This extensive summary contains all the chapters covered from week 1 to 7. It has 57 pages and entails all the important theories and concepts that will prepare you for the exam.
Core task of corporate communication practitioners:
• objective of building, maintaining and protecting the company’s reputation
Which events are outside communication practitioners and managers control?
• Identifying opportunity and engaging with stakeholders of the organisation
Scope and De nition
Until 1970s:
• Public Relations (communication with the press)
Then stakeholders, internal and external to the company started to demand more
information from the company
This new function came to incorporate a whole range of specialised disciplines such as
corporate design, corporate advertising, internal communication to employees, issues
and crisis management, media relations, investor relations.
Corporate communication is a management function that o ers a framework for the
e ective coordination of all internal and external communication with the overall purpose
of establishing and maintaining favourable reputations with stakeholder groups upon
which the organisation is dependent.
Activities:
• Planning
• Coordinating
• Counselling the CEO and senior managers in the organisation
• Producing and disseminating content and messages to relevant stakeholders
Strategy
• Involves actions and communications that are linked to objectives and are often
speci ed in terms of speci c organisational functions.
• Key to having a corporate communication strategy is the notion of a corporate identity:
the basic pro le that an organisation wants to project to all its important shareholder
groups and how it aims to be known by these various groups in terms of the corporate
image and reputation.
Because of favourable images and reputations, customers and prospects will purchase
products and services, members of the community will appreciate the organisation in its
environment, investors will grant nancial resources, and so on.
Business Communication
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,• Tends to focus almost exclusively on skills, especially writing, and looks towards the
individual manager or professional
VS.
Corporate Communication
• Focuses on the entire company and the entire function of management.
Trends in Corporate Communication
Period of 1980s:
• Every function in the organisation was assessed based on its accountability and
contribution to the organisation.
• This led many organisations to restructure separate communication disciplines such as
media relations, advertising, sales promotions and product publicity, and bring these
together into more integrated departments or into speci c working practices.
• Organisational and managerial bene ts
• Strategic direction
• Communication generally had to be used more strategically to ‘position’ the
organisation in the minds of important stakeholder groups
Period of 1990s until early 2000s:
• Organisations became primarily concerned with ideas such as ‘corporate identity’,
‘corporate reputation’ and ‘corporate branding’
Stakeholders have become much more active in voicing their expectations towards
organisations and, empowered by media technologies, have also started to expect more
interactive and dialogue-based forms of communication.
Book Chapter 4
Introduction
How did stakeholder management develop?
How can that theory be used to establish communication strategies for organisations?
Stakeholder Management
Neo-classic economic theory:
• Purpose of organisations is to make pro ts in their accountability to themselves and to
shareholders
Socio-economic theory:
• The question of ‘who counts’ extends to other groups besides shareholders who are
considered to be important for the community of the organisation and the welfare of
society
First Model:
• Organisation in the centre
• Suppliers, Investors etc contribute input
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, • Each contributor of inputs is rewarded with appropriate compensation, and, as a result
of competition throughout the system, the bulk of the bene ts will go to the customers.
Second Model:
• Stakeholder management assumes that all persons or groups who hold legitimate
interests in an organization do so to obtain bene ts and there is, in principle, no
priority for one set of interests and bene ts over another
• All those groups which have a legitimate ‘stake’ in the organization, whether purely
nancial, market-based or otherwise, are recognized, and the relationship of the
organization with these groups is not linear but one of interdependency
Framing accountability through this concept of legitimacy also means that organizations
engage with stakeholders not just for instrumental reasons but also for normative
reasons.
Instrumental reasons:
• Point to a connection between stakeholder management and corporate performance.
Stakeholder management may lead to increases in revenues and reductions in costs
and risks as it increases transactions with stakeholders (e.g. more sales or more
investments) or as a reputational bu er is created for crises or potentially damaging
litigation.
Normative reasons:
• Appeal to underlying concepts such as individual or group ‘rights’, ‘social contracts’,
morality, and so on. From a normative perspective, stakeholders are persons or groups
with legitimate interests in aspects of corporate activity; and they are identi ed by this
interest, whether the corporation has any direct economic interest in them or not.
Stakeholder = a group or individual who can a ect or is a ected by the achievement of
the organisation’s purpose and objectives.
Freeman:
• Equity stakes
• Held by those who have direct ownership of the organisation (shareholders, directors
or minority interest owners)
• Economic or market stakes
• Held by those who have an economic interest, but not an ownership interest, in the
organisations (employees, customers, suppliers and competitors)
• In uencer stakes
• Held by those who do not have either an ownership or economic interest in the
actions of the organisation, but who have interest as consumer advocates
environmental groups, trade organisations and government agencies
Clark:
Primary stakeholder group:
• Is one without whose continuing participation the organisation cannot survive.
Secondary stakeholder groups:
• Are de ned as those who generally in uence or a ect, or are in uenced or a ected by,
the organisation, but they are not engaged in nancial transactions with the organisation
and are not essential for its survival in strictly economic terms. Media and a wide range
of special interest groups fall within this secondary group of stakeholders.
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, Charkham:
Two broad classes of stakeholders in this respect: contractual and community
stakeholders.
Contractual stakeholders:
• Those groups who have some form of legal relationship with the organisation for the
exchange of goods or services.
• Contractual groups, including customers, employees and suppliers, are formally tied to
an organisation because they have entered into some form of contract; the nature of
their interest is often economic in providing services or extracting resources from the
organisation
Community stakeholders:
• Involve those groups whose relationship with the organisation is non-contractual and
more di use, although their relationship is nonetheless real in terms of its impact.
• Community stakeholders, on the other hand, are not contractually bound to an
organisation. This includes groups such as the government, regulatory agencies, trade
associations and the media,
• This ‘inclusiveness’ implies that organisations ideally communicate and engage with all
of their
• stakeholders. a particular way in which this ‘inclusive’ nature of the stakeholder concept
is shown is in corporate social responsibility (CSR)
• CSR includes philanthropy, community involvement and ethical and environmentally
friendly business practices
Stakeholder Communication
• Providing information about the company’s operations that they have an interest in
• Important that organisation provides each stakeholder with speci c information and
builds a strong reputation across exchanges with all of these stakeholders
• Analyse organisation’s stakeholders, their in uence and interest in the organisation
Questions for analysis:
Who are the organisation’s stakeholders?
What are their stakes?
What opportunities and challenges are presented to the organisation in relation to these
stakeholders?
What responsibilities (economic, legal, ethical and philanthropic) does the organisation
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