From Bled: insights on the institutionalization of the pr function and its connection to the interrelationship between strategic management, corporate governance and sustainability

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In a recent comment to a post in which I linked you to the most recent Larissa and Jim Grunig presentation, Estella de Beer from the University Pretoria wrote:
I agree that Jim and Larissa’s presentation is a significant leap forward in our quest to make public relations part of top management’s agenda. I am also glad to see that the Excellence Study is still relevant in this quest, since groundbreaking work was done in that study. Benita Steyn, Retha Groenewald and myself did similar studies in South Africa a few years ago and confirmed the importance of especially the shared expectations between the top communicator and the dominant coalition.
I was specifically interested in the Grunig’s last slide which stated that “Research is needed on the institutionalization of public relations as a strategic management, bridging, function, rather than its common practice as a symbolic, buffering, function (Yin, 2005).”
In a discussion I had last week with Judge Mervyn King, the convenor of the committee who wrote the King Report on Corporate Governance for South Africa, he confirmed that what we are doing as communicators in an organisation is an integral part of the sustainable functioning of an organisation (in my mind his opinion represents the view of the typical enlightened member of the dominant coalition in the SA organisation, since the King Reports (1, 2 and later this year 3) are regarded as important guidelines for doing business in SA. These reports have a strong stakeholder engagement philosophy as their foundation.) He also stated that the organisation of tomorrow will function by taking into account:
°strategy (what should be done),
°corporate governance (how this should be done) and °sustainability (how to keep on doing the right things right).
This will also be the point of departure for the King 3 report.
I am currently exploring these three elements (I originally started out with only strategy and corporate governance), to see where communication and public relations fit in and how it can be made part of the strategic management, corporate governance and sustainability agendas. It would be interesting to hear the Grunig’s view on this approach.

Ok Estella….I had dinner last night in Bled (Slovenia) with the Grunigs and we discussed your comment.
Just to put this into context, you may also be aware that the istitutionalization of public relations and communication management issue will be at the core of the October 2008 Euprera Congress to be held in Milano, in cooperation with Ferpi e with IULM University, and that a call for papers has already been issued.
So, last night we discussed both the institutionalization issue and the relationship between sustainability, corporate governance and strategic management from a public relations perspective.
A caveat: I am of course interpreting what I understood and so I might well be minsinterpreting..as well as spinning my own opinions.
The first thing which came out is that the institutionalization issue must not be interpreted by us as another ‘feather on our hat’.
To the contrary, Larissa was very clear in cautioning that, as the function becomes institutionalized, the role becomes more rigid and we should be very attentive to avoid this trap thus ensuring that the function does not become mor rigid than strictly necessary.
In a way (and this is my personal thought) as we often promote the two way symmetrical concept forgetting the very fundamental difference between two way communication and symmetrical communication, as if we were reciting a prayerwe in practice offer very sound reasons for the professional community not to practice public relations along those lines, as well as good arguments to continue in the still today overwhelmingly practiced one way asymmetric communication.
So we must ‘handle with care’ so to say.
Second, more to Estella’s point, both Larissa and Jim very much agree with the fact that adding on the sustainability concept to the other two (strategic management and corporate governance) is essential if you have a general approach to the corporate responsibility issue along the lines that Mervyin King had spelled out in his preceding reports.
Here in Bled, by the way, we received today a highly interesting presentation by South African Chris Skinner on the impressive state of the social investment debate and practice in South Africa which to all of us seemed to be far more advanced and pervasive in that country than in most if not all others.
Ironically, in Bled we also received the presentation of a compelling paper by british scholars Ralph Tench and Ryan Bowd from Leeds Business School who used the I of CSI not in the Chris Matthews sense of investment, but in the sense of irresponsibility. We are wonderful with words, aren’t we all?
To conclude on this for now and also to summarise in one sentence two intense days of discussions in Bled, it seems clear that our academic community is finally coming to grips with the issue of relationships between public relations and the other organizational management functions, and it is only a sign of coherence that this will be the core theme of the 2008 Bled Symposium.

4 COMMENTS

  1. Estelle (and Toni)

    I am VERY interested in this topic since I believe that it is intricately linked to the strategic role of PR and therefore also to its ultimate purpose (that we are still debating in another post–I hope!) Here are a few thoughts that came up as I was reading your comments:

    We know that business is experiencing a paradigm shift from the old focus on profit as bottom line (striving towards economic sustainability) to a Triple Bottom Line approach that now includes social and environmental sustainability.

