Argumentation and socially questionable business practices: The case of employee downsizing in...

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SCAMAN-818; No. of Pages 22

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corporate annual reports

Scandinavian Journal of Management (2013) xxx, xxxxxx

Available online at www.sciencedirect.com

w.Please cite this article in press as: Vuontisjarvi, T. Argumentation and socially questionable business practices: The case of employee

Taru Vuontisjarvi *

69 Sidney Grove, NE4 5PD, Newcastle Upon Tyne, United Kingdom

Introduction

The beginning of the twenty-first century has been marked bya number of corporate scandals involving companies, such as,Enron, Parmalat and WordCom which have shaken publicconfidence in corporations. Moreover, issues such as insidertrading, human right violations, collaboration with regressiveregimes, excessive executive compensation packages andlarge restructuring operations have provoked public furore,

received considerable media attention and questioned thelegitimacy of the business undertakings.

This paper is interested in the ways in which sociallycontested business undertakings are discursively constructedin corporate mainstream economic and financial disclosures.Special attention is paid to how, if at all, the social isembedded in these disclosures. The starting point of thestudy is that a central part of building social acceptability forcontroversial corporate actions takes place through argu-mentation. The paper is based on the belief that, by con-structing corporate action in a certain way, business is notonly responding to the expectations of society but can alsoinfluence the way it is understood in social reality. As Fou-cault (1974, p. 49) suggests, discourses should not be treated

KEY WORDSAnnual report;Argumentation;Corporate socialresponsibility;Critical discourseanalysis;Downsizing;Socially questionablebusiness undertaking

Summary In spite of the fact that the viability of private companies depends on their ability tomake profit, CSR research has paid little attention to how questionable business undertakings arediscursively constructed in corporate economic/financial disclosures. This paper investigatesthese processes in the context of employee downsizing. It identifies a range of argumentationtechniques which form a basis for broader strategies: rationalisation, normalisation, inevitabilityand emotional/moral distancing, which corporations used to (re)construct a contested businesspractice as a positive, routine management strategy or something that cannot be avoided. Thepaper maintains that the scale and frequency of the questionable undertaking may have animpact on whether the company applies the moralisation strategy, in terms of making an effort todiscursively integrate expressions of feeling or a sense of duty in the text. Moreover, the papergoes on by suggesting that, even if references to these elements remained succinct, theirpresence in the text can still be seen as opening up the potential for dissension and change, asthey place the elements of duty and caring in the proximity of the natural laws of neoclassicaleconomics, such as, the need for profit, unlimited growth and norms of efficiency.# 2013 Elsevier Ltd. All rights reserved.

* Tel.: +44 0 7578495399.E-mail address: [email protected].

0956-5221/$ see front matter # 2013 Elsevier Ltd. All rights reserved.http://dx.doi.org/10.1016/j.scaman.2013.01.003Argumentation and sociallpractices: The case of emp

j ou rn al home pag e: http: / /w wdownsizing in corporate annual reports. Scandinavian Journal of Manaquestionable businessoyee downsizing in

e l se v ier. com/ loc ate /sc ama ngement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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2 T. Vuontisjarvias a group of signs, but as practices that systematically formthe objects of which they speak. Concepts are developed,therefore, not only through actual processes of practicalchange but they can also be talked into being and substan-tively shaped by discourse (Chouliaraki & Fairclough, 1999).From this point of view, the use of language does not onlyreflect social practices and institutional forms, but alsocontributes to (re)producing and sustaining those (Fair-clough, 1992; Wetherell & Potter, 1992).

The paper intends to add to the stream of research whichhas applied corporate social responsibility (CSR) or ethicalperspective and focused on the discursive construction ofquestionable corporate practices (see Joutsenvirta & Vaara,2009; Lamsa, 2001; Makela & Nasi, 2010; Rhodes, Pullen, &Clegg, 2010; Siltaoja & Vehkapera, 2010). The core materialto these studies has been media texts and management orstaff interviews, whereas the construction of socially con-tentious operations as part of corporate economic and finan-cial disclosures has received little attention. This, even if thepresentation of a socially contentious issue, which has beenmade as a part of corporate core financialeconomic talk,can be seen as an important element in demonstrating theextent to (if at all) the organisation discursively integratessocial aspects into its mainstream strategies and policies.The juxtaposition of social and ethical aspects with financialobjectives in the context of questionable business practicemay also demonstrate the existence of a discursive strugglein the text and, therefore, the potential for resistance andchange. The corporate annual report (AR) was selected as theprincipal document, which constructs the corporate eco-nomicfinancial image (see Botosan, 1997; Gray, Meek, &Roberts, 1995b).

The research question is: Through which argumentationstrategies and techniques do companies build acceptabilityinto a questionable business practice in their core economicand financial disclosures and how these contribute to the(re)construction of social reality and power relationships?The research draws from Perelman and Olbrechts-Tytecas(2006, see also Perelman, 2005) The New Rhetoric and fromcritical discourse analysis, especially from authors influencedby Foucault, such as, Fairclough (1992, 1995) and Livesey(see e.g. 2002a, 2002b).

By questionable this paper refers to a socially contro-versial or unethical action conducted by a firm. The researchdraws from concepts and models of contemporary CSRresearch. CSR can be understood as a companys attitudetowards and impact upon the economic, environmental andsocial framework in which it is embedded (Crane & Matten,2004). The quest for a common definition for CSR has, how-ever, remained ambiguous and elusive (Burchell & Cook,2006; Nielsen & Thomsen, 2007) leaving space for differinginterpretations as to what it actually means in theory andpractice. The focus here is on a particular case of question-able business undertaking, namely employee downsizing, amanagerial practice which has provoked much public furoreand considerable debate in the popular press (Orlando, 1999;Van Buren, 2000). Downsizing is seen to be here typically aquestionable business undertaking which encompasses manydiverse, often conflicting discourses. Moreover, in a similarway to the case of the CSR concept, there is no commonunderstanding or consensus on what exactly CSR means in thiscontext, or the appropriate degree of attention which needsPlease cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of Manato be paid to the economic and social aspects of the concept(see Makela & Nasi, 2010). Concerns over downsizing andethics are, however, usually related to whether a decision todownsize is justifiable and how the most affected stake-holders, generally acknowledged to be employees and thelocal community, are treated (see e.g. Lamsa, 2001; VanBuren, 2000).

Prior to the late 1980s, employee downsizing was seen asan aberration from normal organisational functioning anda last-ditch effort to thwart organisational demise or totemporarily adjust to a cyclical downturn in sales (Cameron,Freeman, & Mishra, 1993, p. 20). Over the past couple ofdecades, employee downsizing has, however, emerged as aninstitutionalised management practice, taken for granted bymanagers (see McKinley, Sanchez, & Schick, 1995). Globalisa-tion, increased competition, and the spread of financial andcorporate governance models that emphasize shareholdervalue have marked a change in attitude towards downsizing,in that it is no longer considered to be a socially dubious activitybut a legitimate way to produce value for the shareholders(Budros, 1997; Erkama & Vaara, 2010; Hirsch & DeSoucey,2006). Furthermore, on the basis of their review of contem-porary management and macroeconomics literature, McKinley,Mone and Barker (1998) argue that downsizing is seen as a wayfor healthy firms to become more productive and efficient.

The critics have, however, attributed downsizing togreed, ineptness or the tyranny of improving shareholdervalue (see Boxberg, 2005; Fagiano, 1996; Miller, 1998).Downsizing has not only been suggested to have a negativeimpact on individual life and whole communities (see Childs,1997; Orlando, 1999), but has also been seen to lead tomechanistic relationships at workplaces. Stein (1997, p.232) has, for example, described downsizing as a non-physical act of violence in the workplace, in which peopleare experienced and experience themselves treated asthings, as commodities, as objects, producers of products,and themselves parts of production lines.

The paper focuses on companies operating in Finland andon the reports produced for the year 2005. This year was oneof which had an intensified wave of redundancies in Finland,partly due to manufacturing companies moving their produc-tion into low-cost countries (Finnish Ministry of Employment,2007). Continuous redundancies received considerablemedia attention and also prompted high-level politiciansto comment. The then Trade and Industry Minister AnttiKalliomaki (quoted in Boxberg, 2005) suggested that corpo-rate directors are driven by obvious greediness and areguilty of considerable exaggeration. Later on, in the sameyear, the then Finnish president Tarja Halonen (2005) calledfor business to act in a responsible way when restructuringand disapproved of the selfishness, short-sightedness andnarrowness of the quartile economy.

