The Practice of Corporate Communication in Padiberas Nasional Berhad

Zainol Abidin Ahmad, USIM

Definition of Corporate Communication

Corporate communications have evolved over years and so have their potential

and objective. The primary goal remains the same - communicating information to their

employees, stockholders, media and customers. Nowadays it is used as a public

relations tool to project positive corporate image, to form strong relationship with

stockholders, to inform the public about new products and achievements and to handle

crisis in a responsible manner. Communication is getting easier day-by-day, with web

portals, blogs, e-mails, RSS feeds, and podcasts, in addition to old-fashioned company

publications and press releases becoming the order of the day.

Corporate communications are defined as the products of communications, by

memos, letters, reports, Web sites, e-mails, speeches, or news releases. It is also the

processes as company uses to communicate all its messages to key constituencies – a

combination of meetings, interviews, speeches, reports, image advertising, and online

communications (Argenti & Forman, 2002).

Dolphin (2003) remarked, that corporate communication is concerned with the

process of identifying, establishing and maintaining long-term relations with those

audiences perceived by an organization or being that help to produce successful

outcome for corporate strategy. While Balmer & Kieth (2000), suggests a much broader

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view that looks at corporate communications as a three part systems process - primary,

secondary and tertiary communication.

In the context of primary communication, a strong reputation should be staged so

as to present a positive image of the company while secondary communication should

be designed to support and reinforce primary communication. Finally, the tertiary

communication has to be positive, resulting in a superior reputation if the other two

stages of corporate communication are properly conceived. It is clearly agreed that

senior managers who implement this process can invest their organization with a

competitive advantage.

Corporation’s voice and the images it projects of itself on a world stage populated

by various audiences. Include in this field are areas such as corporate reputation,

corporate advertising and advocacy, employee communications, investor relations,

government relations, media management, and crisis management.

Stages of development for the sake of the “rise and fall of strategies”

The role of corporate communication in the first two stages corresponds to that of

the traditional concepts of marketing communication and PR activities, and the role of

corporate culture. For this reason I shall discuss them only briefly.

The first stage is depicted as that of the agro-based organization actually joining

the market. In the interests of success the two most important preliminary tasks of a

company are to explore the market and to fit the company into the market. In this stage

the basic aims of communicative interaction of a company are as follows:

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 • to obtain and transfer information from the environment (external

communication);

• to absorb environmental values into company strategy and culture (internal

communication);

• to harmonize activities within the company (internal communication);

• to communicate company strategy (both internal and external communication);

and

• to establish alliances and loyalties (both external and internal communication).

In this stage the roles of both external and internal communication are regarded

as significant from the viewpoint of stabilizing the future development of agro-based

industry. Exploring market opportunities is facilitated by marketing communication. An

overall strategic change in the culture of a company is transformed and confirmed in the

processes of internal communication. A significant role of PR activity is to make the

company aware of society’s expectations of the agro-based organization.

The second stage is depicted as one of strengthening agro-based organization

through the following significant communication functions:

• to utilize the most important information obtained by feedback in order to stabilize

the value system of the company (internal marketing communication and PR);

• to facilitate the consolidation of company culture (internal PR activities); and

• to emphasise strongly the image of the company and its products (external and

internal PR).

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 Marketing in the second stage is the systematic collection and evaluation of

consumer feedback. Reliable and authentic transfer of information in marketing

communication and the completeness of the information ought to be a condition for the

successful operation of the other departments of a company. PR activities are also

indispensable in identifying and transforming general external expectations. In this

second stage energetic traditional external and internal PR activities are needed.

The third stage is depicted as one of routine operation. The aim of agro-based

organization in this stage is to utilise its maximum capacity and to maintain the stability

of its operation. This routine operation is attributable to the corporate culture ingrained

in the course of the second stage. A stable and routine operation might lead to a

relaxation of attention to a point where the company cannot recognise relevant changes

in the environment. A complacent company in its routine life or in its achievements

undermines its own future. Such an agro-based organization can be regarded as being

in a state of stagnation and, in the fourth stage, as becoming incapable of responding

effectively to challenges from the environment. It is therefore essential in the third stage

to search for new values which are to be incorporated into company culture only in the

following stage. A company facing sudden or unexpected changes during the fourth

stage has either found itself in an unavoidable plight or has carried out its marketing

and/or PR activities badly during the third stage – or even earlier.

