Communication for Managers

MODULE:2
Chapter: 1
Managing Information Outside Organizations
 Topics
Covered
•Corporate Communication to Stakeholders
•Communication Failures
•Managing Crisis Communication: Managing News
Media and Information through Company
spokespersons
⦿ Variety of stakeholders including
employees, customers, current and
potential partners, Special interest groups,
government and the media are hounding
today’s businesses
⦿ These keep the organizations on their toes
⦿ Anything (which is not ordinary)
happening within the company is brought
to public knowledge
⦿ Hence corporate needs to be
extremely sensitive towards society at
large
Companies don't think clearly about how their audience will
perceive a marketing message or new product

Companies refuse to be transparent and explain what went

wrong, rather than owning up to things and making them
right

Companies don't plan. Sometimes, companies offer

promotions without having an adequate plan in place for
dealing with volume

Companies forget about why customers love them.

Sometimes, brands forget the real reason why customers
keep coming back to them, and change their products
without thinking clearly about the ramifications
In 1997, Nike had to recall a range of sports shoes
carrying a logo that offended Muslims in America and
agreed not to sell the new line in Britain.

In exchange for the sales ban and an apology, the Council

on American- Islamic Relations (Cair) urged Muslims around
the world not to boycott Nike products.

The company also agreed to donate a $50,000 (pounds

31,000) for a playground to an Islamic elementary school
in the United States.

Nike had to withdraw 38,000 pairs of the shoes

worldwide

A similar situation happened in 2019 when they had

to recall as the old US Flag stirred a controversy
KFC Coupon Riots (2009)

KFC worked closely with Oprah Winfrey to promote a new

line of chicken in US

When Oprah offered free coupons on her website, KFC

didn't properly estimate the overwhelming response the
'Oprah Effect' would create

Customers were understandably angry when they didn't

get their free chicken, and KFC had to reimburse them.
Coca-Cola Releases New Coke in 1985

Coca-Cola decided to launch a campaign to keep up with Pepsi,

a new rival at the time.

They declared that they were launching a new Coke brand in

hopes of keeping themselves looking fresh and better than ever.

Unfortunately, customers didn't want a new brand of Coke and

began hording existing beverages.

The company quickly back peddled and brought back original

Coke, but the damage to their brand was done.
Sony’s Playstation ad shows a white woman
threateningly grasping the face of a black model.

Customers have questioned whether the ad has

racist connotations

Sony was highly criticized for failing to be

sensitive
enough
Corporate Positioning

Reputation Management

Employee communication

Community relations

Media relations
Corporate Positioning
• As competition intensifies,
companies must work hard to
differentiate themselves
• They must consistently project
the unique value it brings to the
marketplace
• Management must respond to
the constant changes with
newer products and services
⦿ In October 1998, Nokia became the best-selling mobile phone brand in
the world;
⦿ Nokia’s operating profit went from $1 billion in 1995 to almost $4
billion by 1999;
⦿ The best-selling mobile phone of all time, the Nokia 1100, was
created
in 2003;
⦿ In 2007, Apple introduced the iPhone;
⦿ By the end of 2007, half of all smartphones sold in the world were
Nokias, while Apple’s iPhone had a mere 5 per cent share of the global
market;
⦿ In 2010 Nokia launched the “iPhone killer” but failed to match the
competition;
⦿ The quality of Nokia’s high-end phones continued to decline;
⦿ In just six years, the market value of Nokia declined by about 90%;
⦿ Nokia’s decline accelerated by 2011 and was acquired by Microsoft in
Reputation Management
• Nowadays, perception is
reality unless proven
otherwise
• Every action of a company
has a bearing on its
reputation
• Hence, an active and
deliberate reputation
management is necessary
⦿ The #DeleteUber movement took social media by
storm in January 2017, after President Donald Trump
announced his travel ban. ..

When news of Donald Trump's travel ban against a

majority of Muslim countries hit the trades, the New
York Taxi Workers Alliance called on its members to
avoid JFK International Airport for an hour.
⦿ After the strike was announced Uber took to Twitter
to announce they had dropped surge pricing at the
airport
⦿ Uber users who were against the Muslim ban fought
back in the only way that could hurt the company, by
deleting their apps.
Employee Communication
• When companies develop
strategies for responding to
changes, management often
overlook the importance of
communicating the change
initiatives to employees
• Its important to communicate
the bigger picture to all the
levels of employees
⦿A study of the problems that led to Enron’s
collapse revealed multiple failures by
management specifically when it came to
internal communication tools
⦿ The study highlighted the fact that
management didn’t maintain “adequate
communication to be informed of
organizational operations” and an “openness to
signs of problems.” This lack of communication
from management to employees, and lack of
listening doomed the organization
Community Relations
• Issues that affect
communities needs to be
handled with sensitivity
• People have a right to up-
to-date & correct
information and access to
company spokesperson who
can address their concerns
⦿ BP caused the legendary oil spill that stretched
across the Gulf of Mexico in 2010. Their PR
strategy included airing a number of expensive
commercials and apologizing at every chance
they got--something the public found
disingenuous
⦿ Ultimately, they received criticism from
President Obama and others, who said the
money they put into the ads should have been
put into cleaning up the mess
⦿ Tony Hayward of BP also made the fatal
mistake of saying he wanted his life back,
which showed a blatant lack of respect for
those who had actually lost their lives in the
explosion
Media Relations
• Effective media relations
can deliver huge
benefits to a corporation
• Companies must deliver
their message through
relevant media to
their target audience
Crisis in business is any situation that
threatens the integrity or
reputation of a company

Any kind of legal dispute or a man-

made disaster, accident, theft,
etc

Any situation, where in the eyes of

the media or public, the company did
One crucial aspect in crisis
communication is to tell it all, tell it fast
and tell the truth

Rumours often supplant real facts and

worst-case assumptions spiral
upwards fast

Company involved needs to make rapid

and sound decisions, and increase
communication
Companies are vulnerable to a crisis that
can hurt their business, damage consumers,
investor and employee confidence

In worst cases even threaten their very

existence

Today the companies are subject to intense

scrutiny from a variety of interest groups
and media
It is not enough to identify the problem or
settle the dispute

A company must simultaneously win

the hearts of the public in general and
its stakeholders

Companies involved in litigation and

investigation by government and regulatory
bodies face special communication challenges
It may not be always possible to forecast a
crisis

However a company must plan how it will

communicate the media during during
the crisis

A lot of times crisis does not get reported

in the press because the company handled
it skillfull
Designated spokesperson
• To represent the company,
make official statements and
answer media questions
• Should be able to establish
credibility with the media
• Able to remain calm in stressful
situations and project confidence
Consider what is the most
effective method for
each stakeholder

Employees, communities,
customers, distributors, media,
government all need to
addressed differently
⦿ The company alleged that Amway Corp.
distributors revived those rumors in 1995,
using a voice mail system to tell thousands of
customers that part of Procter & Gamble
profits went to satanic cults.
⦿ Procter & Gamble Co. (PG) won a jury award
of $19.25 million in a civil lawsuit filed
against four former Amway distributors
accused of spreading false rumors linking the
company to Satanism to advance their own
business.
Thank You