Public Affairs ManagementPublic Affairs Management

Public Issues Managing the Public Affairs Function Issue Management Crisis Management

ChapterChapter

2

Public issuesPublic 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 gapA gap between what stakeholders expect and what an

organization is actually doing.

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

Phases of the public issue life cyclePhases of the public issue life cycle

Phase 1: Changing Stakeholder ExpectationsWhen a performance-expectation gap emerges, the seeds of a public issue have been sown.

Phase 2: Political ActionWhen a problem is placed on the agenda for government action.

Phase 3: Formal Government ActionWhen legislative proposals or draft regulations emerge. Characterized also by an increased number of people involved in the conflict.

Phase 4: Legal ImplementationWhen a new law or regulation is implemented and companies are forced to comply with the law.

Figure 2.2

The public issue life cycle

High

Low Time

Life Cycle of IssueManagementDiscretion

Lev

el o

f S

tak

ehol

der

Con

cern

s Phase 1:Changing

StakeholderExpectations

Phase 2:Political Action

Phase 3:Formal

GovernmentAction

Phase 4:Legal

Implementation

Managementdiscretion to resolve the issue

Public affairs activitiesPublic 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.

Corporate public affairs activities of Corporate public affairs activities of 250 companies250 companies

Table 2.1a

Activity Percentage of RespondentsPolitical action committee 89%

State government relations 84%

Issue management 84%

Local government relations 77%

Direct corporate contributions 75%

Community relations 75%

Business/trade association membership 73%

Public policy group relations 73%

Grassroots communication 71%

Corporate foundation 71%

Corporate public affairs activities of Corporate public affairs activities of 250 companies250 companies

Table 2.1b

Activity Percentage of RespondentsEmployee volunteer programs 66%

Media relations 64%

Public relations 61%

Employee communications 59%

Strategic philanthropy 55%

Regulatory affairs 43%

Educational relations 34%

International public affairs 32%

Environmental affairs 23%

Stockholder relations 21%

Public affairs management’s relevant Public affairs management’s relevant stakeholders and functionsstakeholders and functions

Figure 2.3a

Government

• Public policy

•Lobbying

•Political action

• Trade associations

• Advocacy ads

• Grassroots mobilization

Public Affairs Management

Stockholders

• External and internal audit

• SEC filings, compliance

• Communications

• Proxy election management

Public affairs management’s relevant Public affairs management’s relevant stakeholders and functionsstakeholders and functions

Figure 2.3b

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

Public affairs management’s relevant Public affairs management’s relevant stakeholders and functionsstakeholders and functions

Figure 2.3c

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

Public affairs management’s relevant Public affairs management’s relevant stakeholders and functionsstakeholders and functions

Figure 2.3d

Public Affairs Management

Media

• Public relations

• Executive speeches

• Image advertising

• Crisis management

• Web page management

Activists, General Public

• Environmental scanning

• Stakeholder dialogue

• Social reporting

• Social monitoring

An effective public affairs function must: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.

Issue managementIssue management

A structured and systematic process to aid organizations in identifying, monitoring, and selecting public issues that warrant organizational action.

Environmental intelligenceThe acquisition of information gained from analyzing the

multiple environments affecting organizations. Customer Competitor Economic Technological Social Political Legal Geophysical

Eight strategic radar screensEight strategic radar screens

Figure 2.4

Seeking

Environmental

Intelligence

Customer

Environment Competitor

Environment

Legal

Environment

Geophysical

Environment

Political

Environment

Technological

EnvironmentSocial

Environment

Economic

Environment

Figure 2.5

The issue management process

PolicyOptions

ProgramDesign

Results

Issues Identification

IssuesAnalysis

Research

Judgment and priority

setting

Policy andstrategy selection

Implementation

Performance evaluation

Crisis managementCrisis 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.

An effect crisis management plan involves: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.