LU 2 - Public Relations Strategic Contribution to other Management Fubctions

Question 1

Discuss what strategy is

Answer 1

What is strategy?

Over a decade ago I L Thompson (1995) defined strategy as a meam to an end when he wrote, ’The ends concern the purposes and objectives of the organization. There is a broad strategy for the whole organization and a competitive strategy for each activity. Functional strategies contribute directly to competitive strategies.’ Bennett described strategy as ’the direction that the organization chooses to follow in order to fulfil its mission’.

However, globalization has changed the face of managerial texts on the subject. Five uses of the word ‘strategy’:

1. A plan as a consciously intended course of action.
2. A ploy as a specific manoeuvre intended to outwit an opponent or competitors.
3. A pattern representing a stream of actions.
4. A position as a means of locating an organization in an environment.
5. A perspective as an integrated way of perceiving the world.

Colin White offered a broad cognitive map by suggesting that three elements are prescriptive, namely strategy as design, planning and positioning, while 11 others describe what actually happens in strategy making. These become strategy as:

• entrepreneurship;
• the reflection of an organized culture or social web;
• a political process;
• a learning process;
• an episodic or transformative process;
• an expression of cognitive psychology;
• consisting in rhetoric or a language game;
• a reactive adaptation to environmental circumstances;
• an expression of ethics or as moral philosophy;
• the systematic application of rationality; and
• the use of simple rules.

White recognizes the central role that communication with stakeholders plays in strategic thinking and operations management. Today’s generid models of strategy highlight four approaches:

1. classical (analyse, plan and command);
2. evolutionary (keeping costs low and options Open);
3. processual (playing by the local rules);
4. systemic.
   These all shadow the history of public relations, from classical through evolutionary and processual to the systemic model espoused in this book and others. These four dimensions include variables of power and culture, which many of the traditional models lacked. Inevitably, this is important in assessing the nature of organizational reality. For example, there would be a different emphasis in an organization driven by its investment stakeholders such as financiers, compared with an organization driven more by the community and local government or customers and suppliers.

The reflective in-house public relations practitioner does this in the normal course of his or her professional control activity and will be aware that:

• major public relations decisions influence organizational aims and objectives over time;
• public relations decisions involve a major commitment of resources;
• public relations decisions involve complex situations at corporate, business unit or other stakeholder levels that may affect or be affected by many parts of the organization; and

•executive public relations decisions are inevitably based on best available intelligence and sound knowledge management at the time and outcomes are transmuted into the longer-term decision-making cycle.

Although it differs from organization to organization, it is common practice for strategy making to take place at three levels, the macro or corporate, the micro or business unit and the individual/team or operational level. In small to medium-sized enterprises (SMEs), the business unit often operates at corporate level, whereas in the public sector, the UK’s National Health Service (NHS) for example, strategic decisions are made from central government downwards, with operational strategies rolled out at local and regional level.

Whatever the structure, processes must be coherent and so communication strategies between various levels have to be consistent. There is often a lack of recognition of strategic decisions being made at different levels so the role of the public relations specialist is to ensure that consistency applies throughout; what UK politician Peter Mandelson referred to as being ’on message’. This did not mean ’common’ or ’the same’, although perception of the phrase was consistently changed by journalists and ministerial rivals to suggest that it did mean that. A basic understanding of managerial systems theory is crucial to all practitioners but, generally, the most pertinent theories used in public relations management can be summarized as follows.
Theories of relationships

• Systems theory, which evaluates relationships and structure as they relate to the whole.
• Situational theory, whereby situations define relationships.
• Approaches to conflict resolution, which include separating people from the problem; focusing on interests, not positions; inventing options for mutual gain; and insisting on objective criteria.

Theories of cognition and behaviour

• Action assembly theory is an aid to understanding behaviour by understanding how people think.
• Social exchange theory aims to predict behaviour of groups and individuals based on perceived rewards and costs.
• Diffusion theory, whereby people adopt an important idea or innovation after going through five discrete steps: awareness, interest, evaluation, trial and adoption.
• Social learning theory, whereby people use information processing to explain and predict behaviour.
• An elaborated likelihood model, which suggests that decision making is influenced through repetition, rewards and credible spokespersons.

Theories of mass communication

• Uses and gratification people are active users of media and select media based on their gratification for them.
• Agenda-setting theory suggests that media content that people read, see and listen to sets the agenda for society’s discussion and interaction.

Probably the most common area of confusion by practitioners in respect of these theories is in the day-to-day management of brand image. Corporate brand image is as important as product brand image. Indeed, marketing uses many of the same channels of communication as those used in classic public relations and often the same media too. Both product branding and corporate image branding are concerned to move audiences from awareness to clearly defined perceptions that are seen to offer competitive or social advantage, but the underlying psychological tools and techniques will be different and subject to stakeholder analysis.

Question 2

Describe how power and influence has an impact on strategic PR

Answer 2

Power and influence

Because of its alignment with corporate strategy, strategic public relations incorporates power control models operating at the macro and micro levels, based around typical symmetrical models.
Most in-house practitioners know from experience that as advisers they rarely make final strategic business decisions or choices. This is usually made by the dominant coalition and thus, although all these factors may influence the choice of a model of strategic public relations, power control theory from organizational behaviour shows that the people who have power in an organization may choose the type of public relations programmes that they do for reasons best known to them. The traditional view of the in~house practitioner having a board appointment in order to better influence board decision making is only sustainable if the practitioner is highly skilled and experienced in environmental busmess management, organizational behaviour and interactive commumcation.

