Introduction to public relations notes

notes on public relations management and public relations and customer care notes
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Chapter 1 The Importance of Public Relations: UPS Case Public relations can truly mean the difference between life and death for an organization, or the difference between profitability and failure. The following case illustrates the importance of public relations as a means to maintain ongoing, beneficial relationships, to systematically listen to and understand the concerns of publics—in this case, internal publics and a labor union and the external public of news media. Ongoing public relations initiatives, such as strategic issues management, could have prevented the problems encountered by the organization in the following case. The case also demonstrates that an organization can recover its footing and repair its reputation and relationships, once it acknowledges its mistakes and commits to changing course. The following series of events highlight the importance of ongoing, strategic public relations as the very lifeblood of 1 an organization. 1 Case based on classroom lecture and interviews with Kenneth Sternad (personal communication, March 30, 2009; September 2009). Information also based on UnitedParcel Service (2009). Saylor URL: http://www.saylor.org/books Saylor.org 6 1.1 A Conflict Unfolds United Parcel Service (UPS), the world’s largest transportation and logistics company, faced a difficult set of challenges as the year 1997 began. The company, founded in 1907, plays a vital role in both the U.S. and global economy. UPS serves more than 200 countries and territories and delivered more than 3.8 billion packages—15 million packages a day—in 2008. The company achieved 51.5 billion in 2008 revenues and has more than eight million customer contacts per day. It is the second largest employer in the United States and the ninth largest in the world with 427,000 employees. UPS carries approximately 6% of U.S. gross domestic product (GDP) and 2% of global GDP. UPS had a long and, for the most part, positive relationship with the International Brotherhood of Teamsters, the union that has represented UPS employees since the 1920s. In 1997, that relationship would be severely tested and the resulting impact on the company would be profound. Negotiations with the Teamsters began in early January of that year, even though the existing contract didn’t expire until 12:01 A.M. on August 1, 1997. UPS negotiates a national contract with the union every 4 to 6 years, and prior to 1997 there had never been a national strike by the union against UPS. The company is the largest employer of Teamsters in the country, with 225,000 members. The president of the Teamsters was Ron Carey, a former UPS driver from New York City, who— according to many accounts—had left the company with a profound dislike for UPS. Carey had won reelection as president of the Teamsters in 1996, an election that later resulted in an investigation based on allegations of illegal fund-raising and kickbacks. As negotiations with the Teamsters began, Carey’s opponents within the union were attacking him, seeking to erode his support and petitioning for possible new elections. Many believed there was a high likelihood that the federal investigation would result in Carey’s election being overturned. Although UPS was not aware of it as negotiations began, Carey had been quietly preparing the union for a strike. He needed to make a show of force and leadership to galvanize his support in anticipation of rerunning for the presidency if the election was nullified. Saylor URL: http://www.saylor.org/books Saylor.org 7 At the start of negotiations the primary issues focused on traditional areas such as wages and health and retirement benefits. But two other areas proved to be far more important, especially in the communication battle that developed as negotiations began to break down. One of these was job security. UPS had utilized part-time employees for many years, and the Teamsters wanted the company to commit to the creation of a higher percentage of full-time jobs, with a guaranteed minimum number of these jobs. A second underlying issue that heavily influenced the negotiations was control of the pensions for UPS employees in the union. At the time negotiations began, the Teamsters union controlled the pension fund, one of the largest funds in the United States. UPS questioned how the fund was being managed, the future pension security of its employees, and wanted a separate pension fund for its employees who were Teamsters. As the negotiations began to deteriorate, the company began planning contingencies at all levels, including public relations. In 1997, UPS was still a privately held company. The public relations department was small, with only 10 management employees and a limited budget of 5 million in the United States. There were few trained spokespeople, since the company did not have the public disclosure obligations typical of publicly traded firms. The public relations department functions included product publicity, financial communications, reputation management, and executive communications through a speaker’s bureau. The function was also responsible for overall message development, crisis management, sponsorships, and event support. But it was understaffed and underfunded to deal effectively with the global attention UPS was about to face. The contract negotiations continued to unravel throughout the summer of 1997 and culminated with the Teamsters rejecting UPS’s final contract offer on July 30. At that point, federal mediators intervened and continued negotiations through August 3. As the talks