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An Overview of the Corporate Communication Function

Corporate communication is a set of activities involved in managing and

orchestrating all internal and external communications aimed at creating favourable point

of view among stakeholders on which the company depends. A solid corporate

communications team provides initiatives to mould company image, communicate with

internal and external audiences, and sustain a long-term positive reputation.

Corporate communications departments play a key role in how investors, employees

and the general public perceive a company. They often report directly to a company’s chief

executive officer and serve as advisers in managing a company’s reputation. The

corporation department is mostly focused on overseeing various communication strategies

both internally and externally for the cooperation, any media relations with the corporation,

the handling of crisis communications, internal communications within the cooperation

between the staff, managers, etc. They are also responsible for the reputation of the

corporation and its management, relationships with potential and existing investors,

government affairs, suggest new initiatives to keep companies on the cutting edge of

communication with their stakeholders and often communications in marketing .

Corporate communication sounds very similar to "public relations" or "public

affairs", and that is because this particular section of the cooperate industry was known by

those titles before the 21st century.

From ‘PR’ to CorpComm’

Public relations (PR), the predecessor to the corporate communication (CorpComm)

function, grew out of necessity. Although corporations had no specific strategy for

communications, they often had to respond to external constituencies whether they wanted

to or not. This function, which was tactical in most companies, was almost always called

either "public relations" (PR) or "public affairs." Typically, the effort was focused on

preventing the press from getting too close to management. Like a patriot missile, designed

to stop incoming missiles during war, the first PR professionals were asked to protect the

company from bad publicity, often by "spinning" damaging news in a positive light. Thus,

the term "flak" came to be used to describe what PR people were actually doing: shielding

top managers from "missiles" fired at them from the outside. The "flak" era of public

relations lasted for a number of decades.

By the 1970s, the business environment required more than the simple internal PR

function supplemented by the outside consultant. The rise in importance and power of

special-interest groups, such as Ralph Nader's Public Interest Research Group (PIRG), and

environmentally oriented organizations, such as Greenpeace, forced companies to increase

their communications activities. Thus, as individual corporations and entire industries were

increasingly scrutinized and had to answer to a much more sophisticated set of journalists,

the old-style public relations function was no longer capable of handling the flak. In more

recent years, the corporate communication function has continued to evolve to meet the

demands of the ever-changing business and regulatory environments. The need to maintain

this level of transparency has elevated the corporate communication function within

companies to a new strategic level. Messages, activities, and products—from investor

conferences and annual reports to philanthropic activities and corporate advertising—are

now analyzed by regulators, investors, and the public at large with unprecedented scrutiny.

And the proliferation of online communication vehicles, including Web portals, instant

messaging, and blogs, has accelerated the flow of information and the public's access to it to

record speeds.

The Subfunctions within the function

Corporate image and identity

any corporate communication function. What is the difference between image, identity, and

reputation, and how do they shape the operations of a corporate communication

department?

Image is the corporation as seen through the eyes of its constituencies. The "image"

is what the public is supposed to see when the corporation is mentioned. A corporate

image is, of course, the sum total of impressions left on the company's many publics. In

many instances a brief, casual act by an employee can either lift or damage the corporate

image in the eyes of a single customer or caller on the phone. But the overall image is a

composite of many thousands of impressions and facts. The major elements are 1) the core

business and financial performance of the company, 2) the reputation and performance of

its brands ("brand equity"), 3) its reputation for innovation or technological prowess, usually

based on concrete events, 4) its policies toward its salaried employees and workers, 5) its

external relations with customers, stockholders, and the community, and 6) the perceived

trends in the markets in which it operates as seen by the public. Sometimes a charismatic

leader becomes so widely known that he or she adds a personal luster to the company.
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An organization can have different images with different constituencies. Only in the

best of cases does a corporation enjoy a single reputation. Different publics may have

different views of the corporation depending on their different interests. A company may be

highly regarded on Wall Street but may be disliked on the Main Street of cities where it has

closed plants. A company may be valued for providing very low prices yet disliked for its

employment practices or indifferent environmental performance. It is much more likely that

a small business will have an all-around reputation for excellence than that a very large

conglomerate will merit all-around praise. Smallness has its advantages.

Unlike its image, however, the organization's identity should not vary from one

constituency to another. Identity consists of a company's defining attributes, such as its

vision and values, its people, products, and services. An organization has some kind of

identity whether it wants one or not, based in part on the reality it presents to the world.

People all over the world know Coca-Cola's red can and white script lettering and

McDonald's golden arches in front of a store, whether they are in Beijing, China, or Granite

Bay, California. Since identity building and maintenance require a variety of skills, including

developing strategy and the ability to conduct research, to design attractive brochures, and

to enforce identity standards and cohesion, it should be spread around several different

functions in the absence of a single, centralized corporate communication function. For

example, the research needed to determine a firm's image with various constituencies

might be a minor byproduct of the overall marketing research effort currently under way at

a company, to determine customer attitudes toward particular products and services rather

than the firm as a whole.

