Public affairs execs: Orators or communicators?

J e f f r e y A. S o n n e n f e h l

Public Affairs Execs: Orators 9 9 Or Commumcators. In response to a steady increase in societal pressures on corporate institutional policies, there has been a substantial rise in the mmtber of corporate officials with tmblic affairs responsibilities. This empirical study of 10 such types of officers in the forest products , industry suggests some major differences in the ways these officials learn about the public affairs enoiromnent. In this article, Jeffrey A. Somzenfeld gives the reader insights into the importance of the listening and fact-finding phases of public relations work. Dr. Sonnenfeld is an assistant professor at the Harvard Business School, Boston, Mass.

I

ncreasing numbers of corporate officials are becoming involved in man.aging their company's public interface. Such officials may include senior management, company lawyers, public relations officers, government lobbyists, compliance officers, planning experts, human resource managers, and environmental engineers, among others. Recent surveys of this crossdepartment gravitation toward public affairs issues have sugggested the existence of a great deal of confusion and overlapping responsibilities as a result of this pattern? A very different stream of literature--that of organization adaptation--suggests that such multiple readings will lead to biased, inconsistent readings of the environment. In particular, it has been suggested that departmental membership 2 and hierarchical executive rank 3 both have a biasing effect, in that such roles determine the window which a company official has for looking out at the business environment. The purpose of this study was to demonstrate the possible sources of these executive role biases in a field setting. This study examined the impact of such roles on public affairs management by investigating some differences in public affairs information gathering by various types of company officials. 3

Public Relations

Review

These activities include: 1) the amount of time spent in public affairs interactions with recognized stakeholder groups, 2) the range of breadth of such stakeholder interactions, 3) the appreciation of such outside stakeholders as information sources, 4) the general level of attention to public afffairs which company offficials see as part of their job, and finally, 5) the emphasis given to listenership as opposed to espousal in their interactions with stakeholders. These five dimensions can be conceived as basic components of executive receptivity to external information. ~This receptivity then refers more to ho~v an organization learns about its environment rather than how it may project itself to external constituencies. To focus on this variation in the activities of company officials, industry was held constant. The forest products industry was selected for study because of its long, painful history of public affairs exposure. Critical mill openings and mill closings have become very troublesome events. The logging, sawing, and lumber and paper production processes are very hazardous. Labor relations are notoriously poor, as evidenced by a sevenmonth strike in West Coast paper mills in 1977. Companies in this industry frequently control most of the lives and well-being of those who live in the towns around its mills. Serious environmental controversies surround the intense struggles over increased cutting on public forest lands, air pollution from pulp mills, water pollution from mills, aerial spray of dangerous herbicides and pesticides, and solid waste issues (bottles, recycled paper). Many'of these environmental concerns as well as land taxation issues and labor issues have both local and national aspects. Antitrust prosecutions also have cost the industry several hundred millions of dollars in penalties, plus the costs of executive jail sentences, moral losses, and recruitment problems incurred in price-fixing in folding cartons, fire papers, corrugated containers, and plywood. Methods Thirty executives from each of six of the largest firms were contacted. The executives included the top officers in the legal, finance, planning, general management, government affairs, line operations, public relations, environmental engineering and human relations areas. Responses were mailed directly back to the researcher; 141 of the original 180 questionnaires (78%) were returned. Each company returned 15 to 28 of the 30 questionnaires mailed to them. Overall, 89% of the respondents were based at the corporate headquarters. Half the sample had the title of vice president or above, and half the sample were directors or managers. The representation by department is broken out in Table 1, but overall, 45% were in public affairs-type departments (legal, public relations, government affairs) and 65% were in nonpublic affairs departments (finance, planning, general management, human resources, environmental engineering). The measures of receptivity discussed earlier were based on three items from the questionnaire. First, the measures of time spent in external interaction 4

