Communication
‘Only 1% of my business….’
…but 100% of the problem.
Until 3 months ago News Corps was the most powerful news organisation in the world. It owns Fox News in the United States which is the voice of Conservative America, as well as the Wall Street Journal and Daily Post. In Europe its subsidiary News International (NI) controls Sky Broadcasting (BSKYB) which in turn has a virtual monopoly of broadcasting of sport in the UK , it owns The Sun, the tabloid newspaper whose support has decided the election for the last 30yrs and the New of the World the most profitable newspaper in the UK, as well as the Times and Sunday Times. In Asia it owns the Star Network.
In July of this year the News of the World was closed after 168yrs, the Chief Executives of the European and American subsidiaries that control NC’s interests have resigned. The Director of Communication for the British Government has resigned and been subsequently arrested for phone tapping and police bribery. Many senior executives at News International have been arrest as result of police investigation, resigned or been sacked. Many of the police officers responsible for the investigation into News Internationals journalistic activities have either resigned or been removed (or even got jobs with NI).
The owner of NI, Rupert Murdoch and his son, James Murdoch, the CEO of NI, have been dragged before parliament to explain their newspaper’s journalistic activities and links with politicians and the London Police.
The British Prime Minister is implicated in a cover-up, both indirectly through his close connections to NI and directly by employing Andy Coulson the editor of the News of the World during the phone hacking years.
Finally (for the time being), News Corps has had to withdraw a bid to take over 100% ownership of Sky Broadcasting of which they already 30% and face investigation by the FBI for criminal activities.
What is even more surprising is that this crisis is a result of journalistic practices that took place 8 yrs ago and have been investigated twice by the police with nothing found to be amiss. Even the main protagonists are no longer working for News International.
Even though a senior NI executive back in 2003 admitted to criminal activity when questioned by parliament. Was News International too powerful to be investigated by the police? The answer is probably yes.
An example of the links between the London Police and News International is the way the senior police officer who investigated NI ended up working for them as a columnist.
It was not only the police who treaded carefully when dealing with NI; Members of the British Parliament lived in fear of News International.
Tom Watson MP speaking at the debate on News International
So why in the space of 3 months did the crisis have such a profound and long-lasting impact on News Corp.
Here’s is part of the answer. NB James Murdoch has subsequently been accused of lying in regard to how much information he knew when authorising out of court settlements for victims of phone hacking & News International have withdrawn their bid for BSKYB
The anatomy of the crisis that NC are involved in is an extreme example of poor crisis management involving, as with much crisis management, cover-up, blaming of third-parties, misinformation and corporate arrogance. They never dealt with the real issues, whether it was because they felt they didn’t need to or couldn’t, as it would compromise their competitive advantage, and the current crisis is the consequence of this strategy.
The Key Questions are:
- What were the issues the have created this crisis?
- How did NI deal with these issues?
- Why and how did these issue become a crisis, after such a long period of time? Why did NI get away with it for so long?
- How did NI originally deal with the crisis and how has their approach changed (and why)?
- How did NI use Corporate Communication as part of their Crisis Management strategy?
- What impact has this had on their reputation and business performance?
Resources
There are countless articles, discussions and videos on the internet regarding this story. And the story is still evolving. Arrests are still being made and new information is coming to light. This is the biggest scandal since Watergate and it’s impact on government, policing and corporate governance in the UK, and worldwide, is impossible to estimate at this time. Below are some suggested resources to get you up to speed with the story and provide extensive information for this case study. Here are some links to resources which will assist you.
