CCI Leaders Forum 2015: Module 7 -- Corporate ...€¦ · ... Corporate Communication: Critical Business Asset for Strategic ... Figure 4.1 Porter’s Five Forces Model of Competition

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CORPORATE COMMUNICATION INTERNATIONAL at Baruch College/CUNY

CCI Leaders Forum 2015:

Module 7 -- Corporate Communication:

Critical Business Asset for Strategic

Global Change

Dr. Michael B. Goodman

Professor

Director, MA in Corporate Communication

Director, Corporate Communication International

January 2015

Corporate Communication:

Critical Business Asset for

Strategic Global Change

Michael B. Goodman

&

Peter B. Hirsch

NY: Peter Lang, 2015


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Chapter 1 – Communication and Transformation

in the Global Corporation

This chapter explores corporate communication as both

a strategic management function and a strategic

process in corporations.

To understand how radical changes in business and the

media have influenced the practice of corporate

communication, this chapter examines those changes

themselves – globalization, the Web, the Networked

Enterprise, uncertainty, privacy and “big data.” …

This framework enables us then to analyze the role of

corporate communication and how it should be defined

in order to address how the forces described here have

shifted the context of corporate communication.


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Sidebar 1.1 The Corporation

Defined (1)

The form of the modern business corporation originated

in a fusion of the type of commercial association known

as the joint-stock company, which was in fact a

partnership, and the traditional legal form of the

corporation as it had been developed for medieval

guilds, municipalities, monasteries, and universities.

Although business corporations were formed in England

as early as the 16th century, these enterprises were

monopolies chartered by the crown for the pursuit of

strict mercantilist policies and were thus closer, in some

respects, to the form of the modern public corporation

than to that of the private business corporation.


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Defined (2)

The fusion of the two forms took place incrementally

over the first two-thirds of the 19th century in Great

Britain, the United States, France, and Germany with

the passage of general incorporation laws, which

gradually made incorporation a more or less routine

matter for business enterprises…

As corporations increased in size and geographic

scope, control of the enterprise by its nominal owners,

the shareholders, became impossible when the number

of shareholders for the largest companies grew to the


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Defined (3)

tens of thousands and as the practice of proxy voting

(i.e., the voting of shares of absent stockholders by

management in the annual shareholders’ meetings) was

legalized and adopted. Salaried managers came to

exercise virtually proprietary discretion over the

corporation and its assets, which gave rise to debates

that continue today over the nature of ownership and

the social responsibility of corporation.

• http://www.britannica.com/EBchecked/topic/138409/c

orporation


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Chapter 2 – Corporate Communication as a

Critical Business Asset in a Time of Global Change

This chapter discusses the critical thinking that enables

executives to identify rapid changes in technology and

in global business practices that require creative and

strategic integration of knowledge to “connect the dots,”

and then to develop effective action in response.

Understanding and implementing four vital areas in

communication and advocacy -- public affairs,

sustainability, consumer and data privacy, and the

employment contract -- establishes the foundation for

the communication strategy for the corporation.


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Figure 5.4 Strategic Corporate

Communication Model


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Chapter 3 – The Lifecycle of

Organizations and the Role of Corporate

Communication

This chapter investigates four phases that corporations

experience -- birth, growth, decline, and if they are

sustainable, a rebirth -- starting the cycle all over again.

New corporations in the birth stage make the transition

to the growth stage, or their “adolescence.” Chinese

companies have elements of the growth stage.

Companies in the automobile industry recently in

decline, are now undergoing a rebirth. Companies that

can trace their history over a century or more are

excellent examples of corporations that are sustainable

and have maintained their capacity to be “reborn.”


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Figure 3.1 Moore's Technology

Adoption Lifecycle


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Figure 3.2 Five Phases of the

Lifecycle of the Corporation


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SIDEBAR 3.2 Adizes’ Corporate

Lifecycles (1)

The interrelationship of flexibility and control defines corporate lifecycles. The Prime stage is

ideal for sustainability.

