Corporate communication

Corporate communication is the message issued by a corporate organization, body, or institute to its publics. "Publics" can be both internal (employees, stakeholders, i.e. share and stock holders) and external (agencies, channel partners, media, government, industry bodies and institutes, educational and general public).

An organization must communicate the same message to all its stakeholders, to transmit coherence, credibility and ethic. If any of these essentials is missing, the whole organization may fail. Corporate Communications help organizations explain their mission, combine its many visions and values into a cohesive message to stakeholders.

According to the book Essentials of Corporate Communication[1] by Cees van Riel and Charles Fombrun the term Corporate Communication can be defined as the set of activities involved in managing and orchestrating all internal and external communications aimed at creating favorable starting points with stakeholders on which the company depends. Corporate communication consists of the dissemination of information by a variety of specialists and generalists in an organization, with the common goal of enhancing the organization's ability to retain its license to operate.

As Jackson (1987)[2] remarks:

"Note that it is corporate communication — without a final "s". Tired of being called on to fix the company switchboard, recommend an answering machine or meet a computer salesman, I long ago adopted this form as being more accurate and left communications to the telecommunications specialists. It's a small point but another attempt to bring clarity out of confusion.

It is, however, still evident that Jackson's desire to abolish the final "s" has not been universally adopted.

The concept of corporate communication could be seen as an integrative communication structure linking stakeholders to the organization. A corporate communication structure is a system which enables organizations to strategically orchestrate all types of communication.

Contents

Different types of communication

There are three principal clusters of task-Planning and communication is an important part of the business and it based on activity within organizations. They are typically classified as management communications, marketing communications, and organizational communications.

Management communications are communications between management and its internal and external audiences. To support management communications, organizations rely heavily on specialists in marketing communications and organizational communications. Marketing communications get the bulk of the budgets in most organizations, and consist of product advertising, direct mail, personal selling, and sponsorship activities. They are supported by organizational communications from specialists in public relations, public affairs, investor relations, environmental communications, corporate advertising, and employee communications.

Corporate communication encompasses management communications, marketing communications, and organizational communications. Corporate communication implies a coherent approach to development of communications in organizations, so communication specialists can standardize communications by creating a common strategic framework.

The roots of corporate communication

Corporate communication is historical links to the field of public relations, which has been concerned with the voice and image of big business for nearly a century.[3] The “Fathers of Public Relations”, Ivy Ledbetter Lee and Edward L. Bernays addressed some issues that managers still face today in corporate communication. Issues in corporate communication are:

  • The large social, political, economic, and cultural climate in which corporations create their images and project their voices;
  • The “opportune moment” or the creation of circumstances for corporate communications;
  • The need to understand and capitalize on the psychology of constituencies
  • The best mix of communication channels (e.g., videoconferences, email, reports)
  • The ethical dimension of corporate communication.

Key tasks of corporate communication

The responsibilities of corporate communication are:

  • to flesh out the profile of the "company behind the brand" (corporate branding);
  • to minimize discrepancies between the company's desired identity and brand features;
  • to delegate tasks in communication;
  • to formulate and execute effective procedures to make decisions on communication matters;
  • to mobilize internal and external support for corporate objectives
  • to coordinate with international business firms

Communicating with key stakeholders

A Conference Board Study of hundreds of the US’s largest firms showed that close to 80 percent have corporate communication functions that include media relations, speech writing, employee communication, corporate advertising, and community relations.[4]
A modern corporate communication function performs company wide, global activities such as corporate advertising, and the management of corporate identity and image and reputation, as well as communications issues targeted more narrowly to a particular constituency important to the company as a whole, such as employees, customers, investors, government, or the public. The public is often represented by self-appointed activist non-governmental organziations (NGOs) who identify themselves with a particular strategic issue. To address the concerns of these generic groups, most companies have created specialized departments responsible for communicating about and with these groups[5]:

  • Internal Communications: A group responsible for communicating with employees, that frequently interfaces with the human resources function in the company.
  • Marketing Communications: A group responsible for communicating with the company's customer accounts and often interfaces with marketing and customer service functions in the company.
  • Investor Relations: A group responsible for communicating with investors and analysts who monitor the company's financial performance and prospects.
  • Government Relations: Often called "public affairs", these specialists are generally responsible for improving the company's relationships with regulators, legislators, and other government representatives.
  • Public Relations: A group whose responsibilities would include interacting with the diffuse set of NGO and activist groups motivated by concern over a specif social problem to which the company may be contributing.

