Trust and the value of communication

“Trust is in crisis around the world.” So concludes the 2017 Edelman Trust Barometer,[1] the annual review on institutional trust produced by the global communications marketing firm Edelman, Inc. Indeed, their latest survey results find a broad decline in the general population’s confidence in all four key institutions – business, government, NGOs, and media.

The perception of a gradual erosion of public trust in business in particular is not new: The same conclusion was reached, for example, by a 2009 survey of senior executives around the world as conducted by the McKinsey Quarterly.[2] Nonetheless, business is considered more trustworthy than government or the media according to the Edelman survey, though this finding is tempered somewhat by strong respondent support for increased business regulation.

Trust and Communication

The Edelman report goes on to suggest that a new operating model for institutions is required if trust is to be rebuilt, one that puts people front and center.[3] This has long been recognized by management theorists who have posited that corporate strategy must reflect a comprehension of (a) stakeholder values and (b) the role of ethics in strategic decisions.[4] These sentiments are also mirrored in the recently published Connect: How Companies Succeed By Engaging Radically With Society (PublicAffairs, 2016), which argues that business must even move beyond corporate social responsibility initiatives so as to truly engage with consumers and communities. One of the book’s co-authors, entrepreneur Tommy Stadlen, notes that: “This is the era of transparency, and you have to be radically authentic to connect with society.”[5]

This, of course, implicates communication, considered by scholarly approaches as a “fundamentally two-way process that is interactive and participatory at all levels.”[6] Or as former CEO and current executive chairperson John Browne explains it: “In an inter-connected world, it is important not to engage or communicate only when you have to.”[7]

Building mutual trust, in the view of influential public relations scholar J.E. Grunig, is the aim of public relations.[8] This may be surprising considering its negative association with “spin,” yet public relations, according to the discipline’s theorists, is actually and fundamentally concerned with ethics, social responsibility and sustainability.[9] [10] [11] The Global Alliance for Public Relations and Communication Management, which represents some 160,000 practitioners and academics from around the world, clearly agrees and in a series of manifestos asserted that the profession in the course of their work should, for example:

• deliver timely analysis and recommendations for an effective governance of stakeholder relationships by enhancing transparency, trustworthy behavior, authentic and verifiable representation;[12]
• instill responsible behaviours by individuals and organisations;[13] and
• aspire to a social purpose, serve social cohesion, and aim to bring communities together.[14]

Furthermore, the Alliance considers that the communicative organization “[p]ursues policies and practices based on internationally recognized standards for corporate responsibility, sustainability, reporting and transparency.”[15]

The Business Value of Communication

One could easily assume that the importance of communication for business would be readily obvious, yet explaining its value is an ongoing problem facing both communication professionals and academics.[16] In fact, and according to communication professionals surveyed over the past 10 years by the European Communication Monitor, linking business strategy and communication has consistently been found to be one of the most important strategic issues and key challenges facing the communication management field.[17]

This is particularly surprising given it is widely accepted that a company’s value can increase if the expectations, expertise and legitimate interests and concerns of stakeholders (i.e., stakeholder value) is strategically taken into account.[18] [19] [20] [21] [22] After all, connecting with stakeholders, along with listening (i.e., communication feedback) and learning, enable a business to better situate itself within social and political environments and increase revenue by providing those products and services desired by the public.[23] [24] Alternatively, failure to receive feedback (e.g., because of poor communication channels, disinterest, structural inertia), or incorporate it within business operations in a transparent and timely way, may damage corporate or product reputation and engender a variety of costly civil, legislative and regulatory actions.[25] [26]

Communication, of course, also plays a critical role in enabling business operations (e.g., employee relations, publicity), developing reputation and branding, addressing issues of trust and legitimacy and supporting leadership and innovation. Looked at in this way, communication can be seen as a fundamental component of a company’s value chain or value network.[27]

Strategic Communication and Value Creation

Communication in, between and among organizations and their stakeholders can be looked at from multiple disciplines, theoretical perspectives and methodological approaches (e.g., communication science, business administration, marketing science, advertising, public relations). Emerging from this as a somewhat unifying framework (i.e., from which to view organizational communication) is the concept of “strategic communication” which, at its most basic, can be defined as “the purposeful use of communication by an organization to fulfill its mission.”[28]

