1 Introduction and stakeholder communication
Definitions
- Management of communication of organization: negotiation on points of view and
bridging interests
- Management of a mutual understanding between an organization and its publics
- The development of relationships to help communicate about an organization, an issue, a
person or a product
Public relations defines the function or activity that aims to establish and protect the reputation of
a company or brand, and to create mutual understanding between the organization and the
segments of the public with whom it needs to communicate
- Reputation is an overall assessment of an organization by its stakeholders
- It represents the emotional reaction (good, bad, weak, strong) of customers, investors,
employees and public
- It encompasses dimensions, such as product quality, innovation, investment value, people
management and responsibility
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 favourable reputations with stakeholder groups upon which the organization is
dependent
Public relations have always existed; they have a role in capturing the attention of the public and
mobilizing citizens. It is not a surprise that some of the oldest PR material we have today is
connected to political propaganda, or recruitment for wars. In 1900 (Industrial Revolution) the
development of advertisement as a structured concept, PR, became more formalized.
Edward Bernays
- Founding father of PR as a discipline
- Nephew of Freud and deeply influenced by his theories about the subconscious
- Introduced the concept of the focus group and worked with tobacco brands and other
controversial products
Timeline PR
1980 - Restructuring trend: all activities within an organization evaluated on the basis of what they
contribute to the organization
- Communication professionals are consolidated in PR departments and procedures are
established
+ PR starts to be recognized as a function the whole organization benefits from
- No consideration is given for the role of stakeholders
1990 - Strategic positions: organizations use PR as a way to achieve a competitive corporate
identity
- Communication professionals have the role to shape an organization’s brand, which can
be conveniently ‘positioned’ within the minds of stakeholders
+ PR becomes a crucial strategic tool for organizations to be more profitable
- Stakeholders are considered passively, as receivers of messages that can easily be controlled
and managed
2000 - Stakeholder engagement: thanks to new media, stakeholders become real participants in
, an organization’s public relations
- Old principles of strategic communication still apply, but the relationship with stakeholders
becomes a dialogue rather than a one-directional communication
+ Stakeholders can be ‘activated’ and become advocates for the organization
- Organizations will be held to higher standards of transparency and genuine behaviour
Stakeholder = any group or individual who can affect of is affected by the achievement of the
organization’s purpose and objectives
- Immediate stakeholders: customers, employees and shareholders, suppliers
- Secondary stakeholders: competitors, communities in which they operate, general public,
non-profits, governments and media
Strategic management: two theories
1. Input-output model: based on neo-classical economics (supply and demand as driving
forces) where the main objective is maximising profits → assumes that the value of the
organization is a pie and that only the interests of those who own a slice should matter (that
is why the input-output is also called the shareholder model) → not an organization’s job to
care for societal wealth, but the state’s, the only thing a company can offer is employment
and money
- Investors, suppliers, consumers, employees
2. Stakeholder model: based on socio-economics (impact on society), with the objective to
mediate between interests. A company HAS TO be socially responsible and should serve
parties with shared interests plus maximising mutual benefits to societal health
- H&M: employees, media, competitors, financial community, partners, general public,
customers, government, shareholders, board of directors
The stakeholder salience model: attributes
- Power: how powerful is the group of stakeholders vs the organization?
- Legitimacy: how legitimate are their claims?
- Urgency: how urgent is action form the organization?
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