Corporate Communication

Corporate communication is a management function through which all forms of internal and external communication are “harmonized” as effectively and efficiently as possible to create a favorable basis for relationships with groups on which the company is dependent. Corporate communication is important for the study of reputation because stakeholders construct a reputation of the organization partly from information that originates from the organization itself. This entry provides a history of corporate communication, its link to reputation, and criticisms of the term.

As a field, corporate communication developed during the 1980s, prompted partly by David Bernstein, an advertising executive, who was among the first to express the notion that there was a strategic necessity for senior executives to adopt an overarching corporate-wide communication program. The impression was that few organizations realized that everything they do sends a message. Added to this was the sense that communication was an underappreciated resource. Bernstein’s wheel of communication is still used today to illustrate that organizations have many stakeholders and many communication options, not just public relations (PR) and advertising.

Discussions on the structural and role differences between marketing communication and PR have been prevalent since the 1970s, but during the 1980s, more people began to realize that “silo thinking,” where PR and marketing are seen as separate functions, was not productive. A greater emphasis was being placed on the complementary nature of the two functions as well as on the areas where they overlap. This line of thinking led to the rise of a more strategic approach to communication in the 1990s: integrated marketing communication (IMC) and integrated communication. The focus still remained primarily on marketing communication, however, and the approach was geared toward consumers and products, not toward stakeholders in general. IMC also did not embrace the idea of the organization itself as communicator. PR as the publicity part of marketing communication was the dominant view in the IMC model. Corporate communication recognizes that PR activities, marketing activities, and effective employee communication are all necessary for an organization to be successful. However, they need to be coordinated if an organization is to harmonize its communication.

The first academic book on corporate communication, Principles of Corporate Communication by Cees van Riel, was published in 1995. This book integrated the traditional roles of PR and marketing with the goal of achieving harmony in an organization’s communications. This early work described three broad categories of communication constituting corporate communication: (1) marketing communication, (2) management communication, and (3) organizational communication.

Advertising is the dominant element, and the consumer is the primary stakeholder in marketing communication, which supports the sale of goods and services. Management communication embraces communication from senior management to internal and external groups with the objectives of developing a common vision for the organization, establishing and maintaining confidence in the leadership, implementing and managing change processes, and empowering and motivating the employees. The last category, organizational communication, includes all other forms of communication used by the organization, with the primary focus on the stakeholders who are not customers. This view of organizational communication reflects traditional PR such as investor relations, government relations, and media relations, as opposed to what we understand today as organizational communication, primarily an internally focused field.

While branding in a marketing sense positions a product or service, corporate communication uses corporate branding to position the entire organization. One sells product or brand attributes, while the other sells the attributes of the organization. Corporate communication and corporate branding are viewed as more difficult than marketing because they must consider multiple stakeholders, as opposed to just customers. Corporate communication and branding also draw on a greater variety of communication tactics and media. Due to the demand for harmonization, however, there is less room for creativity.

Corporate communication is sometimes seen as a better integration of those functions normally consigned to PR, for example, media relations, financial relations, and crisis communication. Marketing communication may also be included as a function under corporate communication, but typically as marketing PR (product publicity and customer relations).

The premise of corporate communication as an integrated function is that by harmonizing all communications the organization is better able to coordinate and manage communication. Failing to coordinate and manage all communications of an organization can lead to communications that are diffuse, confusing, and contradictory. Therefore, the concept of common starting points (CSPs) is key in corporate communication.

Establishing CSPs that support all formal corporate communications facilitates and helps achieve consistency in corporate communication activities. CSPs are the central values of the organization and serve as the foundation for communication. They help communication departments create clear priorities and facilitate eventual control and evaluation of the total communication policy used in marketing communication and PR alike. Establishing CSPs also aids in the integration process, as it should involve representatives from the organization’s various communication departments and perhaps even the human resources department.

Three concepts are key for understanding CSPs: (1) the strategy of the organization, (2) its image (how others see it), and (3) its organizational identity (how it sees itself). Consistency is based on understanding the organization as a whole, and it is particularly important that those responsible for helping it communicate about itself understand and agree on who and what the organization stands for and is. This is organizational identity, and it comprises what is central, distinct, and enduring in an organization. Identity is what people experience in their contact with an organization, and it is from identity that they build their perceptions or images. Image is the mental associations that organizational members believe others have of them. It is important that there is alignment between the image others have of the organization and the identity of the organization; when the image matches the identity, there is consistency.

By communicating a clear image based on a positive identity, firms can build their reputation. This is important because what an organization says about itself, and how it says it, is an extremely important part of any discussion of reputation.

While an organization cannot communicate its way to a good reputation, sustaining, fostering, and developing a good reputation are among the most important functions of corporate communication. By raising awareness and generating understanding and appreciation of the organization, defending or explaining the organization’s actions, and communicating effectively internally, corporate communication can contribute to reputation building.

There is also some evidence that spending on corporate communication is important for building reputation; that is, there is a correlation between communication spending and reputation. The quality of corporate communication is also important, as some studies show that the higher the perceived quality of corporate communication, the higher the reputation of the firm. For corporate communication to be considered of high quality requires (a) informing the public in a sincere way, (b) the public feeling well informed, and (c) having reliable communication from the firm.

Education in corporate communication is increasingly available, and there is evidence that these programs have been successful in combining both management and communication disciplines, something PR education in most parts of the world has not managed to achieve. This is critical for corporate communication’s acceptance as a management function that is a strategic component in organizational success.

Criticisms

The term corporate communication is criticized as merely being a proxy for PR: It is used because of the negative connotation that PR has for some people or because PR is too associated with press relations or “flack.” There is a belief that the stigma and misunderstanding of PR as merely publicity or image manipulation can be overcome by the new field of corporate communication.

While corporate communication is seen as the overall internal and external communication function of the organization, it is still also called PR. Furthermore, while corporate communication in theory should integrate marketing with PR activities, many in marketing still see PR as marketing PR or product publicity.

Harmonizing communication through a corporate communication department responsible for both marketing communication and traditional PR activities sounds reasonable but is difficult to put into practice. There is evidence that communication managers may report to the CEO but still lack status as formal members of the top management team providing input into strategic decision making. In these situations, communication can rapidly become a one-way tool to convince stakeholders of the organization’s position instead of a strategic instrument in building relationships that can lead to good reputations. Research also indicates that marketing and PR departments often do work together, but the relationship is frequently more informal than formal and often depends on the relationship between members of the departments.

There is also the question of whether corporate communication’s demand for CSPs can be applied to all organizations. Consistency perhaps cannot always be an overriding value. If an organization is always looking for consistency, it will not necessarily be able to adapt to the environment when needed. Inconsistency can be a necessity in a transitional period, for example. In addition, it is difficult to get an organization to speak with one voice in all contexts. The values expressed in CSPs should not be introduced from the top; they must find an expression at the organization’s basic level.

For organizations to maintain an overview of communication activities, they need to use an integrated approach. The field of corporate communication is a response to this need, since it implies that the responsibility for management communication, marketing communication, and PR lies with a single department. Today, media exposure and scrutiny of organizations by the media are greater than ever before, often driven by increased public interest. As noted earlier, failure to coordinate and manage all communication can lead to diffuse, confusing, and contradictory communications that could have a profound impact on an organization’s reputation.