The Problems Companies Face while Becoming Multinational - Research Paper Example

Public Relations Table of Contents Introduction 1 BP 2 Public Relations 4 Communicator and Professional PR Person 7 The Stakeholder Issues 8 Public Relation Plan 9 Public Relation Strategy 11 Communication 14 Conclusion 15 References 16 Bibliography 17 Introduction It is being rightly observed by the business fraternity of today that the only constant thing of today’s world is the word ‘change’ itself. With massive improvements in the arenas of information technology and the communication process, the terms of trade have experienced significant shifts from those of the traditional way of doing business. With the increasing advent of the globalization, the international geographical borders among the various nations are also perishing and the economies are becoming truly transnational in nature. The boom in information technology, especially internet has increased the reach of the customers by great extent. Almost all of the desired products of the customers are within the few clicks of the computer mouse. The companies of today are operating in numerous countries and nations. Not only, such companies have relations of trade with many countries but also the productions and the operations of the companies are also distributed in more than one country; which make them truly multi - national company. Being multi – national in nature, the company faces increased challenges and opportunities. As opportunities, the corporate no longer depend upon the single economy and therefore can mitigate the risk of losing market in case the only focused economy would have collapsed. But being multi – national also have its own challenges as the company would be exposed to various countries which would invariably mean that the desire and the aspirations of the customers would differ significantly not to say about the level of income and the purchasing power, but also the culture of the people. All these factors mean that there should be significant and honest try for the companies to be able to connect itself with the populace of the counties. This calls for increased concentration towards the communication strategies of the companies. Among the various methods of communication, public relations hold utmost importance. BP Previously known as the British Petroleum Plc, BP is one of the largest companies of the world. The company is based at Westminster of England is one of the most efficient energy producers of the world. Founded in the year of 1909 and having been in to the in to the industry for more than 100 years now, the company has glorious past. BP is listed with the London Stock Exchange and is one of the major constituents of the FTSE 100 Index. The company is believed to be the largest private sector energy company of the world (after the merger of British Petroleum, Amoco and ARCO) and is also one of the important members of the “super major” of the vertically integrated oil, petroleum and natural as companies. The company came in to the existence in 1909 as William Knox D’Acry discovered oil in Middle East as he was granted the concession by Shah of Iran to search oil. At the outset, the company was formed as the Anglo - Persian Oil Company. Few years later, it changed its name from APOC to AICO (Anglo – Iranian Oil Company). And the recent name, by which the company was globally acclaimed, British Petroleum, was inducted in the year of 1954. Though the name changed, yet the company operated in the country of Iran. But the Islamic Revolution, in the year of 1979 ended its ties with the country as its assets were freezed by the country. The company continued to operate in other countries of Middle East. In 2000, British Petroleum merged with Amoco, which was previously known as Standard Oil of Indiana and took the name of BP. The company used the slogan of ‘Beyond Petroleum’ which was a major hit and the slogan continued even after the merger and the change of name of the company. The company serves almost the entire world with the employee base of more than 90,000. The financial figures as depicted from the Annual Report of 2008 suggests that the PBIT for the year 2008 had been around US $ 35,239 million which is almost 10% higher than that of the previous year. The company declared the profit for the year of 2008 from continuing of operations attributable to BO shareholders to be around US $ 21,157 million which is also significant increase from the previous year of 2007 ( BP, 2009). The company is believed to have one of the finest management team in the corporate industry which has been instrumental to the pacing growth of the company. The team is led by Carl-Henric Svanberg as the Chairman of the company, Tony Hayward as the Chief Executive Officer, Byron Grote (the Chief Financial Officer) and Angy Inglis as the Chief Executive of the Exploration and Production. Public Relations Public relation is undoubtedly one of the most crucial yet most complex verticals for a multi – national company like BP. As discussed earlier, public relation should be shrewdly used by the companies to connect not only with its customers but also with the entire set of stakeholders. In simple words, public relation is the relationship among the company and the general public. The essential feature of the public relation is that it is not used as a personal medium but as a public one. The company does not direct anything to any of the concerned party through the medium of public relations rather it uses general views and statements to express its standing to the public so that it can connect with people at large. Within the broad spectrum of public relations, there are various sub heads like that of media relations, investor relations, labour relations or the internal communication. Companies all across the globe have been using the media relations as the prime method of public relations. Such methods include the measures like press releases and the press conferences. It