What does Corporate Social Responsibility mean in prac-tice when a company is producing a considerable profit,distributes noteworthy dividends to its shareholders,stock options to its directors and at the same time laysoff its employees? Or when profitable jobs are cut off andmoved elsewhere? (Halonen, 2005)

The paper starts by describing the papers contribution tothe previous research and introducing the related conceptualframework. It goes ahead by presenting the methodologicald socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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Argumentation and socially questionable business practices 3approach, together with the analysis process in practice.Thereafter, results of the analysis of the corporate disclo-sures on ARs are presented, starting from argumentationtechniques and, on the basis of those, progressing intodistinguishing broader argumentation strategies and suggest-ing their power implications. The paper concludes by drawingtogether the main results, discussing the potential for dis-sension and change in this context and presenting some ideasfor further research.

Discursive CSR research and questionablecorporate behaviour

Research with regard to questionable business behaviourgoes back in time and has included case studies, comparisonsof firms in diverse industries and efforts to provide theories orlongitudinal models of corporate illegality (see Baucus &Near, 1991). Studies applying CSR or ethical perspectivewhich aim at revealing the discursive construction of ques-tionable business operations have, however, been relativelyrecent. Scholars have focused on the role of the media andhave reconstructed the framework used for (il)legitimising aparticular case of contestable business operation, such as,cartels (Siltaoja & Vehkapera, 2010), or a specific corporateinvestment project (Joutsenvirta & Vaara, 2009). Thosescholars exploring the discursive construction of downsizinghave focused on media texts or management and staff inter-views and have suggested that managers tend to emphasizethe primacy of economic rationality and efficiency to justifydownsizing (Lamsa, 2001; Makela & Nasi, 2010). Makela andNasi (2010) focus on a downsizing case in the forest sector anddescribe how the corporation and employees representa-tives emphasised the perceived CSR differently. Whereas thecorporation understood CSR as the responsibility to provideeconomic competitiveness and profitability for its share-holders, employees did not approve the tough profitabilitydemands of the shareholders at the cost of other stakeholdersand called the corporation to show local and social respon-sibility.

Scholars have explored corporate public reports and web-sites to establish how they (re)construct issues, such as,sustainability or environmentalism (Laine, 2005; Livesey,1999, 2002a; Onkila, 2009; Tregidga & Milne, 2006), or CSR(Coupland, 2005; Nielsen & Thomsen, 2007). Apart fromLivesey (2001), who investigated two environmental disputesinvolving Shell UK, the focus of these have tended to be,however, generic, rather than concentrating on a specificcontestable business undertaking. Moreover, the interest ofthese studies often lies on a stand-alone social report, or ifinvestigating the annual report, on specific accounts orstatements, where corporations purposefully disclose infor-mation on their actions, aiming at promoting social andenvironmental goals, rather than on exploring whether thesocial aspects are integrated and, if so, how they are inte-grated into the construction of the financial image of theorganisation. This is the case, in spite of the dominantcondition that corporate ethics has to be implemented inthe capitalist market economy, where corporate viabilitydepends on its ability to make profit (see Steinmann &Scherer, 2000); and construction of the financial image ofthe organisation can, therefore, be seen as critical in termsPlease cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of Manaof how the organisation is viewed and judged (Gray, Kouhy, &Lavers, 1995a).

This study aims to extend the previous discursive CSRresearch, which focuses on questionable business practices,to explore systematically, and in detail, how these practicesare constructed in corporate mainstream economic/financialdisclosures as presented in corporate ARs. The research isspecifically interested in how, if at all, social and ethicalelements are embedded in corporate disclosures, as theirpresence can be seen as potentially opening up a space for adiscursive struggle. The paper suggests that subtle argumen-tation strategies and techniques are at work even in a text,which may at first sight appear to provide an impression ofneutrality. It further argues that these patterns of argumen-tation work to sustain certain discourses of downsizing, whichmay have originally been contested, but that then havebecome largely institutionalised in business language andare, therefore, moving in the direction of being seen asdescribing only what is normal and acceptable in this con-text. As Livesey (2002a, 2002b) suggests from Foucaultsperspective, however, meaning is not fixed, so hegemoniccontrol can never be complete; it must be constantly repro-duced and reconstituted (see Chouliaraki & Fairclough, 1999;Deetz, 1992). Contradiction and ambiguity, which emerge asdiscourses overlap and intersect in a complex and unstablefield, allow spaces for resistance and change and for newways of constituting reality (see Chouliaraki & Fairclough,1999; Fairclough, 1992; Livesey, 2002b). Hence, it is impor-tant to interrogate the self-evidence of these discourses (seeSmart, 1983), and problematise the taken for granted knowl-edge, under which certain social and political conditionsbecome accepted as a truth (Livesey & Kearins, 2002).

Conceptual framework: CSR, sociallegitimacy and downsizing

CSR research has been fragmented in terms of empirics andtheory. CSR debate started from the philosophicalethicalconcept that business corporations have an obligation towork for social betterment. Later on, this was extended tothe action-oriented managerial concept of corporate socialresponsiveness, that is, the capacity of a corporation torespond to social pressure and subsequently, has been fol-lowed by many other responsibility-related issues (Frederick,1994; Jones, 1995; Windsor, 2001). In particular, instrumentalapproaches to CSR have grown in prevalence (see Palazzo &Scherer, 2006; Scherer & Palazzo, 2007), the dominant per-spective in current literature suggesting that CSR is good forbusiness (Crane, McWilliams, Matten, Moon, & Siegel, 2008),and its primary function is to enhance the firms profitability(Calvano, 2008). In the organisation and management litera-ture interest has been taken in modelling CSR and relatedconcepts (see e.g. Carroll, 1979, 1991; Elkington, 1997;Swanson, 1995; Wartick & Cochran, 1985; Wood, 1991).These approaches have, in general, either searched for ordescribed a unifying view of CSR.

Wartick and Cochran (1985) suggest that the ideas ofmoral agency and social contract provide the basic premisesfor the CSR concept. Moral agency refers to the premise thata business acts as a moral agent in society and must, there-fore, behave in a manner consistent with that societys valuesd socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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4 T. Vuontisjarvi(Donaldson, 1982), to be morally legitimate. In contemporaryversions of social contract theory, rights and liberties arefounded on mutually advantageous agreements madebetween members of society. The social contract is a crucialelement in both legitimacy and CSR discussions. Legitimacytheory itself relies upon this concept (Deegan, 2002; Math-ews, 1993; ODonovan, 2002). Social legitimacy in the frameof a social contract is understood as a licence to operate insociety, gained by coordinating stakeholders interests andbehaving in a publicly acceptable manner (Deegan, 2002). Anorganisations survival is considered to be threatened ifsociety perceives that it has breached its social contract.As a theoretical construct, the terms (or clauses) of thesocial contract cannot be known with any precision, anddifferent managers will have different perceptions aboutthe various terms of the contract.

According to the principles of CSR and the social contracttheory, downsizing can be seen as a questionable businessundertaking. In many countries, including Finland, the socialcontract has been traditionally based on the idea that as aresponse to employee loyalty and full-time work theemployer offers a (relatively) permanent employment con-tract and predictable income (see Jarvensivu, 2007; Lamsa,2001). Employee downsizing can, therefore, be seen as con-stituting a breach against traditional socio-cultural values.Moreover, Donaldson (1982) suggests that the social contractincludes an element of justice, that is, among other things,that organisations show respect for their workers as humanbeings, and avoid any practice that systematically worsensthe situation of a given group in society. These principles maybe violated when conducting layoffs. Van Buren (2000) sug-gests that any theory with regard to CSR in downsizing muststart with an assumption that employers owe duties toemployees. According to him, the inherent ethical questionsare whether a decision to downsize is justifiable, that is, theextent to which a declining resource munificence exists, andhow downsized employees are treated (see also Lamsa,2001). He goes further and suggests that employment rela-tions have public dimensions and, therefore, employers mayalso owe duties to the surrounding community, which oftensuffers as a result of corporate downsizing operations.

This research is interested in how corporations (re)build asense of legitimacy to a questionable business undertaking,and at the same time (re)construct the role and responsi-bilities of the company in this context. In the context of thisresearch the term legitimation is seen as meaning the sameas creating a sense of a positive, beneficial, understandable,necessary, ethical or otherwise acceptable action in a spe-cific setting (see Siltaoja & Vehkapera, 2010; Vaara & Tienari,2008; Van Dijk, 1998; Van Leeuwen & Wodak, 1999). Much ofthe CSR literature that has applied legitimacy theory origi-nates from the field of social and environmental accounting.These legitimacy analyses have usually considered legitimacyas a resource on which corporations are dependent forsurvival and that they often can manipulate or impact (Dowl-ing & Pfeffer, 1975; Pfeffer & Salancik, 1978) through theirethical codes, standards and other policies.

