Reputational Threats and Controversial Issues: Comparing Reputation Management Approaches in Three State-Owned Enterprises

Abstract

This study examines how state-owned enterprises (SOEs) manage reputational threats related to morally controversial issues. Analyzing three Norwegian SOEs—Norsk Tipping, Equinor, and Kongsberg Gruppen—over 2002–2023, we identify three distinct reputation management approaches: mitigation, translation, and symbolism. The findings show that the SOEs adopt reputation management approaches aligned with norms of appropriateness. Specifically, they show that Norsk Tipping emphasizes mitigation to address concerns about gambling harms, while Equinor and Kongsberg Gruppen use symbolic and translational approaches to manage broader, evolving controversies related to fossil energy production and defense industry activities. Contrary to expectations, the approaches do not become more complex over time but remain stable and refined. We explain these patterns through the Logic of Appropriateness and discuss implications for reputation management theory and government ownership policy.

1. Introduction

Moral controversies have become increasingly prominent in contemporary governance, placing new reputational pressures on public organizations (Knill, 2013; Bach et al., 2022; Abner et al., 2024). This development reflects broader global trends of heightened attention towards progressive social values relating, for example, to ethics, environmental sustainability, and human rights. These shifts intensify the complexity of the institutional environments in which public organizations operate. While many organizations operate in institutional environments where their existence and activities are broadly taken for granted, organizations working with morally sensitive issues face increased scrutiny from citizens, media, politicians, and civil society (Reast et al., 2013; Vollero et al., 2019). For state-owned enterprises (SOEs), these pressures are particularly complex: they operate at the intersection of state and market, depend on political legitimacy, and must justify their activities in ways that resonate with diverse audiences (MacCarthaigh, 2011; Klausen & Winsvold, 2021; Fleischer et al., 2024; Fossheim, 2025).

Existing research on public-sector reputation has mainly examined regulatory agencies (Bach et al., 2022), universities (Christensen & Gornitzka, 2017), and EU agencies (M. Busuioc & Rimkutė, 2020b), where reputational threats often concern performance, professionalism, or procedural integrity (Wæraas & Byrkjeflot, 2012; Christensen & Lodge, 2018). Less attention has been given to organizations such as SOEs that deal with moral controversy, where legitimacy challenges stem not only from organizational conduct but from the morally sensitive nature of their core activities and the sector in which they operate (Reast et al., 2013; Claes et al., 2024).

Against this backdrop, one may ask how organizations achieve a favorable reputation in sectors encircled by a constant halo of controversy that curbs reputational ambitions. In this paper, we argue that SOEs manage their reputation in somewhat different ways than other public organizations. SOEs dealing with controversial issues have different reputational challenges where reputational threats may arise, but audiences are less likely to make moral judgements about the existence or the activities of the organization. These organizations might therefore engage in different forms of reputation management. To explore the reputation challenges and the ways of managing the reputation of organizations dealing with potentially controversial issues, we study SOEs because these represent a blind spot in the public administration reputation literature, which has mainly been concerned with public agencies and public organizations more generally (Binderkrantz et al., 2024). Therefore, we ask

• How do state-owned enterprises involved in controversial issues manage their reputation? To what extent do the government and the state-owned enterprises vary in their reputation approaches?
• What can explain the features of reputation management of the state-owned enterprises involved in moral controversies?

To answer these questions, we compare three state-owned enterprises in Norway that, in different ways, are and have been considered to operate in morally controversial sectors. The Norwegian setting is particularly interesting as the country has a long-standing, active, and elaborate approach to establishing, owning, and operating SOEs. Furthermore, Norway provides a case of state ownership in a setting characterized by an open, internationally oriented economy, a strong democratic framework, and low levels of distrust and corruption. The organizations studied are the Norwegian gambling company (Norsk Tipping), Kongsberg Gruppen (weapon manufacturing and oil and gas sector), and Equinor (oil and gas sector). The data covers the period of 2002–2023.

This study makes three key contributions to the literature on reputation management and administrative sciences. First, it extends reputation management theory by conceptualizing three distinct approaches—mitigation, translation, and symbolism—specifically in the context of morally controversial sectors. Second, it provides a longitudinal, qualitative analysis of state-owned enterprises, a type of organization that is underexplored in reputation management research, showing how these organizations navigate reputational threats at the intersection of state and market. Third, by applying the Logic of Appropriateness, the study offers a theoretical explanation for why these approaches persist and differ across sectors, thereby advancing understanding of how institutional norms shape organizational responses to controversy. Together, these contributions enrich both the reputation management literature and research on SOEs.

