Corporate Communication Relevance

The importance of communication has increased in enormous extent over the past decades. Communication has become a very essential part of our lives. We are living in the information age, which means that having the right information on time or sooner than others, gives you a competitive advantage. Therefore, companies have to use every means of communication available in order to stay competitive or in the best case, to gain competitive advantage over the others.
People nowadays come very early into contact with channels of information. Still the most popular is the TV. Even little children know how to use it, and as we all know it has enormous power in terms of influencing people, because not the medium itself, but the persons acting through this medium, such as news-reporters, have become opinion leaders and can influence people in their decision making. So if someone is told certain things by the media from little age on, his opinion about those things is very likely to be biased in advanced age. So companies have to use those channels as well in order to defend their image and reputation. Relationships are to be established with the media people, in order to be able to use those channels effectively. Besides advertising, which can be very effective if the campaign was realized well, positive report by opinion leaders such as mentioned before can immensely improve a company’s image.
Of course, the direct communication to the various stakeholders is very important. Various channels can be used within a company, for internal communications, for communication among employees. Other important stakeholders are customers and investors. An appearance in the internet in form of a web site is the most important information channel to provide in formation for those two important stakeholders. Another advantage of the internet is that it addresses also to the general public and helps communicating a corporation’s identity, and thus enhancing its image and reputation. But for customers and investors any necessary information can be provided through this channel, and for any further contact the company can provide, address, specific phone-numbers (hot lines) for each constituent, such as the media, investors, and customers; those are the most important.
Finally, the case where a company is most depended on communication is when a crisis occurs. In this situation the company has to set up an effective communication strategy in order to manage the crisis. All channels of communication should be considered in this case, and will probably be needed.
Everything mentioned in this entry may only show the surface of Corporate Communication Relevance, but it already displays how essential and inevitable communication is for today’s business.

Examples/Experiences:
The best example I know, that displays that a company has to embrace communication is the case of Coors. Coors has been a very conservative company and revealed any kind of information it could from the public. When Coors was in a crisis, they realized that other groups used the media and other communication channels to get Coors into this crisis. The only way out of it was to use the media and any other channel available to communicate with the public and overcome the crisis. Coors realized the importance of communication for the company and immediately switched to an open door policy; this all happened in the late 1970’s. Today Coors has a Communication department and an informative and well structured internet appearance.

References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill.

Links:

http://www.feld.com/blog/archives/2005/02/signs_of_increa.html

http://resources.bnet.com/topic/corporate+communications+and+marketing+and+survey.html

http://annualreport07.mla.com.au/corporate_communications.php

http://www.relevantcommunications.com/whyrelevance/relevanceinuse.htm

http://ezinearticles.com/?Relevance-of-Medical-Metaphor-in-Corporate-Turnaround&id=328329

http://www.reuters.com/article/pressRelease/idUS146011+13-May-2008+BW20080513

Communication Technologies

The technological progress changed the world’s shape over the past 50 years more that anything else in human history before. Of course, business was affected by those changes as well. One of the largest impacts of technology on businesses is definitely in the field of communication. Companies have a seemingly endless choice of channels for communication; for internal communications as well as for external. Some of the channels are, for example, E-mails, blogs, and electronic newsletters; just to name a few. The choice of the communication channel finally goes along with the efforts to analyze the appropriateness of communication tools in certain circumstances, because the selection of the wrong channel can make the delivery of the message ineffective. Internet might be considered as the most important channel to communicate, because it has reached such a broad audience today and through the interactivity it offers people can retrieve any kind of information, at any time, from almost any place. Sometimes there can be an overload of information, but if the company builds a sophisticated web site with a good overview, users are very likely to prefer such sites and use them more frequently. Also, live interaction between users is possible through the internet and not only; many people use the internet to retrieve information about certain products and more and more people purchase those products online. The broadband internet of today with many translatlantic cables and worldwide interconnectedness made cost for communication almost insignificant low.
Finally communication nowadays is ubiquitous available (cell phones i.e.); it has become fast, cheap, and easy and part of everybody’s everyday life; all this thanks to progression in communications technology.

Examples:
A good example is how the fax-device revolutionized business. Suddenly documents could be sent in almost real-time from any place in the world, to any other place in the world. Contracts and other document could be sent now much faster than through the conventional postal way. Meetings that were not really necessary helped companies to save a lot of money and transaction costs, because documents could be faxed now and details discussed on the phone. And this technology emerged already in the 1970’s.
Another good example that totally changed business’s shape in the last two decades, are cell phones. In the meantime, having a cell phone is taken for granted by anybody, and especially in the business world it is expected to have one, in order to be reachable all the time and everywhere; there is no question about that. Managers or other responsible persons can immediately get informed if something important happens to business and respond right away immediately; decision no more need to be necessarily taken at work place. Furthermore, newest devices like PDA’s or smart-phones enable the user to receive and read document (Word, PDF etc.), having thus the mobile office in your pocket.

Experiences:
If I think back at my time in school (in the 1990’s) many things were different. I did not have the chance to use Google, to get information about the topic for my homework. Internet was very slow and only in limited places available. Furthermore, I remember that we had a so called telephone-chain; that means that a list was distributed in class, so that when anything happened (like a cancelled class i.e.) the teacher called the person who was alphabetically first on the list and told her about the situation, whereupon this person had to call the next on the list and so on… All this effort unimaginable nowadays. Today an e-mail would have been sent around and that is it.
Another good example are governmental institutions that make many forms available online. The user can fill out the forms on the computer and submit them online. I experienced that during my application process for the visa. This saves those organizations a lot of bureaucratic costs.
And another major trend I realized is that many companies nowadays looking for employees accept exclusively online applications, making it easier and less costly for the applicant and also for HR employee who has to evaluate them. Sometimes a first selection of the applicants takes place electronically by predetermined standards that were programmed in those machines.

Links:

http://www.communicateusingtechnology.com/computer_and_network_articles.htm

http://education-portal.com/communication_technology_articles.html

http://www.idealware.org/articles/peace_through_ICTs.php

http://ezinearticles.com/?Cell-Phone-Or-Mobile-Phone-VoIP-Communication-Technology-is-Changing-the-World-of-Business&id=1235859

Investor Relations

Companies can use communication in form of corporate advertising i.e. in order to attract investment. The investment can be of monetary nature, made available by attracted investors, or it can also be in form of human resources or any other kind of benefit that increases the assets of a company. Furthermore, corporate communications can affect a company’s price on the stock market. According to a study, conducted by the Kellogg School of Business, financial advertising indeed does have a statistically significant positive effect on stock prices.

Investor Relations Definition
According to the National Investor Relations Institute (NIRI), investor relations are defined as “a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a companies securities achieving fair valuation”.

