Corporate communication in times of stress – an introduction to the CCIJ special issue 2011

Corporate communication in times of stress – an introduction to the CCIJ special issue 2011

Article Type: Guest editorial From: Corporate Communications: An International Journal, Volume 16, Issue 3

About the Guest Editor

Michael B. GoodmanPhD is Professor at Baruch College/City University of New York, where he is also Director of the MA Program in Corporate Communication. He is Founder and Director of CCI – Corporate Communication International (www.corporatecomm.org). He is Visiting Professor of Corporate Communication at Aarhus School of Business (Denmark), University of Johannesburg (South Africa), Bangkok University, and Hong Kong Polytechnic University. He is Adjunct Professor of Corporate Communication at Fairleigh Dickinson University where he was Professor and Director of the MA Program in Corporate and Organizational Communication. He has published widely, including most recently: Corporate Communication: Strategic Adaptation for Global Practice with Peter Hirsch (in press), Work with Anyone Anywhere: A Guide to Global Business and Corporate Communication for Executives. He is on the Editorial Advisory Board and Associate Editor for North America of Corporate Communication: An International Journal (UK). He is a member of the Arthur W. Page Society; a Fellow of the Royal Society for the encouragement of Arts, Manufactures & Commerce (The RSA), London; a Fellow of The Society for Technical Communication; and a member of the Board of Directors of the Association for Business Communication. He has been a consultant to more than 40 corporations and institutions on corporate communication, managerial communication, problem solving, new business proposals, change, and corporate culture.

In Corporate Communication: Strategic Adaptation for Global Practice (Peter Lang Publishing, New York, NY, 2010). Peter Hirsch and I have written that the direction of the global economy is likely to be murky at best for some time to come. And that uncertainty has vast implications for the practice of corporate communication for multinational corporations. Three powerful forces have transformed the principles and practices governing the relationship between the corporation and its stakeholders:

1. 1.

   Globalization. A quantitative shift in the globalization of the world economy that has created a qualitative change in how businesses need to communicate.

2. 2.

   Web 2.0. A transformation in the adoption, use, and consumption of information technology.

3. 3.

   Corporate business model – the networked enterprise. An evolution in the nature and purpose of the public corporation that is both influenced by, and at the same time, influences the other two forces at work.

The first of these – globalization – was the emergence of a truly integrated global marketplace in which the business supply chain operates not only around the world, but in a single time zone – now. Complementing and enabling this integration was the rise of emerging markets, not only those markets in the first tier – Brazil, Russia, India, and China, but also was the next 11: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, The Philippines, South Korea, Turkey, and Vietnam.

The second major force was the transition of the internet towards Web 2.0 in which massively greater bandwidth has facilitated a wide range of new communications media from blogs and podcasts to YouTube and Twitter. We explored how the technology transition has created a newly connected, networked, and transparent web of social media which has had a profound impact on the speed and extent to which stakeholders could interact with the corporation and with each. These new interactions have both positive and negative implications for the corporation.

Both of these major transformations have taken place against a backdrop of a long running decline, from the perspective of the general public, in the reputation of corporations and other institutions, such as religion, the justice system, organized sports, and the media. In the developed economies, this skepticism about corporations has been given additional force by the emergence of the Millennial Generation whose lack of faith in and loyalty to the corporation, were so expertly conveyed in Ron Alsop’s The Trophy Kids Grow Up.

The combination of these trends combined with the most perilous economic environment since the 1930s has created conditions of unprecedented volatility for global corporations. Public opinion and political opinion in different parts of the world, about how corporations should behave is likely to shift more quickly than at any time in recent history. From one day to the next, public expectations on subjects, such as corporate governance, social justice, environmental stewardship or data privacy could move 180 degrees. Sovereign governments, struggling to find the solution to intractable economic conditions may seek convenient scapegoats in the form of large corporations, both tying their hands through new regulations and simultaneously blaming them for failing to create more jobs. Economic nationalism, whether in the form of “Buy China” or “Buy America,” further complicates the conditions in which corporations need to operate. Finally, the hyper-transparency made possible by Web 2.0 and demanded by an anxious public raises public scrutiny to a new level.