2. Theoretical Framework

2.1. Reputation and Reputation Management

A distinction can be drawn between legitimacy and reputation. Essential components of legitimacy refer to whether an entity adheres to the expectations of a social system’s norms, values, rules, and meanings, while reputation typically refers to the relative standing, quality, or favorableness of an organization in comparison to others (Deephouse & Carter, 2005, p. 331). From this point of view, organizations may well be perceived as legitimate while simultaneously having reputation challenges, e.g., where the raison d’être of a public organization is not questioned, but its reputation may suffer from perceptions that it is overly bureaucratic or inefficient. Such dissonance is challenging, requiring efforts of reputation management as organizations navigate their surroundings.

The reputation of an organization can be understood as “‘a set of beliefs about an organization’s capacities, intentions, history, and mission that is embedded in a network of multiple audiences” (D. Carpenter, 2010, p. 33). A good reputation is a valuable resource for any organization, but often difficult to obtain and maintain, demanding an appropriate balance between different dimensions of reputation (Rimkutė, 2020). For organizations operating in controversial sectors, this set of beliefs is often complex and nuanced as there is potential skepticism from important actors in the organizations’ environment, including the public, regulators, media, and other stakeholders. In short, organizations must navigate through negative perceptions in order to maintain a favorable view among their audiences. D. Carpenter (2010) distinguishes between four different dimensions of reputation, which have been defined slightly differently across the reputation literature: first, the performative aspect, referring to whether an organization is perceived as delivering on its outputs and outcomes; second, the technical aspect, meaning professional capacity and knowledge within the organization; third, the procedural aspect, which concerns whether an organization follows appropriate laws and standards in its due processes; and fourth, moral reputation, whether an organization carries moral values and is viewed as “compassionate, flexible and honest” (D. P. Carpenter & Krause, 2012, p. 27). In their theorizing on reputation management, Busuioc and Lodge expect “an emphasis on procedural appropriateness in the ways of doing things when it comes to activities that might be controversial in moral terms…” (E. M. Busuioc & Lodge, 2016, p. 250). This supposedly occurs, for example, in situations where performative or professional matters can be contested or are difficult to observe. With this approach, actors would stress organizational aspects or conduct that is difficult to contest and in that way seek to change the criteria used for blame and accountability (E. M. Busuioc & Lodge, 2016, p. 250).

We agree with this line of thinking but also believe that this approach only fits some of the aspects that are relevant for organizations dealing with controversy. This is because organizations might also seek to evade disapproval and addressing their controversies altogether (Reuber & Morgan-Thomas, 2019). Evading can mean framing issues and perceptions of the organization in certain ways, as well as constructing language to neutralize controversial connotations of the organization’s activities (Gamson & Modigliani, 1987; Jacoby, 2000). The organization can also admit to the controversy but then attempt to curb the severity or consequences of it.

2.2. Reputation Management and Controversy: Three Approaches

Two streams of research in the reputation management literature are relevant for managing organizations in controversial sectors (Binderkrantz et al., 2024). The first focuses on reputational threat and its impact on organizational practices and is generally seen as a reactive approach. The second sees reputation management as strategic communication (Maor, 2020; Müller & Braun, 2021) and is often viewed as more proactive and occur on an ongoing basis. This study follows the latter approach, where organizations attempt to “guide the crowd” rather than being guided. In the following, we review the relevant literature on reputation management and research on organizational approaches in controversial policy areas to outline three different approaches for managing reputation in organizations dealing with controversy.

2.2.1. Symbolic Reputation

The first reputation approach we identify is a symbolic one (Hatch, 2018; Christensen & Gornitzka, 2017; Christensen et al., 2020). It emphasizes elements of strong symbolic value such as highlighting core values and mission statements that are appropriate at a given point in time or naming the organization in specific ways that are seen as appropriate. The primary purpose is to project an image of social responsibility that resonates with audiences’ values, beliefs, and ideas, thus promulgating the organization’s moral commitments. By employing this approach, the organization seeks to maintain legitimacy and acquire a favorable reputation by directing attention away from its controversial conduct, so-called “double-talk” (Brunsson, 1989). Examples include stressing compliance with human rights and labor standards within the organization or its partners, or signaling commitment to sustainability regardless of its direct relevance to core operations. For state-owned enterprises, symbolic strategies may also involve structural choices, such as placing an SOE under a ministry that is not associated with business, to signal that the enterprise is about health policy or cultural policy.

