Conceptualizing and Organizing Corporate Communication PDF

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This file is to be used only for a purpose specified by Palgrave Macmillan, such as checking proofs, preparing an index, reviewing, endorsing or planning coursework/other institutional needs. You may proof store and print the file and share it with others helping you with the specified purpose, but under no circumstances may the file be distributed or otherwise made accessible to any other third parties without the express prior permission of Palgrave Macmillan. Please contact [email protected] if you have any queries regarding use of the file. Part 1 Conceptualizing and organizing corporate communication 1 Corporate communication as an academic discipline Rossella Gambetti (Italy) 2 Communicative business: the power of corporate communication to manage complexity Edoardo T. Brioschi (Italy) 3 Public relations in international management Otto Lerbinger (US) 4 The organization of the corporate communication function Donald Wright (US) 1 9780230348028_02_cha01.indd 1 29/08/2012 14:50 proof 9780230348028_02_cha01.indd 2 29/08/2012 14:50 This file is to be used only for a purpose specified by Palgrave Macmillan, such as checking proofs, preparing an index, reviewing, endorsing or planning coursework/other institutional needs. You may proof store and print the file and share it with others helping you with the specified purpose, but under no circumstances may the file be distributed or otherwise made accessible to any other third parties without the express prior permission of Palgrave Macmillan. Please contact [email protected] if you have any queries regarding use of the file. Chapter 1 Corporate communication as an academic discipline Rossella Gambetti Contents Learning objectives Learning objectives Having read this chapter you should be able to: INTRODUCTION know some of the main corporate communi- THE US SCHOOL cation approaches used in Western countries Integrated marketing and how they have evolved over time communications grasp the similarities and the differences of the US and the European approach to corpo- THE EUROPEAN SCHOOL rate communication Corporate communication understand the wide scope of corporate THE ITALIAN APPROACH communication as an academic discipline Total business communication comprehend the articulation of the main Chapter summary and conclusions communication activities and tools currently Revision questions included in both the concept and the prac- References tice of corporate communication Further reading Introduction Corporate communication is a recent academic discipline in the theory of the firm as well as an increasingly important management function. It dates back to the second half of the 20th century when it appeared in the US market- ing literature as a marketing-mix variable: promotion and, later, marketing communication. Since then its evolution from both a theoretical and an empirical standpoint has been particularly rich and complex. In this chapter the two main schools of thought relevant to corporate communication will be briefly illustrated: the US school and the European school. These two schools have provided the most significant contribution to both its conceptual autonomy and its establish- ment in the firm as a strategic input capable of affecting company perform- 3 9780230348028_02_cha01.indd 3 29/08/2012 14:50 proof 4 Managing Corporate Communication ances, creating value and guaranteeing companies’ survival in the short and medium–long run. In the frame of the European school, an interesting and pioneering conceptual contribution has been provided by the Italian approach. The US school, which was the first to analyse communication forms in the firm, has been able to catch the innovation potential of communication media and contents evolution over time. The predominant US approach to corporate communication, rooted in marketing theory, has always developed a pragmatic view of communication also stemming from the professional and consultancy field. This approach has been widely recognized as concrete, immediately actionable, and decision-making oriented. But it has also been considered as lacking a comprehensive view as regards the scope of the corpo- rate communication discipline – both as to the definition of its conceptual domain, and organizational role in the firm, and as to the acknowledgement of its potential function as ‘system interconnector’ inside and outside organi- zational boundaries. Within the US school, the predominant and mainly widespread conceptual approach to corporate communication at the international level is integrated marketing communications (IMC). The US school also includes the public rela- tions (PR) approach (Grunig and Hunt, 1984; Ledingham and Bruning, 2000; Grunig, 2001; Grunig, Grunig and Dozier, 2002; Invernizzi, 2005) and its recent conceptual development towards strategic communication (Holtzhausen, 2002; Grunig, 2006; Hallahan et al., 2007; Stroh, 2007; Invernizzi, Gambetti and Romenti, 2009). Moreover, the public relations approach is considera- bly widespread at the international level, especially within the professional communities of communicators, but also in academic contexts. Finally, the US school includes the organizational communication (OC) approach, characterized by a strong theoretical framework, mainly focused on organizational theories and on the ways through which communication builds and shapes organi- zational sense-making and behaviours (Goldhaber, 1993; Shockley-Zalaback, 2009), and acts as a key factor in constituting the ontology of an organization (Putnam and Nicotera, 2009). On the whole, these three approaches to corporate communication fully grasp its complexity and its several expressions. Nevertheless, the lively dialogue among the three approaches is not always easy; indeed, it is some- times mutually critical and controversial. Within the richness and the variety of the US school’s approaches to corpo- rate communication, this chapter will focus on the conceptual principles of IMC, since it is the prevalent and more widespread approach in the interna- tional community. The European school is very rich in conceptual contributions on corporate communication, which are based on a strong theoretical framework rooted in management and business economics theories. Such contributions, although different, have managed to grasp commu- 9780230348028_02_cha01.indd 4 29/08/2012 14:50  proof Corporate communication as an academic discipline 5 nication in its unity and varied articulation, thanks to the development of a systemic approach to its definition and governing issues. This approach has emphasized the strategic role of corporate communica- tion as a structural and pervasive component of the business, as a system inter- connector and relationship vector both within and outside the firm, as well as an