Consequently the two most significant tasks of corporate communication in this

stage are as follows:

1. To recognise and interpret changes in the environment (external

communication).

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 2. To prevent the company from becoming incapable of activity – namely, control

the company’s attitude towards the values of the environment and to protect the

flexibility of the company’s strategy (internal communication).

In addition but parallel to this, the company may need to stabilise its position by

means of lobbying. In the third stage, depending on the specific features of a company

and its market position, a company may launch vigorous PR activities such as “pre-

announcement” and sponsorship, both of which may significantly assist new

achievements and, through social acknowledgement, may enlarge the circle of potential

consumers.

The process of the third stage depends on the speed of change in the

environment of a agro-based organization company, but it certainly begins with changes

in the company’s environment. The most important fields of change take place either in

the customer environment, in society, or in technology. In this third stage the company

should consider changes in the customer environment which may have external or

internal causes from the company’s standpoint and which may cause significant

changes in the structure of competition. Accordingly, the consequent necessity to

develop different future strategies makes appropriate marketing communication

indispensable. Those changes occurring in the consumers’ media (which cannot be

considered to be the consequences of the external causes) can result from failures in

external and internal corporate communication. The deterioration of the company’s

reputation might be utilised by competitors – first through PR activity, soon followed by

their own new strategy.

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 Changes taking place in society can force the company to change its previous

behaviour and to modify its strategy; this is powered by the company’s external and

internal communication system. The activities of participants in the economy are

regulated by laws and decrees in the common interest. Such regulations describe

exactly how a company should be able to comply with the minimum requirements of the

environment as one player in the socio-economic environment. In certain cases (i.e. in

relation to industrial activity which threatens a whole population) agro-based

organization behaviour which cannot be tolerated at all by society or by a significant

sector of society, may be considered to justify restrictions imposed by consequent

governmental response. The communicative value of restrictions is significant in that the

imposition of a restriction means that the government is forced to impose measures

protecting social values.

Basically, conflicting opinions may lead to social confrontation. The interpretation

of lobbying activity which emphasises its role in solving problems (in contrast with its

influencing effect) may be capable of counterbalancing wrongly interpreted and ill-

applied activity and its aims. In relation to lobbying it is essential to create an awareness

of careful thought: political decision making can be regarded as a mechanism for

solving social conflict. Lobbying used inappropriately simply tries to apply one-way

pressure on this mechanism. Lobbying activities as a component of external

communication of companies, by attracting the attention of the media and of public

opinion, may guarantee open, honest behaviour from a company.

The fourth stage is depicted as one of actively seeking new ways – a stage which

is a great challenge for the agro-based organization management. The agro-based

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organization needs to make a decision on how to resume the cycle – how to set the

direction of changes in strategy: whether to enter more profitable fields of production or

service, and how to introduce innovations. The strategy does not survive the change of

cycle – the strategy is abandoned rather than the company, and new strategy, even a

new mission evolves. Demands in respect of the required return on capital may result in

the setting of totally new trends for the company. The most important activities of this

stage are:

• to incorporate the new values into the corporate structure of values; and

• to prepare for the shift of strategy.

In the fourth stage the company prepares for re-launching the cycle. In this stage

corporate behaviour and opportunities are strictly determined by the consequences of

the previous stages. The operation of a company in general can be regarded as a

series of long-term decisions. Decisions which are crucial from the point of view of the

company and form the basis of further strategies will be made in this fourth stage. The

marketing communication of the company becomes intensive and settles down to

collect information for elaborating the new strategies. The activities of management and

the role of communication become of great importance.

The decision regarding which behaviour to choose may be influenced by several

factors, some of which are of enormous significance (see e.g. Ashmos et al., 1998).

Depending on the market position of the agro-based organization, the process of

decision making can become either complex or quite simple – i.e. a shift of strategy or a

yielding of market position. In the case of a company having survived several cycles on

the market the preparations for shifting strategy in the fourth stage may accelerate and

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in this way generate a powerful offensive in launching the new cycle. Consequently

more rapid growth is facilitated by market expansion in the first stage – thus stimulating

the company’s operation.

