Chapter 1

Foundations and Dynamics of Corporate Communication

Prof. B.P. Mahesh Chandra Guru

1.1 Preamble

Corporate communication is the process of facilitating exchange of information and ideas between the internal and external groups and individuals that have a direct relationship with modern corporate houses and other institutions. It is concerned with communication management of the modern corporate houses from the stand point of sharing knowledge and decisions from the enterprise with investors, employees, suppliers, dealers, customers, media professionals, government officials, members of the community and other stakeholders of the organization. Corporate communication serves as the conscience of the corporation and is responsible for the establishment and maintenance of the reputation of modern organizations. Previously called ‘public relations’ or ‘public affairs’, corporate communication has assumed great significance in the 21st century as a result of corporate scandals or crises at modern companies. The concept of corporate communication has been widened to include the cultivation of mutually beneficial relationships between the organization and various stakeholders who matter most from the point of view of business management. The foundations and dynamics of corporate communication are amplified in this article on the basis of conceptual analysis method.

1.2 Corporate Communication

Corporate communication has been defined differently by various scholars on the basis of several dimensions, contexts and functions. The word ‘corporate’ originally stems from the Latin words for ‘body’ (corpus) and for ‘forming into a body’ (corporate), which emphasize a unified way of looking at ‘internal’ and ‘external’ communication disciplines.

Corporate communication is the set of activities involved in managing and orchestrating all internal and external communication aimed at creating favorable point-of-view among stakeholders on which the company depends. It is the messages issued by a corporate organization, body, or institute to its audiences, such as employees, media, channel partners and the general public. Organizations aim to communicate the same message to all its stakeholders, to transmit coherence, credibility and ethics (Wikipedia).

Corporate communication helps modern institutions of every kind to reach out to various stakeholders and disseminate cohesive messages to them. The concept of corporate communication is understood in the context of integrative communication structure linking stakeholders to the corporate houses. The founding fathers of public relations Ivy Ledbetter Lee and Edward L. Bernays examined the issues concerning corporate communication systematically. It was known as public relations in the past. Corporate communication is the means of disseminating various organizational messages to key constituencies. It is practiced all over the world in a systematic manner by the fraternity of corporate communicators.

Corporate communication is the total of a corporation’s efforts to communicate effectively and profitably about the organizational policies, programmes and contributions. Corporate communication is a strategic tool for the modern corporate houses to gain a competitive advantage over their competitors. It creates a shared understanding among all communication practitioners about the processes of integration, institutionalized processes of integration, thus making the organization less dependent on certain individuals, facilitates continuous improvements of the processes of integration, enables communication practitioners to benchmark their processes against other companies and creates opportunities for cycle-time reduction (Jefkins, 1987:19).

Corporate communication is primarily used by modern organizations as an instrument of management. It includes all consciously used forms of internal and external communication which are harmonized as effectively and efficiently as possible with the overall objective of creating a favorable basis for relationships with groups upon which the company is dependent (Riel, 1995:33). Now communication is the organizing principle behind many business decisions (Sardana, 1995:36). The sustainability and success of a company primarily depends on how it is understood by key stakeholders in modern times. Essentially, corporate communication is a critical part of building, maintaining and sustaining institutional popularity, credibility and reputation.

The corporate communication process governs the flow of information within an organization and from within the company to the external environment in which the business operates. Organizations function as information processors, absorbing information from internal and external sources to produce products or perform services (White and Mazur, 1995:40). Corporate information that allows companies to make progress toward fulfilling their missions and that enables potential customers to learn about available products and services.

One best way to ensure employee involvement is to actuate an effective communication system-through information sharing, listening to people, periodical briefing sessions about the organizations policies, programmes and procedures, speak-up for a team meetings, management by walking around, rap sessions to discuss between the managers and group of employees, complaints, suggestions, opinions and questions, deep-sensing which is an attempt to probe in some depth the issues that are in the minds of the employees (Viswanathan, 1996:38).

Modern organizations have realized the significance of corporate communication which is an autonomous and constant function within the organization. Some communication discipline might still be organized as separate units or devolved to other functional areas to consolidate most communication discipline into a single department so that communication can be strategically managed from a central corporate perspective (Balmer, 1997:06).

Corporate Communication is an art of communicating effectively with employees which is the most important area of Corporate Communication. It has emerged as a separate management function with an important role in Corporate Management (Argenti, 1998:02). The employees are indeed the backbone of organizational development. They must be motivated to work harder in the interest of organizational success and progress honestly and regularly.

The corporate communicators make use of interpersonal channels, group discussions, written communication, electronic communication, new media of communication and social media on day to day basis. They should prepare the time table for the execution of corporate communication activities within and outside the corporation. They should also implement the corporate communication programmes which benefit the corporate house and various stakeholders. The experts in evaluation should be involved for evaluating the corporate communication strategies for measurable results.

Companies must learn to integrate communications three dimensionally; externally with key customers, vertically between senior management and front-line workers, and horizontally across departments. The importance of ‘integrating’ marketing communication and corporate communication has resulted from a variety of factors or ‘drivers’, which have made considerable impact on the profession (Gronstedt, 2000:13). Many organizations have therefore promoted corporate communication practitioners to higher positions in the organization’s hierarchical structure.

