were not subject to the same regulations
(Thomson & Abbott, 2001). In the face of this competition, and in the context of
public policy trends toward market liberalisation, the banks pressed politically for
regulators to reduce and remove some of the burdens of regulation. As a result of this
pressure, the Australian Financial System Inquiry, the first wide-ranging
Commonwealth inquiry since the Royal Commission into Money and Banking of
1936-37, was established in 1979. The Inquiry was conducted by a committee
chaired by Keith (later Sir Keith) Campbell, and its role was to examine the
Australian financial system and recommend changes. From 1979 to 1981, the
committee reviewed an enormous mass of evidence through public hearings and
written submissions (Carew, 1996) and concluded that direct controls on banks
distorted and inhibited the operation and development of Australias financial markets
(Australian Financial System Inquiry, 1981). Some of the changes flowing from this
committee's findings were the removal of interest rates controls and lending
arrangements for banks, a freer foreign-exchange market, the float of the Australian
dollar, and the entry of foreign banks into the Australian financial system.
The mergers of the Bank of New South Wales with the Commercial Bank of
Australia, forming Westpac, and the National Bank of Australasia with the
14
Commercial Banking Company of Sydney, were approved by the Commonwealth and
completed in 1981. The recommendations of the Campbell Committee, and the
review of these recommendations by the Standing Committee on Finance and Public
Administration (Martin Report), commissioned in 1983 by the newly elected Labor
Government, led to further deregulation of the financial system. This case study ends
with the global stockmarket crash of October 1987, just as the recession of the late
eighties began in earnest.
Case Study 2: Recession and Restructuring, 1988 to 1994
The 1987 Crash was a dramatic turning point for Australias banks.
According to many Australians, the banks had prostituted themselves, throwing
money at worthless charlatans with almost total disregard for security. When the
banks realised that most of the money had evaporated, they turned on genuine
borrowers (Verrender, 1997, p. 27). During the latter half of the 1980s, companies
sought to increase the degree of leverage of their capital structures, and a number of
banks and other financial institutions adopted imprudent lending policies to expand
their balance sheets (Gizycki & Lowe, 2000). Entrepreneurs believed that the
great asset inflation of the 1980s, perpetuated by their own buying power and the
sheer weight of money being thrown at them by the banks, would continue forever
(Verrender, 1997, p. 27). Inadequate risk management practices, however, exposed
many banks to record losses, and the economy went into a recession in 1990 (Nielsen,
Terry & Trayler, 1998). Farming businesses, as well as other small or medium-sized
enterprises, were reeling from the impact of poorly conceived and managed foreign
exchange loans, for which the Westpac and Commonwealth banks were primarily
responsible. Overnight, many enterprises were buried in debt or made worthless.
Westpac, until then Australias biggest bank, came perilously close to collapse, and
15
the State Banks, particularly those in Victoria and South Australia, were brought to
their knees (Verrender, 1997).
Recession and deregulation led to the closing of many rural and regional
branches in the 1990s. In 1991, the Australian Financial System Inquiry (Martin
Inquiry) agreed with consumer groups that deregulation had not delivered all the
envisaged benefits to ordinary Australians (S. Singh, 1992). An Australian Financial
Review report from the period advised that rising mortgage rates and the introduction
of account fees were taking their toll on the public relations image of Australia's
banking industry (Boylen, 1989). Citing market research by the National Australia
Bank, the report claimed that consumers were increasingly unhappy with the effects
of deregulation and felt they were paying more and getting less from their banks
(Boylen). There was a general feeling among the banks that the collective public
relations image of the banking industry was damaged by the Commonwealth Bank's
decision to introduce fees for small accounts. This flow of complaints from voters
about banks and financial institutions prompted the Federal Government to set up a
consumer watchdog body to investigate complaints, and the Australian Banking
Industry Ombudsman scheme was initiated in 1989.
One of the most significant events of this period was the privatisation of the
Commonwealth Bank. Shares were offered to the public for the first time in 1991.
Although this plan was contentious, the government was careful to ensure that so-
called ordinary Australians had ample opportunity to invest in the peoples bank,
and this public offering was highly successful. Also during this period, debate
continued over the differences between banks and nonbank financial institutions. The
regulatory imbalance between the banks and nonbanks that emerged in the banks
favour in the 1980s began to be addressed in the 1990s (Thomson & Abbott, 2001, p.
16
82). Until this time, banks were considered to be in a special category for prudential
supervision. Over time, however, it was argued that the only genuine difference in the
activities of banks and nonbanks was that the nonbank financial institutions were
excluded from direct participation in the payments system, which was at that time
exclusively the preserve of the banks (Shanmugam, Turton, & Hempel, 1992). The
Australian Financial System Inquiry of 1991, more commonly known as the Martin
Inquiry, began to address this imbalance, releasing a report recommending a
feasibility study of direct payments system access for nonbank financial institutions.
Also emerging from this Inquiry was the recommendation that the Prices Surveillance
Authority (PSA) examine the profitability of the credit card business and that a code
of banking practice be established.
The Reserve Bank of Australia (RBA) had traditionally been reluctant to
become involved in the supervision of building societies and credit unions and
opposed giving these nonbanks such authority unless they applied for a banking
license (Thomson & Abbott, 2001). In response to the financial failures of the late
1980s, the Australian Financial Institutions Commission (AFIC) was formed in 1992
to regulate the prudential standards of the credit unions and building societies
(Thomson & Abbot, 2001). By 1992, authorised foreign banks were allowed to
operate branches in Australia but were not allowed to accept retail deposits. Limits
on the number of new banks that could be established were removed, and the
competitive face of home lending in Australia was forever altered by the entry of
aggressive new lenders, including Aussie Home Loans. Continuing the trend for
federal and state government to withdraw from the business of banking, the NSW
Government sold the State Bank of NSW to the Colonial Mutual Life Association in
17
1994. This case study period ends in the midst of the most extensive phase of
restructuring ever undertaken by the major banks.
Case Study 3: Reform and Revolt, 1995 to 2001
Between 1994 and 2001, around 3,500 bank branches closed across Australia,
including 1,500 in rural and regional areas, and banks were accused of compounding
the economic problems of these areas (Mathewson, 2001). The Australian Council of
Trade Unions (ACTU) reported that in the decade leading to 2001, the major banks
made $8 billion a year in profits but shed 55,000 workers and 2,000 branches
(Australian Council of Trade Unions, December 2001). The six pillars policy that
began in 1990 became four pillars under the Howard government in response to the
final report of the Financial System Inquiry in 1997. This policy provided that no
mergers would be permitted between the four major banks without evidence of
increased competition, particularly for small-to-medium business enterprises. Any
merger of the major banks continued to be bitterly opposed by consumer, small
business, and labour union groups.
In June 1995, the decision by the bank fees inquiry to direct all banks to offer
fee-free accounts was seen as a major victory for consumer activism (Kirby, 1996).
That same year, Westpac was allowed to acquire Challenge Bank, and the South
Australian Government sold the State Bank of South Australia to Advance Bank. In
1996, as part of its continuing privatisation, Commonwealth Bank offered its shares to
the public for the second time. The Queensland Government simultaneously
announced the merger of Metway Bank and the government-owned Suncorp
insurance and finance group. In response to the ongoing crisis of consumer
confidence, a Uniform Consumer Credit Code was introduced in November 1996, and
the Financial System Inquiry was announced. Known as the Wallis Inquiry after its
18
Chairman, Stan Wallis, this Inquiry was intended to encourage the establishment of a
regulatory system that embodied competitive neutrality between the banks and the
non-banks (Australian Financial System Inquiry, 1997). In a report by The
Australian, the Australian Consumers Association protested that the Inquiry viewed
consumer protection as inefficient intervention or customer welfare rather than a
fundamental element of the market (Kirby, 1996). One significant Wallis Committee
of Inquiry reform was the establishment in July of 1998 of the Australian Prudential
Regulatory Authority (APRA), a single regulator, to oversee the prudential regulation
of the banks, building societies, credit unions, and all other financial institutions. The
banks monopoly of the payments system, by then the major difference between these
institutions, was abolished. As a result, building societies and credit unions were able
to issue cheques in their own right (Australian Financial System Inquiry, 1997).
Other Wallis reforms to come into effect from mid-1999 included the creation of the
Australian Corporations and Financial Services Commission to cover market
integrity, disclosure, and consumer protection; the removal of prohibitions on life
offices taking over banks; the reduction of the governments role in monitoring bank
fees and charges; and the creation of the Payments System Board within the Reserve
Bank to supervise the opening of the payments system to non-banks, including
companies outside the finance sector.
Concerns about the wide-ranging responsibilities of the APRA and the
limitations it placed on its effectiveness, structure, and governance (Thomson &
Abbott, 2001) were apparently justified. HIH Insurance collapsed in May 2001,
leaving thousands of policyholders without cover and forcing the Australian
government to bail them out. The cost of the collapse, estimated at $5.3 billion,
precipitated an insurance crisis in which significant and lasting losses and hardship
19
were inflicted on the Australian community (Department of the Parliamentary
Library, 2003, p.1). In 2001, the ACTU called on bank customers to again support
bank workers in their campaign against branch closures, falling service levels, and
staff cuts (Australian Council of Trade Unions, December 2001). The unions
continued to argue that the banks had responsibilities to their staff, customers, and to
the communities in which they operated, especially in regional and remote areas.
Summary
Banks provide many services that are integral to the work and private lives of
most Australians. In particular, the National, Westpac, ANZ, and the Commonwealth
banks have dominated their domestic marketplace since the deregulation of the
banking system began in 1981. Banks in Australia adhere to federal regulations and
report to federally appointed agencies with national responsibilities and powers. This
provides a relatively uniform environment for bank services to domestic retail and
business banking markets. The activities and policies of these banks affect most
individuals and business operations at some level and are highly scrutinised by
government, industry groups, activist organisations, and the media. Consequently, the
major banks consistently attract extensive media coverage. Their profits are
announced every year, and since the mid-1990s, these announcements have often
appeared alongside reports of branch closures, retail service reductions, and increases
in bank fees.
In the context of Australias national banking industry, the period following
deregulation in 1981 encompasses episodes of upheaval and relative stability, thereby
providing a natural and adequate timeframe to meet the ecological perspective of this
study. Major issues for the banks over the past two decades have varied with the
20
economic fortunes of the times. Recurrent issues have included spiralling profits in
the face of high levels of consumer debt, anti-competitive merger proposals, fees
and charges on accounts and transactions, the targeting of vulnerable groups with
credit, aggressive loan retrieval policies for farms and other small businesses, branch
closures, the attrition of rural and regional services, and aggressive workforce
rationalisation. Australias major banks have intermittently been subject to the
attentions of activist publics, including employee unions, farming and producer
associations, consumer advocacy groups, church and welfare groups, small business
associations, and shareholder activists.
The decision to select this population and setting was driven primarily by
several important factors. First, the political, economic, cultural, technological, and
other environmental dimensions similarly constrain population members (Thomson &
Abbott, 2001). Second, the activities and policies of banks affect most individuals
and business operations and are highly scrutinised, making the public opinion
environment visible to the researcher. Finally, rich sources of accessible data were
available from print media coverage because of the scrutiny the population is paid by
all levels of the government, politicians and political parties, activists, the media, and
other pundits.
Having described the research problem, introduced the primary contentions of
this thesis, discussed the gaps in contemporary public relations research from which
the research problem emerged, and provided an overview of three case studies, I will
review in the following chapter extant academic studies of the literature underpinning
this research.
21
CHAPTER 2
Conceptualisation
This chapter articulates the theoretical foundations and rationale for this
study and is organised into four sections. Contemporary perspectives of public
opinion theory and research related to the organisational context of this thesis are
explored in the first section. Two fundamental conceptspublics and the contested
issues around which they organiseare of particular interest. I will explore the role
of the mass media, specifically the news media, in reflecting and influencing public
opinion and present a more specific discussion of public opinion as an aspect of
organisational environments. Next, I will discuss the ecological perspective in
which the concept of the organisational population is embedded and explain the
evolutionary approach framing the discussion of organisation-activist relationships.
The perspective of public relations as relationship management is relatively new but
important for contemporary public relations theory and practice, so in the third
section of this chapter I will argue for the place of activist publics in the emerging
organisation-public relationships research agenda. Finally, I will articulate the core
assumptions emerging from the literature and present the research questions guiding
the study. I will advance the propositions of the evolutionary model of organisation-
activist relationships (EOAR) model in Chapter 3.
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22
Conceptualising the Public Opinion Environment of Organisations
Public Opinion
Three general laws govern human conductthe divine law, the civil law,
and the law of opinion or reputation (Locke, 1690, as cited in Price, 1992, p. 6).
Opinion is equated with reputation, esteem, and the general regard of others and the
degree to which those things constrain or influence behaviours (Speier, 1950).
Opinion can be viewed as a way of informally condoning or condemning the actions
of individuals, groups, or organisations; such an approach to understanding public
opinion focuses on social approbation or censure (Price, 1992). The formation and
re-formation of publics and public opinion pervades social behaviour (Hennessey,
1975) and encompasses all social systems, including the organisations central to this
study.
The role of the public opinion researcher is to measure and analyse public
opinion, whereas the public relations practitioners role is to help organisations deal
constructively with the force of public opinion (Palmer, 1948 as cited in Newsom et
al., 2000). The father of public relations, Ivy Lee, (Wilcox, Ault & Agee, 1998)
urged organisations to respond to public opinion and align themselves with the
public interest. Public relations has been defined along similar lines as an
organisations planned effort to influence public opinion through good character
and responsible performance (Cutlip and Center, 1971, p. 2). This interrelationship
between public opinion and public relations continues to be a source of interest and
debate in public relations (Cheney & Christensen, 2001a).
Publics and Public Relations
Essential to the research problem addressed in this thesis is the concept of a
public, used here to describe the more specific relationship of an organisation with
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23
its constituencies. In arguing that public relations practice and scholarship has a
social focus, Ehling, White and J.E. Grunig (1992) contrasted the term publics as
applied in public relations, with the term market as applied in marketing. While
organisations generate markets out of larger populations of potential consumers by
identifying the most likely consumers for a product or service, publics are social in
nature and organise themselves (Ehling et al., 1992) in response to issues of concern
(J. E. Grunig & Repper, 1992; Olson, 1971; Smith, 1996; Smith & Ferguson, 2001).
In one of the first attempts to explain the concept of the public, Dewey
(1927) argued that a public was formed when a group of people faced an
indeterminate situation, recognised what was indeterminate and problematic in that
situation, and organised to do something about the problem. Blumer (1946) later
proposed that the public was a group of people who were confronted by an issue,
who were divided in their ideas as to how to deal with the issue, and who engaged in
discussion over the issue. Building on the work of Dewey (1927) and Blumer
(1946), J.E. Grunig (1997) argued that publics began as "disconnected systems of
individuals experiencing common problems that could then evolve into organised
and powerful activist groups (p. 9). This situational theory of publics, predicts the
responsiveness of publics to issues, the degree and nature of communication
behaviour, the effects of communication on cognitions, attitudes, and behaviour, and
the likelihood of participation in collective behaviour to pressure organisations (p.
9). J.E. Grunig (1997) identified independent variables, problem recognition,
constraint recognition, and level of involvement, and dependent variables,
information seeking and information processing, to prescribe the timing, content,
and direction of communication with emerging and active publics. More recently,
cognitive, attitudinal, and behavioural effects have been added to the dependent
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24
variables (J.E. Grunig, 1997). According to this view of the public, as publics
become more active in relation to the issues attracting their attention and concerns,
they engage in more communication and are more likely to develop attitudes and
opinions and to take action in response to issues (J.E. Grunig, 1997; J.E. Grunig &
Hunt, 1984; J.E. Grunig & Repper, 1992).
Communication about issues is essential to the formation of publics. The
significance of these issues first emerged when Blumer (1946) argued that publics
were amorphous groups, their size and membership varying in relation to the issues
to which they were attached. Issues galvanise groups of people, providing the
reasons for activist publics to form and the incentives for others to join (Heath,
1997). As issues are recognised, disputed, resolved, or become dormant, publics
change in size and composition (Blumer, 1946, 1948; Heath, 1997; Olson 1971;
Price & Roberts, 1987; Smith, 1996; Smith & Ferguson, 2001; Tesh, 1984).
Important for this study are contentions that publics organise around issues (L.A.
Grunig, 1992a; Heath, 1997; Mintzberg, 1983; Smith, 1996; Smith & Ferguson,
2001), and seek out organisations directly and indirectly to gain information, seek
redress of grievances, and exert other forms of pressure (J.E. Grunig & Repper,
1992).
Central to this thesis is the use of the term activist publics in preference to
activist organisations, special interest group, pressure group, or similar terms. The
distinction represents an important and deliberate choice. Activist publics are
therefore understood as a process rather than a thing (Botan & Taylor, 2004).
They organise around issues and issues are created when one or more human
agents attaches significance to a situation or perceived problem (Crable & Vibbert,
1985, p. 5). The activist group as a hostile and important but significantly, external
24
25
public in the organisations environment is not a useful perspective at the
organisation-activist relationship level of analysis. The problem of distinguishing
between who or what belongs to the organisation and who or what is part of its
environment is resolved by conceptualising activists first and foremost, as publics
that are active; activist publics.
This introduction to the concepts of public opinion and the publics with
which organisations must build relationships accomplishes an important first step in
conceptualising the public opinion environment of organisations. The role of the
mass media, particularly the news media, in reflecting and influencing public
opinion also demands attention in this discussion.
Mass Media and Public Opinion
According to Price (1992), public opinion researchers typically study public
opinion using one or more of four methods of opinion assessment: survey research
or polling, focus groups, experimental research, and the analysis of mass media
content. It must be emphasised that no single research method has been found to
fully capture public opinion because each method provides different perspectives of
public opinion at one point in time, as well as over time (Glynn, Herbst, O'Keefe &
Shapiro, 1999; Price, 1992).
The analysis of mass media content has played a prominent role in public
opinion research. Public opinion is tracked and monitored using mass media
content, and, as evidenced by public opinion polls, some studies have established
close relationships between media content and public opinion polling (Fan & Tims,
1989; MacKuen & Coombs, 1981; Page, Shapiro, & Dempsey, 1987). In the late
19th century, James Bryce, considered by some to be the first modern theorist of
public opinion, studied the expression and measurement of public opinion and its
25
26
relationship with the activity of political parties, legislatures, and the mass media
(Glynn et al., 1999). For Bryce, newspapers both reflected and directed public
opinion, a sentiment also articulated a few years into the 20th century by the French
sociologist Gabriel Tarde, who noted that both conversation, and the press as
sources of conversation, were major factors in public opinion formation (Glynn et
al., 1999). Allport (1937), however, warned against the danger of journalistic
fallacy (p. 21), which he defined as mistaking opinions that appear in the news
media for public opinion. However, he acknowledged that while the views of the
media should not be confused with those of their audiences, there are good reasons
to suspect the former play a significant role in the formation of the latter (p. 21).
Schramm (1949) described news as the attempt to reconstruct the essential
framework of an event" (p. 288). Lasswell (1949) likewise proposed that a central
function of the news media was surveillance of the environment and the provision of
information about important aspects of the environment. Lippmann (1965) argued
that the media provided maps of the complex environment of issues, and McCombs
and Shaw (1972) extended this argument by contending that these maps were
agendas set for the public by the mass media, who told their audiences which issues
deserved their attention. Agenda-setting theory has continued to contend that the
news media provide major cues to their audiences about how to prioritise issues over
time (McCombs, Danielian & Wanta, 1995).
Fan (1988) developed a model to predict election campaign poll results from a
content analysis of news stories to produce poll predictions. These predictions
developed out of estimates of the impact of positive or negative messages about
candidates based on factors such as the number of messages in the news
environment and the size of the target population. This model raised questions
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27
about the autonomy of public opinion, and whether it is a reproduction of elite
opinion expressed by the media (Price, 1992, p. 87).
Many of the issues receiving major emphasis in the news become the major
issues on the public agenda (Gans, 2003; Gitlin, 2001; Ryan, 1991; Tuchman, 1997),
and are defined as that array of issues concerning the well-being of numerous
individuals (McCombs et al., 1995). When discussing this phenomenon, McCombs
and Shaw (1972) argued that the agenda-setting role of the news media was a
secondary and unintentional by-product of the imperative for news to be constructed
around a few prominent issues. This effect has been described as one of the most
significant potential impacts of the mass media on society.
While the intensity of media coverage has been found to influence public
opinion, the extent of coverage required for an agenda-setting effect to occur has not
been determined (Brosius & Kepplinger, 1990). Studies have shown that the ways
in which the media cover issues influences the probability of impacts for public
opinion. Dearing and Rogers (1996), for instance, found that an issue presented in a
negative light was more likely to be regarded by the community as an important
concern. Taking a resource-based perspective, Deephouse (2000) argued that media
reputation is a strategic resource in the environment of an organisation because it
contributes to the organisations profitability and performance. Although
organisational constraints preclude the news media from reconstructing every event
precisely and soliciting representative opinions from all publics, Deephouse also
asserts that pressures exist at multiple levels for the media to record thoroughly
important events, issues and opinions about them for the media (p. 1095).
The analysis and description of public opinion using mass media coverage
therefore provides an imperfect but essential lens for this study. Following the
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28
approaches taken by Deegan, Rankin & Tobin (2002) and Deephouse (2000) to
reconstructing widely-held opinions from news media coverage in relation to
organisations and their issues, I have described the public opinion environment of
organisations in this study using news media coverage. First, I must define the
nature of the issues and their significance for organisations and their activist publics
and explore the treatment of this concept in the relevant literature.
Issues
The concept of the issue is integral to this conceptualisation of the public
opinion environment of organisations. Smith (1996) argued that some issue
management theorists describe issues as reified entities or objective entities
waiting to be discovered (p. 18) as they emerge from the environment to confront
organisations. Taking this approach, Jones and Chase (1979) described issues as
questions precipitated by changes in the environment that were waiting for
decisions. J.K. Brown (1979) defined issues as conditions or pressure points,
internal or external to the organisation, that were likely to significantly impact an
organisation.
More recently, scholars have recognised the importance of organisational
publics in generating, sustaining, and resolving issues. Crable and Vibbert (1985),
for instance, suggested that an issue is created when one or more human agents
attach significance to a situation or perceived problem. Heath (1997) argued that
issues can lead to a contestable point of difference and that the resolution of the
issues has important consequences for an organisation. Issues are contested because
they concern the self-interests of key stakeholders, leading them to support or to
oppose corporate actions and public policies (Heath & Douglas, 1990, 1991).
Wartick and Mahon (1994) argued that issues are fundamentally controversial
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29
inconsistencies caused by gaps between the expectations of corporations and the
expectations of their publics. These gaps have significant consequences for both
organisations and their publics; in other words, organisations and their publics share
concerns for these issues, even though their positions are often very different (Heath
& Douglas, 1990, 1991).
Based on these approaches to issues, managers assigned by organisations to
monitor issues should define and prioritise their publics based on the opinions
people hold, their degree of involvement with the issues, and their communication
patterns (Berkowitz & Tunmire, 1994; Vasquez, 1994). Activist groups rely on the
attractiveness of the issues to which they are attached to garner and maintain
members, and, as issues gain status, activist organisations gain attention, members,
and resources (Hrebnar & Scott, 1982; Schlozman & Tierney, 1986). Issues rise and
fall in status on the publics agenda (Crable & Vibbert, 1985; Downs, 1972;
Hainsworth, 1990; Jones & Chase, 1979), and when issues appear to be resolved or
otherwise fall from the public's agenda, activist organisations suffer. To survive,
activist organisations must adjust to changes in their issues environments (Gans,
2003; Gitlin, 2001; Jopke, 1991; Ryan, 1991; Smith, 1996; Tuchman, 1997).
Proposing that activist collectives and social movement organisations be renamed
issue organisations, Smith (1996) argued that, like other organisations, activist
groups must work to remain viable by monitoring and adjusting to the status of the
issues they advocate.
The Public Opinion Environment
To close this introduction to the public opinion environment of
organisations, it is crucial to recognise not only that public opinion is driven by
issues, but also that issues are not neatly bounded entities significant only to one
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organisation and one public at any point in time. Much more often, issues demand
the attention of many organisations and a multitude of publics, frequently extending
to organisational groupings by industry or some other classification (Heath, 1997;
Smith, 1996; Smith & Ferguson, 2001). These issues have collective significance
and are contested by organisations individually and, more importantly for this study,
collectively (Heath, 1997).
The public opinion environment is therefore conceptualised as an
aggregation of issues, a set of issues that concern organisations and their publics.
These issues are shared by organisations that occupy similar niches and are similarly
constrained by a common environmental setting. This idea is effectively captured
by the organisational population concept, derived from the perspectives of
organisational ecology (Hannan & Freeman, 1989) and organisational evolution
(Aldrich, 1979, 1999). Anticipating that at the organisational population level of
analysis, variations in organisation-activist relationships emerge over time in
association with variations in the public opinion environment, I will introduce the
ecological and evolutionary perspectives underpinning this study and explore
relevant issues.
The Ecological Perspective
In the same way that biologists study the relationships of populations of
organisms to the carrying capacity of their environmentsthe capacity of
environments to sustain and constrain the organisms of interestpopulation
ecologists study populations of organisations and the carrying capacities of their
environments. The ecological approach to understanding organisations predicts that
environmental factors select those organisational characteristics that best fit the
environment and that when environments change, some types or forms of
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organisations become obsolete and die while others survive and even become more
viable (Aldrich, 1979, 1999; Aldrich & Pfeffer, 1976; Baum, 1996; Baum & J.V.
Singh, 1994; Bidwell & Kasarda, 1985; Carroll, 1988; Carroll & Hannan, 1989;
Hannan & Freeman, 1977, 1989; McKelvey, 1982; McKelvey & Aldrich, 1983).
The goal of the ecological perspective is to understand the forces that shape
populations of organisations over long time spans (Hannan & Freeman, 1989). J.V.
Singh (1990) described the central theoretical thrust of organisational ecology as
the investigation of how social environments shape rates of creation and death of
organisational forms, rates of organisational founding and mortality, and rates of
change in organisational forms (p. 11). Founding and mortality is analysed at the
organisational population level because the individual organisation can experience
only one of each type of event (Carroll, 1988). There is not an assumption that
change equals progress, and the ecological perspective interprets organisational
change as simply achieving a better fit with the environment (Hall, 2002).
Ecological research emerges from longitudinal studies, and strongly comparable
empirical findings across studies are delivered by organisational ecologists because
they are consistently using the same essential variable definitions and
measurements (Lewin & Volberda, 1999, p. 519). Organisational ecologists
characterise successful organisations as having structural inertia, meaning that the
capacity of these organisations to adapt is limited, and they adapt slowly, if at all
(Hannan & Freeman, 1989). In contrast, strategic management theories focus on
adaptation within individual organisations as a function of their internal strategy and
design decisions (Lewin & Volberda, 1999). This perspective dominates
contemporary public relations theory, much of which assumes that organisations are
highly adaptive, that structural changes can and should occur in response to
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environmental variation, and that the role of public relations is to support and
facilitate the organisation as it adjusts and adapts to a changing environment
(Everett, 2001).
Organisational ecology de-emphasises rational action as the prime
determinant of organisational structure or strategy (Hannan & Freeman, 1989); in
other words it adopts the position that change frequently occurs within
organisational populations, without, or in spite of, the rational decisions and actions
of managers. Organisations are conceptualised as complicated systems that have
strong limits on their flexibility and responsiveness (Hannan & Freeman, 1989).
Political processes, together with various kinds of costs and constraints, ensure that
organisations are anything but flexible and quick in collective response to changing
opportunities and constraints in the environment (p. xi).
Carroll (1984) argued that unlike the business policy experts, who have
attributed organisational failures solely to factors internal to organisations, many
failures are due to external causes. This position was deemed radical, if not
blasphemous (Carroll, p. 84) because it implies that business failure, and therefore
success, is not always controlled by managerial initiatives.
Despite its empirical value and validity, particularly when contrasted to
strategic management research (Lewin & Volberda, 1999), a major criticism of
organisational ecology is that it does not explain adaptation at the individual
organisation-level and that the focus on the evolution of populations of organisations
has been disconnected from adaptation at the level of the individual organisational
unit and therefore cannot directly contribute to explicating firm level adaptation
(Lewin & Volberda, p. 519). In response to criticisms of organisational ecology as
deterministic, Hannan and Freeman (1989), argued that they are looking for valid
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and reliable explanations of variability in the organisational world and explained
that in that context, the motivations and preferences of individual decision-makers in
single organisations probably do not matter very much (p. 40). Describing their
models as probabilistic rather than deterministic, they argued that the individual
actions deemed so critical by strategic management theorists may be important for
individual organisations and their departments but are much less important for the
population of organisations in which that organisation is situated (Hannan &
Freeman, 1989).
The Organisational Population
Organisms with the same form and bound to a common environmental setting
make up a population and are affected similarly by changes in the environment
(Hannan & Carroll, 1995; Hannan & Freeman, 1989). Arguing that some forces
affecting organisations can only be detected at the population level, Hannan and
Carroll (1995) defined organisational populations as specific time-and-space
instances of organisational forms (p. 29). An organisational population is therefore
not only defined by a generic label, such as investment bank or public bureaucracy,
but also by the specific historical period and society in which it exists (Aldrich,
1999, p. 38). Using this view of organisations and populations, McKelvey (1982)
argued that organisational forms should be classified as species, which he defined as
polythetic groups of competence-sharing populations isolated from each other
because their dominant competencies are not easily learned or transmitted (p. 192).
This approach recognises organisations are neither all alike nor all unique but
comprise sets of polythetic groupings similar enough to be labelled populations
(Aldrich, p. 36).
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Organisations possess core features, including their goals, their forms of
authority, the core technology utilised, and their marketing strategies (Peli,
Bruggeman, Masuch & O'Nuallain, 1994). Hannan and Freeman (1977) argued that
the research problem provides a context within which organisational forms should
be defined and that populations of organisations are not concrete and unchanging
objects but rather abstractions useful for theoretical purposes. Populations of
interest change from investigation to investigation, depending on the concerns and
interests of the researcher (Hannan & Freeman, 1977).
The Significance of the Ecological Perspective
Ecological approaches to public relations demand the purposeful sensing of
the environment to anticipate and detect changes that affect organisational
relationships with publics (Cutlip et al., 2000, p. 243). Patterns of life events in the
population provide a context for gauging the success of managerial actions (Hannan
& Freeman, 1989).
Following the contentions of organisation ecology that successful
organisations are not flexible, adapt slowly or not at all, and organisations are more
likely to fail when undertaking fundamental change (Hannan & Freeman, 1977,
1989), Everett (2001) contrasts the axiomatic pillar" of contemporary public
relations, continuous adaptation, with the selection perspectives of organisational
ecology and organisational evolution. The continuous adaptation processes
described in public relations theory may actually serve to increase the risk of failure
for an organisation that has successfully implemented a change program (Everett,
2001). Current ecological models of public relations have emphasised continuous
adaptation and neglected selection processes in describing the role of the
environment in influencing an organisations relationships with its publics. In
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addition to providing the level of analysis, the organisational population, the
ecological perspective challenges traditional approaches to public relations theory
building. This perspective provides a contrasting viewpoint from which to
understand the interplay between environments, organisations, and publics by
focussing on the specific associations between variations in one important sector, the
public opinion environment, and the evolving relationships that similarly
constrained organisations have with their activist publics.
The Evolutionary Approach
The challenge of detecting associations between environmental variations
and variations in the structural or behavioural attributes of organisations is an
evolutionary one. To adapt Hutchinsons metaphor (1965), the public opinion
environment of the organisational population is the ecological theatre in which the
particular evolutionary play of interest is the evolving organisation-activist
relationships in the population. Evolutionary ecology describes the study of
ecological processes in an evolutionary setting (Haila, 1990), and ecological and
evolutionary arguments ask complementary questions about the same historical
processes (J.V. Singh, 1990). Organisational evolution is applied to describe and
explain organisational diversity and discontinuity (Baum & J.V. Singh, 1994;
Hannan & Freeman, 1989) and presents a broader approach to examining the
dynamics of organisational change (J.V. Singh, 1990). Aldrich (1999) contended
that the evolutionary approach provided a generic framework for understanding
social change and was an overarching framework for other approaches to
organisational theory. McKelvey (1994) argued that the theory of competition
elaborated by evolutionary ecologists is much less ideological than that posed by
economists because it does not rest on so many assumptions about human behaviour
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and rationality. This approach is a more objective base for analysing organisations
because data are drawn from visible environmental resources and constraints and
visible organisation structural or behavioural attributes (McKelvey, p. 317).
Evolutionary Processes
For evolution to occur there must be variations, stable aspects of the
environment differentially selecting from these variations, and retention processes
that hold on to selected variations (Campbell, 1969). Because every new mutation
represents the failure of previously selected forms to be reproduced, variation is
inherently at odds with retention (Campbell, 1969). Further, in arguing for the
applicability of the evolutionary approach to organisational theory, Allard (1967),
Campbell (1969), and later Aldrich (1999) described these mechanismsvariation,
selection, and retentionas generic and not limited to biological systems. Aldrich,
for instance, argued that these generic processes generate the critical events
occurring in the life histories of organisational entities (p. 20) and subsuming other
change processes.
The following discussion of the generic processes of variation, selection,
retention and transformation provides a foundation for describing the evolution of
organisation-activist relationships. The research problem investigates whether
variations in organisation-activist relationships within the focal organisational
population emerge over time in response to variations in the public opinion
environment. Selection and retention of some variations occur, and organisation-
activist relationships undergo transformation if, and when, a major change in the
relationship occurs.
Variation. Any departure from routine or tradition is a variation, and
variations are intentional or blind (Aldrich, 1999). Variations are the raw materials
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from which selection processes cull those that are most suitable, given the selection
criteria (Aldrich, p. 23). Some theorists argue that variations are most often blind
(Campbell, 1982), while others have proposed a mixed position (Nelson & Winter,
1982), or have contended that managers use their skills to deal effectively with
uncertainty and risk (March & Shapira, 1987), concluding that most variations
within organisations are purposeful (Corning, 1974). Intentional variations arise in
many ways, such as through institutionalised experimentation, official tolerance of
unfocused variation, playfulness, or incentives offered to members (A.S. Miner,
1994). Unintentional or blind variations occur independently of environmental or
selection pressures (Aldrich, 1999, p. 23), resulting from chance, luck, conflict,
creative exploration or accidents, among other things (Brunsson, 1985, March,
1981).
Selection. Some variations are more useful than others in helping
organisations to acquire resources. Selection, the second generic evolutionary
process, is generated by forces that differentially select or selectively eliminate
certain types of variations, and selecting forces may be internal, such as managers
and members, or external, such as market forces and government regulations
(Aldrich, 1999). Within organisations, internal selectors have been identified as
pressures toward stability and homogeneity (Campbell, 1969), the persistence of
past selection criteria irrelevant in a new environment (Campbell, 1974), and the
willingness of some organisational founders and leaders to accept a low
performance threshold (Gimeno, Folta, Cooper & Woo, 1997). Selection processes
occurring within and across organisations and populations have been used to explain
why populations of organisations were more likely to be characterised by the
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attributes of surviving organisations than by the attributes of those that disbanded
(Aldrich, p. 28).
Retention. When selected variations are preserved, duplicated, or otherwise
reproduced so that the selected activities are repeated on future occasions or the
selected structures appear again in future generations, the third evolutionary process
of retention has occurred (Aldrich, 1999; Campbell, 1994). At the organisation and
population levels of analysis, retention preserves the technological and managerial
competencies all organisations use to exploit the resources of their environments
(Aldrich, p. 30). Retention occurs within organisations in the form of routines,
structures, and procedures that help to preserve organisational forms.
Transformation. Fundamental to any discussion of evolutionary processes is
the concept of transformation. A transformation is a major change in an
organisation involving a break with existing routines and a shift to new kinds of
competencies that challenge organisational knowledge (Aldrich, 1999, p. 165).
Transformation only takes on meaning if relative inertia is assumed as the normal
organisational state. Selection forces favour accountability and reliability, so
surviving organisations display high inertia (Hannan & Freeman, 1977).
Transformations, according to Aldrich, occur across three dimensions: goals,
boundaries, and activities. Goals are transformed when major changes are evident in
the domain claimed or in the breadth of products or services offered. Boundaries are
transformed when expansions or contractions involving members or other
organisations change, and activities are transformed when an organisations activity
system changes, precipitating major effects on organisational knowledge (Aldrich,
1999).
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Evolutionary Processes and Organisation-Activist Relationships
Just as organisations are embedded within populations of like organisations,
so too are the relationships organisations have with activist publics and others.
Organisational relationships diffuse variations (L.R. Burns & Wholey, 1993;
Leonard-Barton, 1995), and within-population relationships can be a route
through which successful routines are transferred (Aldrich, 1999, p. 236).
An evolutionary perspective demands that what is being selected be carefully
considered. Selection occurs at two levels: bounded entities such as groups and
organisations engaging in competition and cooperation, and the routines, operating
procedures, and competencies undertaken by these bounded entities (Aldrich, 1999;
Baum & J.V. Singh, 1994). Organisations can be viewed as a mix of routines and
competencies that can vary somewhat independently of one another and are thus
available for selective retention (Aldrich, p. 36). Organisations are therefore the
temporary repositories of competencies and routines that are held by their members
and embedded in their technologies, material artefacts, and other structures and
processes. Their relationships can be found within the structures and processes of
organisations.
The Significance of the Evolutionary Perspective
The evolutionary approach is evident in this study at several levels. First, it
frames the primary research problem, which investigates the associations, if any,
between external variation in the public opinion environment of an organisational
population and the evolution of organisation-activist relationships within that
population. Second, implicit in such a framework is the identification of
organisation-activist relationships in the population as units of selection, the
observation of which helps us to explore their evolution. Third, this study applies
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the evolutionary process of transformation to describe an observable change in the
organisation-activist relationships in the population. It anticipates that, at the
population level of analysis, variations in organisation-activist relationships emerge
over time in association with variations in the public opinion environment.
Organisation-Activist Relationships
To identify and describe the evolving organisation-activist relationship
central to the research problem organising this thesis, I will explore relational
perspectives of public relations and related discussions of activism and
organisations. The purpose of this exploration is to understand the characteristics
and properties of organisation-activist relationships that allow them to be observed
and described over time and from which conclusions are drawn about their
evolution.
Most contemporary approaches to exploring organisational relationships are
useful for capturing the state of a focal organisational relationship at a point in time
or over a limited period (Ledingham & Bruning, 1998, 2000a; Huang, 1997, 2001).
However, such approaches are not as useful for exploring the relationships at the
organisational population level of analysis for a timeframe adequate to that
demanded by ecological and evolutionary perspectives.
While organisational relationships are almost exclusively studied and
understood using the perceptions of the parties in the relationships, Broom et al.
(1997, 2000) provided a model for identifying relationship processes and structures
at the organisation-public level of analysis. Drawing extensively from the
interpersonal and interorganisational literature, they argued that organisation-public
relationships can be described and studied as objective phenomena that are not
limited to the subjective experiences of individual participants, and have properties
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other than the perceptions of those involved (Broom et al., 1997, 2000). This
perspective offers the most utility for describing the evolution of organisation-
activist relationships.
The Place of Relationships in Public Relations
Relationships limit organisational autonomy, but good relationships limit it
less than bad; therefore, building relationships and managing interdependence is the
substance of public relations (J.E. Grunig, L.A. Grunig & Ehling, 1992a; J.E. Grunig
& Repper, 1992). The importance of building successful relationships between
organisations and their publics and the proposition that relationships underpin the
practice of public relations, from issues management to crisis communication
(Plowman, Briggs & Huang, 2001, p. 309) are common perspectives in public
relations theory and research (Huang, 1997). The close attention paid to
understanding and building relationships with publics is, however, relatively new to
the discipline. Following Fergusons (1984) call for increased attention to
relationships, a stream of organisation-public relationship research emerged. Pavlik
and Salmon (1984) argued that no research undertaken within the discipline up to
that date had employed the relationship as the primary unit of analysis. Later,
lamenting the paucity of research addressing the measurement of organisation-
public relationships, Broom and Dozier (1990) asserted that while public relations
programmes have been conceptualised as affecting organisation-public relationships,
the impacts claimed were rarely measured. More frequently measured were the
impacts on either or both sides of relationships from which implicit or, less
frequently, explicit inferences could be made about how the relationships changed
(Broom and Dozier, 1990).
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More recently, a framework for contemporary organisation-public theory has
emerged from interpersonal communication, psychotherapy, interorganisational
relationship theory, and systems theory (Broom et al., 2000; Ledingham & Bruning,
2000a). Relationship management research can be categorised into three major
areas: models of organisation-public relationships, relationship dimensions as
indicators of relationship effects, and applications of the relational perspective to
public relations practice (Ledingham, et al., 1999).
Emerging predominantly from interorganisational relationship theory
(Aldrich, 1979; Galaskiewicz, 1985; Van de Ven, 1976), Broom et al. (1997) argued
that organisation-public relationships are the dynamic results of the exchanges and
reciprocity, appearing as relationships evolve, and that they are able to be described
at any given point in time. They offered the following definition:
Organisation-public relationships are represented by the patterns of
interaction, transaction, exchange, and linkage between an organisation and
its publics. These relationships have properties that are distinct from the
identities, attributes, and perceptions of the individuals and social
collectivities in the relationships. Though dynamic in nature, organisation-
public relationships can be described at a single point in time and tracked
over time (2000, p.18).
Broom et al. (1997, 2000) described relationships as both the consequences
and causes of organisational change. Drawing from interpersonal and
interorganisational relationship concepts, they argued that relationships are
precipitated by social and cultural norms, collective perceptions and expectations,
needs for resources, perceptions of uncertain environments, and legal or voluntary
imperatives to associate. The nature of organisation-activist relationships are
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defined by their exchanges, transactions, communications, and activities, and
important consequences of relationships are goal achievement, dependency or loss
of autonomy, and routine and institutionalised behaviour (Broom et al., 1997, 2000).
Others have taken a broader approach to defining organisation-public
relationships. Ledingham and Bruning (1998), for instance, defined organisation-
public relationships as the state existing between an organisation and its key publics
in which the actions of either entity impact the economic, social, political and/or
cultural well-being of the other entity (Ledingham & Bruning, 1998, p. 62). They
also offer a definition of the ideal organisation-public relationship as the state
that exists between an organisation and its key publics that provides economic,
social, political and/or cultural benefits to all parties involved and is characterised by
mutual positive regard (p. 62).
Based on extensive conceptual development and empirical data, Huang
(1998) offered a perspective in which organisation-public relationships are defined
by the subjective experiences of relationship participants and described by
characteristics emerging from those subjective experiences. She defined
organisation-public relationships as the degree that the organisation and its publics
trust one another, agree on one has rightful power to influence, experience
satisfaction with each other, and commit oneself to one another (p. 12). Huang also
(1997) argued that organisation-public relationships are subjective experiences
rather than objective entities, that they include relationships between a corporate
person and another corporate person or relationships between a corporate person and
a group of seemingly unrelated individuals, and that these relationships frequently
involve the exchange of resources between individuals and organisations. J.E.
Grunig and Huang (2000) specified the properties defining relationships, especially
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good relationships, and proposed that the most important dimensions of
relationships are control, mutuality, trust, relational satisfaction, and relational
commitment and goal attainment.
While the definitions and approaches offered by Ledingham & Bruning
(1998, 2000a, 2000b), Huang (1997, 2001) and J.E. Grunig & Huang (2000) are
useful for understanding organisation-public relationships from the perspective of
individuals involved in these relationships, they have limited utility for exploring the
relationships within an organisational population over a period of time. Such
approaches have no utility for exploring relationships at the organisational
population level of analysis and are also inadequate when the theoretical paradigm
demands more than a snapshot in time. Drawing primarily from the work of Van de
Ven (1976) and Aldrich (1979), Broom et al. (1997, 2000) were the first public
relations scholars to propose a theoretical apparatus with which to explore
organisation-activist relationships from an ecological perspective. Given the so-
called ecological models of public relations and the extensive, if limited, attention
paid to the role of public relations in helping organisations adapt to organisational
change, this advance is long overdue. Using the ecological perspective relationships
between organisations and their publics can be construed as processes with
properties that are distinct from the identities, attributes, and perceptions of the
individuals and other social collectivities in the relationships. These properties can
be described at any given point in time but they are explicitly dynamic and evolve
over time (1997, p. 94). Relational characteristics are viewed as being embedded
within the patterns of interaction, transaction, exchange, and linkage. An important
ambition of this exploration is to discern the characteristics and properties of
organisation-activist relationships that allow them to be observed and described over
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time. This requires a shift away from interpersonal views of relationships to that of
relationship as transactions and exchanges facilitated by processes and structures.
Only then can conclusions are drawn about the evolution or organisation-public
relationships.
Activists, together with other important but excluded publics, are not
adequately accommodated within established public relations theory and research
agendas, and organisation-activist relationships are an important but neglected
subset of organisation-public relationships (Dozier & Lauzen, 2000; Holtzhausen,
2000; Karlberg, 1996). The organisation-centric approach to understanding
activists as organisational problems, however, has been extensively criticised.
Dozier and Lauzen (2000) and Karlberg (1996) asserted that the instrumental deep-
pockets bias evident in public relations research into organisation-activist public
relationships has contributed to a predominantly partisan body of knowledge that
seeks to prescribe organisational solutions to activist problems. They also
criticised the push to show how activists are similar to, rather than different from,
other types of publics (Dozier & Lauzen, 2000). Typical of this deep-pockets bias
was Heaths (1997) assertion that models of activism are valuable if they provide
insight into how organisations can constructively intervene to manage and reduce
the concerns and issues motivating activist publics. In other words, activism in
organisation-public relationships is most often treated in the public relations
research and literature as undesirable for the organisation. Models describing this
phenomenon are useful only when they contribute to the organisations capacity to
control and limit activism (L.A. Grunig, 1992a; J.E. Grunig & L.A. Grunig, 1997;
Heath, 1997).
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Precipitating organisational change is a primary objective of activist groups
(L.A. Grunig, 1992a), and so activists occupy unique and potentially powerful
positions in relation to the organisations with which they share issues of mutual
concern. Whereas organisations can choose to ignore markets, organisations have
little choice other than to communicate with publics when they become active (J.E.
Grunig & Repper, 1992). Relationships between organisations and their activist
publics are typically described as antipathetic, with activists viewed as problem
groups with whom contact is minimised and preferably resisted. The threat
presented lies in their potential power to constrain organisational autonomy, and
these constraints can result in increased costs, reduced market shares and damaged
reputations (L.A. Grunig, 1992a). Symbiotically, activist publics are particularly
important to public relations practice because public relations could lose much of its
value to organisations without the existence of activists (L.A. Grunig, 1992a).
Arguing that the purpose of the activist group is to exert control over
organisations from the outside, Mintzberg (1983) defined the three major
influencers in organisational environments as the mass media, government, and
special interest groups. He contended that activist groups are important in defining
the organisations environment and that activists, the media and government interact
to magnify the importance of activism. In her study of activist groups, L.A. Grunig
(1992a) concluded that activism and its potential for negative public opinion or
excessive regulation represent major threats for organisations; that activist groups,
regardless of size and type, apply various techniques, all of which have the potential
to disrupt the organisation; that no conflict results in a self-ascribed success for the
organisation; and finally, that many organisations try to ignore activists altogether.
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Contemporary perspectives on activism and activist groups emerge from the
works of the scholars of social movements and collective action, including Blalock
(1989), Gamson (1968, 1975), Oberschall (1973, 1978), and Simons (1970, 1972,
1976) (see also Gans, 2003; Gitlin, 2001; Ryan, 1991; Tuchman, 1997). Activism
focuses attention on the same incidents and the shared culture ensures that a similar
interpretation of these events will be made (Oberschall, 1973, p. 310). Olsons
theory of collective action (1982) proposes that special interest groups with
relatively few members have disproportionate power and that special interests of
activist publics often conflict with general community welfare, even though most
activists are interested in collective rather than individual issues. Public relations
scholars use this theory to explain the influence that relatively small activist groups
sometimes have on organisational autonomy (L.A. Grunig, 1992a; J.E. Grunig &
L.A. Grunig, 1997; Heath, 1997).
Environments and Organisation-Activist Relationships
Olson (1982) linked macro-environmental change with the growth of
activism, tying the decline of the economic power of nation states to the rising
power of special-interest groups. Similarly, in his analysis of activism in the United
States during the 1960s, Oberschall (1978) contended that the decline of social
movement organisations resulted from variation in the social environment,
specifically, a weakening national economy and shifting media attention. While
these scholars researched social movements rather than more specific groups of
activist publics, these examples illustrate that other links between activism and
variation in the social environment have been made. Such examples resonate for
this investigation of whether variations in the public opinion environment are
associated with the evolving organisation-activist relationship in predictable ways.
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In their contribution to the organisation-public relationship literature, J.E.
Grunig and Huang (2000) suggested that environmental influences provide the
imperatives for organisations to build effective relationships with specific publics.
Broom et al. (1997, 2000) also described the causes for the formation and
persistence of organisation-public relationships in environmental terms, and
Ledingham and Bruning (2000b) contended that organisation-public relationship
models would be improved by paying closer attention to exploring environmental
dimensions as independent variables that influence relationships.
While useful starting points, the insights into environmental influences and
causes for organisation-public relationships offered by Broom et al. (1997, 2000),
J.E. Grunig & Huang (2000), and Huang (1997, 2001) have not been explored in any
systematic and comprehensive way. Research to date has focused on assessing and
building loyalty in organisation-customer relationships (Ledingham & Bruning,
1998; Ledingham et al., 1999), exploring relational characteristics, such as trust and
satisfaction, in intra-organisational or organisation-public relationships (Huang,
1997, 2001; Lucarelli-Dimmick, Bell, Burgiss, & Ragsdale, 2000) and building
employee and community relationships (Wilson, 2000). Other recent studies have
defined and developed instruments to measure the nature and quality of the
organisation-public relationship (J.E. Grunig & Huang, 2000; Huang, 1997, 2001;
Ledingham, et al., 1999). However, none have attempted to explicitly address the
influence of environmental variables within the organisation-public relationship, and
activists have not yet figured in this research agenda. Much of the research relies
theoretically and methodologically on the perceptions, established through
interviews or surveys, of individuals who are engaged at some level in focal
organisation-public relationships. Generalised conclusions on the state of the focal
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organisation-public relationships are then made. Only Broom et al. (1997, 2000)
provided a conceptual framework to explore organisation-public relationships
longitudinally using evidence of the relationship rather than the perceptions of the
relationship participants.
Relationship Structures and Processes
The approach taken in this thesis toward understanding, quantifying, and
examining relationships between organisations and their publics follows the models
provided by Broom et al. (1997, 2000). Organisation-public relationship research
has tended to focus on discerning the dimensions and characteristics of relationships
and on measuring the outcomes of relationships in relation to public relations
activities (J.E. Grunig & Huang, 2000; J.E. Grunig, 2001; Huang, 1997, 1998;
Ledingham et al., 1999; Ledingham & Bruning, 2000a). The structures and
processes of organisational relationships have received limited attention, although
Broom et al. (1997, 2000) argued that state and process measures would provide
useful profiles of organisation-public relationships.
Van de Ven (1976) and Aldrich (1979) argued that dimensions commonly
used to examine other social systems are appropriate for exploring relationships in
organisational systems. Van de Ven claimed, a growing consensus among
organisation theorists that formalisation, complexity, and centralisation capture the
major dimensions of social structure (p. 26). His contribution has been the
application of dimensions used extensively to define and measure intra-
organisational structures to the study of relationships between organisations.
Contending that it is important to examine the dynamic activities precipitated by
these relationships, Van de Ven identified the major relationship processes as flows
of information and resources. He concluded that organisational relationships could
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be examined in three ways: by defining and quantifying the formalisation,
centralisation, and complexity of relationship structures; by examining the direction
and intensity of resource and information flows and of relationship processes; and
by exploring relationship outcomes, or the relationships perceived effectiveness
(Van de Ven, 1976). Aldrich (1979), on the other hand, proposed four dimensions
of interorganisational relations: the formalisation of agreements or structures, the
intensity of resources committed or interactions between organisations, the
reciprocity of these exchanges as described by the extent to which resources are
transacted with benefits flowing equally to both parties under mutually agreed terms,
and standardisation as the degree to which procedures or the units of resources
exchanged are similar. In exploring the implications of Aldrichs (1979) dimensions
for public relations, J.E. Grunig, L.A. Grunig, & Ehling (1992) argued that
organisations should develop formalised, intense, and standardised relationships
with their strategic publics and isolated reciprocity as an outcome rather than a
component of the excellent practice of public relations.
Structures. Formalisation is the degree to which rules, policies, and
procedures govern relationships in organisational settings (Aldrich, 1979; Marrett,
1971; Van de Ven, 1976). Any form of expression made between parties in regard
to relationship terms constitutes an interorganisational agreement. Indicators of
formalisation include the extent to which rules, policies, and procedures are
established to transact activities between parties and the extent of governing
procedures, such as agendas and minutes, used by the organisations (Van de Ven,
1976). Formalisation increases with the verbalisation, documentation, legalisation,
and regulation of relationships (Aldrich, 1979). According to Van de Ven (1976),
centralisation is the degree of inclusive or concerted decision-making in an
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interorganisational relationship and is measured by perceptions of the influence
individuals have in making decisions that bind the relationship participants in some
way. Complexity is the number of differentiated elements participants contend with,
and integrate, for organisational relationships to function. Indicators of complexity
include the number of organisations involved and the number of different issues or
tasks undertaken. Complexity increases as the number of different activities or
issues increase (Van de Ven, 1976).
Processes. Arguing that the major processes within interorganisational
relationships are the flows of resources and information between organisations, Van
de Ven (1976) made three contentions: first, that resource and information flows are
the basic elements of activity in organised forms of behaviour and that without them,
social action systems cease to exist; second, that without resource flows, one or
more parties to the relationship would probably terminate their participation; and
third, that through resource and information flows, relationship dynamics can be
studied from the perspective of a single relationship participant or the social action
system as a whole. Relationship processes are characterised by their intensity or
frequency, their direction, and their variability, and this approach to analysing
organisation-public relationships was most recently applied in organisation-public
relationship research by Casey (1997) and Broom et al. (2000). In their exploration
of an educational institution and its relationships with significant publics, Broom et
al. (2000) applied three dimensions to describe the state of relationships, including
formalisation, standardisation, and complexity. They also examined the intensity
and reciprocity of information and resource flows. Information flows are the
messages or communications about the units of exchange or the nature of the
relationship transmitted between organisational parties through a variety of media
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52
(Van de Ven, 1976). In their study, Broom et al. recorded face-to-face contact,
written communications, and phone calls to describe information flows (2000, p.
19).
The concept of information flows and the utility of this concept for
describing the state of organisation-activist relationships was given direction and
support by the dimensions described by Aldrich (1979) and Van de Ven (1976), and
later refined by Broom et al. (1997, 2000). Organisation-activist relationships can
be described using observable relationship processes, specifically, information
flows.
Expressions of Conflict as a Relationship Process
Expressions of conflict or its antithesis, cooperation (Ehling, 1992), are
organisation-activist relationship information flows and provide the means with
which to observe and describe the evolution of these relationships. Conflict and
cooperation are particularly valuable for studies of organisations and their activist
publics (Ehling, 1992; L.A. Grunig, 1992a; Heath, 1997; Huang, 1997; Putnam &
Wilson, 1982; Smith & Ferguson, 2001). Organisations and activists relationships
are organised around issues (Smith & Ferguson, 2001; Smith, 1996) and issues are
conflictual in nature (Olien, Donohue & Tichenor, 1995). Their engagement in
relation to issues of mutual concern is the primary source of conflict between
organisations and their activist publics. In such conflict situations, organisations and
their activist publics are likely to attempt to inform and influence public opinion
through the mass media (Heath, 1997).
Conflict and cooperation can be conceptualised as the extremes of a
continuum (Ehling, 1992), and conflict can be described as an essential aspect of
organisation-activist relationships that serves to make some important exchanges in
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53
those relationships visible through the medium of news coverage (L.A. Grunig,
1992a; J.E. Grunig & L.A. Grunig, 1997; Heath, 1997; Olien, Tichenor & Donohue,
1989).
The conflict literature is replete with discussions and frameworks with which
to understand and manage conflict. The discussion that follows is limited only to
that which illuminates the expression of conflict or cooperation in the organisation-
activist relationship and does not extend to the management of such conflict.
Organisations and Conflict
Conflict is vital for facilitating change and adapting to dynamic
organisational environments (Putnam & Scott Poole, 1987; Putnam, 1990) and is the
most exacting test of the character of a relationship (Canary & Capach, 1988). It
exists in interpersonal, intergroup, interorganisational, and international forms and
settings and is an inevitable and pervasive aspect of relationships in organisational
contexts (Huang, 1997; Morrill & Thomas, 1992; Nicotera, Rodriguez, Hall &
Jackson, 1995) and, in particular, in organisation-public relationships that include
activist publics (Ehling, 1992; L.A. Grunig, 1992a; Huang, 1997; Murphy & Dee,
1996; Plowman, 1995; Plowman, Briggs & Huang, 2001).
Conflict is any social situation or process in which two or more social
entities are linked by at least one form of antagonistic psychological relation or at
least one form of antagonistic interaction (Fink, 1968 as cited in Nicotera et al.,
1995, p. 7). Although subject to conceptual and terminologic confusion (Nicotera
el al., 1995, p. 4), theorists define conflict similarly as that which results when
parties hold or perceive incompatible interests, including goals, resources, prestige,
or power (Huang, 1997). All conflicts possess fundamentally similar properties
(Boulding, 1962; Deutsch, 1973; Levinger & Rubin, 1994; Schelling, 1960)
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54
resulting from real or perceived incompatibilities of interests (Levinger & Rubin,
1994; Pruitt & Rubin, 1986; Deutsch, 1973). Putnam (1995) described conflict as
an expressed struggle between at least two interdependent parties who perceive
incompatible goals, scarce rewards, and [potential] interference from the other party
in achieving their goals (p. 183).
Conflicts may arise from competition for scarce resources, prestige and
power, divergence in values or beliefs, or the parties differing views of their
relationships (Deutsch, 1973; Laue, 1987). It exists on a continuum ranging from
entirely relationship-damaging to entirely relationship-enhancing (Levinger &
Rubin, 1994, p. 205) and can be driven by one or more underlying motives,
including cooperation and competition (Huang, 1997).
Conflict and Public Relations
The integration of organisational conflict management strategy and theory
into public relations is increasingly apparent (Ehling, 1992; J.E. Grunig, L.A.
Grunig, Sriramesh & Huang, 1995; J.E. Grunig & Huang, 2000; Huang, 1997, 2001;
Plowman, 1995; Plowman, et al., 2001). Functioning as organisational boundary
spanners and communication managers (J.E. Grunig & Hunt, 1984; L.A. Grunig,
1992b), public relations professionals must help organisations manage their
responses to conflict and to rapid environmental changes (White & Dozier, 1992).
Studies have examined how certain models of public relations contribute to the level
of conflict or activism at organisational levels (Anderson, 1992; L.A. Grunig, 1992a;
Huang, 1990) or how conflict management strategies have been applied to building
long-term relationships with strategic publics (Plowman, 1995; Plowman et al.,
2001). Murphy (1991), for instance, introduced game theory to develop the mixed-
motive model of public relations in which organisations and activist publics were
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55
seen as motivated to cooperate to the extent that the resolution of conflict satisfied
their self-interest.
Ehling et al. (1992) argued that social conflict, and its opposite, social
cooperation, constitute the critical units of analysis for public relations executives.
Others have argued that conflict theories and public relations theories are
substantially similar in their theoretical foundations and that both fields presume that
conflict is unavoidable or even constructive in human relations (Huang, 1997;
Plowman, 1995). Public relations and conflict management both assume the
importance of achieving an equilibrium between the interests of conflicting groups
and emphasise the importance of dynamic communication or bargaining behaviour
in preference to the imposition of one entitys beliefs on the other (Plowman et al.,
2001). Public relations and conflict management share the same themes of
perception, interdependence, and interaction suggested in the literature involving
relationships (Broom et al., 1997), and conflict is therefore fundamental to any
comprehensive discussion of organisation-public relationships, particularly
organisation-activist relationships.
Although all social conflicts share some common traits, organisational
conflicts differ from interpersonal ones in the number of people involved and the use
of representative negotiation (Huang, 1997). Inter-group conflicts such as those
involving organisations and their activist publics typically include two or more large
groups of people. In general, the complexity of organisation-public relationships
increases as more participants become involved in a conflict situation, and
organisations and their publics often assign individuals to represent their respective
interests in a conflict situation (Bazerman & Lewicki, 1983).
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56
Contending parties in conflict situations take tougher, more extreme
positions in the presence of audiences than they do under conditions of privacy
(Levinger & Rubin, 1994). The involvement of the mass media in organisation-
public relationships is thus critical for organisation-activist relationships because it
affects relationship quality and generally intensifies relationships (Heath, 1997;
Huang, 1997). The news media are likely to cover organisation-activist interactions
when the degree of conflict expressed is high because of the importance of conflict
driving the selection and publication of news (Karlberg, 1996). Activists obtain
credibility, resources, and exposure for their positions by attracting media coverage,
and therefore media coverage is critical to their mobilisation and effectiveness
(Heath, 1997, Olien et al., 1989). Regardless of whether media attention is sought
out by organisations or activists in an attempt to better serve their interests in the
prevailing public opinion environment or whether it is an unwelcome but
unavoidable side-effect of the conflict, the higher the degree of evident conflict in
organisation-activist relationships, the more likely that media attention and coverage
will result (L.A. Grunig, 1992a; Heath, 1997; Olien et al., 1989).
The emphasis of this thesis is not on managing conflict in organisation-
activist relationships but on using expressions of conflict or cooperation as
observable evidence of organisation-activist relationship processes, specifically their
information flows. Using information flows, I will describe the evolution of
organisation-activist relationships and investigate the association with public
opinion environment variation. Having explored the literature most relevant to the
abiding research problem, I will summarise the assumptions emerging and
underpinning this research and pose research questions.
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57
The Core Assumptions
Public opinion is critical to contemporary organisational theory and research
and is important because organisations require public consent (Devereaux Ferguson,
2000; Newsom et al., 2000) and support (Deephouse, 2000) in order to continue
their activities. Central to understanding the public opinion environment of an
organisational population is the set of issues around which public opinion forms and
changes over time and around which activist publics organise (Glynn et al., 1999;
Heath, 1997; L.A. Grunig, 1992a; Mintzberg, 1983; Smith, 1996; Smith &
Ferguson, 2001). The public opinion environment of an organisational population is
therefore conceptualised as the set of issues of mutual concern to all population
members that manifest in the public domain over time. Activist publics organise
around these issues, which emerge in the public opinion environment through the
mass media. The public opinion environment varies over time as new issues emerge
and existing issues are resolved or become dormant. One of the significant ways in
which organisations experience the public opinion environment is through the mass
media, where the voices of political leaders, elites, opinion leaders, industry
collectives, and dissenting and supporting publics are heard (McLeod, Pan &
Rucinski, 1995). Although there are limitations with any single method of
measuring public opinion (Price, 1992), one method of describing public opinion is
to analyse the media coverage of issues significant to an organisational population
and to the activist relationships in which members of that population are engaged.
In contending that there is a relationship between environmental variation
and change over time in organisational relationships, the perspective of this thesis is
both ecological and evolutionary and is based on some important assumptions that
emerge from these perspectives. Organisational environments have many
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58
dimensions (Aldrich, 1999; T. Burns & Stalker, 1961; Katz & Kahn, 1978;
Lawrence & Lorsch, 1967; Mintzberg, 1983; Tosi, 1992). There is a relationship
between environmental variation over time and the structures, processes, and
outcomes of organisations, and this premise is common to the major perspectives of
organisation theory (Child, 1972; Hannan & Freeman, 1977, 1989; Pfeffer &
Salancik 1978; Scott 1987). Important structures, processes, and outcomes of
organisations can be linked to environmental variation (Wholey & Brittain, 1989).
Included in these structures, processes, and outcomes are organisations
relationships with important publics and other stakeholders (J.E. Grunig, 2001; J.E.
Grunig & Huang, 2000; Hall, 2002; Huang, 2001; Ledingham et al., 1999;
Ledingham & Bruning, 2000a; Oberschall, 1978; Tosi, 1992).
Ecological analyses of organisations assume that members of a population
are affected similarly by environmental change and share a common dependence on
the material and social environment (Hannan & Freeman, 1989). Consistent with
this perspective, organisation-activist relationships are examined at the population
level of analysis. That is, the within-population organisation-activist relationships
are bound to the same environmental dependencies and are affected similarly by
environmental change. Specifically, these relationships are organised around the
issue set in the public opinion environment of the organisational population.
The environmental conditions in which organisation-public relationships
exist have attracted limited research and acknowledgement, and while the emerging
body of organisation-public relationship literature signals the importance of the
environmental setting of relationships, it does little more (Broom et al., 1997, 2000;
Bruning & Ledingham, 1999; Ledingham & Bruning 2000a; J.E. Grunig & Huang,
2000; Huang, 2001; Pavlik, 1987). Although activist publics hold important (Dozier
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59
& Lauzen, 2000; Karlberg, 1996), sometimes powerful, positions in organisational
life (L.A. Grunig, 1992a; J.E. Grunig & L.A. Grunig, 1997; Olson, 1971), public
relations literature and the wider body of organisational theory and research usually
treat activists as an external, typically hostile element of the organisations
environment that present a management challenge to scholars and practitioners
alike. As such, organisation-activist relationships have continued to be neglected by
organisation-public relationships researchers, leaving a gap in the literature which
this study seeks to bridge.
This research focuses on the evolution of organisation-activist relationships
in the population in response to variation in the public opinion environment
described by the set of issues of mutual concern to the organisational population.
Within organisation-activist relationships, variation, selection, and retention can be
observed over time in their formalisation, standardisation, and complexity and in the
intensity and reciprocity of their information and resource flows (Aldrich, 1979;
Broom et al., 1997; Van de Ven, 1976). Variations in the public opinion
environment of the organisational population are introduced as variations in the
composition of the issue set. This investigation focuses on the consequences of
those variations, if any, for the organisation-activist relationships of the focal
population. Of most interest here are information flows that make the state of the
organisation-activist relationship visible. The degree of conflict or cooperation in
these relationships is embedded in observable organisation-activist relationship
processes, specifically, their public statements to the news media. The information
flows important to this study are the public statements made by organisations and
their activist publics in the population that signal the state of organisation-activist
relationships.
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Research Questions
The research problem organising this research is articulated here: Does
variation in the public opinion environment of an organisational population over
time influence the evolutionary ecology of organisation-activist relationships in that
population? Arising from this overarching problem are the more specific research
questions explored in this thesis:
1. What are the dimensions of the public opinion environment at the
organisational population level of analysis?
2. In what ways does the public opinion environment of an
organisational population vary over time?
3. To what extent can variation in the dimensions of the public
opinion environment of an organisational population be described
and measured?
4. To what extent can the evolution of organisation-activist
relationships within an organisational population be observed and
described?
5. To what extent can associations between variations in the
dimensions of the public opinion environment of an organisational
population and variations in the state of organisation-activist
relationships in that population be specified?
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61
6. Does such an approach to conceptualising and measuring variation
in the public opinion environment of an organisational population
and associating those variations with the evolution of organisation-
activist relationships offer any power from which predictions about
these associations could be formally hypothesised?
Emerging from the contention that the public opinion environment is an
important environmental sector that similarly affects and constrains an
organisational population, this thesis investigates the problem of whether variations
in the dimensions of that environment are associated with the ways in which
organisation-activist relationships in that population evolve. Classic hypotheses
were inappropriate for this exploratory study. Instead, I propose a descriptive
model, the evolutionary model of organisation-activist relationships (EOAR), and
advance a series of propositions. The model is described in the next chapter.
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CHAPTER 3
The Evolutionary Model of Organisation-Activist Relationships (EOAR)
This chapter presents the evolutionary model of organisation-activist
relationships (EOAR) and is organised into three sections. First, I will contextualise
the discussion by providing an overview of the model concept and propositions.
Second, I will explain the conflict continuum applied in the model. Using this
continuum, I will describe the evolution of organisation-activist relationships
according to the movement of these relationships along the continuum toward
conflict or cooperation. Third, I will discuss the dimensions of the public opinion
environment organising the EOAR model. These dimensionsstability,
complexity, intensity, and directionprovide the apparatus with which variations in
the public opinion environment of the focal organisational population are identified
and measured.
Emerging from ecological perspectives of organisations and the wider
domain of organisation-environment theories and the public opinion literature, the
EOAR model proposes associations between variations in the stability, complexity,
intensity and direction of the public opinion environment of an organisational
population and in the evolution of organisation-activist relationships in the
population. These associations are specified in Figure 3.1.

