PR Needs To Be Based In Reality

November 8, 2004
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GRAND RAPIDS — After the reputations of Enron, Microsoft and Wal-Mart disappeared down a black hole, many firms began considering the importance of corporate social responsibility to their success.

They have begun looking for advice from the public relations field.

“Corporate social responsibility is a major trend in business today,” explained Tim Penning, a GVSU professor and president of PRSA West Michigan.

“It’s part of the reason that public relations has grown to be a management function. That’s what we talk about. We don’t just wait for management to make decisions and communicate them.

“We’re counseling management on how to make decisions and then we communicate them.”

As explained by John Paluszek, PRSA liaison to the United Nations, during a recent visit to Grand Rapids, public relations and integrated communication are emerging as an important consideration in the management field.

Not long ago, Paluszek explained, the role of public relations was to deliver a message.

In many companies, that has evolved into “What should the message be?”

But more and more, corporations are asking public relations people to help determine “What should we do?”

“Companies are not just thinking about the marketing paradigm,” Penning said. “It’s not just, ‘Who are the customers and how can we sell to them?’ Now they have to consider all of their stakeholders: employees, community investors and the rest of the public.”

The new century’s wave of high-profile scandals triggered the new importance of corporate responsibility. Some of these situations, like Enron, involved criminal acts by upper-level management. In these cases, the companies collapsed as a direct result of those acts.

Another company involved in that same scandal, Arthur Andersen, could conceivably have weathered the storm, but Penning said its reaction to allegations ultimately killed the entire organization.

Other companies have earned bad press just by acting selfishly in pursuit of profit.

He said those firms are mostly honest and operate within the law, but they have sacrificed some ethical concerns in favor of appeasing shareholders. Now, as companies like Wal-Mart and Microsoft have learned, shareholder and stakeholder interests are converging.

“When something negative is printed about a company or a businessperson, you always hear, ‘That’s bad PR,’” said Peggy Howard of Straightline Public Relations.

“But what is really happening is that the corporation is not concerned about social responsibility and that has resulted in this negative communication.”

“It’s a reaction to reality,” Penning said. “You can’t communicate yourself out of something you behaved your way into. This is something that public relations people have been saying for years.”

Like public relations itself, he said, corporate responsibility entails two-way communication.

His view is that companies need to listen to their employees and communities, and then prove a desire to meet their needs or be involved in the process of meeting their needs as a responsible member of society. He also said companies need to look at the public as a whole, not just its customers or shareholders.

Penning told the Business Journal that he believes establishing and preserving a company’s brand is one of the most important responsibilities of both public relations and marketing. The object of the brand is to associate a company with the product or service it sells.

Nike gives Michael Jordan and Tiger Woods truckloads of money, he said, so that consumers will associate the sports superstars with the firm’s sports apparel.

He said the concept applies in some degree to every company: when consumers think of a product, it’s important that they think of that company’s brand as well.

But among many consumers, he said, there is just as much concern for a company’s social brand as its product brand. When given equal choices, he explained, many consumers will not pick a brand associated with sweatshops, foreign labor or unfair business practices.

“A company is not just known in people’s minds for the products they make,” Penning said. “They are known for how they behave in the community and their society. Look at Spartan Stores; they’re not a sponsor of the Special Olympics so they can sell canned corn.

“That’s part of building a social brand.”

Another local example, he said, would be Quixtar’s national support of Easter Seals.

Quixtar encourages its independent business owners to support the charity, generating $830,000 during the past fiscal year. This allows the company to fulfill the needs of its affiliates on multiple levels, philanthropic as well as business.

At Cascade Engineering, CEO Fred Keller has what he calls a triple-bottom line: social capital, environmental capital and economic capital.

“I think it’s interesting that the companies that put a high value on all of their business, its consumers and stakeholders, those are the ones that succeed over time,” said Jeff Lambert of Lambert, Edwards, & Associates, the firm responsible for Cascade Engineering’s public relations.

“This isn’t the responsibility of public relations. It’s the responsibility of the management team. We get involved in the process because so much of ‘reputational capital’ and corporate responsibility has to do with perception.

“You can have a wonderful product, but if one bad incident happens, it calls into question the overall company’s credibility,” he said. “We’re in the business of managing companies’ brands, their credibility and their reputation. That’s why many times it falls on public relations.

“When a firm meets with a client, it’s their responsibility to talk with that client about social responsibility,” added Howard. “Particularly today in this business environment where consumers are taking a much closer look at how companies are conducting business.”    

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