Title: Coercive media pressures on Indonesian companies' labour communication

Authors: Fitra Roman Cahaya; Stacey Porter; Greg Tower

Addresses: Department of Accounting, Faculty of Economics, Universitas Islam Indonesia, Condong Catur, Depok, Sleman, Yogyakarta, 55283, Indonesia ' School of Accounting, Curtin University, G.P.O. Box U1987, Perth WA 6845, Australia ' School of Accounting, Curtin University, G.P.O. Box U1987, Perth WA 6845, Australia

Abstract: This study examines links between media pressures and Indonesian Stock Exchange (IDX) listed companies' Labour Practices and Decent Work Disclosures (LPDWD). The results show that there are 95 labour-related articles found in Kompas from 1 July 2006 to 30 June 2007. The level of annual report disclosures in 2007 ranges from just under 1% to 100% of companies communicating labour-related information. Correlation analysis reveals that the link between media exposure and firms' communication is significant and positive. The most apparent effect of media is on employee benefit issues. This finding supports the premise of coercive isomorphism. There are, however, major differences between individual LPDWD media exposure items and company reporting. The media intensively highlights Injury Rates and contract employment issues whereas Indonesian companies focus their labour disclosures more on training and Employee Diversity information. This implies that companies in this developing nation window-dress their annual reports to avoid communicating controversial issues especially where they do not perform well. Despite media exposure, it is the government that has greater influence on companies' labour disclosures, pushing companies to continue adopting certain practices and disclose particular issues which contribute to strengthening the Indonesian economy.

Keywords: social accounting; developing countries; labour disclosures; coercive isomorphism; media exposure; Global Reporting Initiative; GRI; media pressure; Indonesia; labour communication; annual reports; employee benefits; government influence; injury rates; contract employment; training; employee diversity.

DOI: 10.1504/IJCA.2016.077550

International Journal of Critical Accounting, 2016 Vol.8 No.2, pp.95 - 117

Received: 31 Aug 2015
Accepted: 11 Jan 2016
Published online: 05 Jul 2016 *

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