Corporate

Communication – The
Changing Environment
BB211 – Corporate Communication
Chapter 1
Corporate Communications

“… is a management function that

establishes and maintains mutually
beneficial relationship between an
organization and the publics on whom its
success or failure depends.”

Cutlip, Broom and Center

(2000:6)
DEFINITION
 In simple terms…
 Communication that is issued by a corporation to its
public or constituencies.

 Public can be both internal (employees, shareholders)

and external (government, media, industry bodies,
educational institutes, NGO and general public).

 It acts as a liaison between an organization and its

public.
 Why is Corporate
Communication so Important?
 We live in an Era in terms of communication –
Information travels at lightning speed from one side of
the world to another result of digital communications
and social media.
 Attract public people with the Information -
Information comes to us in more beautiful packages
than it before. We can see glossy annual reports and
dazzling website from major corporations.
 Organizations have become inherently more complex
– with the large of capacity of employee in one company
will make more difficulty to communicate with each
others. Especially with difference department.
 The Changing Environment for
Business
 Managers need to recognize that the business
environment is constantly evolving.
 Managers of the company need to identify the
opportunity to look at the big picture of how
changing environment of their business to cope with
the new communication strategy among of Internal
and External Stakeholders.
 If the company ignore the changing of environment
in a long terms, this can have damaging results.
 Companies need to quickly determine what if
anything changes if they need to respond to such
chan
MODERN ERA CORPORATE
COMMUNICATION
 Modern corporate communication is
understood by us as integrated
communication – an efficient joint strategy
for public relations, marketing, advertising,
internal communication and all further
communication activities of the company.
 To make corporate communication to be
successful some of the managers are trying
to working to make the communication
become more interesting. For examples like
putting some advertising, graphics,
photography etc.
 Examples Corporate
Communication (Media)
 When Communication Misleads
 Enron misrepresents reality and its values
 Arthur Andersen disregards regulators and clear
signals
 Tyco CEO misuses company funds for now legendary
 birthday bash
 Martha Stewart lies and obstructs justice
 BP talks green but appears to be false
 KPMG creates tax shelters that are illegal
 When Communication Misleads
 Corporate fraud / collapse i.e. Enron

 High pay gap, senior exec vs. employees.

 CEOs of large co. in 2005 earned approx. 400 times

more than the average factory worker!

 All this has led to the public perceiving businesses as

actively trying to deceive them.
When Communication Misleads
 Do Businesses Act Responsibly?

Source: Yankelovich & CNN/USA Today/ Gallup Poll

 Limited confidence in Big
Businesses

Source: 2007 Gallup Poll

 Are they overpaid too?

 Paris Hilton $6.5 Million

 David Beckham $27 Million
 J. K. Rowling $32 Million
 Elvis Presley (deceased)$37 Million
 Rolling Stones $88 Million
 Tiger Woods $100 Million
 Steven Spielberg $110 Million
 Oprah Winfrey $260 Million
 Steve Jobs $647 Million

Source: Forbes, MSNBC, ABC, Rolling Stone

How to Compete in a Changing Environment?

 Recognize and Alert Of the Changing

Environment.
 Adapt to the environment without
compromising organization principles.
 Don’t assume problems will disappear.
 Keep Corporate Communication connected
to Organization Strategy.
How to Compete in a Changing Environment?

Recognized and Alert of the Changing Environment.

 Manager’s need to look at the big picture
 e.g. Coca-Cola, year 2006 wake-up call:
 University of Michigan suspended the purchase of its
products on campus.
 Nothing to do with price or the product itself– it was to do
with environmental concerns in India and labor issues in
Colombia.
 Pressure to build overseas operations

to independent environmental and

labor audits.
How to Compete in a Changing Environment?

Recognized and Alert of the Changing Environment.

 Gillette was target of animal rights groups about their
research methods.
 A letter to its former Chairman –
“ Let this be a warning to you…If you hurt another animal,.. I’ll
bomb your company. PS. Watch your back.”
 Although it was from an 11 year-old student, there is concern
it would have long term negative effects on the company
How to Compete in a Changing Environment?

Adapt to the environment without compromising

organization principles.
Monsanto, produce genetically modified foods, but it was met
with resistance from the public’s.
However, through education and outreach, it was able to get
public to accept its products.
It worked with consumer groups and farmers to foster better
understanding in food biotechnology.
100 years company able to adapt

to their environment.
How to Compete in a Changing Environment?

Don’t assume problems will disappear

 In 2005, a blogger posted a story about Sony BMG’s CD that
contained software that installed itself on PCs and allowed
hackers to access the systems.
 Within hours the story circulated over the world.
 Sony execs underestimated the magnitude of this issue and
responded by turning a blind eye.
 Consumers were angered at Sony’s indifference towards the
problem and class-action lawsuits against the company soon
followed.
How to Compete in a Changing Environment?

Keep Corporate Communication connected to

Organization Strategy.
CC should be aligned with co’s vision
Understanding the core values of the company and its people,
and turning that into pervasive behavior requires leadership,
tools and skills.
e.g. Johnson & Johnson has a “credo” – a companywide code of
ethics that spells out the J&J’s promises to all its stakeholders.
 The Global Village
 Advancements in IT and increased human trans
border mobility has led to the creation of a “Global
Village”
 The public is increasingly looking for companies to
demonstrate care for the communities in which they
operate.
 Anti-globalization backlash has grown immensely.
 Anti-capitalism activism has benefited from the
internet.
 The Global Village
 Blogs and social networks on the internet have made
it difficult for companies to prevent both positive and
negative news about them from reaching individuals
around the world.
 Business leaders therefore must be prepared not only
to handle the international media spotlight, but also
counter advocacy groups that can hurt their
corporate reputation.