Question 3

Interpret PR and the different organisational cultures

Answer 3

Public relations and organizational culture

Organizational culture is created by the dominant coalition, especially by the founder or CEO of an organization, and public relations managers do not gain influence if their values and ideology differ substantially from that of the organization. Organizational culture is also affected by the large; societal culture and by the environment. It affects public relations in the long term by moulding the world view of the public relations function and thus influences the choice of a model of public relations within an organization; see Figure 1.1.

While such a model identifies many of the variables essential to communication management and control, it also shows that if a culture is essentially hierarchical, authoritarian and reactive, the dominant coalitionwill generally choose an asymmetrical model of public relations. Furthermore, it will choose not to be counselled by the public relations expert who traditionally was often not seen as having enough strategic awareness and therefore was of limited value. Many companies have changed their departmental names from ’public relations’ to ’corporate communication’ to reflect this development. With the future unknown, developmental debates centre on the dominant theoretical models I have identified; see Table 1.1.

Key day-to-day executive skills and technical expertise come together in professional practice to support public relations strategy in-house or outsourced to blue chip management consultancies and public relations agencies. In my eight-factor PR integration model shown in Figure 1.2, professional expertise is organized at micro (in-house relations) and macro (external relations) levels. Integrated communication tools and techniques can be broadly classified into eight strategic areas forming an integrated communication network. These have been defined as having a significanl body of peer-reviewed knowledge underpinning them, based on academiC theory and empirical research.

Question 4

Apply difference corporate communication academic models

Answer 4

Corporate communication academic models

The study of corporate communication is perhaps one of the broadest multidisciplinary and interdisciplinary subjects available in universities today Topics will be studied from:

• politics;
• economics;
• philosophy;
• languages, semiology and semantics; •cultural studies;
• psychology;
• sociology;
• IT and computer studies;
• research methods;
• information studies including library/archival sourcing;
• journalism including technical writing;
• media studies including mass communication;
• advertising;
• marketing;
• business studies including transaction theory;
• management studies including change strategies;
• entrepreneurship;
• human resource management including organizational behaviour;
• civil and industrial law;
• ethics.

Universities still have difficulty in deciding whether to classify and invest in the study of this discipline as a ’media arts’ subject area or a ’business and management’ subject area. Media and creative arts faculty people approach public relations through journalism, film, radio and photography production (for events/ publicity, etc) while business faculty people approach public relations through a management orientation based on planning and control in line with business strategy. Hands-on skills are learnt through workshops, sometimes provided by trainers/visitors, usually through the professional bodies such as the CIPR and IPRA, just as they are on continuous professional development (CPD) courses in accountancy, marketing or If through their relevant bodies. However, the methodological principles for development of public relations as an academic discipline are based on accepted research methods, albeit depending on the purpose of a particular piece of research or analysis, as shown in Table 1.2.

Three main areas of popular academic research continue to be:

1. business and political communication strategy, which includes public or government affairs and corporate reputation;
2. governance and leadership communication strategy, involving em’ ployees, managers, directors and shareholders;
3. integrated marketing communication strategy.

As the three most research-based areas, they best support the public relations profession, both in Europe and the United States, at this stage in its history. The importance of the analytical approach for practitioners cannot be overestimated, given the critical role of monitoring and evaluation of campaign policy and planning in today’s ever-changing multimedia, new technology context.

Question 5

Explain semantics is a PR context

Answer 5

Semantics

A long-standing CIPR definition of public relations is ’the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics’. Here, the definition implies strategic management by the inclusion of the words ’planned’ and ’sustained’, and the use of the word ’publics’ for stakeholders, interested parties and other influential groups. A more recent CIPR approach is to refer to public relations as being ’about reputation -the result of what you do, what you say and what others say about you’, and ’the discipline which looks after reputation with the aim of earning understanding and support, and influencing opinion and behaviour’.

Alternative practitioner definitions nearly always identify a strategic role for public relations when they are heard saying that public relations is the management of all communication within the organization and between the organization and its outside audiences. The purpose is to create better understanding of the organization among its audiences. Circumstances determine which audiences or sub-audiences are most important and need priority attention at any time.

Public relations practice involves management of an organization’s reputation by identifying perceptions that are held of the organization and working to inform all relevant audiences about organizational performance. It is concerned with developing a deserved reputation for an organization, one that is based on solid performance not hollow hype. Reputation will not necessarily be favourable and may only be as favourable as the organization deserves. This becomes increasingly complex in the light of new technologies. Many CIPR members reject the notion of a change of name from ’public relations department’ to ’corporate communication department’ and argue that the impact of the intemet on public relations is simply that it offers new electronic operational tools which don’t alter essential practices. However, given that technology has so changed strategic Operations for all forms of business and organizational communication, and given that human communication is the key measurable variable, the term ’corporate communication’ better represents the theory and practice of this discipline in large organizations.

