Corporate Communication PDF

INTRODUCTION - chap 1 Management world believes that, in today’s society, the future of any company is strictly related to stakeholders' view of the company itself. Globalization and the corporate/financial crisis have strengthened this belief. → Company’s reputation is one of the most important st...

INTRODUCTION - chap 1 Management world believes that, in today’s society, the future of any company is strictly related to stakeholders' view of the company itself. Globalization and the corporate/financial crisis have strengthened this belief. → Company’s reputation is one of the most important strategic objectives, the core task of corporate communication practitioners. Until the ‘70s, the term “public relations” was used to describe the communication with stakeholders and this function consisted of communication with the press. When internal and external stakeholders started to demand more information, communication appeared as more than just “public relation” → this new function focuses on the organization as a whole and how it presents itself to all its stakeholders. Corporate communication = the word “corporate” stems from the latin word “corpus” (body) and “corporare” (forming into a body): this emphasizes a unified way of looking at internal and external communication disciplines. ↳ perspective of the organization as a single embodied entity when communicating with stakeholders. Corp.comm is a management function that offers a framework of the effective coordination of all internal and external communication with the purpose of establishing and maintaining favorable reputation with stakeholder groups. Or: is the orchestration of all the instruments that creates and maintains a positive reputation for groups with which the organization has an interdependent relationship is a term used to describe a variety of strategic management functions (it includes media relations; corporate branding; image building; advertising) is the body, of communication, that represents the voice of the corporation itself and its different disciplines and fields of practice together to speak in unison Corp.comm. deals with two areas: 1. marketing: ex. sales promotions, advertising, sponsorships 2. public relations: ex. media relations, online communication, event management and has two types of activity: managerial: ex. planning, coordinating, counseling CEOs tactical: ex. producing messages Corp.comm has some key concepts which reflect its characteristics: 1. Mission: overriding purpose in line with the values and expectations of stakeholders. A mission statement is used to explain core purposes, values and culture of an organization ex. nike mission statement: to bring inspiration and innovation to every athlete in the world. 2. Purpose: specifies the organization’s reason for being and the way in which it aims to positively contribute to society.  ex. nike purpose statement: unite the world through sport to create a healthy planet, active communities, and an equal playing field for all. 3. Vision: inspirational view of a general direction that the organization wants to go in, a desired future state (aspiration). ex. nike vision statement: do everything possible to expand human potential 4. Corporate objectives: statement of overall aims in line with the overall purpose (setting more precise goals) 5. Strategy: way or mean in which the corporate objectives are to be achieved and effective, it involves actions linked to objectives. ex. Nike employs a premium pricing strategy, positioning its products as high-quality, exclusive items. 6. Corporate identity: the basic profile the organization wants to protect, profile and values communicated by an organization, way of presenting itself to the public (logos, colors etc) 7. Corporate image: immediate set of associations of an individual (individual perception of an organization) 8. Corporate reputation: collective representation of past images, established overtime 9. Stakeholders: group/individual who can influence or be influenced by the achievement of the organization’s objectives (employees, consumers, community, NGOs…) 10. Market: defined group for whom a product is or may be in demand 11. Communication: tactics and media used to communicate with internal or external groups (newsletter, advertising campaigns…) 12. Integration: act of coordinating all communication to preserve identity to internal or external groups (to ensure it you have to integrate vision and mission) CORPORATE COMMUNICATION DEVELOPMENT Historical development phase 1: industrial revolution - 1930s Modern form of corp. comm. began at least 200 years ago (modernization of society) These years were characterized by industrialization, markets and mass production and consumption → groups of people, which became business activities and complex organizations, realized that they needed professional communication officers and organization form of handling publicity «The development of the publicity man is a clear sign that the facts of modern life do not spontaneously take a shape in which they can be known. They must be given a shape by somebody, and since in the daily routine reporters cannot give a shape to facts, and since there is little disinterested organization of intelligence, the need for some formulation is being met by those interested parties» Walter Lippmann in his book Public Opinion (1922) “the public be damned”: The public wanted to be entertained → press agents, promoters and propagandists started to conduce activity based on publicity, promotions which often were  exaggerated and false, playing on gullible public who wanted to be entertained. Publicity-seeking approach. Muckrakers = investigative journalists who wrote about injustice and corruption. They risked their life by their work but sometimes it brought improvements. → In the new century, muckrakers exposed scandals associated with government corruption, raising public awareness of unethical practices. For this reason large organizations hired writers, publicis and journalists in pursuit of public approval. Economy changed, stabilized and declined, and the organizations hired advertising agents to promote their products phase 2: 1930s - 1980s After