The global financial crisis of 2008 and the economic turmoil it created in the years following have forced a transformation in fundamental business models, beginning with the evaporation of almost an entire industry sector – investment banking. In 2010, the self-inflicted global crisis of Toyota, has been replaced in the headlines by Goldman Sachs, the impact of the financial challenges of Iceland and Greece on the global economy, and the environmental disaster in the Gulf of Mexico as a result of the explosion in April of 2010 of the BP off-shore oil drilling platform. In 2011, the destruction in Japan from the earthquake and the tsunami which followed has become an environmental and economic disaster in the wake of the failure of the Fukushima nuclear complex, exacerbated by the uprisings in the Middle East which began in Egypt.

Paradoxically, the first decade of the twenty-first century also witnessed an unparalleled increase in the social demands being placed on the corporation. In less than a decade, the expectation that corporations would place corporate social responsibility (CSR) at the core of their activities has moved from the periphery to the middle of the opinion spectrum. Sustainability, which grew out of the concept of environmental stewardship, came to embrace social justice and a wide variety of micro- and macro-economic issues including “fair trade” and community building. To a greater or lesser extent, corporations have responded positively to the concept that ending poverty and healing the planet belong in their job description alongside providing jobs, inventing new products and services, and offering shareholders a return on their investment.

It is too early to predict confidently which of these transformational shifts will have the greatest long-term impact, but what is clear is that the consequences of human exploitation of natural resources have not been abolished merely because economic development has slowed or reversed itself. If anything, the consequences of global climate change and industrial production have made it more important than ever that we find collective solutions to the challenges of hunger, access to clean water and breathable air, as well as sustainable practices in energy production, construction, and packaging to name just a few areas.

In this context, the successful management of corporate communication in a global context requires considerable skill and capability, as well as the most finely tuned judgment, wisdom, understanding, and integrity that the corporate communication professional can muster.

Focus on recent research

The CCI Corporate Communication Practices and Trends Study 2009 (see the CCI web site for the report at: www.corporatecomm.org/studies.html. The 2011 study is being conducted as this issue goes to print) included in-depth interviews in addition to the series of survey questions, for the corporate communication officers who chose to participate in the interviews. One of the open-ended questions asked:

What are the top three critical issues in corporate communication today?

One executive at a global financial services corporation said the issues are: “how to use communication as a tool to help achieve business goals, how to achieve high performance with restricted resources, and how to stay ahead of today’s militant populism.”

An executive at a global pharmaceutical corporation said, “building trust internally and externally, reputation management, transparency,” and in the context of the US debate on healthcare reform, “positioning the CEO.” In addition to rebuilding trust between front-line workers and management, another executive added engaging and addressing multiple stakeholders on issues and plans in a world where there are multiple venues for dialogue and in which anyone can be an “expert, as well as demonstrating leadership” in a complex and rapidly changing world.

Others noted the need to build credibility and trust to mitigate reputational risk – assessing, protecting, and measuring reputation. Adding strategic value and demonstrating the function’s value in driving business performance is another concern. Another issue is the ability to develop important relationships with investors, media, NGOs, and investing the time to focus on relationship building.

For another executive the issues are:

Responding to a changing workplace; relating to a changing employee body. Younger people are coming in and expecting social media. In corporate communication it is authenticity; keeping the creditability of your firm high; operating in an authentic, transparent manner. Keeping employees motivated and keeping your constituents happy in today’s economy.

For another “skepticism of what we’re saying and the sincerity of the message” is a major concern.

One executive indicated the concern we have addressed in our book for strategic adaptation, saying there is “a yearning for the path”, noting that there “is a refusal to acknowledge when things are changing.”

And for another the issues are: a changing media landscape, turning employees into advocates, and the need for authenticity.

Research on corporate communication practices indicates the Chief Communication Officer, and paths toward solutions lie in the strategic functions of corporate communication. Recent research studies by Corporate Communication International (CCI) focused on corporate communication practices and trends in the South Africa, China, the USA, and the European Union:

1. 1.