    One way to deal with the concepts of sustainability and (good) governance is to see them as societal standards/ norms/ values/ expectations that organisations must adhere to in the new business paradigm in order to obtain legitimacy (a precondition to be trusted). Having a good reputation, being regarded as a good corporate citizen, etc. are the rewards/ outcomes for an organisation that has obtained legitimacy, by behaving socially responsible. (Actually, ‘societally’ responsible might be a better concept here since it also includes the environmental component). I remember the Danish scholar, Susanne Holmstrom saying that, in the previous business paradigm, the law was the regulating mechanism for business, i.e. indicating the boundaries/parameters for behaviour. They could make money in any way they wanted to, as long as they stayed within the law! That is no longer the case. In the new business paradigm, according to Susanne, social responsibility has become the regulating mechanism for business (supplementing the law, not substituting it). This view has helped me a lot to understand where social responsibility fit into the business scheme of things!

    By now, everybody agrees that sustainability and good governance must be integrated into organisational strategy. The question is how and where. My view is that the concept of ‘enterprise strategy’ (also called institutional strategy) provides a framework to do so. Unfortunately it is not a well-known concept (in the English language, I must qualify), but when I first read about it 8 years ago I thought: Eureka, I have found it—THIS spells out the contribution of PR to organisational strategy formulation. THIS is the role of the PR ‘strategist’. HERE is a framework to deal with the so-called ‘soft’ issues (that is now fast becoming the ‘hard’ issues!) I share with you below the little that I have found in the literature about it. For the rest of it, I embroidered upon it myself!! (By the way, if anybody knows about any sources on enterprise strategy, I am willing to come up with quite a few beers in exchange!!) Toni, don’t you have some sources hidden away in Italian? (I always knew the Italians gave us spaghetti. I never knew they gave us ‘gorel’). Do you know the concept of enterprise strategy? Please don’t tell me that it is used in Italy all the time? On a more serious note, do you think it is useful in this day and age? It was already conceptualised by Ansoff in 1979, but didn’t catch on. Surprised? Not really. It was all profit and shareholders then—sustainability and good governance and reputation was NOT the name of the game in the 70s.

    OK, enterprise strategy—here we go. It is the highest level of strategy where the legitimacy of the organisation, as well as its relationships with the environment/ society is addressed and its values determined. Freeman said in 1984 that enterprise strategy represents the social and moral/ethical component of strategic management.

    Enterprise strategy focuses on the achievement of non-financial goals such as enhancing the organisation’s reputation, fulfilling its social responsibilities, etc. Whether an organisation responds to stakeholders in a positive, constructive and sensitive way reveals the presence or absence of soundly developed enterprise-level strategy. Mission/vision statements and codes of conduct/ethics are also indications of enterprise level strategy, as are committees on social audits, corporate philanthropy, ethics and public issues. An enterprise strategy can also express a desire to satisfy stakeholder interests or achieve two-way communication with them; increase social harmony or the common good. Important stakeholders at the enterprise level are for instance the media, activist groups in the environment, the government, communities, and society at large (the public sphere).

    So I think it would be logical to add (social and environmental) sustainability and good governance here as non-financial strategic goals—or call it strategic priorities of (enlightened) organisations, if you want. What do you think–Estelle? Toni? Anybody else awake? Once these ‘new’ goals are commonly accepted as the way to do business, they will become part of business life. We don’t set goals to achieve a profit, do we? It goes without saying. But it does not yet go without saying that business must be sustainable! That is why we are still saying it and why it is dominating strategic conversations (and pr conversations!) around the world.

    Enterprise strategy is different from corporate strategy—the latter is focused on the achievement of financial goals. This is the domain of mergers and acquisitions, strategic alliances/ joint ventures, decisions on which portfolio of businesses the organisation should compete in, etc. Saying this, I remember an article by Danny Moss where they did a study on senior PR managers in the UK. A verbatim remark by one of them was quoted. This guy said that he was in a very uncomfortable position. He was supposedly one of the lucky PR managers (but didn’t feel lucky at all). He sat in the boardroom and in strategy formulation sessions, but couldn’t make any contribution at all. He didn’t even understand what they were saying! I maintain that he was in meetings where they were formulating ‘corporate’ strategy. Whereas I do think that PR has a support role in financial strategy formulation, I am not convinced that we can make a ‘strategic’ contribution as such. (If you think we can, please tell me how). It seems to me that we can, for instance, communicate financial strategy, we can build relationships with the investors–but can we take decisions on whether mergers and acquisitions should take place? Or which portfolio of businesses the organisation should compete in—I sure can’t. But take me into a room where they are talking enterprise strategy—it will be hard to get me to keep my mouth shut. (This pr conversation is a case in point!).