Underpinning these changes and developments is the convergence of traditional telecommunications industries. ’Time-to-market’ for some communications technology firms often narrowed from 20 years to six months during the 19905. This convergence has led to some of the most lucrative consultancy in the corporate communication profession as industry tried to cope with the rapid rate of change in company and commercial cultures. Thus we see that corporate communication is both divergent and convergent in theory and practice, requiring special, advanced multi-skilling and powers of strategic thinking and operational practice.
While the public relations industry owes a debt of gratitude to the market. ing industry for its development of numerous research tools and techniques, it has led to considerable semantic confusion. For example, one group of marketeers defined public relations as ’building good relations with the company’s various publics by obtaining favourable publicity, building up a good corporate image and handling or heading off unfavourable rumours, stories and events’. Such academic marketeers View pub. lic relations as a mass promotion technique and suggest that the old name for ’marketing public relations’ was merely ’publicity, and ‘seen simply as activities to promote a company or its products by planting news about it in media not paid for by the sponsor’.

Today, recognizing that public relations reaches beyond customers, the Chartered Institute of Marketing (CIM) concurs with the public relations industry that many marketing tactics such as media relations, press relations and product publicity are derived from the public relations industry. From a strategic point of View, this is important in terms of quality assurance. In global companies, a public relations or corporate communication department is never subjugated to the marketing department even though marketing strategy may be linked to corporate business strategy, because it fails to address the holistic links of strategic public relations with overall corporate strategy. Strategy is essentially longer-term planning while bottom line sales tactics, in spite of loyalty schemes, often demand short-term, if not immediate, results. Of course both can influence strategic decision making under changing circumstances.

Strategic public relations is concerned with managing the relationships between an organization and a much wider variety of stakeholders or audiences and range of priorities at any given time. The development of macroeconomics and environmental management studies has put pressure on the public relations industry to focus public relations strategy on the dimension of the enterprise or organization that goes beyond the bottom line of profit and shareholder price to include measures of corporate success based on social accountability. As well as an organization’s role in the economic life of its country and its position in the global or national marketplace, public relations counsel and activities form an important part of an organization’s policy in defining the environmental factors that affect its corporate business activities. These include social stratification. social welfare and national policy, technology, and the political, legal and regulatory processes appropriate to a particular organization or the industry in which it operates. All these factors need understanding of the attitude?

and cultural norms that influence an organization’s reputation and public acceptability.

Question 6

Describe operational strategy

Answer 6

Operational strategy

Public relations is practised in organizations ranging from SMEs to transnational, multinational corporations with budgets bigger than many countries’ governments.

Public relations practitioners communicate with all relevant internal and external publics to develop positive relationships and to create consistency between organizational goals and societal expectations. Public relations practitioners develop, execute and evaluate organizational programmes that promote the exchange of influence and understanding among an organization’s constituent parts and publics.

Classic models of strategic management try to balance the internal and external perspectives by correlating corporate mission with external environmental factors over time. The public relations operations manager must:

• communicate the mission of the company, including broad statements; •develop a company profile that reflects its internal condition and capability;
• assess the company’s external environment, in terms of both competitive and general contextual factors;
• analyse possible options uncovered in the matching of the company profile with the external environment;
• identify desired options uncovered when the set of possibilities is considered in light of the company mission;
• communicate to all prioritized stakeholder groups the long-term objectives and grand strategies needed to achieve the desired options;
• develop annual objectives and short-term strategies that are compatible with the long-term objectives and grand strategies;
• implement strategic choice decisions using budgeted resources by matching tasks, people, structures, technologies and reward systems;
• review and evaluate the success or otherwise of strategic campaign processes to serve as a basis of control and as benchmarks for future decision making;
• incorporate ethical considerations into the decision-making cycle.

lnevitably, crucial factors in such an exercise are relations with the media and identifying the purpose, nature and nurture required of any desired communication, as indicated by Grunig and Hunt’s summary in Table 1.3. Grunig identified half of US companies as using the public information model, 20 per cent using the two-way asymmetric model and only 15 per cent using one or other of the press agency/publicity model or the two way symmetric model. Of course, no one model is mutually exclusive and all four models may be applied within a single programme, not necessarily simultaneously but as appropriate for specific requirements. Grunig and his researchers at the IABC asserted that quality assurance is best achieved through the two-way symmetrical model, which relies heavily on the analysis of feedback.

However, before looking at the role of feedback in best practice, it is necessary to revisit the concept of stakeholder theory and the responsibilities an organization carries in respect of its dealings with different groups, as shown in Table 1.4.

The role of public opinion in the behaviour of organizations continues to increase via the internet and, while the public relations profession has always been aware of its obligations to all stakeholder groups, a global economy is making for increasingly onerous relations. Edward Bernays said in 1923 that ’it is in the creation of a public conscience that the counsel on public relations is destined, I believe, to fulfil its highest usefulness to the society in which we live’. The CIPR today endorses this thinking, over 80 years later, in its code of conduct, as does the IPRA.

It has already been stated that communicating consistently between stakeholders or audiences does not mean communicating the same message. Rather, a fundamental requirement in public relations is to develop a consistent corporate message (and tone) that appropriately reflects the organization in the way that the organization wishes to be reflected, even as events, crises and issues are occurring. At the same time, messages must be capable of being adapted creatively to be understood by the different audiences targeted.

