CORPORATIONS

Chapter 14

Learning Objectives
Understand the importance of human factor in business. Understand consumerism. Gain knowledge about the importance of business-media relationship. Gain insights about handling crises. Explain issues management.
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THE HUMAN FACTOR IN BUSINESS

The most fundamental and irreplaceable element of every business. May involve the workers, consumers and nonconsumers who are influenced by how companies act. The role of the public relations practitioner is to foster constructive, socially aware behavior and outside the company to convince the public that the firm is a worthy, caring corporate citizen
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THE HUMAN FACTOR

What can happen when businesses overlook the human factor? Ex. Citibank of New York Computers versus humans Courtesy pays
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CONSUMERISM
Non applicability of caveat emptor. Sellers are expected to deliver goods and services of safe, acceptable quality on honest terms , without misleading claims and deceptive financing practices. Consumers have rights protected by the government

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CONSUMERISM
Development of the Consumer Movement.
GOAL: Regain Public Trust Reasons: consumers were cheated and giving of inferior products. RA 7394 Consumers Act of the Philippines (1992)

Product Recalls
The most visible and frequently very expensive form of corporate response to consumer pressure. Example: Nokia Batteries

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THE BUSINESS-MEDIA RELATIONS

Public relations practitioners serving business stand in the middle. They must interpret their companies to the media while showing their chief executive officers and other high officials how open, friendly press relations can serve their interests

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American Management Association

Recommendations of the Study for Executives
Arrange for direct contact between senior executives and reporters. Keep in touch with PR specialists and journalists on a continuing basisnot just when crises erupt. Do not, however try to win favor of a reporter by giving confidences off the record or by offering gifts. Provide means for executives to learn details of media practices, such as the need to attract readers and the importance of meeting deadlines. Allow for the possibility that reporters man not be wellacquainted with business practices, management techniques, economic principles, or the terminology of your company.
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American Management Association

Recommendations of the Study for Executives
Be well-prepared on expected topics before meeting reporters. Where controversial issues are expected, consider drilling with colleagues beforehand. Study and practice specific techniques that help to get ideas across in interviews. Provide handouts or special memos to summarize key points, especially when complicated issues or financial data are involved. Dont try to squelch a story by bringing pressure on higher-ups in the media.
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American Management Association

Recommendations of the Study for Executives
Be aware of public concerns when commenting on issues involving corporate interests Have a third person present at interviews to listen objectively to what is said and to call inadvertent inaccuracies or oversights to the principal executives attention. Maintain a continuing food relationship between legal and PR counsel so that there will be a thoughtful balance between legal and the amount of information volunteered. Dont argue with a negative report in the media. To do so is to keep the issue before the public more than may be warranted. In the event of a damaging story or series, make a long-range plan for constructive future actions.

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American Management Association

Recommendations of the Study for Reporters
Prepare for interviews by such means as studying pertinent company statements, position papers and annual reports. Become familiar with the fundamentals of finance, accounting, economics, and management practices. Be aware of legitimate constraintsprivacy laws, SEC rules, impending law suits, the value of certain facts to competitorsthat limit the ability of executives to divulge certain information. Be open with business executives. Be receptive in presentation materials and to the business point of view. Be careful not to make the selling of news more 06/22/11 important than the news itself. 11

American Management Association

Recommendations of the Study for Reporters
Make certain that headlines reflect the content of the story. An effective responsible story can be damaged by a misleading headline Discourage off-the-record remarks by the business executives. Understand that business reactions to extensive, well-researched stories cannot always be immediate. When possible, check quotes with source, in order to permit review. When necessary, explain deadlines, off-the-record requirements, and other journalistic restrictions to executives. Take advantage of businesss willingness to review financial information. Be wary of quoting disgrunted ex-employees exclusively

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CRISIS PUBLIC RELATIONS

Stone Wall it deny that a crisis exist, refuse to answer the media questions and resist involvement by appropriate government agencies. Suggests a Public-be-damned attitude. Manage it by releasing partial, inaccurate, and delayed information while concealing especailly unfavorable facts. Open communication policy the best course to follow
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ISSUES MANAGEMENT
Social contracts/social responsibility (ex. Granting of scholarships) Environmental issues

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PUBLICITY EFFORTS
Known as image-making or publicity as part of marketing function, like:
Sponsoring sporting events Underwriting of cultural and civic events Sponsorship of polls and research projects bearing a brand name. Public relations tours. Free entertainment Displays. Gifts and Prizes
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FINANCIAL INFORMATION
Maintenance of favorable relations with investors and security analysts, primarily by providing them with liberal amounts of financial information, is a vital part of corporate public relations. (annual reports)

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