Peer Review

To those who have to review my blog for the peer review....if you would like, you can post your comment under this post so that they are all together. Thanks DB :)

Investor Relations

Investor Relations (IR)

According to the National Investor Relations Institute (NIRI), investor relations is defined as “a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community and other constituencies, which ultimately contributes to a company’s securities achieving fair valuation.” When I think investor, I think of someone devoting capital for self-gain of return. A company strategically creates objectives and a “vision” that include “making money” but includes core purpose and values. Once companies thought corporate secrecy was for its own protection. Investors wanted transparency of their investments. Public companies had to disclose company information to the U.S. Securities and Exchange Commission (SEC) with the passing of federal securities acts in the 1930’s. Through the years, SEC oversaw many changes in the regulating companies with institutional investors. Investors today “demand more communications, more transparency and more access to companies.” Companies must have IR programs to stay completive for investors’ capital.

Framework for Investor Relations Program:

IR program needs to have components of communication, strong financial understandings, and guidance on future earnings. First, developing a framework to understand the IR functions. The IR needs to understand the types of investors. Then, there are three key objectives companies need to focus.

Key Objectives of Investor Relations:

The first objective is Explains Company’s Vision, strategy, potential investors and conduit constituencies such as analysts and media. A good example is the Heinz

Company website is user friendly, and has direct links to information with clear titles. Heinz also uses wordage level acceptable to all ages; uses visuals and audio communication strategies; use updated technology. Their annual report uses graphics and colors for easy reading. Heinz use of appealing colorful graphic designs with use of their products is high tech. Heinz technology usage examples are use of MySpace, FaceBook and Webcasts. Furthermore, Heinz employs PowerPoint presentation links and offer access to archived presentations.

Heinz has a direct link for Investor Relations The vision is clearly stated in several places, including annual report and global websites. Heinz’s strategy is visibly stated as “international business growth and aggressive partnership development.” Their potential to investors has up to date information. Heinz offers direct links to the media, stock history and transparency of information to the conduit constituencies.

The second objective is Ensure that expectations of the company’s stock price are appropriate for its earning prospects, the industry outlook, and economy. An example used to explain this objective is the Bank of New York Mellon. Looking at Bank of New York Mellon’s website they offer current informative information. The use of financial data, charts and graphs are clearly appropriate for its earning prospects. The industry outlook is transparent. The Bank of New York and Mellon International recently merged and their website explains the merger and the affects of such a strategic merge. There are many links to current economy investment conditions in today’s market.

The third objective is Reduce stock price volatility. Any organization would want to reduce stock price volatility by means of the indirect communication channels. Many companies publish their rating information from outside analysts from such companies as Standard & Poor's , Moody's Investors Service, or Fitch Corporate.

Framework: Company’s Investor Relations Strategy:

Types of Investors are “investors” and “intermediaries.” The “investors” consists of individual investors and institutional investors. Once again, using Heinz

and Bank of New York Mellon’s websites as examples, the current stockholders have an IR link for updated information. Also, potential investors and institutional investors have direct IR links, which provides information in various formats and contact information. The “intermediaries” are composed of analysts, media and rating agencies. Institutional analysts usually publish a list of rating agencies that analyses the company. Rating analysts will publish findings through the agencies. Companies normally provide direct links/ information in various formats for media and supply contact information strictly for media.

Conclusion:

In conclusion, investor relations is an important facet for public for-profit businesses. The strategy implementing the objectives is intertwined with a strong communication strategy. I believe communications is what makes any company successful. However, in writing this blog, I began to think about non-profit organizations and how would the investor relations component match into the strategy of such an organization.

Identity, Image and Reputation

Identity, Image, and Reputation:

When you see the Golden Arches of McDonald's, what do you think? The Golden Arches represent the identity of McDonald's. On the other hand, a small child, as one kind of constituent thinks “Happy Meal” or Ronald McDonald himself. Then, a health conscious adult, as another kind of constituent thinks one fast food restaurant to stay away from. Another kind of constituent, an entrepreneur might think a successful franchise opportunity.

Image:

A company’s image is a function of how constituencies perceive the company. As the example above, the three different constituents thought differently of McDonalds. Companies want a positive image.

Identity:

The company’s identity needs to stay consistent. A company can establish consistency with the use of their name, logo, motto, products, services, buildings, brands, symbols, uniforms, or self-presentations. Some local identities are IUP, Blairsville-Saltsburg High School’s mascot, the bobcat, and S&T Bank. Other known company’s identities are the “Golden Arches”, “Can’t Just Eat One”, Wal-Mart employees wear navy blue shirts with khaki pants as a uniform, FedEx and Nissan’s “Zoom Zoom”. Further in this Blog, I will address a successful method used by other organizations to manage their identity process.