A Framework for Managing Investor Relations
In order for a company to compete effectively for investors’ capital, it needs to focus on some objectives. First of all, the company has to explain its vision, strategy and potential investors and “conduit constituencies” such as analysts and the media. Secondly, it has to ensure that the expectations of a company’s stock price are appropriate for its earnings prospects, the industry outlook, and the economy. Finally the company should try to reduce the volatility of its stock price.
There are two major kinds of investors, institutional investors and individual investors. Institutional investors are primarily funds, insurance companies, and banks. Institutional investors own almost 60 percent of the U.S. equity market. Having identified an institution whose investing criteria match the company’s characteristics, the company should develop a plan to interest this investor in investing for the long term. This way the company can save time and efforts it would have spent on attracting uninterested investors. Individual investors are the individual shareholders. Individual investors may have smaller accounts and a lower trading volume than institutional investors. Additionally they require different information than institutional investors. Yet all individual investors together own over 40 percent of the U.S. equity market. Furthermore it is more difficult to reach individuals than connecting with institutions, because they are more numerous and harder to identify. In recent years, the internet has proved to be a powerful channel for providing institutional as well as individual investors with real-time information about companies.
Often investors learn about companies through sources other than the company itself, those sources usually are analysts, the media, and rating agencies. Especially the media and the analyst community are key conduits.
The Media includes print, television, and online media; media coverage of business can have a dramatic effect on a company’s stock price. In a survey conducted by the Financial Relations Board, every second retail broker admitted that what they read in the media influenced them and their clients in making investment decisions. So, obtaining the right kind of media coverage can be a critical component of an investment relationship strategy.
There are two kinds of analysts, “sell-side” analysts and “buy-side” analysts. Buy-side analysts work for institutional investors whereas sell-side analysts cover stocks within certain industries and generate detailed research reports offering “buy”, “sell”, or “hold” recommendations. This research is then provided to clients of investment banks. That means that sell-side analysts are intermediaries. Buy-side analysts in contrary are not intermediaries because they are employees of a specific institutional investor.
Rating agencies analyze companies in much the same way that analysts do, but with a specific focus on their creditworthiness. The ratings assigned to companies by those agencies, reflect the companies’ ability to meet its debt obligations. These ratings can be obtained from published reports and are available for the public. Rating agencies are similar to analysts when it comes to their relationship with a company, with the major difference that the agencies will focus on the company’s debt structure. Thus, rating agencies are an important intermediary constituency for a company’s investment relationship efforts.

Developing an Investor Relations Program
The investor relation function can be both, in-house or by external professionals, or a combination of both. According to NIRI the average size of an investor relation department is between one and two people. Usually those individuals have access to senior management, including the CEO and the CFO. The investor relationship department can be used to add value to the company’s stock. Especially when the company meets a crisis, the investor relation department can provide analysts with information, and information as is generally known reduces risk.

Investor Relations and the Changing Environment
As mentioned before, the internet is a very powerful communication channel. It provides nearly real-time information to a wide audience, and this transparency is especially valued in the current business environment; especially after the bankruptcies of 2001, the information on the web site provided by the investor relationship department, hemps uncertainty and mistrust on part of the investors.

Examples:
The Heinz Company for example is organizing events, where Heinz’s professionals from the Investor Relations Department give presentations about the company and display the benefits of investing in Heinz. The schedule of these events can be found online.
UPMC i.e. designed its annual report as a brochure including besides the financial data, information about the company’s vision, mission, social and environmental responsibility, the quality and innovation. All those characteristics are supported with convincing numbers, which can be looked up in the financial section of the report.

Experiences:
When I was working for a real estate company, I joined the IR professional for a few days to his journey, visiting potential investors. What I realized was that no matter if institutional or private investor and no matter how much money they have to invest, the just do not give it away. It was hard to convince them to at least continue considering the company’s real estate portfolio as a potential investment. Of course if the returns are reasonable you will find people to invest I your company, but you can be sure of one thing, they do not just look on the returns, but on everything about your company. It is definitely not an easy job to be an IR professional.

References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 157-175.

Links:

http://heinz.com/Investor.aspx

http://www.bnymellon.com/investorrelations/index.html

http://www.upmc.com/AboutUPMC/AUHome/FinancialInformation/AnnualReport.htm

http://resources.bnet.com/topic/investor+relations+officer.html

http://www.investor.bayer.com/en/reports/10-wppg/

http://www.niri.org/

http://www.federalreserve.gov/

http://www.sec.gov/

http://www.nasdaq.net/

http://www.ccbn.com/

Crisis Communications

What Is a Crisis?
Not only individuals but corporations as well face crises. A crisis is a situation that occurs unexpectedly and puts one in a bad position with initially bad perspectives to find a way out of this situation towards a better position. So, how do crises affect organizations?
Organizations may face either a natural crisis; a hurricane i.e., that physically destroys the business or a human induced crisis. There are two kinds of human induced crises, either an internal or an external. Internal means that one of the employees did something that put the company in a bad situation; external means that someone from outside affects the company’s situation. A human induced crisis is worse than a natural disaster, because it harms the company’s reputation, economy, and may bring the company into a situation where her existence is endangered.
Thus the definition of crisis for organizations is:
“A crisis is a major catastrophe that may occur either naturally or as a result of human error, intervention or even malicious intent. It can include tangible devastation, such as the loss of an organization’s credibility or other reputational damage. The latter outcomes may be the result of management’s response to tangible devastation or the result of human error.”

Crisis Characteristics:
The element of surprise.
- The company is suddenly confronted with facts, it has not been aware before.
Insufficient information.
- The company does not have all the facts, but is suddenly in the position of explaining.
The quick pace of events.
- Things escalate very rapidly.
Intense scrutiny.
- The executives are unprepared for the media spotlight.

The danger of the new millennium is the internet. Hackers and identity thieves try to hack into the computer systems of corporations to steal their customers’ identities. If hacker succeeds in stealing identities from a corporation, this corporation will have a heavy damage in its reputation.
The other major danger for corporations, are people who deliberately and intentionally try to harm a company’s reputation, by setting up web sites reporting negative and generally fictional, and wrongful stories. This is in so far dangerous as those people become opinion leaders in a media with a high and ever growing audience.

How to prepare for crises
First of all it is important for every organization to be aware that it can face a crisis anytime. The organization has to assess the risk of a crisis to occur and prepare its communication department appropriately. Plans have to be developed about potential crises and the best way to deal with those crises. Before a possible respond to the constituencies can be planned, it has to be determined which effect the crisis and the company’s respond will have on the constituencies. Furthermore, it is to be determined which constituencies will be affected by the crisis and to which constituencies to respond and how. So, the communication objectives have to be set for potential crises. While determining the strategy and the communication objectives it is important to analyze the channels and choose the best one; because the best strategy and thought-out objectives in combination with the wrong choice of channel is like casting pearls before the swine.
A different team should be assigned for every crisis, because different problems require different kinds of expertise. Assigning different teams to handle different crises helps the organization put the best people in charge of handling the crisis and communications.
A formal plan should include:
- A list of whom to notify in an emergency.
- An approach to media relations.
- A strategy for notifying employees.
- A location to serve as crisis headquarters.
- A description of the plan.

Communicating during the Crisis
* The first step is to get control of the situation. This includes defining the problem.
* The second step is to gather as much information as possible.
* The third step is to set up a centralized crisis management center.
* Fourth step is to communicate early and often.
* In the fifth step it is to understand the media’s mission in this crisis.
* The sixth step is to communicate directly with affected constituents.
* Step seven is to remember that despite the crisis, the business has to continue.
* Finally in the eighth step plans should be made in order to avoid another crisis immediately.

