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Ch. 17 Notes - Chapter 17 Corporations I Todays Modern...

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Chapter 17: Corporations I. Today’s Modern Corporation With the scandals that have occurred in the recent years, the public is distrustful of the power, influence, and credibility of giant corporations and businesses in general One study showed that fewer than 3 in 10 Americans (27%) feel that most large U.S. corporations are trustworthy Business leaders and stockbrokers have joined used car dealers in the category of “least trusted” individuals in American society Public perceptions of greed and corporate misdeeds are reinforced by stories in the media A. The Role of Public Relations 1. The extensive negative publicity about corporations has made it imperative that companies make a special effort to regain public credibility and trust 2. Corporate social responsibility (CSR) is now high on executives and PR staffs’ priority lists to improve the reputation and citizenship of their employees 3. A coalition of 19 U.S. based organizations for rebuilding public trust in business, (including the Council of PR Firms, the Internal Business Communicators, and the National Investor Relations Institute) published a white paper in 2003 called Restoring Trust in Business: Models for Action , which asked American businesses and their leaders to act in 3 main areas: a) Adopt ethical principles b) Pursue transparency and disclosure c) Make trust a fundamental precept of corporate governance 4. A number of strategies and tactics can be used to implement CSR, which involves corporate performance as well as effective communications a) One of the more important one is the role of the PR executive, who serves as a link between the chief executive and the realities of the marketplace and the organization 5. Corporations seek a better reputation for a variety of reasons a) First, responsible business practices ward off increased government
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regulation b) Second, there is the matter of employee morale; companies with good policies and a good reputation tend to have less employee turnover 6. 4 key factors that must be considered at all times when making a decision (outlined by GE): a) Political —How do government regulations and other pressures affect the decision? b) Technological —do we have the engineering knowledge to accomplish the goal? c) Social —what is our responsibility to society? d) Economic —will we make a profit? II. Media Relations Reporting by the media is a major source of public information and perceptions about the business world and individual companies, but in recent years the news hasn’t been all that favorable Major financial scandals and other negative coverage can cause a corporation’s reputation to plummet As a result, corporate executives are somewhat defensive about how journalists cover business, because they feel that too much emphasis has been given to corporate misdeeds o One study of executives found that half of them believed a CEO must view the media as an enemy and another 60% believed that controversy
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