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Corporate communication and strategic management: history, operational

concept and integration

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DOI: 10.2991/insyma-18.2018.59

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 Advances in Social Science, Education and Humanities Research (ASSEHR), volume 186
15th International Symposium on Management (INSYMA 2018)

Corporate communication and strategic management: history,

operational concept and integration
Bahtiar Mohamad & Hassan Abu Bakar
Universiti Utara Malaysia, Sintok, Malaysia

ABSTRACT: There are divergent views within the literature as to what is meant by corporate communica-
tion. In this article, the authors discuss three main areas, which covered the history, the operational concepts
and last the integration of corporate communication with strategic management. Currently, international com-
panies are increasingly emphasizing their corporate communication in trying to project a favorable image and
reputation that in line with the company’s strategic management. Ongoing trends such as globalization a stra-
tegic corporate communication have accelerated the need to coordinate and harmonize companies’ disparate
global identities and images. This paper seeks to establish the rationale behind the strategic corporate com-
munication program, while looking at issues pertaining to it operational concept, and integration with the stra-
tegic management. The wide variety of literature relating to history, concept and integration of corporate
communication will be discuses, mainly from a strategic management perspective.
Keywords: corporate communication, strategic management, integration

1 INTRODUCTION For example, the issues measurement concepts of

corporate communication (Macnamara 2006) are
The literature on corporate communication dates still not well understood. In addition to that, issues
back to 1970’s (Yamauchi 2001). However, at that like the relationship between corporate communica-
time, corporate communication was known as corpo- tions and strategic management (Goodman 2000,
rate public relations and was the responsible of the Welch & Jackson 2007) are still very much unclear.
public relations department of the organization. Ear- This paper is a review of literature on the con-
lier writings on corporate communication were from cept, history and integration of corporate communi-
journalism, and it focused more on persuasive mes- cation with strategic management. It examines exis-
sages to create mutual understanding between organ- tent studies on the area of communication, strategic
izations and their respective stakeholders (Grunig & management, marketing, public relations and sociol-
Hunt 1984). A two way symmetrical model is wide- ogy. The paper begins with the discussion about dif-
ly practiced by organizations and corporate PR prac- ferent definitions and characteristics of the corporate
titioners more concerned with stakeholders’ feed- communication concept. Past studies on the history
back. For instance, topic studies included the role of and integration will then be reviewed.
corporate communication in media relations, crisis
communication, issues management, community re-
lations and public affairs. Subsequently, the research 2 HISTORY OF CORPORATE
on corporate communication expanded dramatically COMMUNICATION
in the early 21st century, and covered various issues
across multi disciplines including strategic manage- ‘Corporate’ originated from Latin corpus meaning to
ment, marketing, communication and investor rela- complete, entire or total entities of the organization,
tions (Argenti 2000). while ‘communication’ is from the word ‘communi-
As iterated earlier on, the concept of corporate care’. In Latin, the word means to impart, share, or
communication is still under developed and needs make common. Therefore, ‘corporate communica-
more attention (van Riel 1995, Varey 1997). There tion’ can be defined as a total communication of the
exist several unsolved issues in previous research. organization, and it integrates different messages of
Copyright © 2018, the Authors. Published by Atlantis Press. 240
This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
 Advances in Social Science, Education and Humanities Research (ASSEHR), volume 186

organizations under one banner (Christensen et al. business environment more rapidly and much more
2007). systematically.
Yamauchi (2001) believes the term ‘corporate Although, public relations scholars and practi-
communication’ came to the attention of the general tioners were continuously interested in the corporate
public more than 30 years ago when the US business communication, they failed to convince the senior
magazine Fortune held its first annual Corporate managers on the importance of their role in decision
Communication seminar in 1972. However, making (Wright 1997). This is largely due to the in-
throughout the 20th century, the field of corporate ability of many corporate public relations managers
communication has been developed in schools of to escalate beyond the level of the communication
communication and journalism and is categorized as technicians. This has led a lack of acceptance among
public relations or public affairs (van Riel 1995). In the corporate leaders on the role of public relations
the early years, corporate communication practition- as strategic counselors for the organization. This de-
ers worked more on tactical communications with velopment formed the necessity for business schools
the media to create a good image for organizations. to prepare their own professionals who understand
In the early 1970’s, the corporate world changed and and communicate business messages with other
demand from internal and external stakeholders of managers. In some extreme cases, few big compa-
companies became more sophisticated and complex. nies have even removed the top corporate public re-
The organizations required more than the simple in- lations positions, and appointed people from other
ternal public relations (PR) function supplemented fields as senior communication officers.
by the PR consultant firm. For example, public rela- Currently, many managers in multinational com-
tions practitioners faced great challenges to deal panies come from very traditional oriented back-
with a ‘new generation’ of stakeholders. Conse- grounds such as engineering, accounting, finance,
quently, the top management of many organizations production, sales or marketing (Argenti 1996). Their
started looking at communication as more than just communication skills depend on abilities that they
‘communication’ to the stakeholder. According to might have gained from tertiary education, school or
Argenti (1996) and Cornelissen (2008), this is the years of experience. These old-style managers wel-
commencement of the new corporate communica- comed a professional communicator to help and
tion practices and function. guide them to communicate better in their organiza-
Historically, people from business backgrounds tion. Consequently these situations made the field of
started to take over the role of corporate communica- corporate communication more important for the or-
tion because of the inability of the public relations ganizations (van Riel 1995).
practitioner to communicate the ‘business sub-
stances’ to the organization stakeholder. For exam-
ple, research by Wright (1997) indicates only 42 3 DEFINING CORPORATE COMMUNICATION
percents public relations practitioners possessed an
adequate knowledge of business. Realizing the im- In general, corporate communication is a manage-
portance of corporate communication in business, ment tool which surfaced in response to the increas-
many business schools began to focus on it, and ing concern on the complex communication
make it as a subset of management communication processes within corporate organizations (Argenti
(Argenti 1996). Many schools of communication ar- 1998). The complexity of organization growth is
gue that they are the appropriate incubator for the commonly synchronized and is increasingly impli-
development of theory and practice in the field of cated by technology advancement and modern orga-
corporate communication. However, the debate on nizational structure.
this matter continued over which field is best The definition of corporate communication has
equipped to handle corporate communication devel- been discussed by many scholars and can be seen
opment. Argenti (1996) firmly argued that business from different perspectives. Based on Cornelissen
schools are the most suitable places for the discipline (2008), Van Riel & Fombrum (2007), and Goodman
because the function of corporate communication in (2000), three salient characteristics of corporate
the organizations is the same as others such as mar- communication can be delineated as follows:
keting, finance, production and human resource Management instruments or tools: The concept of
management. Therefore, the existence of corporate management in corporate communication is salient
communication is vital for most organizations and to many organizations (van Riel 1995, Cornelissen
should be put under the business administration do- 2008). The management function can be seen in cor-
main. Furthermore, Argenti (1996) believed that porate communication in terms of planning, control-
corporate communication has evolved within the ling, organizing and coordinating the communica-

