Int. Journal of Business Science and Applied Management, Volume 9, Issue 2, 2014
Strategic change: a journey towards new meaning? Semantic
analysis of corporate communication
Malin Olander Roese
Lund University, Department of Design Sciences, Division of Packaging Logistics
Box 118, 221 00 Lund, Sweden
Telephone: +46 46 222 9701
Sverker Sikström
Lund University, Department of Psychology, Cognitive Division
Paradisgatan 5, 221 00 Lund, Sweden
Telephone: +46 70 361 43 33
Strategic change, infused with new data, perspectives and concepts may change the inherent meaning of the
central tenets in an existing strategy. It taps into the cognitive aspects of a journey where language, in verbal and
written form, aids in the process of communicating, understanding and creating new meaning. Hence, it comes
as no surprise that communication is argued to be an important means of forming and executing strategy,
particularly if that strategy involves change. Thus far corporate communication has been the objective of
extensive and predominately qualitative analysis of written content, with a focus on identifying and
demonstrating strategic intent or reorientation. The objective here is to take a different route, not yet explored in
the field of strategic management and change. Leaning on a previously conducted, longitudinal and qualitative
case study of strategic change the aim is twofold: Firstly, to propose a method for quantitative analysis of
semantic content of texts and statistically test the semantic development over time in the same case. Secondly, to
evaluate and discuss the results of a quantitative semantic analysis in relation to previous and qualitative
findings. By applying latent semantic analysis (LSA), we quantified the semantic content of annual reports and
press releases between 2001 and 2010, derived from a case study of one company in the paper packaging
industry. Using this method, we statistically analysed significant changes in semantic content across the ten-year
time period studied. The results indicate interesting avenues for continued and wider use of quantitative
semantic analysis in contributing to the understanding of semantic development and strategic change.
Keywords: strategic change, communication, cognition, latent semantic analysis, paper packaging industry
Acknowledgements: The authors would like to express their gratitude to BillerudKorsnäs: for facilitating the
research and for allowing our findings to be communicated. We would also like to extend a warm thank you to
the anonymous reviewers for their constructive comments on how to improve earlier versions of this paper.
Finally, we would like to acknowledge the Bo Rydin Foundation for financing the research.
Int. Journal of Business Science and Applied Management /
Strategic change is a challenging endeavour requiring everything from a new organisational structure to
underlying culture (Mintzberg & Quinn, 1992; Markides, 1997). Communication is one suggested lever, argued
to be important in the formulation and implementation of strategy and strategic change (Simons, 1995; Porter,
1996; Quinn, 1996; Higgins & Mcallaster, 2004). Communication plays a role both in terms of manipulation
and control, and for creating new meaning and practice (Brown, Collins, & Newman, 1989; Hartelius &
Browning, 2008; Rogers, Gunesekera, & Yang, 2011). The use of a common, and preferably unpretentious
language is, for example, argued to facilitate in closing the strategy-to-performance gap, and to enhance
learning, change and strategic innovation (Pfeffer & Sutton, 1999; Marshak, 2002; Jacobs & Heracleous, 2005;
Mankins & Steele, 2005). Communication and dialogue are likewise argued to be integral parts of strategic
control through interactive control systems, and for discussions on performance, risk, and business ethics
(Simons, 1995; Quinn, 1996; Melnyk, Hanson, & Calantone, 2010).
The value and use of rhetoric, dialogue, narratives and metaphors in verbal and written communication in
this context are well explored from multiple perspectives. Language, being one of our most important means for
communication, influences and is influenced by situations, negotiations and activities within an organisation and
its surrounding environment (Brown et al., 1989; Györi, 2002). Reflective dialogue is considered to be a
prerequisite for changing mental models, and an enabler of strategic change and innovation (Markides, 1997;
Jacobs & Heracleous, 2005). A necessary first step for critically reviewing mental models is to render them
visible through the use of language and metaphors: During such inquiry, a collective language is likely to
emerge. It is through this common language that emergent, new mental models can take shape (Jacobs &
Heracleous, 2005, p. 347).
At the other end of the communication spectrum are written artefacts such as employee magazines,
corporate brochures, press releases, annual reports and more. These are in turn important tools for forming an
organisation’s identity and managing perceptions and expectations in relation to internal and external
stakeholders (Fiol, 1995; David, 2001; Prasad & Mir, 2002). An organisation’s language, made up of its choice
of words expressed in verbal or written forms, is an important cultural artefact in itself. Homburg and Pflesser
(2000) found that an organisation aspiring to be market oriented will not exhibit behaviours to this end without a
market-oriented language.
Given that language is an important marker of cognitive and cultural change, how can it be studied and
measured in relation to strategic change? Thus far, the growing interest in communication and rhetoric in the
management literature is often dealt with in relation to manipulation and control: Specifically, rhetorical
studies and management are concerned with power as it relates to language (Hartelius & Browning, 2008,
p.14). Previous studies in the area and in relation to strategy are predominately qualitative, applying content
analysis and word frequency counts to interview transcripts and public documents. For example, Landrum
(2008) shows how strategic intent and posture are revealed in letters to shareholders using a qualitative narrative
analysis. Rutherford (2005) examines rhetorical ploys and Pollyanna effects by studying narratives in corporate
annual reports using word frequencies as a tool of analysis and a linguistic based approach.
The aim here is to take a different route, which to the authors’ knowledge has not yet been explored in the
field of strategic management and change. Seeing the importance of language as a tool for communicating
strategy or a new strategic direction, and a potential marker of certain behaviours, we address the question of
how language, and more specifically the semantic content in an organisation’s written communication, can shed
light on the understanding of a strategic change process. We applied a quantitative analysis method for
measuring semantic content, which is the underlying meaning of words and narratives. We did this based on
findings from a longitudinal case study of strategic change, and the notions put forth in the literature that an
organisation’s language is a tool as well as a result of a cognitive processes (such as strategic change).