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Public Relations

Review

and the breadth (or number) of stakeholder contacts were both derived from a question which asked executives to rate h o w much they spent with each of 75 prominent stakeholder groups which were listed (e.g., specific government agencies, environmental groups, civic associations, trade groups, professional groups, etc.). The next measure of receptivity, the appreciation of the information value of outside sources, was based on a ratio of the total value of these sources to the actual time spent in outside contact. Finally, the measures of attention to public affairs issues in their jobs and the importance of listenership activities were derived from a question which asked executives to assess the importance of six public affairs boundary-spanning activities as derived from Miles? These six were, "representing," "'protecting," "monitoring," "scanning," "transmitting," and "transacting. ''~ The total of these public affairs boundary-spanning self-ratings comprised the estimate of "attention." The scores for the total of two of the dimensions "scanning" and "monitoring" were the estimate of listenership. Results Interaction Time. While the actual reported time involvement with stakeholder groups was substantial in every department, Table 1 indicates that there were very significant differences between the departments. For example, while general management executives reported that stakeholder interactions accounted for as much as roughly one quarter of the average work week (12 hours), government affairs executives claimed that such activities account for more than three-quarters of the average work week (34 hours). Glancing down the second column (Stakeholder Interaction Time) of Table 1, it is clear that the other public affairs departments (such as public relations and legal) also spent more time in stakeholder interaction than the other departments. More insight on this sharp difference between the use of time in public affairs versus non-public affairs departments is presented in Table 2. While it would be expected that public affairs executives would spend more time in public affairs activities than non-public affairs executives, this more detailed breakdown by stakeholder group tells us a good deal more. Most outstanding in this breakdown is the sharpness of the differentiation between public affairs executives and non-public affairs executives with regard to the first several stakeholder groups. The five stakeholder g r o u p s - industry associations, state legislators, Congress, environmentalists, and the press--are significantlymore prominent in public affairs executives' schedules than in non-public affairs executives' schedules. Primary responsibility for interactions with regulatory bodies and the investment community, is far more blurred and the involvement with advisors and labor unions may even be greater for non-public affairs executives. It is quite possible that the first five stakeholder groups involve activities in which the company is more involved in an effort to maintain the face or image of the company as well as to respond to more general external challenges. The 6

Public Affairs Execs TABLE 2

Stakeholder Interaction Time Public Affairs vs. Non-Public Affairs Departments Stakeholder Group

Public Affairs 1

(Rank ordered by Public Affairs Interaction Time)

(Hours/ Week)

Industry Associations State Legislators U.S. C o n g r e s s

Environmentalists Press Other (local, civic, etc.) Federal Regula|ors Investment Community State Regulators Advisors (consultants, institutes) Professional Associations Labor TOTAL

Non-Public Affairs 2

Significance*

(! tours,q,Veek)

(F value)

6.18 4.95 3.45 2.68 2.33 2.07 1.98 1.57 1.12 1.02 .62 .13

2.95. .62 .63 1.15 .49 1.23 1.26 1.41 .56 1.62 .22 1.09

10.60'*'* 40.00 . . . . 21.00'*** 11.90 . . . . 12.70"*'* NS NS NS NS 5.05** 6.53** NS

28.07 N =60

12.67 N = 81

30.80****

*Degrees of #eMom (1,139) **p < .05 "*p < .01 . . . . p < .001 1 = legal, public relations, government affairs, public affairs 2 = general management, line operations, finance, planning, engineering, human resources

other activities, however, may represent more specialized, technical interactions where functional expertise becomes vital. Thus non-public affairs departments would tend to get more involved in those stakeholder interactions which have a more specific agenda. This possibility is supported in Figure 1 and 2. First, in Figure 1 we see that stakeholder interactions with each individual public affairs department tapers off dramatically in the more "issue-specific" stakeholder groups (e.g., engineering executives and regulators, human resource executives and labor unions, finance executives and the investment community). Two final observations on these stakeholder interaction profiles are comments about both the departments and the stakeholder groups. First, whether a department has overt, broad public affairs responsibilities or not, stakeholder interactions represent a major time commitment. Executives from each department acknowledge important outside constituents. Second, it is interesting to note the relative lack of attention to state regulators and labor unions. Perhaps either the industry feels that the interests of these 7