241
 Advances in Social Science, Education and Humanities Research (ASSEHR), volume 186

tion’s message to internal and external stakeholders 4 STRATEGIC MANAGEMENT PERSPECTIVE

of the organizations.
Internal and external communication: According As mentioned before, corporate communication is a
to Varey (1998), internal communication is the shar- vital instrument of the organization to gain a com-
ing of messages within the transformation process of petitive advantage in corporate setting. Organization
the enterprise, and it includes giving and taking or- can’t execute strategy to their stakeholder without
ders and directives, generation, dissemination and communication. Therefore, corporate communica-
interpretation of performance data and task instruc- tion is important tools and activities for disseminat-
tion. The external communication messages are ing corporate strategies for the companies (Fleisher
shared between members and representative of the 1998). As indicates by Forman & Argenti (2005),
environment in the form of promotional messages business communication scholar has become pro-
via mass communication media and inward in the gressively more interested in the involvement of
form of market information. The medium of com- corporate communication to an ability of the compa-
munication is dependent on who is the receiver ny to create and disseminate strategy. For example,
(stakeholder). Media or channel of communication Rindova & Fombrum (1999) had conclude the
used by organization to transfer organizational mes- linked between strategy and communication were es-
sages to stakeholder might vary: This may include: tablished the competitive advantage by creating de-
Internal mail, intranet, face to face, circular or bulle- sired outcomes through material resources and man-
tin. However, to attend to various numbers of exter- aging the communication. While, Botan (1997) has
nal stakeholder, mass communications instruments found the strategic communication campaign of the
such as electronic media (television and radio), print company can helps to build ethical relationships be-
media (newspaper and magazine) and new media tween the company and its key stakeholder. There-
(internet) are the most influential channels used to fore, corporate communication can be perceived as
persuade their stakeholders. an important competitive instrument to support the
Stakeholders or audiences: The receiver of the organization in its pursuit of strategic objectives and
communication’s message in the corporate organiza- goals.
tion is their stakeholders. In corporate communica- Moreover, Forman & Argenti (2005) also found
tion, stakeholders can be divided into two: Internal ‘the corporate communication function was tightly
or external stakeholders (van Riel 1995, Goodman connected to strategy implementation in some case.
2000, Cornelissen 2008). Employees and the top The elements of strategic can be found from the in-
management of the organization can be considered tegration of three form of communication. Firstly,
as internal stakeholders, while external stakeholders management communication related to both internal
may include media, nongovernmental organizations and external stakeholder; second, marketing com-
(NGO), government agencies, customers and com- munications in relation to advertising and selling;
petitors. and third, organizational communication such as in-
Taking into account the prevailing definitions and ternal media and public relations (Stainer & Stainer
important characteristics of corporate communica- 1997). The company can create competitive advan-
tion, this study defines corporate communication as tage by socializing its stakeholder to its own culture
a management of the organizational perception and use communication strategy to form long-term
(Schmidt 1995). The perception of audiences or relationships with the stakeholders in shaping the
stakeholder can be influenced from all internal and organization’s image and reputation (Rindova &
external information (message of communication) Fombrun 1999).
means and measures (Schmidt 1995, Cornelissen Previous literature identifies a link between the
2008). The collective message from both sources corporate communication function and stakeholder
(Haynes 1990) conveys an organization identity focussed strategy. Yamauchi (2001) identifies a
(Gray & Balmer 1998) through every form, manner close link between corporate communication and
and medium of communications to the respective corporate strategy; indeed Forman & Argenti (2005)
stakeholders. A stakeholder is defined as anyone assert using a corporate communication is a man-
who has a stake in the organization’s success. These agement strategy because it involves determining
include vendors, customers, employees and execu- which stakeholder is important, and what informa-
tive of the organization (Goodman 2000). tion they need. Yamauchi further argues that antic-
ipated responses to communication with stakehold-
ers inform management strategy. Similarly, Varey &
White (2000) advocate using a corporate communi-
cation to create a dialogue with stakeholder in order
to gain a better understanding of their interests.
242
 Advances in Social Science, Education and Humanities Research (ASSEHR), volume 186

It has been found that corporate communication is tools and activities for disseminating corporate strat-
theoretically associated with implementing strategy egies for the companies.
and building company’s reputation and brand (Fom-
brun 1996). Melewar & Karaosmanoglu (2006) indi-
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