Reputation:

When identity and image are aligned, a company has the foundation to build strong reputation. Over time a business’s objective is to build a positive reputation that the constituency will extend to others. If the image is powerfully negative and the identity is confusing, the reputation will be weak. In turn, the constituency would go elsewhere unless the company can turn them around.

Method to Manage the Identity Process:

According to Argenti, an organization should devise a program to analysis and be proactive with the management of the identity process. The following six steps a method to do so.

Step 1: Conduct an identity audit

Step 2: Set identity objectives

Step 3: Develop designs and names

Step 4: Develop prototypes

Step 5; Launch and communicate

Step 6: Implement the program

Muzak:

The case study in Argenti’s chapter four is a good example of this process. When Muzak did an identity audit, the results showed that they did not have cohesiveness within their brand and communications was completely fragmented through out. Plainly, Muzak was not consistent with the company’s identity, branding and logo. Muzak was well known for their development of the “elevator music,” but the various segments of Muzak individually began to change the identity on their own; leaving Muzak with a faded identity. Muzak needed to change their vision, select a new brand and make the representation be an accurate reflection of Muzak’s reality not the company’s history. They accomplished this by the created “elegant simplicity” logo of the circled M. Also, they began portraying the business as an “art” changing the historical science concept of business. Finally, they choose to portray the emotional and creative power of music to their constituency.

Muzak used advertising techniques, webcasts, video news releases and satellite links to reveal the change. Then, the design and roll out of the new “capabilities book” brochure provided consistency among the company and its franchises. The constituency responded to this and other print media such as the specific segment brochures, along with simple teaser postcards in a very positive way. Sales representatives began to use new multi software sales presentations. Muzak began to illustrate and building a new reputation as the business’s services and products as an art instead of the lengthy reputation that the business was of science. Muzak moved their headquarters to the east coast into the new “dynamic energy and innovative” designed building; it was easier to instill the new identity system.

Overall, Muzak changing its identity positively revitalized the slumping business. Several short-term benefits occurred at Muzak with the facilitating the company’s overall strategy in the identity system. One, the subtle, elegant logo will offer consistency of the company to its constituency. Two, the franchisees and salespeople, who were against the new marketing tool, the brochures, quickly found that the uniformity of the brochures had a positive impact. Three, the change provides a visual foundation for Muzak to build the future.

In the long-term, the change will help Muzak continue to be consistent and be aligned in their image, identity and reputation with the reality of the business. A strong reputation will mature with time where employees, consumers and the general public will express pride and commitment to the business. If Muzak is describing themselves as “expertise” in “audio imaging,” and as “audio architects” to skillfully capture the mood and energy of another’s company visual identity through imagery then changing their own identity to be consistent throughout their identity system can only be helpful both short-term and long-term.

Personally, I can only think of one short-term and long-term harmful benefit combined that may occur at Muzak. The decision to not change the name may always associate the company to the “elevator music.” On the other hand, this action may just keep a bit of history alive, which is not a bad thing.

Muzak is describing themselves as “expertise” in “audio imaging,” and as “audio architects” to skillfully capture the mood and energy of another’s company visual identity through imagery then changing their identity must be consistent throughout their company; whereas the stakeholders, employees and franchisees must use the same branding to compete in the global business environment. And like, their consumers need an identity in which they can identify Muzak as the perception that is align with truly what Muzak business is all about. The franchisees are an extension of the parent company. Muzak definitely should educate the franchisees on the new identity system. Muzak may also create and implement a standards manual to assist the management of the identity.

Conclusion:

Image, identity and reputation is irreplaceable when it comes to business, especially in the forceful aggressive global markets and the changing environment of business, corporate philanthropy and social responsibly visibility. The Muzak case study is a good example of what a company can do using a process for building or rebuilding a company’s image, identity and reputation.

I think there was no need to place any links in this self explanatory Blog.

Corporate Advertising

Come back to read my blog about Corporate Advertising on November 30th.

