Corporate Communications Strategies - Research Paper Example

? Corporate Communication Strategies Introduction Corporate communications has over the decades grown to be one of the most valuable management and strategic tools in any organization especially if it is well aligned to the overall strategy of a company and meant to improve and enhance the strategic positioning of the organization (Argenti, Howel and Beck, 2005). The increased interest of both scholars and academicians to the significance of effective corporate communication strategies within an organization: communication strategies which enhance the corporate strategy of an organization, has increased a focus on what kind of corporate communication strategies organizations use to communicate to its diverse stakeholders with different needs and expectations (Gupta, 2011). Since corporate communication is continually evolving, it is imperative the corporate communication strategies used by organizations be up to date, strategic and effective in meeting an organization’s strategic objectives. This research paper investigates the corporate communication strategies employed by organizations that focus on enhancing organizational corporate strategies and goals, and further evaluates the corporate communication functions and channels that enhance such strategies in communicating with different stakeholders such as employees, shareholders, customers, suppliers, among others. Furthermore, the paper analyses the role and significance of corporate communication strategies focusing on corporate reputation, corporate identity and crisis management. 1.1 Corporate Communication Overview and Definition Hasanbegovic (2011, pp. 39) defines corporate communication as goal oriented activities which involve managing all external and internal communications within an organization, aimed at placing an organization in favorable light with its stakeholders. This definition is supported by Hawabhay, Abratt and Peters (2009, pp.12) who in their research note that corporate communication encompasses both external and internal communication channels that align organizational strategic objectives. Such communication need to be systematically integrated in order to prevent a fragmented and blurred image of the company. Various scholars have looked at the link between corporate communication and corporate strategy, concluding that organizations have the ability to develop a competitive advantage not only through the use of organizational resources effectively to achieve desired outcomes, but also through managing communication among different stakeholders in a company aimed at molding the perception and interpretations of the organizational stakeholders (Halliburton & Ziegfeld, 2009; Forman & Argenti, 2005; Hawabhay, Abratt, & Peters, 2009). Such communication also helps form long term relationships with the key stakeholders who shape the organisation’s reputation and image. Corporate communication strategies have mainly been linked to organization’s reputation building. Forman and Argenti (2005, pp. 248) makes this connection noting that the primary role of corporate communication is to develop and enhance the organization’s reputation, thereby creating a competitive advantage for the firm as the firm reduces the firm’s transactions. Corporate reputation defined as the ‘perceptual representation of the company that defines the overall appeal of the organization to the key stakeholders relative to other rival companies (Hasnbegovic, 2011, pp. 39), is clearly a central focus in any corporate communication strategy. From the above definition it can be noted that in order to develop and maintain a favorable corporate reputation, then corporate communications are directed at influencing the perceptions of different stakeholders on how an organization is viewed. This clearly implies therefore, that the central purpose of corporate communication function in an organization is to manage the impression of a company’s stakeholders on order to enhance the reputation of the organization. Much of the academic literature have mainly viewed corporate communications as a strategic function concerned with both acquiring important information from changes in the environment and disseminating information to the environment in manner that casts the organization in favorable light (Gupta, 2011; Barnes, and Walker, 2010; Steyn and Niemann, 2010; Van Riel, 2001; Porter & Kramer, 2006; Kim & Rader, 2010; Kim, 2011). All these research have identified different stakeholders that matter to organizations and different strategies that companies use to communicate and manage these relationships. However, only few researches have focused on analyzing corporate communication strategies and the role that such communication strategies play (Kim & Rader, 2010; Kim, 2011; Gupta, 2011). This research evaluates corporate communication strategies focusing on Kim and Rader (2010) and Kim (2011) proposed corporate communication strategies: corporate ability (CAb) focused strategy, and Corporate Social Responsibility (CSR) focused strategy, and hybrid focused strategy, and further evaluates the role that such corporate communication strategies play in an organization. 2. Corporate communications strategies 2.1 Corporate communication Strategies Corporate communication has been mainly credited for enhancing and building mutually beneficial relationships between an organization and its various stakeholders. The key indicator of how effective communication strategies are often determined by the extent to which communication efforts within the company influence the key stakeholder’s perception, behavior and attitude towards the company (Sora & Kim, 2010; Ahmad, Areiqat, & Abdelhadi, 2010). This implies that corporate communication strategies that an organization adopts are critical in creating positive and favorable corporate associations with the various stakeholders to whom such communication strategies are targeted. Search through literature shows that there are mainly two corporate associations that organizations seek to maintain and which play a crucial in attaining an organization core strategic objectives. These are corporate social responsibility associations and the corporate ability associations (Kim & Rader, 