New Trends in Corporate Reputation Management

Corporations are struggling to build trust among all of their stakeholders in the middle of the global economic crisis. The panel of speakers, which includes Paul Bergevin (VP, Sales and Marketing Group & General Manager, Global Communications Group, Intel Corporation), Peter Diamandis (President, Chairman & CEO, X PRIZE Foundation), Richard Edelman (President & CEO, Edelman Public Relations) and Frank Shaw (Corporate VP of Corporate Communications, Microsoft) have spoke out on the most current trends and strategies for managing corporate reputation and sharpening stakeholder engagement.

The event ‘What the Public Believes’ was a part of The Churchill Club, the premier business and technology forum on the 1^st of March 2011.

Why sustainability matters to business

Market competition today has changed and providing great quality products or services is no longer enough to maintain a successful business. There is a huge demand from customers to government agencies for companies to take on corporate responsibility. Stakeholders are expecting companies take responsibility for their impact on the environment and society. The companies that ignore environmental and social issues may limit the value of their business through loss of opportunities.

The companies can embrace sustainability through philanthropy, as part of a risk management strategy, or by integrating sustainable practices into the business model itself. It is important to realize that it is not always easy to integrate sustainability initiatives. Challenges include dealing with increased transparency, measuring results in an efficient manner, including sustainability into decision-making and business processes and retaining momentum. 

This is a video in which Stephen Howard, CEO of Business in the Community, talking about his views on sustainability and what businesses needs to do to ensure an enduring and profitable future. The movie was recorded as a part of a nine day debate ‘Start Summit’ that took place in September 2010 in the London’s Lancaster House. This is an initiative established by HRH The Prince of Wales, which together with partner IBM, aimed to show what a sustainable future for business might look like.

Stakeholder vs Public

The terms stakeholder and public are often difficult to distinguish. Depending on what type of literature you reach for, they have different interpretations. Stakeholders have been identified more often in the business literature according to their relationships with organizations. Public on the other hand has more presence in the public relations and other mass media literature.

One of the definitions of a stakeholder given by R.E. Freeman in ‘Strategic Management: A Stakeholder Approach’ says that a stakeholder is “any group or individual who is affected by or can affect the achievement of an organization’s objectives.” He describes it in the wide sense of a stakeholder. In the narrow sense of a stakeholder he means “any identifiable group or individual on which the organization is dependent for its continued survival.” Later this definition has been expanded to include groups who have interests in the corporation, regardless of the corporation’s interest in them. In simple words, stakeholders include everyone who has an interest in the organisation such as employees, customers, shareholders, communities and suppliers.

The term ‘public’ on the other hand has been related to the recipients of messages from organizations. The term ‘public’ can be understood as an audience that has become segmented into more homogeneous subsets that help communicators choose appropriate channels in order to reach them. James Grunig in ‘Excellence in Public Relations and Communication Management’ has differentiated the terms ‘stakeholder’ and ‘public’ in the following way: organizations choose stakeholders by their marketing strategies, recruiting, and investment plans, but the public arise on their own choice and choose the organization.

Even though the definitions and names can be confusing for Public Relations practitioners it is the most important to understand to whom, why and when the message should be communicated. Successful campaigns must also consider how messages will be interpreted by its receivers.