Stress-testing Stakeholders Models in terms of Social Media

Virtually all businesses and organisations operate within a complex system of interests and influences. It is therefore paramount for management to assess and evaluate these external forces in order to adjust them with corporate objectives. Individuals and groups who depend on the organization to fulfill their own goals and on whom, in turn, the organization depends, are called stakeholders, or publics, as others may like to call them.

But much as the words are used interchangeably, they are, to an extent, different.  Authors Grunig and Repper (1992) describe the difference by saying ‘People are stakeholders because they are in a category affected by decisions of an organisation or if their decision affects the organisation. Many people in a category of stakeholders – such as employees or residents of a community – are passive. The stakeholders who are or become more aware and active can be described as publics.’

The PR gurus go on to say that ‘Publics form when stakeholders recognise one or more of the consequences (of the behaviour of the organisation) as a problem and organise to do something about it or them’.  Davis (2004) points out that ‘publics sound more important than stakeholders’.

He goes on to say that some groups, for example pressure and cause-related groups, do not form out of a stakeholder mass: they exist as publics immediately because, by definition, they are active.

In other words, he is saying publics have an importance attached to them because of their specific interest and power, current and potential, while for stakeholders the levels of interest and influence are relatively lower and more generalised.

However, in as far as making corporate decisions is concerned, it is necessary to know about the an influence. The advent of social media means that when identifying stakeholders it is necessary to have a look at informal and indirect relationships too, and not just to focus on the formal structure of the organization.

A useful model for this purpose is to visualize the stakeholder environment as a set of inner and outer circles below. The inner circles stand for the most important stakeholders who have the highest influence.

The stakeholder environment

On top of analyzing stakeholder power in terms of their ability to influence people and developments, it is also necessary to evaluate the extent to which stakeholders exert their power. The power/interest matrix therefore, is a useful tool for evaluation the expectations and the impact of particular stakeholders.

The matrix generally measures  the interests stakeholder groups have to impress and if they have the means and power to do so.

Stakeholders in sector A neither do not have a high own interest in corporate plans nor do they have to power to exert much impact. Organizations should keep these groups informed to a lesser extent, but should not invest too much effort into them.

Stakeholders in Sector B do have a high interest in the corporation and its actions. However, they have limited means to influence things. Despite their low power, such stakeholders could be valuable and it is advisable to keep them informed about the issues they are interested in.

The relationship with stakeholders in Sector C could be difficult. Institutional investors or legislative bodies are normally in this sector. They behave passively most of the time and show a low interest in corporate affairs. Despite that, they can exert an enormous impact on the organization, and it is necessary to involve them according to their interests.

The most important stakeholders are those with high interests and high power, to be found in sector D. They have to be involved in all relevant developments.

However, the coming in of social media brings levels the playing field and hence gives an opportunity to for everyone to follow what is happening and hence to access similar information. Eventually, the less interested become more interested and hence acquire some power. Thus, such a strategy allows to form new alliances and to shift power

This on the other hand could be a threat because apart from easily opening up to opponents, some stakeholders still hold the power and ought to be treated as such. They need to have access to some not-for-public-consumption information.  

Nevertheless, all organisations need is to be proactive; engage with key players through an open dialogue (through social media) and keep them satisfied by providing them relevant information and taking into account their feedback on various issues.  

Moreover, this type of analysis can provides opportunity to sub-divide larger stakeholder groups into smaller groups. These sub-groups could be treated differently in order to meet their individual needs and to get their support.

References:

The manager.org

Tench, R. & Yeomans, L. (2006). Exploring Public Relations. England: Pearson Education Limited

Opportunities brought by crises

An issue ignored is a crisis ensured, Henry Kissinger rightly put it. When Toyota was faced with a crisis in 2009 which forced them to recall over 8million cars, they did many things to respond to it. Its spokespeople filled the media with messages of reassurance, its PR people blogged and tweeted non-stop to fill the information vacuum; its website was full of details about the recall and its call centre was working flat out to deal with customer enquiries.

Nevertheless, this still proved a losing game as the company still incurred more than US$ 30 billion loss, faced multiple lawsuits and a 11% drop in share prices, among others. Toyota’s hard-won reputation faced and perhaps is still facing the biggest challenge in its corporate history. Catastrophic.

