--/ %/(y- r~

Sixth Edition

Paul A. ArgentiThe luck School of Du-^ii't Darlimmlli

McGraw-HillIrwin

Table of ContentsPreface to the Sixth Edition ivA Note on the Case Method xAcknowledgments xiii

Chapter 1The Changing Environment forBusiness 1Attitudes toward American Business throughthe Years 1Hollywood: A Window on Main Street andWall Street 7The Global Village 8How to Compete in a Changing Environment 11

Recognize the Changing Environment 11Adapt to the Environment without Compromising

Principles 12Don't Assume Problems Will Magically Disappear 13Keep Corporate Communication Connected to

Strategy 15Conclusion 16Two Kids in a Sandbox 17Don't be Evil 18The Chinese Market 19NGOS, Competitors, and Congress MakeNoise 20Pressure from Shareholders and China 22Case Questions 23

Chapter 2Communicating Strategically 29Communication Theory 29Developing Corporate CommunicationStrategies 31

Setting an Effective Organization Strategy 31Analyzing Constituencies 35Delivering Messages Effectively 40Constituency Responses 43

Conclusion: The Corporate CommunicationConnection to Vision 44Case Questions 46

Chapter 3An Overview of the CorporateCommunication Function 47

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of Corporate

From "PR" to "CorpComm"The First Spin Doctors 48A New Function Emerges 49Corporate Communications TodaySpecific Responsibilities

Communications 50To Centralize or Decentralize Communica-tions? 51Where Should the Function Report? 53

Working Strategically with External PR andCommunication Agencies 57The Subfunctions within the Function 58

Identity, Image, and Reputation 58Corporate Advertising and Advocacy 60Corporate Responsibility 61Media Relations 62Marketing Communications 63Internal Communications 64Investor Relations 64Government Relations 65Crisis Management 65

Conclusion 66Tea Drinkers Heaven 68From Moonshine to Big TimeGrowing Their Brand 68Communications Role 69Case Questions 70References 70

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xviii Table of Contents

Chapter 4Identity, Image, Reputation, andCorporate Advertising 71What Are Identity and Image? 72Differentiating Organizations through Identityand Image 73Shaping Identity 74

A Vision That Inspires 74Corporate Brands 75Putting It All Together: Consistency Is Key 78

Identity Management in Action 80Step 1: Conduct an Identity Audit 80Step 2: Set Identity Objectives 81Step 3: Develop Designs and Names 82Step 4: Develop Prototypes 83Step 5: Launch and Communicate 84Step 6: Implement the Program 84

Image: In the Eye of the Beholder 85Building a Solid Reputation 87

Why Reputation Matters 87Measuring and Managing Reputation 89Corporate Philanthropy 90

What Is Corporate Advertising? 91Advertising to Reinforce Identity or Enhance

Image 92Advertising to Attract Investment 93Advertising to Influence Opinions 95

Who Uses Corporate Advertising andWhy? 96

Increase Sales 96Create a Stronger Reputation 98Recruit and Retain Employees 100

Conclusion 101JetBlue Takes Off 102The Perfect Storm 104On Thin Ice 104Misery Loves Coverage 105Congress Comes Calling 106Conclusion 107Case Questions 107

Chapter 5Corporate Responsibility 109What Is Corporate Responsibility? 110

The UN Global Compact Ten Principles 112

The Twenty-First Century's CR Surge 114The Upside of CR 117

CR and Corporate Reputation 120Consumer Values and Expectations: Taking Matters

into Their Own Hands 121Investor Pressures: The Growth of Socially Responsible

Investing 123Responsibility Inside and Out: Employee Involvement

in CR 124Strategic Engagement: The Continued Influence of

NGOs 128Being Green: The Corporation's Responsibility to the

Environment 130Communicating about CorporateResponsibility 133

A Two-Way Street: Creating an OngoingDialogue 134

The Dangers of Empty Boasting 134The Transparency Imperative 135Getting It Measured and Done: CR Reporting 136

Conclusion 138Fair Trade Coffee 140Starbucks' Issues with Fair Trade Coffee 140The Starbucks Culture 141The Fair Trade Decision 144Case Questions 144

Chapter 6Media Relations 145

The Evolution of the News Media 145The Growth of Business Coverage in the Media 147

Building Better Relation with the Media 148Conducting Research for Targeting Traditional

Media 150Researching and Engaging the Expanded "Press" 152Responding to Media Calls 153Preparing for Media Interviews 154Gauging Success 156Maintaining Ongoing Relationships 157