element able to bestow unity to the company system, thus contributing to its ability to improve its results and expand the value created over time. The conceptual richness of the European school, on the contrary, seldom produces managerial models based on concrete applications of theoretical principles, thus turning out to be mainly conceptual and speculative. The distinctive characters and the recent evolution of the European school will be also illustrated in this chapter. The US school The US school, in its variety, offers three main approaches to corporate communication, which established themselves in the second half of the last century in the academic and professional US communities, and afterwards, in the international ones: integrated marketing communications (IMC), mainly focused on the communication flows directed to the customer; public rela- tions (PR), mainly focused on the communication flows towards the whole set of company stakeholders, both internal and external; and organizational communication (OC), mainly focused on the communicative exchanges among organizational members and between these and external stakeholders. As has already been stressed, this chapter will concentrate on the explana- tion of the conceptual and evolutionary principles characterizing the IMC approach, since this approach turns out to be prevailing in the international communities of both corporate communication scholars and practitioners. Integrated marketing communications The IMC approach originated in the US in the second half of the 1980s in academic and professional contexts, where – although the need for the inter- related and interdependent management of the different communications activities was recognized (Coulson-Thomas, 1983) – each area of communica- tion was, as a matter of fact, still autonomously managed and had a different organizational locus. This theory developed not only as the evolution of the concept of promotion but also as its replacement. In particular, until the 1970s, marketing communication had almost exclu- sively used three tools: personal selling, the activity carried out by the firm’s sales force towards potential buyers and retailers in order to place the prod- ucts on the market; advertising, a persuasive communication activity aimed at building and enhancing brand awareness and image and increasing product 9780230348028_02_cha01.indd 5 29/08/2012 14:50 proof 6 Managing Corporate Communication sales; sales promotion, an activity made up of occasional incentives aimed at increasing sales in the short run. From the 1970s, the set of communication tools used has expanded in conjunction with the international establishment of the concept of ‘promo- tion’, also called ‘marketing communications’, which consists in (Kernan, Dommermuth and Sommers, 1970, p. 9) any identifiable effort of the supplier to persuade – using the various coordinated communication activities – buyers to accept the information given them and to store it in such a way as to be able to retrieve it easily. This concept suggests a unitary view of marketing communication activi- ties (specifically, advertising, personal selling, sales promotion and publicity). Nevertheless, the concept and the practice of promotion have two substan- tial weaknesses (Brioschi, 1990). First, activities such as public relations (of which just a particular expression was initially taken into consideration, publicity) and sponsorship were not acknowledged and accepted – together with the traditional commercial communication activities like advertising and sales promotion. Second, the communication activities considered were not suitably coordi- nated among themselves and with all the other expressions that concurred in conveying the corporate identity. In the 1980s, but even more in the 1990s, the concept of promotion evolved into the concept of ‘integrated marketing communications’ (Schultz, 1990, emphasis added), that, together with the traditional personal selling, advertising and sales promotion, considered and coordinated new communication activi- ties: product public relations; product sponsorship and direct response advertising. There have been several attempts to define the concept of IMC; the one adopted by the American Academy of Advertising (AAA) is presented here. It was posited in the early 1990s by Don Schultz, professor emeritus at the Northwestern University in Chicago, who was also one of the scholars who founded and first spread the IMC approach in the US. Schultz refers to IMC as the overall effort towards integration and coordination, able to create added value. More specifically, he defines IMC as: ‘a concept of marketing commu- nications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines (for example general advertising, direct response, sales promotion, and public relations) and combines these disciplines to provide clarity, consistency, and maximum communications impact’ (Schultz, 1993, p. 10). It refers to the inte- gration of commercial communication contents and forms, aimed at improv- ing their effectiveness and efficiency. During the 1990s, the idea of and need for integration among the objectives, areas and tools of communication evolved and became widespread due to the contribution of factors such as: the progressive fragmentation of commu- nication media and the connected growing segmentation of the needs and 9780230348028_02_cha01.indd 6 29/08/2012 14:50  proof Corporate communication as an academic discipline 7 preferences of individuals; the diffusion of information and communication technologies that are able to increase the extent and depth of the informa- tion exchange with the audience; and the centrality of the management of relationships between the firm and its audiences – first of all the customer – in order to increase their loyalty and build the brand value over time. The concept of IMC during that decade was characterized by the following aspects (Shimp, 2000): the main purpose of IMC is to influence the behaviour of individuals through communication. The actual and potential customers are the main target group of commu- nication activities. The communication process follows an ‘outside-in’ path, from customers and their needs, to the firm and the brand. The firm needs to use all the forms of communication and all the touch- points with customers in order to engage with them in an interactive communication process. The firm needs to establish a stable and lasting relationship with customers through communication. All communication activities and tools have to be managed in a synergistic and coordinated way, in order to create a clear and distinctive brand image. However, the process of communication integration cannot be immediately and simultaneously carried out by the firm; it usually evolves through four stages (Schultz and Kitchen, 2000): 1 Tactical coordination, aimed at the integration of the promotional-mix activi- ties in order to maximize their synergy and performance. 