Study Reveals Impact of Corporate Messaging on Stock Price Amid Herbicide Controversy

Study Reveals Impact of Corporate Messaging on Stock Price Amid Herbicide Controversy - AI in Daily Life - News

A study by North Carolina State University researchers sheds light on the intricate relationship between corporate messaging, public perception, and stock performance during a protracted crisis. The study, which analyzed a decade’s worth of data using advanced big data analytic tools, focused on the complex legal situation surrounding the widely used herbicide Roundup, produced by Monsanto and later acquired by Bayer.

Using big data analytics, the researchers meticulously examined over 230,000 tweets and 334 news articles from 2012 to 2022. Their objective was to dissect how Monsanto/Bayer navigated the public relations crisis associated with Roundup alongside the corresponding sentiments expressed by news outlets and the public. Additionally, the study scrutinized the fluctuation in stock prices of both Monsanto and Bayer to identify correlations between corporate messaging and public sentiment.

Dynamic corporate messaging and public response

The findings unveiled a dynamic interplay between corporate communication strategies and public reactions. Throughout the crisis, Monsanto/Bayer exhibited varying stances in their public messaging, ranging from aggressive to neutral and accommodating. Notably, when the company adopted an aggressive stance, it often mirrored a similarly aggressive response from the public. Consequently, instances of mutual hostility between the company and the public were strongly linked to subsequent declines in stock prices.

Implications for crisis management

The study underscores the pivotal role of corporate communication in shaping public perception and, by extension, influencing stock performance. While companies may not exert direct control over public sentiment, they wield significant influence over their messaging strategies. Consequently, the research suggests that adopting an accommodating approach in crisis communication could be instrumental in safeguarding the company’s financial interests.

Theoretically, the study illuminates the dynamic nature of corporate-public relationships, offering valuable insights into the evolving dynamics over extended periods. The findings align seamlessly with the Contingent Organization-Public Relationships (COPR) framework developed by the researchers, enriching our understanding of these complex relationships. Integrating emerging ai and big data tools allows for a comprehensive analysis of dynamic interactions, propelling crisis communication research into new frontiers.
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