The last thing that can be said is that any experience in life brings on further, a good one, one step, and a bad on three steps. So it is also for companies a great experience if they successfully overcome crises. They learn a lot and are able to prepare better for next potential crises.

Examples: Crises from the Past 25 Years

1982, Johnson & Johnson’s Tylenol Recall:
In late September and early October of 1982, seven people died after taking Tylenol capsules that had been laced with cyanide. Johnson and Johnson removed the potentially deadly product from shelves; 31 million bottles of Tylenol were recalled. Johnson and Johnson decided to try to save the brand rather than come out with a new identity for the product, due to the goodwill it had built up over the years with constituencies ranging from doctors to the media. . Furthermore, the company reacted in a caring and human way, rather than simply looking at the incident from a purely legal perspective.

1990, The Perrier Benzene Scare:
In January 1990, a technician in the Mecklenberg County environmental Protection Department in Charlotte, North Carolina, discovered a minute amount of benzene, 12.3 to 19.9 parts per billion, in the water. Two days after the crisis broke Perrier announced that the problem occurred due to a cleaning fluid, containing benzene, which had been mistakenly used on a production line; only affecting North America. Three days later it was discovered that the real cause of the contamination were defective filters at its spring. The announcement of Perrier before discovering the source of the contamination was a fatal decision. From a market share of 44.8 percent in 1989, Perrier had only a market share of 5.1 percent by 2005.

1993, Pepsi Cola’s Syringe Crisis:
In June 1993 a syringe was found in a can of Pepsi Cola. Unlike Perrier, Pepsi Cola showed concern for the public and demonstrated resoluteness in getting to the bottom of the problem. After intensive investigation, it has been found out that the allegations were wrongful, it was a hoax. Pepsi Cola could maintain its position as market leader.

Experiences:
During my internship in a company, the birds’ disease prevalent and in the latest news; because this company had many employees visiting Eastern Asia for business purposes, it faced the birds’ disease as potential crisis. In order to prepare for this crisis it ordered vaccination to cover all employees in case of an outbreak of the virus; the vaccination packages were distributed to every branch division.
At another company where I worked part-time, every department had a responsible person, who was a different one every week, that was carrying a big suitcase on a Friday home and brought it back the Friday after, where the suitcase switched the person. In this suitcase, there was a formal plan of what to do in a crisis, specifically in case the headquarter would not exists anymore. This measure was a reaction on the attacks of September 11, 2001. This company considered such an attack as a potential crisis. In order to be prepared for such a crisis, this suitcase included the most important data of a department, not electronically, but in form of paper. Furthermore, any material that was necessary to run or recover the business in such a crisis was included in this suitcase.

References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 211-236.

Links:

http://www3.niu.edu/newsplace/crisis.html

http://www.firstmonday.org/issues/issue7_4/bucher/

http://ezinearticles.com/?Crisis-Communications-Planning-or-What-To-Do-Before-During-Or-After-It-Hits-The-Fan&id=428179

http://www.e911.com/monos/A001.html

http://findarticles.com/p/articles/mi_qa3669/is_200107/ai_n8977451

http://www.101publicrelations.com/blog/cat_crisis_communications.html

Corporate Advertising

Corporate Advertising is the easiest and fastest option for organizations to communicate their identity. Any corporate advertising campaign should be either strategic, looking toward the future of the company so that is has longevity; or it should be consistent, in keeping with images of products or businesses of the company.

What is Corporate Advertising?
Corporate advertising is the paid use of media that seeks to benefit the image of the corporation as a whole rather than its products or services alone. Product and corporate advertising though should share a common strategy because they both contribute to a company’s image. A major difference between corporate and product advertising is that while corporate advertising is financed through the corporate communication department, product advertising is financed through the marketing department. Corporate advertising generally falls into three broad categories, image advertising, financial advertising, and issue advocacy.
Image advertising is used to strengthen a company’s identity. This can be in order to enhance the current identity or i.e. if the company modifies its long-term strategy and needs to adapt its image respectively. Another reason might be if companies merge or enter new businesses. Image advertising is important, because a company needs to differentiate itself from competitors.
Financial advertising has the purpose to investment. This kind of advertisement shall attract investors and stimulate interest in a company’s stock. Sometimes a strong financially oriented corporate advertising campaign can even increase the price of a company’s stock. A study conducted by the Kellogg School of Business, confirmed that financial advertising indeed does have a statistically significant positive effect on stock prices.
Issue or advocacy advertising has the purpose to influence opinions. It is often used by companies to respond to external threats from either government or special interest groups. Issue advertising became popular in the late 1970’s to meet the challenges of what was perceived as anti-business media. It is difficult though to compose a message that is suitable for everyone, because there is a trade-off between satisfying everyone and dilution of the power of the messages. If a company decides to pursue an advocacy campaign, the entire senior has to be behind it and be able to support the subject of the message with forceful arguments. Therefore, extreme caution and a full understating of the issue are prerequisites if a company decides to pursue such a campaign.

A Brief Historic Insight of Corporate Advertising in America
According to Thomas Garbett, the earliest corporate ad started in 1908 by AT&T. A decade later many companies started running corporate advertisements. By the mid-century it was called “institutional advertising” and was widespread throughout the United States. Some companies, such as Lucky Strike, were doing a hybrid between product and image ad. After the Second World War, corporate advertising faded from view until its revival in the 1970’s. Nowadays corporate advertising is pretty widespread and intensely observed by constituencies. Advertising has also gained recognition by investors and Wall Street analysts regardless of whether it is a financial advertisement or not. Even equity analysts often discuss companies’ advertisement in their research reports.

Who Uses Corporate Advertising and Why?
Over half of the largest industrial and nonindustrial companies in the United States have corporate advertising programs of one sort or another. There is usually a positive correlation between the size of the company and the use of advertising. Companies within controversial industries, such as the cigarette industry, spent even more on corporate advertising than companies from “regular” industries. The relationship between corporate advertising and though is not as clear as the relationship between product advertisement and sales. Yet, corporate campaigns indirectly contribute to an increase of sales. Nevertheless, it is difficult to determine to which part corporate ads contribute to an increase of sales. But generally corporate advertisements primarily contribute into creating a stronger reputation. As mentioned before, corporate advertisement usually addresses to all stakeholders. Employees are stakeholders as well and therefore are also constituencies of the advertisements. Corporate advertisement, does not only help to build moral along employees, it can also arouse future employees’ interest in a company. Furthermore, this can help to attract new and creative talents as future employees.

Examples:
A good example of how advertising can help to enhance reputation is the advertisement of Pepsi in 1993. Pepsi was this time under a crisis due to wrongful accusation that someone had allegedly found a syringe in a Pepsi can. It turned out that this story was a swindle. Thereupon Pepsi run a full page advertisement in over 200 newspapers with the ad reading: “Pepsi is pleased to announce … nothing. As America now knows those stories about Diet Pepsi were a hoax. Plain and simple not true.” Ending with an invitation “Drink all the Pepsi you want. Uh huh.” Pepsi displayed with this advertising that the quality of its products is faultless and could maintain its reputation.
An example where advertising can go wrong is this of Benetton, a clothing company. With very provocative and obnoxiously images, Benetton started a shocking advertising campaign in the 1990’s. The ads were perceived by the public as scandalous and disgusting. The result was that Benetton rapidly lost an enormous amount of market share from which it could never recover.