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Figure 3.1
The Evolutionary Model of Organisation-Activist Relationships
The Issue Set
Stability Low High P1
Complexity High Low P2
Intensity High Low P3
Direction Favourable Unfavourable P4
Organisation-
Activist
Relationships
The Conflict Conflict Cooperative

Continuum State State
P = Proposition
64
Propositions of the EOAR Model
Proposition 1 (P1) As the stability of the issue set in the public opinion
environment increases, organisation-activist relationships in the population move
toward a cooperative state.
Proposition 2 (P2) As the complexity of the issue set in the public opinion
toward a conflict state.
Proposition 3 (P3) As the intensity of the issue set in the public opinion
toward a conflict state.
Proposition 4 (P4) As the direction of the issue set in the public opinion
environment becomes less favourable, organisation-activist relationships in the
population move toward a cooperative state.
The foundations for the propositions of this model are discussed in the
following sections of this chapter, beginning with an explanation of the conflict
continuum.
65
Evolving Organisation-Activist Relationships
One of the challenges of this study is to locate a meaningful and practicable
way of describing the evolving organisation-activist relationships at the population
level of analysis. The nature of organisation-activist relationships presupposes a
degree of conflict as activists typically seek to precipitate or prevent organisational
change and organisations resist activist pressures (L.A. Grunig, 1992a; Smith &
Ferguson, 2001). Measures may be applied over time to describe the degree of
conflict and cooperation in organisational relationships (Ehling, 1992).
The description of cooperation as the natural opposite of conflict (Ehling,
1992; Levinger & Rubin, 1994) provides a precedent for the conflict continuum
described in Table 3.1 and embedded in the EOAR model (see Figure 3.1). The
extremes of this continuum are conceptualised as representing a cooperative or a
conflict state. In the cooperative state, all efforts by organisations and their activist
publics in the population focus on reconciling their mutual interests, cooperating to
reach joint benefits, and resolving issues to their mutual satisfaction (Putnam, 1990).
In this mutual gains approach, organisations and activist publics in the population
act as cooperative protagonists (as they) struggle to satisfy their own interests with
the knowledge that satisfaction is best accomplished through satisfying each others
interests as well (Plowman et al., 2001, p. 306). In the conflict state, all efforts by
organisations and their activist publics in the population focus on maximising their
own separate gains in relation to issues of mutual concern while minimising their
losses within a win-lose or self-gain orientation (Putnam, 1990, p. 3). This zero-
sum game approach is symptomatic of malignant social conflict (Deutsch &
Schichman, 1986, p. 229). These two ends of this continuum describe extreme and
probably rare cases that provide useful theoretical boundaries but are not expected to
66
represent the state of most organisation-activist relationships; as Murphy (1991)
explained, most situations are located somewhere along the continuum (p. 126).
The EOAR model specifies that, as the public opinion environment of an
organisational population varied, so did the state of organisation-activist
relationships in the population, as described by a move toward a conflict state, or
The concept of information flows is applied in this study to locate the state of
these relationships on a conflict continuum. Information flows are essential
processes within all organisational relationships (Broom et al., 1997, 2000) and
more specifically within the organisation-activist relationships considered in this
study. Because of their role in covering the issues around which activists organise,
the news media have an important role in organisation-activist relationships, and
evidence of these relationships is frequently visible in news media coverage (L.A.
Grunig, 1992a; Heath, 1997; Huang, 1997; Olien et al., 1989, 1995; Smith &
Ferguson, 2001). Information flows in which organisations and activists signal the
state of their relationships include the statements they make in public forums.
Statements reported by the news media in the form of direct or indirect quotes are
information flows. These information flows provide cues about the state of
relationships to the organisations and activists and to interested observers. In a
study of how competitively organisations negotiated issues when direct means of
communication were unavailable or illegal, Moore (1990) analysed public
statements made to the media to derive information about mediated communication
between these competitors. The statements extracted and analysed in Moores study
were quotes published by the media.