also includes the corporate nights or the parties organized and hosted by the companies. The investor relations include the correspondence of communication between the company and the investors of the company. It basically includes that of annual general meeting or the occasion of dividend declaration and such happenings. Labour relations essentially mean the process of communication through formal announcements regarding various aspects of labours and workers. It includes those like the collective bargaining with the trade unions and the formal press conferences. Internal communication comprises of such measures that are taken up to communicate with in the company among the employees. The methods include notices, circulars and declarations. Internal communication can include inter departmental communication as well as intra – departmental communication. Public relation is a very effective medium to communicate with the general public. The public relation can be divided on the basis of various phases as per its development. The traditionally used public relation methods were known as classical public relations. The present models that are used as the public relations methodologies are either professional public relations or the corporate communication. Sandra Oliver has defined the differences of the three models in the book Public Relations Strategy. According to the distinguished expert of public relations, in the classical public relations, the boundary was significantly guided by the locus of control. In case of the professional public relations, the boundary was divergent in nature where as in the corporate communication it is observed to be convergent. According to the scholar, the classical public relations were oriented towards the Greeks and Romans whereas the professional public relations were mainly found in the United Kingdom and the rest of the Europe. The corporate communication is more global in nature and is accepted by almost all of the economies and societies. Oliver rightly observed that there have been significant changes among the three models of public relations over the ages upon the parameters of ideology and role. According to the author, the classical public relations were paternalistic whereas the professional public relations are more of collectivistic in nature. As per the change in the market and the economy, the nature of public relations in the recent years also found to have changed as it became more customized and individualistic in nature. Similarly, the role also differs significantly among the various models of public relations. The traditional public relations were more of public controlled whereas the professional public relations were managed by the systems. The corporate communication emphasizes more upon the relationship with the stake holders. The relationship with the media was more of social according to the traditional techniques. It transformed to legal based relationship with the professional public relations. The present trend suggests that it is more of psychological in nature. The traditional public relations were also a slow process and were strictly protected. The professional public relations was stable and was more into moderate lines where as the present model i.e. the corporate communication is a continuous process and most importantly is also competitive. The three models as described by Oliver takes into account the changing relationship in between the companies and the general public. It has been right noted that the traditional public relations were inclined more towards the social stability in between the companies and the public. The professional public relations was cost based but the presently followed model shows that there is increasing mutual dependence among the company and the public in general. It was also rightly observed that the role of the institutes and the unions were marginal in the traditional way of public relations. The trend was found to be adversarial in the middle years of professional public relations. But the recent attributes suggest that the relationship is more of collaborative in nature (Oliver, 2007). Communicator and Professional PR Person With the advent of internet and the revolution in media industry, public relation has become one of the most challenging careers of the present day. It has been ratified by the number of public relation courses and colleges opening up in all most every part of the world. It is also true that the job of a professional communicator or the public relation person is quite challenging. He acts as the main source of connection in between the company and the general public. Being the professional communicator of the oil conglomerate like BP, he should be able to communicate all the strategies of the companies to the intended public. The public relation officer as the officer can be designated as should be able to handle the various focus groups. The role of the public relation officer of today’s corporate also include being the corporate journalist for the company as it is his duty to let the public know about the standings of the company upon various issues. The public relation person should always maintain a corporate formal way of communication as it is he who represents the company among the mass. The person should essentially be politically correct as well as diplomatic as his confused state of mind, speech or writing might land the entire brand in to undesired problems. As professional public relation person, the officer should be able to take all the vested and the concerned groups together to achieve the organizational objectives with minimum utilization of resources. The Stakeholder Issues The stake holders hold pivotal importance for a modern day business. The companies of the present day no longer aim to generate only the share holder’s value but rather look towards to enhance the value of the stake holders. Stakeholder is a broad term and comprises of almost all of the concerned parties