2010; Kim, 2011; Verboven, 2011; Vielhaber & Waltman, 2008; Vallaster, Lindgreen, & Maon, 2012; Steyn and Niemann, 2010; Halliburton & Ziegfeld, 2009). The corporate ability associations are those cognitive relationships that stakeholders have with the company as they acknowledge their expertise or service and product quality (Kim and Rader, 2011). In this sense, corporate communications that target these relationships would keenly focus on communicating the organization’s expertise and abilities in meeting the needs of the stakeholders. Corporate Social responsibility associations are social relationships between the organization and key stakeholders where the key focus is the organization’s social role as a member of society (Kim and Radar, 2010). In this case, the communication strategies do not dwell on the organizations expertise of product quality, but on social obligations. From these two categories of corporate relationships, three core corporate communication strategies that based on the goals and objectives of organizations as proposed by Kim and Rader (2010) and supported by Kim (2011) can be noted: corporate ability (CAb) focused strategy, and Corporate Social Responsibility (CSR) focused strategy, and hybrid focused strategy. 2.11 Corporate Ability focused Strategy A corporate ability focused (CAb-focused) corporate communication strategy is one which focuses on communicating an organization’s expertise and abilities in meeting the needs of the stakeholders (Kim and Radar, 2010). In this case, the organization mainly focuses to communicate to different stakeholders, whether suppliers, customers, employees among others on different aspects of the product or service provided by the company. Such corporate communications have a greater impact on how the products provided by the company are viewed, and builds the corporate brand image of such products or services. Halliburton and Ziegfeld (2009) in their research of 100 high corporate ranking European companies across France UK and Germany to understand how such companies communicate their corporate identity to the public note that not only do such companies adopt a global approach in their communication, but also mainly focus on communicating their technology ‘savvy-ness’ and in emphasizing their product brand visualizations (company logo, slogan, interactive images etc), design elements (layout, color etc) and content elements (products, brands, navigation, text etc) within their websites. They do this in a manner that communicates their abilities and expertise, as well as quality of products and services provided. A CAb-focused corporate communication strategy hence focuses more on communicating an organization’s expertise and what they have to offer. This therefore implies that such communication from an employee viewpoint would entail efficient operations and culture, brand personality and image from the customer’s viewpoint, or high quality materials and relationship from suppliers viewpoint (Halliburton and Ziegfeld, 2009; Hasanbegovic, 2011; Dekay, 2010). Kim (2011) argues that companies which have low risk high quality products tend to focus more on corporate ability focused communication strategies than CSR focused corporate communication strategies. For instance, a company such as Apple adopts a CAb-focused corporate communication strategy, as it mainly focuses on prominently communicating about its products rather than its culture or social responsibilities. 2.12 Corporate social responsibility focused strategy A corporate social responsibility (CSR) focused corporate communication strategy is one which focuses on communicating the organization’s social responsibilities as a member of society. Such responsibilities may either be environmental, social or political (Kim and Radar, 2010). In this case, the company focuses on communicating to different stakeholders that it is socially responsible and cares for more than making profits. In this strategy, tactics that may communicate this to various stakeholders can include sponsorships, efforts to ensure a cleaner environment through the organizations’ products, degree of employee involvement, or philanthropic giving among others. Such communication impacts stakeholder’s perception of the company which is important for leveraging competitive advantage in the market place. Kim and Radar (2010) in their research assessing which is the most used corporate communication strategies for Fortune 500 companies, they noted that while a majority of Fortune 500 companies adopt a more CAb-focused strategy than CSR focused strategy, the top 100 corporation on the list focused more on CSR focused corporate communication than CAb-focused. This, Kim (2011) attributes to the higher risks that top companies face with regard to their reputations and products. Search through literature shows that CSR focused corporate communication strategies are a rising trends among corporate and play the important role for enhancing how such companies are viewed by stakeholders (Vallaster, Lindgreen, and Maon, 2012; Argenti, 2009; Kim, 2011; Porter & Kramer, 2006). For instance, in Verboven’s (2011) research investigating how CSR communication impacts how the often stigmatized chemical industry is viewed, it is concluded that grouping CRS communication strategies in the companies’ mission slogan, a number of chemical companies such as BASF chemical company, Tessenderlo, Dupont and Bayer, have been able to present their “often stigmatized activities in a euphemistic way” (pp. 415). Examples of the mission slogans include “Bringing chemistry to life” “Science for a better life”, and The miracles of Science” (pp. 421). Hence, companies are leveraging these strategies to improve their corporate branding and image and to enhance the relationship between the company and the society. 