Palazzo and Scherer (2006) suggest, however, that thisconcept of legitimacy is based on relatively stable andhomogenous societal expectations and does not adequatelyreflect changes in modern society, which is challenged by aloss of efficiency in national governance systems, values andPlease cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of Manalifestyles. They argue that legitimacy should be consideredless as something to be engineered, manipulated, bought orimitated by organisations and more as a result of commu-nication where the societal limits to profit making are con-tinuously defined and redefined. In this approach, companiesare seen as being active participants in establishing what issocial responsibility in public discourses rather than onlyusing their social programmes or taking other actions tostrategically respond to or alter the demands of powerfulstakeholder groups (see e.g. Dowling & Pfeffer, 1975;ODonovan, 2002).

The discursive perspective applied in this research is sen-sitive to the fact that societal norms and values, as well as theboundaries of socially acceptable corporate behaviour, areculturally and historically bound and constantly under socialcontest and change. These are often overlooked, but impor-tant aspects, which are necessary in the understanding of notonly legitimacy challenges, but also other aspects with regardto questionable business practices in an increasingly interde-pendent global society (e.g. Levy, 2008; Scherer, Palazzo, &Baumann, 2006). This research, therefore, sees corporationsand their disclosures as not only reflecting a particular truth orpotentially responding to external pressures, such as, publicityin the media, but also contributing to the public debate withregard to acceptable reasons for downsizing and businessrelationships and treatment of affected stakeholders, thatis, employees and local communities, which may have sufferedfrom the downsizing operation.

Methodological approach

Subtle meaning-making processes and forms of reasoning areoften difficult to analyse in precise and systematic ways,because they tend to require interpretation and becausetheir applications shift with context (see Crosswhite,1995). Discourse analysis can, therefore, be described tobe more like a philosophical approach to research than astrict methodological procedure. In this study, argumenta-tion strategies are seen as specific (not always intentional orconscious) ways of using a set of techniques, in order tomobilise or marginalise certain macro-discourses to buildacceptance for a particular interpretation of corporate role,relations and responsibilities in the context of questionablebusiness undertaking. By macro-discourses, this study meansthe broader context of discussion, with wider social implica-tions, on corporate role and responsibilities.

Perelman and Olbrechts-Tytecas (2006) The New Rhetoricis used here to help to reveal the argumentation techniques(which form a basis for broader strategies) used in corporatedisclosures in their ARs. Annual reporting has moved from theconveyance of simple accounting numbers and moretowards narrative (Campbell, McPhail, & Slack, 2009).Rutherford (2005) suggests, however, that narratives in cor-porate reports are constrained notably by the need to alignthe account offered in the narrative with that in the numer-ical financial statements, both to achieve credibility for thenarrative with its readers and to satisfy regulatory require-ments. AR(s) are, therefore, expected to rely in many partson the formal language of economics, which may at first sightprovide an impression of neutrality, especially in compar-ison with other genres, such as, media text or politicald socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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Argumentation and socially questionable business practices 5speeches which are likely to use more openly rhetoricalexpression. The New Rhetoric was considered as a particu-larly suitable framework for this type of text, as its detailedtechniques and rich illustrations have been claimed to behelpful in detecting claims to rationality embedded inverbal structures that at first sight appear to be dispositional(see Arnold, 2005).

The argumentation techniques drawn from The NewRhetoric and adapted to the purposes of this research arelisted in Table 1. Apart from presenting various techniqueswith regard to choice, presence and presentation, Perelmanand Olbrechts-Tyteca (2006, see also Perelman, 2005) divideargumentation techniques into two main categories. Asso-ciation brings separate elements together and establishes aunity among them, whereas dissociation seeks to drive awedge between elements which have been previously pre-sented together within some system of thought. The twotechniques are complementary and always at work at thesame time; but argumentation can stress the association orthe dissociation which it is promoting without making explicitthe complementary aspect. The New Rhetoric further ela-borates these techniques into subcategories and illustratesthem by practical examples.

Downsizing is typically a domain, where corporate man-agers face diverse and possibly contradictory discourses. Inparticular, large-scale redundancies may provoke much pub-lic uproar and considerable debate in the popular press(Orlando, 1999; Van Buren, 2000). Whereas business dis-course tends to stress the potential economic benefit ofdownsizing to the firm and its shareholders, the argumenta-tion of employees, trade unions and local communities typi-cally associates downsizing with the consequent risk ofunemployment and the loss of future earnings or tax revenues(see e.g. Makela & Nasi, 2010).

This potential for contradictory interpretations brings inthe question of power. As critics have pointed out, however,the concept of power does not seem to be an integral part ofThe New Rhetoric (see Summa, 1996). The authors focus one-sidedly on the rational basis of argument, and do not paymuch attention to issues, such as, manipulation, propagandaor ideology (Meyer, 1993). Moreover, Plantin (1990, 2005)argues that The New Rhetoric is based on the implicitassumption that whenever argumentation is used, it is alsopossible to end up with a consensus which is based onrationality. The paper relies, therefore, on notions of poweras presented by Foucault and authors who have built on hisideas, such as, Fairclough (1992, 1995) and also pays atten-tion to Liveseys (see e.g. 2002a, 2002b) research with regardto corporate environmental disclosures.

Following Fairclough (1992, 1995), discourse can be seenas a social practice, which constitutes social identities, (e.g.a company as a rational actor/caring actor), social relations(e.g. relations between a company and employees/localcommunities) and the knowledge and meaning systems ofthe social world. Given discourse is, however, also consti-tuted by social practice and structures.

Analysing how corporate disclosures on downsizing con-nect to other texts and discourses is important in order tounderstand how power relationships work in these dis-courses. For Foucault (1974), texts always draw upon andtransform other contemporary and historically prior texts.Any given type of discourse is generated out of combinationsPlease cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of Manaof others and is defined by its relationships with others(Fairclough, 1992). Moreover, by producing a text that evokesother texts and discourses, the company helps to shape theway it will be interpreted and improves the chances it will betaken up by other actors (see Phillips, Lawrence, & Hardy,2004).

Corporate disclosures do not, therefore, only rhetoricallyproduce particular knowledge or truth about the firmsthemselves, but also are influenced by and influence thesometimes contradictory meanings and practices that aredeveloping under the rubrics of downsizing at the widersocietal level (see Livesey & Kearins, 2002). Business can,therefore, contribute to (re)constructing socially question-able undertaking in a certain way, and influence the way it isunderstood in social reality. A way of exercising power is bymeans of achieving the standardisation of the actions thatare favourable to a certain entity through discourse. In thismanner, discourses reflect and sustain social practice andinstitutional forms by helping to arrange the world in specificways, that then come to be accepted (Fairclough, 1992;Hajer, 1995; Wetherell & Potter, 1992). Discourses do not,however, constitute unified and stable fields. Contradictionand ambiguity allow spaces for resistance and change, fornew ways of imagining and constituting reality, and forsubjects to be empowered as well as enslaved (Chouliaraki& Fairclough, 1999; Fairclough, 1992; Livesey, 2002b).

Sample of downsizing companies

Companies have been selected by following the list compiledby the Central Organisation of Finnish Trade Unions (SAK,2005). The list provides information covering all companieslisted in the Helsinki Stock Exchange that have conductedcodetermination negotiations in the year 2005 to implementstaff reductions, and is based on media follow-up. Only thosecompanies were selected, for which the list also provided thefinishing date for codetermination negotiations, with a deci-sion to make one or more of their employees redundant. Assome inaccuracies were detected in the list, and as manydisclosures in ARs tended to be elusive, leaving the reader towonder if any decision to lay-off staff had actually takenplace, the list was double-checked. If there was a reason todoubt that the company had actually made somebodystraightforwardly redundant or was planning to do so, (ratherthan only reducing its staff by retirement arrangements ormoving employees to other tasks within the company group),on the basis of the information found in the respective AR,the companys press and stock exchange releases, searches inGoogle, in online versions of the leading Finnish daily news-paper, Helsingin Sanomat, and online news of economicjournals, the company was excluded. Two companies pro-duced only the statutory financial statements, which did notinclude, for example, the CEOs review. For reasons ofcomparability, these were not included in the sample.

ARs written in Finnish were selected for investigation.Companies who did not produce a report in Finnish wereexcluded from the sample to ensure comparability betweenthe reports. As the sample has been selected by following alist, which compiles companies downsizing in Finland, theanalysis of reports in the Finnish language ensured that alsothe victims of layoffs, employees who have been, or will beleft without job, and survivors of layoffs, as well as thed socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

members of communities potentially affected by downsizingcould figure among the audience, whether or not they arefluent in a foreign language. Whereas much of the businesslanguage derives from an international context, in someparts, the analysis seeks to go deeper into the meaning ofthe words, such as, dormant (sleeping), metaphors (see

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6 T. VuontisjarviPerelman & Olbrechts-Tyteca, 2006), which are seen to beembedded in the language and largely internalised by thespeaker. The focus on Finnish language reports was, there-fore, considered to provide greater accuracy, as it is likelythat native Finnish speakers have been involved in the writingand editorial process of the reports. Consequently, they canbe seen to draw, to some extent, from the Finnish culturalexperience. Furthermore, as my own mother tongue is Fin-nish, the use of the Finnish language has helped me to betterdetect subtle meaning-making processes, which may other-wise pass unnoticed. English versions of the reports providedhelp for translations. Whenever there was an inconsistencybetween the English and Finnish version, the Finnish versionhas, however, been relied on, and the translation is made bythe author to provide maximum consistency with the Finnishversion.