Determining how a firm wants to be perceived with different constituencies and how

it chooses to identify itself is the cornerstone function of corporate communication. If the

firm is making serious changes in its identity, this subfunction can easily be a full-time job

for a team of corporate communicators for a period of time. In short , Corporate identity

refers to the uniqueness of the organization. This is related to the corporation's image, both

externally and internally, and its reputation. Organizational Identity refers to the

characteristics of the corporation, and what its employees, buyers, and investors believe are

central and distinctive. They are the fundamental communications that employees believe

are integral to the corporation's function.

Corporate Advertising and Advocacy

A company's reputation also can be enhanced or altered through corporate

advertising. This subfunction of corporate communication is different from its product

advertising or marketing communication function in two ways.

First, unlike product advertising, corporate advertising does not necessarily try to sell

a company's particular product or service. Instead, it tries to sell the company itself--often

to a completely different constituency from customers. It can be defined as “paid use of

media that seeks to benefit the image of the corporation as a whole rather than its product

or services alone”. Corporate Advertising is a promotional strategy that is designed to not

only interest consumers in products and services offered by an organization, but also to

cultivate a positive reputation among consumers and others written the business world. For

example , Petronas launched a digitally-led Hari Raya campaign that seeks to crowd-source

content for a short film in 2015 which calls on all Malaysians, regardless of background, to

share their memorable Hari Raya stories. This campaign aimed to create a positive image
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among Malaysian from all races that Petronas is a company that champion togetherness

and love towards the country.

One of the importance of corporate advertising for organizations is for those

companies who haven’t identified the core essence of corporate advertising because they

are entrapped with product advertising. Corporate advertising should brand a company the

way that product advertising brands a product. Corporate advertising is more efficient in

building recall for a company name than product advertising and creation of a good citizen

image through consistent & dedicated effort. Frequent corporate advertisers rated better

on virtually all attitude measures than those with low corporate ad budgets. From the past

most of the reputed companies branded themselves due to usage of very strong

advertisement slogans. Those slogans have been designed to influence consumer habits.

These types of corporate advertisements are powerful than the visual product presentations

as consumers are more likely to recollect the popular brand messages due to constant

media exposure. Corporate advertising can also be designed to get rid of negative

perception If a company is unpopular with or misunderstood by opinion-formers to an

extent that it harms its business, that can be diminished through proper usage of corporate

advertising.

Corporate Social Responsibility

Corporate Social Responsibility (CSR) is a type of international private business self-

regulation. While once it was possible to describe CSR as an internal organisational policy or

a corporate ethic strategy, that time has passed as various international laws have been

developed and various organisations have used their authority to push it beyond individual

or even industry-wide initiatives. While it has been considered a form of corporate self-
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regulation for some time, over the last decade or so it has moved considerably from

voluntary decisions at the level of individual organisations, to mandatory schemes at

regional, national and even transnational levels.

Many companies have a separate subfunction in the human resources area to deal

with community relations and a foundation close to the chairman that deals with

philanthropy, but the two should be tied closely together as companies take on more

responsibilities in communities in which they operate. Taking on these social responsibilities

has a number of positive outcomes for corporate leaders. According to the Edelman 2007

Trust Barometer, the highest percentage of respondents—39percent—said that if they

considered a company to be socially responsible, they would be most inclined to purchase

their products or services; 17 percent said the would "recommend them to others. "28

There are also serious internal implications of a strong corporate citizenship record: A 2007

survey by Net Impact revealed that, assuming all compensation and benefits are the same,

60.3 percent of respondents said they would be very likely to leave their current employer

for one that they believed to be more socially responsible. What's more, when asked to rank

factors based on their importance when considering working for a company, the number

one concern for the survey respondents was the "belief that your job will make a positive

difference in society," which ranked above "opportunity for career advancement" and

"reputation of the organization" (2 and 3, respectively).

Corporate philanthropy also has become increasingly important as companies are

expected to do more than just give back to the community. Firms now feel a greater

obligation to donate funds to organizations that could benefit the firm's employees,

customers, or shareholders. Examples include donations to universities that might be

conducting research in the industry and organizations representing minority interests. In

turn, many companies are publishing environmental and social performance information in

the same manner as they would traditionally report financials. A global report released by

The Social Investment Forum and West LB AG in November 2007 revealed an increasing

trend toward corporate sustainability reporting among large global companies.