Ind (1997) wrote:

Communication strategies should always start from the need to have specifically and ideally quantifiable communication objectives. The over-arching goal should be to achieve a specific positioning that will transcend the objectives for different audiences. The positioning itself should be derived from analysis.

Ind also suggests that public relations functions are to increase awareness and improve favourability:

Public relations loses out to advertising in its controllability, but it has the advantage over advertising in its ability to communicate more complex messages and in its credibility. The press coverage achieved through media relations activity has the appearance of neutrality. Also the ability to target specific media and audiences is enhanced by the flexibility public relations offers.
This requires that a public relations strategy has to consider the ways that all its activities can be integrated, and the most practical and definitive way currently is to base public relations programmes on audience or stakeholder analysis. Just as it is critical to understand the theory and practice of customer relations in order to sell anything, so it is critical to understand what the different audiences or stakeholders need to know, where they are coming from in response to a message or organization’s reputation, so that the principles of mutual understanding, not necessarily agreement, can be

applied. As Ind says:

a communication(s) strategy can then be evolved which specifies within an overall positioning the communication requirements for each Sp€lelC audience. This should not encourage communication anarchy with messages to shareholders contradicting those to consumers, but relevance. Working from audiences inwards encourages an organization to think of its communication mechanisms appropriately.

Question 7

Differentiate between the four traditional PR modelsk

Answer 7

Characteristic

Model

Press agency/ publicity

Public information

Two-way asymmetric

Two-way symmetric

Purpose

Propaganda

Dissemination of information

Scientific persuasion

Mutual understanding

Nature of communication

One-way; complete truth not essential

One-way; truth important

Two-way; imbalanced effects

Two-way; balanced effects

Communication model

Source -> Receiver

Source -> Receiver

Source Receiver Feedback

Group Group

Nature of research

Little; ’counting house’

Little; readability, readership

Formative; evaluation of attitudes

Formative; evaluation of understanding

Leading historical figures

P T Barnum

Ivv Lee

Edward L Bemays

Grunig et al, educators, professional leaders

Where practised today

Sports; theatre; product promotion; celebrity

Government; non-profit associations; business

Competitive business; PR agencies; consultancies

Regulated business; PR agencies; consultancies

Question 8

Describe the responsibilities an organisation carries to its various stakeholders.

Answer 8

1. Customers

Responsibility:

Economic issues: profitability competitive products survival of the company product quality

Ethical issues: honesty, the best possible products and services, satisfy customer needs

Voluntary issueS: long-term business function development

2. Employees

Responsibility:

Economic issues: work and income

Legal issues: cooperation following the regulations in dismissal situations

Ethical issues: good working conditions stability and security developing possibilities honesty

Voluntary Issues: education
supporting activities and interests

3, Competitors

Responsibility:

Ethical issues: truthful information
fair marketing and pricing practices no use of questionable practices consistency and stability
playing the game by the rules

Voluntary issues: good relations
cooperation in industry-relate issues

4. Owner

Responsibility:

Economic issues: return on assets/investments securing investments maximizing cash flow solvency
profits

Ethical issues: Adequate information

5. Suppliers

Responsibilities:

Economic issues: volumes
profitability

Ethical issues: honesty

Voluntary issues: sustainable and reliable long-term relations

6. Community

Economic issues: taxes
employment

Legal issues: influence on trade balance

Ethical issues: following laws and regulations

Voluntary issues: behaving with integrity supporting local activities

7. Government

Economic lssues: taxes
employment
influence on trade balance

Legal issues: following laws and regulations

Ethical issues: behaving with integrity

Voluntary issues: supporting local activities

8. Financial groups

Economic issues: profitability
security of investment

Ethical issues: adequate information

9. The environment eg pressure groups

Legal issues: compliance with environmental regulations

Ethical issues: environmental friendliness protecting the environment product recycling

voluntary issues: proactive environmental management

10. Old and new media, eg press, TV, web

Legal issues: compliance with the law, eg invasion of privacy in celebrity PR

General issues: compliance with guidelines, codes of conduct and ethics statements

Voluntary issues: internal web pages and chat rooms

Question 9

Explain the feedback cycle

Answer 9

The feedback cycle

Given the close psychological connection between perception and com. munication, critical feedback data will include identifying the cyclical re. sponses to a message from receivers over periods of time. The traditional emphasis on feedback as knowledge and intelligence is as important as ever, but is changing in scale as a result of computer software.

Webster’s definition of ’feedback’ is ’the return to the point of origin, evaluative or corrective action, about an action or a process’. What this means in operational public relations terms is that it is possible to provide computer-tabulated information for managers about a firm’s stakeholder practices and behaviour. Because this information is based on day-to-day perceptions, it is a powerful tool for communication analysis, reflection and adjustment.

Feedback can be derived from two sources: those identified for a generic programme to help corporate communication managers focus on key behaviour of their audiences, and those identified on a custom basis where a number of activities or a particular group of stakeholders for the company are identified. Feedback questionnaires and reports usually cover two areas: frequency and importance. Frequency is the extent to which the corp orate communication manager uses a particular activity as perceived by the group or behaviours being evaluated. Importance is the extent to which the corporate communication manager feels a particular activity, message or behaviour is important. A typical feedback report will cover a section-by section summary giving specific scores for each activity and a listing of the ’top 10’ activities in order of importance with scores for each.