This definition does not, however, imply an instrumental – and still common – view in which communication is narrowly considered as a way for managers or directors to accomplish stuff or as a tool to manipulate stakeholder perception.[29] Communication, rather, can be seen as a company’s core competence where “organizational decisions are imbued with stakeholder intelligence and performed with a full understanding of the communication implications.”[30] Stakeholders, then, play a critical role.[31] [32] Or as one iteration puts it: “Strategic communication creates value by co-creating the future.”[33]

Value creation from a strategic communication perspective is situated within what has been termed the “knowledge economy”; capital is generated via communication with employees (human capital), between employees (organizational capital) and between employees and other stakeholders (relational capital).[34]

Excellence Theory in Public Relations

In 1985, the International Association of Business Communicators commissioned a study that was charged with answering the following questions:

• What are the characteristics of an excellent communication department?
• How does excellent public relations make an organization more effective, and how much is that contribution worth economically?

The study, which encompassed 15 years, survey research in 327 organizations and produced three full books, resulted in the “excellence theory” of public relations and communication management,[35] [36] [37] and has spawned extensive follow-up research.[38] [39]

An effective organization, the study concluded, must behave in ways that solve the problems and satisfy the goals of stakeholders as well as of management. For this to happen requires “excellence” in public relations. According to the study’s authors, however, many organizations do not manage their communication programs strategically and, by default, those programs were not effective. But a number of common characteristics were found for those organizations deemed to have excellent public relations:

• most critically, public relations were fully involved in strategic management, represented all strategic audiences and had access to key organizational decision-makers;
• communication activities were integrated into a single department or co-ordinated by a senior vice-president of corporate communications, and not sublimated into marketing or other management function;
• a participative culture and a decentralized structure in terms of internal communications; and
• the empowerment of women and the inclusion of diversity of race and ethnicity throughout the organization.

[1]   Edelman. 2017. 2017 Edelman Trust Barometer – Annual Global Study. Executive Summary.

Edelman, Inc. 16pp.

[2]   McKinsey & Company. 2009. Economic Conditions Snapshot, March 2009: McKinsey Global Survey

   Results. Accessed 14 July 2017 at http://www.mckinsey.com/global-themes/employment-and-

growth/economic-conditions-snapshot-march-2009-mckinsey-global-survey-results

[3]   Edelman, op cit.

[4]   Freeman, R.E. and Gilbert, D.R., Jr. 1988. Corporate Strategy and the Search for Ethics. Prentice-

Hall, Englewood Cliffs, New Jersey.

[5]   McKinsey & Company. 2016. Interview: How companies succeed through radical engagement.

Accessed online on 24 July 2017.

[6]   Hallahan, K., Holtzhausen, D., van Ruler, B., Verčič, D. and Sriramesh, K. 2008. Defining strategic

communication. International Journal of Strategic Communication 1(1): 3-35.

[7]   Prospect Team. 2015. John Browne: How companies succeed by engaging with society. Prospect

October 8, 2015. Accessed 14 July 2017.

[8]   Grunig, J.E. 2001. Two-way symmetrical public relations: past, present, and future. In: Handbook of

   Public Relations: 11-30. Heath, R.L. (Ed.). SAGE Publishing, Thousand Oaks, California.

[9]   Ryan, M. 1986. Public relations practitioners’ views of corporate social responsibility. Journalism

   Quarterly 63(4): 740-762.

[10] Grunig, J.E. 2014. Ethics problems and theories in public relations. Revue internationale de

   communication sociale et publique 11: 15-28.

[11] Kim,S.-Y. and Reber, B.H. 2009. How public relations professionalism influences corporate social

responsibility: a survey of practitioners. Journalism & Mass Communication Quarterly 86(1): 157-174.

[12] Global Alliance for Public Relations and Communication Management. 2010. The Stockholm Accords.

[13] Global Alliance for Public Relations and Communication Management. 2012. The Melbourne Mandate.

[14] Global Alliance for Public Relations and Communication Management. 2014. The Madrid Momentum.