In the case of an agro-based organization company which has reached the limits

of its capabilities and which operates high-risk technology, managerial response may

result in decisions which seriously endanger or which are, at least, harmful to the

environment. Considering the essence of this process, inappropriate internal

communication has resulted in the strategic aim of the agro-based organization being

based on the most constricted values of management: the social roles and position of

the company are determined in terms of survival at whatever price. In the case of

consistency in the value system and in expectations of the society in question “the days

of the company are numbered”.

Describing the fourth stage that agro-based organization company faces a

relatively paradoxical situation because the planning system by the modification of

strategic positions – with some exaggeration – is making efforts to destroy itself or at

least to contribute to its modification, and to be able to keep up with this process

permanent readiness is needed to perform modifications to the system in time.

Background of the Padiberas Nasional Berhad (BERNAS)

Padiberas Nasional Berhad (BERNAS) came into being with the taking over of

Lembaga Padi dan Beras Negara's (LPN) role as the custodian of Malaysian paddy and

rice industry when the latter was privatized in January 1996. BERNAS continued to

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perform an important role in the national paddy and rice industry and also assumed all

social and commercial obligations previously undertaken by LPN. These include

conserving, maintaining and managing the National Paddy/Rice Stockpile, representing

the government on the management and disbursement of subsidies to paddy farmers,

managing the Bumiputera Rice Miller scheme, purchasing paddy from farmers at

guaranteed minimum price and acting as the buyer of last resort. In return, BERNAS

was given the right to import rice into Malaysia until 2010, with the option for renewal for

another five years, subject to approval. On 25 August 1997, BERNAS was listed on the

Kuala Lumpur Stock Exchange main board, marking a historical significance.

BERNAS has continued to evolve through the integration of its supply chain with

international players at the wholesaling, farming, processing and supplying levels. With

this solid foundation, BERNAS has managed to overcome challenges including the

(1997/1998) regional financial crisis.

As a corporate citizen, BERNAS is dedicated towards ensuring continuous rice

supply at affordable prices to feed the nation, by optimizing its supply network,

infrastructure and distribution network. It also places a particular concern on improving

its environmental management, emphasizing on effective rice husk disposal as well as

diversification into other product lines utilizing the potential of its by-products.

Today, BERNAS is just as committed to remain as a responsible organization in

meeting and possibly exceeding the needs of consumers, providing optimum return to

its shareholders and a stimulating and satisfying working environment for its employees.

Achievement of our objectives remains as the driving force in herding the organization

to greater heights of success and acknowledgement.

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 Diversification into other related business activities has led to a greater market

penetration and a more established ground. The Group is currently working to emerge

as a world-class competitor following the ASEAN Free Trade Area.

Looking ahead, in facing the challenges of globalization, BERNAS will continue

its endeavor into new and profitable frontiers-synergizing with other food producers,

enhancing its diversification of resources into related and other businesses, deepening

linkages with related sectors to increase its product range and services, to provide the

very best of variety and excellence in its mission to attain a competitive edge in the era

of globalization.

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BERNAS Corporate Identity

Company official logo:

Vision and Mission

According to William (2008), a mission statement “tells two things about a

company: who it is and what it does”. A number of others offer a similar definition (Bart,

2000; Bart, Bontis, & Taggar, 2001), and this definition holds true regardless of whether

a corporation refers to this statement as a “mission statement,” a “mission,” a “credo,”

“our philosophy,” “core values,” or something else (David, 2007). These statements

often address multiple audiences, or stakeholders, including a firm’s management,

employees, customers or clients, shareholders, and other residents of the communities,

countries, and world where it does business (Amato & Amato, 2002; Bart, 2000).

One of the corporate communications practices that been employed at BERNAS

are the announcement of their Vision and Mission. BERNAS Vision statement read as

follow:

“Our food products are consumed in every household in Malaysia. We

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 are a company deeply committed to nourish the nation better. We do this

by providing quality food products that create value for our company our

partners and our customers.”