After careful consideration, the remaining companieswere included in the sample, even if the number of redun-dancies varied from three to 180 employees. This is becausesome companies, whose layoffs concerned less than tenemployees, provided a clearer account of the matter,whereas many of those laying off more were more elusive.Furthermore, it should be noted that even if the number ofactual layoffs remained small, co-determination negotia-tions may have covered a larger number of employees. More-over, SAKs list concerns only layoffs decided in collaborativenegotiations taking place in Finland in the year 2005. There-fore, the company may have conducted more layoffs outsideFinland, or layoffs may have been part of a series of layoffsstarted in the previous years, or the company may haveplanned more layoffs for the coming years. So, the finalsample consists of 251 companies in various industries, having30 or more employees on their payroll.

The year 2005 was selected as the target year. It was oneof the years with an intensified wave of redundancies inFinland, in part, due to companies moving their productionto low cost countries (Finnish Ministry of Employment, 2007).Furthermore, a lot of attention was paid to corporate layoffsin this year, both by high-level politicians (see Boxberg, 2005;Halonen, 2005) and by the media (e.g. Boxberg, 2005; Miet-tinen, 2005; Mykkanen, 2005a, 2005b). In the year 2007, thenumber of listed companies laying off dropped, but thenpeaked due to the economic recession in 2009 (SAK, 2007,2009). As 2005 was a year with a number of companiesconducting lay-offs, despite the fact that the Finnish econ-omy was still growing, it was likely that the sample wouldinclude profitable companies. This was verified by a review ofARs for the year. A number of companies boasted good overalleconomic results and growth in their respective reports.There were also companies who stated that their results

1 Discourse analysis tends to use small data sets because theobjective of the analysis is to say a lot about a little and becausethe analysis is particularly laborious and time-consuming (see Potter& Wetherell, 1987; Silverman, 1993).Please cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of Manawere not as good as expected, or referred to the year ofchanges in their CEOs review or even to poor profitability orlosses. In their reports, however, only three companiesexplicitly connected the closure or reduction in staff ofthe factory or unit (or one of them) to losses. Nonetheless,for the purposes of this paper, it is not essential as per se, howcompelling each individual decision to downsize was, as thestress is on how downsizing is discursively (re)constructed,not on the event of downsizing itself.

This paper is interested in how socially contested businessundertakings are constructed in corporate mainstream eco-nomic and financial disclosures. The AR (in an electronicform) was selected as the principal document, which con-structs the corporate economicfinancial image. Moreover,the AR is an influential, regularly produced and widely dis-seminated document (Botosan, 1997; Gray, Meek et al.,1995). Discourses in ARs can, therefore, be suggested to playan important role in (re)constructing reality in a certainway.

The genre of ARs provides an interesting object for textualanalysis as it can be expected to rely, in many parts, on theformal language of economics, which may at first sightprovide an impression of neutrality, especially in compar-ison with other genres, such as, media text or politicalspeeches, which are likely to use more openly rhetoricalexpressions. The primary audience of ARs have traditionallybeen financial stakeholders. It has, however, been suggestedthat it has more recently metamorphosed into a marketingand public relations document, impacts of which extend farbeyond this group (see McKinstry, 1996; Stanton & Stanton,2002). It is also important to note that many companiesinclude voluntary type of information with regard to theirpersonnel management, or broader social and sustainabilitypolicies into the narrative content of their reports (see Lovio& Kuisma, 2006; LTT Research Ltd., 2005; Stanton & Stanton,2002).

Even if ARs have moved from the conveyance of a simpleaccounting of numbers towards a more narrative style, andhave substantially lengthened over time (Campbell, Moore, &Shrives, 2006; Campbell et al., 2009) they can be still seen, asbeing notably constrained by the need to align the accountoffered in the narrative with that in the numerical financialstatements, both to achieve credibility for the narrative withits readers and to satisfy regulatory requirements (Ruther-ford, 2005).

Analysis process in practice

As many as 203 accounts, or text fragments where downsizingwas discussed either explicitly or implicitly were distin-guished in the ARs. The average report contained eightaccounts, the highest number of accounts in any one reportwas 23 and the smallest two. The Adobe Acrobat Readersearch engine was used to check the reports against a specificlist of words and terms. All accounts which explicitly men-tioned layoffs, staff reductions, or collaborative negotiationsare included in the figure. In the remaining accounts, down-sizing was typically referred to by a wide variety of terms,such as, efficiency measures, adaptation of production, orrestructuring. Each of these accounts was checked againstbackground information, such as, the downsizing decision,location, specific processes, and the wording used to described socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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Argumentation and socially questionable business practices 7these in corporate press releases, media articles or othermaterial found by searches in Google. If there was any doubtwhether the account actually discussed downsizing, it wasexcluded. Sheer references to the termination of a factory orwork site were not calculated. The same applies to technicalaccounting information with regard to restructuring or plantclosure.

The accounts were read through several times to establishthe salient argumentation techniques with the help of TheNew Rhetoric (Perelman & Olbrecths-Tyteca, 2006). Afterthis, the detected argumentation techniques were cate-gorised in accordance with a discernible pattern (Fair-clough, 1992, p. 236), that is, the theme which they helped to(re)actualise. The established themes discussed downsizingeither as a means towards an increase in corporate perfor-mance, common management practice or one of the manyfactors affecting the results, an inevitable act, an emo-tionless rational act and an act agreed together withemployees and/or having human concerns. It should benoted, however, that these themes include overlaps anddistinguishing the themes often involved interpretation orreading between lines as the theme was not always explicitin the text. Some techniques, such as, argumentation fromauthority, provided support for more than one theme.

I compared these categorised techniques and the themesthey helped to (re)construct with the previous researchwhich has reconstructed argumentation frameworks (seee.g. Erkama & Vaara, 2010; Siltaoja, 2009; Siltaoja & Vehka-pera, 2010; Suddaby & Greenwood, 2005; Vaara, Tienari, &Laurila, 2006; Van Leeuwen & Wodak, 1999). This helped meto establish five broader argumentation patterns or strate-gies, which were named as follows: rationalisation, normal-isation, inevitability, emotional/moral distancing andmoralisation.

Pragmatic means-ends technique, which was explicitly orimplicitly present in the majority of accounts, constructedemployee downsizing as a means for the company to increaseits economic performance. Thus, it referred to the utility orfunction of the action. This corresponds with the definition ofthe rationalisation strategy used by earlier research (seeSiltaoja & Vehkapera, 2010; Vaara et al., 2006). Certainmetaphoric terms embedded in the text, such as efficiencyas an aim of layoffs, can be seen as creating an implicitassociation between the company and a machine (see Clancy,1999; Morgan, 2006). They may prompt the reader to picturethe company as a rational actor, working in a truly systematicand orderly way when downsizing. The definition of therationalisation strategy in this research was, therefore,extended to cover both references to the utility functionand the implicit associations between the firm and amachine.

One commonly repeated technique in corporate disclosureswas categorisation. Categorisation is here defined as present-ing layoffs together with other already established, perhapsless contested, business practices or factors affecting corpo-rate results. This pattern of argumentation seemed to renderdownsizing as a normal, routine business practice. For thatreason, it was named as normalisation. The category hasbeen introduced earlier by Vaara et al. (2006), who claimedthat rendering something as being normal or natural meritsspecial recognition. In their research the impression of normal-ity was achieved by exemplarity, that is, by reference toPlease cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of Manasimilar cases in the future or past. In this research, as thereports were focusing on one year only, and as they weregenerally evasive with regard to downsizing, exemplarity didnot seem to play an important role. Instead, a core techniqueused to reach the same end, to render something normal, wascategorisation, as defined above.

A number of techniques seemed to contribute to creatinga pattern of inevitability in the text and, thus, form astrategy which has been named as such. At the core of thisstrategy are terms like adapt or adaptation which appearto derive from the imagery of the organisation as a livingorganism. They seem to introduce a degree of determinisminto the text, as they created the impression of the companyat the mercy of market forces, in the same way as a livingorganism is dependent on its environment for survival(Clancy, 1999; Morgan, 2006). Another important techniquecreating an impression of inevitability was the fact-conse-quence argument; this portrayed layoffs as a consequence of,for example, collaborative negotiations, or an efficiencyprogram. The definition of this category roughly correspondswith what Suddaby and Greenwood (2005) called cosmolo-gical, in their theorising on rhetorical strategies (see alsoErkama & Vaara, 2010). Cosmological explanations empha-size the inevitability of an action, on the grounds that it isseen as caused by forces which are beyond the agency ofimmediate actors and audiences. Such arguments tend todescribe an act as a natural process of evolution or conse-quence of globalisation.