67
The assumptions made to operationalise the conflict continuum are,
therefore, that organisations and activists signal the state of their relationships in
public statements about their shared issues of concern and that some of these
statements are reported by the news media. It is from this evidence that conclusions
about the degree of conflict or cooperation are drawn. Therefore, public statements
made by participants in relation to issues of mutual concern in the issue set are
extracted from news media coverage and aggregated, and an interpretation is made
as to the location of these relationships on the conflict continuum. The conflict and
cooperative relationship state concepts and their indicators are described in Table
3.1.
The dimensions of the public opinion environment organising the EOAR
model are now advanced. These dimensionsstability, complexity, intensity, and
directionprovide the apparatus with which variations in the public opinion
environment of the focal organisational population are identified and measured.

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Table 3.1.
The Conflict Continuum Concept Summary and Indicators
Conflict State Cooperative State
All efforts by organisations and their All efforts by organisations and their
activist publics in the population focus activist publics in the population focus
on on
maximising their own separate reconciling their mutual
gains on issues of mutual interests.
concern. cooperating to reach joint
minimising their losses within a benefits.
win-lose or self-gain resolving issues to their mutual
orientation. satisfaction.
Indicators of a Conflict State Indicators of a Cooperative State
Public statements attributed to Public statements attributed to

relationship participants by the news relationship participants by the news
media media
explicitly reject cooperation as openly acknowledge cooperation as
desirable and necessary or omit any desirable and necessary.
reference to cooperation. suggest that cooperation is
describe the relationship as being in occurring and that consensus is
a state of conflict. evident.
focus on conflict-seeking and the focus on solution-seeking and the
points of dissension on the issues of points of consensus on the issues of
mutual concern. mutual concern .
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The Public Opinion Environment Dimensions
The dimensions of the public opinion environment of an organisational
population were derived from two very different bodies of literature. Organisational
sociology and, more specifically, studies of organisations and environments provide
many perspectives from which to view the dimensions of organisational
environments and to describe variation in those dimensions. The literature of public
opinion also provides some important dimensions through which change can be
observed and measured. For this study, the relevant contributions of the public
opinion scholars are considered first, followed by a discussion of the major
perspectives of environmental variation in organisational settings. Emerging from
this discussion are the rationales for establishing stability, complexity, intensity and
direction as four major dimensions of the public opinion environment of an
organisational population. While all four dimensions are evident to some extent in
the works from both disciplines, the stability and complexity dimensions of the
public opinion environment are derived largely from the organisational literature.
The public opinion literature substantiates the intensity and direction dimensions.
Glynn et al. (1999) argued that direction, intensity, stability, and information
content are the most important dimensions of public opinion. Direction of public
opinion describes where people stand on issues, intensity describes how strongly
people feel about an issue, stability refers to the consistency of peoples opinions
over time, and information content describes how much the public know about
issues, or how informed and rational opinion may be (Glynn et al., 1999). Other
dimensions of public opinion focus on the differentiating degrees of strength with
which opinions are held (Crespi, 1997). These dimensions include extremity, or the
degree of favourableness or unfavourableness (e.g., completely versus partially

70
favourable); intensity, or the strength of feelings (e.g., strong versus mild feeling);
certainty, or the degree of conviction that one is correct (e.g., very sure versus not so
sure); importance or the degree of personal involvement (e.g., personally very
important versus not so important); and complexity, or the amount of information
held about the issue.
Emery and Trist (1965) were the first to explore notions of stability and
turbulence in dimensions of the organisational environment. While Pfeffer and
Salancik (1978) claimed that offering and withholding critical resources are the most
important environmental dimensions, Aldrich (1979) argued for six core dimensions
of organisation environments: capacity, homogeneity, stability, concentration,
domain consensus, and turbulence. Dess and Beard (1984) collapsed five of these
into three dimensionsmunificence, dynamism, and complexityand argued that
these three dimensions are almost identical to the critical environmental
dimensionsilliberality, variability and complexityproposed by Child (1972) and
similar to those proposed by others, including Pfeffer and Salancik (1978),
Mintzberg (1979), and Scott (1981). The concept of munificence, similar to
Aldrichs concept of capacity (1979), describes the extent to which the environment
supports and sustains growth. Dynamism encompasses the stability and turbulence
dimensions Aldrich suggested, and is characterised by the rate and predictability of
environmental stability-instability. Complexity incorporates the homogeneity-
heterogenity and concentration-dispersion dimensions and is typically viewed as the
heterogeneity and range of an organisations activities (Child, 1972). Dess & Beard
(1984) omitted domain consensus-dissensus, the degree to which organisations agree
to operate within certain boundaries, because of problems with its application to
profit-making organisations.
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In the next section, I will discuss the stability, complexity, intensity, and
direction dimensions of the public opinion environment, the associations anticipated
between variations in these dimensions, and the evolution of organisation-activist
relationships described in Figure 3.1.
Stability and Organisational Environments
One of the primary dimensions of environments is the extent to which they
are static or dynamic (Duncan, 1972). Stability or instability typically refers to the
extent of turnover of elements or parts of the environment (Hall, 2002, p. 212).
Much of the literature in organisation theory suggests that turnover, absence of
pattern, and unpredictability are the best measures of environmental stability-
instability (Dess & Beard, 1984). Stable and certain environments generate low
levels of diversity (Hannan & Freeman, 1989), and a less diverse environment is
simpler for organisations to operate within since they can develop standardised ways
of responding (Hall, 2002).
When an environmental sector is stable and predictable, the organisation
subsystem with which it interacts will be routine (Tosi, 1992, p. 7). In other
words, stability permits standardisation (Aldrich, 1979). Any aspect of an
organisations environment can be stable or unstable, and instability leads to
unpredictability, which organisations resist (Hall, 2002). The concept of stability is
applied here to describe the turnover of issues in the issue set comprising the public
opinion environment of the focal organisational population.
Stability and the Evolving Organisation-Activist Relationship
Stability is the consistency of the public opinion environment over time, and
a stable public opinion environment is evident when the turnover of issues in the
issue set is very low. Conversely, an unstable public opinion environment is

72
characterised by high issue turnover. The turnover of issues has two critical
implications for organisation-activist relationships. First, the extent and
standardisation of relationship routines and interactions are linked to environmental
certainty. Second, issue longevity affects the duration of the relationships around
which they are organised, creating opportunities for issue resolution.
While an issue remains evident in the public opinion environment, it is a
source of contention for the organisations and activist publics within a population.
However, environmental stability permits certainty, standardisation, and
routinisation in relationships (Aldrich 1979, 1999; Hall, 2002) and reduces the need
for interactions (Galaskiewicz & Shatin, 1981). As anticipated by mixed-motive
theory (Murphy, 1991), while organisations and activists in a stable setting are
expected to maintain their self-interest, they also have the opportunity to resolve
their issues of concern cooperatively. A stable public opinion environment allows
organisations and activist publics to establish routine ways of interacting to organise
activities around issues consistently appearing in the issue set. These routines
require some degree of coordination and cooperation. Furthermore, organisations
seek to establish such relationships in order to achieve stability (C. Oliver, 1990;
Van de Ven, 1976).
The environmental stability of organisational relationships, including
organisation-public relationships, allows for more predictable conflicts in which
issues are more clearly defined (Nicotera et al., 1995). If public opinion about an
issue is stable, it is more likely to attract the attention of policymakers (Glynn et al.,
1999) and organisations (Heath, 1997) whereas when public opinion changes
frequently it is more likely to be dismissed. Olien et al. (1995) argued that a sense
of public aversion to the entire issue may develop with issue longevity, the length
73
of time an issue wears on and appears irresolvable, leading to the withdrawal of
public support and a pressure to settle (p. 320). The longevity of an issue is tied
closely to the longevity of activist organisations (Smith, 1996). If the issue around
which activist publics organise disappears, they must either attach to another current
issue or disband. Issue stability is therefore closely associated with organisation-
activist relationship longevity. Neither organisations nor activist publics benefit
from an issue that appears unsolvable. Public attention may wane (W.R. Neuman,
1990) and disadvantage the activist publics, or public pressure may stimulate policy
change resulting in regulation or other sanctions and disadvantage the organisation
(Glynn et al., 1999; Heath, 1997). Levinger and Rubin (1994) argued that time is an
important equalising factor in continuing relationships, such as those relationships
established between organisations and activist publics in a stable public opinion
environment. Relationship power inequalities tend to diminish over time, and as
groups or organisations move toward symmetry, power is either roughly
symmetrical or it moves over time toward symmetry (Levinger & Rubin, p. 208).
When the issue set in the public opinion environment is stable, allowing
organisations and activist publics to organise their interactions and establish routines
that require some degree of cooperation in relation to issues of concern, these
relationships are more likely to move toward a cooperative state. In an unstable
public opinion environment in which issue turnover is high, uncertainty is high, and
routines and standards in relationships are not evident, the opportunity and motive to
advance the resolution of issues cooperatively are more limited. Organisation-
activist relationships within the focal population are therefore expected to move
toward a conflict state in an unstable public opinion environment.

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The first proposition of the EOAR model is, therefore, that as the stability of
the issue set in the public opinion environment increases, organisation-activist
relationships in the population move toward a cooperative state.
Complexity and Organisational Environments
Complexity is the second public opinion environment dimension included in
the EOAR model. Environmental complexity describes the number and variety of
activities and situations with which organisations must interconnect over time (Hall,
2002). Dess and Beard (1984) applied the term complexity to capture the degree to
which organisational environments are heterogeneous or homogeneous and the
extent to which they are concentrated or dispersed. Organisations deal with
complexity by specialising in a limited range of activities (Aldrich, 1979). This, in
turn, leads to a loosely coupled system in which links among organisations are
necessary for organisational survival; therefore, as complexity increases, so too
should the number of interorganisational relationships (Hall, 2002).
In his discussions of this issue, Aldrich (1979) claimed that a more complex
environment increases the organisations need for strategic activities, and Dess and
Beard (1984) argued that organisations competing in industries using many inputs,
or producing many outputs, deal with more complexities and, therefore, more
challenges than competitors using fewer inputs or generating fewer outputs. In more
complex environments, organisations must coordinate many activities, while
organisations in less complex situations have fewer demands placed on their
resources.
In the public opinion environment of an organisational population, as the
number and diversity of issues to be negotiated increases, so too does the complexity
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of interactions demanded. In this study, complexity is described by the number of
issues in the issue set with which the organisational population must contend.
Complexity and the Evolving Organisation-Activist Relationship
Complexity is the heterogeneity of the public opinion environment that an
organisational population must negotiate. This dimension is described by the
number of issues of concern to the organisational population and is measured by the
number of issues in the issue set at intervals over time. The number of issues in the
issue set impacts the organisational population and its activist relationships in two
ways. First, attempts to negotiate, resolve, or deal in other ways with issues demand
the dedication of people, time, and other organisational resources. More issues
means higher demands on organisational resources, and as these resources are
spread more thinly, the resolution of some issues are given lower priority (Heath,
1997). Second, activist publics organise around issues. More issues means more
activist publics vying to advance their interests and more relationships for the
organisational population to sustain. Again, the increasing complexity of issues
adds pressure to the finite human and other resources of the organisational
population.
More issues means greater difficulty in negotiation because there is more to
coordinate (Levinger & Rubin, 1994, p. 208). Organisations dealing with an
increasingly complex environment must choose when and how to communicate and
negotiate with these publics (J.E. Grunig & Repper, 1992). As the public opinion
environment of a population becomes more complex and the number of activist
publics with which the organisation must negotiate increases, the demands placed on
the limited resources organisations have available to deal with these issues and their
associated publics also increase (Heath, 1997).

76
As the public opinion environment becomes more complex, that is, the
number of issues in the issue set increases, the population and its members are under
increasing pressure to deal with significant concerns that have important and, at
times, terminal implications for the organisation. An increasingly complex public
opinion environment is evident when the number of issues multiplies, competition
for the organisational and other resources rises, and the number of relationships to
negotiate increases. Under such conditions of increasing issue-set complexity, the
opportunity to deal with issues of mutual concern cooperatively is constrained, and
organisation-activist relationships in the focal population are more likely to move
toward a conflict state. When issue-set complexity decreases and fewer issues
comprise the issue set, organisation-activist relationships are more likely to move
Emerging from this discussion is the second proposition of the EAOR
model: as the complexity of the issue set in the public opinion environment
increases, organisation-activist relationships in the population move toward a
conflict state.
Intensity and Organisational Environments
The third dimension of the public opinion environment, intensity, is derived
from the public opinion literature and describes how strongly opinions are held by
publics (Glynn et al., 1999). From an ecological perspective, the intensity of the
public opinion environment of an organisational population is embedded in the
concept of legitimacy, which is a generalised perception or assumption that the
actions of an entity are desirable, proper, or appropriate within some socially
constructed system of norms, values, beliefs and definitions (Suchman, 1995, p.
574). Aldrich (1999) described the legitimacy of organisational populations as the

77
acceptance by key stakeholders, the general public, opinion leaders, and government
officials of a venture that has two components: the moral value of an activity
within cultural norms, and acceptance of an activity by political and regulatory
authorities (p. 247).
An organisation relies on larger systems of societal values and legal norms
to secure both general legitimacy for its activities and specific laws or edicts to
buttress its position (Katz & Kahn, 1978, p. 132). Intensity is applied here as an
indicator of the extent of the public opinion environment confronting the
organisational population and is described by the volume of media coverage of
issues in the issue set.
Intensity and the Evolving Organisation-Activist Relationship
Intensity is the magnitude of the public opinion environment of the
organisational population, and it is measured by the volume of media coverage of
issues in the issue set over time. Discussions of intensity and the evolving
organisation-relationship revolve around two related points. First, there is consistent
evidence of a relationship between the volume of media coverage and the level of
public concern for an issue (McCombs & Shaw, 1972; W.R. Neuman, 1990).
Second, as public attention increases and the audience grows, the opportunity for
conflicting parties to resolve issues cooperatively decreases (Levinger & Rubin,
1994).
Evidence indicates that news media coverage tends to be greatest at periods
of high intensity of controversies and that coverage and intensity are interactive
processes (Olien et al., 1989, p. 141). Olien et al. also claimed that media coverage
of issues does not advance the interests of marginal groups, such as activists, but
instead reinforces the established institutions and authorities. However, in more

78
intense periods of media coverage, the flow of information does increase (Olien et
al., 1989, p. 161). W.R. Neuman (1990) predicted that a saturation effect occurs
when the intensity of media coverage continues to increase until after a while,
another unit increase in media attention no longer corresponds to an equivalent
increase in public response (p. 164).
Media coverage of an issue lends credibility and importance to that issue for
the public, and media interest is a critical point in the development of an issue
(Bridges & Nelson, 2000). The salience of issues for audiences increases with the
intensity of media coverage, and the media feed on themselves notoriously,
reporting on the issues which seem to be catching on (W.R. Neuman, 1990, p. 163).
Increased media coverage is an important indicator of an expanding audience for
issues, and conflicting parties are likely to take tougher and more extreme positions
as the size of the audience grows (Levinger & Rubin, 1994). This means they are
likely to be slower to yield as decision makers become over-committed to a
particular course of action (Levinger & Rubin, 1994). Under conditions of sustained
intensity, the audience expands, and opportunities for organisations and their activist
publics to deal cooperatively with their issues of mutual concern decline.
Therefore, the third proposition of the EOAR model is that as the intensity of
the issue set in the public opinion environment increases, organisation-activist
relationships in the population move toward a conflict state.
Direction and Organisational Environments
The direction dimension is derived from the public opinion literature and
describes where people position themselves in relation to issues (Glynn et al., 1999).
Using the favourability of media coverage as an indicator of public opinion, I have
applied direction to describe the degree to which the activities of organisations

79
attract public support or favour (Deegan, Rankin & Voght, 2000; Deegan et al.,
2002; Deephouse, 2000). Other studies of organisations have used this dimension to
describe the reputations of organisations (Deephouse, 2000) and to explain the
responses organisations make to favourable or unfavourable media coverage in their
formal reports (Deegan et al., 2002).
Organisations assess their environments by interacting with the public and
their political representatives to assure legitimacy, protect against unfavourable
legislation, or gain economic advantage (Katz & Kahn, 1978, p. 132). Strongly
positive public opinion about organisational activities and interests contributes to
increased credibility and acceptance, and these are important indicators of
organisational legitimacy (Deegan et al., 2002). Organisations founded in
favourable institutional environments achieve higher levels of institutional support,
and therefore, external legitimacy because they are able to gain the acceptance of
vested interests (Tucker, Singh, & Meindhard, 1990; see also Aldrich 1979; Astley,
1985). Tucker et al. (1990) also found that favourability of the environment
influences the rate and type of organisational change.
Direction is applied here to capture the favourability of the focal
organisational populations public opinion environment as described by the extent to
which the media coverage of the organisational population is favourable.
Direction and the Evolving Organisation-Activist Relationship
The direction of the public opinion environment is described by the extent to
which the media coverage is favourable, unfavourable, or neutral in relation to the
focal population. A favourable public opinion environment is one in which media
coverage of issues in the issue set is predominantly positive for the organisational
80
population, and an unfavourable public opinion environment is evident when media
coverage of issues is primarily negative.
Media coverage records public opinion and is a reasonable indicator of the
publics knowledge and opinions about organisations (Deephouse, 2000).
Organisations are more likely to respond to unfavourable depictions in media
coverage (ODonovan, 1999), and the framing of an issue in the media as positive or
negative both reflects public opinion and signals its importance to the public
(Dearing & Rogers, 1996; Deephouse, 2000; Schoenbach & Semetko, 1992).
Studies have also recorded increases in positive or self-laudatory information
disclosures from organisations around the time of events in which they were
depicted unfavourably (Deegan, Rankin, & Tobin, 2002; Patten, 1992).
In the context of organisation-activist relationships, it is anticipated that
when organisational populations experience predominantly negative media
coverage, that is, an unfavourable public opinion environment, they address this
situation by attempting to increase their degree of cooperation with their activist
publics. Therefore, when the direction of public opinion environment becomes less
favourable, the imperative for the organisational population to resolve the issues of
mutual concern increases, and the degree of cooperation in organisation-activist
relationships increases. As the public opinion environment becomes more
favourable, the degree of cooperation in organisation-activist relationships decreases
as the pressure for the organisational population to resolve issues reduces.
The fourth and final proposition of the EOAR model is that as the direction
of the issue set in the public opinion environment becomes less favourable,
organisation-activist relationships in the population move toward a cooperative state.

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Table 3.2
Dimensions of the Public Opinion Environment
Dimension Concept Description
Stability The consistency of the public opinion environment over time as
described by turnover of issues in the issue set. A stable public
opinion environment is characterised by very low turnover of issues in
the issue set.
Complexity The heterogeneity of the public opinion environment as described by
the number of issues in the issue set. A public opinion environment of
increasing complexity is characterised by an increasing number of
issues in the issue set.
Intensity The magnitude of the public opinion environment as described by the
extent of public opinion generated by the issues in the issue set. A
public opinion environment of increasing intensity is characterised by
an increasing volume of media coverage of issues in the issue set.
Direction The favourability of the focal organisational populations public
opinion environment as described by rating the favourability of media
coverage of the issues in issue set. An unfavourable public opinion
environment is characterised by media coverage that is negative in
relation to the population.

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This chapter provides an overview of the EOAR model and its propositions.
Emerging from public relations and conflict management literature, the conflict
continuum is applied to describe the evolution of organisation-activist relationships.
The four dimensionsstability, complexity, intensity, and directionorganising the
propositions of this model are derived from the public opinion literature and from
discussions of the characteristics of organisational environments and approaches to
capturing variations in those environments. In the next chapter, I will discuss the
methodological rationale and particular research methods with which the
propositions of the EOAR model are systematically explored.

83
CHAPTER 4
Methodology
Methodological Rationale
Methodology provides the standards and principles employed to guide the
research design (Sarantakos, 1993). In this study, these standards and principles
emerge from the theoretical framework of the evolutionary model of organisation-
activist relationships (EOAR) detailed in chapters 2 and 3. In this chapter, I
elaborate on the methodological rationale and particular research methods with
which the propositions of the EOAR model are systematically explored and refined.
Keeping the theoretical orientation and specific propositions of this model in mind, I
discuss the longitudinal and exploratory rationale of this study and describe the
comparative case study method in which both qualitative and quantitative
approaches are accepted (Yin, 1994). Finally, I describe the specific research
methods applied and the procedures for analysis.
Anticipated relationships are implicit in social science research (Singleton
Jr., Straits, & Miller Straits, 1993), and the EOAR model anticipates and specifies
associations between (a) variation in dimensions of the public opinion environment
of an organisational population and (b) the evolution of organisation-activist
relationships in the population. Exploring the propositions of the EOAR model
requires elaboration of the association over time between (a) and (b). The public
opinion environment is conceptualised as a transitory set of issues of concern to
members of the focal organisational populationAustralias major banks and their
activist publics. Change in that issue set over time is described using the dimensions
of stability, complexity, intensity, and direction. The evolution of organisation-
activist relationships is described by the movement of these relationships along a

84
continuum toward either a conflict state or a cooperative state (see Figure 3.1). The
theoretical orientation of this thesis excludes static or cross-sectional research
approaches and sets the imperative for a methodology that is simultaneously
exploratory and longitudinal.
The Rationale for an Exploratory Methodology
Given that it is pointless to seek to explain what has not yet been described
reasonably and precisely (King, Keohane, & Verba, 1994), this study employs an
exploratory approach to address the limited existing research and literature that
addresses either the public opinion environment of an organisational population or
the evolution of organisation-activist relationships. Exploratory research is essential
for breaking new ground and yielding new insights (Babbie, 2004) and enabling
more precise questions to be formulated and answered by future research (W.L.
Neuman, 1997). More specifically, when research demands the investigation of
little-understood phenomena, the identification of important categories of meaning,
and the generation of hypotheses for further research, exploratory research is most
appropriate (Marshall & Rossman, 1999). Library research, case studies, or expert
consultation as sources of data are employed for this type of research (Babbie, 2004;
Sarantakos, 1993).
Exploratory studies are undertaken to satisfy the researchers curiosity and
desire for better understanding, to generate ideas and develop tentative theories, to
formulate questions and refine issues for more systematic inquiry, to test the
feasibility of undertaking further research, and to develop methods appropriate to a
more careful study (Babbie, 1989; W.L. Neuman, 1997; Singleton et al., 1993). The
exploratory elements of this study include defining the core concepts of the EOAR
model and operationalising those concepts to test the models propositions.

85
Exploratory studies offer important insights and provide more specific direction
toward achieving definitive answers than toward actually answering research
questions (Babbie, 2004). W.L. Neuman (1997) claimed that there are many
similarities between descriptive and exploratory research and that these approaches
blur together in practice. While the methodology of this research is exploratory in
intent, the comparative case method is applied to achieve a rich and extensive
description of the case studies selected. The approach taken in this thesis is
therefore exploratory and descriptive to the extent that I set out to conceptualise and
describe the particular environmental context, the public opinion environment of an
organisational population; to specify the dimensions of that environment; and to
describe the evolving organisation-activist relationships in that population.
The Rationale for a Longitudinal Methodology
In seeking to accommodate an ecological and evolutionary theoretical
perspective, I have also made this study longitudinal. An important concern of
longitudinal research is the examination of changes in relationships between or
among variables over time (Menard, 2002). Typically applied to descriptive and
explanatory research approaches, longitudinal research is often more complex and
costly than cross-sectional research but it is also more powerful, especially when
researchers seek answers to questions about social change (W.L. Neuman, 1997, p.
28). Monge (1990) argued that there is good reason to explore theory using a
longitudinal research design when theory specifies that several variables constitute a
process that unfolds over time, as with the EOAR model. Researchers use
longitudinal research to examine focal units of analysis at more than one time and to
observe stability or change in the features of the units or track conditions over
time (W.L. Neuman, 1997, p. 28). This research design is longitudinal because (a)
86
issue-set data are collected for each dimension (stability, complexity, intensity, and
direction) for multiple periods, (b) the cases analysed are comparable from one
period to another, and (c) the analysis involves the comparison of data between one
period and another.
Method
Comparative Case Method
Given the theoretical orientation of this study and the research design
imperatives therein, I have selected the comparative case study method as an
appropriate framework with which to describe and explore the public opinion
environment of the focal population and the organisation-activist relationships
embedded in that setting. Case studies help researchers connect the actions of
individuals to large-scale social structures and processes (Vaughan, 1992). To be
effective, comparative case studies must permit structured and focused comparisons,
and this demands the disciplined and systematic collection of data (George &
McKeown, 1985; King et al., 1994; Verba, 1967). To meet these demands, I have
explored propositions of the EOAR model in this study using three case studies
organised around the same organisational population, Australias national banks,
over three different but consecutive seven-year periods. While the whole period of
interest begins with a new era of deregulation in 1981 and extends through to 2001,
those 21 years are divided into logically derived and purposively selected case
studies representing three seven-year periods. These three periods constitute loosely
significant and natural boundaries in the life of the organisational population, and
their selection enables the collection, organisation, and comparative analysis of
evidence within and across the case studies (King et al., 1994).
87
In contrast to the purpose and approach of this thesis, research concerning
organisation-public relationships usually employs cross-sectional methods,
particularly surveys, focussing on individuals and their perceptions. The logic of the
case study, however, is to demonstrate how general social forces shape and produce
results in particular settings (Walton, 1992). Case studies also provide levels of
detail unavailable to research that applies more static methods and are therefore
more useful for producing new insights into the connections among variables
(Eisenhardt, 1989; Glaser & Strauss, 1967; Yin, 1994). Further, because they permit
replication and extension among individual cases, comparative case studies are a
powerful means with which to create theory (Eishenhardt, 1989) and test theory
(Yin, 1994). Case studies are also important for investigating phenomenon within
its real-life context, especially when the boundaries between the phenomenon and
context are not clearly evident (Yin, 1994, p. 13).
In a comparative case study, the evidence from more than one case is often
considered more compelling, and the overall study is therefore regarded as being
more robust (Eisenhardt, 1989; Yin, 1994). Yin (1994) asserted that multiple case
designs are almost always advisable. The boundaries for cases may be drawn in
various ways. Cases can be individuals, groups, organisations, movements, events,
or geographic units. While many case studies involve qualitative data about a few
cases (Ragin, 1994), they can be based on any mix of quantitative and qualitative
evidence (Yin, 1994). For these reasons, the comparative case study approach is
consistent with the ambitions of this study and the nature of the abiding research
problem.
The first and most preferred strategy for single or comparative case study
analysis is to follow the theoretical propositions that led to the case study (Yin,
88
1994, p. 106). A researcher may intensively investigate one or two cases and, as is
evident in this thesis, compare a limited set of cases, focusing on several factors.
The three case studies in this thesis are selected to facilitate a rigorous comparison.
Individual cases are used to independently corroborate the specific propositions of
the EOAR model, thereby helping to to perceive patterns more easily and to
eliminate chance associations (Eisenhardt, 1989, p. 620). The case evidence is
collected and organised within a comparative case study framework in which the
cases are completed separately and consecutively, allowing for an integrated and
cyclical approach to data gathering and analysis (Miles & Huberman, 1994).
The timeframe. One of the primary challenges of designing research to
explore untested models is the identification of an appropriate timeframe. In this
study, the timeframe imperative is located in the ecological and evolutionary
perspectives of the EOAR model.
Van de Ven and Poole (1990) argued that theory building from case studies
is especially useful for studying longitudinal change processes. Similarly, Yin
(1994) claimed a major strength of case studies is their utility for tracing change
over time. In contrast to the work of the organisational ecologists, this thesis does
not focus on the creation or failure of organisations but rather on the evolution of
particular relationships embedded in those organisations. In organisational ecology,
research is designed to collect data over extended periods in order to describe and
explain organisational diversity and discontinuity over time as it relates to the
creation, failure, and change of organisations (Everett, 2001). For example, Hannan
and Freemans seminal work (1989) involved teams of researchers building and
analysing data sets over the full life histories of organisational populations,
including a study of labor unions extending over 140 years, a study of newspaper
89
organisations encompassing 150 years, and a relatively short a study of the
semiconductor industry that covered 39 years.
Evolutionary models highlight the time-dependent nature of schemes for
classifying organisational change, meaning that change may be classified as routine,
minor, or major depending on the timeframe chosen (Aldrich, 1999). In other
words, the appropriate timeframe for research depends on both the context and the
phenomenon of interest. While a timeframe of less than 50 years may have limited
utility for establishing an ecological theory of bureaucracy (Langton, 1984), 50
years is an extraordinarily long time for research that focuses on public opinion and
is unlikely for research focussing on organisation-activist public relationships or any
comparable phenomenon, such as interorganisational relationships. Contemporary
organisations exist within a volatile public opinion environment for which the
timeframe for action and reaction is progressively condensed by communication and
other technologies (Devereaux Ferguson, 2000). Looking to the related area of
public opinion research, timeframes for studies of change are considerably more
modest. For example, Page and Shapiro (1983) and Stimson, MacKuen, and
Erikson, (1994, 1995) adopted a longitudinal approach, assembling opinion poll data
over timeframes of two to five decades. Fan and McAvoy (1989) applied a shorter
time span of five years to develop predictions of public opinion based on mass
media coverage of AIDS.
This study examines the 21 years following deregulation in 1981, which
encompassed episodes of upheaval and relative stability. Prior to 1981, significant
events in the banking and finance sector included the passing of the Banking Act
1945, the separation of the Commonwealth and Reserve Banks in 1959, and the
1974 passage of legislation that aimed to regulate the activities of non-bank financial
90
institutions (Thomson & Abbott, 2000). While these events may have provided
useful starting points for a different kind of study, the imperative of this research is
to capture changes in this environment that help to elaborate the propositions of the
EOAR model. The year 1981 is a logical and pragmatic starting point because of
the shift in the regulatory climate that occurred around that time in response to the
wider social and political changes. This study therefore provides a timeframe that is
adequate given the theoretical perspective of the study and the practical
considerations of undertaking meaningful and manageable thesis research.
The focal population. Political, economic, cultural, technological, and other
environmental dimensions similarly constrain Australias major banks, and while
these may be differentiated by their marketing and operational policies, there are
uniform national laws and regulations to which all must adhere. For the 21 years of
interest to this study and for many preceding years, the major banks operated within
a relatively consistent regulatory environment in which they were required to abide
by federal regulations and report to federally appointed agencies with
responsibilities and powers in place nationally. The activities and policies of banks
affect most individuals and business operations at some level and continue to be
highly scrutinised by government, industry groups and activist organisations, and the
media. Banks provide many services that are integral to the work and private lives
of most Australians, with the major banksthe National, Westpac, ANZ, and the
Commonwealthdominating the domestic marketplace since the deregulation of the
banking system began in the 1960s and accelerated after the Campbell Inquiry in
1981.
Australias major banks consistently attract extensive media coverage with
announcements recording impressive profits and strategic business decisions

91
reported extensively every year, often alongside reports of branch closures and
increases in fees and charges. The period from 1981 to 2001 encompasses several
crucial years preceding full deregulation: the period of deregulation around the mid-
1980s and the post deregulation years in which the banking industry continued to
undergo change. Major issues for the banks in those decades vary with the
economic fortunes of the times and with the boom of the late 1980s leading into the
recession of the 1990s. Recurrent issues include spiralling profits in the face of high
levels of consumer debt, anti-competitive merger proposals, fees and charges on
accounts and transactions, the targeting of vulnerable groups with credit, aggressive
loan retrieval policies for farms and other small businesses, branch closures, and the
general attrition of rural and regional services and aggressive workforce
rationalisation. Banks are intermittently subject to the attentions of activist publics,
including trade unions, farmer advocacy groups, and retail consumer associations.
Because of the scrutiny historically paid to the major banks by governments,
activists, the media, and various other interest groups and influencers, rich sources
of accessible data are therefore available to build these case studies.
Units of analysis. The purpose of the study dictates what or who must be
described, analysed, and compared; thus it dictates the appropriate units of analysis
(Singleton et al., 1993). The two units of analysis important to this study are the
public opinion environment of the organisational population and the organisation-
activist relationships within that population. To explore the propositions of the
EOAR model, I have operationalised these units of analysis as the issue set for the
major banks and the aggregation of public statements from which the state of the
organisation-activist relationships can be interpreted.

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The public opinion environment of an organisational population is
conceptualised as the set of issues concerning the organisational population and the
activist publics within that population. These issues are manifest in media coverage
and other public forums, such as government inquiries. The first step in each case
study is to establish evidence of the issues comprising the issue set. The next steps
are to use that evidence to determine the stability, complexity, intensity and
direction of that issue set over time. The issue set therefore comprises the collection
of issues germane to that population that emerge in mass media coverage during the
months specified in each of the three, seven-year case studies.
The emphasis of this study is on the collective state of organisation-activist
relationships in the population at specified intervals over time, rather than the
development of individual relationships. Organisations and activists signal the state
of their relationships in public statements about issues, specifically those statements
the news media quotes. For this study, I have extracted public statements made by
the major banks and their activist publics in relation to issues of mutual concern in
the issue set and interpreted them in terms of the state of bank-activist relationships
and the location of these relationships on the conflict continuum.
Sources of evidence. The evidence from which the case studies emerge is
collected in two phasesincluding the extensive review of reports from several
major government inquiries, industry reports and scholarly articles, and the content
analysis of 6,595 newspaper articles. Evidence for case studies typically comes
from six sources documents, archival records, interviews, direct observations,
participant-observation, and physical artifacts (Yin, 1994). Documents are
frequently used in case study research and are most relevant to this study.
Appropriate documents include letters; reports, such as meeting agendas and

93
minutes; internal documents; existing research; and mass media content, such as
newspaper articles.
The decision to select documents as the sources of evidence for this study,
specifically government and industry reports, trade journals, scholarly articles, and
newspaper articles, emerges from both theoretical and practical considerations. The
abiding problem of this research is to explore, over an extended period, specific
environmental characteristics of an organisational population and the evolution of
particular relationships nested within that population. Based on the assumptions
emerging from the literature that relationships can be studied apart from the
perspectives of the relationship participants (Broom et al., 1997, 2000) and that the
examination of news media reports provides a useful and reasonable indicator of
public opinion, the theoretical and methodological imperatives of this study invite
the use of documents as the primary data source, as well as the more limited use of
archival records. The strengths of documents as sources of evidence in case study
research are their stability and unobtrusive nature (Yin, 1994). Documents provide a
public record of names and event details and, fundamental to this study, broad
coverage of long time spans encompassing many settings and events. The
weaknesses of documents as sources of case study evidence include potential limits
on retrievability and biased selectivity if the collection is incomplete, embedded
reporting biases, and access limitations (Yin, 1994). In this study, these weaknesses
are substantially countered by the selection of Australias major banks as the focal
population and the extensive use of public documents, such as the reports emerging
from various Commonwealth government committees of inquiry, and newspaper
reports from the major national and state dailies.