    BS

  2. Benita,
    sorry for coming back so late, but I have been really tied up. When I read you comment I decided I would want to think about it for a few days.
    Of course spaghetti is definitely not an italian invention, but a chinese one, and it was Marco Polo who brought them back to us from that part of the world.
    So you are at least wrong on one count…..
    I entirely agree with your thoughts, specifically on the fact that public relations professionals should be very careful not to lobby to be involved in contributing to corporate decisions which are clearly out of their competencies. It is of course a tricky argument as all corporate decisions have something to do with relationships with influential publics, but your description of a support role is very convincing.
    I have some doubts that corporate strategy deals primarily with financial strategies (what are, in this case, financial strategies?).
    It seems to me that corporate strategies could be interpreted as enterprise strategies. What would impede this today?
    The concept of enterprise strategy, as developed by Ansoff some 25/30 years ago (I was fortunate to work with him on some occasions and my then british partners of Matrix, who were ex ibm europe executives turned consultants who really were the first to implement issue management systems within large corporations, were very close to him) was so because, at that time, the thought of integrating sustainablity and governance into strategy was very unique and Ansoff was a magnet of attraction to those few consultants and scholars of the time who had interest in doing so.
    But today?
    Milano’s Bocconi University (particularly prof. Coda) has developed since many years excellent studies on institutional or enterprise strategy which go in the direction you seem to prefer. There are also many studies coming from the London Business School as well as others in the collection of the HBR.
    Unfortunately we have been long divided from the Business School theorists and they tend to look down on us. But this is less and less so,inasmuch as the relationship paradigm is gorwing in importance in just about every functional area of organizations.
    So let us know about the developments of your studies and good luck.

  3. TONI

    Thank you for your valuable input. You are a walking ‘Wikipedia’—and I really mean it. Judy Gombita has also been most helpful by searching and passing on some articles she found. (I can see that I will have to fork out a case of beer when I meet the two of you).

    As you guessed, I brought up the topic of enterprise strategy because I have a master’s student (Lynne Niemann) who is doing a content analysis of the websites of the 62 companies on the Social Responsibility Index of the Johannesburg Securities Exchange, and she is looking for a framework for what she is finding there. (She could of course still call it ‘corporate strategy’ and just indicate the switch to social and environmental issues, but that wouldn’t really describe the extent of the change towards societal issues that has taken place-keeping in mind that we are talking ‘best practice’ companies here). Anyhow, we will look at the sources you mentioned and share findings, when Lynne gets there.

    With regards to your comment that you have some doubt that corporate strategy deals primarily with financial ‘strategies’ – sorry, I made some typos in the second part of my comment. I originally said that corporate strategy has to do with the achievement of financial GOALS (so some of the sources say) and that is how it should read (not financial ‘strategies’). I interpret financial goals as meaning any goals that are set to make money, i.e. focused on profit (the single bottom line). Hence my feeling that this is not really the forte of PR, except in a support role. I remember Laurie Grunig saying that PR doesn’t make money, it saves money. But when an organisation strives towards a good reputation or socially responsible behaviour or legitimacy, etc (which I interpret to be non-financial goals that will indirectly contribute), I think PR can make a strategic contribution, especially with regards to identifying its importance early, interpreting to the organisation what is meant by such a concept and why it is important, what the implications are for organisational strategies/ behaviour and also to encourage top management to express a position on it/take a stance.
    BS

  4. Benita, you are very welcome for the articles. Sending me a copy of your draft chapter for the new Excellence book has to be the equivalent of at least two cases of beer! But we both know that the majority of the articles found for you on enterprise strategy were actually sourced by my organization’s wonderful dedicated business researcher, Greg Barber:

    http://www.cga-ontario.org/contentfiles/publications_promotions/online_research/online_research_articles.aspx

    And speaking of research, besides the report that I highlighted on today’s post (sustainability reporting), I’d like to mention that our (free) collaborative research (i.e., all CGA affiliates contribute to it) website, PD Net, was recently opened up to qualified individuals, such as academic. You can apply to register through this URL:

    https://www.cga-pdnet.org/en-CA/Pages/default.aspx

    One of the best things on this resource-rich website is its robust, online competency assessment framework tool. (A great place for PR practitioners to test their competencies in the financial/business areas.)

    Cheers,
    Judy

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