When reading corporate disclosures against the researchframework of this paper, attention was soon focused on whatwas not in the text rather than what was presented. Omis-sion, in terms of, for example, missing regrets or possiblemeasures to help employees, contributed to creating thefeeling that layoffs were a purely rational act; that they didnot involve any emotional or moral aspects. The downsizingaccounts tended to be evasive, and avoid the use of exactwords, such as, making somebody redundant. Moreover,they tended to describe layoffs as a means to positive ends,rather than as a fact with potentially negative consequences.Therefore, this argumentation pattern, constructed by thepreviously described techniques, was named as emotional/moral distancing. It can be seen as a counter strategy topathos, that is, emotional and moral claims, drawing fromAristotles (1954) classic rhetoric (see also Erkama & Vaara,2010).

There were traces of elements in corporate accountswhich can be seen as deriving from contemporary CSR dis-course, or opponents discourses with regard to the negativeimpacts of downsizing on employees. This pattern of argu-mentation and technique of presence which forms its corewas named as moralisation. The strategy corresponds withearlier research, which has defined moralisation as legitima-tion by specific values (Siltaoja & Vehkapera, 2010; Vaaraet al., 2006; Van Leeuwen & Wodak, 1999), or what Erkamaand Vaara (2010) named as Pathos (drawing from Aristotle,1954), that is, emotional and moral arguments.

It is important to point out that interpreting the text andidentifying the structure of the arguments provide nothingmore than plausible hypotheses, and other possible readingsand interpretations are always possible (see Perelman &Olbrecths-Tyteca, 2006). Moreover, my own position as aninterpreter of the text is bound not to be neutral, butd socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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8 T. Vuontisjarvicoloured by specific predetermined opinions and meanings.Effort has been made, therefore, to provide details, explaineach stage of analysis and ensure transparency by providingexamples.

Argumentation techniques

This section is divided into main headings as adapted fromThe New Rhetoric (Perelman & Olbrecths-Tyteca, 2006) forthe purposes of this research. Table 1 provides a summary ofthe typical argumentation techniques identified under theseheadings, and further elaborates to describe their character-istics in corporate disclosures and provides examples. Thetext below interrogates the main argumentation techniquesin detail.

Choice, presence and presentation

As examples in Table 1 show, disclosures tended to use theformal language of economics and apply the passive mode ofthe verb or name the company as a subject. Furthermore, thematter tended to be kept at a general level, no reference wasmade to individuals, and focus was kept on groups andnumbers. This is as if the speaker wishes to avoid arousingany emotion. These stylistic attributes tend to have theimpact of decreasing the authors responsibility for thematter; it helps to make him remote from what he says(see Perelman & Olbrecths-Tyteca, 2006).

The speaker also selects certain words and qualifiers overothers (ibid). Most accounts on downsizing were charac-terised by an overall evasiveness. Only 29 (14%) of thedetected downsizing accounts referred explicitly to the termmaking somebody redundant (that is, used the Finnish termirtisanoa). A further 29 (14%) accounts referred to reductionsor decrease in staff numbers and 18 (9%) mentioned code-termination negotiations only without making their resultsexplicit. The remaining accounts replaced or covered thesemore explicit words with terms, such as, measures to:improve efficiency, cut the overlaps, adapt the opera-tions or simplify the organisation structures.

In five cases the whole report made no explicit referenceto redundancies, codetermination negotiations, or to reduc-tions in the number of personnel. The reader could onlysuspect that layoffs had taken place through the documen-ted closure of a factory or business place, or by referencemade to adaptation in the number of personnel, or some-times by references to organisational changes, rationali-sation, or importance of the cost-effectiveness of theoperations.

Layoffs were often either explicitly or implicitly pre-sented as a means to achieve the targeted end. In thisway, they sometimes ended up being categorised with,and thus were given the same status as other means, suchas, more efficient logistic solutions or selling and rentingback a warehouse (see Table 1 for examples). Sometimescategorisation was done by presenting downsizing implicitlyor explicitly under the business strategy, development ofoperations or results and profitability section, and in thisway dealt with other normal management practices, orwith other factors potentially affecting the results of thecompany.Please cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of ManaFurthermore, only seven companies (8 accounts, 4%)attached any qualifiers to the text, which may be interpretedas referring to feelings. In most cases this was done in theCEOs review, and reference was made to codeterminationnegotiations, which felt heavy, or to an adaptation processwhich was hard for personnel, or to difficult changes,difficult or painful decisions, or stinging measures. Thefact that certain elements are presented to the audience,stresses their importance in context (Perelman, 2005; Perel-man & Olbrecths-Tyteca, 2006). The authors also acknowl-edge that suppression of presence (Perelman & Olbrecths-Tyteca, 2006), that is, incompleteness of presentation oromission, is an important tactic in argumentation. In thereports examined here, not only the disclosures referring toemotion, but also those concerning the treatment of employ-ees were missing or tended to remain succinct. Furthermore,none of the seven CSR sections detected in the reportsmentioned staff reductions. Moreover, only twelve of nine-teen companies who had devoted a special section for per-sonal matters referred to reductions in personnel in this. Theabsence of information implies that the company either doesnot regard downsizing and how it is done as an integral part ofits CSR or personnel policies, or does not wish them to beregarded as an integral part of it.

Association techniques

Corporate disclosures relied typically on pragmatic argumentby using either fact-consequence or means-ends succes-sion. Redundancies were often presented implicitly or expli-citly either as a consequence of certain facts, or a means tothe ends, such as, improving efficiency, or improvingcompetitiveness. In Perelman terms, presenting somethingas a consequence minimises its effect, whereas the impor-tance of the matter is enhanced if it is presented as an end(see Perelman, 2005; Perelman & Olbrecths-Tyteca, 2006).Another technique commonly present was argumentationfrom authority, where the prestige of a person or group(which can be unanimous or impersonal) is used to gainacceptance.

The conciseness of the text and lack of openly rhetoricalexpressions can mislead the reader into thinking that the useof metaphors is not customary in the text (see Summa, 1989).Reference to two commonly used business metaphors can,however, be distinguished from corporate disclosures:machine and organism metaphors. These were in the form,which Perelman and Olbrechts-Tyteca (2006; see also Perel-man, 2005) refer to as a dormant, (sleeping) metaphor, thatwhich has got detached from its origins and established itselfin a new context.

For instance, the often used Finnish verb tehostaa(improve efficiency/effectiveness) derives from the wordteho ( power), which is commonly used as a measure inphysics when talking of machines. Streamlining is anotherterm with mechanistic connotations. The dictionary defini-tion for the noun streamline is: a contour given to a car,aeroplane, etc. so as to minimise resistance to motion. Afurther term related to the machine metaphor is the Finnishverb kaynnistaa, which is commonly used with the moreconcrete meaning of switching on a machine, or starting acar. This verb sometimes replaced the more neutral way tod socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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Please cite this article in press as: Vuontisjarvi, T. Argumentation and socially questionable business practices: The case of employeedownsizing in corporate annual reports. Scandinavian Journal of Management (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

Table 1 Argumentation techniques and their applicationa.