94
Collection procedures. Sampling decisions within this case are theoretically
driven; in other words, choices of data sources, episodes, and relationships are
driven by the conceptualisation and research problem rather than by a concern with
representativeness. The goal of this sampling strategy is to address the research
problem and to explore the EOAR model by examining different interrelationships,
at different moments, in different places, with different people (Miles &
Huberman, 1994, p.29). The following sampling decisions are explained in this
section: (1) the selection of the newspapers from which the data are sourced; (2) the
selection of the data points from which issue-set stability, complexity, intensity, and
direction are observed for each case study; and (3) the selection of the data points
from which to locate organisation-activist relationships on the conflict continuum.
Data are systematically sampled from a selection of the largest circulating
national and state newspapers in Australia from April, 1981 to October, 2001. The
newspapers selected are The Australian, Australian Financial Review, The Age,
Sydney Morning Herald, and Courier Mail. The data are collected from microfilm
and electronic print media archives, so the content of these articles is unchanged
from the date of publication. Previous studies suggest that coverage of issues in
print media parallels exposure in the overall communications media (Deegan et al.,
2002). This choice of media titles, which includes national and larger state
newspapers, meets requirements for accessibility and availability and achieves a
broad, geographical reach, a large audience size, a mix of format and content
characteristics in relation to media ownership and perceived political stance
(Hansen, Cottle, Negrine, & Newbold, 1998).
Print media coverage of the issues of concern to Australian banks and their
activist publics is becoming more voluminous over time. Resource limitations,

95
however, prevent the extraction and analysis of all relevant print media coverage
from the selected sources. It is rarely possible or desirable to analyse absolutely all
media coverage of a subject, area or issue (Hansen et al., 1998, p. 100). While the
sampling of the sources of data is purposive, the months selected within each of the
three case studies are sampled systematically (Singleton et al., 1993). In their
discussion of media research, Hansen et al., argued that there are numerous
systematic, ways of obtaining a reasonably representative sample of data to ensure
the sample is not skewed by the preferences of the individual researcher, by the
desire to prove a particular preconceived point, or by insufficient knowledge of the
media and their social context (p. 103).
Longitudinal research designs frequently involve the collection of data at a
single period for several periods (Menard, 2002, p. 2). Because this study concerns
the mapping of variation in the public opinion environment over time and anticipates
associations with the state of organisation-activist relationships rather than the
analysis of specific events (Hansen et al., 1998), data from the nominated print
media sources are extracted systematically from the same two months every year in
each seven-year case study. It is therefore important to understand and
accommodate the cycles and seasonal variations of both the population (Singleton et
al., 1993) and media coverage (Hansen et al., 1998). The starting points for case
studies one, two, and three are the months of April in 1981, 1988, and 1995
respectively. Every sixth month, specifically April and October, is selected because
of the critical position of these months for the population before and after the
financial year-end of June 30. These are important months in bank reporting cycles
during which annual results and shareholder meetings are often conducted or
forecast (October) and quarterly results are posted or projected (April). At these
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times, the banks both seek and attract public and media scrutiny because of the
magnitude of their national and international operations and the foreshadowing of
change or significant announcements of operational and other decisions. It is
anticipated that the richness of information captured in two months out of the year
provides an adequate description given the objectives of the study.
Organisation-activist relationship data for each case study are sampled
systematically using the five newspapers specified. To make an informed
observation about the state of organisation-activist relationships in relation to the
issue set, I have organised this phase of data collection around the same months,
April and October. It is from the resulting data set that I have extracted from the
media coverage public statements made by all organisation-activist relationship
participants. I then scored and aggregated these statements interpreted them in
relation to the state of organisation-activist relationships in the population on the
conflict continuum. In undertaking an active search for confirming or disconfirming
evidence (Miles & Huberman, 1994), I compared the outcomes to the propositions
of the EOAR model.
Government and other reports as sources of evidence. To provide a
framework for the interpretation and analysis of the newspaper coverage, I have
reviewed the reports from several major government inquiries, industry reports, and
scholarly articles in an iterative process until a satisfactory description of the issues
of concern to Australias major banks and their activist publics emerged. Because of
the profile of these banks, one of the significant challenges of undertaking this
research is the overwhelming extent of available sources. In addressing this
challenge, I used as the primary source documents the reports from major
Commonwealth government inquiries, beginning with the Campbell Report in 1981,

97
the Martin Committee of Review in 1983, the 1991 House of Representatives
Standing committee on Finance and Public Administration (Martin Parliamentary
committee), the Financial System Inquiry of 1996, known as the Wallis Inquiry, and
the Report of the Royal Commission into HIH Insurance (2003). The submissions
made to those inquiries by industry groups, community and church organisations,
and various activist publics appearing as supplements to these reports are integral to
this phase of evidence gathering. Also important are responses to the findings of
these committees of inquiry that appeared in trade and journal publications and in
news media reports.
After several months, during which I systematically reviewed these
documents, a detailed view of the set of issues faced by the banks and their activist
publics emerged. The assembled evidence provides a descriptive framework from
which I described the issue sets and the complexity of the bank-activist
relationships. It is from this framework that I derived the detailed schedule with
which to code the issue set and to map the nature of bank-activist relationships and
applied it in the next phase of each case, specifically the extraction and analysis of
newspaper coverage.
While the documents relevant to each of the three case study periods are
examined consecutively, the overlapping and persistent nature of the issues
emerging from this study encourages the development and use of a single coding
instrument. Emerging from this phase is the blueprint for this instrument,
specifically, an overarching description of the issue sets encompassing case study
one (April, 1981 to October, 1987), case study two (April, 1988 to October, 1994)
and case study three (April, 1995 to October, 2001). A total of 48 potential issues
emerged from this review.

98
Newspaper coverage as sources of evidence. To enable the structured and
focused comparison fundamental to effective comparative case research (George &
McKeown, 1985; King et al., 1994), I applied a systematic data compilation
framework, enabling the collection of data on the same variables across the three
case studies. The issue-set data were sampled, collected, coded, and analysed using
typical content analysis procedures. Content analysis provides a set of methods for
analysing communication by reducing the total content to a set of categories
representing the characteristics of research interest (Singleton et al., 1993).
Considered a systematic, objective, and quantifiable method of research
(Krippendorf, 1980; Kerlinger, 1986; Gunter, 2000), content analysis is most often
used in descriptive research but can also be applied to exploratory research (W.L.
Neuman, 1997). Content analyses count occurrences of specified dimensions and
provide for the analysis of relationships between these dimensions following
clearly articulated rules and procedures (Hansen et al., 1998, p. 98). One of the
major advantages of this method for this study is that it readily enables the analysis
of a large quantity of text. This approach to assembling the case study and applying
the tools and processes of content analysis within a comparative case research
framework provides the capacity for the tighter research design Miles and
Huberman (1994) suggested to encourage systematic analysis.
Describing the issue sets. When conducting the research, I initially screened
newspaper coverage for the periods selected using available indices (ABI Inform
and ABIX) to extract all articles mentioning the activities of one or more focal
members of the population. Because these indices were in their infancy during the
early 1980s, specifically until 1988, this process of selection was abandoned in
favour of the much more labour-intensive manual review of each newspaper issue
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archived on microfilm. I read each newspaper edition in the sample for any mention
of the focal banking organisations and collected all articles mentioning one or more
of the four banks. For the second case study, extending from 1988 and 1994, the
indices offered much more comprehensive results for the Australian Financial
Review, Sydney Morning Herald and Age newspapers; however, the manual review
of microfilm continued to be necessary for The Australian and Courier Mail. For
the third case study, 1995 to 2001, the manual screening of microfilm was necessary
only for the 1995 and 1996 editions of The Australian and Courier Mail. I located
all articles obtained electronically with the Factiva and LexisNexis databases
using a simple keyword search on the names of the four banks as well as the terms
major bank and Australian bank*. For some months, this method of searching
produced literally thousands of hits. If available, the key-word-in-context
(KWIC) version of the story was reviewed, and articles were subsequently retained
or removed. Articles cut from the collection do not focus on issues of concern to
banks and their publics. In most of these articles, the banks are incidental to the
content. For example, articles that simply list share prices or include phrases like
the Commonwealth bank building but essentially have no other relevance for the
banks or their publics were deleted from the study. If the KWIC version of an
article was not available or could not be conclusively excluded, I retained and read
the articles to determine their relevance as guided by the theoretical orientation of
this study, that is, an indicator of issues and/or bank-activist relationships.
Once selected and located in the relevant case study data set, I reviewed the
articles at least three times to clean and organise the data in preparation for coding.
Concurrently, I checked and re-checked the issue set classification previously
derived against the articles in each data set as a way of building familiarity with the
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cases and to undertake preliminary coding. Specifically, I undertook a process of
extensive preliminary coding in which I reviewed each article for descriptions and
discussion of issues of concern to the major banks and their publics and of the
activist publics engaging with these issues. In this way, I progressively tested the
utility of the 48-issue classification system emerging from the analysis of
government reports and other documents across each case study. While this phase
was guided by the larger issue classification system, an open approach was taken to
the possible revisions to existing categoriesincluding mergers or deletionsor to
the introduction of new categories. The purpose of this step was to fine-tune coding
instructions for the set of issues, and it was an essential step toward the development
of a reliable coding scheme (Hansen et al., 1998; Riffe, Lacy, & Fico, 1998)
Once I had retrieved the articles, I read each article and made natural
language notes on the apparent issues. I then organised the notes by source and date
and by key terms and phrases and entered the information into tables. The
frequencies of these key terms and phrases were then assessed and a summary of the
issues and activist publics derived for each month. It is important to note that this
process was iterative in that the original set of 48 issues was under constant review.
After repeating this step for each of the 14 months of data collected for each case
study, I used the preliminary coding notes to guide the preparation of a set of coding
rules to be standardised for each of the three case studies. The outcome of this step
was a coding schedule with 32 issue classifications. This was reduced to 28
classifications in the early stages of the first case study after preliminary coding.
Following the guidelines for creating and testing a coding scheme (Hansen et al.,
1998; Weber, 1990), I differentiated the issue classifications to avoid excessive
concentration of coding, while also avoiding excessive differentiation and allowing

101
cross-referencing between different categories and dimensions. I then prepared the
coding schedules following extensive preliminary engagement with the case studies
during a six-month period from June 2003. This engagement included the
examination of the newspaper articles extracted and of relevant secondary sources.
While the number of issue categories is high and therefore potentially more
likely to create problems for achieving acceptable levels of coding reliability, I
anticipated that while some dominant issues would persist throughout the each case
study, others would appear only periodically and then disappear temporarily or
permanently. The final coding scheme included three options for the classification
of issues. While many articles described more than one issue, relatively few articles
primarily covered more than three issues with any degree of depth. The additional
resource demands at both the coding and the analysis phases outweighed the
diminishing benefits of recording more than three issues for each article.
The final coding schedule was applied in each of the three case studies (see
Appendix A). This schedule specified standard publication details for each article,
including source, date, and page number. I also coded the articles for issues evident,
the banks named, and the activist publics named. The content of the article in
relation to its direction, favourable or otherwise, to the major banks was then coded
for an overall impression.
I rated the articles as favourable when the major banks were praised for their
actions or associated with positively constructed actions (Deephouse, 2000) or
where the content indicated that the operations, strategies, or performance of the
banks was beneficial to, or in harmony with, the social environment (Deegan et al.,
2002). Examples of the latter include awards given to the bank or its employees
(Fombrun, 1996), monetary or in-kind donations (Fombrun & Shanley, 1990), and
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director linkages to other organisations (Weigelt & Camerer, 1988). Articles were
rated as unfavourable when the focal banks were criticised for their actions or
associated with negatively constructed actions that past research indicated have been
found to negatively impact public opinion (Deegan et al., 2002; Deephouse, 2000).
A neutral rating was given when the article reported performance without any
evaluative modifiers or when there was a balance of favourable and unfavourable
reporting. These articles typically provided straightforward reports of bank
operations, strategies, or performance and were neither positively nor negatively
constructed (Deegan et al., 2002; Deephouse, 2000).
I employed standard procedures for defining analytical categories,
developing the coding scheme, and checking reliability (Gunter, 2000). Appropriate
reliability checks included consistency between coders, or interrater reliability, and
consistency of the individuals coding practice over time, or intracoder reliability
(Hansen et al., 1998). Over a period of several months, one other coder and I
undertook preliminary coding tests to test the adequacy of the coding scheme and
made adjustments in preparation for coding. The outcome of this process was a
coding scheme suitable for use across the three case studies. While some of the
issue classifications were not used in every case study, the decision to apply the
same issue-set coding scheme was an important way to ensure that a meaningful
comparison could be made in the analysis phase of this research (see Appendix B).
Multiple coding schemes significantly increased demands on the limited research
resources available and unnecessarily complicated coder training and retraining.
Comparability was also confounded, making meaningful comparisons across cases
impossible given the propositions of the EOAR model.

103
Riffe et al. (1998, p. 127) recommended that, assuming an 85% level of
interrater agreement, a 95% level of probability, and a population size of up to
5,000, the number of recording (content) units needed is 139. Two colleagues were
instructed to use the same coding scheme on a random sample of articles for each
case study data set, and Holstis (1969) coefficient of reliability was applied. This
statistic reflects the number of agreements per total number of coding decisions and
is the simplest and most common method of reporting interrater reliability. While
many statisticians have judged this method as inadequate because it does not
account for chance agreement among raters (Capazolli, McSweeney, & Sinha,
1999), others have argued that methods accounting for chance, such as Cohens
kappa, are overly conservative (Potter & Levine-Donnerstein, 1999). In
communications research, Riffe et al. (1998) argued for a minimum interrater coding
reliability of 80% or more, but they added that research that is breaking new
ground with concepts that are rich in analytical value may go ahead with reliability
levels somewhat below that range (p. 131).
The results of those interrater agreement tests are split into three outcomes
for each case study: publication details and actors (banks and activist publics), the
issue set, and the direction of favourability. For publication details and actors
specified in the article, interrater reliability was 0.99, 0.99, and 0.98 for case one,
two, and three respectively. The second outcome related to the issues evident in
these articles. For this category, interrater reliability was 0.96 for case one and 0.95
for cases two and three. The interrater reliability for issue-set direction of
favourability was 0.85 for case one, 0.87 for case two, and 0.78 for case three.
While the interrater reliability was lower for this category, it was considered
acceptable given the exploratory nature of this research (Riffe et al., 1998; Weber,
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1990). Also, when coding for something other than manifest content, interrater
reliability is usually lower (Holsti, 1969).
Describing organisation-activist relationships. Concurrent with the issue-set
coding, each recording unit was coded for the state of organisation-activist public
relationships in the population. The recording unit for the organisation-activist
relationship was defined as the comments contained within a single sentence that
referred to issues in the issue set and were directly or indirectly attributed to the
major banks or their activist publics; in other words, the recording units were the
direct or indirect quotes reported in newspaper articles attributed to either banks or
activists. The use of sentences, natural units of written English appearing between
two punctuation marks, rather than words as recording units are more likely to
provide reliable measures of interrater reliability and remove the need to account
for, or standardise, the number of words (Hackston & Milne, 1996).
The coding scheme required the coder to specify the standard publication
details as derived from the public opinion environment analysis, to specify the bank
or activist source of the statement, and finally to specify the relationship as
reflecting either a cooperative, a conflict, or a neutral state (see Appendix C).
Recording units were coded as signalling a conflict state if they explicitly reject
cooperation as desirable and necessary or omit any reference to cooperation,
trivialise the issue, describe the relationship as being in a state of conflict, or focus
on conflict-seeking and the points of disagreement on the issues of mutual concern.
Recording units were coded as signalling a cooperative state if they openly
acknowledge cooperation as desirable and necessary, suggest that cooperation was
occurring between the relevant parties, refer to evidence of consensus, or focus on
solution-seeking and points of consensus on issues. Recording units were coded as

105
signalling neither conflict nor cooperation if no evidence of either relationship state
was detected.
An assistant coder and I undertook preliminary coding tests to test the
adequacy of the coding scheme and adjust it in preparation for coding. After
reviewing the areas of disparity, we adjusted the coding scheme to differentiate the
neutral and cooperative states. Having made these adjustments, we proceeded with
the coding. These checks enhanced the reliability of the coding process (Weber,
1990).
I extracted and coded the full text of each public statement from the sampled
articles which amounted to 2,175; 5,103; and 4, 646 recording units for analysis for
case studies one, two, and three respectively. During this phase of the research, the
media content analysis guidelines provided by Riffe et al. (1998) were applied, and
an 85% level of interrater agreement was assumed to be acceptable given the
exploratory nature of this study, the scale of the data collected for coding, and the
longitudinal timeframe. In determining reliability checks for the content analysis of
a population size of up to 5,000, an 85% level of interrater agreement and a 95%
level of probability, Riffe et al. (1998) recommended that a second coder code up to
an additional 139 recording units. An assistant coder was instructed to use the same
coding scheme on a random sample of 140 statements for each case study data set.
The results of that interrater agreement test were split into three outcomes for each
case study, and Holstis (1969) coefficient of reliability was applied. The interrater
outcomes were 0.87, 0.84, and 0.81 for cases one, two, and three respectively.
Before the data were entered, the coders reconciled disagreements in one of two
ways. If two of the three coders agreed, the coding decision favoured the majority
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view. If the coders failed to agree, I reviewed the statement and made a final
decision.
Measurement
I managed the data using SPSS for Windows, version 11.5. The public
opinion environment and the bank-activist relationship data sets were dealt with
separately throughout this study. In order to describe the public opinion
environment of Australias major banks, I measured the dimensions of stability,
complexity, intensity and direction and compared them across each of the 14 months
of the three case studies. I also measured the bank-activist relationship data and
interpreted them in terms of the location of that relationship on the conflict
continuum. The sequence of steps in data collection, measurement, and analysis are
described graphically in Figure 4.1.

107
Figure 4.1
Data Collection, Measurement, and Analysis
The Public Opinion Organisation-Activist
Environment Relationships
Case Studies 1, 2, & 3 Case Studies 1, 2, & 3
1. Data Collection Coverage of issues in Public statements quoted in

newspaper articles newspaper articles
2 months each year x 7 2 months each year x 7
years years
(April & October) (April & October)
2. Measurement Measure issue-set stability, Locate organisation-

complexity, intensity, and activist relationships
direction for each month. on the conflict continuum
4. Analysis
Compare the outcomes of

(a) issue set and (b) relationship measures to
(c) the propositions of the EOAR model.
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The Issue Set
After reviewing the issue set category data post-coding, I collapsed three
issuesinternational and domestic ranking, privacy and security, and social
responsibilityinto related issue classifications. The decision to collapse selected
categories was based on the extraction of the lowest ranking issues, that is, the most
infrequently mentioned issues evident. As an important indicator of the
performance of the major banks, the issue international and domestic ranking was
collapsed into profitability and performance. The issue privacy and security
was most evident in the latter years of the study and was relevant to two issues,
electronic banking and technology and consumer consultation and protection.
Given that the more universal content of the consumer consultation category is not
limited to issues of banking and technology, the issue privacy and security was
collapsed into consumer consultation and protection. Similarly, the issue social
responsibility was collapsed into the consumer consultation category because of its
overwhelming emphasis on identifying the banks responsibilities to the retail
consumers.
The issue of economic commentary was then quarantined from the final
analysis. Articles were coded to include economic commentary if they presented
general comments on the state of the Australian economy. These comments were
not specific to the banking and financial sector and were typically produced in one
of two forms. In the first form, the articles showcase a smorgasbord of
information about the current and predicted state of the economy, featuring quotes
from banks and other sources. In the second form, the banks release research reports
and forecasts from their own economists that are then published, usually in the
financial and business sections of newspapers. In either case, the classification

109
economic commentary was used to describe the neutral and declarative content of
these articles. Other content, such as the criticism of government policy, was coded
as evidence of the deregulation issue. Therefore, in the implementation,
economic commentary, for all practical intents and purposes, is a non-issue for
this study. The approach taken to measuring each dimension of the issue set is
detailed below and summarised in Table 4.1.
Issue-set stability. Stability describes the turnover of issues in the issue set
between specified intervals. For this study, I extracted the issue sets for each month
in the case study and made a calculation of issue-set turnover. I then coded the
articles for manifest issues using the standardised set of coding rules. To assess the
stability of the issue set, I compared the data for two months, for example April,
1998 and October, 1998, or October, 1987 and April, 1988, and observed the
turnover of issues. For example, if exactly the same 20 issues appeared in two
consecutive months, stability was recorded as 0.0, that is zero turnover of issues. If
the issue set comprised 15 issues in one month and 20 issues in the next month, 15
of which were the same, and 5 of which were new, stability was calculated as
0.14. That means there was a 14% turnover in issues between the two months.
Therefore, stability equals the number of different issues between two months
divided by the total issues for the two months selected. Stability is expressed as a
number between zero and one where no issue turnover equalled zero and 100%
turnover equalled one.
To further explore issue-set stability, I analysed the data for each month,
applying the same formula but limiting the issue set to only the top ten ranked
issues, that is, the ten most frequently mentioned issues in each month sampled.
Typically those issues in the top ten were mentioned at least 80% of the time. The
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purpose of this analysis was to exclude the issues that attract minimal coverage to
determine whether the issues that attract the most public attention were any more
likely to be associated with the location of bank-activist relationships on the conflict
continuum.
Issue-set complexity. Complexity represents the number of different issues
in the issue sets identified in print media articles at a point in time. To assess
complexity, I extracted the issue sets for each month specified in each case study, as
described by frequency reports on the issues evident. I then made a simple
calculation of the number of different issues appearing in each of the selected
months. Complexity was therefore a calculation of the number of different issues
evident during each month selected.
Issue-set intensity. Intensity represents the number of articles associated
with the issue set at a point in time. To assess intensity, I made a simple calculation
of the number of articles appearing in each of the selected months. In other words, I
gave each article a score of one (1) and calculated a total for each month selected.
Issue-set direction. Direction describes favourability, unfavourability, or
neutrality evident in relation to Australias major banks throughout the selected
periods. Articles were coded as favourable (1), unfavourable (-1), or neutral (0) to
the organisational population. Each article was given equal weight in the measure
(N. Brown & Deegan, 1998; Deephouse, 2000; Dickson, 1992). For each period, I
aggregated the recording units for analysis using the coefficient of imbalance
originally developed by Janis and Fadner (1965) to analyse wartime propaganda.
Deephouse (2000) adapted this formula to assess media reputation as an
organisational resource, renaming it the coefficient of media favourableness. I
applied this coefficient for this study to measure the relative proportion of
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favourable to unfavourable articles while controlling for the overall volume of
articles. Its formula is
(f2 fu)/(total) 2 if f > u;
Coefficient of imbalance = { 0 if f = u
(fu-u2) / (total)2 if u> f
In a given period, f equals the number of favourable recording units, u
equals the number of unfavourable recording units, and total equals the sum of the
number of favourable, unfavourable and neutral recording units (Deephouse, 2000;
Janis & Fadner, 1965). This calculation was made for each of the selected months in
each case study.

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Table 4.1
Operationalising and Measuring Dimensions of the Public Opinion Environment
Dimension Operational Definition Measure
Stability is the consistency The turnover of issues The turnover of issues in the
of the public opinion in the issue set as issue set as identified in print
environment over time and described by print media articles between
is described by turnover of media coverage. specified time intervals.
issues in the issue set. No turnover = 0 and 100%
turnover = 1 Stability is
expressed as a number
between 0 and 1.
Complexity is the The number of issues in The number of different
heterogeneity of the public the issue set as issues in the issue set
opinion environment and is described by print identified in print media
described by the number of media coverage. articles between specified
issues in issue set. time intervals.
All recording units (articles)
are coded issues calculated for
each period.
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Table 4.1 (cont...)
Operationalising and Measuring Dimensions of the Public Opinion Environment
Dimension Operational Definition Measure
Intensity is the magnitude of The volume of media The number of print media
the public opinion coverage of issues in the articles about the issues in the
environment and is issue set as described by issue set between specified
described by the extent of print media coverage. time intervals.
public opinion generated by Recording units (articles) are
the issues in the issue set. given a score of one (1) and a
total calculated for each
period.
Direction is the The extent to which The direction of print media
favourability of the focal print media coverage of articles between specified
organisational populations the issues in the issue time intervals. Recording
public opinion environment set is favourable, units are coded as favourable,
and is described by rating unfavourable, or neutral unfavourable, or neutral to the
the favourability of media for the organisational population. The co-efficient
coverage of the issues in population. of media favourableness is
issue set. then applied.

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The Relationship State
The recording units, public statements that are direct or indirect quotes from
the banks or activists, were coded as indicating cooperation (1), conflict (-1) or
neutral (0). I then aggregated the scores for the months selected. Interpretations as
to the state of these relationships emerged from two approaches to measurement.
First, for each month, I aggregated the total frequencies of conflict, cooperative, and
neutral statements. Additionally, I reported the frequencies of these three statement
categories by source; in other words, they were separated into bank and activist
statements. For each case study, I organised these data into a series of tables
comprising the breakdown of frequency information for conflict, cooperative, and
neutral statements. Additionally, I included researcher notes and commentary that
described the relationship state using a standardised set of phrases, such as very
low conflict, some cooperation evidentmoving toward a co-operative state from
low to very low and very high conflict evidentmoving toward a conflict state
from medium high to very high conflict. On the basis of this detailed description, I
interpreted the articles for each month to determine the relative degree of conflict,
cooperation, or neutrality evident and whether the relationship state was moving
toward a conflict or a cooperative state or remaining static.
Second, to effectively measure the relative proportion of statements
reflecting a conflict state in comparison to those reflecting a cooperative state and
controlling for the overall volume of statements, I applied Janis and Fadners (1965)
coefficient of imbalance. The outcomes for each month were used to place the
relationship on the continuum between -1 (total conflict) and 1 (total cooperation).
I then compared and contrasted the outcomes of both descriptive and
enumerate approaches in order to better understand the data set. While the
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coefficient of imbalance provides a useful measure of the relationship state, the
descriptive approach provides a more detailed understanding of this data in relation
to the interplay between the two groups, banks and activists, and variations in
manifest conflict, cooperation, and neutrality. These insights are invaluable for
interpreting the results of the analysis in relation to the propositions of the EOAR
model.
Analysis
While the case studies emerged from an extensive data set, each case is built
around 14 data points, specifically 14 months sampled over seven years. It is only
when the three cases were compared across all 42 months that sufficient data points
were available to observe the presence or absence of significant relationships using
appropriate statistical methods.
The stability, intensity, complexity and direction of the issue sets and the
state of the bank-activist relationships were reported for each case. In so doing, I
determined the variations in the dimensions of the issue sets between the months
sampled and described the evolving bank-activist relationships. In this way, I
discussed preliminary conclusions about the extent of support for the propositions of
the EOAR model, as well as the noteworthy variations and alternative explanations
essential for effective case analysis (Yin, 1994).
After applying the issue-set stability, complexity, intensity, and direction
measures to describe the public opinion environment of the major banks for each of
the 14 months sampled in the three case studies (see Table 4.1), I also described the
state of the bank-activist relationships by their location on the conflict continuum.
To analyse these separate and distinct sets of datathe issue set and bank-activist
relationshipsI organised the outcomes for each issue-set dimension and for the
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bank-activist relationships for each case using tables and graphs (Miles &
Huberman, 1994). I then made interpretations about the extent to which the
outcomes support, oppose, or are neutral in relation to the propositions of the EOAR
model. More specifically, I examined the bank-activist relationship data to
determine whether the relationship state moved toward conflict or cooperation or
remained constant between the months sampled (e.g. April, 1989 and October,
1989). I then examined the issue-set data for the same two months for variations,
for example, to determine whether stability had increased or decreased. I made
observations about the evident support or otherwise for the associations anticipated
by the propositions of the EOAR model and drew conclusions based on my
extended engagement with the data. For example, if the intensity proposition of the
EOAR model was supported in 7 of the 14 months sampled, that is, if intensity
increased and bank-activist relationships moved toward conflict, or intensity
decreased and the relationships moved toward cooperation, the result was reported
as follows: Support for the intensity proposition is evident in 50% of the months
sampled (n = 7).
In the second, comparative phase of this analysis, I explored the data for
evidence of any statistically significant associations between variations in issue-set
stability, complexity, intensity and direction, and the bank-activist relationships.
Using the Pearson product-moment correlation, I analysed the data for all 42 months
sampled across the three case studies for significant relationships. These outcomes
were intended only to supplement this exploration given the small sample size and
were thus treated conservatively. The results of the data analysis for each case study
and the comparison of all three case studies are reported in Chapter 5.
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CHAPTER 5
Results
In seeking to present the rich description fundamental to the comparative
case approach, I begin this chapter with an overview of the sources of data and
discuss the issues of concern to the banks and their activist publics during the three
consecutive seven-year periods, specifically, 1981 to 1987, 1988 to 1994, and 1995
to 2001. This introduction to the issues provides a framework and context for the
analysis that follows. I then present and compare descriptions of the state of bank-
activist relationships for each case study period. The detailed findings that follow
are organised around the stability, complexity, intensity, and direction propositions
of the EOAR model. While these case studies emerged from an extensive data set,
each case is built around 14 data points, specifically, 14 months sampled over seven
years. It is only when the analysis is extended to include the data from all three
consecutive case studies that sufficient data points are available to observe the
presence or absence of significant relationships. In presenting these findings, I
discuss conclusions about the extent of support for the propositions of the EOAR
model and explore the noteworthy variations and alternative explanations essential
for effective case analysis (Yin, 1994).
The first section of this chapter provides an overview of the public opinion
environment of Australias major banks from 1981 to 2001 and sets the scene for the
more specific exploration of the propositions of the EOAR model. In addressing the
abiding research problem of whether variations in the public opinion environment of
an organisational population influence the evolutionary ecology of organisation-
activist relationships in that population, I organise the results of this study more
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specifically around the six research questions posed. The evolution of bank-activist
relationships within this population is observed and interpreted from the
relationship-signalling statements that locate these relationships on a conflict
continuum (Research Question 4). I then explore the stability, complexity, intensity,
and direction dimensions of the public opinion environment and describe the ways
in which these dimensions vary over time by the measures specified in Chapter 4
(Research Questions 1, 2, & 3). The second section of this chapter is organised by
the propositions of the EOAR model and details the outcomes of each case study in
relation to these propositions. I specify the associations between variations in the
dimensions of the public opinion environment of an organisational population and
the evolutionary pathways of organisation-activist relationships in that population
(Research Question 5). I discuss in Chapter 6 the sixth and final research question
of whether this conceptualisation of the public opinion environment of an
organisational population offers any power from which predictions about the
evolution of organisation-activist relationships can be hypothesised.
The Public Opinion Environment of Australias Major BanksAn Overview
The public opinion environment of Australias major banks is conceptualised
as the set of issues of concern to the population and its members. As the unit of
analysis from which the public opinion environment of the major banks is derived,
the issue set is operationalised as the aggregation of issues apparent in newspaper
coverage during three seven-year case studies. To provide a framework for the
analysis and interpretation of the newspaper coverage, I reviewed reports from
government inquiries, industry reports, scholarly articles, and other media coverage
until a satisfactory description of the issues of concern to Australias major banks
and their activist publics emerged. After I describe the sources of data (see Table
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5.1), I discuss the issues to contextualise the analysis. In this description of the issue
set, the issues evident from 1981 to 2001 are organised from most to least prominent
(see Table 5.2).
Two of the five newspapers, the Australian Financial Review and the Sydney
Morning Herald, provided more than half of the articles analysed for this study (see
Table 5.1). The prominence of the Australian Financial Review can be explained by
its focus on financial issues, and the rankings of the four remaining newspapers are
generally consistent with their circulation and the publics they serve. The second
case study, 1988 to 1994, yielded 45% of the articles (n = 2,999), followed by case
study three with 35% of the articles (n = 2,326), and case study one with 19% of the
articles (n = 1,270).
This research focuses on identifying variations evident in the public opinion
environment as described by the turnover of issues (stability), the number of issues
(complexity), the number of articles (intensity), and the favourability of this
coverage to the major banks (direction). The associations between variations in
these dimensions and the evolution of the bank-activist relationships are proposed by
the EOAR model and discussed in the second half of this chapter. To contextualise
the findings of this study, I will describe the 24 issues emerging from the three case
studies from 1981 to 2001; the issues are organised from the most to the least
prominent (see Table 5.2).