The aim was twofold: Firstly, to propose a method for quantitative analysis of semantic content of texts and
statistically test the semantic development over time in one organisation. Secondly, to evaluate and discuss the
results of a quantitative semantic analysis in relation to qualitative findings of the same organisation.
We start with a theoretical discussion on strategic change, the role of communication and how different
methods are used for studies thereof. Then we briefly present previous findings from a qualitative case study,
followed by a description of the methods used here. The results from the quantitative semantic analysis are
presented and discussed in relation to previous qualitative findings. This is followed by conclusions,
implications for theory and practice and suggestions for the continued use of similar methods in contributing to
the understanding of semantic development and strategic change.
Malin Olander Roese and Sverker Sikström
Normann (2001) argues that The core process of a company in the long term is to form new ‘dominating
ideas’ (ibid., p. 149). Describing the evolution of strategic paradigms, Normann (2001) shows how the
competitive dominance or edge has moved from the industrial economy where resource transformation,
standardisation and production were at the heart of business logic and management, to an economy where the
crucial competence is to organise value creation where the customer is not only an important source of business
but regarded as a co-producer. Simons (1995) similarly describes the differences between ‘old and ‘new’
strategic paradigms from top-down strategy, standardisation and according to plan to customer/market-
driven strategy’, customisation and continuous innovation Simon goes on to argue that a shift or co-existence
between the old and the new reflects a deeper tension between basic philosophies of management and control.
For industries that originate from the industrial economy, this may imply a dramatic conceptual and real change
in how customers are viewed and how value is created.
According to Mintzberg and Quinn (1992) the most difficult challenge in managing strategic change is the
move from a familiar domain to one that is less well-defined. It can take place through continuous and
incremental improvement, or through a more radical renewal of the business (Quinn, 1978; Normann, 2001).
This is a process that in turn can be reactive or proactive, temporal (different phases of stability and change) and
spatial (separated from the rest of the organisation) (Baden-Fuller & Volberda, 1997; Normann, 2001). The
process of forming new ‘dominating ideas’, or changing mental models underlying the strategy paradigm of an
organisation is foremost a cognitive challenge (Markides, 1997; Normann, 2001; Jacobs & Heracleous, 2005).
For an organisation going through strategic change, new perspectives, competencies, tools and models may
come in the form of new concepts with new meaning that has to be addressed. For example, an organisation
aiming for a competitive advantage through a strategy of ‘differentiation’, coming from one of ‘cost’ (Porter,
1985; Porter, 1996), or heading for a Blue Ocean (Kim & Mauborgne, 2005), will instil new meaning (and
practice if successful) in relation to terms like ‘value’, ‘customer orientation’, and ‘innovation’.
Johnson (1992) argues that “…a change in emphasis from control of costs to an emphasis on monitoring
effective customer service, is not simply a means for monitoring the progress of a changing strategy, it is also a
major signal of a change in corporate culture (Johnson, 1992, p. 35). Corporate culture where language
systems and metaphors are central ingredients in forming an organisation’s value systems and norms, are in turn
important levers in strategic change. As put by Higgins and McAllaster (2004): “If strategy and cultural
artifacts are not aligned, then employees are uncertain which messages are real the old familiar, comfortable
ones supported by lots of well-known cultural artifacts, or the new messages about a new strategy that are in
conflict with the old, still in place cultural artifacts”. Homburg and Pflesser (2000) show that a market-oriented
language, being a cultural artefact, is a prerequisite for market-oriented behaviour.
Seeing that language plays an important role in conveying and creating new meaning and behaviour, it is
not surprising that communication is argued to be an important ingredient in leadership and strategic
management in general and for change and innovation in particular (Porter, 1996; Markides, 1997; Mankins &
Steele, 2005; Jacobs & Heracleous, 2005; Groysberg & Slind, 2012).
Thus far research has provided important insight into the relationship between corporate communication,
language and control as well as rhetorical choices for communicating strategic intent and posture (Landrum,
2008). Bryman (1989) points to the increasing interest in studying language in the organisational context and
how communication is used and the consequences thereof. In a recent qualitative study by Rogers et al. (2011),
they examined textual components in strategic statements over time, showing how managers may use language
to articulate shifts in strategy. However, according to Rogers et al. (2011) there is limited research on the
linguistic development within an organisation over time. There is equally, to our knowledge, no quantitative
research on the semantic content of an organisation’s communication, over time, contributing to this field.
Public documents like annual reports and executive statements are important media by which companies
communicate with their shareholders, the stock market and society at large (Fiol, 1995; Prasad & Mir, 2002).
Prasad and Mir (2002) argue that “…the texts of annual reports and letters to shareholders contain important
symbolic meanings that need to be unveiled through interpretation (ibid., p. 110). Even though these may be
written in a way to convey a certain intentional message, Fiol (1995) argues that future research comparing
different forms of communication is important.
Applying a quantitative semantic analysis in an organisational context offers another potential route. By
addressing the need for increased understanding of how shifts in strategy are reflected in language, we wanted to
measure if and how the semantic content of an organisation’s written communication changes over time by
applying latent semantic analysis (LSA). LSA is a mathematical method for computer modelling and simulation
of the meaning of words and passages by the analysis of representative corpora of natural text. It is also a
method for analysing the underlying semantic content. It has primarily been used so far in cognitive science and
educational research (Landauer & Dumais, 1997). A few recent organisation and management studies have used
LSA to examine verbal communication in design teams, showing how semantic coherence within teams creates
shared understanding, and how this computational tool can be used to detect how teams function (Dong, 2005;
Int. Journal of Business Science and Applied Management /
Yang & Helander, 2007). Wallemacq and Jacques (2009), albeit not using LSA, introduce the software Evoq to
visualise the semantic meaning of words drawn from qualitative texts.