2 Redefining the scope of marketing communications, which implies the adop- tion of an outside-in perspective in the development of the relationships between the firm and the customer: it starts from the analysis of custom- ers’ informative and relational needs and it is aimed at aligning internal and external communication activities to the audiences’ needs. 3 Application of information technology, which implies a rational use of data and information about customers by the firm, which, thanks to the support of technology, acquires in this stage the awareness of the ability and importance of analysing, understanding and measuring the impact of communication strategies on the target group. In this stage, communica- tion becomes a strategic tool for the achievement of the general objectives of the firm, beyond its mere operational function. 4 Financial and strategic integration, which is the highest level of integration that can be achieved; the strategic approach developed towards communication, leads the firm to systematically carry out the planning and governing proc- esses for any activity and tool used, assessing their return on investment. 9780230348028_02_cha01.indd 7 29/08/2012 14:50 proof 8 Managing Corporate Communication The concept of IMC, at least until the end of 1990s, tended to address the customer as the primary stakeholder of the firm, and, as a consequence, to plan coordination and an integrated management which mainly considered marketing communication activities and tools. In the 2000s, IMC established itself worldwide as the predominant para- digm in corporate communication, especially thanks to Don Schultz’s and Philip Kitchen’s conceptual joint efforts (Kitchen et al., 2004). In the early 2000s, though, the progressive process of globalization that is developing in the markets has contributed to significantly modify the scenario of corporate communication. More specifically, businesses are evolv- ing towards the adoption of a global managerial approach towards commu- nication in which the dimensions of the brand, linked to the delicate balance between internal image and external image, lead firms to consider the impact of their communication initiatives at the ethical and social level (Kitchen and Schultz, 2001, 2003). Indeed, firms increasingly realize that there is a need to balance the plan- ning of their business scope with respect to the delicate trade-off that ties the pursuit of profit, the satisfaction of customers’ expectations and the pursuit of the public interest and social approval of its own conduct. To this end, in the 2000s the IMC approach grows richer by acquiring a new meaning, broadening its sphere of activity so as also to include corporate- level communication. This encompasses the institutional dimensions of the communicative processes aimed at representing the reality of the firm as a corporate brand (Balmer, 2001; Kitchen and Schultz, 2001; Balmer and Greyser, 2003) that acts as a symbolic and value-based superstructure able to transfer the values of the corporate identity to the single product brands, strengthening them. In particular, international phenomena such as the uncertainty and turbu- lence of markets, war, fear of terrorism, increasing attention to ethical and socially responsible behaviours, and the product brand crisis have given emphasis, in the past few years, to the firms’ need to get their internal and external unity back – through a systematic, strategic, managerial and organi- zational re-evaluation. This is done in order to consolidate and convey to the whole set of firms’ stakeholders the principles and values of a clear, transparent, cohesive and shared corporate identity, that allows firms to recover a leading role in the economic and social development of countries (Gambetti, 2005). Unlike traditional marketing communication, typically applying to the customer, corporate communication is thus addressed to a plurality of stakehold- ers (employees and collaborators, shareholders and investors, retailers, suppli- ers, research institutes, public institutions, public opinion, and so on); each of them exerts a considerable impact on the main economic and commercial results of the firm, such as profit, shareholder and customer value, short-term and long-term market share (Schultz and Kitchen, 2004). 9780230348028_02_cha01.indd 8 29/08/2012 14:50  proof Corporate communication as an academic discipline 9 In this way, the macro areas that IMC – in its most comprehensive concept – should manage are the following (Kitchen and Schultz, 2003, p. 66): integrated communication, that is created and related primarily at the corporate level; integrated marketing communication that takes place primarily at the level of the individual brands. The conceptual and managerial principles of IMC have the great merit of having led and inspired – since their first application in the firm – the decision-making processes concerning communication towards the creation of economic value for the firm. Furthermore, IMC afforded a new umbrella term that allowed previous functional specialists to move with the times into communication in its broadest dimensions while at the same time protecting their individual specialties (Schultz, Patti and Kitchen, 2011). Nevertheless, IMC also presents some critical points, which were recognized by some leading international scholars. In particular (Schultz et al., 2011; Cornelissen, 2001, 2003): (1) there is still no widespread agreed definition of IMC, even though the concept is increasingly expanding in emerging markets; (2) no widespread consensus exists on a methodology for measuring and evalu- ating the return on the development and implementation of IMC programmes; (3) there is a limited anchoring of IMC at the very early stages of conceptual development, that is, tactical coordination; (4) IMC has received critical atten- tion and criticism, in that it pertains to the practice of general marketing, and the established marketing concept has also been widely challenged in this last decade. This is ever more so today since marketing tends to be considered a ‘cost centre’ in most organizations and is continuously subject to downsiz- ing, reductions and downright cancellations as companies try to balance their income and outgoings in increasingly difficult economic situations. Moreover, it has been argued that the definitions of IMC converge around the notion of control. Some authors argue that although IMC points out that the role of the corporate communication department is to counsel, mediate, support, and add value to the business unit, not to police them (Gronstedt, 1996), IMC implies a foremost marketing-inspired vision based on inspec- tion and regulation (Christensen et al., 2005), legitimating the organization’s centralized control on all communication activities (Cornelissen, 2001). Schultz, Tannebaum and Lauterborn (1994), for instance, contend that the integration of communications serves to adapt them to consumer perceptions. They argue that while decentralization may be desirable so as to push decision- making close to the customer, the need for integration calls for centralized jurisdiction of communication forms. Christensen, Torp and Firat (2005) posit that, given the uncertainties of today’s society, the ambitions of integration and control implied by the IMC approach are questionable as for their ability to cope with the current growing complexity. 