Internal Communications

As companies focus on retaining a contented workforce given changing values and

demographics, they have to think strategically about how they communicate with

employees through internal communications. Although strong internal communications

have always generated a more engaged, productive, and loyal workforce, the bursting of the

dot-com bubble, the collapse of several of America's most respected firms, and the

proliferation of outsourcing jobs to foreign countries in recent years have further

necessitated strong communication channels between management and employees to win

back employee trust and loyalty. Often, internal communications is a collaborative effort

between the corporate communication and human resources departments, as it covers

topics from employee benefit packages to the company's strategic objectives. More and

more, companies are making slue their employees understand the new marketing initiatives

they are communicating externally and are uniting the workforce behind common goals and

corporate strategies. This type of communication requires the expertise of strong corporate

communicators who are also wellconnected to senior management and the corporate

strategy process.

Additionally, difficult economic times, layoffs, and uncertainty require open, honest

communication from senior management to all employees. The sensitive nature of some of
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these messages further speaks for the involvement of seasoned communications

professionals alongside their human resources counterparts and, most important, of the

CEO or of senior executives who are the individuals communicating messages to internal

and external audiences most frequently. Finally, as mentioned previously, due to the

blurring of constituency lines, companies must recognize that employees now also may

represent investors and members of community advocacy groups—making thoughtful

communications even more critical.

Investor Relations Investor relations (IR) has emerged as the fastest-growing subset

of the corporate communication function and an area of intense interest at all companies.

(See Chapter 8 for more on investor relations.) Traditionally, investor relations was handled

by the finance function, often reporting to the company's chief financial officer (CFO), but

the focus in recent years has moved away from "just the numbers" to the way the numbers

are actually communicated to various constituencies. IR professionals deal primarily with

shareholders and securities analysts, who are often a direct source for the financial press,

which this subfunction cultivates in conjunction with experts from the media relations area.

IR professionals interact heavily with both individual and institutional investors. They also

are highly involved with the financial statements and annual reports that every public firm

must produce. Given the quantitative messages that are the cornerstone of the IR

subfunction, as well as the need for IR professionals to choose their words carefully to avoid

any semblance of transferring inside information, this subfunction must be a coordinated

effort between communications professionals and the chief financial offices; comptroller, or

vice president for finance. The need for this coordination has only increased in recent years

with more stringent regulatory demands in the age of Sarbanes-Oxley and Reg. FD.

(Regulation Fair Disclosure was an SEC ruling implemented in October 2000. It mandated
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that all publicly traded companies must disclose material information to all investors at the

same time.

Government Relations

The government relations function, also referred to as public affairs, is more

important in some industries than others, but virtually every company can benefit by having

ties to legislators on both a local and a national level. (See Chapter 9 for more on

government relations) Many companies have also established offices in Washington to keep

a finger on the pulse of regulations and bills that might affect the company. Because of their

critical importance in heavily regulated industries such as public utilities, government

relations efforts in such companies are often both staffed internally and supplemented by

outside government relations specialists in Washington. Either firms can "go it alone" in

their lobbying and government affairs efforts, or they can join industry associations to deal

with important issues as a group. For example, the Edison Institute acts as a lobbying group

for electric companies. Either way, staying connected to what is happening in Washington

through a well-staffed and savvy government relations team is important to virtually all

businesses given the far reach of government regulations within industries from

pharmaceuticals to computer software. As companies expand internationally, building or

outsourcing government relations efforts in key major foreign hubs—for example in

Brussels to concentrate on European Union legislation—will become equally important.

Crisis Communications

Crisis communications can be referred to as a public challenge to the corporation's

reputation and image. Challenges such as these can come in the forms of criminal

allegations, media attacks or inquiries, violations of certain regulations regarding the

environment, and more. While not really a separate function requiring a dedicated

department, crisis communications should be coordinated by the corporate communication

function, and communications. professionals should be involved in crisis planning and crisis

management. Ideally, a wider group of managers from throughout the organization—

including the senior management spokesperson who will be facing the public—are included

in all planning for such eventualities. While company lawyers typically need to be involved in

crises, this need presents problems for both the organization and the corporate

communication function, because lawyers often operate with a different agenda than that

of their communications counterparts and do not always consider how actions might be

perceived by specific constituencies or the public at large. A recent study on the subject of

communication versus legal strategies stated: "legal dominance is shortsighted and

potentially costly. . .organizations [must] reconcile the often contradictory counsel of public

relations and legal professionals and take a more collaborative approach to crisis

communication."36 Working collaboratively with in-house counsel and, importantly, senior

management, corporate communications professionals can make the difference between

good and poor crisis management.

Conclusion

The success of a company's communication strategy is largely contingent on how

closely the communication strategy is linked to the strategy of the business as a whole.37 In

addition to thoughtful design and careful planning of firm strategy, a company must have a

strong corporate communication function to support its mission and vision.

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