As a strategic change process progresses, one could assume that a new language is used and developed not
only in lexical terms (i.e. new vocabulary) but also in semantic terms (i.e. the inherent meaning of words and
narratives) hence leading to less semantic coherence over time measured in quantitative terms. Given the
inherent meaning of, and link between, strategy, market orientation and innovation (Frambach, Prabhu, &
Verhallen, 2003; Dobni, 2010) and the cognitive and cultural aspects of strategic change (Homburg & Pflesser,
2000; Normann, 2001; Dufour & Steane, 2006) it could be assumed that an organisation pursuing strategic
change towards increased market orientation and innovation will develop a new and measurable semantic
content expressed through language.
Hence, our research is based on the notion that strategic change; such as moving from an old’ towards a
‘new’ strategic paradigm, requires cognitive change where communication (use of language) is vital. We raise
the question how language and more specifically the semantic content in an organisations corporate
communication can shed light on the understanding of a strategic change process over time. Given the role of
communication and language in strategy and strategic change, and the successful application of quantitative
semantic analysis in other areas, we hypothesised that: an organisation going through strategic change will
display a change in language and more specifically a significant change in the semantic content the underlying
meaning of words or narratives over time.
The study presented here is linked to a longitudinal qualitative case study (Olander-Roese & Olsson, 2007;
Olander-Roese, 2008; Olander Roese & Olsson, 2012). A brief introduction of the study and prior findings is in
One company in the Swedish forest and paper packaging industry was studied between 2004 and 2010 with
the overarching purpose to explore and contribute to the understanding of strategic change, and the link between
strategy, customer orientation and innovation. The research, based on a qualitative and interpretive approach
(Alvesson & Sköldberg, 1994; Gummesson, 2000; Patton, 2002), focused on challenges and enablers of
strategic change, the process in itself and the related managerial actions, decisions and organisational reactions.
The data collection consisted primarily of in-depth interviews, observations and participation as well as studies
of the company’s written material.
The company, a manufacturer of paper packaging material named Billerud (now BillerudKorsnäs), was
formed in 2001 through a merger of three existing Swedish paper mills and introduced on the Stockholm Stock
Exchange. The Swedish forest industry, of which the paper packaging industry is central, is one of Sweden’s
most important primary industries and makes up 12% of the nation’s GDP. It is characterised by capital intense
processes and products with high knowledge content. Efficient production processes, volume output and cost
focus have been at the core of the forest industry paradigm. After the formation in 2001, Billerud spent the first
three years streamlining the activities of the founding mills and developing a strategy. In 2004 Billerud revised
their strategy and the next step was to be taken. An increased market orientation and new product development
were central themes of the strategy. In 2005, the founding CEO was replaced, followed by a review and change
in the company’s objectives, financial targets and strategy. This time around an increased focus was placed on
the direction set out in 2004, combining world class process efficiency and customer focused development.
Processes for innovation and market learning were developed, the organisation restructured, new ventures
launched, and the ‘offering extended beyond the physical product (Olander Roese & Olsson, 2012). In
summary, the journey of strategic change studied between 2004 and 2010 can be described as a move from a
production oriented, cost-focused business towards a more market and customer oriented one. The new financial
targets set in 2006 were reached in 2010.
In Table 1, the introductory words of CEO statements as communicated in annual reports further depict the
strategic journey from 2001 to 2010 along with turnover and margin statistics. One could conclude, when
comparing the fluctuating financial developments over the years with the qualitative findings thus far, that the
financial results are limited. However, given the importance of communication and language in strategy and
strategic change suggests measures for other outcomes beyond profit maximisation, such as semantic
development (See e.g. Whittington, 1997; Dufour & Steane, 2006). This inspired the present study.
Malin Olander Roese and Sverker Sikström
Table 1. CEO statements, turnover and margin between 2001 and 2010 (Billerud, 2011).
Introduction (text in bold by author)
Net sales, Msek
“The new Billerud The past year was dominated for Billerud by the merger of the three
mills at Gruvön, Karlsborg and Skärblacka. Extensive work was required to co-ordinate
production and find models for co-operation between the mills. During the year we have
also formed functions for the head office and established a sales organisation with offices
in seven European countries”.
“The past year was Billerud’s first full year as a listed company. While work in 2001 was
dominated by efforts aimed at creating an efficient business, our focus in 2002 was on
realising the plans made when we formed the company. As we have worked to establish
ourselves on the market we have seen confirmation of the fact that the Billerud brand,
thanks partly to its long tradition, is a strong name in the forest industry. Together with our
strategy of focusing on niches where we are already strong, the name has undoubtedly
contributed to the large interest shown in Billerud both by the market and by investors”.
“At the formation of Billerud we produced a plan for the first three years where the focus
was on establishing the company and consolidating our business. During this first phase
our work has focused on creating procedures for our working methods and on realising the
opportunities for organic growth and increased efficiency that were created through the co-
ordination of three mills within a single company. Now that this phase is over I can state
that Billerud is well established on the market and as a listed company. We have created a
strong base, both financially and as an organisation, for the next phase of Billerud’s
“During its first years since formation Billeurd has co-ordinated the activities of its three
Swedish mills and thereby created a niche business and established listed company focus
on packaging paper. Synergies have led to increased production capacity, which has meant
a significant rise in deliveries. Following the successful start it is now time to move to the
second phase, in which the focus will be on increased market orientation. This will enable
Billerud to meet new demands from customers and end-users. Increasing efficiency within
the business will be equally important, and this will be done by cutting costs”.
“A renewal has begun. Billerud’s results were disappointing. Continued weak economic
conditions and the dramatic rise in costs for energy, raw materials and chemicals affected
us negatively. We have now implemented strong measures to transform our results and
build a more modern, more efficient company”.
“Billerud undergoing change. After several years of faltering profitability, Billerud’s
earnings trend was turned around in 2006. Prices could be raised slightly higher than costs
increased. Combined with greater efficiency this meant a strong improvement in profits”.
“The hard work continues. In 2007 we worked very hard and successfully to develop
markets, customer relationships and products, to reduce costs and improve efficiency. Over
the past 12 months we have raised prices and reduced our energy costs. However, increases
in wood costs and currency changes impacted negatively on earnings. We will continue
working intensively on our chosen course to make improvements”.