9780230348028_02_cha01.indd 9 29/08/2012 14:50 proof 10 Managing Corporate Communication In spite of recognition of these flaws in the concept and the practice of IMC, it still seems one of the most promising marketing concepts that, if conceived and used in a way that resonates of a true customer-centric perspec- tive that allows the consumer to perform the communication integration to create brand meaning (Finne and Grönroos, 2009), will be able to benefit a fast changing and increasingly complex marketplace (Kliatchko, 2008). In this respect, it has been argued (Schultz et al., 2011) that IMC, with its initial intent on identifying the recipient of the communication activity, has done much to point out the flaws in such traditional, outbound marketing communications and the use of such outmoded tools as AIDA (attention, interest, desire and action) and other hierarchy of effects models such as that proposed by Lavidge and Steiner (1961). Obviously, in an interactive, customer-driven and rapidly evolving marketplace and marketspace (an information- and communication- based electronic exchange environment), new concepts and approaches are urgently needed that prove capable of: 1 Incorporating and putting into practice the central issue of a customer- driven marketplace in which consumers are not just message receivers shaped by brand communications, but active senders and co-constructors of brand meaning and messages (Kliatchko, 2008). This means project- ing and accomplishing a relationship communication, that is, any type of marketing communication aimed at influencing the receiver’s long-term commitment to the sender by facilitating meaning creation through inte- gration with the receiver’s time and situational context (Finne and Grön- roos, 2009, p. 180). 2 Enhancing the perceived value that the brand system of a company (that is, the combination of its product brands, corporate brand, and employer brand) has for the top management, to make them understand that the brand is a strategic corporate asset that needs to be incorporated in the business strategy and to be managed by top corporate executives beyond the marketing functional unit. 3 Responding to the challenges of an integrated combined measurement system for IMC programmes’ synergistic effects not bound to single tools (Schultz et al., 2011). The European school The European school focuses around the concept and the practice of corporate communication, holistically meant as the set of implicit and explicit commu- nication forms carried out by any type of organization in its whole (Cornelis- sen, 2011). Within the European school, the Italian approach has acquired a great importance since the 1970s. A specific section of this chapter will be dedicated to this approach, with 9780230348028_02_cha01.indd 10 29/08/2012 14:50  proof Corporate communication as an academic discipline 11 particular reference to the conceptual principles of total business communica- tion (Brioschi, 2008), which will be analysed in its fundamental characters in the light of the systemic approach to the firm and combined with other significant contributions developed by leading Italian scholars (Fiocca, 1993; Invernizzi, 2000). Corporate communication Corporate communication is primarily an approach, a management philosophy that should be adopted by communication managers in order to favour the align- ment and synergistic action of all communication activities carried out by a firm. This managerial approach was introduced in the late 1970s in the most well-known international consulting firms and spread, during the 1980s, to big corporations, first at the senior management level, then at the level of the communication specialists. In the early 1980s, the corporate communication approach received an unsuitable and restricted interpretation, leading firms to give emphasis only to the arrangement of short-term image campaigns and monolithic corporate identity policies. Then, during the 1980s, consultants and managers gradu- ally focused their attention on the antecedents of the corporate image, inves- tigating the nature of the overall corporate strategy, the components of its deep identity and the environmental context in which it operated. Hence, the emphasis was not on the uniformity of the communication strategy, but on the coordination of the different initiatives needed to carry out a unitary communication policy able to distinctively convey the character of the corpo- rate identity in tune with the value of the corporate culture, and to pursue the alignment with the corporate image among stakeholders (Schultz and Kitchen, 2000). In the 1990s, also thanks to the translation into English of the Dutch professor Cees van Riel’s work (1995), the concept and the practice of corpo- rate communication definitely established themselves at the international level and found further development thanks to the insightful work of Profes- sor Cornelissen (2011). Currently, the use of corporate communication is no longer mainly aimed at developing a positive corporate image among the external audiences, but also involves multiple internal functions and tasks, which define the firm’s identity, mission and basic strategic orientation in order to build and reinforce a positive corporate reputation over time (van Riel and Fombrun, 2007). Van Riel (1995, p. 26) defines corporate communication as: ‘an instrument of management by means of which all consciously used forms of internal and external communication are harmonized as effectively and efficiently as possible, so as to create a favourable basis for relationships with groups upon which the company is dependent.’ 