concluded at the end of the day, the union indicated it would return to the table the next day. Without any forewarning, the Teamsters union announced to its members that evening that it would strike. Ron Carey held a press conference early in the morning on August 4 confirming a national strike and encouraging all UPS workers to walk out. The Teamsters had been developing a full-court Saylor URL: http://www.saylor.org/books Saylor.org 8 media blitz, which they launched that day with a well-coordinated campaign using television, radio, and print. The UPS strike instantly became the top national and local news story throughout the United States. The strike affected operations in more than 1,800 locations in all 50 states and generated media interest in every large- to medium-sized city. The UPS public relations office received more than 20,000 phone calls during the strike. According to Ken Sternad, who headed the function at the time, “We got slaughtered in the press.” The strike lasted 15 days and had a severe impact on U.S. and global commerce, costing UPS 750 million in lost revenue and related expenses. In the view of Sternad, the Teamsters won the communication battle largely because they had “key messages that played well.” “They focused their messaging around the theme of ‘Part-time America won’t work’ and that caught on with the media,” said Sternad. “The Teamsters had clearly tested and researched this message and the others they used. They communicated early and often, including holding twice-daily press briefings in Washington, DC. The Teamsters stayed in control of the message and it worked for them.” Sternad also pointed to the way in which the union put a human face on the issue by showcasing unhappy UPS workers, especially those with part-time employment. They effectively engaged third- party experts and made effective use of the Internet. During the strike, UPS established a clear set of guiding principles and never wavered from these. The company’s number one objective was to get a good contract; winning the public relations battle was not an objective. “We had decided early on that we would not attack the union leadership and not make our people a target,” remembers Sternad. He continued, We knew that we would need our people with us for the long term and we didn’t want to do or say anything that would tarnish the image of the UPS driver. They will always be the face of the company and our link to our customers and we didn’t want to alienate them. Saylor URL: http://www.saylor.org/books Saylor.org 9 In preparing for the strike, UPS did have a formal crisis communications plan in place and they had developed a specific communications plan in the event of a strike. The public relations team had compiled extensive facts and figures about the company and had trained regional spokespeople in advance of a strike. They had also identified third-party experts who could point out the many positives of the company. In retrospect, the company acknowledges that they could have done a better job of handling the communication before and during the strike. Says Sternad, We had essentially no communications in the first 24 hours. Our messages simply didn’t resonate with the media or the general public, including our customers. We realized that we had not adequately tested our messages before or during the crisis. And we were much slower to utilize the web than the Teamsters. In the end we just didn’t have the proper resources aligned to manage the crisis. UPS learned valuable lessons from the experience that have served them well in preparing for future crises. Sternad notes, The real work begins before the crisis hits. The PR team must make decisions for the long-term and stay focused on priorities. As in all crises, the first hours are the most critical. How the company responds initially sets the tone for the rest of the crisis period. That is why advance research is so critical. Message testing is fundamental to effective communications, but it must be done before the crisis hits. We also saw clearly that in your messages you need steak and sizzle, facts along with powerful images that touch people’s emotions, not just their intellect. We now cultivate and use third parties on an ongoing basis so that we know them and they know us long before a crisis. We maintain standby web sites that can be turned on instantly in the event of a crisis. As painful as it was at the time, I think we’re a much stronger and better prepared company because of this experience. Saylor URL: http://www.saylor.org/books Saylor.org 10 Though UPS may have failed to gets its point across in the heat of the 1997 battle, the longer term story turned out differently. After the strike was settled, Teamsters president Ron Carey was removed from office, expelled from the union, and banned from participating in labor activities for life as a result of his involvement with election irregularities. The Teamsters had retained control of the pension plan after the 1997 strike, but its financial health continued to erode in the years that followed. Pension benefits were cut, the retirement age was raised, and UPS ultimately negotiated a separate pension plan for more than 40,000 of its Teamster employees previously in the union plan. It cost UPS more than 6 billion to exit the union plan and cover its liabilities, compared to a fraction of that amount it would have cost if they had been granted control in 1997. Following the resolution of the strike, UPS saw its strongest growth and most profitable years in 1998 and 1999. In 1999, UPS became a publicly traded company through the largest initial public offering of its stock in the history of Wall Street. A year later, UPS