Public Affairs Management

2. Chapter 2 Public Affairs Management Public Issues Managing the Public Affairs Function Issue Management Crisis Management

3. Public issues • Public issue An issue that is of concern to an organization’s stakeholders. • Stakeholder expectations A mixture of people’s opinions, attitudes, and beliefs about what constitutes reasonable business behavior. • Performance-expectations gap • A gap between what stakeholders expect and what an organization is actually doing.

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

5. Phases of the public issue life cycle • Phase 1: Changing Stakeholder Expectations When a performance-expectation gap emerges, the seeds of a public issue have been sown. • Phase 2: Political Action When a problem is placed on the agenda for government action. • Phase 3: Formal Government Action When legislative proposals or draft regulations emerge. Characterized also by an increased number of people involved in the conflict. • Phase 4: Legal Implementation When a new law or regulation is implemented and companies are forced to comply with the law.

6. Figure 2.2 The public issue life cycle High Phase 1: Changing Stakeholder Expectations Phase 2: Political Action Phase 3: Formal Government Action Phase 4: Legal Implementation Level of Stakeholder Concerns Life Cycle of Issue Management discretion to resolve the issue Management Discretion Low Time

7. Public affairs activities • External forces • Loss of public trust institutions • Globalization of world markets • Rise of the Internet • Internal forces • Better communication within organizations • More experience dealing with significant change and complexity • Growing focus on the interplay between the organization, its environment, and its strategies • Public affairs management 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.

8. Table 2.1a Corporate public affairs activities of 250 companies

9. Table 2.1b Corporate public affairs activities of 250 companies

10. Public affairs management’s relevant stakeholders and functions Figure 2.3a Public Affairs Management • Government • Public policy • Lobbying • Political action • Trade associations • Advocacy ads • Grassroots mobilization • Stockholders • External and internal audit • SEC filings, compliance • Communications • Proxy election management

11. Figure 2.3b Public affairs management’s relevant stakeholders and functions Public Affairs Management • Employee • Communications • Union negotiations • OSHA, EEOC, and labor law compliance • Diversity and family-work programs • Customers • Customer service • Total quality management • Liability lawsuit defense • Recall management

12. Figure 2.3c Public affairs management’s relevant stakeholders and functions Public Affairs Management • Environment • EPA and state environmental compliance • Internal environmental auditing • Recycling, take-back programs • Community • Corporate philanthropy • Partners with schools, NGOs • Volunteerism, employee time contributions

13. Figure 2.3d Public affairs management’s relevant stakeholders and functions Public Affairs Management • Activists, General Public • Environmental scanning • Stakeholder dialogue • Social reporting • Social monitoring • Media • Public relations • Executive speeches • Image advertising • Crisis management • Web page management

14. An effective public affairs function must: • Manage public affairs as an ongoing, year-round process. • Cultivate and harvest the capability to build, develop, and maintain enduring stakeholder relationships. • Influence stakeholders using refined information. • Recognize the importance of managing the grass roots. • Communicate in an integrated manner. • Continuously align its values and strategy with public’s interests. • Improve its external relations using the accepted facts of contemporary management practice.

15. Issue management • A structured and systematic process to aid organizations in identifying, monitoring, and selecting public issues that warrant organizational action. • Environmental intelligence The acquisition of information gained from analyzing the multiple environments affecting organizations. • Customer • Competitor • Economic • Technological • Social • Political • Legal • Geophysical

16. Eight strategic radar screens Figure 2.4 Customer Environment Competitor Environment Geophysical Environment Seeking Environmental Intelligence Economic Environment Legal Environment Technological Environment Political Environment Social Environment

17. Figure 2.5 The issue management process Issues Identification Issues Analysis Research Performance evaluation Judgment and priority setting Results Policy Options Program Design Implementation Policy and strategy selection

18. Crisis management • Corporate crisis A significant business disruption that stimulates extensive news media coverage. • Crisis management The process organizations use to respond to short-term and immediate corporate crises.

19. An effect crisis management plan involves: • Preparing for action by creating an internal communication system that can be activated the moment the crisis occurs. • Communicating quickly, but accurately. • Using the Internet to convey the public affairs message. • Doing the right thing by not minimizing the seriousness of a problem nor exaggerating minor incidents. • Following up and, where appropriate, making amends to those affected.