2.2.2. Translation as Reputation Management

At the core of the translation approach is discourse and framing (Schmidt, 2008; Vaara et al., 2024). When employing this approach, organizations translate their controversial conduct and morally disputed objects into general terms that are viewed as neutral, trendy, or technical jargon. The aim is to transform associations with contested practices into narratives that emphasize less controversial or more socially acceptable aspects (Du & Vieira, 2012; Reuber & Morgan-Thomas, 2019). Rather than conforming to the opposing values and changing their activities, the organization attempts to construct a moral order through language. Common examples include presenting themselves as a “technology company” or “knowledge company,” or emphasizing involvement in “innovation” that “drives the world forward,” thereby diverting attention from contentious elements of their operations.

2.2.3. Mitigation as Reputation Management

The mitigation approach involves openly acknowledging the controversial aspects of an organization’s activities. Rather than directly challenging competing values, the strategy seeks to reduce the perceived severity of these issues. The organization attempts to mitigate the adverse consequences of the specific policy or product it produces by demonstrating responsibility and quality in how it handles the policies or products, resembling a performance approach (D. P. Carpenter & Krause, 2012). While this strategy carries higher risk—since admitting controversy can invite criticism—it also offers significant potential benefits. Acknowledgment can enhance credibility by signaling honesty and trustworthiness (D. P. Carpenter & Krause, 2012). In competitive environments, mitigation can further differentiate an organization from others that remain silent or evasive, positioning it as proactive in addressing sector-specific moral concerns.

2.3. Explanations and Expectations of Reputation Management of Controversy

To explain how state-owned enterprises manage their reputation, we draw on the Logic of Appropriateness (LoA), a core theoretical concept in the public administration literature (March & Olsen, 1989; Christensen & Lægreid, 2021). The LoA posits that actions of organizations are guided primarily by norms and values defining what is considered appropriate for particular roles, organizations, and situations. Decision-making is not based on instrumental cost–benefit calculations, but on what action is seen as legitimate, expected, and morally acceptable in a given context (March & Olsen, 1989). Embedded simultaneously in public and private institutional arenas, state-owned enterprises face multiple normative demands that require them to manage these expectations to preserve their reputation and legitimacy (D. P. Carpenter & Krause, 2012).

In the context of state-owned enterprises and controversy, the Logic of Appropriateness highlights how organizational conduct and responses are shaped by institutional environments consisting of potentially morally controversial issues. SOEs operate within particularly demanding institutional settings, and previous research has demonstrated that normative pressure shape SOEs’ responses, action, and behavior (Zhao & Patten, 2016; Li et al., 2024; Duan et al., 2025). This research also highlights the need to better understand how SOEs respond to institutional environments, in which controversial issues arise and organizational legitimacy is contested. The most relevant norms related to controversy are transparency, accountability, rule compliance, and responsiveness (Van der Wal & Huberts, 2008; Lund-Tønnesen, 2026). The LoA suggests that SOEs adapt their reputational responses predominantly to meet expectations of norms of appropriateness, instead of pursuing instrumental gains. Thus, the reputation management approaches outlined above represent ways to manage reputation in complex institutional environments, such as in the context of controversy. Our overall approach is that regardless of the reputation dimension emphasized, all SOEs will try to interpret what is seen as appropriate behavior, given their specific institutional environment and potentially morally controversial issue.

First, where controversies are close in time and space (e.g., health-related issues), we expect a focus on a mitigation strategy, because this is seen to be more appropriate when the consequences of the organization’s activities are highly visible and felt. Under such conditions, signaling responsibility is viewed as the appropriate course of action, while evasiveness may be seen as violating norms of accountability. When dealing with distant scenarios and consequences (e.g., environmental issues or weapon production), we expect more emphasis on the symbolic and translational dimensions, because these are conditions where it is more appropriate to keep the controversies at arm’s length.

Second, we expect organizational responses to evolve over time. Early in the studied period, institutional environments are likely to be relatively homogeneous, providing clear and stable norms for what constitutes appropriate organizational conduct. As time progresses, these environments become increasingly heterogeneous and complex, exposing organizations to intensified scrutiny from a growing range of actors and accountability forums (Christensen & Gornitzka, 2019; Common, 2025; Lund-Tønnesen & Christensen, 2023; Zyzak & Farsund, 2025). When complexity increases, organizations must address a growing number of issues and audiences, each demanding distinct interpretations of legitimacy and appropriateness. Consequently, we expect reputation management to be more straightforward and coherent in earlier periods and increasingly diverse and differentiated at later stages.

Third, we expect government and enterprise reputation approaches to be broadly aligned, reflecting shared norms of appropriate conduct. At the same time, differences in role expectations and hierarchical accountability under the Logic of Appropriateness (Christensen & Lægreid, 2021) imply that SOEs will emphasize specific events and audiences, resulting in some variation between actors.

