BUSINESS MANAGEMENT AS ACADEMIC DISCIPLINE

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THE ROLE OF COMMUNICATION IN CORPORATE

GOVERNANCE Internationally, the recognition of the risks and opportunities associated with successfully managing company reputation around corporate responsibility, and thus governance, is increasing. For organisations, the alignment of corporate behaviour with stakeholder expectations is a business priority in managing their reputations. This implies an information requirement among stakeholders that is not currently being satisfied by many organisations (Dawkins, 2004:108). Communication management in the 21st century, according to Falconi (2009:[5]), focuses on building relationships with stakeholders through dialogue to improve the quality of organisational decision-making processes by listening to stakeholders’ expectations. This organisational function addresses the information requirement mentioned by Dawkins and can therefore be regarded as the ‘missing link’ in the practice and communication of corporate governance (Dawkins, 2004:108). An online article published by a US-based company, CoreBrand, which has been in business for nearly 30 years and focuses on correlating branding and communication with financial performance, outlined five major trends in communication management at the end of the 1990s (Altziebler, 1999:[1]).

THE KING REPORT ON GOVERNANCE IN SOUTH

AFRICA South Africa has undergone transformation at political, social and economic levels, which has impacted all aspects of the country, including business. This transformation led to a number of new opportunities and threats for both businesses and their stakeholders alike. Denton and Vloeberghs (2003:86) maintain that business and its stakeholders would benefit if they adapted to a competitive international environment and adopted world-class business principles. Given this, communication management has a significant role to play in this process of mutual adaption between business and the environment, and business and stakeholders (Meintjes, Niemann-Struweg & De Wet, 2009:59), possibly through improved stakeholder relationship management. The economic crisis, coupled with the distrust in business necessitated action in various forms globally, whether it is in the form of guidelines or acts assisting business to become more transparent and comply with governance rules.

The excellence theory and the reflective view as world views

This study was approached from the viewpoints of excellence and reflectivity as expounded in the excellence theory and the reflective view of communication management. These two world views are now discussed in greater detail. (i) Excellence theory Kearney (in Grunig & White, 1992:33) defines a world view as “a set of images and assumptions about the world”. Image in this regard, can be analysed in two ways. Firstly, the literal sense of a visual representation in the mind, and secondly, organising principles that have variously been called schemata, plans and structures. Verwey and du Plooy-Cilliers (2003:23) agree with this definition and further define a world view as “the different ways in which people view themselves, the environment, time, space, truth, etc.” The concept of a world view can be applied in both a research and in a business context. This is also the case in this study where the study is approached from both an excellence and reflective world view.

The strategic constituency perspective and stakeholder inclusive

approach as paradigms The paradigm within which the study falls is the strategic constituency perspective, coupled with the stakeholder inclusive approach. The strategic constituency perspective holds that organisational effectiveness is influenced by the extent to which an organisation is able to satisfy multiple stakeholder needs. This implies that the organisation has a number of constituencies (also referred to as stakeholders), with different degrees of power, attempting to satisfy their demands (Love & Skitmore, 1996:7). Quinn and Rohrbaugh (1983:364) states that by implementing this approach, the impact of strategic stakeholders may be minimised. The minimisation of the impact of stakeholders is possible through the strategic constituency perspective, as organisations are able to identify and understand stakeholders better, with the willingness and ability to consider and satisfy their demands. The stakeholder inclusive approach asserts that in practice the legitimate interests and expectations of stakeholders are considered when making decisions about the best interests of the business. The integration and tradeoffs between various stakeholders are then made on a case-by-case basis, to serve the best interests of the business (Institute of Directors, 2009:9).

Sustainability as interdisciplinary field

The systems theory, as a multidisciplinary approach, can also be related to sustainability which regards nature, society and business as interconnected in complex ways that should be understood by decision-makers. The King III Report on Governance in South Africa argues that “sustainability is the primary moral and economic imperative of the 21st century” and one of the most important sources of both opportunities and risks for businesses. Most importantly, current incremental changes towards sustainability by businesses are not sufficient. A fundamental shift in the way businesses and directors act and organise themselves is needed (Institute of Directors, 2009:9). For businesses to implement this shift, management must become more reflective in terms of their thinking, their strategies and actions. This applies specifically to the way in which they see and treat stakeholders. Organisations have been expanding in size and are operating in more and more countries. This growth has increased the power of organisations and the impact they have on the social, political and ecological environment of these countries (Irwin, 2003:304). This has brought a greater expectation from society for organisations to act responsibly and be accountable for their impacts (Rensburg & Cant, 2009:234).