an economic reform in the US and in the UK, people realized that there was something wrong in organizations and the mass skepticism towards big business intensified. Professional writers, publicists and advertising agents were brought in house as employees and communication developed as a real discipline (development of professional expertise) → Before 1980s, communication evolved in two separate and distinct disciplines 1. PUBLIC RELATIONS (p.r): deals with the public and its concerns * 2. MARKETING (m): need to effectively bring products to market During the ‘70s, communication was used in a tactical support role for other functions such as finance and marketing and its role was to announce corporate decisions, publicize corporate events or promote services and products. phase 3: 1980s - 2000s The ‘80s saw a powerful restructuring trend in many corporate organizations where every function was assessed based on its accountability and contribution to the organization. ↳ many companies bring different communication disciplines together into more integrated departments, so that they could work most effectively in the best interest of an organization. Fragmentation of communication was often counterproductive and it’s likely to bring into a process of sub-optimization = development of procedures and implementation of coordination mechanisms to coordinate communication. Further driver for integrating communication was the realization that communication could be strategically used to “position” the organization in stakeholders’s minds = if the organization has a favorable reputation, stakeholders want to transact with the organization and choose it over others. From now on communication became used to realize the organization objectives and to built reputational capital with stakeholders upon whom the organization depends From the 2000, the positioning paradigm is gradually evolving into a new era of stakeholders engagement, a process of actively involving them in communication, allowing them to have a say in decision-making, which focuses on: interactivity - transparency - authenticity - advocacy. Without this, stakeholders point out lack of transparency and authenticity and may even organize for action at scale) Integrated communication Both marketing and public relation emerged as separated disciplines → Since the ‘80s, organizations started to bring the two disciplines together under one umbrella now known as corporate communication. Different models of relationship between management and public relation a. Total distinction: until the 80s, the disciplines were different in objectives and activities. In this view, marketing deals with markets and exists to sense/serve/satisfy the customers need at a profit, while public relations deals with the public (except customers and consumers), and produces goodwill with the company’s publics so that they do not interfere in the firm’s profit-making ability. b. “MPR”: Over time, cracks appeared in the first view, and it was recognized that marketing and public relations had some common ground. “Marketing public relations”involves the public relations techniques for marketing purposes (ex. free publicity, branded content, starbucks). If we put aside marketing and public relations, we will notices some similarities (page 23) c. P.R. integrated in M: involves the view of marketing as the dominant, leader function, which subsumes public relations = Integrated Marketing Communications. With IMC, public relations is reduced to activities of product publicity and sponsorship, ignoring its wider remit in communicating with ex. employees. d. M integrated in P.R.: marketing’s role of satisfying customers is seen as only part of a wider public relations effort to satisfy the multiple public and stakeholders of an organization. This is to make sure that the goodwill is maintained. e. Complete integration: marketing and pr merged into one single external communication funcion (start-up) It is very rare in modern organizations to have an E model because organizations still want to keep a separation which is, although, coordinated. B model is the most used. Drivers for integrated communication In most organizations marketing and public relations are still distinct disciplines. However, whilst existing separately, the two disciplines are balanced against each other and managed together from within the overarching management framework of corporate communication. The importance of integrating marketing communications and public relations in this way has resulted from a variety of three factors, so called “drivers”. 1. market and environment-based drivers: the demands of different stakeholders, have forced the organizations to put effort in integrating all their marketing and public  relations efforts = this integration is important when we consider the multiple stakeholder role an individual can assume all at once (employees/customers at the same time), and the potential pitfalls that may occur when conflicting messages are sent out. Internal communication cannot be divorced from external communication and vice versa (transparency) 2. communication-based drivers: Media experts studied that a person is hit on average by 13.000 commercial messages per day. Integrated communication breaks this communication clutter. Through consistent messages an organization is more likely to be remembered: messages in various media can complement one another leading to greater communication.Reinforcing messages you avoid clutter. 