Transformation and the corporate communication profession

Citation

Goodman, M.B. (2012), "Transformation and the corporate communication profession", Corporate Communications: An International Journal, Vol. 17 No. 3. https://doi.org/10.1108/ccij.2012.16817caa.001

Transformation and the corporate communication profession

Article Type: Guest editorial From: Corporate Communications: An International Journal, Volume 17, Issue 3

Rapid changes in global business practices, technology, and media require creative strategic integration of knowledge to “connect the dots” – to see the patterns that others with more narrow training and experience do not. The general public is dauntingly skeptical about corporate business practices, and this global reality demands constant and consistent demonstration of ethical behavior by corporate professionals, over and above a clear understanding of the transformations in media and business practices.

The focus of this transformation is the result of three issues for multinational corporations:

1. 1.

   ethics;

2. 2.

   technology and the social network; and

3. 3.

   political opportunities and risks within and across borders.

Meeting the challenge of these changes will be a key part of the strategy of successful corporations.

Ethics

In the light of popular opinion about business corruption and the perceived power gap between the corporation and the individual, corporations have struggled to re-articulate and reinvent the compact between the individual and the enterprise in a variety of formal and informal ways. Some of the more significant efforts in this direction set in the context of continuing concerns about business ethics.

The result of these concerns has been the emergence of formal “principles-based” codes of conduct, as well as the ongoing effort to rebuild public trust through the practice of Corporate Responsibility. The strategic adaptations taking place are an attempt to “normalize” the relationships between these social entities by making them both more transparent and more explicit in the context of new regulatory schemes in foreign as well as domestic operations. Corporate strategies in these critical areas include:

• •

  concerns about corruption and fraud;

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  corporate responsibility and the corporation as citizen;

• •

  governance and the global corporation; and

• •

  the regulatory environment for ethical global practice.

The growing perception of corporate communication professionals as counsel to the CEO and to the corporation suggests the nurturing of leadership capabilities in these critical areas.

Technology and the social network

The transformational impact of social media, Web 2.0, and the semantic internet, require corporations to cultivate media and technology expertise. Successful corporations adapt to this rapidly changing technological, mediated, and ethical environment. Sustainable corporations focus on information relevant to their success, and on being thought leaders in their business sectors through a tenacious pursuit of intellectual competence in the field. The complexity of operating in a multinational business environment with numerous constituencies also calls for professional expertise and familiarity with research tools and techniques.

The internet has had a transformative influence on corporate communication from its beginnings to its current form as Web 2.0. That influence extends not only to the introduction of a wide array of new communication channels, but also to the very core of what we consider to be corporate communication. The extraordinarily high levels of interactivity and transparency enabled by the internet have made the elemental practices of corporate communication – corporate reputation, employee communication, shareholder communication, community relations, and public affairs – unrecognizable to practitioners who entered the profession just a few years ago. For example, almost no multinational corporation sends a traditional “press release,” using the “press room” section of its own web site, as well as electronic distribution to all media outlets. And employee communication is almost exclusively done electronically from bulletin boards to holiday greetings; from vacation policies to benefits; from codes of ethics to letters from managers and executives.

The current transformation will continue, and it is likely that we will look back on this era as having changed not only the way companies communicate with these stakeholders, but the very nature of those relationships as well. We will be able to say in a few years that “the medium is the relationship,” contrary to McLuhan’s classic observation that the “medium is the message.” Or perhaps we will adopt the concept proposed by Rich Teplitsky, head of the Public Relations Society of America’s (PRSA) Technology Section that “there are no more mediums, only messages.”

Political opportunities and risks within and across borders

In the first decade of the twenty-first century, a more truly global marketplace was created than had existed at any time since the decade preceding the First World War. Notwithstanding some reversals of this trend created by the global recession that began in 2008, the global marketplace created through the emergence of countries such as China, India, Brazil and Russia has transformed the nature of global relations for multinational companies.

