COMM 626 Best Practices Strategic Communications-Chapter 1 Summary in preparation for Oral

Presentation Liz Horgan 2010

Chapter 1 sets up the basic premises of the current business environment and offers explanations for
the changes in organizational structure, with a focus on the elevated role of the corporate
communications function.

A brief historical explanation

Prior to Web 2.0 (circa 2000/2001), organizations used “push” communications, one-way dissemination
of information to segmented and target audiences. Stakeholders used to be mere observers;
communications were static, typically in monologue.

Argenti (2010) details the following changes as creating a ‘perfect storm’ which gave power to the
people and resulted in massive change to the way individuals and organizations connect:

 Individual skepticism – due to mistrust of corporations brought on by exposure of numerous

scandals, 9/11 and very visible financial market/economic problems
 Dot com funding/bubble burst with associated Web capability increase
 Growth of Web users (from 16 million in 1996 to 2 billion 10 years later in 2006)
 Fragmentation of Media which changed information gathering and the dynamics of intelligence
(from remote experts to collective knowledge)

These forces had the effect of shifting power away from organizations and towards stakeholders.

So what are we facing today?

Simply put, stakeholder empowerment. The vast number of people using the Internet, combined with
new platforms (blogs, social networks, wikis, search engines, video-sharing platforms, corporate
websites, online news and word-of-mouth marketing), have created a collaborative environment that
“facilitates the creation and exchange of user-generated content”.

Because of technology, communication has been transformed; it is participatory, dynamic, and

conversational. Web 2.0 facilitates the creation and exchange of user-generated content. Access to
information and the power to influence has gone from the few to the many (democratization).
Stakeholders are empowered, examples range from citizen journalists breaking news with home video
footage of the tsunami to an individual consumer complaint about Starbucks going viral.

The rise of stakeholder influence has necessitated changes in the way organizations operate and are
structured. Innovation has become the crux of new business models. There is a new interest in
intangibles (like R & D, internal/external communications) and a shift to a more collaborative business
model.

The role of corporate communications has shifted. It now plays a key role in business strategy and
development. With the ‘pull’ aspect of Web 2.0, issues of organizational reputation and the widespread
acknowledgement of positioning an organization (clearly defining a company’s mission and brand
identity) require new approaches. Stakeholders have increased their impact and visibility, employee
voices once shushed are now visible and organizations find they are now required to listen. Access to
easier and broader collaboration globally and between previously untapped sources (like suppliers,
investment analysts) – all affect changes in how businesses are run. Communications roles and HR now
have increased in importance and have been elevated structurally within organizations.

Where do we go from here?

The authors suggest that there are strategies and actions that organizations can and should make use of
to take back some of the control over messaging that at this point has skewed to the
individual/stakeholder. The vulnerabilities of reputation, sales, even the survival of an organization rests
in large part with communications. The rest of the book will look at this new world and highlight digital
corporate communications strategies.