Chapter 1
The new function of corporate communication is that it focuses on the organization as a
whole and on the important task of how an organization presents itself to all its key stake-
holders, both internal and external. The corporate communication function starts from the
perspective of the organization as a single embodied entity when communicating with in-
ternal and external stakeholders. Corporate communication is a management function that
offers a framework for the effective coordination of all internal and external communication
with the overall purpose of establishing and maintaining favorable reputations with stake-
holder groups upon which the organization is dependent. It can be complex in nature, it is
an integrated approach (transcends the specialties of individual communication practition-
ers) and strategic interests of the organization is at large.
Mission: a general expression of the overriding purpose of the organization
Vision: the desired future state of the organization
Objectives: the more precise (short-term) statements of direction
Strategy: involves actions and communications that are linked to objectives and are often
specified in terms of specific organizational functions
Corporate identity: the basic profile that an organization wants to project to all its important
stakeholder groups and how it aims to be known by these various groups in terms of its
corporate image and reputation.
Corporate communication is geared towards establishing favorable corporate images and
reputations with all of an organization’s stakeholder groups, so that these groups act in a
way that is conducive to the success of the organization. Management communications
focuses on small groups within the organization.
The ‘positioning’ paradigm of the new era of ‘stakeholder engagement’ brings new points
of emphasis around interactivity, authenticity (the quality or condition of communication be-
ing authentic, trustworthy or genuine), transparency and advocacy (an attempt to try to
change stakeholder expectations and public opinions on an issue through issue cam-
paigns and lobbying).
Chapter 4
Stakeholder management, more than any other subject in business, has profound implica-
tions for corporate communication. It requires that managers think strategically about their
business overall and about how they can effectively communicate with stakeholders, in-
cluding customers, investors, employees and members of the communities in which the or-
ganization resides.
The neo-classical economic theory suggests that the purpose of organizations is to make
profits in their accountability to themselves and to shareholders, and that only by doing so
can business contribute to wealth for itself as well as society at large. Input-output model
of strategic management:
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,The socio-economic theory suggests, in contrast, that the question of ‘who counts’ extends
to other groups besides shareholders who are considered to be important for the continuity
of the organization and the welfare of society. One significant feature of the stakeholder
model is that it suggests that an organization needs to be considered ‘legitimate’ by both
‘market’ and ‘non-market’ stakeholder groups. This means that organizations engage with
stakeholders not just for instrumental reasons but also for normative reasons. Stakeholder
model of strategic management:
Freeman: ‘A stakeholder is any group or individual who can affect or is affected by the
achievement of the organization’s purpose and objectives. A stake can be described as an
interest or a share in an undertaking, [that] can range from simply an interest in an under-
taking at one extreme to a legal claim of ownership at the other extreme.
Freeman considered three types of stakes: equity stakes, economic or market stakes, and
influencer stakes. Equity stakes are held by those who have some direct ‘ownership’ of the
organization, such as shareholders, directors or minority interest owners. Economic or
market stakes are held by those who have an economic interest, but not an ownership in-
terest, in the organization, such as employees, customers, suppliers and competitors. In-
fluencer stakes are held by those who do not have either an ownership or economic inter-
est in the actions of the organization, but who have interests as consumer advocates, envi-
ronmental groups, trade organizations and government agencies.
Clarkson suggests thinking of primary and secondary groups of stakeholders. A primary
stakeholder group is one without whose continuing participation the organization cannot
survive. Secondary stakeholder groups are defined as those who generally influence or af-
fect, or are influenced or affected by, the organization, but they are not engaged in finan-
cial transactions with the organization and are not essential for its survival in strictly eco-
nomic terms.
Charkham talked about two broad classes of stakeholders in this respect: contractual and
community stakeholders. Contractual stakeholders are those groups who have some form
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, of legal relationship with the organization for the exchange of goods or services. Commu-
nity stakeholders involve those groups whose relationship with the organization is non-
contractual and more diffuse, although their relationship is nonetheless real in terms of its
impact.
A basic form of stakeholder identification analysis involves answering the following ques-
tions that capture the essential information for effective stakeholder communication:
• Who are the organization’s stakeholders?
• What are their stakes?
• What opportunities and challenges are presented to the organization in relation to these
stakeholders?
• What responsibilities (economic, legal, ethical and philanthropic) does the organization
have to all its stakeholders?
• In what way can the organization best communicate with and respond to these stake-
holders and address these stakeholder challenges and opportunities?
There are two general mapping devices or tools that managers and communication practi-
tioners can use for this task: the stakeholder salience model and the power–interest ma-
trix. Both mapping devices enhance practitioners’ knowledge of stakeholders and their in-
fluence, and enable them to plan appropri-
ate communication strategies.
Stakeholder salience model
In this model, stakeholders are identified
and classified based on their salience to
the organization. Salience is defined as
how visible or prominent a stakeholder is
to an organization based on the stake-
holder possessing one or more of three at-
tributes: power, legitimacy and urgency.
Latent stakeholder groups are groups pos-
sessing only one attribute: dormant,
discretionary and demanding. Three fur-
ther groups are classified as expectant
stakeholders and are groups with two at-
tributes present: dominant, dangerous,
dependent. The final group are definitive
stakeholders.
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