There have been two principal drivers for this transformation. The first is the removal of regulatory barriers controlling foreign ownership of business assets in countries such as India and a parallel reduction in subsidies or protections for homegrown industry champions. The second is the development of truly global supply chains involving wholly owned and wholly outsourced operations.

The combined power of these two shifts has brought about the decline of global corporate infrastructures based on having autonomous country or regional business units in favor of globally matrixed organizations. In these matrixed structures, responsibility for managing a brand globally, for example, could be headquartered in one country and transportation and logistics in another. In this model, employees responsible for marketing or transportation would report both to the global manager of their function as well as a country manager in their own country. Multiple reporting relationships become even more complicated in some contemporary organizations where an individual could be accountable to a country’s managing director, a global function leader, a key client relationship manager, and to the captain of an ad hoc continuous improvement task force. All of these developments have profound implications for the practice of global corporate relations, creating some new and reinforcing some old obstacles to effective corporate communication.

Focus on recent research

The CCI Corporate Communication Practices and Trends Study 2011 (See the CCI web site for the report at: www.corporatecomm.org/studies.html). The “CCI Corporate Communication Practices and Trends Study 2011” included in-depth interviews in addition to the series of survey questions, for the corporate communication officers who chose to participate in the interviews confirms corporate communication as a strategic management function and has significant implications for professional practice worldwide, centered on these ten key findings:

1. 1.

   There has been a transformation of the corporate communication discipline through dramatic consolidation of internal and external functions – marketing, public relations, and employee relations. Increases in internal focus are supported by greater budgets for corporate culture, intranet, and employee communication functions. Increases in external focus are shown through increased budget levels for reputation management, issues management, government relations, and social media functions. These increases underscore the advantages of empowering employees and customers.

2. 2.

   Increased pressure on corporate communicators as a result of continuing static budget and staff levels reflects the continued uncertainty in the global economy. Modest budget (28 percent) and staff (27.4 percent) increases reflect overall corporate caution in response to the global economic downturn, contrasting sharply with decreases in 2009. Nevertheless, communication executives remain optimistic that their budgets will not be “among the first to be cut” (88.2 percent), reflecting the value of the function. Decreasing resources continue to drive corporate communicators to accomplish even more with less. The situation creates an opportunity to leverage the corporation’s culture and its employee “ambassadors” through media technology to add strategic advantage and value.

3. 3.

   Increased attention to corporate culture and employee communication is a response to continued uncertainty in global economic conditions, business model transformation, and the networked enterprise. Renewed internal focus is driven by an understanding of the employees’ essential role in the networked enterprise and the need to boost employee morale, and reflect reluctance to commit resources to hiring additional staff. This presents an opportunity to position for either an economic recovery, or continued global economic weakness.

4. 4.

   Dramatic increases in complexity and speed are in response to social media’s role and importance in corporate practice. Continued increases in the communication officers’ responsibility for the social media function (84.3 percent, up 6.3 percent from 2009) and its budget (74.5 percent up 10.5 percent from 2009). There is also an increased use of vendors for social media (38.8 percent; up from 28 percent in 2009). The opportunity is to focus new technology internally and externally for clearly defined strategic purposes.

5. 5.

   Communication executives continue to see their primary role as “counsel to the CEO” and “manager of the company’s reputation.” Reputation management continues to grow in importance and in budget allocation. Strategic communication counsel has been cited as the primary role for corporate communication officers since the first CCI Study more than a decade ago. Reputation management requires a strategic partnership with the CEO.

6. 6.

   Corporate communication’s responsibility for the management of Investor Relations has dramatically decreased. It is the lowest responsibility for the management of the IR function (15.7 percent) and budget (7.8 percent) since the first CCI Study and this reflects corporate uncertainty. However, corporate communications is overwhelmingly engaged with the Annual Report function (70.6 percent) and budget (60.8 percent). Communication with shareholders, the capital markets, and other stakeholders during a weak economy remains essential in maintaining positive relationships. Such uncertainty offers an opportunity to develop and communicate strategic understanding of the volatile business environment.