3. organizational drivers: one of the main organizational drivers has been the need to become more efficient. Using management more productively = improving communication's productivity. Stand-alone units for different communication disciplines are expensive, in contrast, when disciplines are taken together it may ease coordination and minimize cost → Greater integration increases the accountability of the communication function. A further driver is the realization that various communication disciplines share commonalities in expertise and tools, similar goals, skills and tasks. They could also be dependent on each other. Unifying disciplines can build stronger relationships with stakeholders. CORPORATE COMMUNICATION ORGANIZATION - chap 2 Different perspectives on the relationship between M and P.R. present a different view of how communication in organization is managed and organzìized → evolved from distinct, to complementary to integrated. Corporate communication= management framework to guide and coordinate marketing communication and public relations. public relations functions marketing comm. disciplines Whilst each discipline may be used separately, organizations increasingly view and manage them together from a holistic organizational or corporate perspective with the company's reputation in mind. Bringing the disciplines together permits to share knowledge and skills between practitioners and to see corp.comm as an autonomous and significant function in the organization.  Corp.Com practitioners, have been recently promoted to higher positions in the organization’s hierarchical structure to coordinate communication from a strategic level in order to protect the reputation of the company. Corp.Comm organization - ex. Siemens Figure: different disciplines within the central comm. department, there are specific projects teams for M&A and crisis. Market comm. is part of the corp.com function. strategic role of the corp.com. officer (CCO) → corporate communication director has a role as a key advisor, can have a say in big decisions video: https://www.youtube.com/watch?v=rf6ud_H8oKc authenticity characterize CCO’s voice for stakeholders engagement, risks, importance of being a part of marketing sophistication of the field, external changes, multiplicity of stakeholders, internal changes (top management need corp.com CCO for effective decision making). External and internal changes are difficult to deal with so they need organization: 1. vertical structure: refers to the way in which corp comm tasks and activities are divided and arranged in departments and units. (*) CCO (occupant of the higher position) has the authority to guide and control all the departments and their activities. This high position permits the CCO to have a direct reporting or advisory relationship with the CEO and to even have a seat on the executive board or senior management team. → This structure divides each primary task into smaller ones, each single communication unit is in charge of controlling their own subunits. However this requires coordination and integration of work processes (*). Some departments have more power than others. 2. Horizontal structure: (*) coordination achieved through this structure which ensures that tasks and activities are combined into the basic functions that need to be fulfilled. Allows for cross-functional teamwork and flexibility to manage all specialized units and subunits.  → Important because it enables us to respond fast to emergent issues, provide control and ensure messages are sent out. It may offset the vertical structure’s potential disadvantages. Coordination mechanisms: → Multi-functional teams= important mechanisms of coordination which can include members from different units and subunits to handle situations and to solve specific problems. They can be natural work teams, permanent teams and task force teams. “Agile” teams are flexibly grouped and regrouped. → Standardized work processes are documents which help people, concrete written documents about ways and practises of the organization- → Informal channels permit people to communicate between one another using ex. emails. best informal places to have conversations → council meetings are formal meetings in which people discuss strategic communication issues and evaluate performances. Place where ideas typically bubble up → communication guidelines are common procedures and regulations which help to preserve the identity of the organization, from agreed-on work procedures to design regulations, usually explained in “house-style” books and “global brand book”. Organizing communication isnìt always easy if we consider that practitioners work across time zones, cultures and languages The more you decentralize communication the less effective it will be effective and the more it would cost, but there is no one best organization of CorpComm, it depends on each organization. CASE DISCUSSION Sara Lee/DE case: Sara Lee/DE, headquartered in Utrecht (Netherlands) is a subsidiary of Sara Lee Corporation, and is a global group of branded consumer packaged goods companies. After some M&A the company now includes 2 divisions and around 100 business units operating in more than 40 countries. What are the advantages of decentralized communication in this case? What would you have done differently for the effective organization of corp.com and why? STAKEHOLDER MANAGEMENT & COMMUNICATION Contemporary organizations increasingly realize that they need to communicate with their stakeholders to develop and protect their reputation. Relationship with any type of stakeholders = main purpose of CorpComm theory/practice. Management literature often talks about stakeholder management → we can't manage people but processes and actions. CorpComm literature focuses on communication processes, activities and actions that lead to the establishment of (good) relations with stakeholders video → https://www.youtube.com/watch?v=bIRUaLcvPe8&feature=relmfu&nomobile=1 key ideas: Creating shared various stakeholders theory says you can’t focus only on money and process, stakeholders relationship management improves markets… Evolution of stakeholders thinking 1. neo-classical theory: suggests that the purpose of organization is to make profits, organization considers exclusively their own interests and not stakeholders’s one. Business is the only preoccupation of the company. Input-output model In this model the organization is the center of the economy, where investors, suppliers and employees are depicted as contributing inputs, which the organization transforms into output for customers. In this model the organization has the power and the other parties are dependent on it. Each input is rewarded with an appropriate amount of money. 