Public Affairs Management Chapter 2 Public Affairs Management McGraw-Hill/Irwin Copyright © 2008 The McGraw-Hill Companies, All Rights Reserved.

Ch. 2: Key Learning Objectives Evaluating public issues and their significance to the modern corporation Analyzing the ways business utilizes its boundary-spanning departments to interact with their various stakeholders Knowing the duties of a company’s public affairs manager or department both for domestic and international issues Applying available tools or techniques to scan an organization’s multiple environments Investigating how competitive intelligence is gathered and used Describing the steps in the issue management process and determining how to make the process most effective 2 - 2

Public Issues Public issue An issue that is of mutual concern to an organization and one or more of the organization’s stakeholders Stakeholder expectations A mixture of people’s opinions, attitudes, and beliefs about what constitutes reasonable business behavior

Public Issues: Performance-Expectations Gap Discrepancy between what stakeholders expect and what an organization is actually doing Important to identify emergent expectations as early as possible Doing so can gain the company competitive advantage Failure to understand stakeholder concerns and to respond appropriately will: Cause the performance–expectations gap to grow The larger the gap, the greater the risk of stakeholder backlash or missing a major business opportunity

The Performance-Expectations Gap Figure 2.1 The Performance-Expectations Gap

Boundary Spanning Departments Those departments within an organization that reach across the organization’s boundary line to interact with groups and people in society Building positive and mutually beneficial relationships that span organizational boundaries is a growing part of a manager’s role Figure 2-2 on following slide shows corporate departments and the market or nonmarket stakeholders they engage with In today’s modern corporations is a complex set with multiple departments and numerous stakeholder groups

Figure 2.2 The Corporation’s Boundary-Spanning Departments

Boundary Spanning Departments and Stakeholder Groups Remainder of this chapter will cover function/activities of Public Affairs Department Later chapters will cover departments responsible for Corporate Citizenship functions, and those that work with specific stakeholder groups

Public Affairs Management Refers to the management of a company’s external relations, especially its relations with stakeholders such as government and regulatory agencies, customers, investors, and communities Sometimes called corporate affairs, external affairs, or government relations

Public Affairs Management Growth in Pubic Affairs departments attributed to External forces such as loss of public trust institutions, globalization of world markets, and rise of the Internet Internal forces such as better communication within organizations, more experience with significant change and complexity, and growing focus on the interplay between the organization, its environment, and its strategies

Corporate Public Affairs Activities Exhibit 2.A Corporate Public Affairs Activities

Current Public Affairs Management Theme for common activities shown on Exhibit 2.A is an organization’s need to relate to its stakeholders Many companies today have a “Public Affairs Plan” The Head of Public Affairs is most often a Senior Manager/Executive or Vice President who also serves on the Company’s Senior Management Team Important that management of “sociopolitical” issues be at or near the highest levels in the organization and be linked to strategy

Effective Tactics to Manage Sociopolitical Issues Exhibit 2.B

International Public Affairs Management By necessity, Public Affairs must be global given current business practice is international U.S.-based businesses have expanded Public Affairs activities globally Foreign businesses have developed Public Affairs functions Is important to develop intercultural competencies: Dealing with local media and other stakeholder groups can depend on mastery of language and native cultural norms

Issue Management A structured and systematic process to aid organizations in identifying, monitoring, and selecting public issues that warrant organizational action Environmental analysis Provides managers with the information about external issues and trends that enables an organization to develop a strategy that minimizes threats and takes advantage of new opportunities Environmental intelligence The acquisition of information gained from analyzing the multiple environments affecting organizations Depends on scanning eight “radar” screens shown on next slide

Eight Strategic Radar Screens Figure 2.3

Competitive Intelligence An additional scanning function that is often delegated to the Public Affairs Department Defined as the systematic and continuous process of gathering, analyzing, and managing external information about the organization’s competitors that can affect the organization’s plans, decisions and operations Numerous ethical issues arise in acquisition and use of information gathered through competitive intelligence, public affairs managers must be keenly aware of these issues

Issues Management Process Composed of 5 Steps or Stages Issue Identification Anticipating emerging concerns, or “horizon” issues Issue Analysis Evaluating the issue; coming to an understanding of how it will evolve and how it will affect the organization Option Generation, Evaluation and Selection Evaluating action options, involves complex judgments that take in to account “non-quantifiable” factors like the company’s reputation

Issues Management Process Last two of the five stages Program Implementation Once option is chosen, must design and implement it Assessment of Results and Continuous Improvement Must assess results of the program and made adjustments as needed The Issues Management Process should be thought of as continuous, a “Loop” like shown on next slide Also requires creative problem solving, is as much “Art” as “Science”

The Issue Management Process Figure 2.5