Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective PUBLIC RELATIONS PART IV The Practice Chapter 15 Business and Industry Public Relations Tenth Edition

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Study Guide After studying Chapter 15, you should be able to: 1.Describe the role of public relations in supporting profit- driven corporations. 2.Discuss current business issues, such as corporate governance, executive compensation, and corporate social responsibility. 3.Explain how the public relations function contributes to corporate well-being in the post-9/11 era of heightened security and increased threats from terrorism. 15-1

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Study Guide After studying Chapter 15, you should be able to: 4.Describe the crucial role of public relations in communicating with the financial community. 5.Outline the role of philanthropy as a key element in corporate citizenship. 6.Explain the increasing importance and constantly changing effect that new media can have on corporate reputation. 15-2

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Public Relations Challenges in Corporate Settings 1.Weakening U.S. economy led to downsizing 2.Manufacturing jobs exported to developing nations 3.Concern about the protracted war on terrorism slowed global market expansion 4.Unprecedented corporate misconduct, victimized employees, indicted executives, and massive class-action lawsuits against senior management threatened public trust 15-3

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Corporate Social Responsibility 1.Provide a stable source of employment, with a visible commitment to diversity in hiring, promoting, and compensating workers at all levels. 2.Operate profitably and provide a reasonable return on investment to its shareholders. 3.Establish and meet strategic objectives that provide for long-term growth and competitiveness. 4.Voluntarily comply with—or exceed—government regulations regarding health, safety, and the environment. 15-4

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Corporate Social Responsibility 5.Set aside a reasonable amount of yearly revenue for philanthropic purposes. 6.Maintain comparable operating standards in every country where the company does business. 7.Participate actively in public policy processes affecting the company, its industry, and other stakeholders who are part of the “public interest.” 15-5

Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Profit Maker 15-6 Corporate Social Responsibility

Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Maximize profit in order to perpetuate the market economy and preserve the free-enterprise system. Provide jobs, money, and products and services needed by the community without government involvement Profit Maker Role

Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Profit Maker Good Citizen 15-8 Corporate Social Responsibility

Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Take into account those directly associated with the corporation— employees, stockholders, suppliers, customers, and the community. Government is seen as a necessary evil for ensuring that the interests of the community and corporation are in balance Good Citizen Role

Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Profit Maker Social Leader Good Citizen Corporate Social Responsibility

Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Guided by “enlightened self-interest,” solve the problems of society that affect both the community and corporation. Government intervention is seen as necessary to achieve “quality-of-life” goals. The corporation takes the lead in enacting and enforcing laws and regulations needed to achieve those goals Social Leader Role

Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Shell Youth Training Academy Graduates “Enlightened Self-Interest” 15-12

Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Chicago Bulls’ “Reading Time-Outs” “Enlightened Self-Interest” 15-13

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Financial Public Relations Challenges 1.Financial public relations professionals have access to highly confidential and time-sensitive information that requires extraordinary discretion, lest the practitioner be guilty of insider trading or releasing information prematurely. 2.The financial public relations manager is frequently chosen to answer media queries about the company CEO’s compensation and perks. This may be the origin of the term “being between a rock and a hard place.” 15-14

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Financial Public Relations Challenges 3.Financial relations specialists also must deal with the complex challenge of communicating about mergers, acquisitions, and divestitures. Loaded with SEC confidentiality implications and the need for formal shareholder approval, these situations require exquisite planning between two corporations, with numerous eventual publics to satisfy

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Corporate Misconduct 15-16

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Corporate Misconduct 15-17

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Remedies for Corporate Misconduct: Sarbanes-Oxley Act of Prohibits independent auditing firms from also engaging in business consulting assignments for the client. Arthur Andersen collected $25 million per year in auditing fees from Enron, but $27 million per year in consulting fees—in effect, setting up the business operations, investments, and processes it would later examine as “outside auditors.” 15-18

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Remedies for Corporate Misconduct: Sarbanes-Oxley Act of Ensures uniform legal behavior by companies’ outside auditors by creating a Public Company Accounting Oversight Board. 3.Requires a company’s chief executive officer and chief financial officer to sign all quarterly and annual financial reports, and holds them personally accountable for any mistakes in the reports. 4.Prohibits company loans to directors and officers

Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom The increase in global issues, particularly climate change, is also driving the need for international public relations. American business executives are increasingly participating in global forums…. The Internet has also brought a global immediacy of news, whether it’s happening in board rooms in Munich, Mumbai or Miami. John Bergen, Senior Vice President Corporate Affairs and Marketing Siemens Corporation Globalization and Corporate Public Relations

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved