Business Essentials for Strategic Communicators. Creating Shared Value for the Organization and its Stakeholders

Strategic communication for business enterprises means to support the company to fulfil its mission (Hallahan et al., 2007). To do so effectively, communication professionals need not only excellent knowledge and skills regarding how a company should communicate; they also need profound business knowledge in order to understand what has to be done to achieve the company’s strategic objectives and overall mission in today’s complex environments. Being “strategic” communicators requires being able to contribute to corporate decision making and strategy above and beyond the ability to design goal-oriented communication programmes. To fulfil this “strategic mandate” (Arthur W. Page Society, 2007) and to seize a “seat at the management table” it is imperative that communication professionals have profound knowledge of business fundamentals. However, practice shows that graduates from communication programmes and young communication professionals are often underequipped with such knowledge. The unfortunate gap between demand and reality motivated Matthew W. Ragas and Ron Culp to write a book that provides foundational knowledge on essential business topics from a strategic communicator’s perspective. In this book, which is particularly tailored to the needs of current and aspiring strategic communication professionals, Ragas and Culp give overviews of foundational business knowledge, focal areas at the intersection of business and communication, and aspects of performance measurement. The authors describe the readership of their book as “[a]nyone with a liberal arts or social sciences background who has not received formal training in business but who works for or with companies” (p. 15).

The book starts out with explaining why knowledge of “Business 101” matters. To stress the need for their book, the authors refer to different pieces of research done on the requirements on strategic communicators, including their own survey conducted of the membership of the Arthur W. Page Society. Notably, the authors drew on the feedback they received in their survey to design the contents of the book. The emphasis on finance and stock market topics is certainly due to the importance survey respondents placed hereon. This holds true for the focus on US institutions and examples as many members of the Arthur W. Page Society work for US companies and agencies or organizations located in the USA.

The section on foundational business knowledge covers six areas. Ragas and Culp start out with a coherent introduction to economic fundamentals and explain the meaning of key economic indicators, namely, gross domestic product, employment report, inflation, consumer price index, interest rates, consumer confidence and currency exchange rates. They also point to industry specific indicators and sources where to find more in-depth information. The discussion on the role of the central bank focuses on the US Federal Reserve, mentioning in only two sentences the existence of other countries’ central banks. Although the discussion on economics and economic indicators is brief, it highlights the importance of communicators’ knowledge on economic developments in order to recommend appropriate communication programmes and anticipate stakeholders’ questions and concerns.

In the following two sections, chapters 3 and 4, the focus lies on corporate finance and accounting. In their survey of Arthur W. Page Society members, participants had named knowledge on financial statements and terminology by far most important. After a brief discussion how corporate management can go about raising money, the authors focus on the stock market. This makes sense as the demands for transparency and strategic financial communication are particularly high for public companies compared to privately held businesses. The procedure of initial public offerings at the NYSE or NASDAQ as well as the requirements set by the US Securities and Exchange Commission (SEC) are discussed. Seeing beyond the US financial community, the authors also give a brief overview of the world’s ten largest equity markets. The presentation of the different players in the financial community is particularly valuable for financial communication novices. At this point, it would have been useful to explain the role of financial analysts and journalists as well as their relation to one another in more depth, and refrain from listing the company names of the largest proxy solicitors in the USA. After the introduction to the cornerstones of financial communication Ragas and Culp discuss the financial statement basics, which is the topic three-fourths of their survey participants had mentioned as a must know. Through their financial statements, companies communicate to their stakeholders how financially healthy the company is and whether it has achieved its financial-oriented goals. The discussion is again dominated by US regulations (e.g. US GAAP, 10-Q, 10-K filing) while international standards are only briefly mentioned. Nonetheless, key accounting terms which are universally relevant are explained well using an exemplary income statement and balance sheet of YUM! Brands Inc. The authors advise the interested reader to learn more about accounting concepts by studying business news and investor relations websites.

Compatible with the focus on finance and accounting, the contents in chapter 5 on law and corporate disclosure are dominated by legal requirements relating to financial communication. Again, the rules set by the US SEC are stressed and explained, and channels to communicate with the financial community are outlined. The authors make clear that having a solid grounding in the laws, rules, regulations, and practises surrounding corporate disclosures can add value internally and externally, and strategic communicators can help to communicate complex financial topics transparently and in “plain English”. This chapter also contains a helpful introduction in theoretical concepts like information asymmetry and signalling that are often not taught in communication programmes.