7. 7.

   Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) aligns with leading practices. Most (75 percent) communication officers report that the new legislation has had “no,” “limited,” or “minimal” impact on corporate communication, adding that their transparency policies were in place before the legislation was passed. This provides an opportunity to demonstrate that your organization takes regulatory reform and consumer protection seriously, as well as to help regulators and lawmakers understand your businesses.

8. 8.

   The Citizens United vs. the Federal Election Commission Supreme Court decision (2010) highlights that leading corporate communication practices re-enforce non-partisanship. Communication officers report that the US Supreme Court ruling has had “no,” “limited,” or “minimal” impact on corporate communication, adding that their corporate political campaign contribution policies are long standing and transparent. This situation offers an opportunity to demonstrate that your organization exercises its financial and political influence responsibly.

9. 9.

   Corporate communication officers report decreased use of vendors to help with critical functions, as well as slight increases in Media Relations, Public Relations, Community Relations, Intranet, and Social Media. They also report decreased use of vendors to help with critical functions, but slight increases in their use for Media Relations (up 3.9 percent), Public Relations (up 5 percent), Community Relations (3.6 percent), Intranet (1.5 percent), and Social Media (10.8 percent). Complexity and uncertainty drive the use of vendors, “interns,” and “contingent workers,” but dependence on outside experts may be at the expense of developing internal capability and expert counsel. However, global agencies do offer experience and expertise without long-term commitment.

10. 10.

    Communication officers report the development of an expanded skill set, with even greater emphasis on business acumen and the ability to articulate ideas and to persuade others. The demographic profile of top Corporate Communication officers describes a communication officer who is younger (56 percent 40 – 55; in 2009 60 percent over 50); better paid (48 percent above $300k; in 2009 33 percent above $300k), better educated, and mostly male (75 percent; in 2009 66.7 percent). Because corporate communication executive officers are “middle-aged”, and one out of four is paid over $500K, they might take advantage of the opportunity, and consider the different experiences between them and their staff in employee communication. They could then develop the business competencies of new staff and the leadership experience of managers.

These findings and the commentary by Dr Patricia Scott (see below) and Lou Capozzi (see below) offer a clear picture of the dramatic transformation of the corporate communication profession over the last four to five years as a result of the three powerful forces (discussed in Goodman, CCIJ Vol. 16 No. 3, 2011, pp. 176-178.) – globalization, Web 2.0, the networked enterprise (corporate business model) – that have transformed the principles and practices governing the relationship between the corporation and its stakeholders:

For 2011 the overall goal of the “CCI Corporate Communication Practices and Trends Study” was to outline and analyze the stat-of-the-art for corporate communication practice in publicly-traded, multinational companies. It was determined in the first CCI study in 2000 to focus on publicly-traded companies for several reasons. First, information in such companies is public and more readily accessible. Second, public companies are often in the vanguard of corporate practices because of the pressures of the capital market, their need to respond to the media, and the realities of the global marketplace. And finally, public companies have a greater understanding that their “license to operate” comes from public approval and is maintained by public trust.

The CCI Study 2011 continues the studies from 2000 to 2009. CCI – Corporate Communication International determined that the practices and trends study could be conducted every two years, and this cycle of research was implemented with the study in 2005. In years the practices and trends study was not conducted, the focus of CCI’s research has been on particular issues that have an impact on the profession. In 2006 and 2008 CCI conducted benchmark studies of the Corporate Communication Practices and Trends in China. A CCI Study was also conducted in China in 2010 and reported in June 2011 at the CCI Annual Conference in New York City. In 2008 CCI, along with research partners in South Africa, conducted a benchmark study in South Africa. Information gathering for these Benchmark Studies was based on previous CCI research studies. For the 2011 research we also compared the results with the CCI Studies from 2000 to 2009. The results of these studies are posted on the CCI web site at www.corporatecomm.org/studies.