“A changed reality. Billerud’s positive development continued at the start of 2008. We
were successful on the market and our customers appreciated our new business concepts
and products. In the middle of the year a weakening in the industrial business cycle became
more obvious, and by the end of the year the financial crisis had struck and the downturn
was a fact. We were forced to face up to further challenges”.
“The resurgence. Describing 2009 in brief is almost impossible. We were plunged into a
financial crisis and an economic slump with falling demand, plummeting prices and a
financial market that practically stopped working all together. However, we handled the
situation and bounced back very strongly at the end of the year. I think that in 2009 we
really showed Billerud’s inherent strength”.
“Strong position for Billerud. I am pleased, happy and impressed with the progress that we
made in 2010. Demand for our products rose very strongly over the year, resulting in an
operating margin of 12%. I interpret that as proof of how strong our customer offering is”.
Int. Journal of Business Science and Applied Management /
The data analysed for this paper was retrieved from the Billerud company and consist of the written content
of annual reports and press releases from the period 2001 to 2010. The semantic content was assessed
quantitatively by applying latent semantic analysis (LSA). LSA generates a high dimensional semantic
representation (semantic space) from a large corpus of natural language using information of co-occurrence
words. The texts are then inserted into this space, so that the statistical tests can be applied to the semantic
representation that is associated with the texts. The method is described below. The analyses were conducted
using SemanticExcel, a web-based software for scientific and statistical analysing of semantic representation
4.1 Creating a semantic space
Semantic spaces are generated by applying computational methods to large text corpora. This space is a
representative frame of reference for the meaning of different words (Landauer & Dumais, 1997). For this
paper, an English semantic space was created. The texts generated by the subjects (i.e. the annual reports and
press releases) were not sufficiently large to construct a high quality representation. Instead we collected a
corpus based on 1.6 GB of English news articles from 2007. The latent semantic analysis was generated by the
Infomap software (, using the following parameters settings: the number of
words in the space (15k), the number of context columns (20k), the context size (±15 words), the number of
SVD iterations (500), and the number of dimensions in the semantic representation (100). The result of this
analysis was a semantic quantification of the 120k most frequent words in the corpus, where each word is
described by a 100 dimensional vector. Words that are semantically similar (synonyms) have similar
representation in this semantic space.
4.2 Empirical data texts to be analysed
The empirical data consisted of written expressions in the form of annual reports and press releases from
the years 2001 to 2010, in total ten annual reports and 194 press releases in English. The particular organisation
was selected based on a previous qualitative and longitudinal case study of strategic change (Olander-Roese,
2008; Olander Roese & Olsson, 2012). With the limited reference to similar studies and applications of LSA, it
was important to choose an object of study where we could relate to data and findings beyond the ones in focus
here in order to evaluate and discuss the results of LSA. The material for analysis annual reports and press
releases was selected based on public access and to ensure representation of comparable texts for all years.
The annual reports cover (excluding financial statements): statements from the CEO/president, a summary of the
year’s major events and descriptions of business concepts, vision, strategy, targets, markets and trends,
production, product and business areas, human resources, environmental issues, production and investments,
risk analysis, etc. The press releases include communications of financial reports and market outlook, product
launches and changes in production or number of employees, etc. As already noted, the annual reports and other
public documents are an important means for corporate communication. One limitation put forward by Fiol
(1995) in addition to the potential of formulations aimed at conveying a certain and particular positive image of
the events, is that annual reports are often produced by external consultants. Nevertheless, the information and
language employed should, to our knowledge and personal experience, adhere not only to legal requirements but
also the voice of the organisation and the people interviewed for content.
4.3 Data preparation and procedure of analysis
Annual reports (10) and press releases (194) from the years 2001 to 2010 were downloaded from the
website of the case company or sent as PDFs from the company. All documents were transferred to unique text
files (txt.), 204 files in total, and prepared for analysis by removing financial statement tables, figures, images
and data such as contact information, telephone numbers and links to other documents. Each file was named
with the corresponding date.
The analysis encompassed three steps: First, each document (i.e. text file) was transformed to a semantic
representation. This was done by adding the semantic representation of the words that were presented in each
document, and by normalising the length of the resulting vector to one. This generated one semantic
representation for each document, with the same number of dimensions as the original semantic space.
Second, we created a semantic scale spanning two sets of documents. This semantic scale measures how
semantically similar one document is to two sets of documents. The scale spans from -1 (maximally similar to
set 1) to +1 (maximally similar to set 2), and where a value of zero indicates that it is equally similar to both
sets. We summarised each set of documents by aggregating all semantic representations in the set, and
normalised the resulting vector to one. Then we created a “difference” vector, where the vector representing the
second set was subtracted from the vector representing the first set, and where the resulting vector was
normalised to one. Finally, we measured the semantic similarity between the difference vector and the vector
representing a document that we wanted to measure on the semantic scale. The semantic similarity between the
Malin Olander Roese and Sverker Sikström
vectors is measured as the cosine of the angle of the vectors. Since the lengths of the vectors were normalised to
one, the cosine of the angle was calculated as the sum of the pairwise multiplication of each semantic
dimension. Hence, if the vectors were identical the value was +1 and if exactly opposite the value was -1, and if
unrelated, zero. Thus, 1 signifies extremely high similarity/relatedness, and 0 signifies no relatedness. However,
while calculating the difference vectors, we removed the document that we wanted to measure on the semantic
scale. This was necessary to avoid bias that otherwise would occur when the document to be measured was
included in the difference vector. Thus, the difference vector was slightly different for each document that was
measured. The semantic scale of each document was simply the semantic similarity between this document and
the difference vector, where a positive value indicate a resemblance to set one, and a negative value a
resemblance to set two.
Third, we calculated the appropriate statistic on the semantic scale. To measure whether the two sets of
documents differed in the semantic scale we used a two tailed t-test, where p < 0.05 indicated a significant
result. To measure the size of the difference we calculated z-values (z), by subtracting the mean value of the
second set from the mean value of the first set and dividing the resulting value by the pooled standard deviation.
