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Chapter 20
Business and the
Media
McGraw-Hill/Irwin
Copyright © 2008 The McGraw-Hill Companies, All Rights Reserved.
Ch. 20: Key Learning Objectives
 Understanding the responsibilities of business’s
public relations managers as they interact with
various stakeholders
 Analyzing how businesses can most effectively
manage a crisis situation
 Evaluating when advertising is deceptive or
unnecessarily exposes young people to indecency
and violence
 Knowing how governments around the world have
regulated advertising, especially the tobacco
industry
 Ensuring that gender and racial diversity are
appropriately reflected in the media
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The Media and Business
 Media
A means of communication that widely reaches or
influences people
 Comprises many channels, including television, radio,
books, magazines, and the Internet
 Business utilizes various media channels to educate
and interact with its stakeholders through public
relations announcements, crisis management efforts,
and advertisements
 Media is a both a stakeholder of business, as well as
a profit-making enterprise in its own right, with its own
stakeholders
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Public Relations
 Fundamental to any organization’s relationship with the
media is to design and manage an effective public
relations program
 Public relations programs send a constant stream of
information from the company to the public
 Opens dialogue with stakeholders whose lives are affected
by company operations
 Should be proactive, not reactive
 One purpose of the public relations function is to promote
a positive image for the firm in the media
 In today’s dynamic and complex world, an effective public
relations function must be a year-round, ongoing process
that operates both internally and externally
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International Public Relations
 Multinational businesses have extended their public
relations strategies globally
 New challenges emerge with global perspective
 Public relations (PR) managers must be sensitive to cultural
disparities
 Impact of PR program might be very different given a
country’s culture, social or political systems or history
 PR managers need to be able to communicate in the local
language to be sure embarrassing or misleading
communications do not occur due to poor translations
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Crisis Management
 Corporate crisis is a significant business disruption
that stimulates extensive media coverage

Can affect the company’s normal operations and potentially
negatively affect corporate reputation or credibility
 Crisis management is the process organizations
use to respond to corporate crises
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Crises escalate rapidly, with intense pressures, and is very
costly to develop strategic response once the crisis occurs
Experts recommend organizations develop a crisis
management plan in advance
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Crisis Management
 An effective crisis management plan must:
1. Include an internal communication system that can be
activated at any time; key employees must be identified in
advance
2. Communicate quickly, but accurately; best to take the
offensive and be the first to comment on a situation
3. Use the internet to convey the message, this can minimize
fears and provide assistance
4. Do the right thing; a crisis is often the true test of an
organization
5. Follow up and make amends if necessary; seek to restore
the company’s reputation
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Media Training of Employees
 Media training of employees and executives who are
likely to have media contact is very important
 Advice from media communication experts
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Resist the temptation to see reporters as the enemy;
business spokespersons should build bridges with the
media
Keep the long-term reputation of the company in mind
Being open and honest is a successful media strategy
Make communications a priority and the training of the
company spokesperson an ongoing program
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Responsibilities of Public Relations
Managers
 PR managers face a number of ethical and social
issues in representing their firms
 How they portray themselves and their firm in the
media can greatly influence stakeholder and public
perception of the firm
 Public Relations Society of America is professional
association for PR managers
 Its Code of Ethics, adopted in 2000, has 6 core values:
advocacy, honesty, expertise, independence, loyalty and
fairness
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Deceptive Advertising
 Presentation of fair, balanced and truthful information
is a business necessity
 Deceptive advertising occurs when an advertisement
misleads the consumer by lying, withholding
information, or creating an unreasonable expectation
 Businesses are subject to legal challenges or FTC
enforcement when engage in deceptive advertising
 Some industries have adopted self-regulatory
marketing controls
 Example of 23 pharmaceutical companies that adopted
voluntary standards
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Free Speech
 Free speech issue is how to balance the
constitutional right to free expression and the
trustworthiness of information used by stakeholders
to take action (e.g. make a purchase, seek
employment)
 Legal basis is 1st amendment to the Constitution
 Business have often relied on right to free speech to
promote their advertising yet this can lead to
questions of respect for others
 This is particularly true in other countries where standards
for advertising may be different
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Marketing to Children
 American Psychological Association has expressed
grave concern over effect of advertising on children
 40,000 advertisements per year are targeted at children
 Alliance for American Advertising, formed by major
food companies (e.g. General Mills, Kellogg and
Kraft) promoted its rights to advertising AND its
willingness to police itself
 Children’s Advertising Review Unit, industry group that
monitors children’s advertising, has guidelines that food
companies should advertise truthfully with appropriate
messages children can understand
 Many food producers follow the Review Unit’s selfregulatory standards
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Special Issue: Government Regulation of
Tobacco Advertising
 Should tobacco advertising – particularly ads aimed
at underage smokers – be regulated or even banned
by the government?