[15] Global Alliance for Public Relations and Communication Management, 2012, op cit.

[16] Zerfass, A. and Viertmann, C. 2017. Creating business value through corporate communication: A

theory-based framework and its practical application. Journal of Communication Management 21(1):

68-81.

[17] Zerfass, A. 2016. European Communication Monitor 2016. Exploring trends in big data, stakeholder  

   engagement and strategic communication. Results of a survey in 43 Countries. EACD/EUPRERA,

Quadriga Media Berlin, Brussels. 134pp.

[18] Freeman, R.E. 1984. Strategic Management. A Stakeholder Approach. Pitman Publishing, Boston.

[19] Porter, M.E. and Kramer, M.R. 2011. Creating shared value. Harvard Business Review January-

February: 63-70.

[20] Emerson, J. 2003. The blended value proposition: integrating social and financial returns. California

   Management Review 45(4): 35-50.

[21] Strand, R. and Freeman, R.E. 2015. Scandinavian cooperative advantage: The theory and practice of

stakeholder engagement in Scandinavia. Journal of Business Ethics 127(1): 65-85.

[22] Post, J.E., Preston, L.E. and Sachs, S. 2002. Managing the extended enterprise: The new stakeholder

view. California Management Review 45(1): 6-28.

[23] Koschmann, M. 2016. A communication perspective on organizational stakeholder relationships:

discursivity, relationality, and materiality. Communication Research and Practice 2(3): 1‐25.

[24] Zerfass, A. 2008. Corporate communication revisited: Integrating business strategy and strategic

communication. In: Public Relations Research. European and International Perspectives and

   Innovations: 65-96. Zerfass, A., van Ruler, B. and Sriramesh, K. (Eds.). VS Verlag Für

Sozialwissenschaften, Wiesbarden, Germany.

[25] Carroll, C.E. 2013. Corporate reputation and the multi-disciplinary field of communication. In: The

   Handbook of Communication and Corporate Reputation: 1-10. Carroll, C.E. (Ed.). Blackwell Publishing

Ltd.

[26] Grunig, J.E. 2006. Furnishing the edifice: ongoing research on public relations as a strategic

management function. Journal of Public Relations Research 18(2): 151-176.

[27] Zerfass and Viertmann, op cit.

[28] Hallahan et al., op cit.

[29] Gregory, A. 2013. Corporate reputation and the discipline of communication management. In: The

   Handbook of Communication and Corporate Reputation: 81-93. Carroll, C.E. (Ed.). Blackwell

Publishing Ltd.

[30] ibid.

[31] Hallahan et al., op cit.

[32] Thomas, G.F. and Stephens, K.J. 2015. An introduction to strategic communication. International

   Journal of Business Communication 52(1): 3-11.

[33] Verčič, D. 2016. Why invest in strategic communication? Because it creates value. Communication

   Management Review 1: 28-39.

[34] ibid.

[35] Grunig, J.E. (Ed.). 1992. Excellence in Public Relations and Communication Management. Lawrence

Erlbaum Associates, Hillsdale, New Jersey.

[36] Dozier, D.M., Grunig, L.A. and Grunig, J.E. 1995. Manager’s Guide to Excellence in Public Relations

   and Communication Management. Lawrence Erlbaum Associates, Mahwah, New Jersey.

[37] Grunig, L.A., Grunig, J.E.and Dozier, D.M. 2002. Excellent Public Relations and Effective

   Organizations: A Study of Communication Management In Three Countries. Lawrence Erlbaum

Associates, Mahwah, New Jersey.

[38] Huang, Y.-H. and Lu, J.C. 2012. The influence of excellence: a citation analysis of excellence study in

PR scholarship, 1992-2011. In: Public Relations and Communication Management: The State of the

   Profession; Proceedings of the 19th International Public Relations Research Symposium: 50-63.

Verčič, D., Tkalac Verčič, A., Sriramesh, K. and Zerfass, A. (Eds.). BledCom and Pristop, Ljubljana,

Slovenia.

[39] Verčič, D. and Zerfass, A. 2016. A comparative excellence framework for communication management.

Journal of Communication Management 20(4): 270-288.