3. Materials and Methods

3.1. Case Selection

This study adopts a comparative case study design, which is well suited for exploring how organizations such as SOEs respond to similar types of pressures under different contextual conditions (George & Bennett, 2005; Finchelstein et al., 2022). Accordingly, to examine how state-owned enterprises manage reputational threats in relation to morally controversial issues, we strategically selected three Norwegian SOEs that are involved in distinct forms of modern controversy with varied institutional expectations: Norsk Tipping, Equinor, and Kongsberg Gruppen. The three SOEs were chosen because they operate in sectors where moral concerns are particularly salient, yet the nature of the controversy and the expectations placed upon them differ in important ways. Together, they capture a broad spectrum of reputational challenges faced by contemporary SOEs, from individual-level risks to global ethical debates.

Norsk Tipping was selected because it embodies a long-standing, highly regulated form of moral controversy linked to gambling and risks of addiction (Thompson, 2025). As an SOE established to curb market failures in gambling, the company has faced persistent public scrutiny related to harm prevention, state responsibility, and the ethics of public revenue generation through potentially addictive products. These characteristics make Norsk Tipping an ideal case for exploring how SOEs navigate reputational expectations tied to citizen welfare and norms of responsible service provision.

Equinor represents a different and more globally oriented form of moral controversy. Here, reputational pressure originates from environmental sustainability concerns and changing societal expectations about fossil fuel extraction, climate responsibility, and international ethical conduct. The controversy surrounding Equinor is diffuse, transnational, and dynamic, making it a valuable case for understanding how SOEs manage reputational risks that emerge from long-term global environmental challenges and increasingly heterogeneous audiences.

Kongsberg Gruppen was included because it is situated in the defense and high-technology sectors, where controversies revolve around ethical questions related to weapons production, security policy, and the societal implications of military exports. The organization must navigate reputational threats stemming from moral objections to the defense industry as well as concerns about the legitimacy of state profit derived from potentially harmful products. As such, the case broadens the analysis by introducing a form of controversy rooted not in environmental harm or individual-level risk but in geopolitical ethics and the state’s role in sensitive global industries.

Together, these three organizations enable us to compare how SOEs manage reputational threats across diverse and contemporary forms of moral controversy, each subject to different expectations of appropriateness. The cases therefore constitute a purposeful and analytically rich sample that illuminates the variety of strategies SOEs adopt when navigating reputational challenges in morally contested sectors.

Finally, we restrict our empirical analysis to the period of 2002–2023. This timeframe was chosen because (1) annual corporate reporting practices became more standardized and comparable from the early 2000s onward; (2) the Norwegian government began publishing systematic, annual ownership reports from 2002, enabling a longitudinal analysis of the state’s reputation management role; and (3) the period captures significant developments in each sector, including the rise in sustainability expectations, restructurings within the gambling market, international controversies involving Equinor and Kongsberg, and the broader shift toward transparency and accountability in state ownership policy. This allows for a coherent, 21-year longitudinal examination of how SOEs manage reputational threats in evolving institutional environments.

3.2. Methods and Data

To assess how the SOEs manage their reputation related to controversy as well as how the government contributes to this reputation management, we analyze the key manners in which these actors portray themselves and their activities, as well as how the government portrays them. First, this is performed by the SOEs primarily through their annual reports. Annual reports are excellent documents for analyzing reputation management and have been previously utilized in the literature (see, e.g., M. Busuioc & Rimkutė, 2020a; Rimkutė, 2020). As documents specifically rafted for presentative purposes, they provide insight into how the SOEs are presented to a broad range of audiences, including citizens, activists, regulators, and other stakeholders. Annual reports display identity creation, plans, and activities and provide room for organizations’ discretion for cultivating certain reputation aspects in order to anticipate and manage potential controversy. Unlike interviews or surveys, these sources provide longitudinal, standardized, and publicly available data that reflects official communication strategies over time. This aligns directly with our research questions.

These reports are not only a useful source for managing external reputation, but also for managing the internal reputation logic (M. Busuioc & Rimkutė, 2020a). This is particularly important regarding controversial matters, as an organization’s own members can also contribute to reputational threats from the inside if they speak up and do not believe the organization maintains a moral and ethical standard and is involved in immoral, illegitimate, or illegal practices (Kang et al., 2025). Thus, image building, the use of symbols, the construction of language, and organizational presentation are also important for internal reputation.

Throughout the period of 2002–2023, the scope of the annual reports has expanded drastically, from approximately 50 pages to 300 pages in some cases. This meant that we had to make some assessments about what content is relevant and what to analyze. Our analysis focuses predominantly on the first 15 pages of the reports. This section contains the most relevant information, where the enterprises present their reasoning for existence, their history, future prospects, activities, strategies, goals, visions, and core values. This is the most important information for managing potential controversy. The remaining content is generally quite technical, with operational and financial numbers. We excluded this information from the analysis, although a research assistant read these parts to ensure that we did not miss any important information.