Feedback provides three principal areas of application. First, it can be used in organizational surveys to determine the extent to which a company is following practices that reflect or help to change the organization’s reputation or culture. Secondly, it can be used on a one~to-one counselling basis where the process provides bottom-up or lateral feedback to supplement the top down view usually proposed in dealing with journalists and/or employees, Thirdly, it can be used as a basis for highly focused continuous professional training and development where managers are helped to improve theif communication performance in areas where deficiencies are evidenced.

A typical research plan would always take into account both positive and negative feedback in its research brief, the work plan, data collection: analysis and evaluation. Given that stakeholder groups and subgroup may have cultural differences of language, religion, values and attitudes, aesthetics, education and social organization, feedback and the analytical tools applied to them are a specialist public relations activity.

Question 10

Differentiate between control vs codependency

Answer 10

Control vs co-dependency

Nowhere does the importance of feedback inform the public relations controller more than during a crisis, Where the business continuity plan depends heavily on its quality control during and after a disaster. Taking control while being co-dependent during a crisis taxes the public relations skills of the most experienced practitioner. With the central command role of communication, he or she must manage the crisis centre overall in collaboration with other key personnel responsible for health and safety, HR, marketing and operations, as well as manage any number of media enquiries.

Luftman (2004) examined 245 companies with continuity plans and surveyed 350 business technology managers. Even allowing for multiple responses, he showed the significance of the PR role during a crisis, whichI later developed in my action stations framework. The Luftman data, shown in Figure 1.3, was published in Information Week, with the public relations roles emphasized to include human resources, because there would usually be much internal public relations activity during a crisis.

Question 11

Analyse and apply case study

Answer 11

PGA 22

Question 12

Describe costing communication

Answer 12

Costing communication

The CEO will want to extract value for money and insist on measured justification for public relations expenditure, but a strong, transformational leader will recognize the dangers inherent in not having expert public relations communication input at board meetings. Canadian writer Gareth Morgan (1997) looked at management performance and there is not one of his nine leadership competence modes in which communication does not play a central operational role; see Table 2.1.

It has been reported that on average CEOs spend between 50 and 80 per cent of their working hours on communicating with stakeholders of one sort or another, which suggests that they not only develop strategy but must be seen to operationalize it through the key competency of communication and concomitant public relations, although it is rarely identified; see the first mention in Table 2.2.

A recent example illustrating this point is the case of Sir Fred Goodwin who was a celebrity in the banking industry in Britain, who fell from grace to become what the media called ’the world’s worst banker’. His bank lost £28 billion and is now under state control. The British government Treasury select committee, who met with Sir Fred, heard from other representatives of the investment industry of the problems in the global financial system that have been caused by a critical failure of leadership and corporate governance not the ’masters of the universe’ portrayed by Tom Wolfe in his Bonfire of the Vanities. Whether or not these institutions paid any attention to the internal public relations practitioner’s advice to be more attentive to shareholder concerns, to communicate and act upon those concerns is a moot point. Peter Chambers, head of the investment arm of Legal & General, said at the hearing that ’their campaign to curb the power and modify the strategy of Sir Fred Goodwin at Royal Bank of Scotland came to nothing until it was far too late’. As columnist Anthony Hilton wrote, ’it is precisely when times are difficult as they are currently and the system is severely stretched that rules… and corporate governance come into their own’.

Perhaps the tools of the internet will help Peter Chambers’ mission. Some institutional websites, however, set up and run by in-house public relations departments, only run the good news stories or ones that they want circulated asymmetrically or virally. The leaders of today are going to have to join the blogging revolution to be seen to engage with shareholders, civil servants, media and customers alike, symmetrically. The current generation of young qualified PR practitioners who are au fait with platforms such as Twitter are entering a new era of sophisticated, honest and meaningful public relations. The public relations specialist will investigate and analyse internal and external pressures, diagnose problems confronting the organization, suggest future trends and developments, and propose or counsel prescriptions for future action and, in the case of crisis management, remedial action; together, these activities are generally referred to as ’environmental scanning’. To analyse the pressures and problems confronting the employing organization or company, it is understood that a number of proactive public relations

processes are needed. These include using a variety of methods for collating public relations data such as:

0 electronic sources such as CD-ROM library indexes and other organizational sources and external reference materials;

0 different interpretations of the public relations problem that incorp

orate perceptions of target audiences, including the media;

the extent to which it is possible to define and predict future trends;

the contribution of managers and employees as a resource in meeting

the public relations campaign or corporate communication objectives.

Van Riel’s model shown in Figure 2.1 gives the strategic public relations director a focus for choosing a particular type of communication policy, by analysing the firm’s corporate strategy in relation to the similarity or otherwise of the driving forces affecting the firm’s mission, the amount or nature of control exercised by the board directors and the scale of environmental pressure on the organization. The communication policy is then derived from measures of endorsement, uniformity and variety.