1. socio-economic theory: suggests that the question of “who counts” extends to other groups besides shareholders who are considered important for business. Organizations are not only responsible for making profits for themselves/shareholders, which are still there, but also include stakeholders in their interests. Accountability extends to groups important for the continuity of the organization and the welfare of society, which now has moral/normative duties, not only economic/instrumental ones. Stakeholders model Stakeholder management assumes that all persons who hold legitimate interest in an organization do so to obtain benefits and there is no priority for one set of interests and benefit over another. All interests are important for the organization. The relationship between organizations and stakeholders is interdependent.  This model suggests that an organization needs to be considered “legitimate” by both market and non-market stakeholders groups. This notion of legitimacy stretches beyond financial accountability, to include accountability for the firm’s performance in social and environmental terms There are instrumental(1) and normative(2) reasons for engaging with stakeholders: 1. point to a connection between stakeholder management and corporate performance 2. appeal to underlying concepts such as individual or group rights, social contracts, morality and so on. This highlights that each group merits consideration for its own sake, but also to generate reputational returns which lead to financial returns. main reasons for the emergence of this model: corporate social responsibility, consumer and environmental activism, scope of governments and international bodies, hostile media (journalist, blogger who exposes illegal business practice), loss of confidence ex. https://www.unglobalcompact.org/ The nature of Stakes and Stakeholders Stakeholder: any group or individual who affects and is affected by the achievement of the organization’s objectives and purposes (Edward Freeman) Stake = an interest or a share in an undertaking, that can range from simply an interest in an undertaking at one extreme, to a legal claim of ownership at the other extreme. Stakes of different individuals and groups are thus varied and may be at odds with one another, putting pressure on the organization to balance stakeholder interests. Freeman offers a classification of all those groups who hold a stake in the organization. Three types of stakes: a. equity stakes: held by those who have direct ownership of the organization. ex. directors b. economic or market stakes: held by those who have economic interest but not an ownership interest. ex. employees c. influencer stakes: held by those who have interest as consumer advocates, trade organizations… (no economic or ownership interests) Classification of stakeholders and types of exchanges Clarkson suggests thinking on primary and secondary groups of stakeholders: Primary stakeholders are important because their participation guarantees the organization surviving, while secondary stakeholders are important because they can influence or can be influenced, bad or good, by the organization (no financial transactions). They are capable of mobilizing public opinion. A second way of viewing stakes is to consider whether stakeholders ties with an organization are established through contracts or not, for this reason 1. Contractual stakeholders are those groups who have a legal form of relationship with the organization for the exchange of goods and services. Customers, employees, distributors, suppliers, shareholders, lenders 2. Community stakeholders involve those groups whose relationship with the organization is non-contractual and more diffuse, although their relationship is nonetheless real in terms of impacts. are all those having legitimate interests without a financial return Consumers, regulators, government, media, local communities, pressure groups.  Types of exchanges, giving & taking from society/stakeholders a. employees: exchanges money (compensation) for their work b. suppliers: exchanges money for their provision of goods or services c. customers and consumers: it exchanges products and services for their money d. investors: exchanges money paid later (dividends) for their monetary investment e. government: it exchanges money (taxes) for its goods, services and regulations Stakeholders communication The stakeholder model suggests that various stakeholders of the organization need to be identified and that they must be addressed according to the stake that they hold, they have to be provided with the type of information they need. ex. customers and prospects need information about products and services. Each stakeholder group looks for and is interested in certain aspects of the company’s operations, so it’s important to give them the information they want in order to build a strong reputation across exchanges with them. ↓ To do so: Mapping stakeholders: managers and communication practitioners start identifying and analyzing the organization’s stakeholders, their influence and interest in the organization. 1. Basic form of stakeholder analysis: answering these questions. 2. Stakeholder salience model Stakeholder are identified and classified based on their salience to the organization, so on how visible or prominent a stakeholder is to an organization based on the stakeholder possessing one or more of three attributes: power, legitimacy, urgency. More salient stakeholders have more priority. Classification  Latent stakeholders, possess only one attribute: 1. Dormant: have power to impose their will but they don't have legitimate relationships or an urgent claim. 2. Discretionary: possess legitimate claim, but no power to influence an organization. 3. Demanding: have urgent claims but neither power nor legitimacy to enforce them. Expectant stakeholders, possess two attributes: 1. Dominant: have both power and legitimacy, which give them a strong influence on the organization. 2. Dangerous: have power and urgent claims, lack legitimacy. 3. Dependent: have urgent, legitimate claims but lack power. Definitive stakeholders have all attributes so they need to be actively communicated with. Once stakeholders are classified, practitioners have an overview of which stakeholder groups need priority and they can develop communication strategies to most appropriately deal with each stakeholder.