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Table 5.1
FrequenciesNewspapers, 1981 - 2001
Newspaper Years
1981-1987 1988-1994 1995-2001 Total
n % n % n % n %
Australian 372 29.3 964 32.1 709 30.5 2,045 31.0

Financial Review
Sydney Morning 290 22.8 800 26.7 533 22.9 1,623 24.6
Herald
The Australian 204 16.1 320 10.7 456 19.6 980 14.9
Courier Mail 203 16.0 405 13.5 304 13.1 912 13.8
The Age 201 15.8 510 17.0 324 13.9 1,035 15.7
Total 1,270 100.0 2,999 100.0 2,326 100.0 6,595 100.0
Note: n = number of articles; % = percentage of total articles

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Profit and Performance
As central forces in the Australian economy, the major banks profits and
performance were consistent sources of public discussion and debate. This emerged
as one of the most prominent issues of all three case studies. It ranked as the top
issue for case study three, 1995 to 2001, and the second-most frequently mentioned
issue from 1988 to 1994 (see Table 5.2). Overall, from 1981 to 2001, this issue was
mentioned more frequently than any other, appearing in 20.1% of all articles (n =
1,328), and was evident in discussions of the banks share price movements, annual
general meetings, results forecasts, and all quarterly, bi-annual, or annual reports.
The performance of the major banks was integral to the stability of
Australias finance and banking sector. This importance was reflected in the wide
exposure given to the ratings received by the major banks from international credit
agencies such as Standard & Poor. These ratings have traditionally been considered
crucial indicators of Australias economic robustness (Perkins, 1998). An article
from The Age entitled Banking Systems Feel Strain, which discussed a global
slump in banking profits and referred to the findings of Standard & Poors annual
report, asserted that, Australia's banks are also showing signs of stressBut
Australias asset quality is sound by international standards and low interest rates
will minimise the short-term impact (Kemp, 2001, p.1).
On the other hand, the profits of the banks, especially in the third case study,
were debated by various vested interests. For example, the Sydney Morning Herald
article Banks for people, pointed out that Over the past financial year, the major
banks jointly accumulated $9 billion in profits while continuing to cut staff and
close branches (Banks For, 2001, p.16). This is typical of the observations made
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about the relationship between banks profits and their employment or service
decisions. The growth of shareholder activism from the late 1980s had other
implications for the performance of the major banks. The Commonwealth Bank
found itself in the hot seat after it was revealed that the bank reputedly spent $5
million sending a group of 200 independent advisers and their spouses on a study
tour to Paris. While the bank denied that it should be required to detail such
expenditures to shareholders, the chairman of the Australian Shareholders
Association, Ted Rofe, was quoted in the Sydney Morning Herald article Greed Is
Better Than Ever arguing that any organisation should be prepared to justify any
expenditure of this nature on the basis of the benefit it produces to the organisation
and, in the case of a listed company, the ultimate benefit to shareholders (Tooth,
2001, p. 15). In the same article, Stephen Mayne, an online magazine publisher and
activist, argued that, unlike in the 1980s, companies were now smart enough to
invest in expensive spin-doctoring to keep greed from becoming an issue of public
debate (p. 15).
Deregulation
From 1981 to 2001, the issue of deregulation in Australias banking sector
was consistently prominent, ranking second only to profitability and performance
and appearing in 18.9% of all articles (n = 1,247). It ranked as the top issue from
1981 to 1987 and in the top three for both the second and third case study periods
(see Table 5.2). The deregulation of the banking sector was hotly contested at some
period in each of the three case studies. While consumer and welfare groups argued
that deregulation had favoured the major banks to the detriment of the average
Australian consumer, the major banks argued that the effect had been the reverse
and that deregulation had diminished their profitability and margins (S. Singh, 1992).
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The government chose to take the middle ground, reporting that while the benefits of
deregulation had tended to favour corporate customers rather than retail consumers,
the overall effect had not significantly favoured one class of banking customer over
another (Australian Financial System Inquiry, 1991). Discussions of the role of the
government in regulating the competitive practices of banks and debates about
competition policy characterised this issue.
Operational Decisions and Domestic Investments
The operational decisions and domestic investments of the major banks were
closely monitored by the business and finance sector. This issue encompassed the
appointments of key executives, changes in reporting structures, property acquisition
or divestment, the introduction of new systems or procedures, and domestic
investments. From 1981 to 2001, this issue was ranked third in the issue set,
appearing in 15.8% of all articles (n = 1,044). It was most prominent from 1988 to
1994 (see Table 5.2), during which boardrooms were in turmoil as directors and
senior management dealt with the aftermath of mistakes made in the late 1980s.
Explicitly excluded from this issue were mergers with, or acquisitions of, other
banks, offshore investments, and commercial lending decisions.
Mergers and Acquisitions
The issue of the major banks merging with, or acquiring, other domestic
banks was evident from April of 1981, when the Bank of New South Wales merged
with the Commercial Bank of Australia, forming Westpac. This issue was most
prominent from 1995 to 2001 (see Table 5.2), a fact best explained by the extensive
debate surrounding the governments four-pillars policy, which was reviewed and
extensively contested during the 1997 Wallis Inquiry. In 1981 and 2001, mergers
and acquisitions ranked third in the issue set, appearing in 15.6% of all articles (n =
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1,026). This policy prevented the major banks from merging with each other,
making the question of mergers and acquisitions in the domestic market highly
contentious. The major banks complained that their ability to prosper in the long
term was contingent on their ability to expand in the domestic market. Other
stakeholders were consistently vocal in their opposition. Politicians, other banks
and financial institutions, bank employee unions, and consumer groups asserted that
the consequences of such mergers would be the concentration of market power into
the hands of even fewer dominant players. The Australian Competition and
Consumer Commission (ACCC), formerly the Trade Practices Commission (TPC),
administered policy pertaining to bank mergers and acquisitions. The roles of the
ACCC and the Federal Treasurer were crucial in any serious discussion involving
the mergers and acquisitions of banks and insurance companies, with consideration
given to the administration of policy in that area, the size of the market in question,
the consequences for reduced competition, and any potential benefits relative to the
economic and the social costs of mergers that might reduce competition (Gizycki &
Lowe, 2000).
Home Lending
Most Australians aspire to home ownership at some point in their lives,
making home loan interest rates a hot issue socially and politically. This issue
was consistently evident in all three case studies, but it was most prominent from
1981 to 1987 (see Table 5.2). From 1981 to 2001, the issue of home lending
appeared in 11.7% of all articles (n = 774). Purchasing a home has traditionally
been the most significant financial decision made by the so-called average
Australian, and home lending was historically acknowledged as an essential aspect
of the major banks retail banking activities. There was a consistent expectation that
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interest rate cuts or increases made by the Reserve Bank of Australia (RBA) to
stimulate the economy would be passed on to mortgagees. Banks that were tardy to
pass on interest rate cuts would become the focus of negative media attention. This
issue encompassed discussions about lending policies or products, such as low-start
loans, loans for first home buyers, early repayment penalty policies, or barriers to
loan portability. The major banks dominated the home lending market until the
1990s, when mortgage originators, including Aussie Home Loans, and other non-
banks, entered the deregulated market, offering more flexible, lower interest
products. This signified a new period of heightened competition in the home
lending market.
Corporate Lending (domestic)
The major banks are central sources of funds for Australian business. The
consequences of the major banks decisions to withdraw the supply of funds or to
extend lending arrangements have had significant implications for the finance sector.
This issue was most evident in the first and second case studies (see Table 5.2), and
from 1981 to 2001, it appeared in 10.9% of all articles (n = 721). Specific events
accounted for by this issue included interest rate movements, or other decisions and
announcements on commercial lending rates, comparisons of the corporate or
prime interest rates to retail interest rates, and discussions of major corporate
lending decisions, such as the withdrawal of support for failing corporations.
Foreign exchange currency loans were not included in this category, and discussions
specific to small business enterprises were distinguished from those specific to
larger businesses.
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Deposits and Investment Products
Banks have had variable track records in paying interest on deposits for retail
consumers and have been criticised for policies that calculate interest rates for bank
deposits less generously than interest charged on loans. From 1981 to 2001, this
issue appeared in 8.7% of all articles (n = 573) and was most evident in the first and
third case studies (see Table 5.2). This issue encompassed discussions of bank
policies in relation to deposit accounts, government guarantees for bank deposits,
consumer perceptions regarding the security of their bank deposits, and double-
standards when comparing lending interest rates to interest rates on deposit accounts.
For example, when the RBA instituted a protection mandate to all deposit takers,
including credit unions and building societies, concerns were raised that consumers
would believe that the safety of their deposits were guaranteed by the RBA, and by
extension, the Federal Government (Perkins, 1998). Deregulation of the banking
and finance sector saw the major banks enter the market for superannuation and
investment products and financial advice. At the same time, concerns were
expressed that consumers would confuse the security of bank deposits with their
new superannuation and investment products (S. Singh, 1992). The Wallis Inquiry
recommended that this misperception be clarified by legislative amendment because
of the temptation or moral hazard this created for banks as publicly guaranteed
institutions (Perkins, 1998).
Consumer Consultation Protection and Information
Consumer groups have argued that there is an imbalance of power between
the banks and consumers in particular that is reinforced by banking law and by the
lack of access to information and the oligopolistic nature of Australian banking (S.
Singh, 1992, p. 54). While some take the position that the central truth in the
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banker customer relationship is that the bank is more powerful than the customer
(Kirk, 1991, p.1), the banks have argued that, in a deregulated environment, the
customer is more powerful. The issue of consumer consultation and protection
became more prominent through the course of this study; it attracted the most
attention between 1995 and 2001 (see Table 5.2) and from 1981 to 2001 was
mentioned in 8.4% of the articles (n = 553). While the banks have consistently
argued that less regulation would reduce costs, consumer groups have argued that
deregulation delivered few benefits to retail consumers and that steps to protect
consumers should be legislated (S. Singh, 1992). The government, however, has
resisted such legislative intervention (Australian Financial System Inquiry, 1991).
For example, consumer welfare groups and the Department of Social
Security have lobbied the major banks and government for the provision of a basic
banking product, arguing that those in the lowest socio-economic grades were less
likely to have access to a main financial institution and that this type of product
would alleviate the disadvantages of this class of consumers (K. Oliver & Morgan,
1998). Representing the interests of the major banks, the Australian Bankers
Association argued that no group should receive privileges unrelated to the demands
of a competitive market (S. Singh, 1992). This issue encompassed discussions of
the perceived power imbalance between banks and consumers, the information
available to consumers, government regulations to protect consumers, and consumer
privacy or security concerns.
Competition with Non-Banks and Other Banks
Non-banking financial institutions, such as building societies, credit unions,
and other smaller banks, have traditionally competed in the personal and home-
lending market segments with the major banks. The competition was evident in
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8.1% of the articles from 1981 to 2001 (n = 536) and was most prominent from 1995
to 2001. Historically, the credit unions, building societies, and other non-banks, in
addition to other smaller state and regional banks, were subject to different State and
Commonwealth regulatory controls. This perceived inequity led to contentions
about the relative equity of these controls and their tendency to provide non-market-
related advantages to either the major banks or their competitors. For example,
access to the all-important payments system was exclusively available to banks until
the reforms of the 1997 Wallis Inquiry. Prior to these reforms, non-bank financial
institutions were unable to compete on a level playing field with banks in the
provision of cheque accounts and related services. This issue included discussions
of routine competitive events and conflicts and the relative positioning of banks vis-
-vis non-banks, or other banks, in a competitive marketplace. The entry and
activities of foreign banks were excluded from this issue.
Employee Relations
As the wider employment market changed between 1981 and 2001, so, too,
did the workplace for employees of the major banks. This issue was accounted for
in 7.3% of all articles included in the study (n = 481) and was most prominent from
1995 to 2001 (see Table 5.2). Typical of the increased focus on workforce
rationalisations by the major banks was a Sydney Morning Herald article
announcing that to cut costs and increase efficiencies (Kidman, 1996, p. 37), ANZ
planned to close at least 110 branches and shed up to 7,000 jobs. The Finance
Sector Union representing these employees had previously claimed that the bank
was planning to cut at least 5,000 jobs. According to the report, ANZ downplayed
the union claims, saying the bank was working through a restructuring period and it
was too early to say how many jobs would actually go (Kidman, 1996, p. 37). At
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that time, ANZ had reputedly retrenched approximately 350 executives in an
attempt to cut staff costs by about $40 million a year after paying out redundancy
payments (Kidman, 1996). Discussions of the numbers of staff employed; their
locations within organisational hierarchies; the composition of the workforce in
relation to gender, ethnicity, or disability; and the balance between permanent, non-
permanent, full-time, and part-time staff surrounded this issue. Other aspects of this
issue included workplace conditions, such as working hours, salaries, personal
safety, incentives, or promotional policies.
Foreign Activities and Interests
The activities and investments of the major Australian banks in foreign
markets attracted public interest and occasional contention. This issue was evident
in 7.2% of the articles (n = 477) and was most prominent from 1981 to 1987 and
again from 1995 to 2001. Emerging intermittently, this issue included the expansion
or contraction of Australian banks internationally, products offered internationally,
or the banks international investments.
Crime and Litigation Involving Banks
Banks appeared as both the victims and the perpetrators of crime, and this
issue was accounted for in 7% of the articles (n = 464). Some articles described
bank robberies and other criminal actions taken against banks, while other reports
detailed fraud and other criminal activities involving banks directly or indirectly.
The more colourful stories of crimes against the major banks involved the robberies
by and eventual capture and conviction of Brendan James Abbott. The so-called
Postcard Bandit, Abbott stole almost $1 million, and while on the run, he sent
postcards of himself on holiday to detectives around Australia. Abbott robbed a

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Queensland branch of the National Bank in 1992 and a Commonwealth Bank branch
in 1993 (Oberhardt, 1997).
Electronic Banking
The introduction of electronic banking and related technologies, such as
phone banking and Internet banking, were discussed and disputed in 6.6% of the
articles (n = 438). Most prominent from 1995 to 2001 (see Table 5.2), the issue of
the advent of extensive electronic banking and networking saw heightened debate
about the re-direction of consumers to electronic transactions, the accessibility of
automatic teller machines and other non-personal banking options to technologically
inexperienced consumers, and the storage or transmission of customer information.
Retailers participated in the expansion of the electronic funds transfer networks,
facilitating an increasingly cashless society, and this was fodder for further
discussion and debate in each of the three case studies. With the opportunities for
familiar personal interactions in banking perceived to be diminishing over time,
some consumers, such as the elderly or the disabled, were especially distressed by
their inability to interface comfortably with new electronic banking and financial
transaction technologies. This issue encompassed discussions of the consequences
of electronic banking networks for all classes of consumers, the expansion of
technology into banking services and bank investments, and forays into new
technologies.
Fees and Charges
Bank fees and charges were a major but relatively recent source of
contention, and they were most extensively discussed in the third case study (see
Table 5.2). During that time, this issue was mentioned in 8.9% of the articles (n =
206). Overall, from 1981 to 2001, fees and charges were discussed in 4.4% of the
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articles (n = 290). According to studies undertaken in the 1990s, both costs and
profits in Australian banking were unusually high relative to those of banks in
comparable developed countries (Perkins, 1998). Encompassed within this issue is
the argument that retail customers, as a class, subsidise corporate customers (Perkins,
1998). For example, electronic banking services were initially more favourably
priced, and having captured consumers and removed other traditional points of
access, the banks progressively devolved the costs of electronic banking fees to the
customer.
Image-building
The major banks invested significantly in marketing, public relations, and
advertising and engaged in various image-building activities. They engaged in some
of these activities in response to the sporadic battering of their public image. The
banks expenditures and efforts in this area were intermittently the subject of interest.
At best, this interest attracted neutral attention from activists, the media, and others,
and at worst, the attention was derisive and contentious. From 1981 to 2001, this
issue was evident in 4.4% of the articles (n = 288). For example, a report in The Age
entitled Westpac banks on its come-clean image, reported that the newly launched
campaign from Westpac attempted to rebuild its credibility in the face of the
scandals of the time. Westpacs chief manager of corporate communications said
that the strategy was an attempt to put customers back in control of their banking,
something they felt they had lost in the 80s (Smithers, 1991, p. 23). This issue
accounted for such events as the re-design and launch of corporate logos and
uniforms, the sponsorship of major sporting events and facilities, including the
former ANZ stadium in Brisbane, and the Westpac rescue helicopters.

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Credit Card Policies
In the early 1980s, the credit card market was dominated by the local
product, Bankcard, only to be overtaken rapidly by the global credit card products,
Visa and MasterCard. This issue was evident in 3.9% of the articles (n = 258) and
was most prominent from 1995 to 2001. However, even in 1991, it attracted the
attention of the Australian Financial System Inquiry (the Martin Inquiry), which
recommended that the Prices Surveillance Authority (PSA) inquire into the
profitability of credit cards. This issue encompassed bank policies on charging
interest on credit rates, disputed claims by banks and consumers in relation to credit
card interest rates and fees, credit card marketing strategies employed by banks,
consumer credit card debt, and bank policies controlling how retailers use credit
cards. For example, a Courier Mail report entitled Banks extra credit card profit
blasted suggested that banks had come under fire for the increasing gap between
credit card rates and the official interest rate after only one bank, ANZ, followed an
RBA interest rate cut with a cut to credit card rates (Spann, 2001). A Queensland
Consumers Association spokesperson argued that the failure of banks to adjust
credit card rates in line with official rates was an ongoing problem for consumers.
The rejoinder to this criticism from a Westpac spokesman was that the bank had
dropped its credit card rates several times since official rates had started dropping
and that credit card rates were higher because they were an unsecured debt and that
banks were more vulnerable to credit card fraud (p. 3).
Prudential Controls
Responsibility for prudential control of the banks was vested in, and
administered by, the RBA. Its role in administering prudential controls and the
potential or actuality of RBA intervention in banking practices, was discussed in

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3.9% of the articles (n = 258); the issue featured most prominently from 1988 to
1994 (see Table 5.2). In 1997, the Wallis Inquiry recommended changing the
system of prudential controls for banks. Rather than expanding the role of the RBA,
this Inquiry proposed setting up the Australian Prudential Regulation Commission,
responsible not only for the supervision of banks but other deposit-taking
institutions, as well as life insurance companies, superannuation funds, and
securities markets (Perkins, 1998). Concerns with this decision related to the loss of
RBA expertise in controlling banks and the potential for a loss of public confidence
in the payments system if these supervisory powers were transferred to a new body
(Perkins, 1998).
Branch Closures
Branch closures loomed large in the 1990s and became an issue of
considerable contention for the major banks between 1995 and 2001, when they
were mentioned in 6.5% of the articles (n = 151). Overall, this issue appeared in
3.4% of all articles (n = 224), from 1981 to 2001 (see Table 5.2). The non-price
competition incentive that stimulated the development of an extensive branch
network was largely removed with deregulation, and the major banks divested
themselves of thousands of bank branches in the 1990s (Perkins, 1998). Many
branches closed to reduce the duplication and overlapping of services that resulted
from bank mergers and acquisitions, while others closed because they were
unprofitable and unsustainable. Some of the hardest hit areas were the rural and
remote regions where access to banking and financial services was already relatively
poor.
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Service Quality
The quality of service provided by the major banks to retail consumers
attracted considerable attention, intermittently rather than consistently, and was
most evident from 1995 to 2001 (see Table 5.2). During that time, the issue
appeared in 5.4% of the articles (n = 125). From 1981 to 2001, the issue emerged in
3.2% of the articles (n = 214). Service quality encompassed discussions of the
quality of bank services, the errors and omissions made by banks in their
transactions with retail customers, and descriptions of consumer research
periodically undertaken by consumer organisations and other researchers to assess
perceptions of the quality of service provided by the major banks.
Privatisation
The ownership of the formerly government-owned Commonwealth Bank
emerged as an important issue in the second case study (see Table 5.2), where it was
evident in 4.8% of the articles (n = 145). Commonwealth Bank shares were offered
to the public for the first time in 1991. Overall, the issue was mentioned in 2.9% of
the articles from 1981 to 2001 (n = 194). The privatisation of the Commonwealth
Bank was debated intermittently; however, the success of the initial and later
offerings and the opportunity that the sale of shares in the bank offered to the small
investor were generally positively acknowledged in the media.
Farm Lending and Support
As powerful sources of finance, the banks played an integral role in
providing farming businesses with the capacity to persist in difficult times, and
traditionally, local bank managers were the sole providers of financial advice and
support to farmers. Following deregulation, a range of developments occurred,
including a proliferation of products and services, followed by a reduction in bank

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services to rural areas. Farm lending and support was most evident from 1995 to
2001 (see Table 5.2), and from 1981 to 2001, this issue was mentioned in 2.3% of
all articles (n = 153). In the rural sector, the lending excesses of the 1980s were
followed by difficult times for rural borrowers. In the bush, understanding of
available banking products and services and the suitability or associated risks of
these products lagged far behind the changing banking and financial services
markets. Also lagging was the farming communitys understanding of the
transformation of the local bank manager from conservative financial advisor and
community stalwart to transient marketer with sales regions and sales targets.
Consequently, many farmers made relatively uninformed borrowing and other
decisions. The seasonal nature of farming and the widespread droughts of the 1990s
continued to challenge the farming business. Topics encompassed by this issue
included debates about the adequacy of bank advice and support services for farmers,
codes of practice in relation to bank-farmer dealings, the role of bank finance for
farmers, bank policies for managing and retrieving farm debts, and bank lending
during droughts or other natural disasters.
Small Businesses
The problems small businesses have in accessing funds and advice and the
prices they pay relative to larger businesses were occasionally the subject of
contention. This issue was most evident from 1995 to 2001 (see Table 5.2),
appearing in 3.4% of the articles (n = 80), and from 1981 to 2001, it was evident in
2.1% of the articles (n = 140). Topics embedded in this issue included the
disclosure of margins, fees, and charges to small business customers; the risk
premiums on small business loans; the adequacy of consultation; credit assessment

138
procedures; and the credit standards applied to small businesses in comparison with
larger enterprises.
Foreign Currency Loans
Banks involved in providing high risk foreign currency loans, particularly in
the 1980s, were accused of misleading borrowers by not disclosing the risks of
unhedged foreign currency. This issue was most evident between 1988 and 1994,
appearing in 2.9% of the articles (n = 87). From 1981 to 2001 (see Table 5.2), it
accounted for 2.1% of the articles (n = 136). In response to the more competitive
environment of the 1980s, banks offered foreign currency loans to a wider market.
Many of the loans were poorly structured, and the borrowers were poorly informed.
Ultimately, the banks were lambasted for their intimate roles in the demise of many
small businesses, including farming operations. In the wake of the foreign currency
loans scandal, the banks failed to meet their moral obligation to assist foreign
currency borrowers following the dramatic fall in the Australian dollar in early 1985,
and their belated responses to the problems of these borrowers was unsatisfactory
(Australian Financial System Inquiry, 1991). This issue included the disclosure of
risk to foreign currency borrowers, the marketing of these loans, borrower disputes,
and the management and training of bank staff responsible for selling or
administering these loans.
Foreign Banks
The entry of foreign banks into the domestic market was a competitive issue
for the banking sector, and foreign banks were permitted to enter the Australian
market with the onset of deregulation in the 1980s. This issue appeared in 1.6% of
the articles (n = 107) from 1981 to 2001 (see Table 5.2). It was most prominent in
the first case study, from 1981 to 1987, when the first foreign banks were allowed to
139
enter the Australian market. Prohibitions on the foreign takeover of the four major
banks were lifted after the Wallis Inquiry in 1997, which recommended foreign
takeovers be assessed through the general provisions of the Foreign Acquisitions
and Takeovers Act of 1975. This decision caused some consternation within the
major banks (Perkins, 1998), particularly in view of the decision to continue
prohibitions on the merger of the four major banks. While the large scale transfer
of ownership of the financial system to foreign hands would be contrary to the
national interest (Hanratty, 1997, p. 17), it was argued that some level of foreign
ownership would deliver significant benefits, including the injection of new capital,
access to new skills and technologies, and enhanced domestic competition. Topics
included in this issue were the major banks responses to the entry of foreign
competitors, the activities of foreign banks in comparison to the major banks,
government policy toward takeovers of Australian banks by foreign interests, and
the arguments favouring or opposing foreign takeovers of Australian banks.
Summary of the Issues
The issues of concern to the major banks and their activist publics, as
presented in this section, reveal the particular perspective of the public opinion
environment of Australias major banks underpinning this study (see Figure 5.1).
The impact of such issues as deregulation or mergers and acquisitions must also be
acknowledged. Unlike some of the lower-ranked issues dealt with defensively by
the banks, these dominant issues were pursued offensively. For example, the major
banks often drove discussions about the laws preventing the merger of the major
banks and contested them as a barrier to their expansion. Although the debate that
ensued did not always favour the major banks, as evidenced by the resulting
coverage, they were difficult issue contenders for the media to resist. The important
140
but intermittent prominence of such issues as employee relations or consumer
consultation and protection should also be noted, as these issues attracted substantial
activist interest and were important to this exploration of bank-activist relationships.
Figure 5.1
Overview of the Issue Set, 1981 - 2001
21
18
15
12
9
% of mentions
0
Crime & litigation
Employee relations
Image-building
Home lending
Foreign activities
Competition
Deregulation
Corporate lending
Service quality
Privatisation
Farm lending
Electronic banking &
Prudential controls
Small business
Foreign exch. loans
Foreign banks
Profit & Performance
Credit cards
Operations decisions
Mergers/Acquistions
Branch network
Deposits/investments
Consumer consult.
Fees & charges
The Issue Set, 1981 - 2001
This discussion of the public opinion environment of Australias major banks
contextualises the following specific descriptions and case-by-case comparisons of
the composition of the issue sets for each of the three case studies.
141
The Issue Sets
The composition of the public opinion environment was described using the
issue sets for the three case studies, specifically, 14 months sampled from April,
1981 to October, 1987; 14 months sampled from April, 1988 to October, 1994; and
14 months sampled from April, 1995 to October, 1995. The articles gathered for
each month were analysed and the issue sets described. For example, in April, 1981,
eight issues were evident and ranked from most to least prominent in the following
order: (1) deregulation, (2) home lending, (3) retail deposits and investment products,
(4) competition with non-banks and other banks, (5) corporate lending, (6) crime
and litigation, and (8) electronic banking and technology. As was specified in
Chapter 4, I derived the issue sets and analysed their composition to determine
issue-set stability, intensity, complexity, and direction for each month.
The issues: 1981 - 1987. In this the first and most extensive period of
deregulation in Australian banking history, deregulation emerged as the top-ranking
issue overall (see Table 5.2) and was the number one issue in 50% of the 14 months
sampled (n = 7) between April, 1981 and October, 1987. Corporate lending
(domestic) ranked number one the second most frequently, dominating in 28.6% of
the months (n = 4). Home lending, operational decisions and domestic investments,
and consumer consultation and protection were all top ranking issues for one month
each. Consumer consultation and protection appeared as the top ranking issue in
October, 1985, its only appearance in the top ranking in this case study.
The issues: 1988 - 1994. The years from 1988 to 1994 were turbulent,
coming in the wake of the stock market crash of 1987. Predominant issues of the
period encompassed the major investments, activities, and operations of the banks,
their profitability and performance, the changing regulatory structure necessary for
142
the changing times, lending decisions, and the increased domination of the financial
marketplace by a few major corporations. Less frequently mentioned but high-
impact issues of the times were employee relations, together with consumer
consultation and protection (see Table 5.2). The growing emphasis on right-sizing
the banks, led to changing demands on the workforce. This meant fewer permanent
jobs and a reduction in bank staffing overall as the number of branches were cut.
Foreign exchange loans and farm lending were less frequently mentioned, but
because these were issues of high impact and contention, they were catalysts for the
emergence of hot-issue groups, such as the relatively short-lived Foreign Currency
Borrowers Association.
The issues: 1995 - 2001. Bank branches closed across Australia, and
thousands of bank employees lost their jobs. Rural and regional areas were
especially hard hit because of their limited access to alternative financial institutions.
From 1995 to 2001, mergers and acquisitions was the issue mentioned second-most
frequently, followed by deregulation. The Financial System Inquiry of 1997 failed
to result in the mergers wanted by the major banks. Bitter opposition to many bank
strategies and policies from consumer, small business, and labour union groups
became more commonly known as bank bashing. Discussions of profit and
performance dominated this issue set. This contrasts with the first case study, in
which deregulation was the top ranking issue, and the second case study, which was
more marginally dominated by operational decisions and domestic investments, with
profit and performance a very close second. The dominant issue, profit and
performance, also appeared most consistently in the top-five ranking issues for each
of the 14 months (see Table 5.2). As with the first and second case studies,
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deregulation and mergers and acquisitions also featured regularly in the top five. A
notable entry to the top-five was the issue of employee relations.
Summary of the issue sets. Although media coverage of the issues varied
over time, this overview of the three case studies shows the persistence and
domination of some issues relative to the intermittent and more limited evidence of
others. In the 14 months sampled between 1981 and 1987, five issues ranked in the
number-one position, but only one issue, deregulation, dominated. From 1988 to
1994, nine different issues ranked number one in the 14 months sampled, but several
issues were again prominent (see Table 5.2). New issues appearing in the top ranks
were privatisation, mergers and acquisitions, profit and performance, and deposits
and investment products. This reflected a number of events, specifically, the
privatisation of the Commonwealth Bank, the bank mergers or acquisitions
occurring in response to new competitive imperatives, the positive and negative
analyses of bank profitability, and the introduction of a range of new deposit and
investment products as the banks were empowered to offer superannuation products
and to move more aggressively into financial advisory roles. From 1995 to 2001,
only six issues made it to the top of the issue set, and the dominant issue was profit
and performance, which ranked at the top of the issue set in 50% of the months
sampled (n = 7). Issues new to the top rankings in this case study were electronic
banking and technology and fees and charges.

144
Having described the issue sets, which were characterised by the persistence
and prominence of a relatively small group of issues, I will describe the evolving
bank-activist relationships by the location of these relationships on the conflict
continuum from 1981 to 1987, 1988 to 1994, and 1995 to 2001. I will then present
descriptions and case-by-case comparisons of the outcomes for the stability,
complexity, intensity, and direction propositions of the EOAR model.
Bank-Activist RelationshipsAn Overview
The evolution of bank-activist relationships within this population was
described using relationship-signalling statements to locate these relationships on a
conflict continuum. This section reports the state of bank-activist relationships for
each case study, compares these findings across cases, and describes the significant
points of comparison and contrast within and between cases.
Westpac was the most frequently mentioned bank in all three case studies
(see Table 5.3). ANZ bank was ranked second in the first two case studies but was
overtaken by the National and Commonwealth Banks in the third case. Although
Westpac was consistently located as the most frequently mentioned of the major
banks, it is worth noting that the gap between the banks had narrowed from 1995 to
2001. By that time, the National Bank had become the clear market leader and a
powerhouse of Australian banking and finance. Westpacs prominence is explained
differently in each of the three cases. In the first, the newly renamed and merged
Bank of New South Wales was eagerly seeking to build its profile and was the
market leader. From 1988, Westpacs position changed in the wake of the financial
scandals of the post-1987 crash and the reputation rebuilding that followed. From
1994, the gap between the banks visibility had narrowed, stimulated by an
increasingly competitive retail and corporate market.

145
The frequencies with which the activist publics appeared in the data were
ranked similarly in the second and third case studies. In other words, consumer
groups ranked as the most frequently mentioned activist publics from 1988 to 1994
and again from 1995 to 2001. Activist publics were most frequently mentioned
from 1995 to 2001 (see Table 5.4). Although the reasons for this finding will be
discussed in more detail in the next chapter, this evidence suggests that activists
became progressively more vocal as the nature of the public opinion environment of
the major banks changed and more activist publics emerged around issues.
146
147
148
To examine bank-activist relationships, I coded the recording units and
public statements from the banks or activists as indicating a neutral, cooperative, or
conflict state and allocated a score of one to the applicable category. This example
of a cooperative, bank-sourced statement appeared in an Australian Financial
Review report, in which a Westpac spokesperson commented on an employee
relations dispute in the following way: We are willing to sit down with the union
and clarify other proposals on the table such as increased parental leave and sick
leave (Pay Rise, 2001, p. 44). Another example of a bank-sourced cooperative
statement appeared in a report from The Age, in which Westpac announced a
revamped, come-clean approach to doing business and launched a new advertising
campaign. The managing director, Frank Conroy, was quoted as saying, Its an
attempt to respond to what our customers are saying. There has been an underlying
feeling of almost resentment and mystique. They are saying: For goodness sake
tell us how you operate, (Smithers, 1991, p.23). The next example appeared in a
Courier Mail article and was coded as an activist-sourced statement indicating a
conflict state. Commenting on the credit card interest rates of the major banks,
Queensland Consumers Association president Cherie Dalley said, I think they are
showing a lack of conscience in not reducing these credit card rates at a better rate
than they are now (Spann, 2001, p.3). An example of a neutral, bank-sourced
statement appeared in a Sydney Morning Herald article that discussed the special
packages banks were offering to wealthy customers (Maley, 1995). The
Commonwealth Banks chief manager of group communication, Lyndell Deves, was
reported as saying that the banks packages were negotiated separately but the
149
benefits could include a 0.5 per cent discount off the standard home loan rate,
exemptions on credit card fees and larger lines of credit on credit cards (p. 3).
After I extracted and coded these and other quotes like them, I calculated the
scores for the months sampled. Interpretations as to the state of these relationships
emerged from two approaches. First, the frequencies of conflict, cooperative, and
neutral states were reported by source; in other words, they were separated into bank
and activist statements. The relationship state for each month was interpreted
narratively using a standardised set of phrases such as, very low conflict, some
cooperation evident moving toward a co-operative state from low to very low and
very high conflict evident moving toward a conflict state from medium high to
very high conflict. Bank-activist relationships were then described using the Janis
and Fadner (1965) coefficient of imbalance. By applying this coefficient, I
compared the proportion of statements reflecting a conflict state with those
statements reflecting a cooperative state, controlling for the overall volume of
statements. The outcomes for each month located the bank-activist relationship state
on the conflict continuum between -1 (total conflict), and 1 (total cooperation).
Variations in the location of the bank-activist relationships along the conflict
continuum for each of the three case studies are described in Figure 5.2. When the
line moves above zero on the conflict continuum, the bank-activist relationship state
is described as moving toward a cooperative state, and when the line moves below
zero, the relationship is described as moving toward a conflict state. Zero describes
a neutral state. As is evident in Figure 5.2, the bank-activist relationships moved
more frequently within the range below zero. This means that the relationships were
most often in a conflict state and the variations were in the degree of conflict evident,
from zero (neutral) to -1 (total conflict), rather than between cooperation and
150
conflict. From 1981 to 1987, the variations in the location of these relationships on
the conflict continuum were most extreme. Overall, the second case study, from
1988 to 1994, showed the least variation in the location of these relationships on the
conflict continuum. In the third case study, from 1995 to 2001, the bank-activist
relationships were again less likely to stay in the cooperative range of the continuum,
from zero (neutral) to 1 (total cooperation). In the next section, I describe the state
of bank-activist relationships and compare them case by case.
Figure 5.2
Bank-Activist Relationships on the Conflict Continuum
.1
0.0
The Conflict Continuum
-.1
-.2
-.3
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
One (1981-1987), Two (1988-1994), & Three (1995-2001)

151
Bank-activist relationships: 1981 - 1987. Statements from Australias major
banks featured most prominently in the newspaper coverage from 1981 to 1987 (n =
1,685); they appeared three times more often than statements by activists (n = 570).
While the raw frequencies of conflict statements from banks (n = 332) and activists
(n = 330) were comparable, when considered as a proportion of the total number of
statements each group made, activists were much more likely to generate statements
signalling a conflict state (see Table 5.5). That is, while 19.7% of all statements
made by the banks in this period signalled a conflict state, 57.9% of all statements
made by activists signalled conflict. Although the banks made more cooperative
statements than activists in total, the proportions of these statements were equivalent.
The generation of neutral statements provides the greatest area of contrast, with just
23% of activists statements describing a neutral relationship state compared with
57.5% of bank statements. However, it is important to emphasise that activists made
just 33% of the total number of statements extracted from newspaper coverage and
that the major banks dominated with typically neutral statements.

152
Table 5.5
Frequencies of Conflict, Cooperative, or Neutral Statements
Banks and Activists 1981-1987
Conflict Cooperative Neutral Total
Source n % n % n % n %
Bank 332 19.7 384 22.8 969 57.5 1,685 100.0
Activist 330 57.9 109 19.1 131 23.0 570 100.0
Total
662 29.3 493 21.9 1,100 48.8 2,255 100.00
Statements
Note: n = number of statements; % = percentage of total statements made by source (banks or

activists).
Bank-activist relationships: 1988 - 1994. Of the 14 months sampled
between 1988 and 1994, the banks again generated many more statements than their
activist publics (see Table 5.6). Activists collectively contributed less than 20% (n =
822) of the total number of statements (n = 4,256) considered in this analysis (see
Table 5.9). It is interesting to note that the number of conflict statements from banks
(n = 492) and activists (n = 491) were again almost exactly the samea repeat of
the findings for the first case study. However, as a proportion of the total, almost
60% of activist statements signalled a conflict state, in contrast with 14.3% of bank
statements. With 70.5% of the total statements made by banks signalling a neutral
state, the banks generated even more neutral statements (n = 2,420) when compared
153
with the first case study. In this period, activists again made fewer neutral
statements.
Table 5.6
Banks and Activists 1988 1994
Source Conflict Cooperative Neutral Total
n % n % n % n %
Bank 492 14.3 522 15.2 2420 70.5 3434 100.0
Activist 491 59.7 136 16.6 195 23.7 822 100.0
Total 983 23.1 658 15.5 2,615 61.4 4,256 100.0

statements

activists).
Bank-activist relationships: 1995 - 2001. From 1995 to 2001, the activists
generated less than a third of the total number of statements (see Table 5.7). In
contrast to the first two case studies, the number of conflict statements from banks
and activists no longer matched, and the proportion of conflict statements from
banks plunged to 4.7% (n= 189). Both banks and activists generated fewer
cooperative statements. More than 82% of the banks statements (n = 3,299) were
154
neutral, so the number was higher than in previous case studies, and almost 74% of
the activists statements (n = 943) signalled conflict.
Table 5.7
Banks and Activists 1995-2001
Conflict Cooperative Neutral Total

Source
n % n % n % n %
Bank 189 4.7 516 12.9 3,299 82.4 4,004 100.0
Activist 943 73.5 103 8.0 237 18.5 1,283 100.0
Total 1,132 21.4 619 11.7 3,536 66.9 5,287 100.0

statements

activists).
Bank-activist relationships: 1981 - 2001. When the frequencies of conflict,
cooperative, and neutral statements are compared across all three case studies, the
most dramatic changes are evident in the increase in neutral statements from banks
between 1988 and 1994, and again from 1995 to 2001 (see Figure 5.3), and in the
concurrent increase in conflict statements from activists (see Figure 5.4). In other
words, in the third case study, the banks generated fewer statements reflecting a
conflict state while making an increasing number of neutral statements.