In chapter 6 of the book, the authors shift the focus to intangible assets and nonfinancial disclosure, because value and competitive advantage increasingly accrues from intangible assets. Strategic communication of nonfinancials is considered important as professional investors’ investment decisions are often also influenced by “soft factors”. Ragas and Culp discuss the following categories of intangible assets: vision and strategy, management, employees, reputation/brand/relationships, research and development, and Environmental Social Governance (ESG). Because of the lack of requirements regarding the disclosure and reporting of intangibles, the authors emphasize the significant opportunity for strategic communicators to unlock value for companies and their stakeholders by transparently communicating about these categories.

In the third part of the book Ragas and Culp highlight three of these intangibles, which they refer to as focal areas at the intersection of business and communication: corporate governance and CSR (in financial community collectively termed as ESG) and corporate reputation. Especially in the wake of accounting scandals in the early 2000s, corporate governance has become an increasingly salient topic for companies and their stakeholders. The role and importance of corporate governance is theoretically explained drawing on agency theory. Helpful is also the reference to Hirschman’s (1971) exit, voice and loyalty framework when discussing shareholder behaviour and activism, as this framework is usually unknown to communication scholars. Examples and references to regulations are again only taken from the US regulatory environment. By also drawing on international examples the authors could have put some of the topics, for example, CEO pay, into a broader international context. The chapters on CSR and corporate reputation complete this part of the book. While most of the content contained in these 25 pages should be part of a communication master’s curriculum (e.g. stakeholder theory, definition and measurement of corporate reputation) Ragas and Culp enrich these concepts with corporate examples and by linking them to the business and reporting context. Useful is, for example, the discussion on the relation between “doing well” on “doing good”, even though some key references from the business literature are missing (e.g. Orlitzky et al., 2003; Sen and Bhattacharya, 2004).

In chapter 10 the book closes with how to demonstrate the value of communication through research, measurement and evaluation. Like the three focal areas covered in the preceding part of the book, this content should not be new to strategic communication students or practitioners. However, it is essential in a book on Business Essentials for Strategic Communicators to stress the importance of demonstrating communication’s impact on the strategic goals of the company and discuss how to do so. When presenting the levels of communication measurement (outputs-outtakes-outcomes), the authors could have referred to the extended levels of impact model developed by the German Public Relations Association (DPRG) and the International Controlling Association (DPRG and ICV, 2009). This model comprises an additional top level termed “outflow” which includes communication impacts on strategic and/or financial objectives in the value-adding process. Granted, Ragas and Culp discuss the growing interest in the field in demonstrating business value, referencing this advanced model could have enriched the discussion.

Overall, this textbook is a very good starting point for communication students and young practitioners to become more business savvy, enhance their strategic thinking and to seize a “seat at the table” of corporate management. The book’s strength is its focus on key business topics and the linking of topics already covered in strategic communication programmes to business terms and processes. Extremely helpful is the list of key terms at the end of each chapter and the comprehensive glossary at the end of the book. It deserves particular commendation that the topics were selected based on empirical research on the demands and deficiencies perceived by senior communication managers. Other important business essentials in the areas of strategic management, marketing and controlling go beyond the scope of the book. Here, the interested reader is well advised to consult other resources. The book is suited primarily for students and practitioners working for or aspiring to work for large companies, especially those listed at a US Stock Exchange, as legal and regulatory frameworks are drawn from this national context. This national focus may be a shortcoming for the interested reader from outside the USA. Also, the strong focus on financial communication and investor relations makes the book somewhat less relevant for strategic communicators in private companies.

In sum, with this book Ragas and Culp fill a critical gap in the textbook-landscape. It is a thoughtfully compiled and sufficiently comprehensive resource. The content is explained understandably and vividly, thus sparking readers’ interest to learn more. This book will equip today’s and tomorrow’s communicators with the essential terminology and relevant knowledge to create value for the companies they work for and stakeholders they communicate with. We can definitely recommend this book as an introductory text for teachers and practitioners of strategic communication to be supplemented with in depth readings where needed.