• Courtship. Founders focus on ideas and future possibilities, making, and talking about

ambitious plans.

• Infancy. The founders' attention shifts from ideas and possibilities to results. The need to

make sales drives this action-oriented, opportunity-driven stage. Nobody pays much

attention to paperwork, controls, systems, or procedures. Founders work 16-hour days,

trying to do everything by themselves.

• Go-Go. In this growth stage, sales are king. Founders believe they can do no wrong. They

see everything as an opportunity. Their arrogance leaves their businesses vulnerable to

mistakes. They organize their companies around people rather than functions; founders

make every decision.

• Adolescence. Companies take a new form. Founders hire chief operating officers, but find it

difficult to hand over the reins. An attitude of us (the old-timers) versus them (the COO and

his or her supporters) hampers operations. Internal conflicts leave little time to serve

customers.

• Prime. With a renewed clarity of vision, companies establish a balance between control and

flexibility. Disciplined yet innovative, companies consistently meet their customers' needs.

They passionately nurture both expansive, creative energy and their need for structure.


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SIDEBAR 3.2 Adizes’ Corporate

Lifecycles (2)

Continued (The interrelationship of flexibility and control defines corporate lifecycles.)

• Stability. Companies are still strong, but without the eagerness of their earlier stages. They

welcome new ideas but with less excitement. Financial people begin to impose controls for

short-term results in ways that curtail long-term innovation.

• Aristocracy. Not making waves becomes a way of life. Outward signs of respectability dress,

office decor, and titles-take on enormous importance. Companies acquire businesses rather

than incubate startups. Their culture emphasizes how things are done over what's done and

why people are doing it.

• Recrimination. In this stage, companies conduct witch-hunts to find out who did wrong. Cost

reductions take precedence over efforts to increase revenues. Backstabbing and corporate

infighting rule. Executives fight to protect their turf, isolating themselves. Petty jealousies

reign supreme.

• Bureaucracy. If companies do not die, they become bureaucratic. Procedure manuals

thicken, paperwork abounds, and rules and policies choke innovation and creativity.

Customers-forsaken and forgotten-must devise elaborate strategies to get anybody's

attention.

• Death. This final stage may creep up, or it may arrive suddenly, with one massive blow.

Companies crumble when they can't generate the cash they need; outflow finally exhausts

any inflow.


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Chapter 4 – Major Events for

Corporations

This chapter investigates strategies and offers

examples of corporations that have successfully

navigated one or more of these important changes in

the life of a sustainable business. It focuses on three

areas:

• Communication and Corporate Strategy –

Understanding and Influencing the Change Process

• Communicating Strategic Change – The Continuum

of Reputation, Issues Management, and Crisis

Management is Built on a Positive Corporate Culture


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Chapter 4 – Major Events for

Corporations

Corporate Communication is Essential to the Success

of Strategic Changes: M&A, competition, antitrust;

structural alignment; culture change; innovation; new

leadership models for succession planning and new

concepts of leadership in corporations; downsizing;

global expansion.


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Figure 4.1 Porter’s Five Forces

Model of Competition

Porter’s Five Forces Model of Competition

Threat of New Entrants

Barriers to entry - Economies of scale - Product differentiation - Capital requirements - Switching cost to buyers - Access to distribution channels - Other cost advantages - Government policies

Incumbants’ defense of market share Industry growth rate

Determinants of Supplier Power

Supplier Concentration Availability of substitute inputs Importance of suppliers’ input to buyer Suppliers’ product differentiation Importance of industry to suppliers Buyers’ switching cost to other input Suppliers’ threat of forward integration Buyers threat of backward integration

Rivalry Among Existing Firms

Number of competitors (concentration) Relative size of competitors (balance) Industry growth rate Fixed costs vs. variable costs Product differentiation Capacity augmented in large increments Buyers’ switching costs Diversity of competitors Exit barriers Strategic stakes