155
Figure 5.3
Frequencies of Bank Statements, 1981 - 2001
400
Frequencies of Bank Statements
300
200
100 Conflict
Cooperative
0 Neutral
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
One (1981-1987), Two (1988-1994), & Three (1995-2001)
Neutral and cooperative statements made by activists were comparable for
all three case studies; however, the frequency of conflict statements increased
dramatically in the third case study. This is consistent with the increased presence
of activist publics in the third case study from 1995 to 2001 (see Table 5.7) in
comparison with the first and second case studies. In the first two case studies, the
banks and their activist publics generated conflict statements with similar frequency
(see Figure 5.5). However, from 1995 to 2001, the gap widened as the banks made
fewer conflict and more neutral statements, while activists made many more conflict
statements.
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Figure 5.4
Comparison of Bank and Activist Conflict Statements, 1981 - 2001
300
Frequencies of conflict statements
200
100
Banks
0 Activists
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
One (1981-1987), Two (1988-1994), & Three (1995-2001)
Having provided an overview of the composition of the issue sets for each of
the three case studies, described the state of bank-activist relationships, and
presented evidence of the interplay between conflict, cooperative, and neutral
statements from banks and activists, I will report on the findings of this study in
relation to the propositions of the EOAR model in the next section.
The EOAR Model: Exploring the Propositions
Because of the small number of data points (14 months) within each case
study, I made observations about the evident support or otherwise for the
propositions of the EOAR model and preliminary conclusions based on extended
engagement with the data. For example, in April of 1981, eight issues were derived
and ranked from most to least prominent in the following order: (1) deregulation, (2)
157
home lending, (3) deposits and investment products, (4) competition with non-banks
and other banks, (5) corporate lending, (6) crime and litigation, and (8) electronic
banking and technology. The next month sampled was October of 1981, and the
issue set comprised 15 issues. Ranked from most to least prominent, the issues for
this month were (1) deregulation, (2) home lending, (3) operational decisions, (4)
retail deposits and investment products, (5) mergers and acquisitions, (6) corporate
lending (domestic), (7) profit and performance, (8) competition with non-banks and
other banks, (9) credit card policies, (10) electronic banking and technology, (11)
employee relations, (12) crime and litigation, (13) foreign banks, (14) foreign
activities and interests, and (15) prudential controls. After establishing the issue set
for each month sampled, I compared these data points to establish the turnover of
issues (stability), the number of issues (complexity), the number of articles
(intensity), and the favourability of this coverage to the major banks (direction). If,
for example, the intensity proposition of the EOAR model was supported in 7 of the
14 months sampledthat is, if intensity increased and bank-activist relationships
moved toward a conflict state, or intensity decreased and the relationships moved
toward a cooperative state I reported the result as supporting the intensity
proposition in 50% of the months sampled (n = 7).
I also explored the propositions of the EOAR model for statistically
significant relationships using all 42 months of data from 1981 to 2001. I applied
the Pearson product-moment correlation and treated the outcomes of this analysis
conservatively given the small sample size. In the next section, the results of this
phase of the analysis are reported by issue-set dimension, stability, complexity,
intensity, and direction for each of the three case studies.

158
Stability and Evolving Bank-Activist Relationships
The first proposition of the EOAR model contends that, as the stability of the
issue set in the public opinion environment increased, organisation-activist
relationships in the population moved toward a cooperative state. I measured
stability by dividing the number of different issues between two data points (months)
by the total number of issues evident in the two months selected. Stability was
therefore expressed as a number between zero and one, where no issue turnover
equalled zero, and 100% issue turnover equalled one. Taking the example of the
issue sets derived for the months of April, 1981 and October, 1981, I found that
eight issues were common to both months, and seven issues appeared only in
October 1981. Therefore, I calculated issue-set stability calculated using the sum of
the issues for both months (15) divided by the number of issues that were not shared
(7). Therefore, issue-set stability between April and October of 1981 was 0.47,
which describes a 47% turnover in issues.
Issue-set stability: 1981 - 1987. The baseline reading for stability was
established using the first available month of data, which was April of 1981. The
turnover of issues in the issue set between 1981 and 1987 ranged from a high of 0.47
to a low of 0.05 (see Figure 5.5). From 1981 to 1987, bank-activist relationships
moved around the conflict continuum, and some consistency in the associations
between issue-set stability and this relationship was observed in 46% of the months
sampled (n = 6). In the remaining 54% of data points (n = 7), the proposition was
not supported (note that the first month, April of 1981, provided the baseline).
Issue-set stability: 1988 - 1994. The stability of the issue set during this
period varied from 0.0, the highest point of stability in which no turnover in the
issue set occurred, to a low of 0.29, when issue turnover was most evident. When
159
compared with the first case study, the period of 1988 to 1994 was moderately
variable (see Figure 5.5). Some associations between issue-set stability and bank-
activist relationships were observed in 61.5% of the months explored (n = 8).
Issue-set stability: 1995 - 2001. The stability of the issue set during this
period varied from most stable, at 0.04 in April of 1995 to the least stable, at 0.33 in
October of 1996. Again, issue turnover in this period was moderately variable
within a limited range (see Figure 5.5). Some consistencies between issue-set
stability and bank-activist relationships were observed, and support emerged for the
stability proposition in 53.8% of the months explored (n = 7).
Stability and evolving bank-activist relationshipsComparisons and
conclusions. From 1981 to 2001, issue-set stability varied from 0 to 0.47 with a
mean of 0.17 and standard deviation of 0.09. Issue-set stability varied most widely
between 1981 and 1987 (see Figure 5.7). Stability moved above 0.30 in three of the
42 months considered and below 0.05 in four of the months and was therefore
variable but limited in range. To explore the issue-set for evidence of covariation
between this and other dimensions, the Pearson product-moment correlation was
applied. No significant relationships were detected between variations in stability
and complexity, stability and intensity, or stability and direction. A significant
relationship was evident between stability and complexity of activist relationships
r = -0.304 p < 0.05 (one-tailed) indicating that as the issue-set stabilised and
turnover of issues decreased, the number of bank-activist relationships evident in
media coverage increased. The connections between a stabilising issue-set and the
emergence of bank-activist relationships are elaborated in the discussion of issue-set
inertia in the next chapter.

160
Figure 5.5
Issue-set Stability, 1981-2001
.5
.4
.3
.2
Stability
.1
0.0
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
One (1981-1987), Two (1988-1994), & Three (1995-2001)
In 51.2% of the months for which an outcome could be extracted (n = 21),
the stability proposition was supported; in other words, decreasing stability was
associated with bank-activist relationships moving toward a conflict state, and
increasing stability was associated with moves toward a cooperative state. When all
42 months of data from 1981 to 2001 were explored, some statistically significant
outcomes were derived. These outcomes must be treated with caution and are
intended only to supplement this exploration given the small sample size.
Using the Pearson product-moment correlation, I did not detect a significant
relationship between variations in issue-set stability and the location of bank-activist
relationships on the conflict continuum. I derived the location of bank-activist
relationships on the conflict continuum by applying the coefficient of imbalance to

161
the frequencies of conflict, cooperative, and neutral statements attributed to the
banks and their activist publics. To further explore the stability proposition, I broke
down the bank-activist relationship data into the raw frequencies of conflict,
cooperative, and neutral statements and analysed the data using the Pearson product-
moment correlation. Some significant relationships emerged between variations in
issue-set stability and the frequencies of these statements. As issue-set stability
decreased and issue turnover increased, the number of cooperative statements made
by the banks increased, r = -0.327, p < 0.05 (one-tailed), as did the frequency of
conflict statements made by the activists, r = -0.258, p < 0.05 (one-tailed). When
the frequencies for conflict, cooperative, and neutral statements from both banks and
activists were aggregated, significant relationships between issue-set stability and
the frequencies of neutral and cooperative statements emerged. When issue stability
decreased, the frequency of neutral statements increased, r = -0.261, p < 0.05 (one-
tailed), as did the frequency of cooperative statements r = -0.287, p < 0.05 (one-
tailed).
This analysis provides some important insights that are reviewed briefly here
and elaborated in more detail in the next chapter. The banks contributed an
overwhelming majority of neutral and, to a lesser extent, cooperative statements in
all three case studies. In contrast, activist publics provided many more conflict
statements than the banks. When the stability of the issue set decreased and there
was an increase in the turnover of issues in the issue set, the banks were more likely
to make cooperative and neutral statements, while the activists were more likely to
make statements indicating a conflict state. These relationships are depicted
graphically in Figure 5.6. Although the stability proposition of the EOAR model
was not supported, significant relationships were evident between variations in

162
issue-set stability and the frequencies of statements from banks and their activist
publics.
Figure 5.6
Issue-set Stability and Frequencies of Bank and Activist Statements
The Issue Set
Stability Low High
Organisation-
Activist
Relationships
Activists Conflict Cooperative/Neutral
Statements Statements
Banks Cooperative/ Conflict

Neutral Statements
Statements
Complexity and Evolving Bank-Activist Relationships
The complexity proposition of the EAOR model contends that, as the
number of issues in the public opinion environment increased, as described by the
issue set, organisation-activist relationships in the population moved toward a
conflict state.
Complexity: 1981 - 1987. From 1981 to 1987, the complexity of the issue
set varied from a minimum of eight issues in April of 1981, to a maximum of 22

163
issues in April of 1987 (see Figure 5.8). Support for the complexity proposition was
evident in 46.1% of the months analysed (n = 6). In these months, bank-activist
relationships moved toward a conflict state when complexity of the issue set
increased and away from a conflict state when complexity decreased. Note that the
first month, April of 1981, provided the baseline.
Figure 5.7
Issue-set Complexity, 1981 - 2001
30
Complexity - Number of Issues
20
10
0
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
One (1981-1987), Two (1988-1994), & Three (1995-2001)
set varied from 17 to 24 issues. Evidence to support the complexity proposition was
found in 50% of the months explored (n = 7). Other evidence worthy of additional
scrutiny emerged. In April of 1989, complexity was constant, and bank-activist
relationships moved toward a conflict state. In other words, the turnover of issues
164
declined between April and October of 1988 and was constant between October of
1988 and April of 1989, suggesting that the issue set had stabilised around some
issues of consistent concern. Although the issues did not increase in complexity, the
focus of public attention had narrowed or become more concentrated; in other words,
a few issues were attracting the most media coverage. In October of 1989,
complexity increased, while bank-activist relationships moved toward a cooperative
state. Further analysis of the data showed the issue of home lending had attracted
extensive media coverage in April of 1989 but then dropped out of the top five
issues by October of 1989. While not consistent with the proposition that increasing
complexity is associated with the move toward a conflict state, this example
provided useful insights into issue-set composition, the concentration or dispersion
of the issue set, and the dynamic interplay with relationships.
set varied from 18 to 22 issues. Evidence to support the complexity proposition
emerged in only 21.4% of the months examined (n = 3). In 21.4% of the months
examined (n = 3), complexity was constant, and bank-activist relationships moved
toward a cooperative state. In this case, the variations in complexity were even
more limited in range; in other words, the numbers of issues from month to month
were more constant, changing minimally, if at all (see Figure 5.7). When
complexity was constant or decreasing and was associated with increased bank-
activist relationship conflict, further examination of the data suggested that the issue
set had again stabilised around some issues of consistent concern. In other words,
the focus of public attention had concentrated. For example, although fees and
charges and consumer consultation and protection had not appeared in the top five
issues in October of 1994, these emerged as the two leading issues in April of 1995.
165
This suggested that public attention had shifted substantively. Again, in April of
1998, employee relations and deregulation moved up into the top five issues from
much lower rankings in October of 1997.
Complexity and evolving bank-activist relationshipsComparisons and
conclusions. In the second and third case studies, the number of issues in the issue
set stabilised, and variation in the number of issues from month to month became
much more limited over time. With a mean of 19.7 and a standard deviation of 3.0,
complexity varied from a low of eight issues in the first case study to a high of 24
issues in April of 1992. To explore the issue-set for evidence of covariation between
this and other issue-set dimensions, the Pearson product-moment correlation was
applied. While no significant relationship was detected between variations in
complexity and stability, significant relationships were evident between complexity
and intensity r = 0.635 p < 0.01 (one-tailed), complexity and direction r = -0.478 p <
0.01 (one-tailed), and complexity as the number of issues and complexity of activist
relationships r = 0.479 p < 0.01 (one-tailed). In other words, as the number of issues
increased (complexity), so too did the number of articles (intensity), bank-activist
relationships were increasingly evident (complexity of activist relationships), and
the favourability of the issue-set decreased (direction).
Overall, the data did not support the complexity proposition; the anticipated
associations were evident in 39% of the months examined (n = 16). When all 42
months of data from 1981 to 2001 were explored as an aggregate using the Pearson
product-moment correlation, some statistically significant outcomes were derived.
These outcomes must be treated with caution and are intended only to supplement
this exploration given the small sample size. No significant relationship was
detected between the complexity of the issue set and the location of bank-activist
166
relationships on the conflict continuum. The location of these relationships on the
conflict continuum was derived by applying the coefficient of imbalance to the
frequencies of conflict, cooperative, and neutral statements attributed to the banks
and their activist publics. To further explore the complexity proposition, I again
broke down the bank-activist relationship data into the raw frequencies of conflict,
cooperative, and neutral statements and analysed the data using the Pearson product-
moment correlation. Significant relationships emerged between variations in issue-
set complexity and the frequencies of conflict, cooperative, and neutral statements
from which conclusions about the state of bank-activist relationships were derived.
As issue-set complexity increased, so, too, did the total number of conflict,
cooperative, and neutral statements, r = 0.567, p < 0.01 (one-tailed). Comparisons
in issue-set complexity across the three case studies therefore supported the
contention that, as the issue set became more complex, the banks were more likely
to make cooperative and neutral statements, and their activist publics were more
likely to make cooperative and conflict statements. As complexity decreased, the
frequencies of these statements also decreased. In other words, as complexity
increased, both banks and activists tended to generate more relationship-signalling
statements. Because of the correlation evident between issue-set intensity (number
of articles), and issue-set complexity (number of issues), the significance of the
relationship between complexity and the frequencies of relationship-signalling
statements was further explored by partialling the number of articles (intensity) out
of the correlation. The outcomes of this test indicated that when intensity was
partialled out of the correlation, there was no significant relationship between
complexity and the total number of relationship-signalling statements.

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Complexity of Activist Relationships
Given the limitations of the complexity proposition of the EOAR model as
described earlier, I considered other ways to effectively describe the complexity of
the issue set. In so doing, I explored the concept of complexity as the number of
activists that the banks must engage with, or respond to, over issues of concern. The
foundations of this conceptualisation of complexity emerged from the
interorganisational relationship literature, in which the number of relationships an
organisation must sustain is considered to be an important aspect of organisational
environments (Aldrich, 1979; Broom et al., 1997, 2000; Hall, 2002; Van de Ven,
1976). The complexity of activist publics was therefore operationalised as the
number of bank-activist relationships in the issue set, as described by the number of
activist publics mentioned in the print media coverage.
Similar to the original complexity proposition, the complexity of activist
relationships proposition anticipated that any increase in the frequencies with
which activist publics were mentioned would be associated with bank-activist
relationships moving toward a conflict state, and any decrease would be associated
with moves toward a cooperative state. The frequencies with which activist publics
were mentioned were extracted and aggregated for each month, and the outcomes
explored in relation to this complexity of activist relationships proposition.
Complexity of activist relationships: 1981 - 1987. From the period of 1981
to 1987, 84.6% of the months analysed (n = 11) supported the proposition that an
increasing number of activist mentions would be associated with bank-activist
relationships moving toward a conflict state and a decreasing number with the move
toward a cooperative state. In other words, when the complexity of activist

168
relationships increased and more activists were mentioned in the media coverage,
bank-activist relationships moved toward a conflict state. When the complexity of
activist relationship decreased, bank-activist relationships moved toward a
cooperative state. Note that the first month, April of 1981, provided the baseline.
to 1994, 92.9% of the months analysed (n = 13) supported the proposition that there
are variations in complexity, as described by the increase or decrease in the number
of activist publics mentioned. As with the first case, the outcomes of this case
suggest a stronger association with this conceptualisation of complexity as the
number of activist public relationships attached to issues of mutual concern in
contrast to complexity as the number of issues only.
to 2001, 92.9% of the months analysed (n = 13) supported the contentions of the
complexity of the activist relationships proposition. When the complexity of activist
relationships increased, bank-activist relationships moved toward a conflict state,
and when it decreased, bank-activist relationships moved toward a cooperative state.
Complexity of activist relationshipsComparisons and conclusions. When
the three cases are compared, 92.7% of the months analysed (n = 38) supported the
proposition that there are variations in complexity, as described by variation over
time in the number of activist publics mentioned. When the complexity of activist
relationships is conceptualised as the number of activist public relationships in an
organisational population and operationalised as the frequency of activist public
mentions in media coverage, a consistent relationship emerges between this
dimension and the location of bank-activist relationships on the conflict continuum.

169
With a mean of 19.98 and a standard deviation of 13.72, the number of activist
mentions by month varied from a low of 0 to a high of 66 (see Figure 5.8).
Figure 5.8
Complexity of Activist Relationships, 1981 - 2001
70
60
50
40
30
20
10
0
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
One (1981-1987), Two (1988-1994), & Three (1995-2001)
Using the number of activist publics mentioned as an indicator of complexity,
I explored the 42 months of data from 1981 to 2001, applying the Pearson product-
moment correlation, and detected a significant, but not strong relationship, with the
total bank-activist relationship outcome, r = -0.280, p < 0.05 (one-tailed). This
relationship is described in Figure 5.9. To explore the complexity of activist
relationships dimension further for evidence of covariation between this and other
issue-set dimensions, the Pearson product-moment correlation was applied.
Significant relationships were evident between complexity of activist relationships

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and stability r = -0.304 p < 0.05 (one-tailed), complexity as the number of issues r =
0.479 p < 0.01 (one-tailed), intensity r = 0.728 p < 0.01 (one-tailed), and direction r
= -0.635 p < 0.01 (one-tailed). In other words, as the number of bank-activist
relationships increased, issue turnover decreased (stability), the number of issues
(complexity) increased, as did the number of articles (intensity), and the issue-set
grew less favourable (direction).
Figure 5.9
The Issue Set
Complexity of Low High

Activist
Relationships
Organisation-
Activist
Relationships
Bank-activist Cooperative State Conflict State

relationships
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Intensity and Evolving Bank-Activist Relationships
The intensity proposition of the EOAR model contended that, as the intensity
of the public opinion environment increased, organisation-activist relationships in
the population moved toward a conflict state, and as issue-set intensity decreased,
these relationships moved toward a cooperative state.
Issue-set intensity: 1981 - 1987. From 1981 to 1987, the intensity of the
issue set increased steadily from a low of 18 articles to a high of 156 articles.
Evidence to support the intensity proposition was found in 53.8% of the months
examined (n = 7). Note that the first month, April of 1981, provided the baseline.
Further support for the intensity proposition emerged in an additional 23% of the
months sampled (n = 3), when issue-set intensity decreased and bank-activist
relationships were constant, moving only slightly toward the conflict end of the
continuum. For example, only three additional conflict statements accounted for this
very slight move in October of 1987. Therefore, when intensity was constant or
unchanging, so, too, were bank-activist relationships. The results from 30.8% of the
remaining months (n = 4) did not support the intensity proposition.
Issue-set intensity: 1988 - 1994. From 1988 to 1994, issue-set intensity
increased steadily from a low of 118 articles to a high of 356 articles. Support for
the intensity proposition was evident in 64.3% of the months analysed (n = 9). The
months for which support for the intensity proposition was most evident were also
the months in which the change in intensity was most extreme. The intensity
proposition was most likely to be confirmed when variations in intensity were more
substantial in magnitude; in this case, that occurred when the number of articles
increased or decreased by more than 20% (n = 71).

172
Issue-set intensity: 1995 - 2001. From 1995 to 2001, the intensity of the
issue set increased steadily from a low of 100 articles to a high of 275 articles.
Support for the intensity proposition was evident in 57% of the months analysed (n
= 8). In 42.8% of these months (n = 6), in which support for the intensity dimension
was most substantial, the change in intensity was also the most extreme.
Intensity and evolving bank-activist relationshipsComparisons and
conclusions. Issue-set intensity varied from a low of 18 articles in April of 1981 to a
high of 356 articles in April of 1992 (see Figure 5.10). When the data were
aggregated, issue-set intensity recorded a mean of 150.7 and a standard deviation of
60.4. Covariations between issue-set intensity and the other issue-set dimensions
were identified as has been documented. In summary, as the number of articles
(intensity) increased, the number of issues (complexity) increased, the number of
bank-activist relationships increased, and the issue-set grew less favourable
(direction).
Support for the intensity proposition was evident in 58.5% of the months
analysed (n = 24). The months for which support for the intensity proposition was
strongest were also the months in which changes in intensity were most extreme.
This relationship was particularly evident from 1988 to 1994 and again from 1995 to
2001. Using the Pearson product-moment correlation, I could not detect significant
relationships between the intensity of the issue set and the location of bank-activist
relationships on the conflict continuum. Again, this outcome must be treated with
caution and is intended only to supplement this exploration given the small sample
size.
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Figure 5.10
Issue-set Intensity, 1981 - 2001
400
Intensity - Number of Articles
300
200
100
0
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
One (1981-1987), Two (1988-1994), & Three (1995-2001)
As with the stability and complexity dimensions, significant relationships
emerged between intensity and the frequency of conflict statements r = 0.554, p <
0.01 (one-tailed), the frequency of cooperative statements r = 0.444, p < 0.01 (one-
tailed), and the frequency of neutral statements r = 0.630, p < 0.01 (one-tailed). It is
important not to overstate the significance of this outcome. Intensity described the
volume of media coverage, operationalised in this study by the frequency of
newspaper articles. Frequencies of bank and activist relationship-signalling
statements were extracted from those articles. The fact that the volume of articles
and the frequencies of statements increased and decreased in tandem adds little
value to this analysis. However, it is important to note that when the increase or
decrease in intensity was more extreme, that is more substantial in range, bank-
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activist relationships were more likely to move along the conflict continuum toward
conflict or toward cooperation in the ways anticipated by the propositions of the
EOAR model. This relationship is described in Figure 5.11. The implications of
these finding are explored further in Chapter 6.
Figure 5.11
Issue-set Intensity and Bank-Activist Relationships
The Issue Set
Intensity High to Low Low to High
Organisation-
Activist
Relationships

relationships
Direction and Evolving Bank-Activist Relationships
The direction proposition anticipates that as the public opinion environment
becomes less favourable, organisation-activist relationships in the population move
toward a cooperative state. The direction of the public opinion environment for this
organisational population is operationalised as the favourability of the issue set, that
is, the favour with which Australias major banks were regarded. The rationale for
this proposition is that as organisations are faced with an increasingly unfavourable

175
public opinion environment, they work to recover favour with their publics. An
anticipated outcome of these attempts is the movement of bank-activist relationships
toward a more cooperative state.
Issue-set direction: 1981 - 1987. The direction of the issue set moved from a
relatively favourable position in the early 1980s to a more consistently unfavourable
position, particularly from 1984 through 1987. The proposition that bank-activist
relationships would show less evidence of conflict in the context of an unfavourable
issue set was supported in only 23% of the months analysed (n = 3). Note that the
first month, April of 1981, provided the baseline. In 69.2% of these months (n = 9),
the reverse outcome resulted, and as the direction of the issue set became less
unfavourable, bank-activist relationships moved toward a conflict state, and when
the direction was more favourable, relationships moved toward a cooperative state.
Issue-set direction: 1988 - 1994. From 1988 to 1994, the direction of the
issue set moved from a relatively favourable position of the early 1980s to a more
consistently unfavourable position in the late 1980s and early 1990s. The
proposition that bank-activist relationships would show less evidence of conflict in
the context of an unfavourable issue set was supported in 21.4% of the months
analysed (n = 3). Similarly, the remaining 78.6% of months (n = 11) showed the
opposite result; in other words, as the direction of the issue set moved from
favourable to unfavourable, bank-activist relationships moved toward a conflict state.
Issue-set direction: 1995 - 2001. From 1995 to 2001, the direction of the
issue set was consistently unfavourable. In a pattern similar to the first and second
cases, 100% of the months analysed (n = 14) showed the opposite result to what was
anticipated by the direction proposition. In other words, as the direction of the issue
set moved from favourable to unfavourable, bank-activist relationships moved

176
toward a conflict state, and when direction moved from unfavourable to favourable,
bank-activist relationships moved toward a cooperative state.
Direction and evolving bank-activist relationshipsComparisons and
conclusions. The direction proposition was supported in just 14.6% of the months
analysed (n = 6) for all three case studies. In each case, the evidence supported the
opposite contention; in other words, as issue-set direction varied from favourable to
unfavourable, bank-activist relationships were more likely to show evidence of
movement toward a conflict state. Issue-set direction varied from the most
favourable at 0.18 to the least favourable point at -0.18, with a mean of -0.04 and a
standard deviation of 0.07. As described in Figure 5.12, issue set was most
favourable in the first case study, varying in limited range from 0.0 to -0.18.
Covariations between issue-set direction and the other issue-set dimensions were
identified as previously specified. In summary, as the issue-set became less
favourable, the number of issues (complexity) increased, the number of articles
(intensity) increased, and the number of bank-activist relationships increased.
As with the study of stability, intensity, and complexity, when I explored the
1981-2001 data using the Pearson product-moment correlation, significant
relationships between the direction of the issue set and the frequencies of
relationship-signalling statements emerged. These outcomes must be treated with
caution and are intended only to supplement this exploration given the small sample
size. As with the stability and intensity dimensions, significant relationships
emerged between direction and the frequency of conflict statements r = -0.613, p <
0.01 (one-tailed), the frequency of cooperative statements r = -0.395, p < 0.01 (one-
tailed), and the frequency of neutral statements r = -0.358, p < 0.01 (one-tailed). As
the direction of the issue set became less favourable, the banks generated more
177
cooperative, conflict, and neutral statements, and the banks made fewer relationship-
signalling statements when the direction was more favourable, r = -0.445, p < 0.01
(one-tailed). The activists responded similarly with more or less relationship-
signalling statements associated with issue-set direction, r = -0.507, p < 0.01 (one-
tailed).
Figure 5.12
Issue-set Direction, 1981 - 2001
.5
.4
Issue Set Direction - Favourability
.3
.2
.1
.0
-.1
-.2
-.3
-.4
-.5
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
One (1981-1987), Two (1988-1994), & Three (1995-2001)
The contention that more evidence of cooperation would emerge as the
direction of the issue set became less favourable was therefore supported by the
outcomes of these cases. A pattern emerged in which unfavourable direction would
be accompanied by an increase in cooperative statements, and a more favourable

178
issue set would be associated with fewer cooperative statements. However, the
cooperative statements alone were not enough to move the bank-activist
relationships toward a cooperative state. As the direction of the issue set became
less favourable, there was a concurrent increase in total conflict and neutral
statements. Evidence therefore emerged to support the contention that, as the issue
set grew more unfavourable, the frequency of relationship-signalling statements
increased. In other words, when the anticipated associations between issue-set
favourability and bank-activist relationships were reversed, as described in Figure
5.13, the revised proposition was well supported.
Figure 5.13
Issue-set Direction and Bank-Activist Relationships
The Issue Set
Direction Favourable Unfavourable
Organisation-
Activist
Relationships

relationships
179
Summary of Results
In the months sampled from 1981 to 1987, the issue set was dominated by
debates about the benefits and future directions of deregulation and the place of
government in the business of banking. The issue of the major banks transacting
loans with the corporate sector took a more secondary role. The presence of activist
publics was limited throughout this period. The banks were much more likely than
their activist publics to make, or, at least be reported by the media as making, any
relationship-signalling statements, especially statements that were manifestly
cooperative or neutral.
The first case study provided limited support for the propositions of the
EOAR model in relation to stability and intensity. The complexity proposition was
supported in less than half of the months sampled. The anticipated relationship
between direction and bank-activist relationships was not supported. An alternative
perspective emerged, however, in which a more favourable direction was associated
with the move toward a conflict state overall. Embedded in that move along the
conflict continuum was evidence of more cooperative and neutral statements from
banks and more conflict statements from their activist publics. When complexity
was re-conceptualised as the number of activist relationships, a much stronger
association with the bank-activist relationships moving toward or away from a
conflict state emerged. These conclusions were considered in the analysis of the
second and third case studies.
The second case study, from 1988 to 1994, encompassed the years following
the 1987 crash. In this period, Australians endured economic recession and further
deregulation of the banking and finance sector. A single issue did not dominate the
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issue sets in these years, but several issues took prominent roles at various times.
Banks were as likely as activists to be quoted, directly or indirectly, making
statements indicating the relationships were in conflict. Once again, banks were
much more likely than their activist publics to make statements that were manifestly
neutral or, to a lesser extent, cooperative. Shareholder activists made their first
appearances in this case study, and the business groups were more likely to make
statements expressing conflict than were the employee unions, even though the
unions were engaged in several serious disputes during that time in relation to job
security and other employment conditions.
Support for the stability and intensity propositions of the EOAR model was
again limited in the second case study. Some evidence emerged of interplay
between issue turnover and the concentration or dispersion of the issue set, that is,
the degree to which public attention was dispersed across a number of issues or
concentrated on just a few issues. Additionally, the range of variation in issue-set
intensity appeared to be associated with more predictability in the location of bank-
activist relationships. In other words, when variations in issue-set intensity were
more extreme in range, bank-activist relationships were more likely to move in the
ways anticipated by the intensity proposition. The direction proposition was not
supported, and decreasing issue-set favourability was more consistently associated
with the move toward a conflict state. Evidence suggested that, as the direction of
the issue set moved from more to less favourable, the number of cooperative and
neutral statements from banks tended to increase, as did the conflict statements from
activist publics. The complexity proposition was not supported. However, the
complexity of activist relationships, operationalised as the frequency with which
activist publics were mentioned, was more substantially supported.