Phase II: In-depth interviews with senior communicators

Phase II consisted of in-depth interviews with senior communicators (specifically involved in stakeholder relationship management) of selected companies in South Africa. It was necessary to gain some insight and understanding of how those who work closest to the management of stakeholder relationships conduct this, coupled with whether a need exists for a more formalised and methodological approach to stakeholder relationship management. This formed the empirical phase of the study. Phase II was informed by the literature review on stakeholder relationship management, the discussion of Chapter 8 of the King III Report on Governance and its implications for business and communication management, as well as the global review of communication management practices and trends.

Corporate communication and communication management

Public relations according to Argenti (2003:38) is regarded as the predecessor to corporate communication. Typically, the public relations function was tactical in most companies and was often also referred to as public affairs. The effort was to prevent the press from getting too close to management. Today, the strategic influence of the function is being recognised more widely, where corporate communication is seen to be managed communication for the organisation in order to enhance the effectiveness of the organisation with the use of establishing and servicing stakeholder relationships (Steyn & Puth, 2000:5). Similarly, Goodman (2006:197) states that corporate communication is used as an umbrella term for a number of functions regarded as strategic. These functions include “public relations, crisis communication, corporate citizenship, reputation management, community relations, media relations, investor relations”. It can thus be argued that the terms, ‘Public Relations’, ‘Corporate Communication’ and ‘Communication Management’ can be used interchangeably due to the close nature of the definitions provided, although some may argue that slight differences between them exist. For the purpose of this study, all three terms are throughout referred to as ‘Communication Management’.

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Table of contents :