For the government’s reputation approaches to the SOEs, we utilize two main data sources: first, the government’s “ownership report”, which the Norwegian government has published annually since 2002, and second, the white papers on state ownership, which have been published once in every government period since 2002. These include overall strategies of ownership as well as justifications for ownership in specific enterprises. The structures of the government reports and white papers have also changed throughout the period. The assessments of ownership of specific enterprises early in the time period are exclusively in the white papers, but later on, they are more prominent in the ownership reports, although this varies based on enterprise.

In total, we analyzed 116 documents (88 annual reports of SOEs + 28 documents from the government) using the qualitative data analysis software NVivo 14. We coded approximately the first 15 pages of each report. To ensure analytical rigor, we developed a coding scheme grounded in reputation management theory, focusing on the three dimensions elaborated upon above and summarize in

Table 1. Coding scheme.

Dimension	Operationalization
Symbolic	Stress general appropriate conduct, moral commitment
	Sustainability, diversity, inclusion
Translation	Frame controversy in neutral terms
	Emphasis on neutral language, e.g., “technology”, “knowledge”, “innovation
Mitigation	Admit adverse consequences
	Stress quality, responsibility, minimizing adverse consequences

. Coding followed a forced-choice logic, assigning each statement to the most prominent dimension. One of the authors and a research assistant conducted the coding. For intercoder reliability testing, we used Cohen’s kappa, arriving at a score of κ = 0.87, based on 125 randomly assigned statements, which is considered a strong level of agreement between coders (McHugh, 2012). Differences were settled by discussion. In total, we arrived at 1249 statements, with variation from single sentences to long paragraphs. The structure of the reports naturally impacts the number and nature of codes, and not every statement matters equally. Thus, we did not put too much emphasis on the number of codes and focused rather on their qualitative content and the more general messages of the documents. While triangulation through interviews, media analysis, or stakeholder validation was considered, it was not included due to scope and resource constraints. Instead, robustness was strengthened by analyzing a large longitudinal dataset (116 documents over 21 years) and applying systematic coding procedures.

4. Results

Overall, we see clear variations between the state-owned enterprises in their reputation management of potential controversy. Evidently, all three organizations are explicitly concerned with managing controversy and creating autonomy for themselves, but in somewhat different ways. The symbolic approach is the most common one among the three organizations, and unsurprisingly becomes more prominent over time. Apart from this, there is no indication that the reputation management approaches become more complex over time. On the contrary, the reputation approaches are quite consistent and refined over time. The enterprise dealing with the “classical” moral issue of gambling has mitigation as its most common reputation approach. The enterprise with the more “modern” moral challenges of oil/gas and weapon production emphasizes symbolic and translation approaches and engages in constructing neutral language of “knowledge” and “technology” about its activities.

Table 2. Overall reputation management approach by the three state-owned enterprises.

	Norsk Tipping	Equinor	Kongsberg Gruppen
Overall reputation management approach	Mitigation	Symbolic	Translation
Condensed meaning unit	Focuses on responsibility, control, and regulation.	Appears as an energy company instead of just oil/gas. Leader in the green shift.	Translates potentially controversial conduct to neutral ideas such as “technology»” and “innovation.
Representative quotes	“The most important part of Norsk Tipping’s social mission is to prevent negative consequences of gambling by offering attractive and responsible gambling.”	“We are an international energy company that will take a leading role in the green shift and facilitate continued value creation in a climate-neutral future.”	“For us, technology is not just a means for use in product development, but a kind of ‘religion’.”

provides an overview of overall reputation management by SOEs, and

Table 3. Overview of ministry owners, justification of state ownership, and the state’s stated purpose of ownership.

	Norsk Tipping	Equinor	Kongsberg Gruppen
Ministry ownership	Ministry of Culture	Ministry of Oil and Energy (1978–2021) Ministry of Trade, Industry and Fisheries (2022–)	Ministry of Trade, Industry and Fisheries
General ownership justification by the state	Objective of achieving sectoral policy goals in the most sustainable and efficient manner.	Goal of achieving the highest possible return over time while adhering to sustainability guidelines.	Goal of achieving the highest possible return over time while adhering to sustainability guidelines.
State Ownership Shares	100%	67%	50.004%
The state’s stated purpose of ownership (2002)	Moral considerations central to Norwegian gambling laws; state ownership ensures control, transparency, and channels gambling revenues to community benefits.	Ensure development of petroleum and value creation in Norway, and ensure national anchoring of headquarter functions.	Ensure control over a key defense supplier and develop economic values and achieve acceptable returns.
The state’s stated purpose of ownership (2011)	Control Norwegians’ desire to gamble through a responsible service that does not create societal problems.	The state has commercial objectives and wants to ensure national anchoring of headquarter functions.	Develop an important knowledge industry and ensure Norwegian anchoring.
The state’s stated purpose of ownership (2023)	Facilitate responsible gambling, and prevent negative consequences of gambling.	Maintain a leading energy company with headquarters in Norway, and achieve highest possible return within sustainable frameworks.	Maintain a high-tech industrial company with headquarters in Norway to control a strategic defense provider, and achieve highest possible return within sustainable frameworks.