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The prominent issues for the third case study, from 1995 to 2001, were profit
and performance, mergers and acquisitions, and deregulation. Given the speed of
technological change and the explosion of new communication technologies, a
newly prominent issue was electronic banking and technology (see Table 5.2). The
banks were far less likely than activists to be the source of statements indicating
relationships in conflict, and they were much more likely to be quoted making
neutral, and to a lesser extent, cooperative comments. Consumer groups and
employee unions continued to sustain a strong presence throughout the period,
despite being consistently overshadowed by the extent of bank comments.
Support for the complexity proposition was least evident when limited to the
number of issues and most evident when extended to include the number of activist
relationships. Limited support for the stability and intensity propositions of the
EOAR model was again evident. The direction proposition was again not supported,
but the reverse proposition was much more likely to be supported. Consistent with
the first case, an increasingly unfavourable public opinion environment, as described
by issue-set direction, was likely to be consistently associated with more cooperative
and neutral statements from banks and more conflict statements from their activist
publics.
In the final chapter, I describe the implications of these findings in relation to
the abiding problem of whether variation in the public opinion environment of an
organisational population influences the evolutionary ecology of organisation-
activist relationships in that population. Embedded in this discussion are
refinements to the propositions of the EOAR model. In completing this discussion, I
will discuss the limitations of this study and explore opportunities for further
research.
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CHAPTER 6
Discussion
In this thesis, I have conceptualised the public opinion environment at the
organisational population level of analysis, and introduced ways to measure
variation in that environment. Central to understanding the public opinion
environment of an organisational population are the issues around which activist
publics organise, public opinion develops, and organisation-activist relationships
emerge. I have developed a descriptive model and advanced a series of propositions
to explore the abiding research problem of whether variations in the dimensions of
the public opinion environment were associated in predictable ways with the
evolution of important and often highly exposed relationships between organisations
and their activist publics. I explored this model through the lens of the comparative
case method using Australias major banks and their activist publics as the focal
population. In this chapter, I will discuss the implications of the major findings of
this research and propose revisions to the model. I will then advance the
conclusions, limitations of the study, and opportunities for further research.
Overview of Major Findings
The Public Opinion Environment of an Organisational Population
The comparative case approach taken in this thesis revealed some distinct but
related outcomes for this conceptualisation of the public opinion environment of
Australias major banks. First, the issue sets for each of the three case studies
comprise many of the same issues over time, typically varying only to the extent that
different issues are more prominently ranked in the issue set at different points in
time. In other words, many of the issues of concern to the major banks as a
population persisted over time. Second, the public opinion environment was
183
consistently unfavourable for the banks. The majority of newspaper reports sampled
in each case study were, on balance, unfavourable to these organisations. Therefore,
when described at the population level of analysis, the public opinion environment
of Australias major banks was consistently variable and generally unfavourable
during the three periods of interest; it was not the volatile public opinion
environment that might otherwise have been anticipated (Devereaux Ferguson, 2000,
p. ix).
The ecological perspective and evolutionary approach of this study were
accommodated by the decisions to adopt a longitudinal timeframe and apply the
population level of analysis. The evidence suggests that the public opinion
environment can be very slow to shift and will typically settle around some
dominant issues of concern. Van Leuven and Slater (1991) proposed that the media
have two roles in the development of issues: providing running accounts of
developing issue dimensions and events prompted by the issue and providing a
description of how publics are organising around an issue (p. 166). Media
coverage is an indicator of public interest and public opinion (Price, 1992), and the
continuing and intensive coverage of issues evident in this study suggests that public
interest was also persistent. Inertia is one appropriate way to describe the
consistency of issues in the public opinion environment. Issue-set inertia is
analogous to the structural inertia of organisational ecology, in which
organisations are conceptualised as slow to adapt and anything but flexible and
quick in collective response to changing opportunities and constraints in the
environment (Hannan & Freeman, 1989, p. xi).
In developing this concept of issue-set inertia, I have acknowledged that the
events and topics making up the sets of issues of concern to the banks and their
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activist publics varied within and across the three case studies. While the focus of
public opinion, as described by changes in issue-set stability and intensity, varied,
the fundamental composition of the issue sets remained substantially constant. For
example, the issues of deregulation, profitability and performance, home lending,
and consumer consultation and protection consistently appeared in the top 10 issues
for each of the three case studies. Therefore, when described at the organisational
population level of analysis, the public opinion environment of Australias major
banks was shown to be consistent and variable rather than volatile. Adopting a
population level of analysis and a longitudinal approach provides the means with
which to advance a description of the public opinion environment that recognises the
overlapping and persistent nature of issues. In other words, what may appear to be a
turbulent public opinion environment from the perspective of the single organisation
over a few months or years takes on an entirely different order and logic when the
level of analysis moves to encompass more organisations over a much longer time
span. For example, the potential for mergers between the major banks was the focus
of extensive attention in 1996 and 1997 because of the debate preceding the
Australian Financial System Inquiry (the Wallis Inquiry) and the subsequent
discussions of the findings of that Inquiry. This was an intense period of interest
during which the banks and their publics participated in and were exposed to
heightened levels of scrutiny and debate about the potential for the major banks to
merge. At that time, merger opponents expressed concern about the threat of market
domination by fewer major players and the consequences for further reductions in an
ever-shrinking traditional branch network. Merger proponents argued that the banks
would be doomed if they could not merge and compete globally. Given the
perspective provided by the concept of issue-set inertia, it is important to

185
acknowledge that the issue of mergers and acquisitions was debated in the early
1980s and again in the early 1990s. As turbulent as 1996 and 1997 may have
appeared at that point in time, neither the issue nor the points of view being
expressed were new. The Wallis Inquiry was an event that precipitated a shift in
attention to the issue of mergers and acquisitions. That issue was already entrenched
in the set of issues comprising the public opinion environment of Australias major
banks.
Issue-set inertia is particularly interesting to public relations because of the
emphasis now placed on issues management and the strategic role of public relations
managers in scanning organisational environments for issues, identifying,
monitoring, prioritising, and managing those issues in the best interests of the
organisation (Bridges & Nelson, 2000; Heath, 1997). Bridges and Nelson suggested
that issues managers who are systematically scanning their organisational
environments should experience fewer surprise threats or missed opportunities (p.
112). They argue that for many organisations, issues management typically begins
as a reaction to crises or events that escalate problems into the mass media and
possibly onto legislative agendas. Implicit in this definition is the view that issues
management presumes to remove an issuea potential problemfrom the public
agenda (Bridges & Nelson, 2000). However, organisations have less ability to
influence issues when they become the focus of mass media coverage, legislation
and/or litigation (Bridges & Nelson, 2000; Coates, Coates, Jaratt, & Heinz, 1986;
Heath, 1997; McCombs, 1977). The findings of this study in relation to issue-set
inertia in the public opinion environment are important for the issues management
professional literature because they further substantiate suggestions that, although

186
organisations can monitor and manage their responses to issues, to think they can
manage the issues themselves is navely optimistic at best.
Olien et al. (1995) described the persistence of individual issues as issue
longevity, arguing that the longer an issue persists and appears unsolvable, the more
likely it is that the public will develop a sense of aversion to the issue. This aversion
leads to the withdrawal of public support and pressure to settle. Although the
assumption that issues persist over time (Olien et al., 1995; Heath, 1997; Smith,
1996; Smith & Ferguson, 2001) is supported by the findings of this study, the public
aversion anticipated for such issues was less evident at the organisational population
level of analysis. Several dominant issues in the public opinion environment of
Australias major banks consistently attracted extensive media coverage. For
example, the issues of home lending and consumer consultation and protection were
ranked in various positions in the top 10 issues for each of the three case studies.
The evident and sustained interest in these persistent issues did not result in the
public aversion suggested by Olien et al. (1995). Public attention as described by
the extent of media coverage varied over time with the events and topics comprising
these issues. However, these variations were not so extreme as to suggest that the
public had reached a saturation point and withdrawn interest in the issues.
This study of Australia's major banks and their activist publics provides
further support for McCombs (1977) warning that, Once an issue is highly salient
and opinions are largely shaped, public relations may be limited to a defensive
posture or a redundant me-tooism (p. 90). These findings suggest that when
issues have emerged in the public opinion environment at the population level of
analysis, they are likely to remain there, providing a hub around which publics
organise and a focus for discussions and debates for years to come. The persistence
187
of issuesissue-set inertiahas important implications for the organisations
relationships with their publics, especially the activist publics organised around
these issues of concern.
The results of this study suggest that activist publics engaging with the major
banks over issues of mutual concern have had a limited voice in the public opinion
environment. That voice has typically been antagonistic, and in evolutionary terms,
the organisation-activist relationships most likely to persist in all three case studies
were attached to multiple, persistent issues. In other words, their mutual concerns
were for issues with enduring prominence in the issue set. For example, while the
Finance Sector Union had an obvious stake in the issue of employee relations, it also
was involved in other issues that had repercussions for their members, such as
mergers and acquisitions, the expansion or contraction of branch networks, and
electronic banking and technology.
The existence and actions of activist publics alone do not explain the
consistently unfavourable public opinion environment of the major banks, nor can
the interests of activist publics fully explain the persistence of issues. It is important
to note that the activists were mentioned in only 10.3% (n = 677) of all 6,595 articles
examined and therefore played a relatively small role in generating unfavourable
commentary about the banks. The extensive influences of other actors must be
highlighted. Politicians, bureaucrats, and the journalists themselves were major
contributors to discussions about the issues. Crucial to the stability, complexity,
intensity, and direction of the public opinion environment of Australias major banks
was the ongoing discourse of a select group of bankers, bureaucrats, politicians,
journalists, and occasionally, activist publics.

188
The evolutionary approach directs attention to the operation of some generic
processes, specifically, variation, selection, retention, and transformation. Any
departure from routine or tradition is a variation, and variations are intentional or
blind (Aldrich, 1999). Selection is generated by forces that differentially select or
selectively eliminate certain types of variations, and selecting forces may be internal,
including managers and members, or external, including market forces and
government regulations. When selected variations or structures are preserved and
repeated or reappear on future occasions or in future generations, the third
evolutionary process of retention has occurred (Aldrich, 1999; Campbell, 1994). A
transformation is a major change involving a break or shift in existing routines and
competencies. It only takes on meaning if relative inertia is assumed as the normal
organisational state (Aldrich, 1999).
The contention that some variations are more effective than others in helping
organisations acquire resources or legitimacy (Aldrich, 1999) provides further
explanation for the persistence of some organisation-activist public relationships
over others. Organised activist publics with financial and human resources,
formalised management structures, and extensive memberships were the same
publics with which the major banks had persistent relationships that emerged and re-
emerged from 1981 to 2001. Selected variations that are preserved or reappear in
the population signify retention (Aldrich, 1999; Campbell, 1994). As a case in point,
banks and employee unions share relationships fitting all of these criteria. Employee
unions are formal organisations that have been legitimated by Australias industrial
relations laws and share with the major banks multiple and persistent issues of
concern. While not subject to the same regulatory imperatives, the major consumer
organisations, such as the Australian Consumers Association, and welfare

189
organisations, including the Australian Council of Social Services and other groups
belonging to the mainstream church organisations, such as the St. Vincent de Paul
Society, engaged similarly with the major banks. As formal organisations
recognised by regulators and other government and social institutions, these activist
publics have persistent structures and share similarly persistent multiple issues of
concern with the major banks. In contrast, variations in bank-activist relationships
were also evident in the appearance and eventual demise of the single or hot issue
activist publics. For example, the Foreign Currency Borrowers Association
persisted only as long as that issue remained prominent in the issue set. This issue
emerged from circumstances peculiar to the Crash of the late 1980s and continued
while matters were dealt with in the courts and periodically reappeared in
retrospective accounts of the events of that period. Eventually the issue captured a
place in popular culture and was dramatised in The Bank, a movie released in
2001.
The results of this study also suggest that between the first, second, and third
cases, variations were evident in certain bank-activist relationship routines. While
the banks more consistently made, or at least were reported making many more
public statements about issues of mutual concern in all three case studies, several
important variations occurred over time. First, the gap between the frequencies of
bank and activist statements grew between the first and third cases. Second, the gap
between neutral statements from banks and all other statements from banks or
activists became more emphatic between the second and third case study periods,
specifically from 1992 to 2001. Third, as is described by the approximately
equivalent number of conflict statements from both activists and banks, the banks
tended to match the activists blow for blow in media coverage in the first and
190
second case studies extending from 1981 to 1994. However, from 1995 to 2001,
this matching routine disappeared to be replaced by an escalation in neutral
statements from banks that was followed closely, but not matched in scale, by the
escalation in conflict statements from activists. This represented a transformation in
bank-activist relationships between 1981 and 1995. Specifically, the first case study
was characterised by balanced, if limited, engagement in the exchange of
relationship-signalling statements between banks and activists. Statements from
activists were acknowledged and debated by the banks. In the second and third case
studies, the routine changed, and banks became increasingly unlikely to make
conflict statements.
One explanation for the changing pattern of information flows in bank-
activist relationships, as described by the frequencies of public statements, emerges
from the shift in media relations practice and approaches to issues management
advanced in issues management professional literature since the late 1980s. Over
the past two decades, public relations practice in Australia has followed U.S. trends
for organisations under activist attack and resisted engaging with activists directly
and publicly in the media (L.A. Grunig, 1992a; Heath, 1997; Manheim, 2001; Smith
& Ferguson, 2001). There are two rationales for this approach. First, the
organisations can avoid sustaining a debate that might otherwise fade from the
public view by refusing to engage in a debate fuelled by media exposure (Heath,
1997; Manheim, 2001). Second, dominant groups, such as the major banking
corporations in this study, ward off challenges by downplaying controversy and
thereby withdrawing legitimacy from alternative views (Olien et al., 1995, p.320;
see also Karlberg, 1996, Dozier & Lauzen, 2000). For example, in a Sydney
Morning Herald report about pending job losses, the reporter described a dispute
191
between one bank and the Finance Sector Union, noting that ANZ downplayed the
union claims, saying the bank is working through a restructuring period and it is too
early to say how many jobs would actually go (Kidman, 1996, p. 37). By avoiding
making public statements signalling conflict at a rate comparable to their activist
publics, it could be argued that the banks were strategically but indirectly
downplaying the legitimacy of those claims and the activists authoring those claims.
The public opinion environment was most consistently unfavourable when this
strategy of downplaying and neutralisation was most intense. If one of the goals
of generating more neutral statements and avoiding generating conflict statements
was to improve the direction of the public opinion environment, its effectiveness
was not evident in the findings of this study. In other words, if the major banks
employed these strategies as a means of improving their image and encouraging
more favourable media coverage, these outcomes reveal nothing to support such a
contention. If anything, it could be argued that the banks neutral comments
spurred the activists to assert their positions more aggressively by making an
increasing number of conflict statements that were reported by the media more
frequently. Without elaborating beyond the available evidence, the outcomes of
these three case studies call into question the value of advice that encourages
organisations to deal with issues of concern and contention by seeking to downplay
issues and escalating the use of neutral statements.
In summary, this discussion provides an overview of the findings of this
study in relation to the composition and variability of the public opinion
environment of Australias major banks and their relationships with activist publics,
and it explores the more important implications for public relations theory and
practice.
192
Having provided an overview of the major findings of this study in relation
to this conceptualisation of the public opinion environment at the organisational
population level of analysis, I will address more specifically in the next section the
propositions and utility of the EOAR model and its potential for further development.
Refining the EOAR Model
I conceptualised the public opinion environment of an organisational
population as the set of issues of concern to the focal population and their publics. I
derived four dimensions from the organisational and public opinion literature and
explored the utility of these dimensions using a longitudinal, comparative case study
approach. These four dimensionsstability, complexity, intensity, and direction
were operationalised as turnover of issues in the issue set (stability), number of
issues in the issue set (complexity), volume of media coverage of the issues
(intensity), and the favourability of the media coverage to the focal population
(direction). I detected variations in these dimensions by measuring these dimensions
at specific intervals over time.
The focal bank-activist relationships in this study evolved in ways that were
both consistent and inconsistent with the propositions of the EOAR model. These
propositions are revisited in Figure 6.1 for ease of reference.

193
Figure 6.1
The Evolutionary Model of Organisation-Activist Relationships
The Public Opinion Environment
The Issue Set Stability Low High

(issue turnover)
Complexity High Low

(number of issues)
Intensity High Low

(volume of media
coverage)
Direction Favourable Unfavourable

(favourability to
focal organisations)
Organisation-
Activist
Relationships
The results of this study indicate some support for the intensity proposition,
more limited support for the stability proposition, and no support for the complexity
proposition. The direction proposition was emphatically rejected. When
reconceptualised to reverse the associations from an unfavourable public opinion
environment and a cooperative relationship state to a favourable public opinion
environment and a cooperative relationship state, the revised direction proposition
was strongly supported. Complexity was reconceptualised as the number of activist
relationships, as described by the frequencies with which activists were mentioned
in media coverage. The notion that an increasing number of these relationships

194
would be associated with moves toward a conflict state and a decreasing number of
activist relationships would be associated with moves toward a cooperative state was
also strongly supported. These findings are summarised in Figure 6.2.
The complexity of activist relationships shows the most evidence of an
association with the evolving bank-activist relationships; in other words, when more
evidence of activist relationships emerged in the issue set, bank-activist relationships
moved toward a conflict state (see Figure 6.2). As the direction of the issue set
became more unfavourable, banks and activists generated more relationship-
signalling statements. This increase in relationship-signalling statements was
consistent with the move toward a conflict state, and this pattern was repeated with
the stability, intensity, and complexity (number of issues) dimensions. When the
increase or decrease in intensity was more extreme, bank-activist relationships were
more likely to move along the conflict continuum toward conflict or toward
cooperation in the ways anticipated by the propositions of the EOAR model. In
other words, a move from low to high intensity (volume of media coverage) was
likely to be associated with a move toward conflict, and a move from high to low
intensity was likely to be associated with a move toward cooperation.
In summary, the findings of this study indicate inertia as an important
property of the issue set in which these dimensions are embedded and suggest that
the evolving bank-activist relationships are more tightly coupled to the direction,
intensity, and the complexity of activist relationships than to the stability and
complexity (number of issues) dimensions (see Figure 6.2).

195
Figure 6.2
Summary of FindingsEvolutionary Model of Organisation-Activist Relationships
The Public The Issue Set

Opinion
Environment Stability* Low High
(issue turnover) (more issue turnover) (lower issue turnover)
Complexity of High Low

Issues* (number (more issues) (fewer issues)
of issues)
Complexity of High Low

Activist (more activist publics to (fewer activist publics to
Relationships negotiate) negotiate)
(number of activist
relationships)
Intensity Low to High High to low

(change in volume (volume of issue coverage (volume of media
of media coverage) increases dramatically) coverage decreases
dramatically)
Direction Unfavourable Favourable

(favourability to
focal organisations)
Organisation-
Activist
Relationships
Relationship- More relationship- Fewer relationship-

signalling signalling statements signalling statements
statements
More cooperative More conflict
statements from statements from
organisations organisations
More conflict More cooperative
statements from statements from
activists activists
*Note that the complexity (number of issues) proposition was not supported and the stability
proposition was largely unsupported. However, some weak associations were detected between
variations in stability and complexity and variations in relationship-signalling statements.
196
The Stability Proposition
The stability propositions of the EOAR model anticipated that, as the issue
set stabilised and the turnover of issues decreased, organisation-activist relationships
in the population moved toward a cooperative state (see Figure 6.1). The results of
just over half the 42 months sampled, particularly those from the second case study
from 1988 to 1994, support this proposition. Two explanations are offered for this
outcome. First, in contrast to an issue set that varies frequently, a stable issue set
can provide more opportunities for organisations and activists to gather resources
and to advance their positions on issues of mutual concern. Second, when issue
turnover is higher, the more intermittent media coverage given to issues heightens
the challenge for organisations and activists to attract interest to their issues of
concern, and this limits the evidence available to track the evolving relationships.
Although variations in issue-set turnover were not consistently associated
with moves toward or away from a conflict state, as anticipated by the EOAR
model, some evidence of significant relationships emerged. As the issue set became
more unstable and the turnover of issues in the issue set increased, relationship-
signalling statements from both banks and activists increased in frequency. More
specifically, as the stability of the issue set decreased, the major banks were more
likely to generate statements signalling a cooperative relationship state, while their
activist publics were more likely to generate statements signalling conflict (see
Figure 6.2). The implications of these outcomes are that variations in issue-set
stability and the location of bank-activist relationships on the conflict continuum are
associated in some important ways, but these associations are more complex than
anticipated by the stability proposition of the EOAR model.

197
The stability proposition of the EOAR model anticipated that a stable public
opinion environment permitted organisations and activist publics to establish routine
ways of interacting and organising their activities in response to issues appearing
consistently in the issue set. Routines require coordination and cooperation, so
embedded in the stability proposition is the assumption that a more stable public
opinion environment should be associated with more cooperative relationships. One
explanation for the lack of consistent support for this contention and for the opposite
association between a stable public opinion environment and heightened relationship
conflict is that, as the issues in the issue set stabilised, organisations and activists
had more opportunity to pursue issues of mutual concern, to marshal resources, and
to advance and substantiate more sophisticated arguments. For example, the issue of
consumer consultation and protection attracted more attention from activists
between the first and third case studies, ranking as the 10th-most-frequently-
mentioned issue from 1981 to 1987, 9th from 1988 to 1994, and 5th from 1995 to
2001. While consumer organisations barely made an impact in the first case study,
appearing in less than 1% of all articles, they appeared in 6% in the third case study.
A stable issue set can therefore provide a more conducive environment for a
heightened conflict state as activists and organisations have further opportunities to
advance their positions on issues of mutual concernpositions that are frequently in
opposition and therefore predisposed to conflict. With the time and opportunity
provided by issue-set stability, the relationships between the banks and activists
become more visible in media coverage.
Furthermore, the predispositions of organisation-activist relationships to a
conflict state ensure that these relationships vary only in the degree of conflict
evident. Under less stable conditions when the turnover of issues increases, the
198
activist publics attached to issues have less time to marshal resources, attract
followers, and go forward with consistent force and influence. For example, while
the issue of farm lending and support occasionally gained attention, the attention
was inconsistent and intermittent. In an unstable public opinion environment
characterised by higher issue turnover, it is also potentially difficult for activist
publics to build and sustain public interest using the more intermittent media
coverage available as attention shifts from one issue to the next. Even if the
relationships are in a heightened state of conflict during times of higher issue
turnover, less consistent media coverage of the issues of concern means fewer
relationship-signalling statements and therefore more limited evidence from which
to track the relationships.
Issue turnover captures some important aspects of issue-set stability and is a
very useful dimension for describing and measuring variation in the public opinion
environment. However, the findings of this research suggest that variations in issue
turnover are not consistently associated with the state of organisation-activist
relationships, and, as Figure 6.1 describes, variations in other dimensions of the
public opinion environment were more closely associated with the evolving
organisation-activist relationships.
The Complexity Proposition
The complexity proposition of the EOAR model contends that, as issue-set
complexity increased, organisation-activist relationships moved toward a conflict
state, and as complexity decreased, these relationships moved toward a cooperative
state on the conflict continuum (see Figure 6.1). The findings of this study do not
support these associations. Variations in other dimensions of the public opinion
environment were more closely associated with the evolving organisation-activist

199
relationships (see Figure 6.2). However, variations in the number of issues were
associated with the volume of relationship-signalling statements these organisations
and activists generated.
The rationale for the complexity proposition emerged from the perspectives
of public relations, public opinion, and interorganisational relationship literature.
The logic underpinning this proposition was that, as the public opinion environment
became more complex and the number of issues in the issue set increased, the
population and its members were under increasing pressure to deal with these issues,
and a heightened state of conflict arose. Several important points emerge from the
consideration of the outcomes of this study. First, the inertia of the issue setthat is,
the consistency of the issue set of the focal populationwas not anticipated.
Because of this inertia, the range of variation evident in the issue set was limited,
particularly between the first and third case studies when the number of issues varied
only slightly between the months sampled. Second, variations in the number of
issues are already accounted for in the stability dimension, and as a single dimension,
complexity becomes less useful when variations in complexity are more limited.
Third, complexity can be conceptualised in other ways. Two important ways to
describe complexity are the number of relationships with which organisations must
contend (Hall, 2002; C. Oliver, 1990) and the concentration or dispersion of an
environmental sector (Aldrich, 1979; Dess & Beard, 1984).
The number of activist publics responding to, or engaging with, issues of
concern was operationalised in this study by assessing the frequency with which
activist publics are mentioned. The foundations of this aspect of complexity emerge
from interorganisational relationship theory (C. Oliver, 1990), which suggests that
the number of relationships with which organisations must contend is an important

200
aspect of environmental complexity. In a public opinion environment where
complexity increases, as described by the number of activist relationships within the
organisational population, the strain on organisational resources also increases.
Organisations must then negotiate with multiple publics, either by spreading
resources or by prioritising their publics (Heath, 1997).
The complexity of activist relationships is therefore conceptualised as the
number of activist publics with which organisations must negotiate relationships at
the population level of analysis. This concept is operationalised as the number of
organisation-activist relationships in the population and measured by the frequency
with which activist publics were mentioned in relevant news coverage. As is
described in Figure 6.2, variations in this dimension are associated with the evolving
bank-activist relationships according to their location on the conflict continuum.
The degree to which the issue sets are concentrated or dispersed is another
aspect of complexity not accounted for in the complexity dimension conceptualised
as the number of issues in the issue set. Specified as one of the important properties
of environmental variation, concentration-dispersion is defined from an ecological
perspective as the degree to which resources are evenly distributed or concentrated
in particular locations (Aldrich, 1979; Dess & Beard, 1984). In the context of the
public opinion environment, concentration can be conceptualised on a continuum
from highly concentrated to highly dispersed and described by the relative
proportions of media coverage given to each issue. A concentrated issue set,
therefore, is one in which a few dominant issues attract most of the media coverage,
and in a dispersed issue set, public attention is evenly distributed across most issues.
A dispersed issue set is characterised by the absence of dominant issues, with media
coverage spread evenly across the issue set.

201
The concentration-dispersion aspect of issue-set complexity was not
explicitly addressed in the original complexity proposition. However, preliminary
consideration of the concentration of the issue set using the data in this study
indicated at face value that the higher the concentration of the issue set, the more
likely there would be evidence of a heightened state of conflict in the focal bank-
activist relationships. Both concentrated and dispersed issue sets were observed, and
variations were evident in the degree to which the issue set was more or less
concentrated over time. Rate and range of change are important characteristics of
environmental variation (Tosi, 1992), and the preliminary consideration given to this
dimension in these case studies indicated that the range of variation, specifically
from a dispersed to a highly concentrated issue set, was more likely to be associated
with the location of bank-activist relationships on the conflict continuum. Because
the number of issues addressed could not adequately capture issue-set complexity
and because there were evident variations in issue-set concentration over time, this
aspect of complexity is included in the revised EOAR model.
Given the inertia of the issue set evident in this study, the complexity
dimension conceptualised only as the number of issues captured only part of a more
extensive picture of complexity. The findings of this research suggest that while
variations in the number of issues are not associated with the state of organisation-
activist relationships, variations in the number of activist relationships are associated
with these evolving relationships and deserve further investigation. The
concentration of the issue set was not explicitly considered in this study, but the
findings strongly suggest the value of this dimension in elaborating the public
opinion environment of an organisational population and developing a refined
EOAR model.
202
Therefore, the next refinement to the EOAR model is to expand the original
complexity proposition into two new propositions in which complexity is described
by two indicators, the number of activist relationships and the degree to which the
issue set is concentrated or dispersed.
Revised proposition 1. As the number of activist publics organised by the
issue set increases, organisation-activist relationships move toward a conflict state.
When the number of activist publics organised by the issue set decreases,
organisation-activist relationships move toward a cooperative state on the conflict
continuum.
Revised proposition 2. As the concentration-dispersion of the issue set
becomes more variable, as described by the range of variation in the proportion of
media coverage given to issues, organisation-activist relationships move toward a
conflict state.
The Intensity Proposition
The intensity proposition of the EOAR model anticipates that as issue-set
intensity increases, bank-activist relationships in the population move toward a
conflict state, and when issue-set intensity decreases and the volume of media
coverage declines, these same relationships move toward a cooperative state.
Limited support for the anticipated associations between important relationship
outcomes was most evident from 1988 to 1994. However, evidence emerged to
suggest that these associations were more consistent when variations in issue-set
intensity were extreme and more random when variations in intensity were small or
moderate. For example, in the second case study, all but one month in which the
intensity proposition was confirmed recorded variations of intensity in the range of
19% to 60%. There was a substantial variation in intensity in only one of the
203
months that did not support the intensity proposition. In the third case study,
support for the intensity dimension was strongest when the variation in intensity was
most extreme, from 32% to 51%, between the months sampled.
It is important to recognise evidence of a pattern that deserves further
exploration without overstating the value of these outcomes. Once again, rate and
range of change are important characteristics of environmental variation (Tosi,
1992). The increasing intensity of the public opinion environment, as described by
the volume of media coverage of issues, is an important indicator of public attention,
concern, and scrutiny (McCombs & Shaw, 1972; W.R. Neuman, 1990). While the
original intensity proposition accounted for variations in intensity, it did not
differentiate between marginal and substantial variations. Given the findings of the
second and third case studies in particular and the significant foundations for
intensity emerging from the mass media and public opinion literature (Glynn et al.,
1999; McCombs & Shaw, 1972; W.R. Neuman, 1990; Price, 1992) and other studies
(Deegan et al., 2002; Deephouse, 2000), an alternative approach to the intensity
proposition deserves further exploration. The range of variation is thus made
explicit in the revised intensity proposition of the EOAR model. This anticipates
that a more consistent relationship between variations in issue-set intensity and the
evolution of organisation-activist relationships is likely when the variations in
intensity are more extreme.
Revised proposition 3. As variations in issue-set intensity become more
extreme in range, organisation-activist relationships are more likely to move toward
a conflict or cooperative state in anticipated ways. In other words, as issue-set
intensity increases, organisation-activist relationships move toward a conflict state,
and as issue-set intensity decreases, organisation-activist relationships move toward

204
a cooperative state. When variations in issue-set intensity decrease and the range of
variation is small or moderate, the anticipated associations with the state of
organisation-activist relationships are less evident.
The Direction Proposition
The direction proposition of the EOAR model contends that as the public
opinion environment becomes less favourable, organisation-activist relationships in
the population move toward a cooperative state. The associations between bank-
activist relationships and the direction propositions of the EOAR were not supported
as anticipated. Instead, comparisons of issue-set direction for all three case studies
supported the opposite contention; in other words, when the issue set became less
favourable, bank-activist relationships moved toward a conflict state. In this conflict
state, banks were more likely to make cooperative and neutral statements, while the
activists were more likely to make statements indicating a conflict state. These
findings are summarised in Figure 6.2.
The increase in cooperative statements in the setting of extensively
unfavourable media coverage is consistent with expectations that organisations are
more likely to respond to unfavourable depictions by the media (ODonovan, 1999).
Studies have recorded increases in positive or self-laudatory information disclosures
from organisations around the time of events in which they were depicted
unfavourably (Deegan & Rankin, 1996; Deegan et al., 2002; Patten, 1992). In this
study, one way in which the banks responded to an increasingly unfavourable public
opinion environment was to refrain from being drawn into exchanging conflict
statements with activists, preferring instead to make more cooperative and neutral
statements; they seemed intent on bringing public opinion back in support
(Deegan et al, 2002).

205
While they were quoted more frequently and more extensively, the major
banks operated within a consistently unfavourable public opinion environment. In
exploring this finding, it is important to reiterate that many of the articles coded as
unfavourable did not quote activist publics, but instead included commentary
reporting the perspectives of activists or other actors, such as politicians and
bureaucrats. Journalists authoring opinion pieces and editorials made critical
comments about the major banks, and these contributed to the direction of the public
opinion environment, which was most often unfavourable. The focus of media
coverage in these case studies was very clearly on the dominant powers, the major
banks, with the activities and comments of activist groups selectively and, in relative
terms, minimally reported. This gave the appearance of balanced reporting at times,
but when total media coverage is systematically sampled, the imbalance evident
illustrates the extent to which these publics were kept at the margins of mainstream
discourse.
The literature on activism makes extensive reference to the need for activist
publics to make controversial statements to attract media attention, whereas
dominant groups such as major banks have established multiple points of access to
the media (Karlberg, 1996). Although not the focus of this study, these findings are
certainly consistent with contentions that the media are less likely to report any
statements made by activists unless they manifest conflict. What transpired in this
media coverage could quite reasonably be described as the ongoing discourse
between a select group of journalists, bankers, bureaucrats, and politicians that was
occasionally interrupted by comments from activists.
The direction proposition correctly anticipated that when the direction of the
public opinion environment became unfavourable, the banks would respond by

206
making fewer conflict statements and more cooperative and neutral statements.
While more evidence of cooperation in the form of cooperative statements from
banks was apparent in the findings of this study, these statements alone were not
enough to move the bank-activist relationship toward a cooperative state. The issue-
set direction proposition of the EOAR model is thus revised as follows:
Revised proposition 4. As the direction of the issue set in the public opinion
environment becomes less favourable, organisation-activist relationships in the
population move toward a conflict state, and as that environment becomes more
favourable, organisation-activist relationships in the population move toward a
cooperative state.
207
Figure 6.3
The Revised Evolutionary Model of Organisation-Activist Relationships
The Issue Set
Proposition 1 High Low

Complexity of activist relationships
As the number of activist publics organised by the issue set increases, organisation-activist
relationships move toward a conflict state. When the number of activist publics organised
by the issue set decreases, organisation-activist relationships move toward a cooperative
state on the conflict continuum.
Proposition 2 Variable Constant

Concentration
As the concentration-dispersion of the issue set becomes more variable, as described by the
range of variation in the proportion of media coverage given to issues, organisation-activist
relationships move toward a conflict state.
Proposition 3 Low to High High to Low

Intensity
As variations in issue-set intensity become more extreme in range, organisation-activist
relationships are more likely to move toward a conflict or cooperative state in anticipated
ways. In other words, as issue-set intensity increases, organisation-activist relationships
move toward a conflict state, and as issue-set intensity decreases, organisation-activist
relationships move toward a cooperative state.
Proposition 4 Unfavourable Favourable

Direction
As the direction of the issue set in the public opinion environment becomes less favourable,
organisation-activist relationships in the population move toward a conflict state, and as that
environment becomes more favourable, organisation-activist relationships in the population
move toward a cooperative state.
Organisation-
Activist
Relationships
208
Conclusions and Implications
I have discussed the major findings in relation to this study of the public
opinion environment of an organisational population and the evolution of
organisation-activist relationships. I have reviewed these findings and their
implications for the EOAR model and have advanced revisions to the propositions
of that model. In this section, I summarise the ways in which this study informs the
research questions posed at the outset and, thus, the abiding research problem. I
then discuss the conclusions and implications of this work, its limitations, and the
opportunities for further research.
The Research Questions
The first three research questions posed were: (1) What are the dimensions of
the public opinion environment at the organisational population level of analysis? (2)
In what ways does the public opinion environment of an organisational population
vary over time? (3) To what extent can variation in the dimensions of the public
opinion environment of an organisational population be described and measured? In
answering those three questions, I advanced the concept of the issue set, that is, the
set of issues concerning the members of an organisational population and their
publics. I then derived four dimensionsstability, complexity, intensity, and
directionfrom the literature and explored these dimensions in a comparative case
analysis focussing on the public opinion environment of Australias major banks.
During this study, other dimensions emerged: the complexity of activist
relationships and the concentration (or dispersion) of the issue sets. The dimensions
explored in this study are extensively grounded in the organisational and public
opinion literature. After deriving the four dimensions, I characterised and measured
variations in these dimensions. When the public opinion environment of an

209
organisational population is described as a set of issues, these dimensions provide a
robust lens through which to detect and measure variation. Using this lens I was
able to detect and derive the concept of issue-set inertia.
The fourth research question posed was: (4) To what extent can the evolution
of organisation-activist relationships within an organisational population be
observed and described? To meet the challenge of describing the evolution of
organisation-activist relationships at the population level of analysis, I developed a
conflict continuum and located the state of organisations-activist relationships on
that continuum using relationship-signalling statements published in the media.
When organisation-activist relationships are described at the population level of
analysis, the required lens is necessarily long, and the resulting description is a
landscape of change rather than the close-up portrait that is more familiar to public
relations research. I observed some important aspects of the variation, selection,
retention, and transformation of organisation-activist relationships using the lens
provided by the conflict continuum and the relationship-signalling statements
comprising that continuum.
The fifth research question was: (5) To what extent can associations between
variations in the dimensions of the public opinion environment of an organisational
population and variations in the state of organisation-activist relationships in that
population be specified? To address this question, I developed the EOAR model
and explored four propositions (see Figure 6.1). The findings suggest that the
evolving bank-activist relationships are more tightly coupled to the complexity of
activist relationships (number of activist publics), direction (favourability), and
intensity (volume of media coverage), than to the stability (issue turnover) and
complexity (number of issues) dimensions (see Figure 6.2). Thus, the extent to
210
which variations in the dimensions of the public opinion environment of an
organisational population and the evolution of organisation-activist relationships in
that population can be specified is more limited than the propositions of the EOAR
model anticipated. The association between these two entities is complex and must
be considered when considering the final research question: (6) Does such an
approach to conceptualising and measuring variation in the public opinion
environment of an organisational population and associating those variations with
the evolution of organisation-activist relationships offer any power from which
predictions about these associations could be formally hypothesised? While all the
relationships anticipated by the propositions of the EOAR model were not supported,
this study has important academic and practical implications. A new conceptthe
public opinion environment of an organisational populationis advanced, and some
important properties of that environment are made explicit. The conceptualisation
and operationalisation of both the public opinion environment, and organisation-
activist relationships, at the organisational population level of analysis demands
further investigation crucial for challenging current approaches to issues and
reputation management and for advancing the relationship management perspective
of public relations. This study establishes a place for activist publics in the
organisation-public relationship research agenda and responds to calls by Dozier and
Lauzen (2000) and Karlberg (1996) for public relations research that extends and
builds theory and for such research to be liberated from the organisation-centric
and frequently prescriptive research agenda of public relations practice. These
advances meet and exceed the basic commitment of public relations to assess the
environment of the organisation of which it is a part to determine the threats and
opportunities confronting that organisation (Ehling et al., 1992, p. 390).

