CHAPTER 1

What is Reputation?

CHAPTER 1 Overview of Corporate Communication

Describe the importance of corporate communication to today’s organizations;

Explain the communication theory and the application to its practice;

Explain the integrative framework of corporate communication; and

Describe how the organization communicates globally.

Overview of Corporate Communication?Corporate communication is a part of the strategic

management discipline that managers can use to improve organizational perception management and strategy development.

Managers of corporate communication are concerned with planning and implementing corporate communication functions such as corporate image and identity, corporate branding, internal communication, media relations, investor relations, marketing communication and government relations.

Managers of corporate communication acting as ‘eyes and ears’ of the organization, are responsible for maximizing the organizational values through managing the reputation and relationships.

focus on long term profitability by balancing a firm profits and relationships with their stakeholders.

reputation is a hallmark of organizational core competencies that what make corporate communication important to the firm

Overview of Corporate Communication?

What is Corporate Communication?Corporate communications is the process of facilitating

information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise.

The word “corporate” in this field is relating to “corporation”.

Latin word ‘corpus’ (body) in relations to “total”.

The word “communication” means transmit or disseminate messages/data.

Corporate communication can be interpreted as a total communication activity.

Corporate communication (without “s”) as “the total communication activity generated by a company to achieve its planned objectives”, (Jackson, 1987).

Van Riel and Fombrun (2007) define corporate communication is “the set of activities involved in managing and orchestrating all internal and external communication aimed at creating favorable starting points with stakeholders on which the company depends”.

Cornellisen (2004) defined corporate communication as “a management function that offers a framework and vocabulary for the effective coordination of all means of communications with the overall purpose of establishing and maintaining favourable reputations with stakeholder group upon which the organisation is dependent”.

What is Corporate Communication?

Definition of CorpComThe above definition contains several important elements, as explained

below: Communication comprises the internal and external communication

techniques and media that are being used to send relevant messages to internal and external constituencies.

Relationship is a functional activity that aims to create mutual understanding between two or more groups (the organization and its strategic constituencies).

Reputation is an individual’s collective representation of past images of an organization established over time. Reputation is an intangible asset of the organization.

Stakeholder is any individual or group who is keenly interested in the services offered by the enterprise. A group can be directly or indirectly affected by the functional activities of the enterprise.

Technical level of corporate communication – deals with functional activities such as event management, media relations and marketing communication.

Managerial level of corporate communication – concerns with strategic formulation, planning and implementation of managerial activities such as corporate identity, corporate branding, corporate reputation, investor relations, and corporate social responsibility.

Two Levels of Corporate Communication

First, a customer is always a KING! Corporations find today’s stakeholders are more sophisticated as compared to the last century.

Second, every corporation is expected to express and unleash potential to their constituencies. Perception management is a key to improve their business strategy.

Third, globalization has drastically changed the way a corporation runs its business.

Fourth, the convergent media of computing and telecommunication, the information or data can be transmitted from one place to another with a greater speed.

What Corporate Communication is So Important?

According to Argenti (1998), “by creating a coordinated, coherent corporate communication system, an organization will be able to face the new century with the strategies and tools that few companies in the world have at their fingertips”.

Thus, corporate communication will help the organization to be visible and transparent to their constituencies.

What Corporate Communication is So Important?

The Roots of Corporate Communication Communication is about transmitting messages, data or

information from a sender to a receiver using verbal or non-verbal behaviors.

Communication is not about transferring a thing from one place to another, but it must be interpreted as a shared meaning between two parties to achieve their goal in a win-win situation.

There are four basic elements of communication:

Sender (by whom) Receiver (to whom) Message (what messages/data/information are communicated) Channel (through which medium)

A Basic Communication Model 1#

A Basic Communication Model 2#

The above elements describe a communication process which a sender encodes the message and transmit it to a receiver using the appropriate channel.

The shared meaning depends on how a receiver decodes the message he/she receives.

In the organizational system, communication flow from the level of top management to the functional level requires a strategic communication policy.

Managers communicate with their subordinates to get the work done.

Internal communication is responsible for transmitting organizational policies to all employees in every business unit of the corporation. 

A Basic Communication Model 3#

Meanwhile, communication can flow from the bottom level to the top management in the dynamic environment. Feedbacks given by subordinates are used to improve the strategic communication policy.

In a communication process, disturbances such as noise, distraction, and hindrance are those annoying elements that preventing the messages successfully convey to receivers.

The sender, who carries the messages, must aware of any sign of disturbance in a communication process to ensure that messages can be clearly decoded by receivers

A Basic Communication Model 4#

Switching To New Paradigm 1#From public relations to integrated

communication

When defining corporate communication, some people view public relations is corporate communication. Is there any difference? Changing the name will not improve practices! Is it true that there is no significant different between these two terms?

The answer is studies (Zulhamri, 2007; Van Riel & Fombrun, 2007) have proved that there is a significant difference between these terms.

In practice, today’s public relations is about publicity and promotion through the management of special events and media relations. It is located at a functional level of management.

Meanwhile, from a holistic approach, corporate communication is about managing reputation through the management of corporate identity and images.

Switching To New Paradigm 2#

Many global corporations attempt to overcome fragmentation and to minimize inconsistent impression about the products and services of the corporation.

Through public relations programs, a corporation merely polishes its images and creates fragmented images which sometimes caused inconsistent messages to stakeholders.

Moving towards integrated communication is desirable to many corporations.

Van Riel and Fombrun (2007) argued that integrated communication is “a systematic process for building a fully coordinated communication system inside the organization”.

Switching To New Paradigm 3#

Thus, managers of corporate communication must understand that using integrated communication (public relations, marketing, and advertising) will make a corporation more visible and transparent to their stakeholders.

This supports the notion that corporate communication is about a Total Communication Activity.

Switching To New Paradigm 4#

Communicating GloballyGlobalization is inevitable!

There are two options: Adapt or die!

The world has been transformed from a traditional, ‘industrial economy to an attention economy’, (Bikker & Regt, 2001) precisely from selling product branding to selling corporate branding (Kitchen & Schultz, 2001) in order to venture into globalisation challenges.

According to McLuhan and Powers (1992), McLuhan coined the term “Global Village” to describe the world now becomes smaller and borderless.

The use of the Internet and World Wide Web has dramatically changed the way managers are doing business.

Through this process, it makes globalization possible to those strong and giant corporations.

Communicating Globally

SummaryIn this chapter, you have learnt that:

Corporate communication is the management science that requires a systematic process for building a strategic communication policy towards achieving desired goals and objectives of the firm.

Corporate communication consists of two important elements: reputation and relationship. The challenge is how a firm deals with reputation and relationships in a functional area.

Perception management is a key to improve an organizational business strategy.

Corporate communication deals with internal and external communication for the purpose of building favourable images with their stakeholders.

Globalization is inevitable. A corporation must adapt to the complex features to improve their reputation; otherwise, it will face a greater risk.

Class Exercise

Class Exercise