The following results are presented and discussed: first, the semantic similarity between annual reports and
annual summaries of press releases respectively, comparing all pairwise years and the consecutive development;
second, the identification and measurement of significant keywords of pairwise years.
5.1 Semantic similarity of annual reports
In analysing the annual reports we used words rather than documents as the underlying unit of analysis
simply because statistics could not be based on a single data point as only one report is related to each year. For
example, if year 2005 consisted of 10,000 words then a set of data (e.g. set 1) consisted of the 10,000 semantic
vectors representing these words. The results are presented by all pairwise combinations of years (Figure 1) and
by changes across consecutive years (Figure 2).
First, the results show that the semantic similarity scores (s) diminish gradually over time between the
annual reports (AR) from 2001 to 2010, indicating a change in the semantic content (i.e. inherent meaning of
words and narratives) across time. Figure 1 illustrates the semantic similarity score of each year in relation to the
preceding and following years as well as in relation to itself (s=1.0). The semantic content of annual report 2001
(AR 2001) is identical to itself (s=1.0), highest in similarity to AR 2002 (s=0.9990), and lowest in similarity
compared to AR 2010 (s=0.9958). The results show high significance. The similarity score between 2001 and
2010 rendered a p-value of 0.000 and z-value of 86.697. The analysis further shows that the semantic similarity
between directly preceding or following years is the highest: AR 2004 is most similar to AR 2003 (s=0.9994)
and 2009 to 2010 (s=0.9991). The semantic content in annual reports between 2001 and 2004 have the lowest
similarity to AR 2010, and the annual reports between 2005 and 2010 have the lowest similarity with AR 2001
(i.e. the semantic distance becomes greater relative to the first year and progressively closer to the last year).
Figure 1: Semantic similarity scores (s) of annual reports (AR) 2001-2010
Int. Journal of Business Science and Applied Management /
Second, Figure 2 shows that changes in semantic content across consecutive years differ. The semantic
similarity scores between years can be seen as a measure of semantic change, sometimes called coherency
(Foltz, Kintsch, & Landauer, 1998). Figure 2 illustrates the semantic similarity of consecutive years, where each
year is related to the following year. Hence, the semantic similarity score between 2001 and 2002 is s=0.9990,
between 2002 and 2003 is s=0.9995, etc. The results show a higher semantic similarity between 2002-2003
(s=0.9995) and 2007-2008 (s=0.9995), and lower similarity between 2004-2005 (s=0.9989) and 2006-2007
(s=0.9989). The lowest similarity score is between 2008 and 2009 (s=0.9985), which shows a significant value
(p=0.000; z=38.5).
Figure 2: Semantic similarity scores (s) of consecutive years, annual reports (AR) 2001-2010
In summary the semantic development in annual reports yielded a gradual variation of the semantic content
ranging from s=0.9958 to 1.000. If we compare the results of the quantitative latent semantic analysis (LSA)
with the findings from interviews and documentation in the qualitative study (see brief summary, section 3) the
low semantic similarity between 2001 and 2010 (as shown in Figure 1) and gradual shift (Figure 2) may not be
surprising. The semantic distance does become greater relative to the first year and progressively closer to the
last year. Seeing the company’s semantic development over the years, also considering the financial results, this
could be interpreted as a continuous or incremental strategic change.
An examination of the actual content of the annual reports reveals that there is a notable difference in terms
of themes, expressions and highlights that are in line with the results of the consecutive development (Figure 2).
The three lowest points of semantic similarity between the years shown in Figure 2 are of interest (see 2005,
2007 and 2009). Firstly, in 2004 in line with the revised strategy, ‘market orientation’ was emphasised for the
first time with a separate chapter in the annual report on ‘Customer focus’. In the following year, 2005, a new
CEO arrived and the company experienced a decrease in turnover and negative margins. This indicates that the
lower similarity can be explained by the difference in semantic content between the years (and the ‘dip’ in
2005). It could also be interpreted as the focus on market orientation’ becoming secondary in times of
organisational changes and financial turbulence. 2006 (similar to 2004) was characterised by the introduction
and communication of a new strategy with an increased emphasis on customer-focused development. The
following year’s annual report, 2007, communicated the efforts to implement the new strategy, with an
increased focus on environmental and sustainable development issues and new business initiatives. The low
similarity with 2006 was therefore surprising; however, a closer look revealed the equally continued
concentration on production efficiency and cost reductions, which are prerequisites, but not drivers for market
orientation per se in terms of customer focused language. Finally, 2009 is the year after the 2008 financial crisis,
and the time when the company communicated their vision and sustainability targets for the first time, as well as
launching a new product, which was much communicated.
5.2 Semantic similarity of press releases
We measured the semantic scale between all pairwise combinations of press releases aggregated over a
year (i.e. 2001-2010), where the press releases were the unit of analysis. The results are presented in Figures 3
and 4. The preferred level of analysis for conducting the statistical analysis was on the level of press releases
because it answers the question whether the results can be generalised across units of press releases. In the
annual report analysis described above, it was not possible to use annual reports as the underlying units of
analysis because there is only one annual report available each year, so that the pooled variance in the t-test
could not be calculated.
Malin Olander Roese and Sverker Sikström
First we illustrate the semantic similarity score between the years based on the press releases for each year
in relation to the preceding and following years as well as in relation to itself (Figure 3). Hence, the results show
the semantic content of press releases 2001 (PR 2001) is identical to itself (s=1.0), highest in similarity to PR
2002 (s=0.9024), with the lowest similarity to PR 2009 (s=0.1627). The similarity score between 2001 and 2009
rendered a p-value of 0.000 and z-value of 9.099. In summary, the years 2001 and 2002 appear to be exceptions
in semantic content compared to the other years. PR 2003 through PR 2010 all show the lowest similarity score
in comparison with 2001 with appropriate levels of significance. Where the annual reports showed a gradual and
limited change of semantic content over the years, the differences indicated through the press releases were
more dramatic, considering also the greater variance of actual similarity scores ranging from s=0.1627 to 1.000
(compared to s=0.9958 to 1.000 for annual reports).