Corporate branding

A corporate brand is the internal perception of a company that unites a group of products or services for the public under a single name, a shared visual identity, and a common set of symbols. The process of corporate branding consists creating favorable associations and positive reputation with both internal and external stakeholders. The purpose of a corporate branding initiative is to generate a positive halo over the products and businesses of the company, imparting more favorable impressions of those products and businesses.
In more general terms, research suggests that corporate branding is an appropriate strategy for companies to implement when:

  • there is significant "information asymmetry" between a company and its clients;[6] That is to say customers are much less informed about a company's products than the company itself is;
  • customers perceive a high degree of risk in purchasing the products or services of the company;[7]
  • features of the company behind the brand would be relevant to the product or service a customer is considering purchasing.[8]

Corporate identity/organizational identity

There are two approaches for Identity, respectively Corporate Identity and Organizational Identity.

  • "Corporate identity is the reality and uniqueness of an organization, which is integrally related to its external and internal image and reputation through corporate communication" (Gray and Balmer, 1998[9])
  • "Organizational Identity comprises those characteristics of an organization that its members believe are central, distinctive and enduring. That is, organizational identity consists of those attributes that members feel are fundamental to (central) and uniquely descriptive of (distinctive) the organization and that persist within the organization over time (enduring)". (Pratt and Foreman, 2000[10])

Four types of identity can be distinguished (Balmer, 1997;[11] Balmer and Wilson, 1998 [12]):

  • Perceived identity: The collection of attributes that are seen as typical for the ‘continuity, centrality and uniqueness’ of the organization in the eyes of its members.
  • Projected identity: The self presentations of the organization’s attributes manifested in the implicit and explicit signals which the organization broadcasts to internal and external target audiences through communications and symbols.
  • Desired identity (also called ‘ideal’ identity): The idealized picture that top managers hold of what the organization could evolve into under their leadership.
  • Applied identity: The signals that an organization broadcasts both consciously and unconsciously through behaviors and initiatives at all levels within the organization.

Corporate responsibility

Corporate responsibility (often referred to as corporate social responsibility), corporate citizenship, sustainability, and even conscious capitalism are some of the terms bandied about the news media and corporate marketing efforts as companies jockey to win the trust and loyalty of constituents. Corporate responsibility (CR) constitutes an organization’s respect for society’s interests, demonstrated by taking ownership of the effects its activities have on key constituencies including customers, employees, shareholders, communities, and the environment, in all parts of their operations. In short, CR prompts a corporation to look beyond its traditional bottom line, to the social implications of its business. (Argenti, 2009;[13])

Corporate reputation

Reputations are overall assessments of organizations by their stakeholders. They are aggregate perceptions by stakeholders of an organization's ability to fulfill their expectations, whether these stakeholders are interested in buying the company's products, working for the company, or investing in the company's shares.[14]

In 2000, the US-based Council of PR Firms identified seven programs developed by either media organizations or market research firms, used by companies to assess or benchmark their corporate reputations. Of these, only four are conducted regularly and have broad visibility:

  • "America's Most Admired Companies" by Fortune Magazine;
  • The "Brand Asset Valuator" by Young & Rubicam;
  • "RepTrak" by Reputation Institute.
  • "Best Global Brands" by Interbrand.

Crisis communications

Crisis communication is sometimes considered a sub-specialty of the public relations profession that is designed to protect and defend an individual, company, or organization facing a public challenge to its reputation. These challenges may come in the form of an investigation from a government agency, a criminal allegation, a media inquiry, a shareholders lawsuit, a violation of environmental regulations, or any of a number of other scenarios involving the legal, ethical, or financial standing of the entity. The crisis for organizations can be defined as follows[15]:

A crisis is a major catastrophe that may occur either naturally or as a result of human error, intervention, or even malicious intent. It can include tangible devastation, such as the destruction of lives or assets, or intangible devastation, such as the loss of an organization's credibility or other reputational damage. The latter outcomes may be the result of management's response to tangible devastation or the result of human error. A crisis usually has significant actual or potential financial impaact on a company, and it usually affects multiple constituencies in more than one market.

Internal/employee communications

As the volume of communications grows, many companies create an employee relations (ER) function with dedicated staff to manage the numerous media through which senior managers can communicate among themseves and with the rest of the organization. Internal communications in the 21st century is more than the memos, publications, and broadcasts that comprise it; it’s about building a corporate culture on values that drive organizational excellence. ER specialists are generaaly expected to fulfill one or more of the follwoing four roles (Krone et al., 1987[16]):

  • Efficiency: Internal communication is used primarily to disseminate information about corporate activities.
  • Shared meaning: Internal communication is used to build a shared understanding among employees about corporate goals.
  • Connectivity: Internal communication is used mainly to clarify the connectedness of the company's people and activities.
  • Satisfaction: Internal communication is used to improve job satisfaction throughout the company.

Investor relations

The investor relations (IR) function is used by companies which publicly trade shares on a stock exchange. In such companies, the purpose of the IR specialist is to interface with current and potential financial stakeholders-namely retail investors, institutional investors, and financial analysts.
The role of investor relations is to fulfill three principal functions:

  • comply with regulations;
  • Create a favorable relationship with key financial audiences;
  • contribute to building and maintaining the company's image and reputation.

