TOPIC 2: MANAGING PUBLIC ISSUES

Objectives

1. Evaluate public issues and their significance to the modern corporation

2. Describe the ways business utilizes its boundaries

Managing Public Issues

Every business organization faces many public issues-matters of common concern to the firm and its
stakeholders. The emergenceof new public issues presents both a risk and opportunity for companies.
Conpanies may develop and operate various departments to engage and learn from stakeholders. Senior
executives often proactively manage public issues through these departments or a centralized public
affairs office. Public affairs managers have many functions invclidign environmental scanning and issue
management. Because of the importace of public issues, many firms ,have moved to inegrate public
affairs activities tightly with strategic management at the highest level of the firm.

Public Issue is an issue that is of mutual concern to an organization and one or more of the organizations
stakeholders. Stakeholder expectations is a mixture of people’s opinions, attitudes and beliefs about
what constitutes reasonable business behavior.

Public Issues: Performance Expectations Gap

-Discrepancy between what stakeholders ecpect and what organization is actually doing

-Important to identify emergent expectations as early as possible

Doing so can gain the company competitive advantage

-Failure to understand stakeholder concerns and to respond appropriately. This will cause the
performance-expectations gap to grow. The larger the gap, the greater the risk of stakeholder backlash
or missing a major business opportunity.

Boundary Spanning Departments

Tose departments within an organization that reach across the organizations boundary line to interact
with the groups and people in society. Buiding positive and mutually beneficial relationships that span
organizationsal boundaries is a growing part of manager’s role. The list of the corporation’s market and
non-market stakeholder, alongside the corporation departments that typically have responsibility for
engaging with them are the following:

Stakeholders-----Departments

1. Stockholders-Shareholder Relations, Investor Relations

2. Customers-cCustomer Relations
 3. Community-Community Relations, Corporate Citizenship
4. General Public, Activitis, NGOs- Public Affairs, External Affairs, Corporate Affairs, Corporate
Relations and Corporate Citizenship
5. Media- Public Relations, Media Relations, Corporate Communications
6. Environment- Environ,emt, Heathy and Safety
7. Employees- Human Resource, Labor Relations
8. Government-Public Affairs, Governmetn Affairs, Government Relatiosn

Public Affairs Management

-Refers to the management of a company’s external relations, especially its relations with stakeholders
such as government and regulatory agencies, customers, investors and communities. Sometimes called
corporate affairs, external affairs or government relations.

Growth in Public Affairs departments attributed to

1. External forces such as loss of public trust institutions, globaliation or world markets and rise of
the interne
2. Internal forces such as better communication within organizations more experience with
significant change and complexity and growing focus on the interplay between the organization
its environment and its strategies.

The following are the theme for common activities of an organization’s need to relate to its stakeholders

1. Stare government relations

2. Political action committee
3. Issues management
4. Local Government relations
5. Business/trade association oversight
6. Direct corporate political contributions
7. Grassroots/grasstops
8. Coalitions
9. Charitable contributions/foundation
10. Community relations
11. Public interest group relations
12. Crisis management
13. Corporate communication/PR
14. Employee communications
15. Regulatory affairs
16. International public affairs
17. Media relations
18. Corporate social responsibility
19. Employee volunteer programs
20. Internet administration
 21. Educational relations
22. Environmental affairs
23. Advertising
24. Consumer affairs
25. Institutional investor relations
26. Stockholder relations
27. Other

Many companies today have a “Public Affairs Plan”

The Head of Public Affairs is the most often a Senior Manager/Executive or Vice President who also
serves on the Company’s Senior Management Team.

It is of importance that management of “socio-political” issues be at or near the highest levels in the
organization and be linked to strategy.

The most effective tactics to socio-political issues are the following:

-Increase transparency about the risk of products or processes.

-Developing and implementing policies on ethics or corporate responsibility issues (e.g. human rights,
environment)
-Media and public relations
-Engaging stakeholders (e.g. nongovernmental organizations)
-Improving compliance with laws and regulations.
-Using industry coalitions to develop joint responses to these issues.
-Lobbying of regulations and government
-Speeches and other public actions taken by the CEO
-Changing product lines and processes
-Publication of sustainability or corporate-citizenship reports
-Advertising and marketing