Determinants of Buyer Power

Number of buyers relative to sellers Product differentiation Switching costs to use other product Buyers’ profit margins Buyers’ use of multiple sources Buyers’ threat of backward integration Seller’s threat of forward integration Importance of product to the buyer Buyers’ volume

Threat of Substitute Products

Relative price of substitute Relative quality of substitute Switching costs to buyers


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Chapter 5 – Strategic Models for

Corporate Communication Practice (1)

This chapter explains how the goals of the enterprise

are achieved through structures and functions within the

organization, the history of an individual organization,

and the communication needs of a particular industry. In

creating a corporate strategy, executives focus on the

assessment of the competitive environment and the

selection of a position in the marketplace that is

profitable, defensible, and achievable. They also

envision their corporation in the competitor’s position.

Then considering the possible moves the competitors

will make, they develop corporate strategies that will

move their business enterprise to sustainable profits.


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Chapter 5 – Strategic Models for

Corporate Communication Practice (2)

Strategically, the function of corporate communication

serves these corporate goals: advocacy for, or the

engineering of, public opinion concerning the

corporation; stewardship of corporate reputation,

identity, and image; counsel to the CEO and the

corporation. In addition, the importance of these

different corporate goals depends on several factors

such as the business cycle, the policy climate in an

individual country or industry, and the maturity of the

communication function in an individual organization.


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Figure 5.1 GE-McKinsey 9-Box

Matrix

High Medium Low

Competitive strength of business unit

Invest

& Grow

Selectivity &

Earnings

Harvest

& Divest

The Life Cycle of the Corporation

Figure 5.1 GE- McKinsey 9-Box Matrix

Med

ium

H

igh

Ind

ust

ry a

ttra

ctiv

en

ess

Low


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Figure 5.2 Peters and

Waterman’s 7-S Framework


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Figure 5.2 Peters and

Waterman’s 7-S Framework


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Strategy

Skills Structure

Super-

ordinate goals

(shared

values)

Style System

s

Staff

Figure 5.3 Coley’s Three

Horizons for Growth

Horizon 3: Create viable options

Horizon 2: Build emerging businesses

Horizon 1: Extend & defend core businesses

Time

Pro

fits


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Communication Model


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Communication Model

Global Environment: -Political

-Economic

-Historical

-Physical Audience Needs and Expectations Stakeholders: stockholders, vendors, analysts, media,

general public, etc.

Corporation’s

Goals and

Objectives

Ideal

Convergence

Corporate

Context


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Figure 5.5. Characteristics of Deal

& Kennedy’s Corporate Tribes Culture Type/

Characteristics

tough guy / macho work hard / play hard bet-your-company culture the process culture

Examples Advertising, Construction,

Entertainment, Publishing, Venture Capital

Consumer sales; Retail stores Oil, Aerospace, Capital-goods, Mining,

Investment Banking, Computer Design,

Architectural firms; Actuarial Insurance

Banks, Insurance, Financial Services,

Government, Utilities, Heavily regulated

industries (pharmaceuticals)

Risk & Stakes HIGH LOW HIGH LOW

Feedback from

environment

QUICK

FAST (You get the order or you

don't)

SLOW (Years with constant pressure) VERY SLOW TO NONE

Rewards Short-term focus; speed, not endurance Short-term focus; Endurance, not

speed

High stakes; Constant Pressure; Long-

term focus

Focus on how work is done; Real-world

remote

People "COWBOYS"; Individuals; Rule-breakers Super salespeople are the Heroes Company over individual; Heroes land the

big one; Young managers seek a "Rabbi"

Achieving rank; VPs are Heroes (or

survivors)

Structure of

Organization

FLAT for fast decision-making FLAT for fast-decisions; Forgiving of

poor decisions

HIERARCHICAL;