that are crucial in running of the business. It includes the share holders or the owners, the end customers, the retailers and the distributers along with the employees of the company. The broad periphery of the stakeholders also includes the likes of the financers i.e. the banks and the financial institutions, the creditors and the debtors and the suppliers to the company as well as the media. In brief, it comprises almost all of the concerned parties. There can be various issues that erupt with time which affects the interests of the stake holders. Such issues can be internal as well as external. For example, the issues that arise with the trade unions or the employees in general are internal in nature whereas that of with suppliers and the customers are external. Along with ensuring consistent profitability, best of the work environments at BP and generating value for the stake holders, in a company like BP, the public relation person also has a crucial role to play. The initiatives taken toward corporate social responsibilities are used by the company to settle the issues of the stake holders. BP uses its public relations to advertise about the initiatives. The public relation officer can take various measures to address the key issues of the stake holders. He can conduct surveys among the parties and take note of the desires and aspirations of the company. He can inculcate various qualitative measures so that the issues are taken care better by the company. It is the responsibility of the public relation person to communicate with the stake holders and in order to address their issues, the public relation officer can make the stake holders party to the measures that BP takes. The public relation officer should be able to handle all the parties efficiently and contribute towards the organizational objectives (Polonsky, 2005). Public Relation Plan As discussed earlier, the stakeholders include of any corporate organization includes customers and consumers, the employees, the local communities, the government and the regulatory bodies, the share holders and the investors, the suppliers, the niche interest groups and the media. The public relation strategy should be such that it serves the intention of the company to connect with all the above mentioned groups. It is truer for the oil conglomerate because there are ample chances for the company like BP to be misjudged if not properly communicated its intentions and aims. In order to develop public relation plan, the company should, at the outset try and understand the most appropriate medium that would cater the needs of the company. According to Nexis, it has been observed that the newspapers and the newsletters are the mostly used sources of information. Therefore, the company should focus on it public relation through these two mediums. The other mediums that could be used to relate with the public might include industry trade press, magazines, journals, and scientific materials and tenders opportunities. The company should also put due emphasis on the web based publications and blogs to let the people know about the initiatives of the company. The public relation planning should duly consider the mediums of reaching the consumers of BP at the most right time by the most appropriate way. It can build the database of the consumers and can communicate them at any special occasions like new product development or the eco – friendly initiatives that the company undertakes time to time. The public relation strategy should have due regard for the homogenous message to communicate internally within the company and can have dedicated intranet for the purpose so that the employees can log in to their accounts from anywhere in the world. The public relation of the international player like BP should essentially include international as well as local media contacts. The company should be aware of the fact that the envious competitors of the brand can take every possible measure to ensure bad publicity of the company. Also many of the initiatives taken by the company can lead to such a happening. BP should well plan the crisis management mechanism much in advance to handle such happenings. Being the market leader as the company is, the public relations planning and strategy should be to remain in the headlines of the media and that too for all the positive news like innovation, social responsibilities, employee well being and stake holder satisfaction, etc. Public Relation Strategy The essence of effective public relation strategy is that it should be aligned with that of the overall corporate strategy or the business strategy. It has been observed that the key strategy elements for BP include advertising, branding, quality, new product development and strategy. Therefore, the public relation strategy that is to be enacted by the company should include measures that would ultimately be beneficial to such strategy. Another important aspect that should be kept in mind while creating the public relation strategy of any company is that of SOSTAC (that stands for situational analysis, objectives, strategy, tactics, action and control). It is a comprehensive consideration which includes the entire vital phenomenon that is crucial to devise a strategy. The public relation person should be able to collaborate various undertaken strategies. He should take appropriate measures so that the aims of advertisings and the branding of BP can reach the target group of customers. The public relation person should be very clear to the stake holders at large about the measures taken to develop and retain the quality standards of the products and processes. Also, the public relation should be succinct but enough elaborate to promote the business strategies of the company. The public relations should be targeted towards the product engineering skills of the company and the cross functional coordination along with the marketing abilities. The public relation department should also made it very clear