211
A further conclusion and contribution of this thesis is the finding that the
public opinion environment at the organisational population level of analysis is
resistant to change over time and characterised by inertia. This inertia was revealed
only when the dimensions of the issue-setstability, complexity, intensity, direction,
and complexity of activist relationshipswere identified and tracked over time. In
other words, the degree of issue-set inertia is revealed by exploring the issue-set
dimensions over time. When issues of concern to organisations and publics emerge
in the issue set comprising the public opinion environment at the population level of
analysis, the stage may be set for the relationships between organisations and their
publics for some years to come. Organisations therefore should not expect to
manipulate issues, but instead should expect to use issues management principles to
analyse and adapt to issues in ways that enhance conflict resolution (Bridges &
Nelson, 2000, p. 111). Bridges and Nelson (2000) argued optimistically from a
relationship management perspective that if organisations are able to identify and
work toward achieving mutual interests and goals with their publics, they will have
a good probability of ending organisational-public conflict, (p. 112). In other
words, organisations can improve their relationships if they can identify and better
understand the issues that matter to their publics. One strategic response to issue-set
inertia for organisations is to differentiate an organisations activities and operations
from its cohorts in the population, reframe the perceptions of their publics, and
extend the foundations on which relationships with publics are built. Such a
contention is ripe for further exploration in the issues management professional
literature. To ensure that their issues of concern attract consistent rather than
intermittent attention, activist publics can adopt strategies to link issues of concern
to the organisational population rather than just one or two organisations and, more
212
importantly, to apply strategies that do not depend for impact on the limited
exposure given to activists by the mainstream media.
The degree to which the activist publics are themselves institutionalised and
organised (Smith, 1996; Smith & Ferguson, 2001) and the extent to which the
relationships are mandated by government regulation (C. Oliver, 1990) are
important indicators of organisation-activist relationships longevity. The bank-
activist relationships most likely to fit the public opinion environment as described
by their preservation and reappearance over time were the relationships organised
around multiple persistent issues. These activist publics engaged not only with the
organisations in the focal population, Australias major banks, but with other
organisations in other populations. The existence of these activists and, therefore,
their relationships with the banks was not limited to the negotiation of one issue with
a few organisations but extended to multiple issues and many organisations in
different populations.
Even while the major banks were enjoying record profits in the third case
study, from 1995 to 2001, the public opinion environment remained unfavourable,
with the banks enduring heavy and extensive criticism in what became known
colloquially in the mid-1990s as bank-bashing. Banks responded to this
increasingly unfavourable public opinion environment by refraining from being
drawn into exchanges with activists, especially exchanges expressing conflict; they
preferred instead to make more cooperative and neutral statements, intent on
bringing public opinion back in support (Deegan et al., 2002). The outcomes of
these three case studies call into question the value of advice that encourages
organisations to escalate their use of neutral statements in response to issues of
concern. The public opinion environment was consistently unfavourable as the flow
213
of neutral statements from banks increased. The outcomes of this study contest the
value of this strategy, suggesting that the banks neutral comments at best had no
impact and, at worst, incensed the activists to the point where they were more vocal
that ever. If the major banks employed these strategies as a means of improving
their image and encouraging more favourable media coverage, the outcomes of this
study reveal nothing that would support such a contention. If anything, it might be
inferred from the increasing number of conflict statements that the banks neutral
comments spurred the activists on to assert their positions more aggressively and
were quoted the media more frequently. Without elaborating beyond the available
evidence, the outcomes of these three case studies call into question the value of the
advice of public relations practitioners that encourages organisations to deal with
issues of concern and contention by seeking to downplay the issues and the activist
public associated with those issues.
Although media reputation and the profitability and performance of the
major banks is not the focus of this study, it is worth commenting on the findings of
these case studies in relation to Deephouses (2000) contention that media reputation,
indicated by the direction of the public opinion environment, is closely bound to
profitability, or, more specifically, return on investment. Taking the perspective of
resource dependency theory, Deephouse argued that media reputation is an
important organisational resource that could enhance or limit profitability. In his
study of regional banks in the United States, Deephouse hypothesised, with some
success, that the more favourable the media reputation, the healthier the
organisations profits and the higher the returns on investment for shareholders.
Although these hypotheses are not formally addressed in this study, it is important to
note that Australias major banks typically prospered, even in the midst of intensive
214
and extended criticism from consumer groups, employee unions, competitors, and
other activist publics. Some years were, however, more profitable than others, and
in the midst of the more depressed economic periods of the late 1980s and early
1990s, many Australian businesses, including the major banks, experienced reduced
profits or losses. An ecological perspective would predict that this outcome may
have been different for smaller or newer organisations that did not hold such a
dominant place in the national political and economic consciousness and therefore
may have been more vulnerable to criticisms that called into question the
organisations legitimate right to exist and do business. Additionally, the extensive
corporate and foreign interests of the major banks would have helped to quarantine
their balance sheets from what was at times a barrage of criticism in the domestic
retail market.
The environmental conditions in which organisation-public relationships
exist have attracted no research and very limited acknowledgement, and while the
emerging body of organisation-public relationship literature signals the importance
of the environmental setting of relationships, it does little more (Broom et al., 1997,
2000; Bruning & Ledingham, 1999; Ledingham & Bruning, 2000a; J. Grunig &
Huang, 2000; Huang, 2001; Pavlik, 1987). The findings of this study support
contentions that the composition of the public opinion environment, as described by
the issue set, can be derived and measured at the organisational population level of
analysis. Furthermore, there are some associations between variations in the
dimensions of the public opinion environment and the relationships organisations
have with activists, a critical but neglected subset of their publics. The more
specific limitations of this study are specified in the next section, followed by
recommendations for further research.

215
Limitations
The comparative case study approach requires the fine-grained analysis of a
specific context of interest and is appropriate for this exploratory study, the goal of
which is theory building. It must first be acknowledged, however, that 42 months of
newspaper coverage spanning three seven-year case studies is a relatively small
number of observations from which to draw conclusions and, therefore, an important
limitation to these findings.
A fundamental challenge confronted in this study was to meet the
imperatives imposed by the ecological and evolutionary lens, as well as the demands
of the comparative case study approach. The former demanded that the phenomena
of interest be examined over a timeframe adequate for observing change at the
population level of analysis, and the latter demanded thick, rich description. These
demands create a prerequisite for research that is rich, descriptive, and extensive in
timeframe. In negotiating the constraints imposed by the resources available to a
single researcher over a limited period of time, I could not always pursue the
explorations of other events and turning points that may have enriched this study.
For example, it may have been useful to apply multiple methods, or triangulation,
including interviews with news or assignment editors to consider news routines to
provide other perspectives for issue-set inertia. Alternatively, the timeframe could
have been extended to capture some of the important changes in the public opinion
environment occurring post-World War II as a consequence of the dramatic changes
in Australias social, economic, cultural, and political composition. Even within the
three selected case periods, the inclusion of more data points may have provided a
more complete picture of the public opinion environment. Instead, using the limited
resources of a single researcher, this study organises and interprets a meaningful, but
216
broad, overview of the public opinion environment at the organisational population
level of analysis, which is sufficient for an exploration into new theoretical realms.
One of the challenges of balancing timeframe and detail was confronted in
the development of the issue set. The population level of analysis set the imperative
for a set of issues that was useful over an extended period of time, rather than the
more typical perspective of the individual organisation over a much more limited
period. In order to establish a robust coding scheme that was adequately detailed to
describe this set of issues and yet extensive enough to be applied longitudinally, the
issues comprising the issue set had to be broad. Many of the issues with which the
boundaries of the issue set were defined shifted in emphasis as events and topics
changed. However, more consistencies than differences emerged over time, and it
was on the basis of these consistencies that the decisions shaping the issue set were
founded. For example, while the banks lobbied for less regulation, consumer and
welfare activists pressured for more regulation and for stringent controls on the
banks. This debate recurred in all three case studies. If each topic or event was to
be viewed as an issue, the issue set for this study would then have multiplied,
creating a detailed but deceptive view of the issue set as being more turbulent than
was revealed. In contrast, the issue set may have been reduced to less than 10 core
issues. While this level of reductionism may be appropriate given a more extended
timeframe, the issue set was shaped by the level of analysis and emerged from the
boundaries unique to the three seven-year periods selected for this study.
The compromise between timeframe and the provision of the detail
necessary to build comparative case research also manifested in the use of media
coverage to describe the state of bank-activist relationships. Given the lack of
precedents established in relevant bodies of literature and research, a major

217
challenge in constructing this study was to determine a meaningful way to describe
the evolution of organisation-activist relationships at the population level of analysis.
The nature of this type of research demanded that the state of bank-activist
relationships be constructed using artefacts of those relationships, specifically
evidence collected from statements published in the public domain. An alternative
way of describing the bank-activist relationship state that was not bound to media
coverage would have been useful for providing further insights into the bank-activist
relationship state. Sources other than media coverage, such as internal records from
the banks and their activist publics, correspondence, meeting minutes, and
memoranda, would have also enriched this study. However, assuming such records
existed and were continuous, intact, and accessible, the resources required for
obtaining, analysing, and interpreting them would defeat all but the most well-
resourced team of researchers, particularly within a limited timeframe.
While a useful indicator of the state of bank-activist relationships, the
aggregation of data required for applying the coefficient of imbalance (Janis &
Fadner, 1965) obscured some important complexities in the exchange of
relationship-signalling statements used to locate bank-activist relationships on the
conflict continuum. These organisation-activist information flows, specifically
public statements reported in media coverage signalling the relationship state,
became less visible after the application of this coefficient. In reducing the
frequencies of relationship-signalling statements to a single number, I lost some
important contextualising information; for example, the overwhelming number of
statements from banks relative to their activist publics was not evident once the
coefficient was applied.

218
Another important methodological limitation to this study was the use of
content analysis procedures to collect and code the data. Berelson (1952) originally
defined content analysis as a research technique for the objective, systematic, and
quantitative description of the manifest content of communication (p. 18). The
objectivity claim has since been debunked. Content analysis is not objective in a
value-free sense of the word (Hansen et al., 1998, p. 95). Instead, content
analysis requires the researcher to make subjective choices that are informed by the
theoretical framework (Hansen et al, 1998). Scholars have taken issue with the loss
of context and interpretation required (Sumner, 1979) and the fragmentation arising
from the quantification of rich original text (Thomas, 1994). However, Hansen et al.
(1998) have argued that many of the criticisms of content analysis concern its
misuse rather than its inherent weaknesses. Furthermore, because of the clearly
articulated rules and procedures applied in content analysis in contrast to other
qualitative or interpretive approaches, it is a transparent method of dissecting
and examining texts (Hansen et al., 1998).
This research is also limited by the focus on one population of large
organisations. Australias major banks are important and powerful national
institutions. That profile makes them useful subjects for this type of study, but other
populations of smaller or less influential organisations are subject to more
intermittent public scrutiny. The type of organisational population and the
implications therein for the public opinion environment deserve further scrutiny than
was available given the constraints of this study. Furthermore, other organisational
populations that are not protected by their size and entrenched economic and social
roles may respond differently to activist publics. Such differences may have
implications for the evolution of organisation-activist relationships.

219
Further Research
Emerging from these conclusions and limitations are opportunities for further
research. The extent to which variations in the dimensions of the public opinion
environment of an organisational population and the evolution of organisation-
activist relationships in that population can be specified is more limited than the
propositions of the EOAR model anticipated. These findings suggest that the
evolving organisation-activist relationships are more tightly coupled to some
dimensions than others. More specifically, the propositions of the refined EOAR
model invite further attention. The findings of this study support the contention that
some associations exist between variations in the dimensions of the public opinion
environment and the evolutionary pathways of organisation-activist relationships.
However, the complexities of these associations and the interplay evident at the
population level of analysis have not yet been unravelled or explained using
appropriate quantitative methods.
The first ambition of this study was to capture the nature of the
organisational public opinion environment and to specify its dimensions and
characteristics. The dimensions proposed and refined within this thesisstability,
complexity, intensity, and directionprovide the means with which to
systematically order, describe, and measure variation in an organisational
populations public opinion environment. At the organisational population level of
analysis, the public opinion environment offers several opportunities for further
research. The literature recognises the extent to which issues become embedded in
news media coverage (Heath, 1997; McCombs, 1977); however, explanations for
issue-set inertia at the population level of analysis and consideration of the extent to
which this phenomenon can be generalised across organisational populations are

220
important areas for further investigation. The focal population in this study included
relatively large corporations with extensive resources to dedicate to managing issues.
The question of whether issue-set inertia is more evident for larger organisations
facing higher levels of public scrutiny as compared with other organisational types
deserves further consideration. The nature of issue-set inertia, the extent to which
inertia is evident in the public opinion environment of any organisational population,
and the refinement of the dimensions through which to organise and understand the
nature of the public opinion environment all offer substantive and important
opportunities for further research.
The public opinion environment dimensions emerging from these case
studies have application for problems occurring within more limited timeframes.
For example, the approach applied in this study to detecting and measuring variation
has particular relevance for the analysis of crises and events during which the public
opinion environment changes suddenly with dramatic consequences for
organisational relationships. To provide a richer and more detailed description of
variation in the public opinion environment of an organisational population in crisis,
the frequency or range of intervals for which appropriate data is collected would be
adapted to the focal situation.
The use of media coverage is one important way to describe public opinion,
but there are others (Price, 1992). An alternative approach to gathering information
about specific issues comprising an organisational populations public opinion
environment would be to gather and adapt data from public opinion polls. Polls are
more useful for tracking public opinion over time in relation to clearly defined issues
and would have particular utility for exploring associations between the variations in
public opinion on specific issues in relation to changes in organisation-public

221
relationship management policies and strategies. For example, changing public
opinion about health care has important implications for health care providers and
their relationships with clients.
One of the most important contributions of the perspective of evolutionary-
ecology is that it provides a dramatic contrast to the strategic management approach
applied predominantly in public relations research. Embedded in mainstream public
relations theory and research are many untested assumptions about the capacities of
organisations to adapt to environmental change, to manage issues, and to build
relationships with publics. However, research exploring the associations between
environmental sectors and organisational relationships is difficult to accomplish
because it demands that environmental qualities and relationships must be measured
over time (Hall, 2002; Ledingham & Bruning, 2000b). Longitudinal research is rare
in public relations and is even rarer in the study of organisation-public relationships.
Consequently, there are few models for researchers to follow. Broom et al., (1997,
2000) provided some important starting points and this study advances their work
conceptually and operationally, building a framework for further organisation-public
relationship research that is not limited to the perceptions of a few select individuals
captured at only one or several points in time. Such advances are fundamental to the
development of more informed theories about these relationships. A further
contribution of this thesis is to bring activists into the organisation-activist research
agenda, and to provide a new perspective from researchers can analyse the strategic
and often critical role of these relationships.
Issues that emerge in the public opinion environment at the population level
of analysis are likely to remain there, providing a hub around which publics organise
and a focus for discussions and debates for years to come. The persistence of issues
222
evident at the population level of analysisissue-set inertiaand the dimensions of
the issue sets proposed in this thesis have practical implications that are equally
relevant for organisations and activists. Although specific events and topics that
describe the issue set cannot be predicted, the evidence of issue-set inertia suggests
that some degree of predictability is evident in the composition and variability of the
issues over time at the organisational population level of analysis. Organisations
and activists are better equipped to manage resource decisions if they can
differentiate systematic from random environmental change. The results of this
research explicitly demonstrate the limited capacities of organisationseven those
that are large and influentialto manage issues in the same way that personnel or
supply decisions are managed. While organisations can manage their responses to
issues, their capacity to manage the issues themselves is another rationalist
presumption (Cheney & Christensen, 2001a, p. 182) that promises more than it can
deliver. Also emerging from this study is the important question of whether the
degree of issue-set inertia is associated with the size and influence of the
organisations comprising a population.
The concept of the variable public opinion environment of an organisational
population as a set of issues that can be dimensionalised according to their stability,
complexity, intensity, and direction emerges from the organisational and public
opinion literature. The dimensions proposed in both the original and refined EOAR
model provide a robust lens that researchers can now apply and refine to detect and
measure public opinion environment variation. Although the relationships between
variations in the public opinion environment of an organisational population and the
evolving organisation-activist relationships, as anticipated by the propositions of the
EOAR model, were not extensively supported, this thesis captures, describes, and
223
measures important properties of an organisational populations public opinion
environment. Therefore the ambition of this study, to enrich contemporary public
relations theory, is achieved by conceptualising and measuring variation in the
public opinion environment of an organisational population, bringing this complex
and multi-dimensional environment more sharply into focus for both scholars and
practitioners. This thesis challenges traditional approaches to public relations theory
building. Advanced within is a theoretical apparatus with which one of the most
persistent but untested assumptions of public relations theory, continuous adaptation,
can be investigated by focussing on the specific associations between variations in
one important sector, the public opinion environment, and the evolving relationships
that similarly constrained organisations have with their publics.

224
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251
APPENDIX A
Coding Instructions for the Issue Sets
Item Section Instruction
1. Coders initials: Initial each coding sheet.
2. Sheet number: Number each sheet sequentially. No number can be used
twice.
3. Headline: Write the article headline in full.
4. Date: dd/mm/yy
5. Page: Write the page number on which the article appeared.
6. Newspaper: Write down the number for each newspaper according

to this list.
1. The Australian
2. Australian Financial Review
3. Sydney Morning Herald
4. Age
5. Courier Mail
7. Length of Electronic articles include number of words specified.
Microfilm copies use the following rating:
article:
1. Brief (1-5 paragraphs)
2. Medium (6-25 paragraphs)
3. Long (26 + paragraphs)
252
Appendix A - Coding Instructions cont...
8. Banks 1. Write down the number corresponding to the bank.

The National (NAB, National Australia)
2. Westpac
3. ANZ
4. Commonwealth (CBA) OR
5. Bank Advocates (Australian Banking Association)
9. Issues Write the numbers of the three (3) most relevant
categories.
See further instructions for detailed coding guidelines.
1. Branch closures
2. Competition with non-banks and other banks
3. Consumer consultation, protection, and
information
4. Corporate lending (domestic)
5. Credit card policies, products, and costs
6. Crime and litigation involving banks
7. Deposits and other investment products
8. Deregulation
9. Electronic banking
10. Employee relations
11. Farm lending and support
12. Fees and charges
13. Foreign activities and interests
14. Foreign banks in Australia
15. Foreign exchange loans
16. Home lending
17. Image-building
18. Mergers and acquisitions
19. Operational decisions and domestic investments
20. Privatisation
21. Profitability and performance
22. Prudential controls
23. Service quality
24. Small business
252
253
10. Activist publics Insert numbers from list. If the name does not appear
on the list provided and there is no quote, write the
name in full in the notes section.
11. Favourability Rate the recording unit as 1, -1, or 0 according to the
following:
Favourable (1) A member of the organisational population, that is, a
major Australian bank
is praised for its actions or associated with
positively constructed actions.
The content indicates that the operations,
strategies, or performance of a member of the
population is beneficial to, or in harmony with,
the social environment.
Examples include awards given to the bank or
its employees, monetary or in-kind donations,
and director linkages to other organizations.

254
Favourability (cont...)
Unfavourable (-1) A member of the organisational population, that is, a
major Australian bank,
is criticised for its actions or associated with
negatively constructed actions.
The content indicates that the operations,
strategies, or performance of a member of the
population is detrimental to, or not in harmony
with, the social environment.
Examples include the court decisions
sanctioning the actions of a bank and
criticisms of bank actions, products, or
services.
Neutral (0) A neutral rating is given if the article
is exclusively declarative in its reporting of
the role or performance of a bank and does not
include evaluative modifiers.
does not indicate that operations, strategies, or
performance are beneficial or detrimental.
establishes a balance between favourable and
unfavourable reporting.
254
255
Public Statements
10 Bank source: Does the article directly or indirectly quote a bank in
relation to the issue/s of concern?
Yes / No
11 Activist source: Does the article directly or indirectly quote an activist
public in relation to the issue/s of concern?
Yes / No
Notes:
1. Some photocopied pages include more than one relevant article.
2. Some articles exceed one page.
3. Any articles that presents coding problems should be set aside (record nature
of problem in detail and attach to article).
4. Estimate the article length for most recording units without counting the
number of paragraphs.
APPENDIX B
Coding InstructionsThe Issues
Issue Description
The article:
1. Branch closures: - discusses the scheduled or threatened closure of banks.

- describes the impacts of a planned expansion or contraction of the branch network.
- discusses strategies to reduce the duplication and overlapping of branch services.
- describes the distribution of branches in rural and remote regions.
2. Competition with non- - describes the relative positioning of banks vis--vis non-banks in relation to government policy and
banks and other banks: regulation.
- describes specific examples of banks or non-banks being unfairly advantaged by some
government regulation, such as interest rate controls and subsidies.
- discusses the payments system in relation to the privileges of banks over non-bank financial
institutions.
- focuses on competitive conflicts, issues, events, and announcements in which the activities and
products of banks are compared, contrasted, or discussed.
- discusses inter-bank competition.
Issue Description
The article:
3. Consumer consultation, - discusses the adequacy of consultation between consumers and banks and the representation of
protection, and consumers in such consultations.
information: - discusses the adequacy of information communicated to consumers by banks.
- discusses the mechanisms for consumer protection in the banking industry.
- mentions the Trade Practices Commission (TPC) or the ACCC in relation to the activities of banks
in their dealings with consumers.
- discusses the powers of the relevant agencies, such as the ACCC and the CFSC, in administering
consumer protection.
- discusses the power imbalance between banks and consumers and specifies the lack of information
available to consumers.
- discusses the issue of access to banking services for all classes of consumers.
- discusses the question of whether banks should be required to provide basic banking products.
- describes the screening and identification of customer account holders.
- discusses the banks duty of confidentiality or duty to provide customers with access to their
personal information.
4. Corporate lending - discusses movements in prime (corporate) interest rates.

(Domestic): - discusses the supply or withdrawal of funds to domestic corporations.
- specifies events such as interest rate movements or other decisions and announcements on
commercial lending rates and comparisons of the corporate or prime interest rates to retail
interest rates.
- discusses corporate lending decisions, such as the withdrawal of support for failing corporations.
Issue Description
The article:
5. Credit card policies, - discusses bank policies of charging interest on credit rates.
products, costs: - describes disputes in relation to credit card interest rates and fees.
- discusses credit card marketing strategies employed by banks.
- describes problems associated with credit card products and policies and consumer debt.
- describes bank policies controlling how retailers use credit cards.
- discusses interactions between banks and retailers in relation to credit card transactions.
6. Crime and litigation - describes robberies and other criminal actions taken against banks.
involving banks: - describes fraud and other criminal activities occurring within or directly or indirectly involving
banks.
- discusses civil or criminal litigation involving banks.
7. Deposits and other - discusses bank policies in relation to deposit accounts as well as debentures/trusts, etc.
investment products: - describes government guarantees in relation to bank deposits.
- mentions double-standards when comparing deposits to lending interest.
- compares interest rates on deposit accounts with interest charges on other account types.
- discusses bank deposit rates vis--vis building societies/non-banks.
- discusses the moral hazard associated with public guarantees.
- discusses consumer perceptions in relation to the security of their bank deposits.
- discusses the role of banks in the provision of non-traditional investment/financial products, such
as superannuation.
- discusses conflicts of interest for banks in relation to the provision of non-traditional products,
such as superannuation
Issue Description
The article:
8. Deregulation: - discusses the role of the government in regulating the competitive practices of banks.
- specifies government policy in relation to competition and discusses its relevance, consequence, or
necessity.
- discusses the place of government intervention in delimiting restrictive trade practices.
9. Electronic banking: - discusses the expansion of technology into banking services (telebanking, homebanking, internet
banking).
- describes bank investments and activities in technology (ATMs, EFT etc.).
- discusses the privacy issues associated with electronic banking.
- discusses the consequences of electronic banking networks for all classes of consumers and
specifies the difficulties electronic banking services present for some retailers and consumers.
- discusses the consequences of electronic banking networks for retailers.
- discusses the security of electronic networks.
10. Employee relations: - discusses or describes working hours, salaries, or other conditions of employment.
- discusses or describes issues of security (bank robberies, etc.).
- describes the reduction or expansion of employee numbers and the allocation of responsibilities.
- discusses the composition of bank workforces.
- discusses the employment and promotion practices of banks and argues their acceptability or
unacceptability.
- discusses the composition of the bank workforce in relation to full-time equivalence, gender,
ethnicity, disability. etc.
Issue Description
The article:
11. Farm lending and support: - discusses the adequacy or inadequacy of bank advice and support services for farmers.
- describes formal or informal codes of practice in relation to bank-farmer dealings.
- discusses the need for farmers to seek financial advice and support from non-bank sources.
- discusses the role of bank finance for farmers.
- describes bank policies in relation to the management and retrieval of farm debts.
- discusses the nature of the relationship between farm borrowers and banks.
- describes approaches to bank lending during droughts and other natural disasters.
12. Fees and charges: - discusses the fees and charges levied by banks on standard savings and cheque accounts.
- describes and compares the costs of maintaining bank accounts.
- discusses the affordability of banking for segments of the community.
- specifies cross-subsidisation of banking costs by one class of consumers.
- discusses the user pays issue and its implications for all bank customers.
- compares the prices paid for banking services by retail consumers and other customer classes, such
as corporations.
13. Foreign activities and - discusses the activities of the banks in countries other than Australia.
interests: - describes the expansion or contraction of Australian banks internationally.
- discusses Australian bank products on offer internationally.
- describes the international investments of Australian banks.
Issue Description
The article:
14. Foreign banks in Australia: - discusses the major banks responses to the entry of foreign competitors.
- compares the activities of foreign banks to the activities of the major banks.
- discusses government policy toward takeovers of Australian banks by foreign interests.
- discusses the role of the ACCC (TPC) in assessing proposed takeovers of Australian banks by
foreign companies.
- describes arguments for and/or against foreign takeovers of Australian banks.
15. Foreign exchange loans: - describes the banks approach of disclosure to borrowers of the risks of foreign currency loans.
- discusses the banks marketing of foreign currency loans, including advertising, seminars,
promotions, and the allocation of sales targets.
- discusses the training and activities of bank staff in relation to the provision of foreign currency
loans.
- discusses bank and borrower disputes in relation to foreign currency loans, including mediation
and litigation.
16. Home Lending: - describes home loan policies and products.

- discusses bank policies and their impacts on the availability of home loan products to consumers.
- discusses advantages and disadvantages of home loan products.
- discusses loan portability and flexibility for consumers.
- describes loan penalties and the taxes and charges associated with mortgages.
- discusses the effects of interest rates on home loans.
- discusses the passing of interest rate cuts or increases to housing loan holders following Reserve
bank announcements of changes to interest rates.
- discusses the gap between the prime (corporate) interest rates and home loan rates.
Issue Description
The article:
17. Image-building: - describes the banks approach to advertising, branding, and positioning.
- discusses banks investment in marketing, public relations, advertising, and image-building
activities.
- describes the banks efforts in response to the sporadic battering of their public image.
- mentions bank sponsorships of charities, sporting events, the arts, and other causes.
18. Mergers and acquisitions: - describes specific bank mergers.

- describes post-merger restructuring.
- discusses government policy toward bank mergers and acquisitions.
- describes the arguments for or against either the six or four pillars policy.
- discusses the role of the Treasurer and the ACCC (TPC) in bank mergers and acquisitions.
- discusses the ownership of banksthe acquisition or divestment of shares, etc. by
institutions/individuals (e.g. Packer/Spalvins, etc.).
19. Privatisation: - discusses government ownership and management of the Commonwealth Bank.
- discusses privatisation and the implications for the CBA and its competitors.
20. Profitability or - describes any aspect of profitability (Return on assets).

performance: - discusses the share price movements.
- describes annual general meetings and announcements of forecast and actual results.
- discusses the international or domestic ranking of Australian banks according to indices such as
Standard and Poors, etc.
- discusses concerns about lower credit standard and increases in bad debts.
- discusses Australias international credit ranking.
Issue Description
The article:
21. Prudential Controls: - discusses the role of the RBA in administering prudential controls.
- describes RBA intervention or the potential for RBA intervention in banking practices.
- discusses the decisions of the Wallis committee in relation to the RBA and the APRC.
22. Operational decisions and - discusses significant appointments (CEO / Directors).

domestic investments: - discusses significant operational decisions (managementreporting restructure, property,
acquisitions, or divestment).
- discusses significant investments and deals between banks and corporations in Australia.
- describes significant changes in the banks traditional approaches to doing business.
23. Service Quality: - describes quality of bank services.

- describes positive and/or negative accounts of bank service.
- discusses research in which service quality provided by banks is considered.
24. Small Business: - discusses the interest margins on small business loans.
- discusses the scope or the disclosure of margins, fees, and charges as they relate to small business.
- discusses small business needs in relation to bank products, advice, and support.
- describes the problems small businesses have in accessing advice and support about the range of
bank products and services.
- discusses the obligations and responsibilities of banks to all segments of Australian society,
including low income earners.
264
APPENDIX C
Coding instructions for Bank and Activist Statements
Section Instructions
Coder Initials _________
Recording Unit Issue set sheet number: For example, Sheet = 1; Row =
No. _________ 3;
4th quote in the article = 4;
Issue set row number: Therefore, the number for
__________ coding purposes is 1-3-4
Article quote number:

__________
Coding number:
______________
Source Newspaper: 1. The Australian

2. Australian Financial Review
3. Sydney Morning Herald
4. Age
5. Courier Mail
Activist Public: See list. Provide details if source

is not listed.
265
Relationship State
Conflict These statements
explicitly reject cooperation as desirable and necessary.
omit any reference to cooperation.
describe the relationship as being in a state of conflict.
focus on conflict-seeking and the points of disagreement on
the issues of mutual concern.
will only make a no comment statement.
Keywords: refused, no comment, not competitive, disagree,

deny, reject, dont trust, negative, dismissed
claims, barred from entry, warned, failed
Sample phrases: the issue is trivial
we have limited power in responding to this
issue
we are both on the same side
there are winners and losers in this issue
they have mislead us
they have deceived us
they are unyielding and rigid
we need government interventions (or the
intervention of some third party to apply
pressure)
we will keep fighting this issue until we win or
they concede
266
Conflict cont... Example:

I think they are showing a lack of conscience in
not reducing these credit card rates at a better rate
than they are now (Spann, 2001, p.3).
Cooperative These statements

openly acknowledge cooperation as desirable and necessary.
suggest that cooperation is occurring between the banks and
the activists.
suggest that consensus is evident.
focus on solution-seeking.
discuss points of consensus on the issues of mutual concern.
Keywords agreement, consensus, help, compromise,
conciliation, apology, regret, resolve, solve,
optimistic, understand, bring in line, help
Sample phrases we are responding to our customers

we want to help our employees
we are willing to negotiate
we are willing to make concessions
we are willing to compromise
we are looking for alternative solutions
we have the will to achieve a mutually
acceptable solution
we appreciate that there are other sides to this
issue
we need to jointly seek solutions
267
Cooperative cont...
Examples: We are willing to sit down with the union and
clarify other proposals on the table such as
increased parental leave and sick leave (Pay
Rise, 2001, p. 44).
Its an attempt to respond to what our customers

are saying. There has been an underlying feeling
of almost resentment and mystique. They are
saying: For goodness sake tell us how you
operate, (Smithers, 1991, p.23).
Neutral These statements

declare facts without evaluative modifiers.
do not indicate a position of either conflict or cooperation in
relation to the issues.
cannot be coded for conflict or cooperation within the given
parameters.
Keywords: No keywords.
Sample phrases: we have provided a new service

the current outlook for the economy is positive
the product will be available next week
the service includes ....
the package includes....
the new technology will mean faster processing
the deal will involve $X dollars
Example The banks packages were negotiated separately
but the benefits could include a 0.5 per cent
discount off the standard home loan rate,
exemptions on credit card fees and larger lines of
credit on credit cards (Maley, 1995, p. 3).
268
APPENDIX D
Activist Publics Mentioned in Articles
Activist shareholders (Miscellaneous)

Amnesty International
Association of Superannuation Funds
Association of Permanent Building Societies
Australian Bank Employees Union
Australian Consumers Association
Australian Council of Social Services
Australian Council of Trade Unions
Australian Federation of Consumer Organisations
Australian Federation of Credit Unions
Australian Financial Counselling and Credit Reform Association
Australian Investors Association
Australian Pensioners & Superannuants Federation
Australian Property Institute
Australian Retailers Association
Australian Shareholders Association
Business Council of Australia or Miscellaneous Business
Catholic Welfare Commission
Chamber of Commerce (Australian)
Commonwealth Bank Officers Association
Community Legal and Advocacy Centre
Confederation of Australian Industry
Consumer Credit Legal Centre
Consumer Groups
Council of Small Business Organisations
Credit Union Services Corp Australia
Electronic Money Information Centre
Federation of Travel Agents
Finance Sector Union
Financial and Consumer Rights Council
Financial Counsellors Association
Financial Services Consumer Policy Centre
Foreign Currency Borrowers Association
Home Interest Association
Housing Industry Association
Legal Aid
Letters to the Editor
Lifeline
Local government (Associations and Councils)
Miscellaneous church & welfare groups
Miscellaneous farmer and rural Groups
Miscellaneous pressure groups
Miscellaneous Workers Union
269
National Farmers Federation

National Federation of Blind Citizens
National Seniors Association
New South Wales Association of Rural Financial Counselling Group
New South Wales Farmers Association
Real Estate Institute of Australia
Rural Action Group
Salvation Army
Small Business Association.
Smith Family
St Vincent de Paul
Tourism Council of Australia
Uniting Church of Australia
Wilderness Society

Elizabeth Dougall Thesis

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THE ECOLOGY OF PUBLIC OPINION ENVIRONMENTS AND THE

EVOLUTION OF ORGANISATION-ACTIVIST RELATIONSHIPS: A

COMPARATIVE CASE STUDY OF AUSTRALIAS MAJOR BANKS, 1981-2001

Elizabeth Kathleen Dougall (M.A., Comm.)

A thesis submitted for the degree of

School of Advertising, Marketing and Public Relations

Queensland University of Technology

Public opinion environment, organisation-activist relationships, issues management,

public relations, relationship management, organisational population.

The premise that the continued existence of organisations in a democracy

is fundamental to public relations theory. Furthermore, the challenge of coping with

the potential constraints and opportunities of public opinion as an aspect of the

organisational environment is essential to contemporary public relations practice.

trade publications, the dimensions and characteristics of this aspect of organisational

environments remain largely unspecified.

This thesis explores two challengesthe first is to conceptualise and measure

variation in an important aspect of contemporary organisational environments, the

environment on the critical and often highly exposed relationships between

organisations and activist publics. In suggesting a relationship between variation in

the environment and the evolutionary pathways of organisational relationships, the

perspective underpinning this thesis is both ecological and evolutionary. Ecological

analyses of organisations assume that members of a population are affected similarly

environment and the organisation-activist relationships therein longitudinally at the

population level of analysis. The focal organisational population is Australias major

banks, and the period of interest extends from 1981 to 2001.

An evolutionary model of organisation-activist relationships (EOAR) is

comparative case study approach. These propositions anticipate and specify

associations between variations in dimensions of the public opinion environment of

an organisational population and the evolution of organisation-activist relationships in

the population. Central to understanding the public opinion environment of an

opinion develops, and organisation-activist relationships emerge. Then, the public

opinion environment is conceptualised as a set of issues that concern Australias

dimensions: stability (turnover of issues), complexity (the number of issues in the

organisation-activist relationships. To observe and describe this evolution, I have

located the state of these relationships on a conflict continuum using relationship-

published during each of the three case study periods.

dimensions of the public opinion environment of an organisational population are

associated with the evolutionary ecology of organisation-activist relationships in that

for further investigation.

A primary contribution of this study is that it provides the theoretical

organisation-activist relationships organised around those issues. Because the

important implications for organisational relationships. Given these conditions,

organisations can monitor and manage their responses to issues. However, it is

navely optimistic at best to accept the contention of issues management consultants

publics and by downplaying the issues in the media.

LIST OF TABLES................................................................................................ xii

LIST OF FIGURES............................................................................................... xiii

STATEMENT OF ORIGINAL AUTHORSHIP................................................... xv

The Significance of the Ecological

Stability and the Evolving Organisation-Activist

Issue-set direction......................................................... 110

CHAPTER 5.......................................................................................................... 117

Complexity of activist relationships: 1981 - 1987........ 167

CHAPTER 6.......................................................................................................... 182

Table 3.1 The Conflict ContinuumConcept Summary and Indicators... 68

Table 3.2 Dimensions of the Public Opinion Environment........................ 81

Table 4.1 Operationalising and Measuring Dimensions of the Public

Opinion Environment.................................................................. 112

Table 5.1 FrequenciesNewspapers, 1981 - 2001..................................... 120

Table 5.3 Prominence of the BanksA Comparison of the Frequencies,

Percentages, and Rankings of Bank Mentions in Articles ......... 146

Table 5.4 Prominence of Activist PublicsA Comparison of the

Frequencies, Percentages, and Rankings of Activist Mentions

Table 5.5 Frequencies of Conflict, Cooperative, or Neutral Statements