SUVs and Public Affairs Issues Company attempts to manage stakeholders What tactics were used and were they successful? What company stakeholders were important to the company and why? Stakeholders What are they expecting of the company? Were they successful in making their interests or demands known and how?

SUVs and Public Affairs Issues SUVs and teen drivers Overall crash rates, per-mile driven, higher for drivers ages than for all other age groups Crash risk for year-olds almost three times as high as for year- olds Most teens learn to drive in sedans -- unprepared to handle higher, heavier SUVs, especially in emergencies Illusion that vehicle size equals safety, teens tend to drive SUVs too fast, leave inadequate time for braking, and overcorrect in turns 37 percent of SUV drivers younger than 25 in single-vehicle crashes rolled over Rollovers account for 3 percent of U.S. crashes but a third of driving deaths More than half of the 3,660 teen drivers killed in 2003 weren't wearing seat belts, and a third had been drinking Source: Detroit Free Press, 1/16/05

Figure 2.2 The public issue life cycle High Low Time Life Cycle of Issue Management Discretion Level of Stakeholder Concerns Phase 1: Changing Stakeholder Expectations Phase 2: Political Action Phase 3: Formal Government Action Phase 4: Legal Implementation Management discretion to resolve the issue

Corporate public affairs activities of 250 companies Exhibit 2.A ActivityPercentage of Respondents Political action committee89% State government relations84% Issue management84% Local government relations77% Direct corporate contributions75% Community relations75% Business/trade association membership73% Public policy group relations73% Grassroots communication71% Corporate foundation71%

Corporate public affairs activities of 250 companies Exhibit 2.A ActivityPercentage of Respondents Employee volunteer programs66% Media relations64% Public relations61% Employee communications59% Strategic philanthropy55% Regulatory affairs43% Educational relations34% International public affairs32% Environmental affairs23% Stockholder relations21%

“In Ad Blitz, Wal-Mart Counters Public Image as Harsh Employer” Wal-Mart bought full-page ad space in January 2005 in more than 100 newspapers nationwide Co said ads are attempt to set record straight on labor issues “It’s becoming clear that we have to do more and be more aggressive in telling our story. The purpose is to be proactive and initiate debate.” New web site: Amid criticism of labor practices, in 2004 Co initiated new wage structure to increase pay of some hourly Ees, created 40-person compliance team to ensure labor laws adhered to and diversity goals met Also linked percentage of executive bonuses to certain diversity goals Source: Wall Street Journal, 1/14/05

Eight strategic radar screens Figure 2.4 Seeking Environmental Intelligence Customer Environment Competitor Environment Legal Environment Geophysical Environment Political Environment Technological Environment Social Environment Economic Environment

Figure 2.5 The issue management process Policy Options Program Design Results Issues Identification Issues Analysis Research Judgment and priority setting Policy and strategy selection Implementation Performance evaluation

An effective crisis management plan involves: Preparing for action by creating an internal communication system that can be activated the moment the crisis occurs. Communicating quickly, but accurately. Using the Internet to convey the public affairs message. Doing the right thing by not minimizing the seriousness of a problem nor exaggerating minor incidents. Following up and, where appropriate, making amends to those affected.