Typical disclosure Examplesb

Choice, presence, presentationChoice of words Expressions stating explicitly that

somebody has been made redundantreplaced/covered/used interchangeablywith other terms

The productivity was improved by the increasedtotal volume and the corrective measures, whichwere used to adapt the capacity of packagingmachinery manufacturing to better meet demand.(Elecster, 2005, p. 8)

Categorising Categorising redundancies together withother routine management strategies/practices and, therefore, giving them thesame status

StoraEnso Timber has also taken decisions to reduceproduction volumes and personnel at some othersawmills. . .Other actions to improve productivityinvolve more efficient logistic solutions, reductionof fixed costs, and further fine-tuning of theorganisation. (StoraEnso, 2005, p. 24)

Presence Reference to an element, which can beseen to represent ethics, duty or feeling

The lay-offs were largely carried out in September.In addition, the pension plans, reassignments, andchanges in job positions that were agreed, as well asexpiring fixed-term jobs will be enough to cover theneed for a reduction in staff. (PKC-Group, 2005, p.24)

Omission Missing presentation of measures to helpemployees; lack of emotional language;omission of downsizing from CSR sections/personnel sections

No disclosure

Association and dissociation techniquesArgumentationfrom authority

Reference to demand, market, a profitor efficiency program, or to collaborativenegotiations which implicitly or explicitlyauthorised the lay-offs

. . .and production volumes at some plants will beadapted to better match the demand of the productsthey produce. These measures will impact on thenumber of personnel towards the end of 2006.(Fiskars, 2005, p. 22)

Fact-consequencepragmatic argument

Presenting downsizing as a consequence ofcertain facts, such as adaptation ofoperations, or as a result of a specificprogramme

The total number of personnel has fallen in recentyears mainly due to the adaptation measures andoutsourcing of non-core businesses. (Raute, 2005, p.14)

Means-endspragmatic argument

Presenting downsizing implicitly orexplicitly as a means (or one of the means)to positive economic ends, such as,improving efficiency or competitiveness

In order to maintain competitiveness and to improvethe efficiency of its operations, eQ Bank Ltd heldcodetermination negotiations in the brokerageservices business unit and support operations inJune. As the result of these negotiations, the numberof employees decreased by nine. (eQ 2005, p. 35)

Metaphors Association of downsizing with mechanisticterms, such as improving efficiency orstreamlining

The Groups operations were streamlined bytransferring the cutting of wiring, a front-of-linefunction in the production process from the factoryin Kempele to the one in Kostomuksha. (PKC-group,2005, p. 17)

Association of the company with a livingorganism, and drawing a link between thecompany and the idea of a persons health.Suggestion that organisations are opensystems that need to adapt toenvironmental circumstances for theirsurvival

Perlos decided on February 6th, 2006 to continue toadapt its functions to match demand and will startup measures to regain the health of its loss-makingoperations in Finland and US. (Perlos, 2005, p. 28)

Dissociation byreversal of pairs

Means-ends argument can be seen as aresult of dissociation, where layoffs havebeen separated from the humanconsequences which ordinary people mayassociate to it

Inherent in the examples above concerning means-ends constructions (see section Dissociationtechniques for further details)

a The list of techniques is not exhaustive, but is based on frequency and strategic importance of any one technique.b Italics added by the author.

Argumentation and socially questionable business practices 9

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10 T. Vuontisjarvisay, for example, that the measures to increase efficiency ofoperations aloitettiin (e.g. were initiated).

The organism metaphor sees the organisation as a livingsystem, existing in a wider environment on which it dependsfor the satisfaction of various needs (Morgan, 2006). In linewith this, some companies referred to regaining the health(tervehdyttaminen) of the business operations as an implicitor explicit aim for staff reductions, thereby making anassociation between the company and the idea of a personshealth. Clancy (1999) argues that, although health (or illness)is characteristic of all living beings, the use of this entailmentin business usually has a human context. As the human beinghas a transcendent value in virtually all cultures, the idea ofbusiness as being humanlike suggests, therefore, that thebusinesss survival and goals are superior to any other pur-poses, including that of society.

Furthermore, the term environment indicates the inter-dependence of the organisation with the surrounding society.Organisations are, therefore, seen to be open systems thatneed careful management to satisfy and balance internal needsand to adapt to environmental circumstances (Morgan, 2006).With regard to corporate disclosures, terms, such as, adapt oradaptation (sopeuttaa, sopeutus) were commonly used toreplace or cover more explicit terms referring to layoffs.

Dissociation techniques

Most ordinary people would probably associate being maderedundant with the negative impacts this has on the indi-vidual or society, such as, financial difficulties, decrease inself-esteem and loss of job opportunities. In companiesdisclosures, a pragmatic means-ends argument was, how-ever, used to associate downsizing with positive ends, suchas, profits or gains in efficiency (see Table 1). In Perelman andOlbrechts-Tytecas (2006) terms, this can be seen as a dis-sociation, which follows the reversal of philosophical cou-ples. The philosophical couple (consequence/fact orprinciple), where redundancies have an absolute value asa fact or principle (term II) (see Perelman, 2005; Perelman &Olbrecths-Tyteca, 2006):

consequences to individual and=or society term Iredundancies term II

can be seen, therefore, as being transformed into aphilosophical pair (means/end), where redundancies haveonly a relative value (term I) in comparison with the end,which has the absolute value:

redundancies term Iincreased efficiency term IIRedundancies, which was in the absolute position of

term II in the first pair, transforms itself to the relativeand weak position of term I in the second pair, where it ispresented as a means to an end (for more details, seePerelman & Olbrecths-Tyteca, 2006, pp. 415436; Perelman,2005, pp. 126137). For Perelman and Olbrecths-Tyteca(2006), if something is regarded as a means, it is the sameas saying that the concern with regard to it is only apparent.The end, in this case increased efficiency, now presents anorm which allows the distinguishing between the differentconsequences of redundancies, and promotes those whichare of value to this end, whereas those which are not,Please cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of Manaseemingly cease to exist. Redundancies now only have avalue in terms of their potential positive impact on thecorporation and its economic performance, which is the realobject of preoccupation.

Argumentation strategies and their powerimplications

Argumentation techniques were grouped together andnamed on the basis of the more general argumentationpattern they helped to establish as rationalisation, nor-malisation, inevitability, emotional and moral distancingand moralisation. These five patterns are called argumen-tation strategies in order to make a difference betweenthem and argumentation techniques, which are used hereto describe more specific, linguistic or presentational ways touse language. It should be noted, that moralisation as astrategy tended to remain vague and incomplete in compar-ison with other strategies and was often played down bythem. Nevertheless, this strategy has been presented below,as it demonstrates how social elements are embedded in theaccounts, which is an important purpose of this paper. More-over, moralisation can be seen as bringing into the text theelements of discursive struggle around what the properrelationship among corporation and society should be (seeHajer, 1995; Livesey, 2001), by presenting human concernstogether with profit making and economic performance.

In corporate downsizing accounts, the distinguished stra-tegies were often interconnected and intertwined. The dis-tinction made, therefore, is first and foremost an analyticaleffort and, so, is open to critical scrutiny. Table 2 summarisesthe identified argumentation strategies, suggests core tech-niques used in their construction, and discourses which thesestrategies work to (re)actualise or marginalise and the poten-tial power implications of this. Each technique is illustratedby a sample extract. More detailed scrutiny over particularexamples is provided below.

Rationalisation

Rationalisation, as a legitimation by reference to the utilityof the action, is one of the strategies identified by VanLeeuwen and Wodak (1999; see also Siltaoja, 2009; Siltaoja& Vehkapera, 2010; Vaara et al., 2006). In this study ratio-nalisation is extended to also refer to the ways the companywas portrayed as a rational actor when laying off employees,that is, working in straightforwardly and orderly ways for aseemingly predictable economic interest.

Rationalisation strategy was distinguished in 82% of thedownsizing accounts. These accounts can be seen as (re)con-structing the social acceptability of the economic utility (forthe company and its owners) as the driving force behinddownsizing and, thus, marginalising or excluding other possi-ble interpretations of acceptable reasons for layoffs in thiscontext. Core to the rationalisation strategy is the use ofexplicit or implicit means-ends argument and machine meta-phor. Means-ends argument associated a variety of positivebenefits, purposes and outcomes to downsizing, whilstmachine metaphor commonly enhanced the impression ofthe company working in a predictable, rational way towardsthese aims. Argument from internal authority, typically drewd socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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Table 2 Argumentation strategies, discourses and power implicationsa.

Argumentationstrategy

Accountsb

(n = 203)Reportsb

(n = 25)Techniques on which thestrategy is basedc

Accountsb

(n = 203)Reportsb

(n = 25)Emerging discourse Potential power implications

Rationalisation 166 (82%) 25 (100%) Means-ends argument: Collaborationnegotiations were completed in thespring and other activities forimproving the efficiency ofoperations were started, aiming atannual savings of some EUR 20 millionin Kesko Food. (Kesko, 2005, p. 22)

Machine metaphor: The operation ofthe entire logistic chain from sourcingto delivery of finished products hasbeen streamlined and made moreefficient (Scanfil, 2005, p. 35)

Argument from internal authority: Asa result of the programs aiming atoperational excellence andproductivity improvements, I amconvinced thatwewill be able tomeetour profitability target of 13% returnon capital employed even in theexpected new competitiveenvironment. (Outokumpu,2005,p. 4)

158 (78%)

99 (49%)d

42 (21%)

25 (100%)

24 (96%)d

10 (40%)

Downsizing as a positivemanagement strategy aiming atends, such as, improvedefficiency (drawing fromcontemporary management andmacroeconomics literature,mechanistic views commonlyattributed to Taylorism)

Constructing a company as arational actor

Emphasises the interest ofshareholders/portraysemployees as interchangeableobjects

Constructing the primacy of theutility motive as an acceptablereason for downsizing