  • DECLARATION
  • ACKNOWLEDGEMENTS
  • ABSTRACT
  • TABLE OF CONTENTS
  • LIST OF TABLES
  • LIST OF FIGURES
  • APPENDICES
  • CHAPTER 1 ORIENTATION AND BACKGROUND
    • 1.1 INTRODUCTION
    • 1.2 TOWARDS SUSTAINABILITY THROUGH GOOD CORPORATE GOVERNANCE
    • 1.3 THE ROLE OF COMMUNICATION IN CORPORATE GOVERNANCE
    • 1.4 STAKEHOLDER RELATIONSHIP MANAGEMENT
    • 1.5 THE KING REPORT ON GOVERNANCE IN SOUTH AFRICA
    • 1.6 PROBLEM STATEMENT AND RESEARCH QUESTIONS
    • 1.7 PURPOSE OF THE STUDY
    • 1.8 RESEARCH OBJECTIVES
    • 1.9 CONCEPTUALISATION AND METATHEORETICAL FRAMEWORK
      • 1.9.1 Theoretical and metatheoretical conceptualisation
      • 1.9.2 Systems theory as grand theory
      • 1.9.3 The excellence theory and the reflective view as world views
      • 1.9.4 The strategic constituency perspective and stakeholder inclusive approach as paradigms
      • 1.9.5 Sustainability as interdisciplinary field
      • 1.9.6 Business law as academic discipline
      • 1.9.7 Business management as academic discipline
      • 1.9.8 Communication management as academic discipline
    • 1.10 RESEARCH DESIGN
      • 1.10.1 Phase I: Exploration
      • 1.10.2 Phase II: In-depth interviews with senior communicators
    • 1.11 PUBLIC RELATIONS VS COMMUNICATION MANAGEMENT
      • 1.11.1 Public relations
      • 1.11.2 Corporate communication and communication management
    • 1.12 DEFINITION OF KEY TERMS
    • 1.13 DELIMITATIONS AND ASSUMPTIONS
      • 1.13.1 Delimitations
      • 1.13.2 Assumptions
    • 1.14 IMPORTANCE OF THE STUDY
    • 1.15 RESEARCH ETHICS
    • 1.16 RELATIONSHIP OF THE PHASES WITH THE RESEARCH
    • OBJECTIVES OF THE STUDY
  • CHAPTER 2 THEORETICAL FOUNDATION
    • 2.1 INTRODUCTION
    • 2.2 SYSTEMS THEORY
    • 2.3 WORLD VIEWS
      • 2.3.1 Excellence theory
      • 2.3.2 Reflective view
      • 2.3.3 The strategic constituency perspective
      • 2.3.4 The inclusive stakeholder approach
    • 2.4 SUSTAINABILITY AS INTERDISCIPLINARY FIELD
    • 2.5 BUSINESS LAW AS ACADEMIC DISCIPLINE
    • 2.6 BUSINESS MANAGEMENT AS ACADEMIC DISCIPLINE
      • 2.6.1 Strategic management
      • 2.6.2 Corporate citizenship
      • 2.6.3 Corporate social responsibility (CSR)
    • 2.7 COMMUNICATION MANAGEMENT AS ACADEMIC DISCIPLINE
      • 2.7.1 Communication management world view and models
      • 2.7.2 Communication management roles
      • 2.7.3 Strategic communication management
      • 2.7.4 Stakeholder relationship and reputation management
    • 2.8 THEORIES THAT GUIDE THE STUDY
      • 2.8.1 Agency theory
      • 2.8.2 Stewardship theory
      • 2.8.3 Resource dependency theory
      • 2.8.4 Resource based view (RBV)
      • 2.8.5 Stakeholder theory
      • 2.8.6 Social identity theory
    • 2.9 CONCLUSION
  • CHAPTER 3 STAKEHOLDER RELATIONSHIP MANAGEMENT
    • 3.1 INTRODUCTION
    • 3.2 THEORETICAL VIEWS OF THE STAKEHOLDER CONCEPT
      • 3.2.1 Instrumental stakeholder theory
      • 3.2.2 Descriptive stakeholder theory
      • 3.2.3 Normative stakeholder theory
    • 3.3 RELATIONSHIP BUILDING WITH STAKEHOLDERS THROUGH EFFECTIVE IDENTIFICATION, CATEGORISATION AND PRIORITISATION
    • 3.3.1 Freeman’s stakeholder management framework (SMF) (1984)
      • 3.3.2 Grunig and Hunt’s linkages model (1984)
      • 3.3.3 Donaldson and Preston’s Three part taxonomy (1995)
      • 3.3.4 Clarkson’s primary and secondary stakeholder classification (1995)
      • 3.3.5 Mitchell, Agle and Wood’s stakeholder typology and classes (1997)
      • 3.3.6 Steyn and Puth’s types of publics (2000)
      • 3.3.7 Grunig’s Situational theory of publics (2005)
      • 3.3.8 Rawlins’ four step process to stakeholder prioritisation (2006)
      • 3.3.9 Gregory’s communication strategy typology (2007)
      • 3.3.10 Falconi’s GOREL process (2009)
      • 3.3.11 Analysis of the identification, categorisation, prioritisation and relationship management models, frameworks, guidelines and processes and their value and relevance in the context of this study
    • 3.4 STAKEHOLDER ENGAGEMENT (SE), STAKEHOLDER RELATIONSHIP MANAGEMENT (SRM) AND GOVERNING STAKEHOLDER RELATIONSHIPS (GSR)
    • 3.4.1 Stakeholder engagement (SE)
    • 3.4.2 Stakeholder relationship management (SRM)
    • 3.4.3 Governing stakeholder relationships (GSR)
    • 3.4.4 Analysis of stakeholder engagement (SE), stakeholder relationship management (SRM) and the governing of stakeholder relationships (GSR)
    • 3.5 ISSUES MANAGEMENT
    • 3.6 CRISIS MANAGEMENT/CONFLICT RESOLUTION
    • 3.7 REPUTATION MANAGEMENT
      • 3.7.1 The relationship between identity, image and reputation
      • 3.7.2 Integrated strategic communication in support of reputation management