shows the government’s approach to the SOEs.

4.1. Reputation Management by the State-Owned Enterprises

In general, the reputation management approach for the Kongsberg Group seems to be a translation approach, and it appears to be relatively consistent throughout the studied time period. Even though the enterprise is strongly involved in the controversial sector of war/weapon production, in addition to oil and gas, it rarely acknowledges the downsides of this, or the negativity surrounding the sector. The Kongsberg Group strongly emphasizes neutral ideas related to “technology”, “innovation”, and “knowledge” without really mentioning their actual business. One of the most prominent statements from the CEO in 2002 is

“For us, technology is not just a means for use in product development, but a kind of ‘religion’, something we fundamentally believe in and make use of all the time”.

Moreover, we observe some changes in the reputation management approach for Kongsberg over time. The translation approach seems to be relatively consistent; however, the symbolic approach, unsurprisingly, gains much more prominence in the second half of our time period. This is where ideas about, for example, sustainability and climate change appear. To illustrate, in 2023, the company stressed that

As a world-leading technology company KONGSBERG has a duty to promote technology and solutions that strengthen nations’ defense capabilities, reduce emissions, promote sustainable energy sources, and drive digitalization forward.

Overall, throughout 2002–2023, the Kongsberg Group consistently presented itself as a knowledge-based firm that supplies high-technological systems.

Equinor has a different reputation approach compared to Kongsberg Gruppen. In its annual reports, the company presents itself predominantly through simple descriptions of what the organization does and highlights key numbers related to its activities, rather than making any normative evaluations about the companies’ activities. However, there is a change throughout the studied period. The symbolic approach gains much more prominence, where Equinor goes from not conveying anything distinctly negative about oil and gas to becoming more and more concerned with the environment and sustainability. For example, in 2009 they stress that “In the long term we maintain our positive view of gas as an energy source”, whereas in 2020 they accentuate that “We are an international energy company that will take a leading role in the green shift and facilitate continued value creation in a climate-neutral future”. This only partially reflects what the company does as its main business —by far—is petroleum extraction and production, and clearly represents a symbolic approach to managing the environment and maintaining autonomy.

Analyzing the reputation management of Norsk Tipping in 2002, it predominantly makes references to entertainment and symbolic aspects and makes no reference to anything regarding controversy or responsibility for gambling or addiction. This comes about in 2003, after the Parliament votes to give Norsk Tipping exclusive rights to operate slot machine games with the rationale of preventing gambling addiction. Norsk Tipping maintains their mitigation approach after the Parliament decision, and it gains prominence over time. Early on they were concerned with the “balance” between entertainment and responsibility, but the entertainment part disappears, and responsibility, control, and regulation become their focus. Two quotes from their annual reports illustrate this development:

2002:

Norsk Tipping is the country’s leading betting company, with the state as sole owner. The purpose is to create the largest possible profit for socially beneficial purposes. The profit from the games is divided equally between sports and culture.

2020:

The most important part of Norsk Tipping’s social mission is to prevent negative consequences of gambling by offering attractive and responsible gambling, and the company has an ambition to be a world leader in responsible gaming.

Overall, throughout the studied period, Norsk Tipping emphasizes a balance between entertainment and responsibility, where they admit their moral challenges, and then stress how their existence contributes to mitigating the adverse effects of their task and activities.

4.2. Reputation Management by the Government

On the whole, the government is relatively modest in its elaboration on the justification for ownership in the specific enterprises through the statements they have published. One way to interpret this is that the government leaves it up to the organizations to handle any potential controversy. Unsurprisingly, the government does not really acknowledge any moral controversy regarding its ownership of the different SOEs. The reputation approaches also seem to align well with the enterprises’ own approaches, but there are some things to note. Regarding Kongsberg, the government increasingly cultivates the enterprise as a “knowledge company” and describes it as dealing with “high-tech”, in line with the translation approach. Additionally, the government is sincere about the moral challenges of gambling early on in the time period, something that is not reflected in Norsk Tipping’s own reputation approaches at that time.