that though the company is aggressive in its domain yet it does not wither its quality to be aggressive and therefore the incentives are linked with the quality standards. The public relation strategy of the company should essentially focus on the extensive research and development that the company undertakes in the fields of various alternative energies like that of solar power, wind power, bio fuels and carbon capture, etc. The three basic principles of BP namely that of safety, people and performance should be the focus of the public relation strategy of the company. The public relation strategy can take the forms of proactive or the reactive. The proactive strategy is that in which measures are taken on anticipation of the changes where as in case of reactive strategies, it is based on the reactions on happening of certain events. For a brand like BP, it is prudent to have proactive public relation strategies. The proactive public relation strategy includes organizational performance (the performance of the group), audience participation (involvement of the customers and the stakeholders), special events and alliances (mergers and acquisitions), sponsorships (in terms of social responsibilities) and activism (with social rights and as the industry leader) as the action strategies. The communication strategy includes publicity of newsworthy information through transparent communication (Smith, 2004). The company can initiate sponsorships of corporate events and can take up certain social responsibilities which should be highlighted in the public relation strategy. The communication process should be effective and the communicator should use well chosen words to highlight the deeds and planning of the company which should be in line with the mission and vision of the company. The public relation department or the public relation person can use various measures to implement the strategy undertaken. It can target the public on the various divisions like demography or income segment or location. Similarly, to attain higher objectives, the company can use the public strategy of lobbying (which implies creating focus groups within the influential persons). Among other public relation strategies, the company uses the forms of blogs, publicity stunts, advertisements and talk shows. It can also take the form of advertisements or advertorials. The public relation strategy can take the following measures to address the strategic challenges: Market share – The company can always try and create positive aura for the company. It can introduce newer ventures time and again so that the market share is boosted. The company should innovate and emphasize on research and development for the purpose. Employee development – No doubt, the company is involved in high risk business and therefore it should safe procedures and processes involved. BP should have world standard wages and salary for the hard working employees and should also provide sufficient training and development opportunities. International cohesion – The company should have public relation strategy involved towards international cohesion and operations. The public relation measures should be able to promote the positive image of the company. Eco friendly policies and awareness of the local communities – The company have dedicated eco friendly projects and that should have significant importance in its public relations. The public relation should also involve creating awareness among the local communities. Marketing, refinement and cost reduction – The public relation should try to provide extra advantage to the company and should help towards the marketing initiatives. The public relation strategy should also provide insights about the cost reduction and the quality maintained in the refining processes. Communication Public relation is a continuous process. There cannot be any specific deadline to implement certain strategies. If the company stop innovating newer methods of reaching and addressing to the public, it is all certain that I will fade away from the mind of the focus groups. Therefore, the company should look forward to implement public relation measures on continuous basis and it should start the process immediately. The company should try and communicate with the various stake-holding groups through the most appropriate techniques. The employees of the company can be communicated through dedicated IT architecture of intranet. The customers and the consumers should be informed by the means of advertisements and advertorials in the newspapers and online means like blogs. The local authorities and the local communities can be made aware of the group strategies through industry trade press and tender opportunities. The competitors and niche focus groups can be reached by the means of newsletters and press releases. Conclusion The public relation strategy is one of the most vital components in the hand of the companies especially like a large conglomerate that of BP, to fight the ever increasing competition. The companies take innovative measures to reach to the target group of customers in the best possible way and in that regard public relation is the connecting point in between the general public and the company. The public relation strategy is effective and efficient only when it is aligned with the business strategy. It should not be the case that the public relation strategy and the organizational objective are headed towards two different directions. References BP, 2008. Annual Review 2008. Smith, R. D. Strategic planning for public relations. Routledge, 2004. Polonsky, M. J. Stakeholder thinking in marketing. Emerald Group Publishing, 2005. Oliver, S. Public Relation Strategy. Kogan Page Publishers, 2007. Bibliography BP, No Date. Our History, About BP. [Online] Available at: http://www.bp.com/extendedsectiongenericarticle.do?categoryId=10&contentId=7036819 [Accessed 08 January 2010]. Grant, R. M. Contemporary Strategy Analysis. Wiley-Blackwell, 2005. Read More