Stakeholders or Publics?

The job of a PR practitioner is to facilitate the relationship between an organisation and its publics...or is it stakeholders?!…or maybe both…let me think…!

The distinction between these two terms requires further explanation. I remember in the first essay I wrote for my masters degree, I used both terms interchangeably, believing that the meaning was equal. Was it because I hadn’t done enough reading on the topic or because it is difficult to distinguish the difference?

According to Freeman (1984) a stakeholder is someone who has an interest or is affected by the organisation. The stakeholders of an organisation would include its customers, shareholders, employees, suppliers, media, local community and national government. The number of stakeholders that each organisation has, can vary; however not all of these groups or individuals are active towards the organisation, despite the fact that they seem to hold a stake on it. Grunig and Hunt (1984) defined publics as these individuals or groups that eventually will become active towards an organisation when a problem or issue comes up. That means that each stakeholder can be a potential public. This could happen for example when a company’s employees organise a protest against the organisation at the loss of their jobs. Immediately they turn from a group of stakeholders to being a public.

A PR practitioner’s job is to scan and categorise the stakeholder groups of the organisation, according to their power, needs, expectations and influence. There are many ways to segment the organisations’ stakeholders  and publics; it can be done by geographic, demographic,  psychographic orientation or by group membership, overt and covert power, or even according to their role in the decision making.

The Power-Interest Matrix can help categorise stakeholders according to how interested they are in the organisation or how influential they can be on it. This model is used to plan the engagement strategies based on the position that these groups hold in the matrix. It is possible that from time to time some groups might need to be repositioned from one segment to another depending on the situation, meaning interest or power change. Based for example on Grunig and Hunt’s (1984)  theory about stakeholders and publics as mentioned above, it is necessary when an issue occurs and a stakeholders’ group turns into a public, to reposition them within the power/interest matrix.

Some of the stakeholders might belong to more than one groups at the same time. The challenging task for a PR practitioner is to identify in advance the conflicts that may occur between the different stakeholder groups, within an environment that is constantly changing and coordinate public relations activity in such way to prevent these conflicts.

Communicating during a corporate crisis

There is no recipe that can guarantee success when a company faces a crisis situation; however there are some key elements that can really help a corporation turn crises into an opportunity. It is important initially to define the problem (awareness) and take into consideration all stakeholders. A company should be prepared to deal with the worst cases scenario, centralize the information flow and communicate effectively.

Standing against the media during crisis can be a big misstep; the battle will be lost. Media need a ‘cause and effect’ story to which their audience will feel related and a corporate crisis is always newsworthy. Being combative at time of crisis can really destroy corporate reputation. Any irrational response or wrong statement, when loosing control, can give media a good story, which most probably will have a negative impact on the brand. The way a company chooses to communicate with the media might determine the outcome of a crisis. It is necessary to select a spokesperson to represent the brand with confidence, showing true concern about the situation that has occurred and consideration towards the people affected. Since the beginning of the crisis the company should send clear messages to all of  its stakeholders, demonstrate competence and maintain control of the situation when talking to the media.
Evidently, good communication skills during crisis can support a company's reputation, whereas poor communication or complete lack of it can damage the company's business.

This is the proposed 5Cs model that is being introduced in Tench R. and Yeomans L.’s book ‘Exploring Public Relations’ (2006, 2nd edition). This model is based on the experience of senior crisis managers, who believe that it can be effective during corporate crisis.