George Westinghouse
-reported to have created the first corporate public relations department in 1889 for his project on alternating current (AC) electricity.

The importance of public relations in today's world
-public relations is seen by executives as a process of negotiation and compromise with a number of key publics.
-public relations is building relationships with strategic publics
-public relations executives will be required to be, "strategic communication managers rather than communication technicians," James Grunig, prof. of public relations at the Univ. of Maryland
-public relations helps save money by reducing costs of litigation, regulation, legislation, pressure campaign boycotts, or lost revenue from bad relationships
-public relations helps make money through relationship-building with donors, customers, shareholders and legislators

Organizational structure
-large, complex organizations tend to include public relations in the policy-making process due to factors that inlcude a highly competitve environment, sensitivity to policy issues and public attitudes and establishment of a solid corporate identity
-large, complex organizations tend to lend great authority and power to the public realtions department
-small, less complex organizations tend not to include public relations in their organization and public relations generally has little or no imput into the policy-making process
-small, less complex organizations tend to assign public relations technician roles to staff members, i.e. news letters and news releases

-perceptions and expectations of management also affect the role of public relations in an organization
-public relations may be seen as just a jounalistic and technical function
-public relations may be seen as a support function of the marketing department

-according to Julie O'neil of Texas Christian University, the infuence of public relations in an organization is based on four factors:
1. perception of value by top management
2. practitioners taking on the managerial role
3. reporting to the CEO
4. years of professional experience

Names of departments
-Most often the public relations department does not go by the name "public relations"
-In the largest corporations the department is generally known as "corporate communications" or "communications"
-this reflects the growing role of public relations and the integration of communications services in an organization

Organization of departments in public relations
-the head executive generally goes by one of three titles
1. Manager
2. Director
3. Vice President

-the department is usually divided into specialized sections that have a:
1. Coordinator or Manager
--these specialized sections may include media relations, investor relations, community relations, marketing communications, employee communications, etc.

-USC study found that Fortune 500 companies typically have 24 professionals in the corporate communications/public relations department with an average annual budget of $8.5 million

Expertise required in a department
--Strategic and Operational Management Knowledge
--Research Knowledge
--Negotiation Knowledge
--Persuasion Knowledge

Functions of a Corporate PR/Communications Department
-Media Relations
-Crisis Management
-Special Events
-Reputation Management
-Employee Communications
-Product/Brand Communication
-Community Relations
-Annual/Quarterly Reports
-Measurement and Analysis
-Public Affairs/Governmental Relations
-Product/Brand Advertising

Line/Staff functions
-Organizations typically have line and staff functions
--Line functions genarally have direct authority such as management
--Staff functions generally have little or no direct authority
---Public relations is considered a staff function, functioning as a support role to top management
---Top management formulate policy decisions based on the advice of the public relations department
---This is why the public relations department is located high on the organizational chart

Levels of Influence:

  • On the lowest level, public relations functions as purely advisory-- this is often not effective. Ex. The Enron scandal. The company generated a great deal of criticism because public relations was relegated to a low level and for all practical purposes, nonexistent.
  • On the highest level, public relations functions as compulsory-- organization policy requires that line managers (top managers) at least listen to the appropriate staff experts before deciding on a strategy. Ex. Johnson& Johnson the Tylenol crisis. Seven people died from taking capsules containing cyanide. The company based much of its reaction on the advice of the public relations staff.
  • Concurring authority is another level at which public relations functions-- organization policy dictates that the dessimination of any information be first approved via the public relations department and/or the legal department. Many firms use this mode to prevent departments and divisions from disseminating materials that do not conform with the company standards. In such a structure the legal department may be relegated command authority, giving them final say on what and how information gets dessiminated. This can limit the freedom of the public relations department and can result in legalese that makes the information hard to comprehend.

-Public relations is part of the managerial subsystem. The four areas of possible friction are: legal, human resources, advertising, and marketing.

-Suggestions to manage areas of possible friction include:
--Create committees- representatives of departments can exchange information on how various programs can complement each other and achieve overall objectives
--Create equal job titles among department heads- helps preserve the autonomy of each department
--Department heads should report to one superior- all viewpoints can be considered before a strategy is formulated
--Informal, regular contact with representatives of other departments- helps dispel mind-sets and create understanding and respect for each other's viewpoint
--Establish written policies to define the responsibilities of each department- helps settle disputes over which department is authorized to communicate with employees or alter a news release

Trend toward Outsourcing:

  • A major trend for American corporations has been the outsourcing of services, whether telecommunications, accounting, customer service, software engineering, or legal services.
  • The trend line is to outsource their communication activities to public relations firms vs in (house departments) and to outside contractors.
  • Public relations firms studies have found that Fortune 500 companies now spend 25% of their public relations budgets on outside firms.
  • Almost 90% of the companies use outside public relations counsel to varying degrees
  • A national survey by PRWeek found that companies of all sizes spent an average of more than 40% of their public relations budget on the services of outside firms.

Why outsource to outside public relations firms?
  • The most frequent reason given for outsourcing is to bring expertise and resources to the organization that can't be found internally.
  • A second reason is to supplement internal staffs during peak periods of activity

The most frequently outsourced activities, according to research, are in descending order:
  1. writing and communications
  2. media relations
  3. publicity
  4. strategy and planning
  5. event planning
Public Relations Firms
Major sectors of growth in 2000
  • Technology by 46%
  • Financial products and services by37%
  • Industry by 36%
  • Government and Nonprofit by 36%
  • Health care by 30%
  • Consumer and Retail by by 22%
-Future growth in the public relations field is expected as more countries adopt free-market economies
Services Provided
  • Marketing communications
  • Executive speech training
  • Research and evaluation
  • Crisis management
  • Media analysis
  • Community relations
  • Events management
  • Public affairs
  • Branding and corporate reputation
  • Financial relations
Code of Ethics for the Council of Public Relations Firms includes the following:
  • commit to standards of practice that assure the highest level of professionalism and ethical conduct in every relationship
  • charge a fair price
  • avoid representing any conflicting or competing client interests without the expressed approval of those concerned
  • respect client confidences and the privacy of client employees
  • refrain from recruiting employees of clients
  • maintain total accuracy and truthfulness
  • respect the personal rights of employees and former employees
  • provide employees the necessary tools to serve clients and develop professional skills
  • give credit for ideas and services provided by others

Pros of using a public relations firm:
  • Objectivity
  • Variety of skills and expertise
  • Extensive resources
  • Offices throughout the country
  • Special problem-solving skills
  • Credibility

Cons of using a public relations firm:
  • lack of thourough understanding of the business and its needs
  • lack of full-time commitment
  • need for prolonged briefing period
  • resentment by internal staff
  • need for strong direction by top management
  • need for full information and confidence
  • costs
Fees and Charges
Methods include:
1. Basic hourly fee, plus out-of-pocket expenses
2. Retainer fee/Monthly service charge
3. Fixed project fee
4. Pay-for-placement

-Standard industry practice is to bill clients at least 3 times a person's salary
-Average hourly rate across the industry is $213 according to one national survey