 Question asked by many stakeholder groups over the years
 National Association of Attorneys General and
tobacco industry 1998 settlement provided for
significant restrictions on media marketing
 Examples include prohibiting all advertising targeting youth
and stopping marketing through clothing logos
 Some positive effects have been seen since agreement
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Special Issue: Government Regulation of
Tobacco Advertising
 Governments of other countries have also tried to
regulate tobacco industry
 In 2002 European Union health ministers voted to
outlaw most tobacco advertising
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Special Issue: Government Regulation of
Tobacco Advertising
 World Health Organization sponsored global effort to
limit or prohibit tobacco advertising
 In 2005 the world’s first anti-smoking treaty came into
force, the Framework Convention on Tobacco Control
(FCTC)
 Signed by 168 countries as of May 2006
 Ratifying countries were obligated to
• Establish strict health warnings on cigarettes and ban
tobacco advertising and sponsorship
• Outlaw misleading marketing terms, like light and mild
• Increase efforts to reduce exposure to second-hand
smoke
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Ethical and Social Responsibility in the
Media Industry
 The media, like any other business, is subject to
ethical and social responsibilities
 Issues particularly relevant to the media industry
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Issues of decency in broadcasting
Diversity in portrayal of women and minorities
Presentation of fair and balanced view of the issues
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Issues in Decency in Broadcasting
 Has been series of relevant government rulings:
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1969: U.S. Supreme Court ruled free-speech protections for
broadcasters narrower than publishers
1978: Supreme Court upheld FCC ban on indecencies
1995: Indecency ban validated by a Federal appeals court but
limited time to between 6 a.m. and 10 p.m.
 Despite government rulings, 2005 Kaiser Family
Foundation study found 70% of all TV shows include
some sexual content
 Active monitoring by FCC has caused industry to develop
self-regulatory practices

Despite industry’s attempts at self-regulation, Broadcast
Decency Law passed in June 2006
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Portrayal of Diversity in the Media
 Question of whether various social groups are
portrayed in a biased or discriminatory light in the
media
 Are ethnic groups portrayed as second-class citizens?
 Are women only portrayed in a subservient role?
 Have been some steps towards greater diversity in
characters in prime time shows, but issues remain
 Advertising revenues and good time slots tend to still go to
mainstream shows
 Has also been some positive movements in depiction
of women in advertising
 Starting to use “everyday” women as opposed to super thin,
super tall models
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The Fairness and Balance Issue
 Fairness and balance issue is about how the media reports
business activities
 Pro-business organizations and business leaders claim
coverage of business activities is unfair and that media does not
provide adequate information for viewers to make informed
decisions
 FCC, from 1949-1987, was entrusted with enforcing the
Fairness Doctrine
 Required television and radio broadcasters to cover both
sides of important or controversial issues and to give the
opportunity for contrasting viewpoints to be aired
 Gave FCC authority to rule on the fairness of broadcasts
 Law was repealed in 1987
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The Fairness and Balance Issue
 Study by Pinnacle Worldwide, independent PR firm,
whether media portrays business fairly
 Reported significant differences in opinion between business
and media executives
 For example, business executives rated their ethical
behavior as an 80 on a 100 point scale; media leaders gave
business a 30 point rating
 Pinnacle advised businesses to seek out or generate
opportunities to communicate their values and
principles through the media
 “Too many businesses appear to be taking an ostrich
position” Jerry Klein, President of Pinnacle Worldwide
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