Download Public Relations and Strategic Management

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
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.
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.
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.
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.
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.
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.
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.)
Public Relations Contributes to
Strategic Management by
1. Participating in management decision-
2.
3.
4.
5.
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.
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).
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.
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).
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.
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.
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.
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.
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.
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.
When PR Reports to the CSuite 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.
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)