Figure 3: Semantic similarity scores (s) of press releases (PR) 2001-2010
The semantic similarity between consecutive years based on press releases yields an equally more varied
picture (Figure 4) than the corresponding development in annual reports (Figure 2). As shown in Figure 4, there
is a significant change in semantic similarity between 2002 and 2003 (s=0.69, z=2.52); however no other
consecutive years show statistically significant differences. 2002 and 2003 were also statistically different from
all subsequent years (2004-10). Finally, 2003 differed from 2007, 2009, and 2010, and 2004 differed from 2009
and 2010.
Figure 4: Semantic similarity scores (s) of consecutive years, press releases 2001-2010
In summary the semantic changes in press releases across years shows a significant change between 2002
and 2003, and there were no differences between other subsequent years (Figures 3 and 4). These results could
not be directly compared with the results from the annual report, because the statistics in the annual reports were
based on words as the underlying unit of observation.
Int. Journal of Business Science and Applied Management /
However, studying the actual content of the press releases yielded a difference in themes and highlights, in
line with the results of the consecutive development (Figure 4). The significant dip in 2003 with a low semantic
similarity compared to 2002 can be understood through the sole focus on financial communication in the two
preceding years. While financial communication is aimed for the (financial) market, the language is restricted in
the sense that it has to adhere to the format for financial communication of a listed company. In 2003, an
acquisition and product launch contributed to differentiating the semantic content. Interestingly, there is no dip
in the consecutive semantic development in annual reports (Figure 2). A potential explanation for this is the
differences in content and purpose of annual reports and press releases. Press releases are predominately
financial statements, interim reports or related messages (128 out of 194 in the study) and limited in text aimed
at relevant stakeholders, particularly on the financial market. The annual reports on the other hand allows for
more elaborate descriptions and an opportunity to, in retrospect, prioritise areas to highlight with the exception
of fulfilling legal requirements for the financial reporting. It is aimed at a broader audience. Furthermore, press
releases are bound to show greater variance given that they are more event driven whereas annual reports
provide summaries. The dip in 2007 (i.e. low semantic similarity with 2006), even if not significant, corresponds
with that of the annual report. The consecutive similarities between the years (2007 to 2010) are notable in that
they show an increased number of press releases communicating product and service launches, alliances, co-
operation projects with customers and product awards and personal statements compared to previous years.
5.3 Significant keywords across the years
A further analysis of the semantic content in annual reports was made by identifying significant keywords
of pairwise years. This was done by first making a frequency count of the words in the annual reports and then
comparing these frequencies to words in the corpus used for generating the semantic representation (i.e.
constituting a norm of word frequencies). We selected the 100 most overrepresented words in the annual
reports, by making a chi-square test for each unique word, and where all the selected words were significantly
overrepresented following Bonferroni corrections for multiple comparisons. These 100 keywords were selected
as a set of words to compare text related to one year in relation to another year (see Table 2). This analysis was
carried out using the chi-square test with the Bonferroni correction method just described. Hence, the analysis
was limited to the 100 most overrepresented words, rather than all words in the reports. Table 2 (to be read
horizontally) shows all significant words for 2001 compared to 2010, 2005 compared to 2001 and 2010, and
finally 2010 compared to 2001 and 2005.
Comparing the significant keywords across the years provides a further indication of the semantic
development. From significant keywords of ‘turnover’, ‘investments’, ‘segments’, ‘tonnes’, ‘production’ in
2001, to ‘customer’ entering in 2005, albeit still communicating cost-reduction measures and investments in
production processes through ‘electricity’, ‘wood’, etc. The keywords for 2010, in relation to previous years, are
primarily related to the company’s offering, the market and sustainability positioning, which can be seen as a
result of the strategic change initiated in 2004 and in 2006.
Table 2. Significant keywords of pairwise year and their chi-square test scores with Bonferroni correction
AR 2001
AR 2005
AR 2010
Malin Olander Roese and Sverker Sikström
Summarizing the presentation of results and discussion thereof, the results provided some surprises in
relation to the qualitative findings. One example is the difference between the years 2006 and 2007 (Figure 2).
Where the qualitative study (based on document analysis and interviews) concluded that the revised strategy in
2006 was followed by similar expressions and development of product and service launches and new business
initiatives in 2007, the LSA pointed to an equal emphasis on a continued focus on process efficiency and cost
reductions hence showing less semantic similarity than was first concluded. Moreover, the overall trend of the
semantic development where the semantic distance becomes greater relative to the first year and progressively
closer to the last year is equally interesting from the perspective of strategic change indicating a gradual and
continuous change, or logical incrementalism (Quinn, 1978). This development is further enhanced given the
resulting significant keywords, based not only on frequency but also on the semantic representation of these
words. At the same time, given the inherent meaning of these words (Table 2) equally raises the question of a
more revolutionary change (Hamel, 1996) given the particular industrial setting and strategic change at hand.
Applying LSA to annual reports and press releases, which yielded somewhat different results that required
different levels of analysis (i.e. words and document level), draws the attention to the different nature and
purpose of corporate communication. Comparing the evolving semantic content between the two sources
(Figures 2 and 4) begs the question whether these artefacts of corporate communication, and their semantic
content, communicate change (i.e. are an effect of a strategic change) or if they influence change explicitly
(aimed communication) or implicitly (through communication that might be required legally). Where the
semantic content in annual reports in this particular case could be seen as an effect of strategic change, and a
gradually developing one, the press releases may qualify as a representative of both. As noted in the literature,
both are tools for corporate communication, written in adherence with legal and stock exchange requirements
and/or with the aim to communicate a predetermined message to relevant stakeholders (Fiol, 1995; David,
2001). However, annual reports allow for more elaborate descriptions of important events, prioritised focus
areas and more. Press releases are shorter in form, often event driven for reasons of legal of financial reporting
requirements and/or with the objective to communicate a new product launch or collaboration.