Question 13

Explain how organisations move from function to strategy

Answer 13

There are a number of wealmesses in this model, or at least potential in misunderstanding. While the model shows the essential elements of the strategy process, it is not linear, starting at the establishment of a mission and ending with implementation. As all competent public relations practitioners know, these processes must run in parallel and with consideration of resources and the practicalities of implementation. Johnson and Scholes attempt to discuss the process of managing strategically through human resources and make the reader more aware of the tactical requirements necessary for the strategy process to be effective. They include a model of stakeholder mapping to characterize stakeholders in terms of their level of power and interest in any outcome. This approach suggests that, although mission statements articulate organizational objectives and these objectives are usually derived from economic managerial or social responsibility considerations, stakeholders have expectations that may not always be met. These expectations relate to the performance of the organization as well as being influenced by the external cultural context in which the organization is operating. Stakeholders have different degrees of power to determine the objectives of an organization and various levels of interest in exercising that power, and so stakeholder objectives affect the development of future organizational strategies. Business re-engineering in the 1980’s challenged firms to think more deeply about process. The systems approach to management is not just a process of analysis and reductionism but one of linking things together the process of synthesis. In the 19905, Johnson and Scholes produced a model for analysing organizational culture which, they argued, was essential if synthesis were to occur. They referred to the interplay of various factors in organizational culture as the cultural web or the mindset of an organization that is to say, the way it sees itself and its environment. In Figure 2.4, they suggest formal and informal ways that organizational systems work through important relationships (structure); core groupings (power); measurement and reward systems (control); behavioural norms (stories); training (rituals); language and livery (symbols); and process and expected competencies (routine). There can only be synthesis if communication is performed to a high standard in linking together these strategic areas for competitive advantage.
On a more philosophical note, it is worth considering here how these factors make up a paradigm, as the organizational paradigm lies at the heart of any public relations strategy. It describes a set of preconceptions that underlie people’s way of looking at the world in general, not just an organization. It comprises a set of assumptions that people rarely question. From time to time a paradigm is shaken up and a paradigm shift takes place. In such an event, textbooks have to be rewritten as it involves the rethinking of basic assumptions underlying people’s perceptions. Paradigm shifts, that is, fundamental changes in the ruling paradigm, are rarely dramatic in business and management, although electronic communications and global technology are accelerating change pertaining to the ruling paradigm of strategic public relations theory and practice.

Electronic systems and processes, particularly in respect of media re~ lations, are working on an underlying set of assumptions and beliefs that are changing and undergoing a revolutionary paradigm shift as a result of the cultural implications of globalization. At such times, organizations impose tighter controls. For instance, there are few organizations where managers are allowed to differ openly from or criticize the official line on strategy and policy, yet this may lie at the heart of the public relations expert counsel. Adherence to the accepted way of running an organization and the markets within which an organization is operating may not be openly criticized, and internal communication will attempt to reflect and reinforce the official line, through the company newsletter, for example.

Question 14

Apply the stakeholder mapping matrix to characterize stakeholders in terms of power and interest

Answer 14

Figure 2.3 on page 32

Question 15

Analyse the cognitive dissonance and how to cope with conflict

Answer 15

Cognitive dissonance: coping with conflict

Stacey’s approach to strategy takes conflicts inherent in any organizational processes resting on cultural differences and change, and provides a model of ordinary and extraordinary management. Modern models of strategy formulation stress the instability of the relationship between an organization and its environment because time and dynamics never stand still. In any organization there is a perceived need to maintain stability and harmony while making sure that the organization can change in order to survive. This contradiction is expressed by Stacey as ordinary management on the one hand and extraordinary management on the other. These are useful concepts to critically appraise the role of public relations in corporate strategy. They reflect the fundamental philosophy of public relations in that the overall corporate message must be consistent (ordinary management) while monitoring changes in stakeholder perceptions that could impact on corporate objectives (extraordinary management) and which in turn lead to changes in the message.

The challenge for strategic public relations is to accept widely that, for efficient Operation at any given time, it is necessary for an organization to have a clear sense of purpose and unity, but also a parallel culture in which it is possible to raise safely a variety of viewpoints to challenge complacency and ensure survival. Clinical psychology tells us that it is important that cognitive feedback loops operate in a positive manner so that perception and communication can be updated and clarified where appropriate. This is the basis of the symmetrical models promoted by Grunig.
Public relations choices are made on the basis of rational criteria, but this is only possible when there is agreement on what the business is all about and What kind of environment it has to cope with. Stacey argues that managers only Operate within bounded rationality. The complexities of modern organizations mean that they have to adopt a pragmatic approach to decision making and accept that they cannot conceptualize or accommodate all possibilities. Bureaucratic procedures help to simplify the manager ’5 task, providing rules and procedures for tackling many decisions. Ahierarchical management structure ensures that difficult decisions can be made within the context of the prevailing ideology the official line of the ruling coalition.

Question 16

Debate the differences between ordinary and extraordinary pr management and the importance thereof

Answer 16

Ordinary PR management

Ordinary management is necessary to ensure that targets can be met and that the organization survives through rational processes. It presupposes a stable environment and can only be practised in contained change situ~ ations. It is not a negative concept given that it must be practised if an organization is to be able to control and deliver competitive advantage. It also implies that public relations, however, is conducted on the basis of asymmetrical communication in which the organization ’ gets what it wants without changing its behaviour or without compromising’ (Grunig and White, 1992).

The asymmetric nature of public relations means that the organization will find it difficult to adapt to a changing environment because it does not recognize that communication with the outside, as well as with its own employees, must be a two-way process. Stacey’s (1993: 72) definition of extraordinary management states that it is ’the use of intuitive, political, group learning modes of decision-making and self-organizing forms of control in open-ended change situations. It is the form of management that managers must use if they are to change strategic direction and innovate’.