9780230348028_02_cha01.indd 11 29/08/2012 14:50 proof 12 Managing Corporate Communication So corporate communication addresses many audiences at once in an effort to establish and maintain a favourable and coherent corporate reputation across different stakeholder groups (Cornelissen, 2011). The term corporate is used as an adjective referring not to corporation, but rather to organization, concerning both private companies, public companies and non-profit organizations. The term derives from the Latin corpus and thus it refers to an organization in its unity, regardless of its private, public or non- profit nature. The aims of corporate communication are: to develop initiatives that can minimize the mismatch between corporate identity and corporate image, considering the existing interrelationships between strategy–image–identity; to enhance the distinctive characters of the firm, which represents the reference point of the single product brands; to set procedures that make decision-making processes concerning communication easier, and to indicate the responsibilities and tasks of every communication specialist. Therefore, corporate communication presents itself as: a new view of the communication role, both inside the firm and in the inter- relationships between the firm and the environment; a new managerial approach developed towards communication, with an inter- disciplinary and holistic character. Interdisciplinary, since it draws on several sciences, among which are organization, strategy, psychology, soci- ology, marketing, business economics, communication theory. Holistic, in that it informs the whole organization and considers the communicational value of each managerial aspect in the company, conceiving the organiza- tion as a single unit in communication with its stakeholders (Christensen and Cornelissen, 2011). So corporate communication scholars basically conceive it as the inte- grated communication discipline par excellence, claiming to pool all possible communication disciplines and provide an all-encompassing framework for their integration (van Riel, 1995; Nessmann, 1995; Cornelissen, 2011; Chris- tensen and Cornelissen, 2011). Corporate communication includes three communication categories (van Riel, 1995; van Riel and Fombrun, 2007): management communication, organi- zational communication and marketing communication. 1 Management communication is the communication carried out by senior managers towards internal and external stakeholders. ‘Management’ is here conceived as the planning, organizing, coordinating and governing activity carried out by individuals (managers) who supervise other people in order to fulfil their task. Senior – but also middle and junior – managers use communication for these purposes: 9780230348028_02_cha01.indd 12 29/08/2012 14:50  proof Corporate communication as an academic discipline 13 developing a shared view of the firm among the personnel; creating and maintaining loyalty towards corporate leadership; encouraging and managing organizational changes; promoting the personnel’s empowerment and motivation; communicating the corporate vision to the outside environment, in order to obtain the stakeholders’ approval and support. The management, especially the CEO, needs to be able to communicate the corporate vision to the outside environment so as to achieve the exter- nal stakeholders’ support. Therefore, management communication presents itself as the strategic communication activity aimed at correctly conveying the firm’s corporate identity. It refers to the communication of the corporate mission, vision, culture and strategic orientation and it is addressed to internal stakeholders (employees of any level, collaborators, sales agents, and so on) as well as the external ones (all the stakeholders of the firm). 2 Organizational communication is a complex and articulated communication activity that includes a broad spectrum of communication activities: corporate public relations (communication activity addressed to specific audiences such as mass media, influencers, opinion leaders and trend setters, with the aim of establishing positive relationships with them, so as to develop a benevolent and approving attitude towards the firm that results in a positive presentation of the firm in the media or in a positive word-of-mouth); public affairs (communication activity addressed to public institutions on a national, regional and local level, to power elites, and to lobbies, with the aim of establishing positive relationships with these audiences so as to obtain favourable presentations and/or support and facilitations for the development of the firm’s activity); social and environmental communication (communication activity addressed to the overall community with the aim of illustrating the initiatives and commitment of the firm towards the progress of the economic and social wellbeing of the environment in which it oper- ates, with the purpose of obtaining the society’s approval and support on firm’s values and behaviours); investor relations (communication activity addressed to those who bring capital to the firm such as shareholders and credit institutions, stock- brokers, financial analysts and, in general, to the financial-economic community, with the aim of illustrating the ways in which the resources of the firm are used, in order to obtain approval and support from them and to raise capital to let the activity of the firm continue); communication towards the labour market (communication activity addressed to potential employees and trade unions, in order to illustrate 9780230348028_02_cha01.indd 13 29/08/2012 14:50 proof 14 Managing Corporate Communication the managerial philosophy, the managerial abilities and the operational modalities characterizing the firm and its behaviour, with the aim of obtaining trade unions’ cooperation and talent recruiting); institutional advertising (advertising activity aimed at promoting the firm as a whole, beyond its products); internal communication (communication addressed to the personnel at all organizational levels, aimed at spreading and consolidating the char- acters of the corporate culture and identity in order to direct employees’ performances towards the achievement of the firm’s objectives). Heterogeneous forms of communication fall therefore within organi- zational communication. Their common characteristic is that they are addressed to firm’s stakeholders through interdependence relationships. Unlike marketing communication, these communication forms impact the behaviour of influential audiences in a less direct way. 3 Marketing communication is mainly constituted by commercial communi- cation activities, developed in order to support sales. It typically includes: product advertising, direct response advertising, personal selling, product sponsor- ships, sales promotion, product public relations, and, in general, all the tools of the promotional mix. At a general level, it is necessary to point out that such a broad concept of corporate communication, tied more to the British culture than the Ameri- can one, is close to the concept of total business communication, according to which everything in the firm communicates; thus communication is a pervasive element in the whole firm, at every organizational level and in every business unit (Nelli, 1999). This is something new in the Anglo-Saxon world and it distinguishes the corporate communication approach from the IMC one, that, in contrast, tends to consider corporate communication in a more limited meaning – that is, the complex of institutional communication activities of the firm, aimed at communicating to the different stakeholders the reality and the initiatives of the firm as an overall entity. On the other hand, around the end of the 1990s, corporate communication was defined as an emerging concept, which had progressively formed through (Varey, 1997, pp. 59, 68): ‘the convergence around fundamental business proc- esses of several traditionally separated functions … such as public relations, employee communications, personnel, marketing, and quality management.’ Nevertheless, the concept and the practice of corporate communication actually appear quite confusing, for two main reasons. The first is that the distinction between the areas of communication is not clearly apparent. In particular, management communication and organizational communication overlap in terms of audiences (both are actually addressed to internal and external stakeholders) as well as in terms of contents (the communication 9780230348028_02_cha01.indd 14 29/08/2012 14:50  proof Corporate communication as an academic discipline 15 of the corporate identity – vision, culture, strategic orientation – is a task of both management communication and organizational communication in its forms of internal communication, public relations, communication towards the labour market, public affairs). The meaning and role of internal communication within organizational communication appear especially ambiguous, since the contents of manage- ment communication actually seem to recall those of internal communication. The second reason is the relationship between the new all-comprehensive concept of corporate communication and the traditional concept of corporate public relations, which has progressively expanded by acquiring new commu- nication forms and tools (publicity, institutional advertising, public affairs, lobby- ing, issue management, financial public relations, corporate sponsorship). This relationship appears confusing and ambiguous, since there are evident over- laps in contents, audiences and objectives. Some authors claim that the principle of corporate communication conceptu- ally comes from public relations. With regard to this, Oliver and Riley (1996, p. 12) claim that: ‘corporate communication theory is emerging from public relations as practised by industry and commerce.’ Also Kitchen (1997, p. 29) states that: ‘the major theoretical underpinning for corporate communication is … public relations.’ Kitchen (1997), while examining the relationship between corporate communication and public relations, has also incisively contended: the need not to consider the concept of corporate communication as an umbrella-term that just nominally includes the communication activities belonging to the concept of public relations; the awareness that the issues about internal communication have already been widely considered in the field of internal public relations; the need to not just formally but also effectively include marketing commu- nication activities in the concept of corporate communication. The corporate communication approach has anyway the merit of having identified a way of leading all the communication policies that, in the 1990s, were still managed in a fragmented and autonomous way, considering the strategic role that communication carries out while defining and expressing the deep identity and the strategic orientation of the firm. In this last decade, the need to integrate communication initiatives and harmonize the messages conveyed to stakeholders is perceived not only at a managerial level, with reference to a mere operational integration of tools and contents, but also at an organizational level. Namely, it is considered fundamental according to a corporate communication approach, to have the presence in the company of a corporate communication officer (CCO), as a permanent member of the C-Suite (that is, the most senior executives), since 9780230348028_02_cha01.indd 15 29/08/2012 14:50 proof 16 Managing Corporate Communication communication is seen as a strategic management function, and a key factor in the creation and spreading of corporate identity. Moreover, the corporate communication approach has the merit of having highlighted the fundamental role of communication as the ‘bridge’ between the inside and the outside of the organization. Despite the value of the corporate communication approach, it has recently been criticized by some scholars for two main reasons. First of all, corporate communication proposes a strongly sender-biased perspective on communi- cation, downplaying the propensities and requirements of a receiver who is not passive and wishes to participate actively in both the construction and the meaning making of the messages he receives (Christensen et al., 2005; Christensen and Cornelissen, 2011). Namely, consumers and employees likewise creatively co-construct and deconstruct the meanings of corporate messages in ways that are not intended by management (Christensen and Cheney, 2000). Second, corporate communication assumes that it is possible for an organi- zation to oversee and control its own communications as a whole, whereas it is argued that such an all-embracing standpoint is an illusion, since no system can describe or have control over itself in full (Andersen, 2003). Moreover, with its all-inclusive notion of integration, corporate communication is seen as imposing inflexibility onto organizations, hindering their ability to respond to changes in environments marked by turbulence and change (Christensen, Firat and Torp, 2008; Christensen, Firat and Cornelissen, 2009). Finally, corporate communication has been also criticized because its instru- mental value is seen as difficult to identify and evaluate owing to the vague- ness of its jargon (Cornelissen and Lock, 2000). And other authors argued that the corporate communication belief of message regulation and control ignores important developments and insights from organization studies (Christensen et al., 2008). The Italian approach Total business communication The Italian approach to corporate communication is rooted in the theory of the firm and offers its most relevant contribution in the frame of the system approach to corporate governance. The system approach states that the firm is a unitary and open system that acquires and yields resources from/to the environment (Zappa, 1957; Airoldi, Brunetti and Coda, 1989), with the aim of lasting in time in an economic balance condition, developing consonance with its own subsystems and reso- nance with the environmental supersystems it interacts with (Golinelli, 2000). The firm is an autopoietic cognitive system, based on value creation through a 9780230348028_02_cha01.indd 16 29/08/2012 14:50  proof Corporate communication as an academic discipline 17 self-propulsive process of knowledge creation which starts from the