Summarising the presentation and discussion of results, a number of issues are of particular interest in
relation to the aims of the study. Firstly, by quantifying the semantic content of the annual reports and press
releases we have examined and statistically evaluated the semantic development, with several significant results.
Secondly, having used LSA for the first time in this particular setting and study of strategic change we have
demonstrated that it can be a helpful method in further analysing and contrasting qualitative findings in case
study research. It can also serve as a starting point for a longitudinal qualitative study of strategic change,
providing indications of variations to consider on both an aggregated level and in relation to significant
keywords and/or particular time periods.
We conclude that in this particular case the semantic content changed significantly over the time period
covered, expressed through texts, and that an LSA as a quantitative method can be a complementary guide in a
longitudinal qualitative study of strategic change. However, given the limited variation in semantic similarity
scores over the years in annual reports (Figures 1 and 2), albeit statistically significant, indicate that strategic
change may be limited expressed through the semantic content of corporate communication. Further and
comparative research between actors and cases are important for future references.
Discussing the findings one step further, the theoretical implications of this study are related to the field of
strategic management (i.e. strategic change) and case research. Firstly LSA opens up new ways of measuring
strategic change. For example, testing and measuring an organisation’s relative emphasis on market and non-
market oriented cultural artefacts, such as customer-focused language and employee narratives as suggested by
Homburg and Pflesser (2000) could yield novel answers to how strategic change is managed over time. This is
of particular relevance given the traditional ways of measuring strategic change. While the rational and classical
approaches to strategy and strategic change build on efficiency and achievement of objectives of (financial)
profit maximisation, the processual or political approach (see e.g. Dufour & Steane, 2006; Whittington, 1997)
acknowledge pluralistic outcomes (i.e. other than profit max). Through these perspectives, other ways of
measuring strategic change towards for example increased market orientation and innovation can be argued for.
Homburg and Pflesser (2000) argue the importance of cultural artefacts (e.g. customer focused language) as an
important prerequisite for translating new norms for market orientation to actual market oriented behaviours.
Hence, applying LSA in studies of strategic management and change provides new possibilities for identifying
new findings and for operationalising and testing previous qualitative findings as well as provide opportunities
for triangulation and validation in otherwise qualitative case study research. From the perspective of cognition
and learning (Argyris, 1989; Brown et al., 1989), a measure of the semantic development over time may be an
indicator of whether an organisation learns and adopts a new intended strategy and it’s market oriented (or
other) language, or just “learns about it”.
Int. Journal of Business Science and Applied Management /
For practice and management, the findings indicate that the use of LSA can serve as a complementary
quantitative measure to for example financial results to measure the cognitive change (expressed through
language), argued necessary in strategic change. The application of LSA could thus provide a benchmark to
financial reports which does not capture and on-going cognitive change in an organisation. Furthermore, LSA
could serve as a tool to measure the degree of coherence and/or non-coherence between individuals in
management groups and other teams in relation to strategy implementation and innovation through
operationalising the findings by Kellermans et al. (2011) and adding to the findings by Dong (2005) and Yang
Helander (2007).
It should be noted that the study was limited to one case and the type and amount of data found in annual
reports and press releases. This is why continued research using LSA in the areas of strategy and change is
recommended. We welcome similar applications of LSA as the one performed here, as well as studies
encompassing larger amounts of data. Even though our results were largely significant, statistical methods
benefit from more data.
Hence, beyond corporate communication, other written material, interview transcripts and media clips may
be used. The number of actors can naturally also be extended, opening for comparative case studies within and
between industries as well as studies at group and individual levels. One example would be to apply LSA to
management teams similar to studies performed by Dong (2005) and Yang and Helander (2007). A possible
avenue could be to further develop the notions suggested by other authors, such as Kellermans et al. (2011), who
argue that a high degree of strategic consensus in management groups improves strategy
stable environments, with the likelihood of opposite effects in dynamic business environments. In applying LSA
one could measure the semantic similarity between verbal expressions of individual actors (management team
members) in relation to the strategic intent and with regard to the external environment.
Seeing that strategic change taps into the assumption and need for cognitive change, continued use of LSA
would be most interesting to increase the understanding of how, if, why and when change occurs measured
through semantic content of verbal and written, internal and public communication and documentation.
Alvesson, M. & Sköldberg, K. (1994). Tolkning och reflektion - Vetenskapsfilosofi och kvalitativ metod. (First
edn ed.) Studentlitteratur, Lund.
Argyris, C. (1989). Strategy Implementation - An Experience in Learning. Organizational Dynamics, 18(2), 5-
Baden-Fuller, C. & Volberda, H. W. (1997). Strategic Renewal - How Large Complex Organisations Prepare for
the Future. International Studies of Management & Organization, 27(2), 95-120.
Billerud. (2011). Billerud Annual Reports 2001 - 2010.
Reports/ .
Brown, J. C., Collins, A., & Newman, D. (1989). Situated cognition and the culture of learning. Educational
Researcher, 18(1), 32-42.
Bryman, A. (1989). Research methods and Organizations Studies. Reprint 1995. Routledge, London.
David, C. (2001). Mythmaking in annual reports. Journal of Business and Technical Communication, 15(2),
Dobni, C. B. (2010). Achieving synergy between strategy and innovation: The key to value creation.
International Journal of Business Science and Applied Management, 5(1), 48-58.
Dong, A. (2005). The latent semantic approach to studying design team communication. Design Studies, 26(5),
Dufour, Y. & Steane, P. (2006). Competitive paradigms on strategic change: mapping the field and further
research development. Strategic Change, 15(3), 129-144.
Fiol, C. M. (1995). Corporate Communications - Comparing Executives Private and Public Statements.
Academy of Management Journal, 38(2), 522-536.
Foltz, P. W., Kintsch, W., & Landauer, T. K. (1998). The measurement of textual coherence with latent
semantic analysis. Discourse Processes, 25(2-3), 285-307.