Background
Timeline of events dating back to 2005
http://www.nytimes.com/interactive/2010/09/01/magazine/05tabloid-timeline.html?ref=europe
There are many information depositories on this crisis the best is from The Guardian who broke the story.
http://www.guardian.co.uk/media/phone-hacking?INTCMP=ILCNETTXT6921
This video gives a good summary of the position in 2010 before the scandal broke and outlines the problems with the explanation given by NI of the ‘one rogue reporter’ scenario, which was finally dismissed after a parliamentary investigation of journalistic practices at The News of the World.
http://www.guardian.co.uk/media/video/2010/feb/23/alan-rusbridger-phone-hacking
An insight as to the reason’s behind NI unwillingness to deal with the issues is here.
http://www.guardian.co.uk/media/video/2010/sep/09/news-of-the-world-phone-hacking-newsoftheworld1
Finally, an authoritative view of Murdoch’s influence on journalism and wider aspects of his influence
Management Communication
An important part of these events are the management communication that comes directly from Rupert Murdoch. Here is part of the testimony of the CEO of the worlds largest media corporation to the British Parliament.
Here is what Rupert Murdoch’s biographer thinks of the impact of this crisis and the future of NI/News Corps
http://www.guardian.co.uk/commentisfree/video/2011/aug/09/michael-wolff-rupert-murdoch-video
Read Full Post | Make a Comment ( None so far )The Identity Mix
Every organisation has a reputation, whether it is carefully manage, such in the case of Shell, or not, as seems to be the case with BP. This reputation is derived from the corporate personality and each personality is a function of the identity that is presented to stakeholders. From this, stakeholders create corporate reputations.
Identity is important to the creation of reputation; organisations need to understand how to
present their personality, through their identity, to their stakeholders.
Not only that, they need to ensure that stakeholder groups see an identity that is an appropriate one; one that they identify with, in a positive way. Remember, different stakeholders have different interest in an organisation and interact with different aspects of the organisation (either in a planned or unplanned way). Corporations must manage their identity so that it creates positive reinforcements with each stakeholder group. However as personality is not a fixed entity and open to interpretation, then so is identity has to be constantly refocussed. Consequentially corporations need to create strong identities that aren’t context specific.
Too confuse things further stakeholders expectations aren’t fixed, so the presentation of the corporate personality, which stakeholders identify with, needs to be organic, but based on recognisable fundamental truths. This personality must also be robust to withstand negative interference.
‘Sex, drugs and booze, don’t impress my little girls.’
Everyone has their public and private face, everybody behaves slightly differently dependent on the context that they are in. When these contexts overlap or become confused then, trouble may ensue. For instance, the language that we use in front of our parents, or children, tends to be more guarded than that with our friends or colleagues. Similarly the way that an organisation presents its personality must be harmonious with the stakeholder’s expectations and needs. Creating mixed messages or confusing target stakeholders creates a personality that is not clear cut and distinctive. A corporate personality needs to be one that is relevant to all stakeholders, but one that meets a variety of expectations.
Not enough corporations have learnt to present their personality to stakeholders in a way that will contribute to a positive reputation.
How should organisations go about presenting themselves to their stakeholders?
Birkigt and Stadler have created what they call the Identity Mix, which focuses on three key elements of the presentation of an organisation’s image.
These three elements are represented by:
- Behaviour
- Communication
- Symbolism
These three elements are key in the way that a corporations personality is developed.
Behaviour
The things that a corporation does, how it goes about doing business, how it develops its core competences and how it derives its competitive advantage is all part of behaviour. Sometimes behaviour as part of a business model, the way business is done, sometimes it is the way that the corporation deals with an issue or a crisis. Think about the differences between the way that Ryanair goes about doing business compared to British Airways. Or the way that Apple does compared to Dell or HP.
Communication
How organisations’ communicate is key to their personality. Virgin under Richard Branson and Ryanair under Michael O’Leary have two completely different approaches to business but they epitomise the way their organisations are perceived, and both are highly success in competitive markets.
BP and Shell communication in completely different ways. Here are the two examples of how Shell and BP present their environmental credentials.
and
Symbols
These are logos, images, catch-phrases that are representations of the corporation’s personality that stay in the memory. It may be a person, such as Steve Jobs, who represents the Apple brand or a simple symbol such as:
These symbols represent strong associates with corporations, that are intended to be positive reinforcements of each’s personality. Logos or even phrases are very powerful tools in the development of the corporate brand.