was named by Forbes magazine as its “Company of the Year.” Saylor URL: http://www.saylor.org/books Saylor.org 11 1.2 What Can Be Learned From the UPS Case? Although UPS ultimately overcame the setbacks it incurred from the Teamsters strike of 1997, the company would have much preferred avoiding the strike altogether. Clearly, the strike had an adverse impact on the company’s reputation, an impact that took years to reverse. The case demonstrates the importance of developing and maintaining relationships, even with those whom you may feel are adversaries. In this case, the company underestimated the Teamsters willingness to call for a strike. They also miscalculated the underlying resentment of Teamsters members toward the company. Once the strike was under way, the company began to regain its footing. Management consciously chose not to vilify its employees, even though they had walked off the job. This strategy proved to be a key in limiting the long-term damage from the strike and allowing UPS to recover its reputation and rebuild labor relations within a relatively short time. Saylor URL: http://www.saylor.org/books Saylor.org 12 Chapter 2 What Is Public Relations? Public relations is a conduit, a facilitator, and a manager of communication, conducting research, defining problems, and creating meaning by fostering communication among many groups in society. The United Parcel Service (UPS) case illustrated the importance of this communication, both in financial terms—the strike cost UPS about 750 million—and in terms of reputation with strategic publics. Public relations is a strategic conversation. As you might imagine, it is an ephemeral and wide- ranging field, often misperceived, and because of the lack of message control inherent in public relations, it is difficult to master. Public relations is even difficult to define. Is it spin or truth telling? Either way, the public relations function is prevalent and growing; the fragmentation of media and growth of multiple message sources means that public relations is on the ascent while traditional forms of mass communication (such as newspapers) are on the decline. You can find public relations in virtually every industry, government, and nonprofit organization. Its broad scope makes it impossible to understand without some attention to the taxonomy of this diverse and dynamic profession. Learning the lexicon of public relations in this chapter will help you master the discipline and help your study move quicker in subsequent reading. Corporate and agency public relations differ. These concepts are discussed in detail in a later chapter, along with nonprofit public relations and government relations or public affairs. For the purposes of an overview, we can define corporate public relations as being an in-house public relations department within a for-profit organization of any size. On the other hand, public relations agencies are hired consultants that normally work on an hourly basis for specific campaigns or goals of the organization that hires them. It is not uncommon for a large corporation to have both an in- house corporate public relations department and an external public relations agency that consults on specific issues. As their names imply, nonprofit public relations refers to not-for-profit organizations, foundations, and other issue- or cause-related groups. Government relations or public affairs is the Saylor URL: http://www.saylor.org/books Saylor.org 13 branch of public relations that specializes in managing relationships with governmental officials and regulatory agencies. Saylor URL: http://www.saylor.org/books Saylor.org 14 2.1 Defining Public Relations Among the many competing definitions of public relations, J. Grunig and Hunt’s is the most widely cited definition of public relations: Public relations is “the management of communication between an 1 organization and its publics.” One reason this definition is so successful is its parsimony, or using few words to convey much information. It also lays down the foundation of the profession squarely within management, as opposed to the competing approaches of journalism or the promotion-based approach of marketing and advertising that focuses primarily on consumers. The component parts of Grunig and Hunt’s famous definition of public relations are as follows:  Management. The body of knowledge on how best to coordinate the activities of an enterprise to achieve effectiveness.  Communication. Not only sending a message to a receiver but also understanding the messages of others through listening and dialogue.  Organization. Any group organized with a common purpose; in most cases, it is a business, a corporation, a governmental agency, or a nonprofit group.  Publics. Any group(s) of people held together by a common interest. They differ from audiences in that they often self-organize and do not have to attune to messages; publics differ from stakeholders in that they do not necessarily have a financial stake tying them to specific goals or consequences of the organization. Targeted audiences, on the other hand, are publics who receive a specifically targeted message that is tailored to their interests. As “the management of communication between an organization and its publics,” public relations has radically departed from its historical roots in publicity and journalism to become a management discipline—that is, one based on research and strategy. 