In addition to the government’s expressed justifications of ownership in specific enterprises, its reputation management also involves other symbolic measures, for example, the name change of Statoil to Equinor in 2018 to remove the oil focus and the strategic placement of Norsk Tipping under the Ministry of Culture. This can be interpreted as symbolic measures to manage the controversies the enterprises might be involved in. However, this is also a matter of performative structural considerations: as Norsk Tipping distributes funding for sports and culture, the enterprise also serves policy aims that belong to particular policy sectors.

5. Discussion

This study shows that the three studied state-owned enterprises involved in controversial issues manage reputation through three distinct approaches: mitigation, translation, and symbolism. The type of reputation approach employed depends on the nature of the controversy, with the SOEs typically adopting one dominant strategy while simultaneously incorporating elements of the other approaches. We use the Logic of Appropriateness as our theoretical lens to explain the approaches by the three organizations (March & Olsen, 1989).

Our findings indicate that the reputation management approaches do not become more complex over time as previous research has found (see Christensen & Gornitzka, 2019). Instead, the approaches remain stable and gradually more refined. From a LoA perspective, this suggest that once norms of appropriateness become institutionalized within an organization’s environment, they provide stable expectations for what constitutes legitimate and acceptable conduct (Pan et al., 2020). Rather than continuously adding new layers of complexity, organizations reinforce and sharpen the reputation management approaches that align with these norms. In this way, reputation management becomes less about adapting to every new demand and more about deepening alignment with the normative frameworks that define what is considered appropriate.

A central finding is that Norsk Tipping, operating in a sector with clear and longstanding moral expectations related to harm reduction, relies heavily on mitigation. The organization consistently acknowledges risks associated with gambling and emphasizes responsible practices as part of its core identity. From a LoA perspective, acknowledging risks and stressing responsible practices is considered appropriate, which explains their consistent use of mitigation strategies. Because the norms governing gambling policy in Norway have been institutionalized over decades (Thompson, 2025), the organization faces a relatively stable environment, where expectations for accountability and transparency are well defined. As a result, the mitigation strategy becomes reinforced rather than replaced, creating a path-dependent pattern of communication.

In contrast, Equinor and Kongsberg Gruppen operate in environments characterized by more contested and rapidly evolving societal expectations. Their reputational challenges, climate responsibility for Equinor and defense-related ethics for Kongsberg, are less settled and involve a wider set of audiences with divergent views. Applying the LoA, the findings suggest that the SOEs in these contexts interpret legitimacy through broader, evolving societal values. Appropriateness here is not about acknowledging specific harms but about signaling alignment with progressive ideals, such as sustainability, technological innovation, and global responsibility, which resonate with diverse audiences (Liang et al., 2015). Equinor increasingly adopts symbolic strategies, aligning itself rhetorically with the green transition and broader environmental values, even while its core operations remain centered on fossil energy. Kongsberg relies primarily on translational strategies, reframing its activities in neutral or technical terms such as “technology” and “innovation,” which allows the company to distance itself from the ethical sensitivities of weapons production. Both approaches enable SOEs to navigate conflicting and complex norms without directly confronting the moral tensions embedded in their sectors.

Consistent with public organizations, generally, reputation approaches depend partly on the organization’s politically defined mandate (Wæraas & Byrkjeflot, 2012). A SOE facing a “classical” moral issue has its mandate closely shaped by government policy and operates with limited market competition, which narrows the range of appropriate reputational responses. As we expected, the government and SOE approaches largely align, and the government remains mostly uninvolved in managing controversy. Viewed through the Logic of Appropriateness, this can be explained by established norms, as it is more appropriate for the SOEs themselves to manage such issues, while the government is expected to remain at arm’s length (Christensen & Lægreid, 2025).

Our findings indicate that SOEs maintain a clear understanding of their societal role and responsibilities, regardless of the reputation approach employed. The pressure from their institutional environment develops over time, with more awareness towards moral issues (Reast et al., 2013; Christensen & Gornitzka, 2019). This means that the organizations face trade-offs when determining what reputation aspects to focus on. This applies to both single-task organizations (Rimkutė, 2020) and those with multiple mandates across markets. Their choices reflect what is seen as appropriate within their socio-cultural environment, given their tasks and role in society (March & Olsen, 1989; Du & Vieira, 2012; Flatøy & Lund-Tønnesen, 2025). Because these approaches tend to persist, shifting an organization’s profile becomes increasingly difficult, which may reinforce elements of corporate hypocrisy (Brunsson, 1989).