Corporate communication is practiced vigorously all over the world by public and private undertakings to enhance the reputation of the organization and improve the business status of modern corporate houses. In some organizations, the corporate communication department manages all the activities while in other organizations marketing and communication disciplines are not merged or reduced (Clutterbuck, 2002:10). These ‘drivers’ can be grouped into three main categories from organizational development point of view.

The corporate communication function starts from the perspective of the ‘bodily’ organization as a whole when communicating with internal and external stakeholders. Corporate communication offers a framework for effective coordination of all internal and external means of communications with the overall purpose of establishing and maintaining a favorable reputation with stakeholder groups which are responsible for the success of organizations. It is consciously used forms of internal and external communication which are harmonized in a proper way to create a favorable basis for relationships with several constituencies (Argentini, 2003:02). Modern corporate houses have brought a wide range of communication disciplines together into a single entity. The knowledge and skills of practitioners are shared and corporate communication is seen as an autonomous and significant function within the organization.

The corporate communication was consolidated under a common umbrella to manage the organizational communication activities from a central corporate perspective. The big organizations such as multidivisional companies and multinational corporations also located the corporate communication department at a high level vertically within the organization under the leadership of a CEO and executive team in an advisory capacity (Lages and Simkin, 2003:25). The major types of corporate communication include – employee relations, investor relations, supplier relations, consumer relations, distributor relations, media relations, government relations, community relations, and international relations.

Corporate communication functions are carried out by the organizations which consist of several specialists. The organizational communication generally emanates from specialists in corporate communication, public affairs, investor relations, environmental communication, corporate advertising and employee communication. Corporate communication encompasses management communication, marketing communication and organizational communication (Werder, 2003:39). Corporate communication facilitates better corporate governance, participatory communication and social integration through different names such as internal communication, public relations and market communication.

The corporate communication professionals deal with various aspects of corporate communication management on the basis of skill, creativity and competence. They reach out to various stakeholders and enlist their active participation in the process of organizational development (Easler and Easler, 2004:11). Corporate communicators are required to handle various communication assignments and projects, which would fetch rich dividends to the organizations in this age of competitiveness.

Senior communication practitioners are members of their organization’s management team in Indian and foreign public and private undertakings. These higher positions in the organization’s hierarchy enable corporate communication practitioners to coordinate communication from a strategic level in the organization to build, maintain and protect the company’s reputation with its stakeholders (Nelson, 2004:29).

Market and environment-based drivers are based upon the integration of marketing and corporate communication efforts in modern organizations. This integration is also important when one considers the multiple stakeholder roles that any individual may have and the potential pitfalls that may occur when conflicting messages are sent out. The communication-based drivers are required to protecting their corporate image by rigorously aligning and controlling all communication campaigns and all other contact points with stakeholders.

1.3 Process of Corporate Communication

The process of corporate communication broadly include – assessment of communication requirements of various stakeholders, development of internal communication infrastructural facilities, recruitment of competent corporate communicators, identification of corporate communication goals, development of corporate communication strategies, selection of corporate communication media, designing corporate communication messages, facilitation of two-way communication, collection of feedback from various stakeholders and improvement of corporate communication strategies and operations (Zabala et. al, 2005:41).

The corporate communication has certain challenges with respect to strategic management (Goodman, 2006:12). They include:

The need to build trust with all internal and external audiences;

The expectation by the corporation to accomplish more with less;

The demand to build a responsible and accountable global corporate culture in response to a hostile environment for multinational corporations;

The perception of the corporate communication executive as ‘counsel to the CEO’ and ‘manager of the company’s’ reputation; the understanding of the global impact of the local act, and the local impact of the global act;

The demand for greater transparency and disclosure have made media relations more complex and strategic;

The expectation that the company be a good citizen and make money;

The reality of global terrorism makes crisis communication planning a critical success factor for corporate communication professionals;

The understanding of transparency as a best practice strategy for reputation management;

The knowledge that writing remains the core skill for corporate communication

Experts have offered certain strategies of corporate communication to achieve success in terms of organizational reputation management. The corporate communicators are responsible for keeping the employee teams informed, optimizing product delivery and creating an efficient communication center. Corporate communicators should determine their audiences who are the internal and external stakeholders.

The term corporate communication is defined as the set of activities involved in managing and orchestrating all internal and external communication aimed at creating favorable starting points with stakeholders on whom the company depends. Corporate communication consists of the dissemination of information by a variety of experts working in an organization, with the common goal of enhancing the reputation of corporate houses (Riel and Fombrun, 2007:32). The corporate communication department is established in the corporate headquarters, from where it provides better connectivity between the management, different branches and constituencies. The multi-functional teams are an important mechanism in the coordination and integration of work of different communication disciplines within the organization. Hence, corporate communication encompasses all organizational communication activities directed at different stakeholders of organizational development.

1.4 Significance of Corporate Communication