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

2 - 3

Public IssuesPublic 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

2 - 4

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

2 - 5

Figure 2.1 The Performance-Expectations Gap

2 - 6

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

2 - 7

Figure 2.2 The Corporation’s Boundary-Spanning Departments

2 - 8

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

2 - 9

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

2 - 10

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

2 - 11

Exhibit 2.A Corporate Public Affairs Activities

2 - 12

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

2 - 13

Exhibit 2.B Effective Tactics to Manage Sociopolitical Issues

2 - 14

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

2 - 15

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

2 - 16

Eight Strategic Radar ScreensFigure 2.3

2 - 17

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

2 - 18

Issues Management Process

Composed of 5 Steps or Stages

1. Issue Identification Anticipating emerging concerns, or “horizon” issues

2. Issue Analysis Evaluating the issue; coming to an understanding of how it will

evolve and how it will affect the organization

3. Option Generation, Evaluation and Selection Evaluating action options, involves complex judgments that

take in to account “non-quantifiable” factors like the company’s reputation

2 - 19

Issues Management Process Last two of the five stages

4. Program Implementation Once option is chosen, must design and implement it

5. 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”

2 - 20

The Issue Management ProcessFigure 2.5