knowledge that was previously stored through learning processes (Vicari, 1992a). Therefore, the firm does not present itself as a linear system (input–output pattern) that acquires the factors of production from the outside, processes them and puts them on the market, exchanging them with monetary value. Rather it is a system that is the result of a set of interconnected resources (Penrose, 1959), that survives if it is able to generate resources with more value, storing and recombining the existing ones thanks to the development of management abilities and distinctive competences and to the organization of the resources it moves and controls. According to recent evolutions in resource-based management studies, within the resources moved by the firm, intangible assets (Itami and Roehl, 1987) are those that prove more responsible for its survival in the long term. In particular, the information-based intangible assets governed by the firm can be distinguished in two macro classes (Vicari, 1992a): knowledge, based on already formed and sufficiently stable cognitive patterns that allow the firm to operate; loyalty, based on cognitive patterns of external subjects which are the result of communication processes. The firm’s dynamic capabilities of regenerating its fundamental resources – besides its governing skill on a stock of heterogeneous resources (Wernerfelt, 1984; Barney, 1991) – and establishing relationships among them through exchange and self-generative learning mechanisms (Teece, Pisano and Shuen, 1997) allow the firm to expand its value-potential dimension, that is, its future growth perspectives, related to the increase in its expected income flows (Guatri, 1991). More precisely, the firm’s set of intangible assets explains its competitive skill (competitive differential) and its income potential, related to the distinctive characters of such assets: that is, uniqueness, deep bond with the history of the firm (path dependence), idiosyncratic nature (firm specific), causal ambiguity, social complexity, difficulty of being acquired, copied and substituted (Rumelt, 1984; Grant, 1991; Vicari, 1992b; Peteraf, 1993). In such a scenario, communication is seen as the means by which the firm achieves and maintains its own systemic unity. This happens according to three profiles: 1 In line with the managerial approach called communication view of the firm, introduced in Italy in the 1970s by Edoardo Teodoro Brioschi, professor at Università Cattolica del Sacro Cuore in Milan, in his studies on company practice (Brioschi, 1973). In this view, every element, every aspect, every activity of the firm acquires a precise meaning at the communication level, which conveys the distinctive characters of the firm and in this way 9780230348028_02_cha01.indd 17 29/08/2012 14:50 proof 18 Managing Corporate Communication influences its image so as to enhance the results of the firm. The concept of total business communication, which established itself in the early 1990s (Brioschi, 1990), derives from this perspective. It focuses on corporate iden- tity and the various static and dynamic relationships between this and corporate image, with the aim of pursuing a balance over time. Therefore, total business communication underlines the unity of the firm, the fact that it lasts over time, as well as the subordination of every activity in the pursuit of its general objectives (Nelli, 1994). The evolving dynamics of total business communication in the systemic approach to the firm have recently reinterpreted it in its whole as a system- brand (Brioschi, 2008). It is an innovative systemic concept that is close to the demand of a continually changing market, characterized by stakehold- ers with which the firm needs to create and maintain in the long term not just utilitarian relationships, but also relationships based on symbolic, experiential and affective value, exactly as happens in the relationships between consumer and brand. 2 From the standpoint of the relationship between communication and informa- tion, which sees communication as the intermediary of the information flows that interconnect the firm with the environment, thus becoming a pervasive phenomenon of the company system, since it fulfils the function of stimulating those relationship abilities that allow the system to work and evolve in tune with its own environment. In this sense, the firm can be interpreted as a centre for the acquisition and the spread of signs that – through communication – create essential information for all decision- making processes (Nelli, 1999). Therefore, communication represents a structural component and a unifying element that permeates the whole corporate system. It functions as an element enabling the connection between the firm and the environmen- tal subsystems and supersystems and as a tool for its functioning and its development since it is a constitutive element of all corporate processes (Invernizzi, 2000). 3 From the view according to which communication represents a subsystem within the corporate system, that is, the result of the coordination and integration of the various forms and different activities in which it consists (Brondoni, 1988; Fiocca, 1993). Moreover, communication contributes to spreading and creating economic value in the relationships that tie it to the environment, strengthening the intangible assets it controls (Fiocca, 2001). This is possible both directly and indirectly, since communication: spreads the value created, translating the intrinsic value of the offer into objective, explicit value perceived by the market (indirect way); 9780230348028_02_cha01.indd 18 29/08/2012 14:50  proof Corporate communication as an academic discipline 19 allows the firm to get near to, adjust and satisfy the market, relating the demand’s endless needs to the abilities of differentiation allowed by the offer system (Pilotti and Rullani, 1993) (direct way); expands the firm’s set of intangible assets. In fact, it nurtures both knowledge, transferred and shared through communication flows, and loyalty, settled through communicative flows that improve mutual knowledge and make the exchange conditions transparent, thus reducing the informative asym- metry among the actors and strengthening a mutual positive relationship. Communication acts then as a central element to build knowledge and loyalty resources, acting as a system interconnector and relationships vector inside and outside the firm towards all its stakeholders (indirect way). Due to the open nature of the firm, characterized by increasingly ephem- eral and indefinite boundaries with the environment, a superior coordination, able to manage the complexity of its elements, is therefore necessary. Such a coordination can be obtained through the optimization of the communica- tion flows aimed at integrating the firm and the environment according to a relationship of circularity and