Normalisation 119 (59%) 24 (96%) Categorising: As part of the groupsefficiency improving measures Elisahas carried out statutory employeenegotiations leading to personnelreductions. (Elisa, 2005, p. 40)

119 (59%) 24 (96%) Downsizing as a routinemanagement strategy (drawingfrom contemporarymanagement andmacroeconomics literature)

Constructing a company as anactor conducting business asusual

Contributing todeinstitutionalisation ofpermanent employmentcontracts

Constructing downsizing asnothing exceptional orextraordinary

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Table 2 (Continued )

Argumentationstrategy

Accountsb

(n = 203)Reportsb

(n = 25)Techniques on which thestrategy is basedc

Accountsb

(n = 203)Reportsb

(n = 25)Emerging discourse Potential power implications

Inevitability 84 (41%) 23 (92%) Straightforward choice of words:When improving Stora Ensoscompetitiveness layoffs cannot beavoided. (Stora Enso, 2005, p. 6)

Organism metaphor: All companies inthe industry need to adapt theiroperations to be able to maintain theprofitability of their operations.(Tietoenator, 2005, p. 14)

Argument from external authority:We are seeking to adapt our own coststructure to enable us to operateprofitably, even under weak marketconditions. (UPM, 2005, p. 7)

Fact-consequence argument: Thenumber of personnel was reduced bythe operational efficiencyprogrammes carried out (Raisio,2005, p. 54)

21 (10%)

43 (21%)

25 (12%)

42 (21%)

14 (56%)

12 (48%)

9 (36%)

19 (76%)

Downsizing as an unavoidableaction (drawing fromglobalisation discourse, Darwinand Herbert Spencers SocialDarwinism)

Constructing a company as ahelpless actor

Transferring the responsibilityto an external authoritymarkets

Constructing the markets as anirresistible force

Emotional/moral distancing

197 (97%) 25 (100%) Evasive choice of words: . . .the focusin personnel management shifted in2005 from the adaptation ofpersonnel to future developmentprojects. (Martela, 2005, p. 16)

Omission: Missing disclosures withregard to emotional/moral discourse

Dissociation by reversal of pairs:Present in all means endsconstructions

145 (71%)e

154 (76%)f

158 (78%)

7 (28%)e

6 (24%)f

25 (100%)

Marginalising or excludingemotional/moral discourse

Constructing a company as anactor committing a neutral actwithout a contestable social/ethical dimension

Marginalising or excludingemployees/local communitiesas stakeholders

Marginalising or excludinghuman concerns/ethicalconsequences

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Moralisation(remained vagueand incomplete)

49 (24%) 19 (76%) Presence of duty/ethics: Thecollaborative negotiations concerned34 employees. As a result ofrearrangements, twelve new jobs willbe created in other parts of theSuomen Rehu Group. (Lannentehtaat, 2005, p. 9)

Presence of emotions: The measuresinitiated towards the end of theprevious fiscal year in order to reducethe overcapacity in our packagingmachinery manufacturing werestinging, however in thatcircumstances indispensable.(Elecster, 1995, p. 2)

Argument from internal authority: Asa result of the codeterminationnegotiations that were held lastautumn, a total of 34 employees werelaid off at the Raahe factory. (PKCGroup, 2005, p. 19)

Argument from external authority: Inthe context of personnel reductions,Stora Enso will follow a consistentapproach, tailored to the legalrequirements and redundancypractices of the countries in which itoperates. (StoraEnso, 2005, p. 29).

13 (6%)g

8 (4%)

41 (20%)

3 (1%)h

9 (36%)g

7 (28%)

16 (64%)

3 (12%)h

Emotional/moral discourse(drawing from contemporaryCSR discourse, GRI, prevailingregulations)

Constructing a company as anactor with a duty or even as acaring actor

Constructing layoffs as an actconducted with the consent ofemployees

(Re)constructing theemotional/moral discourse and,therefore, providing an elementwhich has the potential fordissension and change

a Italics added by the author.b Same account/report can include several strategies and techniques. Same technique can be repeated several times in any one account/report.c The list of techniques is not exhaustive, but is based on frequency and strategic importance of any one technique.d The figure covers all accounts/reports referring to the terms: efficiency/effectiveness, streamlining and the Finnish verb kaynnistaa (initiate), commonly used with meaning of switching

on a machine.e The figure covers all accounts/reports which do not explicitly refer to either making somebody redundant or reducing personnel.f The figure covers all accounts/reports where none of the techniques presented under moralisation strategy were detected.g The figure does not cover accounts/reports with sheer reference to collaborative negotiations.h The figure does not include references to collaborative negotiations, even if they are also a legal obligation in the Finnish context.

Argu

mentatio

n an

d so

cially questio

nab

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ess

practice

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13

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14 T. Vuontisjarvifrom the prestige of a specific internal action programme,which implies that layoffs are a strategic, rather than one-offdecision, in order to further increase the acceptability of theutility function. By this strategy, companies (re)actualised and(re)produced the common discourse in contemporary manage-ment and macroeconomics literature, which sees downsizingas a way for a company to become more productive andefficient (see McKinley et al., 1998). It should be noted in thiscontext, that this view has been contested; several studieshave suggested that employee downsizing may actually have adeleterious impact on an organisations profitability (see e.g.Cascio & Young, 2003; De Meuse, Vanderheiden, & Bergmann,1994; Guthrie & Datta, 2008). It can undermine long-termcompetitive advantage by eroding skill bases, disrupting orga-nisational relationship networks, demoralising and elicitingnegative responses on the part of survivors (Datta, Guthrie,Basuli, & Pandey, 2010; Guthrie & Datta, 2008).

The example below is one of the many, which presentedlayoffs explicitly or implicitly as a means to an end, such as,improving results or efficiency. The action programmeand the newly appointed Managing Director are referred to asan authority.

Belttons subsidiary Wulff pursued its action programmeof aiming to improve the results. Juha Broman took upposition as Wulffs Managing Director with the goal tostrengthen Wulffs sales organisation and to improvethe efficiency of sales support services through staffreductions. (Beltton, 2005, p. 3)

Improving efficiency and other terms, such as, stream-lining can be seen as deriving from the thinking behind thecommon organisational imagery, the organisation as amachine. This view of business tends to see employees asinterchangeable parts (Clancy, 1999) and is commonly attrib-uted to Frederic Taylors Scientific Management, which advo-cates an approach based on control, predictability,rationality and standardisation to details (Morgan, 2006).This together with the means-ends argument can, however,encourage a depersonalised and dehumanised view ofemployee relationships, and contribute to creating work-places, where employees are treated as replaceable objects,rather than human beings.

In the way illustrated in this section, the (re)actualiseddiscourse, that is, downsizing as a positive managementstrategy, promoted the value of an economic perspectiveover all other viewpoints, implicitly reflecting the knowl-edge of the market economy and relying on taken-for-granted ideas from this sphere. From this perspective,the market is constituted as a reality rather than as theproduct of social construction (see Gibson-Graham, 2000).Knowledge of market includes understanding of and conform-ing to its natural laws, for example, the need for profit,unlimited growth and norms of efficiency and effectiveness(see Livesey, 2002a). Thus, the market functions as an osten-sibly neutral and apolitical arbiter of competing social inter-ests (see Livesey, 2002b).

Normalisation

Vaara et al. (2006), in their research exploring the mediacoverage of a pulp and paper sector merger, suggested thatPlease cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of Manarendering something normal or natural is a strategy meritingspecial recognition and, therefore, developed a category fornormalisation strategies. They defined this category, how-ever, by referring to exemplarity (similar cases in future orpast), which differs from the definition of this study. In thisresearch, the core technique for this strategy was the cate-gorisation of downsizing with other business practices, suchas, new investments, taking into use new technology orimproving customer services. Alternatively, layoffs werecategorised with other factors potentially affecting theresults of the company, such as, new clients or increasesin the volume of production. Both ways worked to normaliselayoffs as a routine management strategy. Thus, normalisa-tion tended to support the rationalisation strategy presentedpreviously.

The normalisation strategy was distinguished in 59% of theaccounts. In the sample extract below, layoffs are implicitlypresent, and categorised under the umbrella term efficiencymeasures. The text goes further, however, and places layoffs(under the term efficiency programme) implicitly in thesame category with another, perhaps less controversial effi-ciency measure from an ethical point of view, that is, sellingand renting back a warehouse.

Kesko Food responded to the competition by startingseveral efficiency measures during the year. At the begin-ning of the year it sold and rented back its central ware-house property and started an efficiency programme aimingat savings of over EUR 20 million. (Kesko, 2005, p. 2)

In the text extract, normalisation strategy supports therationalisation strategy, as the text implicitly connectslayoffs with efficiency gains.