   CCI 2009 Corporate Communication Practices and Trends – United States.

2. 2.

   CCI Corporate Communication Practices and Trends: South Africa Benchmark Study 2007-2008.

3. 3.

   CCI Corporate Communication Practices and Trends: A China Study 2008 – Phase II.

4. 4.

   CCI Corporate Communication Practices and Trends: A European Union Benchmark Study 2008-2009.

These four studies, taken together, form the first global benchmark for corporate communication practices and trends. The papers can be found on the CCI web site at: www.corporatecomm.org/studies.html. A third study has been conducted in 2010-2011 in China will be available on that web site shortly, as will the CCI 2011 Corporate Communication Practices and Trends Study.

Papers from the CCI Conference on Corporate Communication 2010

The Annual CCI Conference on Corporate Communication is a clear opportunity for corporate communicators to develop professionally and to bring value to their companies. It is also an opportunity for scholars to share their knowledge and research. It has been the premise of this conference that relationships among scholars and practitioners are an essential element of the social glue that binds civilized people together. And international meetings are important to build and maintain trust among professionals with common interests and goals, but who are disbursed around the world.

It is in this spirit that once again corporate executives and university scholars met in Wroxton, England from June 4-7 to exchange information and explore communication from a global perspective.

The CCI Conference on Corporate Communication 2010 was intended to:

• •

  Illuminate the interest in corporate communication as a strategic function in organizational success.

• •

  Explore the influence of globalization on the corporate communication profession as it relates to theory, practice, roles, processes, and ethics.

• •

  Continue as a forum for the exchange of ideas and information among industry and university representatives.

• •

  Indicate trends and provide analysis for communication professionals, university faculty, and others interested in corporate communication.

• •

  Disseminate the conference discussions through the publication of the conference proceedings, and selected in Corporate Communication: An International Journal.

The three-day conference featured speakers from 16 countries: Australia, Brazil, Canada, Denmark, Finland, Hong Kong, Italy, India, New Zealand, the Netherlands, Norway, Portugal, Singapore, South Africa, the UK, and the USA.

The papers that follow in this special issue of CCIJ reflect some of the presentations and discussions of essential issues facing corporate communication.

In “Mapping and leveraging influencers in social media to shape corporate perceptions”, Norman Booth and Julie Ann Matic argue that the emerging new influencer community is wielding significant power over the perceptions of brands and companies, largely driven by the rapid expansion of social media channels through which influencers communicate. The “nobody’s” of the past are now the new “somebodies” demanding the attention of communication professionals who seek continuous engagement with targeted consumers throughout the various channels of the social web.

This paper reviews a customizable valuation algorithm created to identify the “new somebodies” who are the influencers creating a revitalized level of brand awareness for companies. The index valuation algorithm measures a cross-section of variables that numerically rate influencers in the social media conversation about a particular company, product or service. The index also identifies the “conversation points” that should guide engagement with each individual influencer, determining aspects, such as subject and tone, and identifies who these influencers are. This information helps us understand how these “somebodies” influence traditional target audiences, and help communications professionals establish effective outreach strategies. Integrating the influencer index data into a holistic social media strategy provides a comprehensive social media approach for optimizing brand equity.

Eraldo Carneiro, Mário Mendes Neto and Marcos Andre Costa’s “Petrobras’ study of publics: a step toward achieving the company’s strategic vision for 2020” describes and analyzes a study of publics that was conducted by the Corporate Communications Department of Petrobras, an integrated energy company of Brazilian origin, one of the ten largest in its sector worldwide. Petrobras’ strategic vision for 2020 includes the goal of becoming the preferred company among its publics of interest. To achieve this, Petrobras had to develop a concept and categories of publics that could be applied to all the company’s areas and subsidiaries. The study was based on analysis of theories related to publics and stakeholders, secondary data gathering, and on consultation of Petrobras’ areas and subsidiaries in workshops. The analysis of theories of publics and stakeholders enabled the identification of some variables that can provide a basis for building concepts.