The CCI Conference on Corporate Communication 2011

The papers that follow in this Special Issue of CCIJ reflect some of the presentations and discussions of essential issues facing corporate communication:

L. Simone Byrd (Alabama State University, USA) in her “Hi fans! Tell us your story! Incorporating a stewardship-based social media strategy to maintain brand reputation during a crisis” investigated Toyota‘s corporate Facebook page through communicative patterns and themes in the wake of the 2010-2011 vehicle recall crisis to determine what components of the stewardship model (reciprocity, responsibility, reporting and relationship nurturing) were present there. She also looked at comments/posts by the social media team. In the last two weeks of March 2010, most of the conversations that took place were initiated by fans, and not the social media team. She concludes that the social media team allowed the Toyota consumer community to direct the conversation. This is perhaps what most social media strategists would agree should ultimately be the goal.

In “Language choice in a European-based international organization”, Elizabeth de Groot (Radboud University Nijmegen, The Netherlands) looked at how language can be applied efficiently in international companies, using a cross-cultural survey that was conducted in a Dutch international company intending to improve internal communications between Dutch-based and German-based employees. Her study shows that although English is frequently used with foreign colleagues, its effectiveness depends on passive as well as active language skills. She indicates that quantitative academic research may help international companies in formulating a relevant corporate language policy.

Sophie Esmann Andersen and Trine Susanne Johansen (Aarhus University, Denmark) in their article “The voicing of ONE by many: rethinking integration within communication and brand management” discuss how organizational self-understanding and self-presentation are challenged by consumer resistance. For their case study they analyze Arla Foods’ internal communication vehicle ONE. Subsequently, the case is approached from a critical consumer perspective, drawing on empirical studies of consumer responses to Arla Foods as ONE – one voice, one sound, one story, with an immersion of the organization into consumer narratives and market cultures.

Sam H. DeKay (BNY Mellon Corporation and St John’s University, USA) in his “Controlling unfavorable feedback on the wall: how large companies react to negative comments posted to corporate-sponsored Facebook pages” notes that 79 percent of Fortune 100 companies use some form of social media to communicate with customers and other stakeholders, and that specialists recommend that negative comments should be treated as opportunities to resolve potential problems. His paper examines whether or not large companies adopt the recommended approach when reacting to negative comments. It identifies official Facebook pages sponsored by the top 10 companies (as defined by the Forbes 2000 for 2010) in four industry groups – Banking, Retailing, Software and Services, and Household and Personal Products. The study concludes that large corporations do not generally address negative comments as public relations opportunities, but prefer to censor or ignore critical feedback. This suggests that companies that combine marketing messages and “fun” postings attract significantly fewer negative comments.

In their article, “Internal corporate communication and its impact on internal branding: perception of Indian public sector employees”, Neha Sharma and T.J. Kamalanabhan (Indian Institute of Technology, Madras, India) develop a model depicting internal corporate communication in achieving internal branding outcomes in India. The organization they studied is particularly focused on the achievement of three internal branding outcomes. They note that the capacity of internal communication to relate employee’s identification, commitment and loyalty with better delivery of brand promise to customers was not a factor that emerged from their interviews, but there was some evidence that this might be a pertinent goal for such a communication to address in the future.

Roger W. Hutt (Arizona State University, USA) in “The extent and patterns of multi-stakeholder communications in annual report letters” sets out to find out if CEOs use multi-stakeholder communications in their annual report letters, as well as to describe any patterns observed in those communications. He analyzed annual report letters of the ten largest US companies using content and text analysis procedures, and found that CEOs made little use of multi-stakeholder communications in their annual letters. Hutt proposes a model for communicating with a multi-stakeholder audience, and examines how stakeholders relate both to the organization and to each other, a focus that has not been examined in great depth.

