Corporate Communication

An International and Management Perspective

Otto Lerbinger

• Publisher: Wiley-Blackwell
• Year: 2018
• ISBN:
  9781119471158
• Edition: 1
• Topic: Languages & Linguistics
• Subtopic: Communication Studies
• Index: Languages & Linguistics

Provides an international and management perspective on the field of corporate communication

Corporate communication plays an important role in higher-level management to help build and preserve a company's reputation. This intangible yet valuable asset determines the net worth of a company and affects the success of its operations. Corporate Communication: An International and Management Perspective introduces readers to the broad environment of the modern extended organization and provides an understanding of the globalization process. It describes how economic, political, and cultural features of a country affect company decisions and communication and discusses various communication disciplines and practices that are employed in programs and campaigns. This book addresses the key management issues of sustainability and technology and innovation. It also emphasizes the importance of why corporate communication must be seen as a management function and not restricted to a communication process.

Presented in five parts, Corporate Communication offers comprehensive chapters covering: The Domain of Corporate Communication; Strategic Application of Communication Practices; International Perspective; Key Management Issues of Sustainability and Technology; and Corporate Communication Contribution to Management. The foundation of Corporate Communication is public relations but also included is the entire range of communication practices and the contribution to management decision making.

• Conceptualizes corporate communication as a strategic management function which helps management recognize, adjust to, and construct policy related to global issues
• Emphasizes the critical role that corporate communication plays in making corporate decisions and behaviors more socially responsible and sustainable
• Demonstrates how corporate communication draws on public affairs, marketing and social media in its strategic planning
• Emphasizes the critical importance of relationships to corporations and their effect on reputation
• Provides numerous examples of cases of global problems and how corporations have responded to them

Corporate Communicatio n is intended for upper-level undergraduate and graduate students in schools of communication and schools of business and management who want to extend their competence to the global arena and to combine the various communication practices to design strategic programs and campaigns. Course titles include corporate communication, international public relations, corporate public affairs, global marketing communication, global corporate communication, and social media.

Part I
The Extended Enterprise

Corporate communication is the most accepted organizational designation of public relations when used by business organizations, in contrast to the designation by government and nonprofits. The purpose of corporate communication is to strengthen communications between management and its internal and external constituencies. Professionals who conduct corporate communication activities call these constituencies stakeholders, while public relations professionals prefer the traditional term publics. Both terms refer to any group that can affect the welfare of an organization and, in turn, can be affected by it.

The definition of public relations by the Public Relations Society of America's (PRSA) refers to publics: “Public relations is a strategic communication process that builds mutually beneficial relationships between organizations and their publics.”¹ Because of the early association of public relations with public opinion, an organization could go beyond the opinions of the general public and also consider the opinions of discrete groups of people, such as customers, employees, and community citizens, which were called publics.

Companies that refer to stakeholders adopt a stakeholder relations model for running their operations. This model proposes that a company not be run exclusively for the benefit of its stockholders but also to satisfy the needs of other stakeholders. The former is called the classical creed and the latter the managerial creed. The latter is called the stakeholder management approach by James R. Emshoff and R. Edward Freeman of the Wharton School's Applied Research Center. They popularized the term stakeholders and stated that the aim of stakeholder management is to “achieve maximum overall cooperation between the entire system of stakeholder groups and the objectives of the corporation.”² This aim is best satisfied by viewing a company as an extended enterprise.

The Extended Enterprise

A corporation was originally defined as a group of managers and employees organized vertically by the scalar system of different levels of authority – such as president, vice president, and manager – and horizontally by specialized areas of activity, such as treasurer, engineering, human resources, and marketing. Contractual exchanges governed the relations among firm's employees, owners, and others.