1 Grunig and Hunt (1984), p. 4. Emphasis in original. Saylor URL: http://www.saylor.org/books Saylor.org 15 2.2 The Function of Public Relations In 1982, the Public Relations Society of America (PRSA) adopted the following definition of public relations that helps identify its purpose: “Public relations helps an organization and its publics adapt 1 mutually to each other.” In its “Official Statement on Public Relations,” PRSA goes on to clarify the function of public relations:  Public relations helps our complex, pluralistic society to reach decisions and function more effectively by contributing to mutual understanding among groups and institutions. It serves to bring private and public policies into harmony.  Public relations serves a wide variety of institutions in society such as businesses, trade unions, government agencies, voluntary associations, foundations, hospitals, schools, colleges and religious institutions. To achieve their goals, these institutions must develop effective relationships with many different audiences or publics such as employees, members, customers, local communities, shareholders and other institutions, and with society at large.  The managements of institutions need to understand the attitudes and values of their publics in order to achieve institutional goals. The goals themselves are shaped by the external environment. The public relations practitioner acts as a counselor to management and as a mediator, helping to 2 translate private aims into reasonable, publicly acceptable policy and action. As such, the public relations field has grown to encompass the building of important relationships between an organization and its key publics through its actions and its communication. This perspective defines the field as a management function and offers insight into the roles and responsibilities of public relations professionals. The PRSA definition, however, is not perfect: A main weakness of that definition is that it requires public relations “to bring private and public 3 policies into harmony.” In reality, we know that the relationships an organization has with all of its publics cannot always be harmonious. Further, that definition obligates us to act in the best interest of both the organization and its publics, which could be logically impossible if those interests are diametrically opposed. A few examples would be class action litigation, boycotts, and oppositional Saylor URL: http://www.saylor.org/books Saylor.org 16 research and lobbying; despite the negative nature of those relationships, they still require public relations management and communication. The unique management function of public relations is critical to the success of any organization that engages people in its operation, whether they are shareholders, employees, or customers. Although many people think of publicity as the sole purpose of public relations, this text will help you understand that publicity is a subfunction of the overall purpose of public relations and should not be confused with the broader function. 1 Public Relations Society of America (2009b). 2 Public Relations Society of America (2009a). 3 Public Relations Society of America (2009b). Saylor URL: http://www.saylor.org/books Saylor.org 17 2.3 Naming the Public Relations Function A plethora of terms has come to be associated with modern-day public relations practice. Because of the disreputable beginnings of public relations that we will briefly discuss next, it is often the case that organizations will choose to name their public relations function by another moniker. These various terms create much confusion about the responsibilities of public relations versus overlapping or competing organizational functions. The term corporate communication is the most common 1 synonym for public relations in practice today, followed by marketing communication and public affairs. We view the term corporate communication as a synonym for public relations, although some scholars argue that corporate communication only applies to for-profit organizations. However, we view corporate communication as a goal-oriented communication process that can be applied not only in the business world but also in the world of nonprofits and nongovernmental organizations, educational foundations, activist groups, faith-based organizations, and so on. The term public relations often leads to confusion between the media relations function, public affairs, corporate communication, and marketing promotions, leading many organizations to prefer the term corporate communication. We believe that the key component of effective public relations or corporate communication is an element of strategy. Many scholars prefer to use the phrase strategic public relations to differentiate it from the often misunderstood general term public relations, or “PR,” which can be linked to manipulation or “spin” in the minds of lay publics. Strategic communication management, strategic public relations, and corporate communication are synonyms for the concept displayed in the preceding definitions. To scholars in the area, public relations is seen as the larger profession and an umbrella term, comprising many smaller subfunctions, such as media relations or public affairs or investor relations. The subfunctions of public relations will be delineated later in this chapter. Academics tend to use the term public relations, whereas professionals tend to prefer the term corporate communication. Do not be distracted by the name debate and the myriad of synonyms possible. Whatever name you prefer or encounter, a strong body of knowledge in the field, based on academic study and professional practice, has solidified the importance of the concepts supporting the strategic communication function that we will discuss in this text. Saylor URL: http://www.saylor.org/books Saylor.org 18 1 Bowen et al. (2006). Saylor URL: http://www.saylor.org/books Saylor.org 19 2.4 Chapter Summary This chapter has provided