Corporate Communication for Conflict Resolution and Improving Performance - Essay Example

Corporate Communication As Tool for Conflict Resolution And Improving Performance Corporate Communication Corporate communication is a strategy designed to give a desirable image to an organization in relation to its shareholders, investors, employees, customers, consumers and members of the community in which the organization operates (Cornelissen, et al., 2006). In the past, this activity was confined within the purview of public relations, intended mainly to polish up the image of the organization, such that it was of little consequence to the overall functioning of the corporation. Because of social turmoil, political reforms, public skepticism and activism, the 1990s saw the start of the evolution of public relations into organizational communication - a multi-discipline managerial function that is tasked not only with media relations and advertising, which were its old duties, but also with government relations, employee communications, community relations, investor relations, corporate design and management of issues (Ibid). Under this new configuration, corporate communication is defined as "an instrument of management by means of which all consciously used forms of internal and external communication are harmonized as effectively and efficiently as possible to create a favorable basis for relationships with groups upon which the company is dependent (Van Riel, 1995)." This reflects a growing recognition by top management and corporate boardroom that the ability to succeed and rise above the competition depends upon the firm's capability to communicate effectively with its stakeholders, thus making corporate communication an absolute and integral part of top management functions. In line with this thinking, communication managers and departments are now assigned such loftier titles as corporate communications, public affairs or corporate affairs (Fombrum, 1996). It also gave rise to a new corporate communication vocabulary, which consists of words like stakeholders, identity and reputation, among others. Moreover, the work of corporate communication has widened in scope to take place at three dimensions: corporate, market and operational levels. This corporate work involves communicating the organization's mission and vision to its shareholders, employees, customers, etc., while the market-oriented activity explores and implement ways by which the company can compete best in a given market. At the operational level, the communication group is left to manage its own resources, processes and people, a function used to be done on its behalf by the finance department, the engineering section and the human resource department. Relationship to Management How corporate communication has wormed its way into the top rung of the corporate ladder may be seen at Siemens, whose productivity, profitability and corporate image continue to be the envy of its competitors. At Siemens, communication managers oversee a wide range of activities related to management and decision-making, including analysis and research, formulation of communication objectives for the entire organization, and counseling of senior management. The company maintains a corporate communication department that handles advertising, internal communication and media relations. In addition, there is a central corporate messages section that supervises the senior communication professionals responsible for developing and protecting the overall corporate image of Siemens, as well as copywriters for the speeches of senior managers. Such consolidation of communication activities in one or two departments is now commonplace in progressive companies, with the communication practitioners having the ear of CEOs and senior executive teams, especially on stakeholder and reputation issues (Grunig & Grunig, 1998). The same importance is given to corporate communication by Philips, which keeps a large corporate communication department at its head office in Amsterdam that counsels the CEO and senior managers on stakeholder and corporate branding matter. Philips has positioned corporate communication as a professional function with increased visibility in the company, resulting in added value to the firm (Kitchen & Schultz, 1999). However, despite the increasing value of organizational communication to companies, the corporate world is yet to see the day when communication professionals actually occupy a seat on the management team for direct involvement in decision-making. The reason is that most of the communication experts do not possess the necessary skills and training in financial management, strategy making and use of communication in organizational development and change. In effect, they fall short of the requirements and expectations of senior managers for providing worthy inputs in corporation decisions (Cornelissen, et al., 2006). Communication Theories & the Workplace Corporate communication today goes by the corporate strategy and stakeholder theories. By the first theory, the corporate strategy is interwoven with communication processes that express and differentiate the company in relation to the stakeholder groups in its environment, and which impact and lead to a viable image and reputation for the organization. The second