Linking Business Strategy and Excellent Communication

1. Linking Business Strategy and Excellent Communication James E. Grunig, Professor Emeritus Larissa A. Grunig, Professor Emerita Department of Communication University of Maryland College Park, Maryland, USA

2. About the Excellence Study,1985-2002 • 310 organizations, of mixed size and effectiveness. • Communication heads; CEOs; 3,400 employees. • Canada, United Kingdom, and United States. • 1,700 quantitative questions from each organization. • 25 qualitative cases. • Three books published.

3. Principles of Excellent Public Relations Practice • Public relations is a unique management function that helps an organization interact with the social, political, and institutional components of its environment. • The value of public relations can be determined by measuring the quality of the relationships the organization establishes with its institutional environment.

4. Principles of Excellence • Public relations serves a strategic managerial role as well as a technical role. • Public relations departments strategically plan, administer, and evaluate public relations programs. • Public relations helps to shape the underlying conditions of organizational excellence—organizational culture and structure.

5. Principles of Excellence • Communication activities are integrated through the public relations department or a senior communication executive. • Public relations is empowered by the dominant coalition of the organization. • Public relations is not subordinated to marketing or other management functions.

6. Principles of Excellence • Public relations is two-way and symmetrical. • Publics relations executives are ethics counselors and internal advocates of social responsibility. • Public relations departments have a professional base of knowledge. • Activism and crises create demand for excellent public relations.

7. These Principles Suggest That Public Relations Is a Strategic Management Function • Public relations participates in strategic decision-making to help manage the behavior of the organization. • Public relations is a bridging activity to build relationships with stakeholders rather than a set of messaging activities designed to buffer the organization from stakeholders. • Emphasis is on two-way and symmetrical communication of many kinds to provide publics a voice in management decisions and to facilitate dialogue between management and publics.

8. This Approach Corresponds to the Stakeholder Approach to Management • The corporation is more than “an extension of the basic human right to own property.” • “…organizational wealth can be created (or destroyed) through relationships with stakeholders of all kinds…—that is managing relationships with stakeholders for mutual benefit.” • “Corporations ARE what they DO.” (James E. Post, Lee E. Preston, and Sybille Sachs [2002], Redefining the the Corporation: Stakeholder Management and Organizational Wealth, pp. 12, 1, 2.)

9. Public Relations Contributes to Strategic Management by • Participating in management decision-making to identify consequences that create stakeholders. • Segmenting stakeholders and publics. • Using communication to cultivate relationships with strategic publics. • Influencing management behavior. • Measuring the quality of relationships.

10. Reinventing Corporate Social Responsibility and Ethics • From corporate social responsibility to social responsiveness to social rectitude to social reason. • Corporate social reason is the everyday role of public relations in strategic management. • It is an ethical obligation for an organization to engage in dialogue with publics (deontology) when it has consequences on publics (teleology).

11. The New Social Media • These media create the possibility of symmetrical communication, or dialogue, if used interactively rather than solely to disseminate information. • Their greatest value may be in environmental scanning to listen to stakeholders and bring information into strategic decision-making.

12. The Status of Integrated Communication • Results of the Excellence study on the organization of the public relations function (late 1980s). • Research by Thomas Hunter on Fortune 500 companies (late 1990s). • Studies of Generally Accepted Practices (GAP) by the Center for Strategic Public Relations at the University of Southern California (2005).

13. Excellence Propositions On the Organization of the Public Relations Function • The function should be located to have ready access to the key decision-makers of the organization and to participate in strategic management. • All communication programs should be integrated into or coordinated by the public relations department or a senior executive with a public relations title.

14. Propositions On the Organization of the Public Relations Function • Public relations should not be subordinated to other departments such as marketing, human resources, or finance. • Public relations departments should be structured horizontally to reflect strategic publics and so that it is possible to reassign people and resources to new programs as new strategic publics emerge and other publics cease to be strategic.

15. Summary of Excellence Results Related to Organization of the Public Relations Function • It makes little difference whether public relations and marketing are housed in separate departments or one department. • The relative size of the budgets also makes little difference. • However, when marketing communication dominates how senior managers think about public relations, excellence in public relations declines. • Public relations departments buy advertising and promotional materials from outside firms.

16. Conclusions from 25 Qualitative Cases • Public relations seldom was sublimated to marketing, human resources, or other management functions. • Sublimation occurred mostly at the bottom of the excellence scale. • A few excellent departments demonstrated marketing thinking, but emphasis was on customers, sponsorships, and asymmetrical communication.

17. Related Research by Thomas Hunter on Fortune 500 Firms, 1997-1999 • Public relations and marketing work together well in most companies and do not compete. • Public relations and marketing generally are found in separate departments. • Marketing communication programs are integrated into public relations through a senior vice-president of corporate communication.

18. 2005 USC GAP Study • 64% of organizations report to the C-Suite, 25% to marketing. This percentage is increasing. • Public relations is more likely to report to the C-Suite in larger organizations with larger PR budgets. • PR has a larger role in these organizations that goes beyond the sales-driven emphasis of marketing.

19. When PR Reports to the C-Suite Rather than Marketing • PR receives more support and is more often included in strategic management and senior-level meetings. • Evaluation metrics include effects on crises, culture, reputation, and stakeholder attitudes and awareness. When it reports to marketing, metrics include contribution to sales and numbers and distribution of clips.

20. Moving to the Future • Research is needed on the institutionalization of public relations as a strategic management, bridging, function rather than its common practice as a symbolic, buffering, function. (Yi, 2005)