Chapter 2: Public Affairs Management


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Chapter 2: Public Affairs Management

  1. 2. Public Affairs Management <ul><li>Public Issues </li></ul><ul><li>Managing the Public Affairs Function </li></ul><ul><li>Issue Management </li></ul><ul><li>Crisis Management </li></ul>Chapter 2
  2. 3. Public issues <ul><li>Public issue </li></ul><ul><ul><li>An issue that is of concern to an organization’s stakeholders. </li></ul></ul><ul><li>Stakeholder expectations </li></ul><ul><ul><li>A mixture of people’s opinions, attitudes, and beliefs about what constitutes reasonable business behavior. </li></ul></ul><ul><li>Performance-expectations gap </li></ul><ul><ul><li>A gap between what stakeholders expect and what an organization is actually doing. </li></ul></ul>
  3. 4. Figure 2.1 A stakeholder network focusing on a public issue Stakeholders with a shared focus on an issue Stakeholders with a shared focus on an issue Stakeholders with a shared focus on an issue Stakeholders with a shared focus on an issue Stakeholders with a shared focus on an issue
  4. 5. Phases of the public issue life cycle <ul><li>Phase 1: Changing Stakeholder Expectations </li></ul><ul><li>When a performance-expectation gap emerges, the seeds of a public issue have been sown. </li></ul><ul><li>Phase 2: Political Action </li></ul><ul><li>When a problem is placed on the agenda for government action. </li></ul><ul><li>Phase 3: Formal Government Action </li></ul><ul><li>When legislative proposals or draft regulations emerge. Characterized also by an increased number of people involved in the conflict. </li></ul><ul><li>Phase 4: Legal Implementation </li></ul><ul><ul><li>When a new law or regulation is implemented and companies are forced to comply with the law. </li></ul></ul>
  5. 6. 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
  6. 7. Public affairs activities <ul><li>External forces </li></ul><ul><ul><li>Loss of public trust institutions </li></ul></ul><ul><ul><li>Globalization of world markets </li></ul></ul><ul><ul><li>Rise of the Internet </li></ul></ul><ul><li>Internal forces </li></ul><ul><ul><li>Better communication within organizations </li></ul></ul><ul><ul><li>More experience dealing with significant change and complexity </li></ul></ul><ul><ul><li>Growing focus on the interplay between the organization, its environment, and its strategies </li></ul></ul><ul><li>Public affairs management </li></ul><ul><ul><li>The active management of a company’s external relations, especially its relations with external stakeholders such as government and regulatory agencies, customers, investors, and communities . </li></ul></ul>
  7. 8. Corporate public affairs activities of 250 companies Table 2.1a 71% Corporate foundation 71% Grassroots communication 73% Public policy group relations 73% Business/trade association membership 75% Community relations 75% Direct corporate contributions 77% Local government relations 84% Issue management 84% State government relations 89% Political action committee Percentage of Respondents Activity
  8. 9. Corporate public affairs activities of 250 companies Table 2.1b 21% Stockholder relations 23% Environmental affairs 32% International public affairs 34% Educational relations 43% Regulatory affairs 55% Strategic philanthropy 59% Employee communications 61% Public relations 64% Media relations 66% Employee volunteer programs Percentage of Respondents Activity
  9. 10. Public affairs management’s relevant stakeholders and functions Figure 2.3a <ul><li>Government </li></ul><ul><li>Public policy </li></ul><ul><li>Lobbying </li></ul><ul><li>Political action </li></ul><ul><li>Trade associations </li></ul><ul><li>Advocacy ads </li></ul><ul><li>Grassroots mobilization </li></ul>Public Affairs Management <ul><li>Stockholders </li></ul><ul><li>External and internal audit </li></ul><ul><li>SEC filings, compliance </li></ul><ul><li>Communications </li></ul><ul><li>Proxy election management </li></ul>
  10. 11. Public affairs management’s relevant stakeholders and functions Figure 2.3b Public Affairs Management <ul><li>Employee </li></ul><ul><li>Communications </li></ul><ul><li>Union negotiations </li></ul><ul><li>OSHA, EEOC, and labor law compliance </li></ul><ul><li>Diversity and family-work programs </li></ul><ul><li>Customers </li></ul><ul><li>Customer service </li></ul><ul><li>Total quality management </li></ul><ul><li>Liability lawsuit defense </li></ul><ul><li>Recall management </li></ul>
  11. 12. Public affairs management’s relevant stakeholders and functions Figure 2.3c Public Affairs Management <ul><li>Environment </li></ul><ul><li>EPA and state environmental compliance </li></ul><ul><li>Internal environmental auditing </li></ul><ul><li>Recycling, take-back programs </li></ul><ul><li>Community </li></ul><ul><li>Corporate philanthropy </li></ul><ul><li>Partners with schools, NGOs </li></ul><ul><li>Volunteerism, employee time contributions </li></ul>
  12. 13. Public affairs management’s relevant stakeholders and functions Figure 2.3d Public Affairs Management <ul><li>Media </li></ul><ul><li>Public relations </li></ul><ul><li>Executive speeches </li></ul><ul><li>Image advertising </li></ul><ul><li>Crisis management </li></ul><ul><li>Web page management </li></ul><ul><li>Activists, General Public </li></ul><ul><li>Environmental scanning </li></ul><ul><li>Stakeholder dialogue </li></ul><ul><li>Social reporting </li></ul><ul><li>Social monitoring </li></ul>
  13. 14. An effective public affairs function must: <ul><li>Manage public affairs as an ongoing, year-round process. </li></ul><ul><li>Cultivate and harvest the capability to build, develop, and maintain enduring stakeholder relationships. </li></ul><ul><li>Influence stakeholders using refined information. </li></ul><ul><li>Recognize the importance of managing the grass roots. </li></ul><ul><li>Communicate in an integrated manner. </li></ul><ul><li>Continuously align its values and strategy with public’s interests. </li></ul><ul><li>Improve its external relations using the accepted facts of contemporary management practice. </li></ul>
  14. 15. Issue management <ul><li>A structured and systematic process to aid organizations in identifying, monitoring, and selecting public issues that warrant organizational action. </li></ul><ul><li>Environmental intelligence </li></ul><ul><ul><li>The acquisition of information gained from analyzing the multiple environments affecting organizations . </li></ul></ul><ul><ul><ul><li>Customer </li></ul></ul></ul><ul><ul><ul><li>Competitor </li></ul></ul></ul><ul><ul><ul><li>Economic </li></ul></ul></ul><ul><ul><ul><li>Technological </li></ul></ul></ul><ul><ul><ul><li>Social </li></ul></ul></ul><ul><ul><ul><li>Political </li></ul></ul></ul><ul><ul><ul><li>Legal </li></ul></ul></ul><ul><ul><ul><li>Geophysical </li></ul></ul></ul>
  15. 16. 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
  16. 17. 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
  17. 18. Crisis management <ul><li>Corporate crisis </li></ul><ul><ul><li>A significant business disruption that stimulates extensive news media coverage. </li></ul></ul><ul><li>Crisis management </li></ul><ul><li>The process organizations use to respond to short-term and immediate corporate crises. </li></ul>
  18. 19. An effect crisis management plan involves: <ul><li>Preparing for action by creating an internal communication system that can be activated the moment the crisis occurs. </li></ul><ul><li>Communicating quickly, but accurately. </li></ul><ul><li>Using the Internet to convey the public affairs message. </li></ul><ul><li>Doing the right thing by not minimizing the seriousness of a problem nor exaggerating minor incidents. </li></ul><ul><li>Following up and, where appropriate, making amends to those affected. </li></ul>