The normalisation of layoffs as business as usual, asnothing exceptional or extraordinary, can be seen as con-tributing to supporting the deinstitutionalisation of relativelypermanent employment contracts (see Ahmadjian & Robin-son, 2001), which Finnish working life has traditionally beenrelying on (see Lamsa, 2001). It can also increase insecurityand stress levels at workplaces, and lead to decreased levelsof loyalty and commitment among employees (e.g. Lewin,2003).

Inevitability

Inevitability corresponds with what Suddaby and Greenwood(2005) called cosmological, in their theorising on rhetoricalstrategies (see also Erkama & Vaara, 2010). Cosmologicalexplanations for a business undertaking emphasize inevit-ability because of forces beyond the agency of immediateactors and audience, and often describe an action as anatural process of evolution or consequence of globalisation.The globalisation discourse relies upon the trope of inevi-table change in the face of inexorable external pressure (Fiss& Hirsch, 2005), such as, increased competition and need forcost-efficiency, and is commonly used to justify restructuringor offshoring operations (see Erkama & Vaara, 2010).

The inevitability strategy can be seen as present in 41% ofthe detected downsizing accounts. The core techniques toform this strategy were; choice of words, organism metaphor,fact-consequence argument and argument from externalauthority. Organism metaphor most commonly worked tod socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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Argumentation and socially questionable business practices 15create an association between the company and a livingorganism that is conditioned by its environment (see Clancy,1999; Morgan, 2006). Alternatively, references to the com-panys need to regain its health can be seen as associatingthe economic performance of the company and the idea of apersons health (Clancy, 1999). Thus, it helped to add a senseof unavoidability to the healing action, that is, the reductionof personnel. Fact-consequence argument presented layoffsas a consequence of certain facts, such as, a specific programor collaborative negotiations. Argument from externalauthority typically complemented the organism metaphor,by referring to the prestige of markets, in order to gain asense of acceptability for downsizing. The inevitability strat-egy works for diminishing corporate responsibility of the act,and tended to build an image of the company at the mercy ofmarkets. Moreover, this strategy tended to intertwine withrationalisation strategy and, therefore, often describe cor-porate efficiency and profitability needs as inevitable con-sequences of market demands.

The example below is based on the straightforward choiceof words, an absolute necessity and inevitably, and usesthe passive mode and fact-consequence argument to furtherenhance the deterministic impact.

Expenditure on personnel is a considerable cost item inproduction. Thus, transferring manufacturing to countrieswith significantly lower wage costs is an absolute necessi-ty. This has inevitably led to a reduction in production jobsin Finnish operations. . . (Efore, 2005, p. 6)

More typically, however, disclosures present downsizing asan adaptation strategy to the corporate environment. Theexample below comes from a company, which has beentargeted in the Finnish media, after its decision to close afactory, claimed to be profitable by employees represen-tatives (see TEK, 2005) and expand its operations in low-costcountries. The company intends, however, to further con-tinue its rationalisation measures. The employees repre-sentatives stated that the company is not in crisis and thatthey will resist layoffs (Karvonen, 2006).

The Board of Directors of the Company decided in itsmeeting on 6 February 2006 to continue to adapt its pro-duction to match demand and will start up measures toregain the health of its loss-making operations in countriesthat are considered as high-cost. A rationalisation pro-gramme was commenced in Finland with an aim to achieveannual savings of approximately EUR 25 million startingfrom the beginning of 2007. The company seeks to achievethe savings target by boosting operational efficiency, andreducing the number of personnel. (Perlos, 2005, p. 60)

The text utilises the metaphor of the organisation as aliving organism, to create a feeling of inevitability. It doesso by referring to the adaptation of its operations and to theneed to regain the health of them. Demand and, there-fore, markets are here presented as an authority. The exam-ple intertwines with rationalisation strategy, as it connectslayoffs to ends, such as, efficiency and rationalisation.

The key concepts of organism imagery are similar toevolution, borrowing from Darwin and Herbert SpencersSocial Darwinism, which sees competitive economic strugglefor existence as the engine for progress (Clancy, 1999), and itPlease cite this article in press as: Vuontisjarvi, T. Argumentation andownsizing in corporate annual reports. Scandinavian Journal of Manais commonsense business thinking to believe that companiesfail because of their ill adaptation and that the strong must,and will, succeed.

In this way, downsizing as an adaptation strategy privi-leged the economic rationale and constructed market as atotalising ethos and an irresistible disciplinary force (seeLivesey, 2002a). From this perspective, the company sawitself not as an agent of, but rather as subject to, market-place exigencies (see Deetz, 1992).

As Clancy (1999) points out, the metaphor can be a goodexcuse for avoiding a lot of hard work and difficult thinking.Its inherent degree of determinism may have such an impactthat the company does not bother to seriously consider anyalternative means to redundancies, or make an effort to keepthem to a minimum. Furthermore, Kumra (1996) argues thatto suggest that organisations need to adapt to their envir-onments is misleading, as it tends to neglect the fact thatorganisations and their members are not simply reacting toforces operating in an external world, but rather that theyare active participants operating in concert with others toconstruct that world (Kumra, 1996).

Emotional/moral distancing

Emotional and moral distancing can be seen as a counterstrategy for pathos, that is, emotional and moral claims,drawing from Aristotles (1954) classic rhetoric (see alsoErkama & Vaara, 2010). The strategy aims at distancingemployee layoffs from human concerns and contemporaryethical/CSR discourse. The core techniques for this strategywere: the evasive choice of words, omission, and dissociationby reversal of pairs. This strategy can be seen as beingpresent in one of these forms in nearly all the detectedaccounts. Evasive choice of words was commonly in thecorporate accounts in the form of replacing explicit terms,such as, laying off employees with more positive terms, likeefficiency measures or adaptation of production, illus-trating the potential benefits of the act for business orreflecting its perceived inevitability. Typically, omission tookthe form of missing information with regard to help offered toemployees or lack of emotional qualifiers. Dissociation byreversal of pairs is implicit in the rationalisation strategy, aspresenting downsizing as a means to achieving economicfinancial ends, can be seen as automatically containing adissociation from the consequences ordinary people tend toassociate with layoffs, that is, the negative impacts onindividuals and society.

In most accounts of downsizing, companies tended to avoidbringing layoffs to a human or CSR context. There were nostraightforward regrets expressed to employees who havebeen, or will be left without a job, or to communities, whichmay suffer from redundancies. There were no explicit state-ments concerning possible efforts to avoid or minimise layoffs.Moreover, most companies omitted any information withregard to employee treatment in the context of layoffs, andeven if they did not, the disclosures tended to lack emotionalqualifiers, and sometimes presented measures to help employ-ees only as a cost factor. No report referred to possible negativeimpacts on the local community or any help provided for it.

In addition, layoffs were not always reported as a part ofpersonnel section and, thus, were distanced from otheremployee related disclosures. More commonly, however,d socially questionable business practices: The case of employeegement (2013), http://dx.doi.org/10.1016/j.scaman.2013.01.003

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16 T. Vuontisjarvicompanies tended to distance downsizing from CSR or ethics(see section Choice, presence, presentation). None of thecompanies mentioned layoffs in their CSR section, and onlytwo accounts explicitly connected corporate responsibilityor ethics to layoffs elsewhere in the report (examples ofthese are presented under the moralisation strategy).

Moralisation

Moralisation as an argumentation strategy refers to legitima-tion by specific values in the previous research (Siltaoja &Vehkapera, 2010; Vaara et al., 2006; Van Leeuwen & Wodak,1999). In this paper, moralisation strategy also correspondswith what Erkama and Vaara (2010), drawing from Aristotle(1954), called ethos, that is, emotional and moral argu-ments. Here, the strategy means creating a sense of accept-ability by referring to feelings, such as, expressing regretswith regard to layoffs. Alternatively, action was legitimatedby drawing from the contemporary CSR discourse by refer-ring, for example, to employees role in the decision-makingor any measures implemented in order to help employees.The core argumentation technique used which forms thebasis for this strategy is presence of moral or emotionalelements. The technique of presence was often fused andthus enhanced by an argument from internal or externalauthority. For example, the reference to collaborative nego-tiations introduces a moral element to the text, as employeeparticipation can be seen as an indicator of proceduraljustice or fairness (see e.g. GRI, 2002; Rousseau & Aquino,1993). At the same time, this reference can be interpreted,however, as an argument from internal authority. In a similarway, a reference to legal requirements brings a moral ele-ment into the text, but it also plays the role of an argumentfrom external authority. This strategy was commonly inter-twined with the inevitability strategy as, in this context,downsizing was often presented as unavoidable or as aconsequence of collaborative negotiations, rather than anactive decision by the management.

According to Perelman (2005), selecting certain aspectsfor presentation implies that they are important. He suggestsfurther, however, that the length of the presentation, repeti-tion and providing details helps to attach more weight to thematter. In these terms, moralisa

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