Building a Successful Media RelationsProgram 159

Involve Media Relations Personnel in Strategy 159Develop In-House Capabilities 160Use Outside Counsel Strategically 160

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Developing an Online Media Strategy 160Extend Your Media Relations Strategy to the

Blogosphere 162Handle Negative News Effectively 164

Conclusion 165History of the Adolph Coors Company 167The Coors Mystique 167The Nature of the Brewing Industry 168Marketing and Distribution at Coors 168Management-Labor Relations at Coors 169Nationwide Boycott 170Federal Lawsuit 170David Sickler and the AFL-CIO 171Corporate Communication at Coors 171Shirley Richard 172Confrontational Journalism 172Open or Closed Door? 173Case Questions 174

Chapter 7Internal Communications 175

Internal Communications and the ChangingEnvironment 176Organizing the Internal CommunicationEffort 177

Goals for Effective Internal Communications 178Where Should Internal Communications

Report? 179Implementing an Effective. InternalCommunication Program 180

Communicate Up and Down 181Make Time for Face-to-Face Meetings 182Communicate Online 183Create Employee-Oriented Publications 184Communicate Visually 186Focus on Internal Branding 187Consider the Company Grapevine 188

Management's Role in Internal Communi-cations 189Conclusion 191Westwood Publishing Background 192Corporate Communication at Westwood 193

The Voluntary Severance and Early RetirementProgram 193Communicating About the Plans 194Case Questions 194

Chapter 8 ~—~—^Investor Relations 195

Investor Relations Overview 195The Evolution of Investor Relations 196

A Framework for Managing InvestorRelations 199

The Objectives of Investor Relations 199Types of Investors 200Intermediaries 203

Developing an Investor Relations Pro-gram 208

How (and Where) Does IR Fit into theOrganization? 208

Using IR to Add Value 209Investor Relations and the ChangingEnvironment 212Conclusion 214History of Steelcase, Inc. 215Identity, Vision, and Reputation 215The Initial Public Offering 216Steelcase as a Public Company (IPO TO JUNE2000) 217The Investor Relations Effort (1998-2000) 218Case Questions 220

Chapter 9Government Relations 221

Government Begins to Manage Business: TheRise of Regulation 222

The Reach of the Regulatory Agencies 223How Business "Manages" Government: TheRise of Government Relations 224

The Government Relations Function Takes Shape 225The Ways and Means of ManagingWashington 228

Coalition Building 228

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CEO Involvement in Government Relations 229Lobbying on an Individual Basis 229Political Action Committees 231

Conclusion 232The Controversy Comes to a Head 234The Disney's America Concept andLocation 235The Virginia Piedmont 236Disney's Plans Revealed 237Piedmont Opposition 239Disney's Campaign 240The PEC's Campaign 241The Vote 241The Historians and Journalists Take Over 241Disney's Response 244Congressional Hearing 245The Debate Continues 245The Decision 246Case Questions 246

Chapter 10Crisis Communication 247

What Is a Crisis? 247Crisis Characteristics 249

Crises from the Past 25 Years 2501982: Johnson & Johnson's Tylenol Recall 2511990: The Perrier Benzene Scare 2521993: Pepsi-Cola's Syringe Crisis 253The New Millennium: The Online Face of Crises—

Data Theft and Beyond 255How to Prepare for Crises 262

Assess the Risk for Your Organization 263Set Communication Objectives for Potential

Crises 265Analyze Channel Choice 265

Assign a Different Team to Each Crisis 266Plan for Centralization 266What to Include in a Formal Plan 267

Communicating during the Crisis 269Step 1: Get Control of the Situation 270Step 2: Gather as Much Information as Possible 270Step 3: Set Up a Centralized Crisis Management

Center 270Step 4: Communicate Early and Often 270Step 5: Understand the Media's Mission in a

Crisis 272Step 6: Communicate Directly with Affected

Constituents 272Step 7: Remember That Business Must Continue 272Step 8: Make Plans to Avoid Another Crisis

Immediately 273Conclusion 273History of Coke 276Indian History 279Coke in India 279The Indian Beverage Market 280Marketing Cola in India 281Corporate Social Responsibility 283Previous Coke Crises 284Corporate Communication at Coca-Cola 286NGO Activism 286Indian Regulatory Environment 287The Initial Response 287Gupta's Dilemma 289Case Questions 289Case Bibliography 290

Bibliography 291

Index 295