Experiences:
I remember when this small Italian restaurant opened in the neighborhood. Its meals were delicious and the prices very fair. Almost three months after its opening it could not really establish and build a customer base that would allow this business to exist in the long-run. Finally, the owner decided to advertise, expressively mentioning its lunch-special. Only a couple of days later this place had enormous difficulties to manage the torrents of new customers. This shows how effective advertising (in this case “increase sales advertising”) can be even for small businesses.
One can also experience how pervasive advertising nowadays is, by taking a closer look to phrases that established in everyday use and their origin is from big advertising campaigns running through various media channels.

References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 87-100.

Links:

http://www.ana.net/

http://query.nytimes.com/gst/fullpage.html?res=990CE2D81E3FF930A35751C0A963958260

http://ipsnews.net/news.asp?idnews=39750

http://www.iht.com/articles/2008/04/09/technology/naked.php

http://ezinearticles.com/?Artists-are-Critical-of-Corporate-Advertising-in-a-Hypocritical-Way&id=454601

Internal Communications

For many years companies focused on communication with external constituencies. A study by consulting firm Wyatt Watson, found that companies with the highest level of communications experienced a 26 percent total return to shareholders, from 1998 to 2002. In contrary, firms that communicated less effectively experienced a return to shareholders of only 25 percent. Therefore, it is important that companies consider all the stakeholders as constituencies, including the employees. Besides memos publications and broadcasts it is important to build a corporate culture.

Internal Communications and the Changing Environment
Over the past decades the environment for business has changed dramatically. Employees nowadays face greater workloads, longer hours, and a high emphasis on their performance. Today’s employees are increasingly demanding participation in conversations that are driving organizational change. This participation is important, because it gives employees the feeling to contribute to the organization’s culture. It is important the managers listen to the employees’ opinions and give feedback. This is important to do for all employees, even those on the lower levels. As managers listen, employees become more excited about their work and not only perform their tasks better, but also develop a higher loyalty toward the company. Therefore, companies should pursue an open door policy toward employees and improve the internal communication.

Organizing the Internal Communication Effort
First of all, it is to find out what attitudes employees have about the firm. A communication audit is a good way to find out about that. Once management knows how the employees feel about the company and its internal communications, they can implement an internal communication infrastructure in order to meet those needs.
It is important to display to employees that they are the company’s most important asset. Professionals from the human resource department and from the communications department should closely collaborate in order to communicate this message effectively. A two way channel, bottom up and top down, is essential for effective internal communications. In some cases, external consultants can be asked for help to improve the internal communication infrastructure. Employees should also as much as possible be involved in several constituency roles, like being stockholders, or customers etc. Furthermore, it is important that the company immediately responds to media reports with an own verion of the story.

Implementing an Effective Internal Communication Program
As mentioned before, it is important to develop a two way communication channel, bottom up and top down. Employees’ concerns should be heard by managers and managers should respond to those concerns. Employees should feel free to express their concerns without fear of reprisals. Regular meetings between employees and supervisors or managers are a good way to show the managements interest about the employees’ concerns. This finally leads also to a higher effectiveness, because managers can adapt changes in the workflow according to employees’ concerns. In large companies where such face to face meetings are virtually not realizable, managers could meet with representatives chosen by the employees, or supervisors could meet with employees and forward concerns to management.
An electronic internal network, intranet, should be implemented so that employees and managers can communicate with one another any time, through e-mail, chat room, or public discussion on forums and even blogs. An effective intranet should be regularly updated and maintained and should be also kept clear and transparent. The only thing to be paid attention to is, that the intranet does not replace personal and face to face communication.
Another medium that can be used to communicate with employees can be a company internal magazine that can be sent to the employees’ home. Also visual media, like a video magazine can be made available to employees. With help of those media an internal branding can also be established, with the result that employees feel proud and more committed to their company. Finally, some informality should be kept in the communications so that employees feel more comfortable to express themselves, and managers on the other can easier find out what employees really think.

Management’s Role in internal communications
Managers should be aware that they are opinion leaders and culture carriers within a company. They should embody the company’s culture, morals, and ethics. Furthermore, they should display their belonging to the employees, thus many managers nowadays voluntarily renounce an individual office in favor of a workplace among the employees. And management by walking around is a good way to keep in personal touch with the employees and give them the feeling that they are doing valuable work.

Examples:
Starbucks hires for example outside consultants to conduct internal communication audits in order to identify strengths and weaknesses in existing communication practices. Detailed questionnaires uncover precisely how employees view internal communications and help management to develop possible solutions to communication problems.
Another example for implementing an effective internal communication program is JetBlue, where each employee spends his or her first day at an orientation, including an hour with president and COO Dave Barger, CEO Dave Neeleman, and vice president of people Vincent Stabile to talk about the JetBlue brand, airline economics, how to interact with customers, as well as the fundamentals of the company’s culture and values.

Experiences:
During my time at a telephone service provider, meetings took place once a week, where employees could communicate their concerns about any aspect of the company. Furthermore, because this company consisted of many young employees, the managers tried to pursue a flat structure, and one way of implementing this was that every single person either employee or manager had to be addressed by his first name, no “Sirs”. This created a culture of affiliation among employees and managers. Additionally at least twice a day any operation was stopped by a manager, so that he could give some motivating words in order to keep the employees happy.
When I was doing an internship in a rather serious company where hierarchies were dominating, I realized that there are also ways to improve internal communication within a very hierarchical structure. One big effort, costing the company a lot of money to implement was Voice over Internet Protocol (VOIP). Provided with special VOIP-phones at every work-place, every employee could reach any other employee either typing in his number or name. Furthermore, instant messages could be sent through this technology. In case of a missed call, one could see the name and time and even reference of the person who called. There was a strict guideline that every employee had to answer internal requests immediately as he got knowledge of it; this applied to every mean of communication VOIP, e-mail etc.

References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 137-153.

Links:

http://www.watsonwyatt.com/

http://www.conference-board.org/

http://www.right.com/

http://www.towersperrin.com/

http://www.forrester.com/

http://ezinearticles.com/?Internal-Communication:-12-Essential-Elements&id=12286

http://performance-appraisals.org/Bacalsappraisalarticles/articles/comstrat.htm

http://www.work911.com/articles/comstrat.htm

http://www.measure-x.com/publication/pubs10-05-internal.html

21st Century Communication Trends

Globalization
Nowadays almost no company can avoid resisting the globalization trend, if it wants to be successful in the long run. There are so many advantages in connection with globalization that actually every company tries to act global. They can penetrate foreign markets if the domestic market is saturated. They can shift production to countries where it is significantly cheaper or they can set up various R&D centers worldwide in order to gain expertise from al over the world. The first step to globalization, involving the less risk is to export goods or services. The highest diversity with the highest complexity and thus high risk would be a wholly owned subsidiary overseas. Globalization nowadays has become more feasible due to reduced costs and improved quality of international transportation and communication. Furthermore, the appeal by emerging markets with enormous potential pushes globalization even more.

