In defence of disclosure studies and the use of content analysis: a research note

Citation

Guthrie, J. (2014), "In defence of disclosure studies and the use of content analysis: a research note", Journal of Intellectual Capital, Vol. 15 No. 2. https://doi.org/10.1108/JIC-03-2014-0029

In defence of disclosure studies and the use of content analysis: a research note

Article Type: Research note From: Journal of Intellectual Capital, Volume 15, Issue 2

I am writing this note in conjunction with Dumay and Cai's (2014) paper critically reviewing content analysis (CA). The authors have invited me to comment on my personal views on the future of CA, rather than directly critique their study. Much has been written about different types of intellectual capital (IC) frameworks, how organisations disclose IC (both externally and internally), and the importance of IC. One lens with which to examine these issues are disclosure studies using CA. These studies mainly focus on how organisations formally construct and tell stories about what we call IC. Their widespread use suggests these studies have something to contribute to the literature, providing insight into organisations’ activities that would otherwise remain unseen.

Disclosure studies and CA have a long history in the social and environmental accounting (SEA) literature. My recent review of 25 years of SEA research publications (Guthrie, 2013) outlined the number of disclosure studies in the literature. When compared to other methods (i.e. case/field/action/interviews/historical; survey; commentary/theoretical/literature review; experimental and combination), I found that since 2003, there had been a significant increase in the use of other research methods when compared to disclosure studies. However, disclosure studies still represent about 30 per cent of SEA publications in 2009-2013 in the selected journals.

In the IC literature, the first issue of JIC in 2000 published two of my articles, which together have been cited in over 1,200 articles. It is interesting that the first article, co-authored by Richard Petty, is a CA on Australian annual reporting practices (Guthrie and Petty, 2000) and is still one of the most cited IC articles internationally. Of course, disclosure studies have moved on from annual reports to other forms of media, for instance internal documents (e.g. strategy, board minutes, etc.) and external (e.g. web sites, stand-alone reports, prospectuses, news releases, etc.). Not only has the range of media examined become more complex, so too has the method itself, which now relies not on word count but on quality indexes and global frameworks to determine levels of disclosure and quality. For instance, the article by Guthrie et al. (2004) in JIC has over 400 citations and was an early analysis of the issues associated with using CA as a research method to inquire into IC reporting. Also, the Guthrie et al. (2012) literature review of a decade of IC research publications, found that fewer than 10 per cent of all articles published were disclosure studies using CA.

These various reviews of the SEA and IC literature indicate there is now a diversity of methods being used. It is a myth that there is a dominance of disclosure studies and there should not be a concern about their value to scholarly activities. All methods have their strengths and weaknesses, and disclosure studies have stood the test of time in terms of understanding IC and how it is used for reporting and in organisational documents.

Disclosure studies and the use of CA are a legitimate method of collecting data. They make possible the understanding of certain research issues in the IC field, in ways that other methods cannot. For emerging scholars they are important because the method is well established and there are a number of significant articles reviewing its application. For all researchers, the method is not overly time consuming, mainly consisting of desk-bound activities, with relatively easy access to materials. In times of limited research funds this makes it an achievable means of undertaking research, because it is much less costly than, for example, undertaking interviews. Moreover, there are various established theories available to interpret the data and form insightful conclusions. Finally, the research can be applied to a number of settings varied by geography, organisational form and type of documents.

However, I do recognise that there is a stream of disclosure studies in the North American positivist tradition are now starting to creep into SEA and IC research. These can be simply classified as regressions against strategy or market outcomes (e.g. share price, earnings, risk, etc). As an example, I have seen many corporate governance studies that use as external input variables, gender, percentages of independent directors, length of board member tenure, director gender and functional specialism, and so on. This research seems to me to be fundamentally flawed, as there is no logical argument that justifies the causal linkages between these inputs and earnings, strategy, and so on. They are simplistic in nature, completely ignoring the multiple factors that may influence, for example, the internal workings of the board, and the management and governance processes that are value creating.

I believe the JIC should be an avenue for all forms of IC research. It is of no value to the research community for the journal to only publish replications of previous disclosure studies, or endless discussion of how CA can be used as a method. Nor does it do so. Hence, I agree with Dumay and Cai's (2014) call for more innovative perspectives on, and approaches to CA, as well as all accounting research topics. Too many researchers remain locked into familiar, safe topics and perspectives. Endless replication of form is not a pathway to new perspectives, innovative approaches, searching critiques, and solutions that are demanded by business, professional, and scholarly communities. The latter are the stuff of which new discoveries are made. As Guthrie and Parker (2014) recently stated, some of the greatest discoveries in other fields have been achieved by researchers taking risks in choosing subjects, framing their research, collecting data, analysing data, and even in presenting their findings and arguments.

James Guthrie
Bologna University, Bologna, Italy and Macquarie University, Sydney, Australia

References

Dumay, J. and Cai, L. (2014), “A review and critique of content analysis as a methodology for inquiring into IC disclosure”, Journal of Intellectual Capital, Vol. 15 No. 2, pp. 264-290

Guthrie, J. (2013), “Social and environmental accounting: past, present, and future”, A-CSEAR Conference Plenary, Waikato University, Hamilton, 1-3 December

Guthrie, J. and Petty, R. (2000), “Intellectual capital: Australian annual reporting practices”, Journal of Intellectual Capital, Vol. 1 No. 3, pp. 241-251

Guthrie, J. and Parker, L. (2014), “The global accounting academic: what counts!”, Accounting, Auditing & Accountability Journal, Vol. 27 No. 1, pp. 2-14

Guthrie, J., Ricceri, F. and Dumay, J. (2012), “Reflections and projections: a decade of intellectual capital accounting research”, British Accounting Review, Vol. 44 No. 2, pp. 68-92

Guthrie, J., Petty, R., Yongvanich, K. and Ricceri, F. (2004), “Using content analysis as a research method to inquire into intellectual capital reporting”, Journal of Intellectual Capital, Vol. 5 No. 2, pp. 282-293