an introduction to the purpose of public relations. Although the public relations function goes by many different names, it is essential to understand that it is a unique management function that contributes to an organization’s success through its focus on developing and maintaining relationships with key publics. Those publics are generally employees, financial stakeholders or shareholders, communities, governments at many levels, and the media. It is also important not to confuse the overall purpose of public relations with its subfunctions, such as publicity and media relations. These subfunctions will be defined in the next chapter and covered in more detail in Chapter 10 "The Practice of Public Relations". Saylor URL: http://www.saylor.org/books Saylor.org 20 Chapter 3 Models and Approaches to Public Relations Although there were ancient public relations—as far in the past as ancient Greece—modern-day public relations in the United States began with a group of revolutionaries mounting a public relations campaign to turn public opinion in favor of independence from England and King George. The revolutionaries effectively used words and actions to mount a successful activist campaign leading to the Revolutionary War. Thomas Paine’s Common Sense, published in 1776, gave rise to the sentiment that England’s governance under King George III was unjust. The subsequent Declaration of Independence and outward acts of protest were largely influenced by the rhetorical arguments found in Paine’s pamphlet, which has been called the most influential tract of the American Revolution. Slogans, such as Don’t Tread on Me, and use of printed materials, such as Colonial newspapers, were key message tactics used to sway opinion in favor of a revolution and a war for independence. Following the independence, The Federalist Papers were used to ratify the United States Constitution. These 85 essays were, according to the assessment of Grunig and Hunt, 1 exemplary forms of effective public relations. These founding fathers of the United States used public relations to build the public consensus necessary for a budding nation to form a new kind of government and establish the human rights necessary for the nation to survive. 1 Grunig and Hunt (1984). Saylor URL: http://www.saylor.org/books Saylor.org 21 3.1 The Historical Development of Modern Public Relations Modern public relations in the United States can also be traced back to less illustrious beginnings 1 than the creation of a new democratic republic. P. T. Barnum, of circus fame, made his mark by originating and employing many publicity or press agentry tactics to generate attention for his shows and attractions. Barnum was famous for coining the phrase, “There’s no such thing as bad 2 publicity.” He was even known to pen letters to the editor under an assumed name outing some of his attractions as hoaxes just to generate publicity and keep a story alive. Unfortunately, Barnum’s ethics left much to be desired. One-Way Communication Models: Publicity and Dissemination of Information Barnum thought that honesty was not the domain of a press agent, and infamously stated, “The public be 3 fooled.” Droves of press agents followed in Barnum’s tracks, in efforts to get free space in the news for their clients, ranging from Hollywood figures to private interests, such as railroads, and also politicians. This approach to public relations was termed press agentry by Grunig and Hunt because of its reliance on generating publicity with little regard for truth. For modern-day examples, we have to look only to the entertainment publicity surrounding a new film release, or the product publicity around a new energy drink or a new technological gadget. Publicity and press agentry are synonymous terms meaning simply to generate attention through the use of media. The next historical phase resulted in a new model of public relations that Grunig and Hunt termed public information. In this approach to public relations, a former journalist works as a writer representing clients, issuing news releases to media outlets in the same style as journalistic writing. The idea of the public relations specialist acting as a counselor to management, as opposed to a simple practitioner of press agentry tactics, was born. The pioneering public information counselor was a man named Ivy Ledbetter Lee, who revolutionized public relations practice at the time with the idea of telling the truth. Lee studied at Harvard Law School, but went on to find a job as a journalist. After working as a successful journalist for a number of years, Ivy Lee realized that he had a real ability for explaining complicated topics to people, and had the idea of being a new kind of press agent. Rather than tricking the public, Lee saw his role as one of educating the public about truthful facts and supplying all possible Saylor URL: http://www.saylor.org/books Saylor.org 22 information to the media. Ivy Lee opened the third public relations agency in the United States in 1904, representing clients such as the Pennsylvania Railroad, the Rockefeller family, and the Anthracite Coal 4 Roads and Mine Company. Lee became the first public relations practitioner to issue a code of ethics in 1906, based on his declaration that “the public be informed”—to replace railroad tycoon Commodore 5 Cornelius Vanderbilt’s infamous statement, “The public be damned.” Ivy Lee ushered in a more respectable form of public relations that is objective and factual. His public information approach is still in use today, especially in government reporting, quarterly earnings statements, and similar reports intended simply to inform. Both the press agentry and public information models of