Marshall & Gordon - Assignment Example

Marshall& Gordon Executive summary The Marshall& Gordon is an international company that is among the worlds best recognized for its efforts in the public relations sector with its headquarters in New York. Public Relations firms across the world provide a wide range of services that are aimed at improving and managing the reputation of a company’s brands, products, goods and services. However, public relations firm are currently facing lots of challenges as they carry on their work. Public relations consultants’ jobs were previously underestimated to be that of creating and issuing of press releases, whereby the PRs had the task of looking for connections with media personalities so that their articles could be placed well in articles. The main aim of doing this was to enhance and sell their products to the public well. This is not the case currently as firms are consolidating through mergers and acquisition; they are also working hard to develop global competencies and expertise to be able to serve clients who are multinational and the powerful social media. This has helped the PR firms to grow a lot and diversify into other extensions of PR services such as handling cases of reputation management. The firms also seek to increase their annual growth to a significant digit. The main objective in writing this memo is analyzing the issues that are associated with the public relations industry using the case of Marshall& Gordon and the challenges its facing in implementing its compensation system. Introduction The Marshall& Gordon Company is an international organization that was founded out of a merger between Marshall, a firm based in Atlanta and Gordon based in New Orleans. The merged firm came into being in 1950s and made its strategic decisions regarding its focus on communications, branding of products and creation of portfolios, with its headquarters relocated to New York. In 1962, the Marshall& Gordon firm was acquired by PTG, an international firm that was widely recognized in its advertising proceeds, the way it carried out its public relations and its media companies. By 1999, the firm had gone international and got its offices in various continents, with a great person famous for renowned implementation of media tools and innovation in public relations innovation as the CEO. She really helped the firm to grow a lot through her good prowess in the PR activities. The Marshall &Gordon PR has since then assisted other firms to grow especially where they have challenges and issues with the PR section. The company grows fast with its annual growth superseding that of former years in its advertising and branding of products. However, the company is currently facing several challenges which have turned out to be some of its weaknesses. The company’s strength lies in the prowess of the CEO, who has great skill in public relations hence can make decisions that will have great beneficial impact on the company’s reputations. She has also assisted other firms to grow in the decisions that she assists them to make, this has earned the company a lot of respect especially from other PR firms that recognize the company. The fact that the firm has several offices in other continents is a good sign that the company has grown and expanded its business activities; this is another strength and opportunity for the firm. The company’s early decisions to venture into public relations has made it get connections with other great firms from which it has benefited a lot. The company also has strong production, branding and selling of its products however, it has failed in the way it markets its products. The weakness of the firm is in its lateral hires of people who are neither mentoring on any of its associates nor developing any of its clients. The other thing regarding the marketing of its products is the issue of developing an effective compensation system for its clients and public relations consultants. The compensation system will however hinder collaborations. The firm is likely to face stiff competition from other organizations that have learned the prowess of public relations and have also gone international in their branding. The companies that have advantage over the Marshalls& Gordon Corporation are those that are better in their marketing activities. The firms that also have a good compensation system for entrepreneurial and mitigating factors are the ones that will be upfront in their PR management systems. Substitute goods are products that perform the same product with the former goods; these goods prove to be a threat as they are a source of competition for these products. These companies are at a better side if they have good marketing and advertising skills. Other companies could also take advantage over the company’s weakness in its marketing prowess and develop substitute or complementary goods that will be marketed and sell easily (Sullivan, 2003). The Marshall& Gordon firm is in a strong competitive position as compared to the other organizations due to its wide spread fame and respect from other firms that it has mentored. The company however needs to improve its compensation system and its entrepreneurial systems; otherwise other firms that are aiming to be at the top will take advantage of this situation. The weaknesses that the firm has so far can be overcome and developed by employing more people who are better skilled in public relations, especially the marketing section. The advantage that the firm has of being international can be a good opportunity for it to market itself outside the country where they face competition from other goods. The threats of it being overcome by other firms should not really be an issue as they can all put their heads together and improve their marketing and compensation system. The compensation is supposed to act as bait for its employees and PR consultants. The rate at which the firm is implementing its compensation system is worrying and it needs to speed up the crucial matter before it gets out of hand. The company’s goals and objectives that aim at providing and efficient compensation and branding system is a good corporate strategy. The company also needs to produce subsidiary goods of its own so as to boost their sales. The pro that is associated with this strategy is efficiency in its marketing system and an increase in values for the company. Its disadvantage is that the system does not encourage collaboration with other firms. This is hard for the well established Marshall& Gordon firm. The marketing strategy for the firm in giving high bonus to those who market their products the highest is a good way of getting their products to sell and generate more revenue (Exhibit 1). This will not increase the costs of salaries at all since the product sales also get to increase and cover up the costs incurred. The general focus however should be on compensation and increasing the marketing strategies by PRs. To ensure success of the company, the employees should be rewarded for their activities in marketing products of the firm, the compensation of the company should change so as to encourage other consultants to alter their approach and support the firm’s strategic shift. Regardless of the environment that the firm is in, if firms delivered the required revenues, then they are supposed to be given compensations so that they do not lose these firms. Conclusion The Marshall& Gordon firm needs to change its prospects towards its compensation, despite the fact that it will discourage collaborations with other firms. The economic downturn that hit the firm so hard should not be a setback in any way, it should instead steer the company to increase their revenues from other firms. The tiered system where one is paid according to the revenue that they take to the firm each year is a very effective way of ensuring that marketing is done broadly by the employees (exhibit 2). The compensation system hinders collaborations with other firms; however this perspective can be changed for the latter to accept this shift. The pace at which the firm carries out its compensation activities should be fast since it has already experienced an economic downturn of its activities. The objectives, business and corporate strategy level should keep the firm focused. The Marshall& Gordon firm should enhance its PR activities in the various countries and sectors. Exhibit 1 Financials of the firm- in millions Year 2008 2009 2010 Total revenue $432.1 $277.9 $343.8 Total operating expenses $394.9 $295.7 $332.1 Net income $26.1 $13.9 $5.0 Exhibit 2 Tier salaries Origination fee paid out at % Under $280,000 10% $280,000- $560,000 20% Over $560,000 30% Tiers for execution fee Paid out at % Under $280,000 15% $280,000- $560000 20% $560,000- $1,000,000 25% Over $1,000,000 30% Reference List Sullivan, A. (2003). Economics: Principles in action. Pearson Prentice Hall Read More