Public relations: issues management and media relations

The role of the public relations specialist, in many ways, is to communicate with the general public in ways that serve the interests of the company. PR therefore consists of numerous specialty areas that convey information about the company to the public, including sponsorships, events, issues management and media relations.

Issues management A key role of the PR specialist is to make the company better known for traits and attributes that build the company’s perceived distinctiveness and competitiveness with the public. In recent years, PR specialists have become increasingly involved in helping companies manage strategic issues – public concerns about their activities that are frequently magnified by special interest groups and NGOs. The role of the PR specialist therefore also consists of issues management, namely the “set of organizational procedures, routines, personnel, and issues” (Dutton and Ottensmeyer, 1987[17]). A strategic issue is one that compels a company to deal with it because there is “ a conflict between two or more identifiable groups over procedural or substantive matters relating to the distribution of positions or resources” (Cobb and Elder, 1972[18]).

Media relations To build better relationships with the media, organizations must cultivate positive relations with influential members of the media. This task might be handled by employees within the company’s media relations department or handled by a public relations firm.

Company/spokesperson profiling These "public faces" are considered authorities in their respective sector/field and ensure the company/organization is in the limelight.

  • Managing content of corporate websites and/or other external touch points
  • Managing corporate publications - for the external world
  • Managing print media

Corporate communication officers

Recent research on the corporate communication function reports that corporate communication officers (CCOs) in Global Fortune 500 companies tend to have average tenures of about 4.5 years and that nearly one-half (48 percent) report to the Chief Executive Officer. CCOs say that approximately 42 percent of their job is strategic and 58 percent is tactical. Over the next year, they will be focusing more on social responsibility, social media and reputation. The research done by Weber Shandwick and Spencer Stuart found distinct differences between CCOs in Most Admired companies versus Contender companies.[19]

See also

References

  1. ^ Riel, C.B.M. van & Fombrun, C. (2007) Essentials of Corporate Communication, Abingdon: Routledge.
  2. ^ Jackson, P. (1987) Corporate Communication for Managers, London: Pitman.
  3. ^ Argenti, P. and Forman, J. (2002) The Power of Corporate Communication, New York: McGraw-Hill.
  4. ^ “Managing Corporate Communications in a Competitive Climate,” a Conference Board Study, by Kathryn Troy, 1996.
  5. ^ Riel, Cees B.M. van and Fombrun, Charles J. (2007) Essentials of Corporate Communication, Abingdon: Routledge.
  6. ^ Nayyar, P.R. (1990) "Information asymmetries: a source of competitive advantage for diversified service firms", Strategic Management Journal, 11: 513-519.
  7. ^ Aaker, D.A. and Myers, J.G. (1991) Advertising Management, New York: Prentice-Hall.
  8. ^ Brown, T.J. and Dacin, P.A. (1997) "The company and the product: corporate associations and consumer product responses", Journal of Marketing, 61 (1): 68-84.
  9. ^ Gray, E.R. and Balmer, J.M.T. (1998) Managing Corporate Image and Corporate Reputation, London: Long Range Planning.
  10. ^ Pratt, M.G. and Foreman, P.O. (2000) "Classifiying managerial responses to multiple organizational identities", Academy of Management Review, 25 (1): 18-42.
  11. ^ Balmer, J.M.T. (1997) Corporate Identity: Past, Present and Future, International Centre for Corporate Identity Studies, Working paper series 1997/4.
  12. ^ Balmer, J.M.T. and Wilson, A. (1998) "Corporate Identity: there is more to it than meets the eye", International Sutdies of Management & Organziation, 28 (3): 12-31.
  13. ^ Argenti, P.A. (2009) Corporate Communication, New York: McGraw-Hill/Irwin.
  14. ^ Charles, F. (1996) Reputation: Realizing Value from the Corporate Image, Boston: Harvard Business School Press.
  15. ^ Argenti, P.A. (2009) Corporate Communication, New York: McGraw-Hill/Irwin.
  16. ^ Krone, K., Jablin, F.M., and Putnam, L.L. (1987) "Communication theory and organizational communication: multiple perspectives", in F.M. Jablin et al (eds), Handbook of Organizational Communication, pp. 18-69, Newbury Park, CA: Sage Publications.
  17. ^ Dutton, J. and Ottensmeyer, E. (1987) "Strategic issue management systems: forums, function and context", Academy of Management Review, 12: 355-365.
  18. ^ Cobb, B.W. and Elder, C.D. (1972) Participation in American Politics: the Dynamics of Agenda Building, boston: Allyn and Becon.
  19. ^ The Rising CCO

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