The project identified needs and issues of each public of Petrobras and gave rise to the concept and categories of publics of interest of the company. The project brought greater understanding of the individuals and groups that compose the network to which Petrobras belongs. The participative process of internal consultation amplified the debate on the theme and enabled the conceptualization and classification of publics for Petrobras as a whole. The project represents a direct collaboration of the corporate communications area with the company’s strategic vision. In a world scenario, where multiplicity and the instantaneousness of interactions prevail, the identification of individuals and groups with whom companies and institutions may interact is regarded as essential to the success and even the very existence of these organizations. This perspective may be observed in the challenge faced by Petrobras. The company’s strategic vision for 2020, which aims to place Petrobras among the five largest energy companies in the world and make it the preferred company among its publics of interest, reinforces the importance of relationships for its business strategy. Therefore, the company’s Corporate Communications Department developed a project to conceptualize the company’s publics, taking into account the context and activities of Petrobras. This paper describes and analyzes the concepts, methods, and results of this initiative.

In “Strategic stakeholder dialogues: a discursive perspective on relationship building”, Trine Susanne Johansen and Anne Ellerup Nielsen demonstrate that societal developments and increasing stakeholder awareness have placed accountability and responsibility high on corporate agendas emphasizing the ability of corporations to secure their licenses to operate. As corporations have to act in new ways in order to deal with pressures brought on by different social, environmental and economic issues, e.g. climate change, sustainability and financial scandals, CSR has begun to inform other disciplines such as corporate strategy, corporate marketing, and corporate. Responsibility, legitimacy, and corporate citizenship have also taken up a central position within recent research on corporate identity, while studies have shown that CSR has become a key driver when measuring corporate reputation. Simultaneously, European companies have experienced a move away from state regulation towards a higher degree of self-regulation and delegation of responsibility to organizations themselves. The move towards greater self-regulation has meant a shift in relation to how corporations communicate CSR activities from implicit to more explicit forms of communication. CSR is consequently becoming a significant aspect of corporate communication, corporate identity, and reputation. Therefore, organizations have to respond strategically to increased awareness and concerns.

The paper argues that focal overlaps with regards to the stakeholder orientations of CSR, corporate identity, and corporate communication research can potentially aid in handling the legitimacy challenges faced by organizations by strengthening relationship building through dialogue. Stakeholder dialogue is introduced as a key aspect in CSR, corporate identity and corporate communication research, but the question remains how dialogue can be initiated and maintained? In order to address this question, the authors suggest that a deeper understanding is needed in relation to the form dialogue takes with different stakeholders, as well as how such dialogue is scripted. To provide a provisional answer, they offer a brief outline of the stakeholder perspective. Second, they identify how key stakeholder groups, and the varying stakes they hold, are addressed within the disciplines of CSR, corporate identity and corporate communication. Third, with the aid of discourse theory, they discuss how to understand and explore stakeholder dialogue. The exploration is carried out with reference to dialogue forms and scripts identified in relation to the different stakes and interests held by stakeholders. The proposed framework is illustrated by a corporation-consumer dialogue that demonstrates implications of utilizing forms and scripts as explorative tools. The framework thus acts as a theoretical lens for understanding dialogue in practice, and to discuss the wider strategic implications of framing stakeholder dialogue as scripted interaction.

In “Communicating crisis: how culture influences image repair in Western and Asian Governments”, Yvonne Siew-Yoong Low, Jeni Varughese, and Augustine Pang investigate how the image of a government can be threatened by crises that they do not handle well, and this impacts the trust it has with its citizens as well as its standing internationally. Trust is eroded when citizens feel they are not informed of government actions, especially in times of crises when it is imperative to respond to the threat in the socio-political system and where promptness is required of governments to engage its citizens. Communication can help restore some level of trust.

Two recent crises, representing two different cultures, are instructive on how governments can communicate with its citizens, and they offer a view of how sensitivity to culture can play a critical role in communicating crises. On one end of the spectrum is the Asian culture, represented by Taiwan, on August 8, 2009. Typhoon Morakot hit Taiwan, resulting in the worst flood the country experienced in 50 years. On the other side of the spectrum is the Western culture, represented by the USA. In 2005, Hurricane Katrina struck the American Gulf Coast in what was termed by the National Oceanic and Atmospheric Administration as “the most destructive storm ever to strike the United States.”