2.13 Hybrid Strategy A hybrid corporate communication strategy in one which encompasses both the CSR focused strategy and the CAb-focused communication strategy (Kim and Radar, 2010). Hence therefore, an organization focusing on this strategy gets to enjoy the benefits of CAb-focused communication strategies which seek to enhance the quality value of the organizations products while also enjoying benefits from CSR-focused communication strategy where the company is noted to be social responsible. Though such companies often have less risk with regard to corporate brand image, the dilution of resources to both corporate communication strategies has the potential of making the company less competitive (Kim, 2011). More often, companies concentrate a greater degree of their resources to either of the two strategies in order to have a competitive edge. 2.2 Strategic corporate communications: Communication functions and channels Organizations have multiple stakeholders with whom their relationships need to be effectively managed where the corporate communication is both responsive and effective to these stakeholders (Argenti, 2009). Corporate communication function is strategic and imperative in building and sustaining corporate brands as well as business strategy. The challenge for senior management within an organization is to determine which elements of the organizations overall business strategy as well as corporate branding to communicate to each of the key stakeholders in an organization. Whether the organization seeks to develop a coherent and strong identity to the public through advertising, or seeks to communicate with the employees during a change in the organization, or informing suppliers of change in materials procured, developing an effective communication strategy for each of the stakeholders is imperative in ensuring effective communication. Such messages to be communicated are often broken down into bits and the right pieces communicated to the right stakeholders (Argenti, Howell and Beck, 2005, pp. 87). Irrespective of which corporate communication strategy is employed in an organization, various communication functions and channels fulfill specific organizational objectives which they aim to attain in corporate communication and contribute to the overall strategic impact to an organization’s goals. The various corporate communication functions are as evaluated below. 2.21 Media Relations Media relations within an organization’s corporate communication strategy mainly entail mainly a good image through the various points of media. The core objective for an organization to have an elaborate and effective media relations is mainly so as to not improve public relations but also have an effective and quick crisis management tactics through the medias such as through press releases, or through interviews on media. Since the media relations tactics are often aimed at the wider public audience, then it is essentially meant for all the key stakeholders within a company (Argenti, Howel and Beck, 2005; Pettigrew & Reber, 2010). 2.22 Employee communications On the other hand, employee communications function within a corporate communication strategy mainly aims at informing the employees concerning various changes or facets of the organization that are impact the employee and which they need to know. Often the objective such communication is often so as to involve the employees in key decision making as well help build consensus among employee and the management within the organization. Employees can be informed either through emails, newsletters, internal memos, and meetings among others. While the core stakeholders in such communication are the employees, it may also aim to reach out to customers as well as the families of the employees, or other potential talent in the market that the company may be aiming to tap (Steyn, and Niemann, 2010; Argenti, Howel and Beck, 2005). 2.23 Marketing Communications Marketing communication function within corporate communication strategy are mainly aimed at the customers and potential customers with the aim of driving sales, profits and building a strong brand image for a company’s products. Marketing communications are often done through promotions and advertisements with the core target stakeholders mainly being the customers and potential buyers of the company’s products. However, since most advertisements and promotions are often aired publicly in order to capture the customers, all the stakeholders in an organization are become secondary targets of the marketing communication (Barnes, and Walker, 2010; Argenti, Howel and Beck, 2005). 2.24 Financial communications Unlike marketing communication, financial communication within a company is often mainly meant for the owners of the companies, the potential investors, the media or analysts. Financial communication function mainly communicates financial performance data and information with the aim of ensuring transparency in company operations and also ensuring that the set company targets are met. This communications are often conducted in conference calls with the chief financial officer or the chief executive officer gets to inform shareholders and investors on the financial state of the company and how profitable it is (Argenti, Howel and Beck, 2005). 2.25 Community and government relations Community and government relations function within a corporate communication strategy mainly aims building the image of the company to the surrounding community in which it operates, and also complies with the various set rules as well as regulatory expectations. Though the main target of such communication are mainly the community and regulators, other stakeholders who have a significant impact such communication mainly entail consumer groups, non government organizations such as environmental groups, the media, and consumers. The manifestations of such relations are mainly through speeches, lobbying efforts, events, philanthropic activities as well as meetings (Kim & Nam, 2012; Argenti, Howel and Beck, 2005). 