mutual influence. The more the environment is characterized by uncertainty and turbulence and the firm presents itself as a complex system, the more important the role of communication becomes for an optimal management of the relationships inside the system. In order to integrate the firm and the environment and to create added value, communication needs to be managed in an integrated way. The funda- mental reasons for integration are (Fiocca, 1993): the role adopted in the environment by communication as a relationship vector towards the outside and system interconnector towards the inside, able to represent the firm as a unified and systemic entity. As a relationship vector, it ties the firm to the environment in which it operates, encouraging its adaptation, interaction, and dialogue. And it is a system interconnector since it is able to reduce confusion, develop creativity, innovation and cohesion among the various functions of the firm around common identity, values and culture, and orient employee behaviours towards shared purposes. Moreover, it is a fundamental element in determining the distinctive abilities, strengths, and ‘know how’ of the firm, since it fosters the elaboration, sedimentation and spread of the developed skills in the organization (Corvi, 2007); the fact that communication expresses and conveys, outside and inside, the deep values of the firm, its history, its culture, its mission and its vision; the high cost of communication that, in order to achieve the desired effects, calls for exploiting synergies and scale economies; the fact that investments in communication follow a logistic path and thus develop effects hoarded over time. 9780230348028_02_cha01.indd 19 29/08/2012 14:50 proof 20 Managing Corporate Communication In an economic and social context characterized by high complexity and rapid change such as the current one, the systemic approach to corporate communication management, which points out the adoption of a communica- tion view of the firm, highlights the fact that every aspect of the firm’s identity and operations has a communicational effect and needs therefore to be ration- ally managed and oriented to corporate objectives. The specific contribution of every aspect of the firm to the delivery of its corporate identity and forma- tion of its corporate image among its audiences (Brioschi, 1990, 1999) needs to be carefully considered. A firm that is managed according to a communication view of the firm is guided by a communication culture: it considers communication as a strategic and permanent factor of production of the firm (Brioschi, 1990, 1999). Strategic because it is both a structural and pervasive element of the strategic orienta- tion of the firm, from which corporate identity (mission, vision, basic values, areas of activity, competitive contexts) originates (Coda, 1988), and because it is able to influence the corporate image and, through this, the firm’s perform- ances. Permanent because the firm that rationally uses communication makes a systematic and not occasional use of it, planned and controlled in its effective- ness and efficiency conditions. The total business communication approach, although rich and articu- lated from a conceptual standpoint, lacks a pragmatic contextualization in the organization, being basically speculative and not immediately actionable into operational managerial guidelines for communication managers (Brioschi and Gambetti, 2010). Moreover, as in the case of corporate communication, the criticalities related to the difficulty an organization has in controlling and integrating all communication forms, as well as the sender-biased communication model, may be also found in the total business communication approach. Chapter summary and conclusions Corporate communication is a relatively recent discipline in the theory of the firm. The conceptual examination concerning its nature and its contribution to business economics dates back to the late 1990s, when communication appears – in a restrictive concept – in the US marketing literature as a variable of the marketing-mix. Since then, its evolution on the theoretical and empiri- cal levels has been extraordinarily rich and complex. Now, in this study the two main schools of thought related to business communication have been analysed. The American school and the European school have significantly contributed to the conceptual autonomy of business communication as an academic discipline and to its establishment as a strategic production factor of the firm, able to contribute to the company’s results, to the creation of value and to the survival of the firm in the medium and long term. 9780230348028_02_cha01.indd 20 29/08/2012 14:50  proof Corporate communication as an academic discipline 21 The American school, which was the first to study the forms of business communication, managed to systematically conceive the innovation poten- tial of the means and the contents that have characterized and still charac- terize the evolution of communication and the interaction modes with its audiences. It has also focused attention on the need to measure communica- tion performances to enable companies to evaluate return on investments of communication efforts. Finally, it has recently highlighted the importance of including customers in corporate decision-making, widening the scope of the communication discipline to develop an inclusive customer-centric view of corporate brand messages. The European school managed to grasp communication in its complexity thanks to the development of a systemic approach to its defining and govern- ing issues. This approach has emphasized the strategic role of communication as a structural and pervasive element of the firm, as a system interconnector and as a factor able to bestow unity to the firm. It has also pointed out that corporate communication acts as a relational vector of the firm, capable of enhancing its social, intellectual and economic capital (Nahapiet and Ghoshal, 1998), nurturing its strategic intangible assets over time. Revision questions 1 What are the main characteristics of the US and the European schools of corporate communication? 2 What are the basic distinctive features of the IMC, the corporate communication and the total business communication approaches? 3 In what aspects are they similar and in what others do they differ? 4 What are their innovative features? And what are their criticalities according to the literature? 5 After reading this chapter, if you were asked to define corporate communication and illustrate its scope and organizational role, what would you say? References Airoldi, G., Brunetti, G. and Coda, V. (1989) brand management’, Journal of General Lezioni di economia aziendale (Bologna: Il Management, 27(1): 1–17. Mulino). Balmer, J.M.T. and Greyser S.A. (eds) (2003) Andersen, N.A. 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