Extraordinary PR management

Despite the potential dangers for organizations remaining exclusively dedicated to ordinary management, a closer look at what is involved in extraordinary management will explain British reticence. Extraordinary management involves questioning and shattering paradigms and then creating new ones. It is a process that depends critically on contradiction and tension. The changing of paradigms is a revolutionary rather than an evolutionary process and cannot be intended by the organization. Stacey argues that both forms of management have to coexist if the organization is to evolve and survive a changing environment. An organization needs to provide a stable basis for meeting its short-term objectives and targets while at the same time providing a basis for transforming itself in the future to respond to changes in the environment.

Some organizations fail to recognize the need to allow for extraordinary management and instead rely on radical changes of CEOs, chief executives, consultants and other outside change agents who have little understanding of the nature of the problems within the organization. This is where the public relations consultant has to be particularly aware and cautious of the conflicting demands that may be put upon service provision. Many practitioners argue that they do what they’re asked, no more no less, within the brief and the fee. In that they are professionally pragmatic. However, that approach may not be conducive to being consciously aware of where a particular service provision fits into the overall scheme of things. When monitoring and evaluating the wider environment, important elements are dependent on perception of how change in one area can impact on other areas or overall.

The implications of ordinary management for public relations are familiar through relationships with major stakeholders:

• Shareholders - the annual report is a regular calendar project. For most shareholders asymmetrical communication of results will tend to apply, whereas with major institutional shareholders self-interest will dictate a degree of symmetrical communication, and a genuine desire to listen to their concerns will be essential and generally implemented.
• Customers - the marketing and sales departments will tend to dominate in this aspect of the public relations role but, increasingly, symmetrical communication is being recognized as essential to obtain competitive advantage through ’relationship marketing’. A long-term two-way re lationship may be established with customers to allow for feedback into marketing strategy. Grant and Schlesinger (1995) developed the concept of ’value exchange’ in which a company optimizes the relationship between the financial investment a company makes in particular customer relationships and the return that customers generate by the Specific way they choose to respond to the company’s offering. For this careful attention to the behaviour of customers is essential.
• Employees - the ruling coalition within the organization can of course use a wide range of channels to communicate with employees to achieve the aim or harmony, fit or convergence to a particular configuration and to ensure that they share the same mental models or paradigms. Posters that repeat the published mission statement, memos, messages contained in the actions of management relating to discipline suggestions and so on all contribute to an overall strategic process.

Implications of ordinary and extraordinary management

The implications of extraordinary management for public relations are significant. The need for extraordinary management in order for the organization to survive and flourish in an unstable environment has been emphasized, but control of the extraordinary process has to be achieved by informal organization of its activities. As the formal organization exists to protect the paradigm, the status quo, managers who wish to change the paradigm have to operate within an informal organization in informal groups that they organize themselves. These groups can cope with uncertainty and ambiguity -anathema to the formal bureaucracy and tap into each other’s perceptions of what is going on in the organization. According to Stacey, these groups are essentially political in nature. People handle conflicting interests through persuasion and negotiation, implicit bargaining of one person’s contribution or interests for another’s, and power exerted by means of influence rather than authority. This informal system has been referred to as ’the network system’ and often lies at the heart of public relations expertise. It can coexist with hierarchy and bureaucracy, but must be encouraged by the actions of the bureaucracy and supported by top management.

When organizations manage successfully to combine ordinary with extraordinary management to create an innovative culture while maintaining stability, a sound public relations strategy plays a core role in sustaining the iirm’s corporate strategy. Both support competitive advantage while ensuring the capability to ward off hostile competition, pressure groups and the media.

Extraordinary management may lead to groups within the organization attempting to undermine the control of the organization and, ultimately, the ability of the organization to adapt requires that subversive activity takes place without control being lost. Decisions are not made by organizations as such, but rather by dominant coalitions within organizations, and these coalitions are not likely to be defined clearly in the official organization chart. White and Dozier (1992) argue that dominant coalitions still need information to help them make decisions. This is frequently provided by ‘boundary spanners’ individuals within the organization who frequently interact with the organization’s environment and relay information to the dominant coalition.

Question 17

Explain the CEO as a cultural icon

Answer 17

The CEO as cultural icon

The strategic challenge for most organizations today is adapting their structures, processes and cultures to achieve sound relationships built 0n long-term mutual advantage through the integration of internal and external communication. The principles and communication processes 0f public relations contribute to all cultural aspects of an organization, with the CEO as the figurehead or cultural icon, becoming a representative and leader of the organization’s culture by his or her management style, Gruni were really discussing management style when they advocated symmetrical communication as best practice and, in today’s language, the management style can often drive the corporate brand. As Ind writes:

A corporate brand is more than just the outward manifestation of an organization, its name, logo, visual presentation. Rather it is the core of values that defines it… Communications must be based on substance. If they are not, inconsistency creeps in and confusion follows shortly thereafter… What defines the corporation in comparison with the brand is the degree of complexity. It is larger, more diverse and has several audiences that it must interact with. The corporate brand must be able to meet the needs of the often competing claims of its stakeholders. To achieve that it must have clarity of vision, of values and of leadership.