Diversity
The workforce in the 21st century becomes more and more diversified; i.e. a woman on a construction site or a man as steward on a plane, are nothing unusual nowadays. Sexual, racial and cultural issues do not exist anymore in a 21st century enterprise. This trend can be the source of innovation on the one hand, but it can also be the origin of conflict and communication problems. Challenges that go along with this trend are the need to cope with different styles of interaction, dress, presentation, physical appearance, and so forth. The trend of diversity occurs due to changing demographics and the globalization of the labor markets.

Flexibility
Through flexibility in an organization, organizational systems and processes can respond differently to different situations. In a flexible company, relatively fewer detailed rules and procedures dominate the atmosphere, in contrary to a mechanistic company. Employees are empowered; they receive a greater autonomy and more encouragement for initiative actions. Some companies have flexible working hours for their employees and offer them the opportunity to work from home. One negative aspect of flexibility might be uncertainty for some employees who never learned to work based on their own decisions. Management could help out by giving those employees mental rewards, and thus improving their self-confidence. The necessity for flexibility is due to a rapidly changing business environment. A company needs to be flexible at least to a certain degree so that it is able to adapt to economic changes, changing customer needs, etc.

Flat
A flat organization is an organization that has few levels in its hierarchy relative to its size. There are fewer levels of management and workers are empowered to make decisions in scope of their tasks. Furthermore, the differences in responsibility across the various levels of management are less significant than in a hierarchical structure. The advantage is that fewer managers are needed, so bureaucratic costs can be saved. Furthermore, due to less control and more freedom in decision making the speed and flexibility of the employees are improved. In addition, the changes in communication technology make middle managers more and more obsolete, because a better and more direct information channel from bottom up and top down can be established. The costs saving s of a flat structure are very important and necessary for a company that needs to be globally competitive.

Networked
The invention of the 20th century is definitely the internet. Its interconnection throughout the entire world made physical boundaries disappear. Direct communication across the world is nowadays such less effort possible and the costs are going nearly zero. Direct communication within companies (intranet) improved the communication across various levels and departments of a company. New kinds of team structures are now possible because the individual team members do not need to be within certain physical vicinity anymore; they can be from a different department or from the same department at a subsidiary overseas and work together. Also the customers benefit from this trend, since many companies offer any kind of information on their websites. Customers can review products at any time from any place. The networked global business became possible because of the advance of new information technology, especially groupware, client-server, and distributed computing. This new technology helps to handle fast changing customer needs and competitor offerings. Furthermore, the production of more complicated products is now feasible, because this technology enables a better integration of manufacturing, design and marketing functions.

Examples:
BMW for example has its suppliers in China, its engineers in Germany its Design Development Center in Palo Alto, CA. Some cars are assembled in the US, some in Germany at various locations, and some in South Africa or China, in order to meet those customers’ demands. And they are sold all over the world. I think this is a good example of how companies nowadays became global actors in any aspect of their business.
Google is another good example for a young company that enforces throughout the entire organization a flat structure and flexibility. Every employee is connected to the company’s network (intranet), and there is a high diversity among the employees because they come from all over the world and work at the same place. Furthermore, Google has subsidiaries overseas. I think Google is a very good example for a company that embodies all five of Borgatti’s organizational trends for the 21st century.

Experiences:
When I was working for a relatively young company (est. 1996), I could see some of those trends being embodied. The most important trends for this company were a flat structure and flexibility, because they wanted to improve their employees’ creativity. Furthermore many of were also consulting customers over the phone, and it was told to us that even if the customer can just hear us, she is able to “see” or feel if we are in a bad mood. Therefore, by implementing a flat structure and flexibility, this company tried to keep its employees as happy as possible, and let the customers feel this happiness.
At another very serious and conservative organization, where I did my internship, though trends like flexibility and a flat structure were barely realized, this company made any effort to implement newest network technology for its employees and for its customers as well. The purpose was to increase productivity on the one hand and to make communication and thus some tasks easier for employees. Of course, this company was also acting globally. Here we can see that even a very conservative organization can not refuse to adopt some the the 21st century trends described by Borgatti.

References:
Hill, Charles W.L. (2008). Global Business Today. New York, NY: McGraw Hill/Irwin.

Jones, G. R. (2007). Organizational Theory, Design, and Change (5th ed.). Upper Saddle River: Pearson Education, Inc.

Pearce & Robinson (2007). Strategic Management (10th ed.). New York, NY: McGraw Hill/Irwin.

Links:

http://www.bmwgroup.com/d/nav/index.html?../0_0_www_bmwgroup_com/home/home.html

http://www.globalpolicy.org/globaliz/econ/index.htm

http://www.articles911.com/Diversity_Issues/

http://www.boston.com/news/globe/ideas/articles/2007/08/05/the_downside_of_diversity/

http://www.hrmguide.co.uk/flexibility/

http://www.nytimes.com/2005/04/03/magazine/03DOMINANCE.html

http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/The_future_of_the_networked_company_1091_abstract

http://www.opendemocracy.net/article/supermedia-the-networked-journalism-future

Communicating Strategically

It is essentially important that an organization connects its strategy with its communication. Communication should be a part of the strategy, and this considered, an effective organization strategy is to be set up. The organization strategy should include three subsets; firstly, to determine the objectives for a particular communication; secondly, to decide what resources are available for achieving those objectives; and thirdly, to diagnose the organization’s reputation.
By determining the objectives, it is important to determine what result the organization desires, what does the organization want each constituency to do as a result of the communication. The resources that are to be dedicated for achieving those objectives are not solely monetary. Human Resources are also an important factor in determining the success or failure of those objectives. And time, consuming both human and monetary resources, is a very important factor as well.
In addition to the allocation of resources, the company has to diagnose the organization’s reputation. Reputation needs a long time to establish and is based on the constituencies’ perceptions. The organization should therefore try to interact with the constituencies and release news and publish advertisement that helps enhancing the organization’s reputation. Sometimes the reputation can be damaged by external factors that are in the scope of the organization’s action. Especially in such times, where a crisis may occur, it is important for organizations to have a good reputation.
A part of the strategy is to analyze the constituencies by determining who they are, what they think about the organization, and what each knows about the communication in question. Constituencies usually consist of all stakeholders and in some cases even the general public is included. Constituencies comprise of various sets of people, and these people interact with one another. Sometimes a company has to communicate to certain constituencies through other constituencies.
Furthermore constituencies may have competing interests and perceptions about an organization. So, it is to be determined, what the constituency’s attitude is toward the organization. If the organization finds out what the constituencies think, it can adjust its communication respectively and implement the adjustments in its strategy. Those adjustments should also consider what a certain constituency knows about a topic. If the messages communicated are beyond knowledge of the constituency, the communication is likely to fail.
With this knowledge, the organization should now decide how it wants to communicate, by choosing a communication channel, and by structuring the message itself appropriately. Finally, the constituencies’ responses are to be analyzed. Did the constituencies respond to the messages the way it was desired by the organization? If not the organization should consider to revise the message in light of the constituencies’ responses; in this case the whole cycle starts over again.