    • 3.8 CONCLUSION
  • CHAPTER 4 KING III THE IMPLICATIONS FOR COMMUNICATION MANAGEMENT
    • 4.1 INTRODUCTION
    • 4.2 EXAMPLES OF TWO OTHER INTERNATIONAL EFFORTS TO IMPROVE CORPORATE GOVERNANCE
      • 4.2.1 The Cadbury Report (UK)
      • 4.2.2 Sarbanes-Oxley Act (USA)
    • 4.3 SOUTH AFRICAN CORPORATE GOVERNANCE AND THE KING III REPORT
    • 4.3.2 The King Committee and Report on Governance for South Africa
    • 4.4 GOVERNING STAKEHOLDER RELATIONSHIPS ACCORDING TO KING III
      • 4.4.1 Principle 1: Stakeholders and reputation
      • 4.4.2 Principle 2: Proactive management of stakeholder relationships
      • 4.4.3 Principle 3: Stakeholder engagement
      • 4.4.4 Principle 4: Shareholder treatment
      • 4.4.5 Principle 5: Transparent and effective communication with stakeholders
      • 4.4.6 Principle 6: Dispute (or conflict) resolution
    • 4.5 SUMMARY OF THE KING III REPORT AND THE IMPLICATIONS FOR COMMUNICATION MANAGEMENT
    • 4.6 CONCLUSION
  • CHAPTER 5 ANALYSIS OF THE GLOBAL PRACTICES AND TRENDS OF COMMUNICATION MANAGEMENT
    • 5.1 INTRODUCTION
    • 5.2 THE PURPOSE OF ANALYSING GLOBAL COMMUNICATION MANAGEMENT PRACTICES AND TRENDS
    • 5.3 CRITERIA FOR SELECTING THE GLOBAL COMMUNICATION MANAGEMENT STUDIES
      • 5.3.1 The Stockholm Accords
    • 5.4 METHODOLOGY OF THE ANALYSIS
    • 5.5 ANALYSIS OF GLOBAL STUDIES
      • 5.5.1 Studies conducted during 2005/
      • 5.5.2 Studies conducted during
      • 5.5.3 Studies conducted during
      • 5.5.4 Studies conducted during 2009/
    • 5.6 SUMMARY OF THE GLOBAL STUDIES ANALYSIS
      • 5.6.1 Purpose and methodology
      • 5.6.2 Findings of the analysis in the form of themes
    • 5.6.3 Implications of the global studies for communication management
    • 5.7 INTER-CODER RELIABILITY
    • 5.8 GLOBAL STUDIES ANALYSIS IN RELATION TO THE
    • STOCKHOLM ACCORDS, KING III AND THE THEORY
    • 5.9 CONCLUSION
  • CHAPTER 6 RESEARCH DESIGN FOR DEVELOPING GUIDELINES AND POSITIONING FRAMEWORK
    • 6.1 INTRODUCTION
    • 6.2 SUMMARY OF THE PHASES
    • 6.3 RESEARCH OBJECTIVES
      • 6.1.1 Research question
      • 6.1.2 Research objectives
    • 6.4 SAMPLING DESIGN
      • 6.4.1 Sampling plan
      • 6.4.2 Selection of participants according to geographical region
      • 6.4.3 Determining sample size
    • 6.5 INTERVIEW GUIDE
    • 6.6 DATA COLLECTION THROUGH IN-DEPTH INTERVIEWS
    • 6.7 DATA ANALYSIS
      • 6.7.1 Data analysis process
      • 6.7.2 Steps in the data analysis process
      • 6.7.3 Use of field notes
      • 6.7.4 Nvivo
    • 6.8 PILOT STUDY
      • 6.8.1 Purpose
      • 6.8.2 Selection of pilot interview participant
      • 6.8.3 Pilot interview process
      • 6.8.4 Consequences of the pilot study
    • 6.9 RIGOUR OF THE RESEARCH DESIGN
    • 6.10 RESEARCH ETHICS: PHASE II
    • 6.11 CONCLUSION
  • CHAPTER 7 SENIOR COMMUNICATOR VIEWS OF STAKEHOLDER RELATIONSHIP MANAGEMENT ACCORDING TO THE KING REPORT ON GOVERNANCE
    • 7.1 INTRODUCTION
    • 7.2 SUMMARY OF PHASES RELATED TO THIS CHAPTER
    • 7.3 SENIOR COMMUNICATOR INTERVIEW RESULTS
    • 7.4 FIRMAGRAPHICS OF THE PARTICIPANTS’ COMPANIES
    • 7.5 RESEARCH RESULTS OF RESEARCH OBJECTIVES 1 &
      • 7.5.1 RESEARCH OBJECTIVE
      • 7.5.2 RESEARCH OBJECTIVE
    • 7.6 DISCUSSION OF FINDINGS
    • 7.6.1 RESEARCH OBJECTIVE
    • 7.6.2 RESEARCH OBJECTIVE
    • 7.7 CONCLUSION
  • CHAPTER 8 GUIDELINES AND POSITIONING FRAMEWORK
    • 8.1 INTRODUCTION
    • 8.2 SUMMARY OF PHASES
    • 8.3 GUIDELINES ACCORDING TO THE KING REPORT ON GOVERNANCE FOR MANAGING STAKEHOLDER RELATIONSHIPS
    • 8.4 A STAKEHOLDER RELATIONSHIP POSITIONING FRAMEWORK
    • 8.5 CONCLUSION
  • CHAPTER 9 CONCLUSIONS AND RECOMMENDATIONS
    • 9.1 INTRODUCTION
    • 9.2 CONCLUSION OF FINDINGS RELATED TO RESEARCH OBJECTIVES
    • 9.2.1 The role, scope, function, structure and level of authority of communication management in managing stakeholder relationships
    • 9.2.2 King III, Chapter 8 implications for business and communication management in managing stakeholder relationships
    • 9.2.3 Global practices and trends in communication management and the Stockholm Accords
    • 9.2.4 Guidelines for strategic stakeholder relationship management (SSRM)
    • 9.2.5 Strategic stakeholder relationship management positioning framework
    • 9.3 CONTRIBUTION OF THE STUDY
    • 9.4 CONCLUDING REMARKS
    • 9.5 RECOMMENDATIONS FOR FUTURE RESEARCH
    • 9.6 LIMITATIONS OF THE STUDY
    • LIST OF REFERENCES

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A STRATEGIC COMMUNICATION APPROACH TO MANAGING STAKEHOLDER RELATIONSHIPS ACCORDING TO THE KING REPORT ON GOVERNANCE

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