The critical role of communication in operationalizing corporate mission and translating it into reality, and the importance of vision in the achieve ment of corporate objectives, are based on perception as a measurable variable of reality. Strategic planning models relate to public relations planning through open systems theory and general management tools such as hard line (not necessarily bottom line) value-added concepts. Many public relations professionals will argue that this is not new. Such factors have always existed as benchmarks for justifying their intangible but critical contribution. The difference today is that IT capability produces a variety of identifiable factors that can be seen to be part of an organization’s intellectual capital, if not essential to its survival on occasions.

The public relations expert acts as specialist counsel to a corporate boardroom and his or her technical input is fundamental to management in sourcing, analysing, assessing, managing and tracking information and translating that information for the benefit of the corporate whole. Through flexibility and change, organizations today have to be lifelong learning organizations. They must encourage effective symmetrical communication to such an extent that external audiences such as the media and dominant political coalitions can occasionally influence or even drive strategy from time to time without destabilizing it. An organization making policy in response to public criticism alone may prove to have revealed weak management based on poor strategic planning.

Question 18

Describe performance assessment for PR strategy

Answer 18

Performance assessment

Public relations strategy, like any other variable in corporate planning
must be able to identify measurable performance indicators. The eight-factor assessment shown in Figure 2.5 is a checklist, with each variable having its own tools and techniques in the shortand longer-term operating schedules.

In monitoring and measuring performance, in-house or consultant public relations professxonals act as boundary spanners by translating meaning from and about the organization in relation to the environment. They will counsel the CEO and top management about the organization’s implicit assumptions. White and Dozier (1992) describe the case of a logging company, which might View trees as a crop to be harvested rather than a natural resource to be cherished. Indeed, the logging company’s traditional worldview is embedded in its language as, for example, when it refers to ’timber strands’, a term implying that trees are there to be’ harvested like ’strands’ of corn. During a symmetrical communication process, conflict between an organization and environmental pressure groups can be forestalled if public relations professionals fulfil their role as boundary spanners by ensuring that there is a two-way exchange of information or perception between the organization, the groups involved and the wider, often medialed environment.

In another example, from local government, the dominant and ruling leftwin g coalition within a UK local authority might have a world view that saw the town for which they are responsible as consisting of needy people with rights to subsidy and support. A different, say right-wing, group might view the situation as one consisting of local council taxpayers being burdened with payments and challenge money going to needy people who may be exempt from paying council tax. In this latter case, the public relations task would be to increase awareness and modify the unidimensional view of the dominant coalition while simultaneously communicating the needs of the poor to the ratepayers within the community without loss of coherence.

Question 19

Explain strategic alliance

Answer 19

Strategic alliances

Managing the public relations activity surrounding the outcomes of strategic alliances has become an important financial option for organizations. They involve relationships between organizations that fall short of merger but may go as far as mutual equity stakes, each organization owning a minority of shares in the other. On the other hand, they may involve no more than limited cooperation and consultation between otherwise bitter rivals, but either way the financial press will take a close interest. These alliances do not just involve very large organizations. No organization, whatever its size, can any longer hope to acquire all the skills and competencies necessary for operating in a global environment and it must therefore attempt to fill the gaps by working with other companies in partnership. The types of alliances that can arise are licences, joint ventures, franchising, private label agreements, buyer/seller arrangements or the forging of common standards and consortia. A prerequisite for a successful alliance is that there must be a clear purpose and objective for the arrangement and the process must be managed according to schedule and without loss of control. The role of the public relations strategist will be to ensure that media coverage does not lead to the organizations involved losing control of their own destinies.

It would be interesting to see how long the strategic alliance approach lasts. For example, there are already claims that Japanese companies rarely commit their best scientists and engineers to projects sponsored by the Ministry of International Trade and Industry (MITI), while IBM set up a special facility in Japan where Fujitsu could test its new mainframe software before considering a licensing agreement. This provided some protection against loss of technological know-how through an alliance. Brouthers (1995) outlines a set of guidelines to be considered, namely complementary skills, cooperative cultures, compatible goals and commensurate levels of risk -what he calls the Four Cs of successful international strategic alliances, as shown in the multinational giant Philips’ alliance network and current joint ventures (2006); see Figure 2.8.

Strategy in its classical sense is a competitive model that aims to enhance the value of an organization to its shareholders. An organization chooses between strategic options, which may include mergers and divestments. Public relations strategists may be involved in merger acquisitions to increase shareholder value, merger acquisitions’ decision-making processes, postmerger implementations and corporate divestment programmes. Once an organization becomes too unwieldy from a communication perspective, it will need to segment its image and identity. Philips has 10 key joint ventures and participations and has segmented them into three key activity sectors.

The trend for sustainability, if not a reversal of the movement towards growth, has led to the break-up of some corporations with the intention of releasing shareholder value. In a turbulent environment, organizations have to include in their range of strategic options a consideration of unexpected as well as planned research and development. This is often seen as a cost rather than an investment in the UK and, as with public relations programmes, there are disagreements about the extent to which expenditure should be subjected to vigorous cost-benefit analysis. Given the emphasis on producing downsized companies and outsourcing many essential functions, including public relations, issues about innovation and the virtual company, Chesborough and Teece (1996) assert, are on the increase in many companies.