While their mission as a corporate organization are as follow:

Value creation by increasing market share, introducing new products and

acquiring complementary products. It is our goal to be a market leader in

Malaysia. We will be market driven focusing on the following areas:-

1. Brand Building

2. Product Performance

3. Customer Service

Corporate Values

To success in the challenging environment of agro-based industry, BERNAS

make promises to all stakeholders that they called their corporate values. They divide

their corporate value into 3 main categories namely Challenges, Conduct and

Commitment. All the values are as follow:

1. Challenges

a. Improving performances

b. Renewing understanding of our changing business

2. Conduct

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 a. Integrity

b. Ethics

c. Probity

d. Corporate governance / transparency

3. Commitment

a. Value for customers

b. Leadership for community and environment

c. Teamwork

d. Shared purpose with regulators

e. Value for shareholders

Employee Relations

BERNAS continued to invest in enhancing employee relations and development

of staff through the many courses, workshops and training seminars to enhance softskill

and new skills development of its staff. More than RM160,000 were allocated and spent

to promote job training, orientation and skill development of its staff nationwide. To

assist children of its staff to excel in public examinations, BERNAS conducted

motivational and tuition courses for 676 children of its staff sitting for UPSR, PMR and

SPM examinations (nationwide). To further motivate the students of the staff to excel,

prizes were also given to students of staff who scored straight A’s in these public

examinations.

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Corporate Social Responsibility

There is no universal definition for Corporate Social Responsibility, but most

agree it includes discretionary activities and contributions that improve community well-

being, and community can be defined broadly to include internal and external

constituencies (Freitag, 2007). According to Spitzberg (2007), CSR policy and activities

are neither mandated by regulatory agencies nor are they compelled as part of normal

business operations. However, voices persist, grow louder and spread calling for

organizations to pay greater attention to CSR.

Too often, corporate social responsibility (CSR) is understood only from the

perspective of business generosity to community projects and charitable donations

(Adenekan, 2007). This perspective fails to capture the most valuable contributions that

an organization can make. According to Nan & Heo (2007), social responsibility is

complex and multifaceted. In its simplest expression, however, it means operating in a

way that meets or exceeds society's ethical, legal, commercial and public expectations.

While ensuring shareholders expectations of profitability, BERNAS has never

undermined the importance of cultivating good corporate social responsibility practices.

Despite the difficult operating environment in 2008 and 2009, BERNAS continued to

expand its corporate social responsibility programmes to ensure maximum and better

reach to all communities.

Recognizing the fact that their employees are our best goodwill ambassadors, in

August 2008, BERNAS established its own employee volunteer programme which was

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participated by 70 employees nationwide. The programme kicked off with the volunteers

spending 90 hours volunteering at three private orphanages and tahfiz centers in Kota

Bharu, Kelantan, Alor Star, Kedah and Sungai Besar, Selangor. The activities organized

include building improvements and repairs, “gotong-royong”, taking the orphans out

shopping for clothes and spending quality time with them by playing the roles of “mom”

and “dad” for a day in each centre. In addition, the volunteers also brought along

physical donations to each centre such as rice, food items and household products.

BERNAS also sent their volunteers to provide rice supplies and relief efforts to

the flood victims in Kedah, Perak, Pulau Pinang, Kelantan, Sabah and Sarawak. A total

of 2,000 MT of rice were promptly sent to the unfortunate victims in these areas.

BERNAS also contributed rice provisions to orphanages, senior citizen homes,

single mother associations and other charitable organizations. A total of 8,000 MT of

rice were contributed to these organizations in 2008. The Umrah programme saw 100

farmers performing the Umrah in 2008 in appreciation of their dedication and loyalty to

BERNAS. They continued to support the popular GP Joran Competition by sponsoring

rice for the competition winners. BERNAS has been a sponsor for GP Joran since 2000

and will continue to promote this popular recreation activity in Malaysia.

BERNAS in its research and development collaboration with Universiti Putra

Malaysia (UPM) will continue to promote rice as a healthy staple diet through

continuous development and introduction of rice varieties of the highest nutrition and

value. The “Pilihan Bernas” brand has proven to be popular and has helped consumers

identify good rice brands from the variety of rice available in the market. Beginning April

2009, BERNAS introduced the “Save More Community Store” – a retail initiative to

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provide consumers with a seamless supply of affordable, quality rice at all times. This

new initiative exemplifies our commitment to play our part in stabilizing rice prices and

supply while maintaining close ties with the community. To date, four outlets have been

opened in Setia Alam, Bukit Tinggi, Subang Perdana and Bukit Jelutong with more

stores to be opened in a year’s time.

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