The Composition and Interaction of Stakeholders - Essay Example

Public Relations 2009 Public relations may be defined as the management of relationship between the company and its various stakeholders, including customers, shareholders, employees, channel partners like dealers and distributors, the government and the community. The stakeholder theory was first suggested by Freeman (1984), who defined a stakeholder of an organization as “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (quoted in Jonker, 2004). The composition and interaction of stakeholders is a complex process and not necessarily independent of stakeholder grouping for organizations. The organization needs to manage the stakeholders effectively for a collective development process through proper identification of stakeholders, set up processes to organize relationships with the stakeholders as well as the transactions with them. Public relations are an efficient management of stakeholder relationships. Hence, the public relations department manages the communication between the management of the organization and all stakeholders, whether within or outside the organization (Botha and Chaka). Public relations influence perception of the company, its brand and, of course, its products and services through generating media coverage and image-building exercise, that in the long run would drive revenue growth. While advertising is the above-the-line communication that directly influences image of the company’s goods and services, the brand and its social responsibility, Public relations are the below-the-line indirect communication for the same purpose. Marketing expenses include those for space ads on TV, print, the internet and outdoor and direct mailing through newsletters and e-mails. PR expenses include those for press and blog coverage, TV appearances, brand awareness, sponsorships, analyst coverage, in-house communication, government liaison and so on. While product advertising expenses are handled by the marketing department, corporate advertising and branding is usually the responsibility of the corporate communications department. Hence the advertising and PRs budget and the organization structure are often overlapping. The most direct tool for influencing perception of the company’s goods and services and its corporate social responsibility and role is the media, which includes print, broadcast and the Internet. Social media, or PR 2.0 as it is commonly known, is becoming a potent tool for public relations. Communication within an organization or a group is essential to bring the best out of the employees of the organization or the members of the group. Communication is necessary to familiarize new employees with the organization, the group to operative in a cohesive manner so that there is maximum output with minimum wastage. Besides, with communication, the operations of the organization may be streamlined to make it most productive. The Public Relations department, in association with the Human Resource department, should make the process of communication within the organization smooth enough so that employees can become the most productive. Media spin is usually used in a derogatory sense to denote a type of public relations that provide a biased portrayal of an organization or an event in one’s favor. The spin is used as a public relations exercise most typically by governments, more often during times of war. The administration then attempts to focus on certain issues and highlight achievements in order to develop public opinion in its favor. The typical techniques that are used as media spin are deliberately choosing certain facts and quotes and denying others, often resorting to providing false statements or phrasing statements in euphemisms in order to hide statements or to propagate own agenda. In an interview in 2005, Larry Bienhart describes fog facts as the news that are trivia and should be highlighted actually disappear in the fog while the more important news get hidden. This is not any accident, according to Bienhart, but deliberately done as an exercise in media spin. Most news, with exceptions like natural disasters and so on, are made big through deliberate manipulations like press releases and conferences, which are actually spin instruments and spinrooms. Bienhart points out that public relations in the United States have matured over the twenty years since the Vietnam War. While most administrations need to justify some dishonest actions, media spin has become more sophisticated now than it had been during the times of Kennedy or Clinton, who had also spun the media but less successfully. On the other hand, Bush had the not only the support of an extremely competent set of spin doctors but also the environment of war hysteria that had already shaped public opinion on his side. Propaganda is an extreme form of public relations used by governments particularly in times of war. During the World War I, the Creele Committee churned out propaganda on German barbarity on a regular basis while also severely censoring the media. Joining the war, overthrowing the American isolationist policy since Independence, garnering public support for the war was thought to be crucial. The propaganda material was developed by blending studies on psychology and advertising. The media was instructed to abide by “voluntary guidelines” and a frenzy of German atrocities was garnered. Although the CPI did not have explicit enforcement powers, it undertook extensive censorship of the media and the arts. News was monitored and most newspapers were filled with press releases churned out by the CPI. The committee also released numerous features, which were written in association of professional short story writers. The academics – even great names like John Dewey and Walter Lippman – were made to voice support for the war. Propaganda posters, created by the leading advertising professionals and artists, were generously displayed as newspapers and magazines donated advertising space for these. Even the film industry collaborated with the propaganda efforts of CPI. Films like The Kaiser: The Beast of Berlin, Wolves of Kultur, and Pershing's Crusaders were what was shown in most American theaters during the war (propagandacritic). Public relations exercise is often used for crisis management. In 2002, Qantas Airlines initiated a major public relations exercise to increase its market share and to thwart the adverse publicity generated by an investment fund taking a majority shareholding. The company inducted John Travolta, actor and a trained pilot, as the company’s “ambassador-at-large” to develop on the “Spirit of Australia” slogan. Travolta’s image was used to promote the brand as well as employee initiative through a global tour. Ogilvy Public Relations Worldwide Australia managed Travolta’s global tour and the campaign through the “Spirit of Friendship” slogan, particularly focusing the American market. Travolta’s passion for aviation was put to use in the campaign. The agency concentrated on press conferences in Los Angeles and New York, thereby guaranteeing a large media presence. The invitations were sent out exclusively in Travolta’s name, hinting at “a global initiative” that was certain to raise the media’s curiosity. The press conference itself was a dramatic event, held at the abandoned Imperial Terminal at the Los Angeles Airport done up as the First Class Lounge of Qantas Airways, Sydney. The media was provided with a photography package with Travolta dresses as a 1964 pilot as well as one-one interview and photo opportunities along the tarmac. The campaign resulted in Qantas achieving global markets. Nearly 300 local and national slots highlighted the “Spirit of Friendship” Global Tour on the segments, “Entertainment Tonight”, “Access Hollywood”, “Live with Regis and Kelly” and “CNN Headline News”. Nearly 450 print articles were published in the United States, including those in Time, Los Angeles Times and Chicago Tribune besides 2,000 articles in global newspapers including The Sunday Telegraph in Australia and Sunday Times in London. About 900 television slots included HBO Asia in Hong Kong, BBC News in London and RA1 in Rome were taken. While more than 50 million audience was reached in United States alone, the campaign also raised employee morale within Qantas (Ogilvy). Thus, public relations encompass a variety of activities including media relations, employee relations, government relations and crisis management. It is the intermediary in communication between the management and the stakeholders and needs to be in constant touch with all departments. Organizations ranging from private to government, large to small, in all industries need to undertake public relations to communicate with all stakeholders. Works Cited Ogilvy P R, Case Studies: Qantas Airways, http://www.ogilvypr.com/case-studies/qantas-2.cfm Propaganda Critic, Committee on Public Information, http://www.propagandacritic.com/articles/ww1.cpi.html Jonker, J A (2004). Destination Strategic Direction and Positioning, PhD Thesis, University of Pretoria, upetd.up.ac.za/thesis/available/etd-07022004-130908/unrestricted/00front.pdf Freeman, (1984). Strategic Management: A Stakeholder Approach, Boston, Pitman Beinhardt, Larry (2005). Fog Facts: Searching for Truth in the Land of Spins, Nation Books Botha, D and Chaka, M, Public Relations, Pearson South Africa Read More