However some symbols of a corporation aren’t all positive and aren’t under their control…..
Symbols can highly effective representation of the personality of an organisation but also they can become liabilities. But it the responsibility of the corporation to ensure that such negative symbols don’t ruin their reputation. Organisations have survived major crises, such as plane crashed and been able to rehabilitate their reputation.
Communication is the key
For a corporation to successfully manage its image or identity in the minds of its various stakeholders it must manage the communications it produces and influence the communication of third parties, particularly negative ones.
The three elements can be an effective to in the management of reputation, so long as organisations are pro-active in their use and recognise communication is central to a successful Identity Mix.
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For more on Identity Mix see Cornelisson Chapter 4
Read Full Post | Make a Comment ( None so far )Whose crisis is it anyway?
Ok so it’s not a crisis but more of an issue, but an interesting subject all the same. Google and Skype have under the eye of the Indian Government with regard to access to private data
http://www.bbc.co.uk/news/technology-11137647
This is similar to the issue that Blackberry faced in both India and Dubai
http://www.bbc.co.uk/news/business-11131330
Blackberry have seemed to side-stepped this issue both in India and Dubai, or certainly delayed the impact of it, without any effect on their reputation though, it is a reprieve not an agreement.
http://www.bbc.co.uk/news/technology-10923893
What is interesting, for students of Corporate Reputation, is that though for Google, Skype and Blackberry the issue is the same, how it impacts on their stakeholders perspective of the three organisations can be completely different. Why?
Well, they have slightly different stakeholders and slightly different reputational platforms.
Let’s take Blackberry to start with, they’re have built their reputation on a solid, unspectacular business model, focussing on doing business with business people. As with business people their pre-occupation and reputation is about keeping business moving. For their stakeholders keeping communication routes open for business is key, profit is the bottom -line. They are much more likely to get an easy ride, or little more than a passing glance from their stakeholders, so long a communication routes are kept open.
For Google, and by association Skype, things are slightly more complex. They have already been embroiled in a censorship row in China, and a data security issue, in Germany, and elsewhere,
http://www.guardian.co.uk/technology/2010/may/15/google-admits-storing-private-data
So their reputation on privacy is slightly sullied, plus their stakeholders who are likely to be more geeky than Blackberry’s and see Google more anti-establishment or certainly anti-Microsoft are going to be more sensitive to Google co-operating with India (or Dubai) than Blackberry.
This is a good example where a similar issue can impact on two organisations completely differently due to each’s reputational platform and the blend of stakeholder they have. Students should understand that an issue and it’s impact on an organisation is relative, and dependent on their particular stakeholders interests, and who are the dominant stakeholders.
Another interesting point in the cases, that should be discussed, relating to Dubai and India is the reason for the ‘invasion of privacy’. An organisation co-operating with government in the fight against terrorism is perceived differently from one colluding with a government in-fringing civil liberties just to be nosey. Which in reality are the same things.
For students, the nuances of issues impacting organisations differently, even in the same industry, and the different stakeholder expectations is a fascinating discussion point.
Read Full Post | Make a Comment ( None so far )Welcome to the world of Corporate Reputation
Welcome to my blog.
This is a teaching resource centre for Corporate Reputation, Corporate Communication and Crisis Communication teaching professionals. The resources this site contains are provided from public domain sources, such as newspapers and corporate websites.
The purpose of the site is to develop resources that are up-to-date and relevant for the teaching of Corporate Communication subjects at Post-graduate and Post-experience level.
The resources will be presented with contextualisation of the resources through comment and other evidence or a wider perspective.
The purpose of the site is not to develop a judgemental approach to corporate communication but provide discussion material for student learning.
The site is going to take a few weeks to get up and running so please be patient!!!
Graeme Lindsay
Corporate Reputation Resource Centre 