Examples:
A good example of good corporate communication is Johnson & Johnson during its crisis in 1982, when poisoned Tylenol capsules killed seven people. Johnson & Johnson recalled 31 million bottles of Tylenol. The company set up a communication strategy during this crisis, pursuing an open door policy communicating frequently and honestly with the public. Johnson and Johnson showed big social responsibility and displayed that the people’s well-being is more important than any money. Johnson & Johnson could not only avoid losing its reputation, with a good communication strategy it took advantage of the situation and even improved its reputation. After the crisis Johnson & Johnson launched the same product with the same name again, and sales confirmed that people trusted Johnson & Johnson.

Another good example is the case of Coors. Coors has been for decades very reserved in communication or issuing information about the company. The result of this restraint, when Coors was accused of racism and discriminating women and homosexuals, was that its public image collapsed. After Coors changed its communication strategy into an open door policy, the public could have a look inside the company and get convinced that all those accusations were wrongful. Employees as the most important part of the company, communicated in the best manner about Coors. This is a good example of how important it is that not only the communications department is doing a good job, but all the employees.

References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 23-35.

Links:

http://www.biz-community.com/

http://www.watsonwyatt.com/

http://www.cbd.int/cepa/toolkit/html/resources/34/34404DBC-7BBF-48CA-BFCA-1F5A3BBD906D/Section%204%20_final_.pdf

http://www.carlisle.army.mil/DIME/documents/Eder.pdf

Identity, Image, and Reputation

Corporations’ identity and image are essential parts of a company’s communication. A corporation’s identity usually gives the stakeholders a first impression about a company. Therefore, it is important for a company to be aware of it and deliberately present a certain image that is advantageous for her business.

What Are Identity and Image?
A company’s identity is the message that a company sends in tangible form. The visualization is conveyed through the organization’s name, logo, buildings, uniforms and all other tangible pieces created by the company, and communicated to the constituencies. Based on these evidential messages, constituencies form perceptions about the organization. The reflection of the organization’s identity by the constituencies is the image an organization has.

Differentiating Organizations through Identity and Image
Companies try with their limited resources to shape their identity and image so that they have some distinguishing characteristics among torrent of competitors in a globalize world. Nowadays products become more and more similar all over the world, therefore companies on the one hand need to distinguish from competitors and consumers on the other need a distinction in order to know from which company a certain product comes. So, it is important for companies to pursue a certain image and communicate a unique identity.

Shaping identity
The identity communicated by the company should be defined in her mission statement and visualized in a homogenous manner to this statement. Furthermore, this identity should be inimitable. Names and logos are the most important parts of a company’s communication in terms of perception by consumers; one think of the Coca-Cola characters or the Nike logo. They should be communicated throughout the entire company, from the logo on the building, the employees’ uniforms, to the product. Additionally a motto could accompany the logo in order to display the company’s core competences, FedEx: “The world on time”.

Identity Management in Action
A method that has been successfully used by corporations in order to manage the identity process consists of six steps and will be presented now. The first step is to examine what the current public image of this company is and how close it is to the self-image of the company. This examination should be conducted by external, professional consultants to get the most objective results.
In step two, now that the company knows how it is perceived by the public, it should be examined how close the public perception is to the image that is communicated. The company should be absolutely certain about her self image, so that the second step, the setting of identity objectives, can be performed. It is essentially important that the constituencies’ response is taken into consideration, rather than an arbitrarily made decision based solely on the firm’s action. No change should be made just for the sake of change.
If the public perception though is apart from the company’s self image, based on step two, designs and names should be developed in step three. Here again professional consultants should be contracted and create in close collaboration with the company, and based on the results thus far, a corporate design and name if necessary. The name of course should have some connection either to the company’s background, or business or history. Furthermore, the logo should accurately reflect the company’s reality. Eventually, the final decision should based on both parties, the professional consultants’ and the company’ ideas as well. It is important that a good balance is prevalent in their collaboration.
The fourth step, once the final design in step three was selected and approved by everyone, would be now to develop a prototype. In order to prevent a total failure, before the official launch of the new identity the constituencies should be involved, i.e. in form of a poll conducted by professional consultants.
If the effect on the constituencies is the desired result, the new name and logo should be launched. The new design should be clearly displayed and communicated from now on. Advertising and news releases could be additionally used as communication tools.
The sixth and final step is the implementation the program. The implementation can take up to several years, depending on the size of the company. Resistance will be inevitably; therefore the company should establish standards that are to be followed by every employee. The process of implementation should be monitored throughout this time, and in some cases flexibility can be allowed. Finally over the years minor changes might be necessary to be performed, and then again professional consultants should evolve those changes in harmony with the company.

Image: In the eye of the beholder
The identity communicated by the company and the image based on the constituencies’ behavior can sometimes differ. Constituencies might be preoccupied by other publications or what they heard from friends. Therefore it is important for companies to keep interaction with constituencies in order to correct their public image. And by constituencies not only customers, but every stakeholder should be considered of, especially employees. A word to mouth communication by employees can cause a much more positive effect on a company’s image than just the company’s communication itself. On the other hand bad reports by employees can cause incredible damage, therefore the company should communicate and train its employees.
Building a Solid Reputation
What comes after an image is a company’s reputation. If the organization’s identity and its image are aligned the foundation for a solid reputation exists. According to Charles Fombrun a company should try to shape a unique identity and project a coherent and consistent set of images to the public. The difference between reputation and image is that reputation is build over time and is not simply a perception at a given point in time.
Reputation is important, because as mentioned before a report by friends or relatives, or opinion leaders like Forbes and several other magazines and media personalities can change the perception of the public about a certain company. If the people are biased due to those reports, the communication of a corporation’s identity is severely affected. On the other hand, a positive reputation can be more than helpful in case of crisis. Therefore, a company should always monitor the constituencies’ perceptions and try to measure its reputation.
A good way for a company to enhance its reputation is to show social and environmental responsibility. Do good things and talk about it, is the motto. Corporations can use news releases and advertisement to display their social responsibility, and of course their core competencies that distinguish them among others.

Examples:
KFC (formally known as Kentucky Fried Chicken) is a good example how a company successfully changed its image. KFC desired to change its image and menu as a result of changes in American dietary habits. One of the most important things that needed to be eliminated was the word Fried in the company’s name, because in its new menu KFC offered also broiled chicken. Thus, it was decided to use only the initial from that time on. The question was if people would recognize KFC as Kentucky Fried Chicken. KFC had a strong corporate identity and its major brand recognition characteristic was Colonel Sanders. So, KFC kept Colonel Sanders with the new logo, and successfully established an image change from just fast-food to health conscious fast-food.
Fed-Ex (formally known as Federal Express) also successfully changed its name. FedEx found out that this abbreviation was used many customers as a verb “Let’ FedEx this…” and so decided to change its entire corporate identity to this abbreviation. Its launch advertisement read in 1994: “We’re changing our look to FedEx. Isn’t that what you call us anyway?” With the new name FedEx also launched a new slogan “The world on time”. The name, paired with the new slogan, had the intention to let FedEx become a synonym for timely accurate delivery.