A better model for corporate communication is the “extended enterprise.” This approach was used by James E. Post, Lee E. Preston, and Sybille Sachs, who envisioned three zones surrounding a corporation: resources, industry structure, and socio-political setting.³ This book adopts the idea of the extended enterprise but describes each zone differently to suit the needs of corporate communication. As shown in Figure 1, the three zones are as follows:

1. Zone 1: Primary Stakeholders. These have been the focus of public relations. They include investors who provide capital, employees who provide labor, and local communities that provide “land” and accompanying infrastructure. Collectively, they represent the economist's “factors of production.”
   These stakeholders are only partly reflected in a company's formal organization chart and balance sheet, which shows assets, liabilities, and capital (net worth). The organizational chart includes only managers and other employees. The balance sheet excludes employees as an asset even though they are as important as buildings and equipment that are listed.
   The factors of production are paid dividends and interest. Wages, and rents from the revenue flow from consumer. It was Chester Barnard who observed in his classic The Function of the Executive, that customers had not been included as part of a company even though they are essential to an enterprise's success.⁴ Public relations and corporate communication overcome this deficiency by recognizing all stakeholders, including consumers.
2. Zone 2: Socio-Political Environment. This term is used by the Public Affairs Council, a Washington, DC professional society, to define public affairs. Included are government on all levels, advocacy groups, and the general public. The attitudes and actions of these constituents constitute a company's “license to operate.” The sociopolitical environment is especially important for companies that are highly regulated and are targets of advocacy groups.
3. Zone 3: International Arena. This zone is of special importance to global corporate communication and includes other multi-national corporations (MNCs), supranational organizations such as the United Nations, international organizations such as the World Bank and International Monetry Fund, and other nation states.

Figure 1The extended enterprise. Prepared by Joyce Walsh.

Chapters 2 and 3 of Part I discuss the stakeholder groups of Zone 1. The socio-political environment of Zone 2 is the subject of Part II's Chapter 5 on public affairs, and because this book takes an international perspective, the five chapters of Part III discuss Zone 3, the international arena.

Endnotes

1 See PRSA website on “What is Public Relations.” 2 R. Edward Freeman, Strategic Management: A Stakeholder Approach (Boston, MA: Pitman 1984). An excellent introduction to the concept of stakeholders is James R. Eshoff and R. Edward Freeman, “Who's Butting Into Your Business?,” The Wharton Magazine, Vol. 4, Fall 1979, pp. 44–48. 3 James E. Post, Lee E. Preston, and Sybille Sachs, “Managing the Extended Enterprise: The New Stakeholder View,” California Management Review, Vol. 45, No. 1, Fall 2002. 4 Chester Barnard, The Function of the Executive (Cambridge, MA: Harvard University Press, 1938, 1962).

1
Introduction: The Domain of Corporate Communication

Corporate communication relates a company to its stakeholders, its socio-political environment, and society. It manages communications with its internal stakeholders of investors and employees, with its external stakeholders in local communities, and with governments, and society at large. Its overall mission is to improve communications and relationships within a company, enhance its reputation, and achieve harmony with society. It is an essential management function on the same organizational level as finance, human resources, and other top management activities. Its unique competence is an understanding of how business can most effectively interact with other parts of society.

“Corporate public relations” was the original name for “corporate communication.” It was one of three institutional applications of public relations. It dealt with business organization while the other two dealt with government and non-profit organizations. It was important that a public relations professional in each of these sectors of society knew something about the structure of their industry, its challenges, and its problems. Those in the business sector were expected to know how a business operates, what laws and regulations govern it, how cultures among companies differ, and what events and issues affect its operations.

Business embraced public relations as a way to offset the damage to its operations and reputation by the muckracking activities of the news media against corporations. Public relations was a bulwark against growing government power and the aggressiveness of advocacy groups in civil society. The power of public relations to influence what the mass media said and to sway public opinion was attractive to business. Public relations also offered services such as issues management and the publication of social reports. Despite these accomplishments, public relations suffered because it was too closely identified with publicity and “spin” to give it sufficient credence. Many c...