theory specifies the different stakeholder groups that the firm can depend upon, the nature of their stakes and the appropriate strategies for the firm to establish and maintain a working relationship with these groups (Cornelissen, et al., 2006). There are three models of corporate communication involving people and processes in the workplace: Rational - in this classical view, the organization is seen as a rational and technical process that exhibits characteristics like formalized rules and regulations, specialized members' roles, hierarchies, job descriptions, rationality and predictability. In other words, communication looks at the organization as a machine. Dissipative - this more modern model disputes the human relations and stable systems theories, arguing that the business environment is so unpredictable that the organization is prone to disorder, which in turn presents an opportunity for the organization to re-invent its functions and values. Here, the organization is part of nature that can dissipate. Responsible dialogue - this post-modern approach focuses on human beings such that it seeks to build a stable and flexible relationship with the community surrounding the organization based on mutual understanding and trust. (Juholin, 20006). In terms of effectiveness, corporate communication is given a good chance of success if its programs and practices reach what Luss & Nyce (2004) call the strategic, behavioral and foundation tiers. The strategic requirement is met if the communication program is carefully designed to respond to change and promote conscious improvement in business operations. As for the behavioral goal, it is reached when communication aims to change attitudes and give proper motivation for both management and employees to work together in achieving the goals set by the organization. With the foundation tier, a strong sense of employee awareness is built as the foundation of the communication program, which can be done by offering rewards and incentives, keeping posted on employee attitudes and leveraging technology (Ibid). Organizational communication when effective educes better employee performance because of these reasons: 1) employees feel connected to business and understand how their actions can support it; 2) even new employees feel an attachment to the company's culture; 3) communication quickly connects employees to any new business challenge, resulting in faster adjustment and response; 4) when there is a need for organizational change, employees get the right message from management; 5) a foundation of formal communication structure and processes is developed; and 6) there is continuous improvement, integration and alignment of business strategy (Luss & Nyce, 2004). This can be gleaned from the Return-on-Investment Survey conducted by the Watson Wyatt Communication in 2003 involving 267 communication and human resource development executives in the US. Of the firms surveyed, the average yearly turnover was $1.1 billion, and the average employee size was 6,000 with 200 part-time workers. The survey showed that companies with the highest levels of effectiveness in corporate communication were able to generate the highest levels of surplus value for their organizations to earn a premium in the marketplace. Between 1998 and 2002, these firms posted a 26 percent total return to shareholders, against only 15 percent by the firms with the least effective communication. This meant that a $100 share of stock in the group with effective communication had appreciated to at least $126 in five years, while the stock value of $100 in the less effective group had depreciated to $85 in the same period. In sum, the shareholder ROI for companies with effective communication was nearly 50 percent higher. Organizational Theory & Conflict Resolution Conflict is part of organizational life (Pfeffer, 1988), which becomes even more pronounced in highly politicized and hierarchical organizations. One view of organizational structure looks at it as the outcome of a political contest for control within the organization, which at the same time provides the participants with further advantages in the political struggles because of their structural positions (Inderst, et al., 2002). Once people of different capabilities and estimation of their self-worth come together, they invariably form a political organization. According to organizational theory, each individual and group in an organization is expected to play a specific role, like organs in the human body, and that all institutions, laws and traditions in a society are designed to support those in power or groups perceived as superior to others. Consequently, conflict arises when any of that individual or group breaks out of its specific role and aspire for a higher position or a greater share of the organization's resources (Rajan & Zingales, 2000). Studies of resource allocation in organizations show that such apportionment is determined by power and conflict. As for hierarchical organizations being a breeding ground of conflict, it has been shown that small stand-alone firms with a single hierarchy seldom experience organizational conflicts (Pfeffer, 1988). Conflict within an organization is thought of as unpleasant, counterproductive and time-consuming. But it need not be destructive if the energy expended