Experiences:
One the biggest advertising campaigns I remember is when the German Post became privatized, and in order to work more effectively it added an additional digit, from four to five digits now, to the ZIP-Code. There was big uncertainty among the population which was used for decades to the old system. Finally, the campaign was successful by clarifying how the new ZIP-Code system works and the Post could keep its reputation as a reliable deliverer.

References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 65-83.

Links:

http://www.harrisinteractive.com/

http://www.reputationinstitute.com/

http://www.washingtonpost.com/wp-dyn/content/article/2007/07/01/AR2007070101355.html

Media Relations

The Media are omnipresent nowadays; they are both a constituency and a transmitter of information. Investors, suppliers, retailers, and consumers as well receive information whereupon images of companies are developed. Almost every company nowadays realized the significance of the media as a disseminator and has some kind of media relations department.

The News Media
News is spread through every media, television, radio, internet, and written media like magazines and newspapers. They reach almost everybody and with the right of free speech, guaranteed through the First Amendment of the Constitution they helped shape attitudes among the population, making them a powerful part of society. For business the media turned out to be a challenge. Business leaders used to privacy for decades had suddenly to face the exposure practiced by the media. Companies had to find a way to deal with the media and use the media as rather as tool for spreading positive news. This led to more responsibility on part of the companies toward society, because the corporations realized that they could not afford to be connected with any exposure of scandals.
In the 1970’s and thereafter the coverage of business related issues in the media began to expand more and more. Today many magazines and Web sites are solely devoted to business news. TV Channels like FOX, CNBC, and CNN broadcast news around the clock covering corporate news. While in 1983 were 50 corporations controlling the vast majority of the media in the US; due to consolidation there are only five corporations today operating 90 percent of the mass media in the US. Another trend is that the media in order to catch the audience’s attention are not interested in reporting about the good things companies do, as much as about spreading the “bad” news.

Building better relations with the media
With their media relations departments (MRD) companies strive to build a better relationship with the media. In order to be successful with this intend the companies’ media relation departments attempt to build up relationships to specific members of the media, so that they get heard. There are so many press releases sent by companies to reporters that most of them end up in the trash can. Therefore it is important to have the relationship to reporters who take one seriously. The aim for companies is to achieve to communicate their subject through the media, reaching the audience the way it was initiated by the company.
Employees of the MRD do a lot of elaborate research before they release any news. Firstly they determine the objectives they have for a certain story. Secondly they look for the right place to public the story. It is important to find a reporter who publishes a balanced story, that means a story that is rather positive than negative for the corporation. Though there is never a guarantee for a good story, by conducting this research it can be avoided to some extent that the story fails its objectives.
At least as much important as the research before publishing stories or advertisement, is to respond to media calls; missing incoming requests from media means missing the chance to communicate one’s public image. The best option would be having a call-center integrated in the MRD. The agents in the call center should be specifically trained for these calls in order to distinguish important from unimportant calls, to find out the reporters attitude in this story, and to try to get as much information as possible from the phone call and in return giving as less information as possible.
If it comes to an interview, an MRD professional should plan to sit in on the interview. Research about the reporter and the show are necessary to prepare the executive for the interview; watching the last major stories published by the reporter who will conduct the interview, can be very helpful for an appropriate preparation.
Finally it is important for companies not only to build good relationships with the media, but also to maintain those relationships; one way to achieve long-term relationships id to try to keep face-to-face contact with the reporters so the both get to know better one another. If possible, reporters should be chosen who personally fit with the executive. Should this be impossible, the MRD professional will have to convince the executive to get along well with the reporter, by keeping always in mind that reporters need the companies as much as the companies need them.

Building a Successful Media Relations Program
Companies have to be willing to devote some resources to improve their relationships to media. Those resources can be monetary, but not only; the executive, i.e. should also invest some time to keep in contact with the media. An in-house media relations staff should also be developed in order to build log-term relationships with the media. Consultants and public relation firms can be helpful but are not enough for the long term. Outside consultants can be used for a major story or if a crisis arises. Also in creating video news releases and their distribution, outside firms can turn out to be very valuable.

Developing an Online Media Strategy
The internet is a medium that is not to be neglected. Over the past two decades it became so powerful that it is a very effective medium to use. The company can display her self-image on her Web site, release news, blogs, etc. Current customers can get any information at any time they want, about the company and the products; also potential customers can be attracted by this offer of information. The internet became so widespread, that bad or phony news can reach consumers as fast as valid news. So, today many companies put great efforts into monitoring the internet in order to correct wrongful news and to avoid getting a bad public image.
A blog is a great opportunity for companies to fight wrongful allegations published in the web. Everybody can be a publisher in the internet, so people who want to harm a company or her image can publish such reports on the internet even if they are based on wrongful assumptions. In a blog a company gives the reader the chance to place a comment and the company on the other hand has the chance to reply to those concerns. Furthermore companies can search other blogs whether they were mentioned on them, and have the chance to correct fact by replying appropriately.

Examples:
In order to build better relations with the media, Verizon measures its success by keeping records of all of its hits in the media. Verizon does not only look where and in which extent in the media it was mentioned, but how well the company’s key messages are communicated. Verizon tries to elevate its media score by tracking where the hits landed and with what constituencies.
Another example of a company’s successful efforts to build strong media relations is Matalan Clothing Retailers in the United Kingdom. The company offers journalists tours of its headquarters, including opportunities to try on its clothing in changing rooms and to fully analyze its distribution network. The company tactically avoids phone to phone interviews and pursues face to face contact with the journalists. With this personalized approach, Matlan became a favorite company among the journalists.

Experiences:
When I did my internship at the world’s largest steel pipe producer, I found out that this company has been visited by a camera team a few months ago. They were producing a documentary for a show on a channel similar to the Discovery Channel. They documented the whole process how raw steel becomes a steel pipe and have of course mentioned some words about the company. The producers of the shoe were happy because they got permission to film within the company, finally having another episode of “The world’s greatest…”, and the company on the other hand was happy that this documentary was also a very positive report about the company, showing the high quality of their products and, the uniqueness of this company, the world’s largest steel pipe producer.

References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 111-126.

Links:

http://www.corporations.org/

http://www.ereleases.com/

http://www.benchpoint.com/

http://www.matalan.co.uk/

http://www.cyberalert.com/

http://www.aboutpublicrelations.net/

http://www.levick.com/resources/topics/articles/bonusTactics.php

Communication Theories

The history of communication theory is thousands of years old. Even in ancient Greece people used rhetoric, which is the use of language to persuade the constituent to do something. Aristotle, who was Plato’s student, developed rhetoric as an art and in his major work “The Art of Rhetoric” is regarded as the root of modern communication theory. Aristotle’s definition of the composition of every speech contains three major parts, the speaker, the subject treated in the speech, and the constituent to whom this subject is addressed to. In the following, the most important modern communication theories are to be discussed.