And just like many companies and organisations, Toyota’s main problem lied primarily in what happened before the crisis erupted, rather than its response to it. Thus, central to Toyota's problem was its perceived delay in identifying and addressing the situation in the first place. As Jonathan Hemus of The Guardian rightly reported, corporate denial appeared to have been the order of the day, with the company following the advice of the Japanese proverb: "If it stinks, put a lid on it." What a mistake.

Toyota could have done better to avoid the recall

Most effective crisis management takes place before the problem escalates out of control during the "incubation" phase. Unfortunately, Toyota, like many companies, missed the first crucial first step: understanding that perceived risk is potentially as damaging and costly as actual risk. They ignored the problem until they were forced to take action.

Toyota should have known better that some of the biggest potential crises have been identified and addressed before they ever escalated out of control. And this is crisis management at its best.

This action, however, requires an organisational culture that is vigilant for potential crises; an organisation that puts communications on every agenda; has open lines of communication from staff to management and all stakeholders; and has a willingness to address unpleasant truths.

Toyota’s issue should certainly serve as an example to many companies, especially with the advent of New and Social Media today when the world is freer, and everyone has free opinions and information and everyone is an expert and a publisher.

Granted, managing a crisis is more complex. But companies ought to realise that today there is more knowledge, there’s zero tolerance to risk and inevitable greater demands for transparency.

Crises certainly bring with them dangers and opportunities. But by often thinking the unthinkable and preparing and rehearsing a contingency plan, crises bring PR practitioners opportunities to demonstrate their value and hence raise the profile of organisations and companies.

The following slide and video  is perhaps helpful to PR practitioners facing crisis and are still in the dark oh how best to deal with them.

Crisis Management

View more presentations from Brett Atwood

The road to a reflection of Contemporary Issues in Public Relations

Hello and Welcome aboard,

As part of looking at the Public Relations Trends, I would like to introduce you to what we will be sharing in the coming few weeks, perhaps up to April. Having started with an introduction to social media last week, this forum of yours will be looking at issues in the PR industry, their emergence and what we all make out of such issues.

From looking at spinning especially during times of war as a starter, we will go on to look at the new challenge to the power of PR which comes in the name of transparent New Media. Thus, we will discuss if PR is walking in the same line with New Media revolution or if it is being left behind.

The following week will see us reflecting on the relationship between culture and PR i.e how communications is influenced by organisational and cultural cultures. We can’t talk of PR without ethical issues and this will also take centre stage later as we will be reflecting on some of the theoretical models that buttress PR Industry’s ethical constructs and practices; reflect on issues of spinning again and in the later weeks share ideas on why practitioners love a crisis, among others. So you can see that there are a wide range of issues to reflect on and discuss.

But let me be quick to point out that the forum will also be a reflection and response to PR Issues that Masters in Public Relations students at University of Westminster in London will also be looking at in class. However, the analysis (and obviously reflection) will be from my own point of view.

Social media is about two-way communication as such, I would be grateful to have your relentless comments of these topics. Certainly all your views, comments and general feedback will be appreciated and without doubt will add value to this blog. Above all, flexibility is the "nickname" of this blog so let’s apply and enjoy it.

PR and Social Media- students' perspective

The term social media is now a massive phenomenon and a darling to the close to 2billion people who use the internet today. As the popularity of social media continues to rise, organizations of all types and sizes are becoming aware of the ways in which the social media phenomenon can help them better comprehend, respond to, and attract the attention of their target audience. Its power cannot be underestimated.

For example, more than 500 million people are active users of Facebook and 50% of this log on in any given day. An average user has 130 friends and people spend over 700 billion minutes per month on Facebook, according to recent research by facebook. It is said that if facebook were a country, it would be the fourth largest.

It is against this backdrop that businesses are now jumping on the social media bandwagon at a fast rate, embracing blogs, social networks, wikis, and other vehicles to achieve their marketing and public relations goals. No wonder, there are over 200 million blogs, 54% of bloggers post content or tweet daily and 34% of bloggers post opinions about products and brands.

The Public Relations industry is one such that inevitably embraces social media to reach out to its publics, perhaps for obvious reasons. But before going further, it is paramount to appreciate the knowledge that students and other up and coming bloggers have about this new phenomenon and how beneficial they think it is to the industry.

In this video, I take you through to how students view this phenomenon and its benefits.