Communication Theories

Communication Theories:
Communication theory traceable evolution began with Aristotle , and rhetoric. He presents a communication model with three main components- speaker, message and listener. Today, any theory appears to have at least all three components. Communication is an interactive process, which is more complex than speaker, message and listener. In today’s ever changing environment, communication must be circular rather than linear, whereas communication is an ongoing process. Theorists started with the linear concept and evolved communication models to become circular.
1900’s Theorists Developments:
Throughout the 1900’s several theorists created communication theories (models). Beginning in 1949’s Five theorist’s models of interest emerged and are as follows: Laswell’s Model, Shannon & Weaver’s Model, Schramm’s Models, Westley-Maclean Model, and Kincaids’ Convergence Model.
Laswell’s Model - 1948: Laswell’s model describes communication as “who says what to whom in what channel and with what effect”. His model focused on the verbal communications. Information is communicated with the purpose to persuade, inform, or to entertain. Also, it introduces the concept of medium of how the message is delivered to the listener (receiver). Communication is straight forward directly to the effect, a linear model. A tyrannical communicator would be an illustration of someone still practicing Laswell’s model.

who → what → channel → whom = EFFECT
(speaker) (message) (medium) ( audience/listener)

Shannon & Weaver’s Model - 1949: One year after Laswell’s model, Shannon & Weaver went more in-depth. They changed the speaker to an “information source” that transmits the message by channel, which could be effected by a “noise source” (interference), that the receiver receives which concludes the message has reach its destination. Basically, Shannon & Weaver introduced a vertical aspect of the “Noise Source” to their linear model.

message signal received signal message
↓ ↓ ↓ ↓
Information → Transmitter → Channel → Receiver → Destination
Source ↑
Noise Source

Further reading of interest would be “Brief Excerpts from Warren Weaver’s Introduction to: Claude Shannon’s The Mathematical Theory of Communication” http://darkwing.uoregon.edu/~felsing/virtual_asia/info.html

Schramm’s Models: Schramm developed three models, beginning in 1954 with Schramm’s First Model. This model discusses a "Source" and from the information "Source" there needs to be an "Encoder" for the information. From the "Encoder," there needs to be a "Signal" in which to send the communication. From there, the message needs to be decoded using a "Decoder." It is only after all of these steps that the message has reached its "Destination."

Schramm's Second Model shows overlapping circles or "Fields of Experience" between the "Source" and the "Destination" of the communication. Schramm's second model details the same elements as the first model. The only difference is that the "Signal" is an overlapping feature between the "Source" and the "Destination." An example of this model would be one-way communicated information whereas the receiver can relate the information to a field of their own experiences and open to the decoder’s own interpretation.

Schramm's Third Model includes the same elements as the first and second models. The difference in this model contains feedback from the recipient. Within this model, both the sender and receiver have opportunity to acknowledge if the correct meaning to the message is being sent and receive with the feedback. Schramm’s third model begins taking out the “assumptions” within communications.

More information about Laswell’s model, Shannon & Weaver’s model and Schramm’s models can be found in Robert Croft’s article: Communication Models

Westley-Maclean Model: This model focuses on “events” and “advocates” to convey the message. Then, the message flows through the “channel,” and finally to its “audience.” This is the most complex communication model to me, but I have seen this in action. Once, the president of an employer used this style of communication within the organization. Nobody knew what was being communicated and to whom. Communication was very confusing for approximately two years. It was interesting to see the changes occurring due to the mass confusion within communication.

Kincaids’ Convergence Model – 1979: Kincaids’ model was much more complex than any other communication theories developed in the past, but the communication is understood with his model. He develops “Psychological Reality(A),” “Physical Reality,” and “Psychological Reality (B) that influence the information being communicated. “Action” and “Collective Action” stem from the information being communicated. This leads to “Believing” and “Understanding,” which eventually would lead to “Mutual Agreement” and “Mutual Understanding.” All stages of this model direct to “Social Reality.” Communication can be simple or complex. This model is complex to visually study the diagram below. But this circular mode of communication is a simple model. Simply put, I have a message I want to convey to you. I begin with my own interpretation of the information. I send my interpreted message to you. You receive and interpreted the message in a way that you perceive the message. You respond with your decoded message to your understanding. I can believe the response or start the cycle again. This model causes communication an on going process.

Kincaid has continued his works internationally. If you are interested in learning more about his communication theory and the global application, I recommend the following book as a reference reading:

Kincaid, D. Lawrence, (1987). Communication theory: eastern and western perspectives.

San Diego, C: Academic Press.

In conclusion:
Many communication theories introduce other concepts which facilitate or hinder the communication process besides the five theorist mentioned here. Kincaid avows his theory the best. In my view, communication is reality! And communication has to be circular.