Communication is an information-related behavior, and is necessary for individuals in order to survive. Interpersonal Communication is an interactional process between two persons either face-to-face (direct) or through mediated forms (indirect). Machine-assisted communication means the use of media like telephone, telegraph, computer in order to communicate. Machine-assisted communication can be used either for interpersonal communication or for mass communication. Mass communication is the use of any media to reach a broad audience, such as television or the internet.

Harold Laswell’s Model of 1948 depicts an equation that describes the effect of a message as a result on the right side of the equation. The left side of the equation consists of the variables “speaker”, “message”, “medium”, and “audience or listener”. The parameters are “who” for speaker, “what” for message, “channel” for medium and “whom for audience or listener. The equation is one of the most famous quotations of communication theory, “who says what to whom in what channel with what effect.”

Shannon & Weaver’s Model, developed in 1949, shortly after Laswell’s model, focuses on the transmission of information. The source of the message can be a person or a group. The message, the subject that is treated, is of secondarily importance in the Shannon Weaver model. The transmitter is the media that is used to communicate, i.e. telephone, fax, e-mail etc. The signal can be the voice or an electronic impulse, etc. Noise is the disturbing factor that distorts the information and can be either of physical or of semantic nature. A physical noise can be i.e. a loud passing car or a strong hiss in the phone’s speaker. A semantic noise can be i.e. if the listener is distracted by the speakers appearance, thus hearing but not listening to the message; or the sender might speak in a tone that causes ambiguity in her message. The receiver finally, is the constituent; if there is no receiver, no communication can occur.

Schramm enhanced Shannon and Weaver’s model in 1954. He added two important components into the model, the encoder and the decoder. The encoder is not a medium like telephone (transmitter) i.e.; in a face to face communication the encoder is the tone of the voice, the gestures, and the body language in general. Decoding the message is very important for the receiver, because if the sender uses i.e. written characters the receiver cannot read and respectively cannot decode, the message failed to be transmitted as purposed. The sender might use i.e. a lot of technical terms that the receiver does not understand, here again the message failed to reach the receiver.

Since people became encoders and decoders, Schramm adds the field of experience in his model. The signal occurs where the fields of experience overlap. This common field of experiences is an area where both sender and recipient are familiar with the content that is communicated. Messages have to be in this common field of commonalities in order to be understood appropriately. Those commonalities can be language, culture, values and beliefs etc. If they are not in this field, communication is disturbed and frustration can arise.

While the second model is still mechanistic, Schramm’s third model breaks with the linear nature of transmission models. The encoder is also the decoder. After the message is encoded, it is interpreted, and then again the receiver becomes a sender by assembling a new message (feedback), encoding and sending it to the receiver, respectively former sender.

Katz and Lazarsfeld’s Model of 1955 basically describes how individuals can be affected by opinion leaders. Opinion leaders are people who can influence other people in their decisions. What Lazarsfeld discovered in the 1940’s by observing people’s decisions during the elections, was that many voters regarded family members and close personal friends, and not the mass media, as major influences in their decision making process. So, opinion leaders filtered the messages sent trough mass media and affected therefore other people’s decisions.

The Westley-McLean Model describes the role of mass media in communication. Westley and McLean introduce the role of the channel into the communication flow between the advocate and the audience. The advocate is the sender and the audience the receiver; messages are regarded as events. The advocate sends messages through a gatekeeper (channel) that may alter the messages before they can reach the audience. This model shows the influence of mass media and the participants’ responses to the events.

Communication is defined by Kincaid as “a process in which two or more individuals or groups share information in order to reach a mutual understanding of each other and the world in which they live” (Gudykunst & Mody, 2002, p.184). Furthermore Kincaid states that mutual understanding can be approached but never perfectly achieved. Kincaid presents a mathematical model to the way information is created and shared in order to reach mutual understanding; “By means of several iterations of information exchange, two or more individuals may converge towards a more mutual understanding of each other’s meaning” (Gudykunst, 2004, p. 11). Mutual understanding, the product of ongoing interaction and communication, is included in Kincaid’s Convergence Model as a key element. Kincaid uses rather the term information than message. The convergence model is a cyclical model depicting the process of exchanging and giving meaning to each other’s information.

Examples / Experiences:
Many companies apply communication theories in practice in order to improve internal and external communication. I used to work for a company that provided customer care by phone by order of other companies. All service agents were not only trained about the products, but also about the way to communicate to customers. It was put a lot of effort by the company to ensure that every employee understood how to communicate correctly with customers, because you do not have only customers who seek for information, there are also customers who are dissatisfied with the company or its product. The employee has to try to make the customer finish the conversation with a smile, no matter how angry or annoyed the customer is. Communication theories and some basic psychology are taught to the employees in order to manage their job best.
Of course, I was taught communication theories also in my MBA program. A very interesting, practical exercise we had to do was preparing a 30 second speech, pretending that we meet our boss in the elevator and have only 30 seconds time to convince him that you are the right person for the next promotion. It was really hard at the beginning to find a way to compress everything you want and you need to say so that it fits the time frame of 30 seconds. I think it was a good exercise and everybody should try to do this exercise; it really helps you to improve your communicative skills and to learn to reduce to the max.

References:

Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 23-24.

Beck, Andrew, & Bennett, Peter, & Wall, Peter (2004). Communication Studies: The Essential Resource. New York, NY: Routledge, pp. 38-39.

Gudykunst, William B. & Mody, Bella (2002). Handbook of international and intercultural communication (2nd ed.). Thousand Oaks, CA: Sage Publications Inc, p. 184.

Gudykunst, William B. (2004). Theorizing About Intercultural Communication. Thousand Oaks, CA: Sage Publications Inc, pp. 11-12.

Windahl, Sven, & Signitzer, Benno, & Olson, Jean T. (1992). Using Communication Theory: An Introduction to Planned Communication. Thousand Oaks, CA: Sage Publications Inc, pp. 73-74.

Ruben, Brent D. (1985). Information and behavior. Piscataway, NJ: Transaction, p. 105.

Szul Dr., Linda. PowerPoint Presentation. Retrieved June 9th, 2008 from http://webct.iup.edu/SCRIPT/BTST670LZ/scripts/serve_home

Theaker, Alison (2004). The Public Relations Handbook. New York, NY: Routledge, pp. 18-24.

Watson, James (1998). Media Communication: An introduction to theory and process. New York, NY: Mcmillan, pp. 37-38.

http://www.ciadvertising.org/studies/student/97_fall/theory/functional/2step.html Retrieved June 9th, 2008.

http://www.cultsock.ndirect.co.uk/MUHome/cshtml/introductory/sw.html Retrieved June 9th, 2008.

http://www.uky.edu/~drlane/capstone/interpersonal/ Retrieved June 9th, 2008.

Links:

http://en.wikibooks.org/wiki/Communication_Theory/Introduction

http://www.ciadvertising.org/studies/student/99_spring/theory/griswold/twostep.html

http://findarticles.com/p/articles/mi_qa3669/is_200201/ai_n9064814

http://www.tcw.utwente.nl/theorieenoverzicht/

http://www.mhhe.com/mayfieldpub/westturner/student_resources/theories.htm

http://www.uky.edu/~drlane/capstone/interpersonal/#List%20of%20Representative