public relations are based on writing and technical skill with images, words, Web sites, and media relations. These concepts are based on a one-way dissemination of information. They are not management-based models because strategic management is based on research. Research is what makes management a strategic pursuit based on knowledge and data that comprise two-way communication, as opposed to a simple one-way dissemination of information based on assumptions. Two-Way Communication Models: Strategic Management of Public Relations The next two models of public relations are based on research. Using research to gather public opinion data led scholars to label these models two-way rather than one-way because they more resemble a conversation than a simple dissemination of information. Grunig and Hunt termed the two management models asymmetrical and symmetrical. The asymmetrical model was pioneered between 1920 and 1950 by Edward Bernays, nephew of psychoanalyst Sigmund Freud, and is based on the principles of behavioral psychology. Public relations research seeks to determine what publics know and understand or believe about the client organization, issues of importance, and so on. Then, in the asymmetrical model, once these beliefs are learned through polling and other means, they are incorporated into the public relations messages distributed by the organization. It is called asymmetrical because it is imbalanced in favor of the communicator; the communicator undergoes no real change, but simply uses the ideas she knows will resonate in communicating with publics with the purpose of persuading them on some issue or topic. For example, if Saylor URL: http://www.saylor.org/books Saylor.org 23 I am a politician running for reelection and my research identifies tax cuts as an important topic with publics, then I include the importance of tax cuts in my next campaign speech. Research is a key component of this model, as it seeks to persuade publics to adopt the attitudes and beliefs that are favorable to the organization based on the collection of data about their existent beliefs. The symmetrical model was also pioneered by Edward Bernays and several prominent public relations practitioners and educators between about 1960 to 1980. It seeks also to use research on public opinion just as the asymmetrical model does. However, it does not use research with the intent to persuade, but to build mutual understanding between both publics and organizations. Organizations are open to changing their internal policies and practices in this model based on what they learn from their publics. It is a collaborative approach to building understanding, and, although not perfectly balanced, it is a moving equilibrium in which both sides in the communication process have an opportunity to have input and change an issue. To revise this example, after research identifying tax cuts as an issue, a symmetrical politician would actually incorporate tax cuts into her belief system and offer ideas supporting those beliefs on the campaign trail. In modern public relations, we often see a mixing of the public relations models among multiple tactics or communication tools within one public relations campaign. It is best to think of the models as theoretical constructs that, in implementation, become combined through the mixed motives of public relations. In most cases, public relations professionals not only want to aid their employer or client but also to assist the publics outside the organization to access and understand the inner workings of the firm. This mixed- motive approach is based on the real-world contingencies that impact public relations decisions, and the desire to facilitate communication on both sides of an issue, both for organizations and for publics. Summary of the Models of Public Relations In summary, the historical development of the field showed four distinct models of public relations, as identified by Grunig and Hunt. With this brief background in the history of public relations, you likely know enough about the models now to begin employing each in your public relations management. All are still in use in public relations practice today, and these terms are used in the academic literature and in public relations management. The one-way models are not based on social scientific research but on a Saylor URL: http://www.saylor.org/books Saylor.org 24 simple dissemination of information. The two-way models are based on research, which is what makes them the two-way management model. In order of their development, the models are as follows:  Press agentry. One-way (information) dissemination focusing on publicity for persuasion/attention.  Public information. One-way (information) dissemination providing information.  Two-way asymmetrical. Two-way (research), which is imbalanced in favor of persuading publics to support the organizations’ interests.  Two-way symmetrical. Two-way (research), which is more balanced in terms of creating mutual understanding; moving equilibrium. Due to the mixed-motives inherent in the public relations process, public relations professionals will most likely use a combination of these models in public relations management. These models suggest an overall philosophy of public relations, while situations require different approaches. Therefore, it is also useful to have public relations strategies that reflect a contingency of varying approaches, as discussed later in this volume. 1 Cutlip (1995). 2 Grunig and Hunt (1984), p. 28. 3 Grunig and Hunt (1984), p. 29. 4 Grunig and Hunt (1984), p. 32. 5 Hiebert (1966), p. 54. Saylor URL: http://www.saylor.org/books Saylor.org 25

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