Reflecting on our findings overall, reputation management for SOEs is complicated because large and diverse audiences increase the number of potential reputational threats (D. P. Carpenter & Krause, 2012; Pan et al., 2020; Zyzak & Farsund, 2025). This poses challenges for governments as owners, since they risk being drawn into controversies that they would prefer to void. Yet governments often have political and economic incentives to retain ownership, making it difficult to find an appropriate balance of state engagement in controversial sectors. Even when the state is not directly involved in operational decisions, stakeholders may still hold it accountable. Thus, it is not certain that the government avoids reputation and legitimacy loss by, for example, selling its enterprises. Government ownership can legitimize a sector but also serves as a mechanism for ensuring accountability (Klausen & Winsvold, 2021). Compared with private corporations, SOEs are therefore expected to address, rather than evade, accountability concerns (Dragomir et al., 2021). These dynamics suggest both normative and pragmatic reasons for maintaining state ownership, as selling out may not be a viable strategy for blame avoidance. This is further supported by research that has found that political influence on SOEs can lead to higher trust (Krause et al., 2023). Thus, if political involvement can enhance rather than undermine legitimacy, governments may have incentives to engage more actively in reputation management to safeguard autonomy and strengthen the legitimacy of the sectors in which they remain involved.

6. Conclusions

In this study, we investigated the reputation management of three state-owned enterprises involved in controversial matters in Norway. We find that these organizations manage reputation somewhat differently compared to approaches identified and established in the literature (D. Carpenter, 2010; D. P. Carpenter & Krause, 2012; Binderkrantz et al., 2024). These organizations adopt reputation management approaches relating to mitigation, translation, and symbolism in order to manage controversy and maintain legitimacy.

By conceptualizing these three reputation dimensions, we add important analytical contributions to the reputation management literature in public administration, showing a great variety of approaches in the face of reputational threats from multiple audiences (Abner et al., 2024; Binderkrantz et al., 2024). We also provide important empirical contributions to the study of state-owned enterprises, by displaying the dynamics of organizational communication through a longitudinal perspective across different sectors where SOEs operate. Previous studies have predominantly concentrated on financial performance, where quantitative analyses have been employed, and have only utilized qualitative data in their analyses to a small extent (Bozec et al., 2002; Putniņš, 2015; Daiser et al., 2017).

We explain our findings with the Logic of Appropriateness (March & Olsen, 1989; Christensen & Lægreid, 2021), highlighting that SOEs respond to reputational challenges by adhering to norms that define appropriate conduct in their institutional context. In stable environments, this means emphasizing responsibility through mitigation, while in more ambiguous settings, organizations adopt symbolic and translational strategies to demonstrate responsiveness to shifting societal expectations.

The integration of the LoA advances reputation management theory by introducing a framework that can be applied to other controversial policy sectors or issues worldwide. Organizations with no direct state connections can also be expected to embrace these reputation approaches, given that they are dealing with controversy in some way. Beyond the Norwegian democratic context, we can expect the translation approach to also be prevalent in other political cultures, where organizations must cater to, for example, both (semi-) authoritarian governments, as well as multiple shareholders (Pan et al., 2020; Lund-Tønnesen, 2026). Dynamic political settings may require organizations to use more seemingly neutral language about their conduct and activities in order to cater to multiple audiences and allow for different interpretations by these audiences. A symbolic approach can be important for all organizations but might come under pressure when a moral or cultural order changes quickly. The mitigation approach can also involve risk in such settings, as it involves admitting to the controversy. Simultaneously, they may strengthen the reputation and legitimacy among some audiences and weaken it among others (Juráček et al., 2025).

Beyond theoretical contributions, our study has policy implications for governments as owners of SOEs. Governments should recognize that leaving reputation management primarily to SOEs may be appropriate but can also expose the state to reputational risks. Symbolic measures, such as ministry placement, naming strategies, and sustainability commitments, can mitigate these risks and influence public perceptions of controversial issues that SOEs are involved in. Policymakers should thus consider how these symbolic actions complement substantive governance reforms and other reputation approaches to maintain legitimacy.

This study is subject to limitations, which point to several promising directions for future research. In our approach to reputation management, we focused on proactive reputation building (Maor, 2020), whereas others have focused on more reactive management (Müller & Braun, 2021; Bach et al., 2022). Organizations are likely involved in both, and future research should therefore focus more on both aspects in relation to specific controversy-related events. In addition, studies should examine reputation management of SOEs beyond the Norwegian context, including Europe and China, where SOEs are key economic actors (Liang et al., 2015; Pan et al., 2020). Additionally, future research should explore reputation management in other sectors and on other issues with other methods such as interviews and surveys to develop a comprehensive understanding of how organizations deal with controversial issues.