Despite the differences in culture, the two crises shared several similarities. There were massive death and destruction in both crises; and they shattered the people’s confidence in their respective governments’ ability to handle the crisis. The accusations made against both governments were also similar. Both governments were accused of:

1. 1.

   Being slow in their response and were not prepared for the crisis.

2. 2.

   Showing lack of empathy and compassion for the victims.

Crisis type, in this case, natural disaster, serves as a frame that defines how people interpret crisis responsibility. Even though the loci of control for both these disasters were external, the culpability for mismanagement of the disaster was evident. Another similarity was the massive efforts undertaken by both governments to repair their image subsequently. Given the similar conditions these two governments faced, it presented a unique opportunity to study the image repair strategies used by both governments, identify similarities and differences in the use of strategies, and examine the influence of culture on the choice of strategies.

This study is significant, because it examines image repair strategies used by governments in both a Western and an Asian setting, but also because it compares the differences in image repair strategies used. More importantly, while studies have extended to examine perceptions of CSR, relationships, and source credibility in image repair, this is arguably the first study examining the influence of culture on the use of image repair strategies, through the lens of Hofstede’s cultural dimensions theory. This study thus aims to fill the cultural gap by applying Hofstede’s theory to understand reactions to image repair strategies in Western and Asian countries. With the USA representing the Western culture and Taiwan representing the Asian culture, it is hoped that this study can inform practitioners the skill sets required to function in the global marketplace, where different cultures often converge. It is hoped that practitioners can benefit from the findings to begin to learn how to be more culturally attuned.

Alessandra Mazzei and Silvia Ravazzani argue in their “Manager-employee communication during a crisis: the missing link” that perceptions represent a critical aspect to consider when studying crises, as a crisis occurs when people perceive the situation as such. In addition, the complexity of a crisis situation creates multiple interpretations. In such contexts, communication activities are often misinterpreted, resisted or rejected by employees, despite strategies grounded in principles of “excellent” communication. The purpose of their paper is to investigate the effectiveness of internal communication during a crisis by comparing the perceptions of internal communication managers and employees. Their study explores how internal communication managers meant to communicate to employees the global financial crisis of 2008-2009, and how employees interpreted these efforts. It is based on interviews, a survey, and two focus groups involving internal communication managers and employees.

The authors investigate the effectiveness of internal communication during a crisis by comparing the perceptions of internal communication managers and employees. This study explores how internal communication managers meant to communicate with employees during the global financial crisis of 2008-2009 and how employees interpreted these efforts. The study is based on interviews, a survey and two focus groups involving internal communication managers and employees. This paper starts directly from empirical data and draws on literature in the final part to critically discuss results and to identify practical implications and areas for future research.

The last paper by Heather Lynne Hamilton, “Employee dissent in federal government organizations”, investigates how Canadian Government employees perceive and react to limits on their right to express public dissent about their employer. Her findings suggest that organizations might better manage reputation and minimize external employee dissent by focussing on communications that foster a value-driven organizational culture, rather than by implementing formal limits or policies to control dissent.

Finally, this special issue of CCIJ could not have been possible without the insight and expertise of the CCI Conference on Corporate Communication 2010 Program Committee. They are:

• •

  Krishna S. Dhir, PhD, Berry College, USA.

• •

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

• •

  Finn Frandsen, Professor, Mag. Art., Aarhus University, Denmark.

• •

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

• •

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

• •

  John Leipzig, PhD, University of Alaska Fairbanks, USA.

• •

  Roslyn Petelin, PhD, University of Queensland, Australia.

• •

  Pat Scott, PhD, Uhmms & University of Pennsylvania, USA.

• •

  Jo-Ann Straat, MA, Daiichi Sankyo, USA.

• •

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

• •

  Don Swanson, EdD, Monmouth University, USA.

Michael B. GoodmanGuest Editor