on it is directed towards problem-solving and organizational improvement. Instead of viewing it as a destructive force, it is seen as a factor to stimulate members in increasing their knowledge, skills and contribution to organizational innovation and productivity. To do this, all parties must understand the nature of conflict in the workplace (Bacal Online). The more modern approach to organizational conflict puts a premium on clarity, responsiveness and adaptability as the keys to organizational success, which can only be done by effective communication. Modes of Conflict Resolution Organizational conflicts may be resolved by mediation, negotiation, adjudication or arbitration. Whatever the process, it is done through five 5 basic modes of conflict resolution, which are: 1) Competing - this is the traditional adversarial method of resolving conflicts, which brings the dispute to the appropriate courts for arbitration. 2) Collaborating - the classic "win-win" situation, in which both parties agree to what each other wants although not in the form originally demanded. 3) Compromising - this is the most common mode of conflict resolution wherein each party gives up a little of what the other wants, and the latter gets part of what the former wants. 4) Accommodating - this calls for a high sense of cooperation because one party sacrifices his interests for the interest of the other party. 5) Avoiding - instead of meeting the conflict head-on, the parties go about their business as if no differences exist such that the dispute continues to fester within the organization. (Fox & Taylor, 2003) Of the five modes of conflict resolution, collaboration and accommodation have been found to be the most effective because the outcome is often longer lasting and the conflict leaves no scar at all on the organization. In fact, it can even make the organization stronger and more profitable. A good example is the conflict between a reputable grocer and a new-product supplier over the latter's request that his goods be displayed prominently at the store shelves of the former. This could affect sales because that supplier's goods don't sell as fast as those being given advantageous positioning at the store. To resolve the conflict, the supplier offers lower prices, believing that exposure of his goods in a well-known store is worth the sacrifice. The grocer naturally accommodates the supplier's request since he pays less for the goods while giving his customers more product choices and well-stocked shelves. The avoidance and competition modes, on the other hand, have the potentials to become the most destructive to an organization. Avoidance is in fact one of the biggest contributors to the growth of destructive conflicts in the workplace (Bacal Online). When you sweep conflict under the rug, you have people giving up on addressing or resolving the problem and they spend more time and energy protecting their own interests than working for a common goal. Meanwhile, the conflict simmers on until it eventually destroys both people and organization (Ibid). A strong sense of competition, on the other hand, will bring conflict resolution nowhere if the two parties involved have a shared history and both will be ruined if the conflict goes unresolved. In this case, not one of the parties is expected to give in (Fox & Taylor, 2003). Rather than try to eliminate conflict or suppress its symptoms, the best way is to manage the conflict so that it enhances instead of destroys people and organizations. This can be done by cooperative communication (Bacal Online). Conclusion To recapitulate, an effective corporate communication program holds promise as a tool not only for resolving conflicts that commonly occur in large, multi-layer organizations and for boosting a corporate image but also for improving the bottom line. The better you communicate, according to the study by Luss & Nyce (2004), the better your return on investment, such that organizations that communicate effectively outpace the other organization that fail to do so. The same benefit has been derived by companies that elevated corporate communication functions to a higher level in their organizational setup, even giving communication practitioners a greater say on some vital aspects of corporate decision-making. Bibliography Bacal, R. "Organizational Conflict - The Good, the Bad and the Ugly." Availzble online at: http://conflict911.com/conflictarticles/orgconflict.htm Cornelissen, J., Bekkum, T. & Ruler, B. (2006). "Corporate Communications: A Practice-Based Theoretical Conceptualization." Corporate Reputation Review, vol. 9, no. 2, Palgrave MacMilland Ltd. Fombrum, C. (1996). "Reputation: Realizing Value from the Corporate Image." Harvard Business School Press, Cambridge. Fox, G. & Taylor, D. (2003). "Conflict Management: Style Isn't Just for the Catwalks." In Training and Management, August 2003; Occupational Psychology Services Ltd., Kent, UK. Inderst, R., Muller, H. & Warneryd, K. (2002). "Distributional Conflict in Organization." February 2002, Stockholm School of Economics, Sweden. Juholin, E. (2006). "Searching Paradigms for Communication of Work Organizations." Working paper 7-2006, Department of Communication, University of Hensinki, Finland. Kitchen, O. & Schultz, D. (1999). 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