Slow decision making

HIERARCHICAL (many layers of

management); Slow decision-making from

the top down

Behavior Informal; Temperamental behavior

tolerated; Stars

TEAM Players; informal

atmosphere; friendly, optimistic,

humor encouraged; NO PRIMA

DONNAS

Formal, polite; TEAM players; NO

PRIMA DONNAS

Protect the system; "Cover your ass"

mentality; Emphasis on procedures,

predictability, punctuality, orderliness


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Figure 5.6. Hierarchy of Internal

Communication Effectiveness Effectiveness

High

Low

– Face to face, individual meetings

– Face to face, small group meetings

– Face to face, town hall meetings

– Live webcast/video- or teleconference meetings

– Interactive text-based intranet meetings, with polling

– Video to the desktop/podcasts

– Intranet postings

– Non-digital text/visual materials

– Email

– Voice mail

Interactivity

&

Engagement

High Low

Source: Goodman & Hirsch (2010)


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Figure 5.7 Media Management

Dashboard


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Chapter 6 – Ethical Issues for

Multinational Corporations


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Chapter 6 – Ethical Issues for

Multinational Corporations

In this chapter, we look at various mechanisms

business organizations have created or participate in to

promote ethical decision-making in spite of the

temptation to focus on the bottom line at all cost. These

are a focus on creating ethical corporate cultures,

participation in global agreements that create ongoing

shared commitments to ethical behavior, and

mandatory transparency in richly detailed financial

reporting.


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Chapter 7 – Technology and the Social

Network

This chapter analyzes how Digital Media—the Web—

has created internal and external communication

challenges for corporations, examines what they are,

and suggests some of the ways in which companies

deal with them. The challenges include globalization,

employee use of social media in a networked

enterprise, news aggregation and timely corporate

responses in an instantaneous media environment, and

the use of electronic media in the regulated

environment of investor relations.


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Chapter 8 – Political Opportunities and

Risks within and across Borders

This chapter investigates the challenges that an

environment with fewer restrictions and more globally

complex supply chains has on corporate business

strategies. This environment for services, intangibles,

and intellectual property presents political opportunities

for corporations, as well as risks. The chapter will

analyze the opportunities and risks that are offered in

six functional areas: (1) sustainability—the triple bottom

line—social, financial, environmental performance; (2)

the supply chain; (3) advertising and marketing; (4)

accounting; (5) responsible investing, and (6) ethical

business practices.


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Chapter 9 – Metrics—Measures That

Determine Corporate Communication

Success

This chapter demonstrates the importance of metrics to

good corporate communication management. Objective

and scientific information provides a context for

evaluating performance, provides guidance for change,

helps to overcome weaknesses, and creates a

foundation for goal-setting. Setting clear research goals

and objectives keeps an organization focused. Quality

research, based in clear reasons and focused goals for

the research, can articulate long-term strategy and

operational tactics. Corporate communication

executives can then determine appropriate and

affordable metrics, tools, and techniques.


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Figure 9.3 Balanced Scorecard

Vision & Strategy

Customer

To achieve our vision, how should we appear to our customers?

Objectives

Measures

Targets

Initiatives

Internal Business Processes To satisfy our shareholders and customers, what business processes should we excel at?

Objectives

Measures

Targets

Initiatives

The Balanced Scorecard

Learning & Growth To achieve our vision, how will we sustain our ability to change and improve?

Objectives

Measures

Targets

Initiatives

Financial

To succeed financially, how should we appear to our shareholders?

Objectives

Measures

Targets

Initiatives


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Chapter 10 – Looking Ahead

This chapter examines the forces that concern the chief

communication officers of major multinational

corporations in three important areas as they lead their

companies:

1) Technology—"always on" communications;

2) Complexity—Companies whose entire footprint is

global need to have a corporate communication

capability with the same footprint.

3) Integrity. These conversations build on the findings

of the CCI—Corporate Communication Practices

and Trends Studies in the US and in China.


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Documents

CCI Leaders Forum 2015: Module 7 -- Corporate ...€¦ · ... Corporate Communication: Critical Business Asset for Strategic ... Figure 4.1 Porter’s Five Forces Model of Competition