In their opinion piece, “The Conversation Age: the opportunity for public relations”, Laura Berlin Kathryn Zipfel, and Louis Capozzi (New York University PRCC, USA) note how the communication industry, as we know it, has changed dramatically, and how the channels through which we communicate have shifted rapidly towards an era rife with digital and social media. With over 100,000 blogs created every day, it is hard to overstate the importance social media is having on communication strategies. Organizations, they contend, must interact differently with their audiences, particularly their customers, altering our current definition of “two-way communication” and resulting in a shift towards customer-centric models of integrated marketing communication. Although there is some debate surrounding the “new media over traditional media” perspective, it is evident to the authors that communication has entered “The Conversation Age;” and that the skills of public relations professionals make them uniquely qualified to lead communication initiatives in this new environment.

Patricia Scott (Uhmms and Wharton School University of Pennsylvania, USA) in her “Evolution or revolution: how is the study of communication changing?” sets out to see if the field of corporate communication research has changed, or remained static over time. She says that if the Conference on Corporate Communication is reflective of the field as a whole, this field of study is constantly changing and evolving to attempt to understand and explain communication in our changing world and business environments. As a follow up to her study, she proposes to examine the semantic network analysis of a purely academic journal to see if the Conference on Corporate Communication mirrors other research vehicles in our field. This review would also allow us to see if other members of our field are on divergent research paths. Second, she suggests an examination of the business literature for each year of the conference to pinpoint situations, or crises that would have led to the concepts discussed at the conference, so that we can ask if there is a correlation between what has happened in the corporate world and what we research; and are corporate communication professionals reactive in their interests or do they independently set their own research agenda.

In his paper, “Image work and crises: toward a crisis pre-emptive image management model across the crisis life cycles”, Augustine Pang (Nanyang Technological University, Singapore) consolidates disparate studies on image. He also introduces new concepts such as image transformation, image reinvention, and enduring image with the view of demonstrating how image can work for or against the organization. He then suggests what organizations can do to communicate their desired images through multiple platforms. His goal is to heighten practitioners’ awareness of the profound effects lingering images have on the organization.

Marianne Grove Ditlevsen (University of Aarhus, Denmark) in “Revealing corporate identities – on the annual report as the business card of a company” describes the annual report as the “call card” of a company that reflects the corporate identity of a company, often used for public relations. As a legal requirement, it is first and foremost a statutory document, and is one of the most important investor relations tools. From a communicative perspective the annual report is a complex genre with two potentially conflicting communicative purposes: to give a true and fair view of the state of the company’s affairs and to provide a positive image of the company. On the basis of a visual analysis of six Danish company annual reports, the study seeks to demonstrate how, and to which extent, the annual report as a statutory document is used strategically by companies as both a means of investor relations and public relations, in order to position the company as attractive to investors and other stakeholders.

Acknowledgements

The papers published here first appeared in the Proceedings of the CCI Conference on Corporate Communication 2011 edited by Christina Genest, Annie Keller, Cynthia Chang, Darnide Cayo and Kate Jones.

We are grateful to the members of the CCI Conference on Corporate Communication 2011 Program Committee for their insight and expertise in making this conference a success. They are:

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  Wim J.L. Elving, PhD, University of Amsterdam, The Netherlands

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  Krishna Dhir, PhD, Berry College, USA

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  Finn Frandsen, Professor, mag. art., Aarhus University, Denmark

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  Christina Genest, MA, CCI at Baruch College/CUNY, USA

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  Michael B. Goodman, PhD, CCI at Baruch College/CUNY, USA

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  John Leipzig, PhD, University of Alaska Fairbanks, USA

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  Augustine Pang, PhD, Nanyang Technological University, Singapore

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  Roslyn Petelin, PhD, University of Queensland, Australia

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  Patricia Scott, PhD, University of Pennsylvania, USA

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  Jo-Ann Straat, MA, Daiichi Sankyo, USA

• •

  Daniel W.C. So, EdD, The Hong Kong Polytechnic University, China

• •

  Don Swanson, EdD, Monmouth University, USA

Michael B. GoodmanGuest Editor