Frambach, R. T., Prabhu, J., & Verhallen, T. M. M. (2003). The influence of business strategy on new product
activity: The role of market orientation. International Journal of Research in Marketing, 20(4), 377-397.
Groysberg, B. & Slind, M. (2012). Leadership Is a Conversation. Harvard Business Review, 90(6), 76-84.
Gummesson, E. (2000). Qualitative Methods in Management Research. (Second edn ed.) Thousand Oaks,
California: Sage Publications Inc.
Malin Olander Roese and Sverker Sikström
Györi, G. (2002). Semantic change and cognition. Cognitive Linguistics, 13(2), 123-166.
Hamel, G. (1996). Strategy as revolution. Harvard Business Review, 74(4), 69-82.
Hartelius, E. J. & Browning, L. D. (2008). The application of rhetorical theory in managerial research - A
literature review. Management Communication Quarterly, 22(1), 13-39.
Higgins, J. M. & Mcallaster, C. (2004). If you want strategic change - don't forget to change your cultural
artifacts. Journal of Change Management, 4(1), 63-73.
Homburg, C. & Pflesser, C. (2000). A multiple-layer model of market-oriented organizational culture:
Measurement issues and performance outcomes. Journal of Marketing, 3(4), 449-462.
Jacobs, C. D. & Heracleous, L. (2005). Answers for questions to come: reflective dialogue as an enabler of
strategic innovation. Journal of Organizational Change Management, 18(4), 338-352.
Johnson, G. (1992). Managing Strategic Change - Strategy, Culture and Action. Long Range Planning, 25(1),
Kellermanns, F. W., Walter, J., Floyd, S. W., Lechner, C., & Shaw, J. C. (2011). To agree or not to agree? A
meta-analytical review of strategic consensus and organizational performance. Journal of Business
Research, 64(2), 126-133.
Kim, W. C. & Mauborgne, R. (2005). Blue Ocean Strategy - How to Create Uncontested Market Space and
Make the Competition Irrelevant. Boston: Harvard Business Review Press.
Landauer, T. K. & Dumais, S. T. (1997). A solution to Plato's problem: The latent semantic analysis theory of
acquisition, induction, and representation of knowledge. Psychological Review, 104(2), 211-240.
Landrum, N. E. (2008). A narrative analysis revealing strategic intent and posture. Qualitative Research in
Organizations and Management: An International Journal, 3(2), 127-145.
Mankins, M. C. & Steele, R. (2005). Turning great strategy into great performance. Harvard Business Review,
83(7), 64-72.
Markides, C. (1997). Strategic innovation. Sloan Management Review, 38(3), 9-23.
Marshak, R. J. (2002). Changing the language of change: how new contexts and concepts are challenging the
ways we think and talk about organizational change. Strategic Change, 11(5), 279-286.
Melnyk, S. A., Hanson, J. D., & Calantone, R. J. (2010). Hitting the Target ... but Missing the Point: Resolving
the Paradox of Strategic Transition. Long Range Planning, 43(4), 555-574.
Mintzberg, H. & Quinn, J. B. (1992). The Strategy Process - Concepts and Context. Englewood Cliffs: Prentice
Hall International, Inc.
Normann, R. (2001). Reframing business - When the Map Changes the Landscape. Chichester, John Wiley &
Sons Ltd.
Olander Roese, M. & Olsson, A. (2012). Challenging the strategy paradigm within the paper packaging
industry. International Journal of Business Science and Applied Management, 7(2), 1-12.
Olander-Roese, M. (2008). Towards a new business paradigm - A study of the paper packaging industry. Lund:
Department of Design Sciences, Division of Packaging Logistics, Lund University, Media-Tryck.
Olander-Roese, M. & Olsson, A. (2007). Adapting to changes in the supply chain Challenges to re-defining
the supply chain for increased customer orientation and product innovation within the paper packaging
industry. In R. Lamming (Ed.), 16th annual IPSERA conference.
Patton, M. Q. (2002). Qualitative Research & Evaluation Methods. (3rd ed.) Thousand Oaks: Sage Publications,
Pfeffer, J. & Sutton, R. I. (1999). Knowing "what" to do is not enough: Turning knowledge into action
(Reprinted from The knowing-doing gap: How smart companies turn knowledge into action). California
Management Review, 42(1), 83-108.
Porter, M. E. (1985). Competitive advantage, Creating and Sustaining Superior performance. New York: The
Free Press.
Porter, M. E. (1996). What Is Strategy? Harvard Business Review, 74(6), 61-78.
Prasad, A. & Mir, R. (2002). Digging Deep for Meaning: A Critical Hermeneutic Analysis of CEO letters to
Shareholders in the Oil Industry. The Journal of Business Communication, 39(1), 92-116.
Quinn, J. B. (1978). Strategic Change - Logical Incrementalism. Sloan Management Review, 20(1), 7-21.
Quinn, J. J. (1996). The role of 'good conversation' in strategic control. Journal of Management Studies, 33(3),
Int. Journal of Business Science and Applied Management /
Rogers, P. S., Gunesekera, M., & Yang, M. L. (2011). Language Options for Managing - Dana Corporation's
Philosophy and Policy Document. Journal of Business Communication, 48(3), 256-299.
Rutherford, B. A. (2005). Genre Analysis of Corporate Annual Report Narratives: A Corpus Linguistics-Based
Approach. Journal of Business Communication, 42(4), 349-378.
Simons, R. (1995). Levers of control: how managers use innovative control systems to drive strategic renewal.
Boston: Harvard Business School Press.
Wallemacq, A. & Jacques, J.-M. (2009). Exploring Semantic Fields. International Studies of Management &
Organization, 39(1), 9-33.
Whittington, R. (1997). What is strategy and does it matter. London: International Thomson Business Press.
Yang, X. & Helander, M. G. (2007). Semantic Analysis of Verbal Communication in Cross-functional Design
Team: A Study of Driver Seat Design in an Automotive Company. In 2007 IEEE International Conference
on Industrial Engineering and Engineering Management pp. 1292-1296.