3. Role and significance of corporate communication Strategies With increased global competition, consumer activism and digitization, it is increasingly becoming important for organization to effectively manage their relations with various stakeholders. This has in turn increased the significance of corporate communication in organizations and the key role that such communication play in enhancing organizational performance. The key roles and significance of the corporate communication strategies analyzed above are: 3.1 Corporate Reputation and Image A number of literatures have emphasized the significance of corporate communications in building an organization’s corporate reputation and image. Gupta (2011) in his research on the role of corporate communication notes that 80% of respondents in study acknowledged that the core purpose of corporate communication was to build corporate brand and enhance its reputation. Corporate communication strategies have mainly been linked to organization’s reputation building. Forman and Argenti (2005, pp. 248) makes this connection noting that the primary role of corporate communication is to develop and enhance the organization’s reputation, thereby creating a competitive advantage for the firm as the firm reduces the firm’s transactions. Corporate reputation defined as the perceptual representation of the company which defines the overall appeal of the organization to the key stakeholders relative to other rival companies (Hasnbegovic, 2011, pp. 39), is clearly a central focus in any corporate communication strategy. Indeed Forman and Argenti (2005) and Hawabhay, Abratt and Peters (2009) acknowledge that a company’s reputation is not only influenced but also determined by how effective it manages its corporate communication. Therefore, it can be noted that in order to develop and maintain a favorable corporate reputation, then corporate communications are directed at influencing the perceptions of different stakeholders on how an organization is viewed. 3.2 Corporate Identity The corporate identity of an organization encompasses both the brand and reputation of the organization and is the very essence by which an organization identifies itself. Corporate communication impacts how well an organization is able to communicate its corporate identity. For instance, Halliburton and Ziegfeld (2009) in their analysis of Fortune 500 companies’ corporate identity through the corporate websites noted that most Fortune 500 companies took on a global corporate identity with a core focus on ‘tech savvy’. Such corporate communication through the corporate websites enables the development of an organization’s corporate identity. Indeed Gupta (2011) found in has research that as organizations are undergoing a change in their corporate identity, most adopt a stakeholder based corporate communication so as messages are customized for different stakeholders yet still aim to achieve the corporate identity the company targets. For instance, shareholders would be concerned on the future prospects of the organization while employees for their future employment prospects. 3.3 Crisis management Corporate communication is a critical part crisis management (Gupta, 2011b). Usually crises are often unprepared and chaotic in nature, and if not well handled may spin out of control. Crisis communication is an inherently significant part of any corporate communication plan as organizations always face the potential of a crisis. Chen and Seeger (2012) in analyzing an organizational crisis at CE Health International Holdings, one of the biggest corporate failures in Australia, noted that failure of proper corporate communication strategy to such crisis resulted to denials and shifting of blames as a strategy which resulted to the complete collapse of the trouble company. Indeed Erikson, Weber and Segovia (2011) argue that in a crisis situation, an organization needs to take an image restoration approach in its corporate communication strategy, where the organization needs appoint a crisis communication team to take the organization effectively through the crisis without grossly impacting its reputation (Gupta, 2011b). Furthermore, adoption of technology such as the internet communication (social networking) to counter negative message and image that may spread (Vielhaber and Waltman, 2008). This implies that the corporate communication plan put in place to handle crises is important in helping companies tackle such events and still come out unscathed. 4. Conclusion In conclusion, from the above evaluation, it can be noted that of the three core corporate communication strategies identified, though Corporate social responsibility focused strategy are increasingly adopted by organizations, the corporate ability (CAb) focused strategy, tend to be more effective in enhancing corporate brand than either Corporate Social Responsibility (CSR) focused strategy, and hybrid focused strategy. However, CSR focused strategies enhance corporate reputation more. However, how effective a strategy is wholly depends on the organizations goals and objectives. What actually determines how effective these corporate communication strategies, are effectively the communication functions within the strategies are developed for each of an organization’s stakeholders. Communication messages to be communicated are often broken down into bits and the right pieces and communicated to the right stakeholders to attain a given organizational goal. The key roles and significance of the corporate communication within an organization are mainly to enhance the corporate image and reputation of the organization, and to build its corporate identity while at the same time leveraging the company’s ability to deal with crisis situations. Organizations which have high risk products would most likely adopt a CSR focused corporate communication strategy in dealing with any crises that may result from its products. In essence, therefore, the degree with which corporate communication strategy is either CAb-focused or CSR focused, is inherently based on the how the communication messages would be broken down into bits and the right pieces and communicated to the right stakeholders to attain a given organizational goal, as well as the key role that such strategies play within an organization. 5. References Ahmad, M. A., Areiqat, A., & Abdelhadi, T. (2010). Islamic Approach to Management of Corporate Communication and Relationship Strategy and its Implications. Interdisciplinary Journal of Contemporary Research in Business, 2(2), 519-541. Argenti, P. A. (2006). How technology has influenced the field of corporate communication. Journal of Business and Technical Communication, 20(3): 357-370. Argenti, P.A. (2009). Corporate Communication. (5th Ed). New York: McGraw-Hill. Argenti, P.A., Howell, R.A., and Beck, K.A. (2005). The Strategic Communication Imperative. 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