Public Relations

Res~lew FIGURE 1 Stakeholder Interaction Time*

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STAKEtIOLDER GROUPS "See

Table for comparative s t a t i s t i c s

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legal, public relations, government affaLrs, p u b l i c affa~s.

groups are easy to understand or else that the power of these groups is far less pronounced than that of other stakeholder groups. In closing this section, it is important to note that there is no reason to believe that the amounts of time spent in stakeholder interactions are an index to the quality of information reception. Various stakeholders may be overlooked while others are overemphasized. Furthermore, this time spent in stakeholder interaction may serve as having a buffering rather than an information-seeking purpose. The pattern of time involvement presented in this section is helpful to understand the bias structured into executive roles. Because the types of stakeholder contact are so different among the various groups, the internal perspectives on public affairs interchanges, while others are oriented toward the political and communications levels of involvement. Whether such differences are vital inputs from diverse receptors or unobservant restatements of a departmental bias is dependent on the unit receptivity. Interaction Breadth. The first of these receptivity dimensions, breadth, refers to the distribution of potential sources (as measured by averaging the number of different outside contact sources with which a particular $

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FIGURE 2A S t a k e h o l d e r Interaction Profiles for P u b l i c A f f a i r s Departments

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executive spent at least an hour a week in contact). A further inspection of the stakeholder interaction profiles of each department (Figure 2) suggests that some departments have a wide array of channels to the outside while others are highly reliant on few channels. In actually counting the number of stakeholder channels for each department (interaction of I hour/week or greater), these differences between departments turn out to be quite significant. The scores for each department appear in Table 1. These data show the public affairs departments as having far more channels to the outside. As with the amount of stakeholder interaction time, however, the scores of the non-public affairs departments are far from negligible. 9

Public

Relations

Review FIGURE 2B Stakeholder Interaction Profiles for Non-Public Affairs Departments

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A p p r e c i a t i o n . Thus far we have seen that public affairs executives s p e n d m o r e time with outside stakeholders and interact with a w i d e r variety of stakeholders. It w o u l d be erroneous, h o w e v e r , to conclude that these d e p a r t m e n t s are necessarily receiving m o r e information from the outside as a c o n s e q u e n c e of these interactions. In fact, an examination of the use of stakeholder interaction time as an information source suggests just the o p p o s i t e conclusion. T h u s , again referring to Table 1, the m e a s u r e s of total reliance on outside stakeholders as information sources is lower for public affairs d e p a r t m e n t s than for non-public affairs d e p a r t m e n t s . T h e s e d e p a r t m e n t s were c o m p a r e d by a score for the " a p p r e c i a t i o n " of the information potential of time in public affairs interaction. This is calculated by dividing the aggregated r e p o r t e d value of various outside sources (listed on the questionnaire) by the time s p e n t in interactions with such sources. The non-public affairs d e p a r t m e n t s clearly s u r p a s s e d the public affairs d e p a r t m e n t s o n their willingness to appreciate the information value of time spent with outside

10

Public Affairs Execs

stakeholders. It is not surprising to find department scores in "receptor breadth" and in appreciation to be negatively correlated. Therefore, although executives in general management, human resources, engineering, and finance spend less time dealing with outsiders, they tend to use what time they do spend on information-gathering endeavors. As an important aside to this discussion of information sources, it should be pointed out that these sources could be classified either by stakeholder group or by closeness of stakeholder contact. The departments did not differ significantly by either of these two splits, but they support the distinction of each of these sources. Thus, in the first classification, the sources were positively related by stakeholder area. Examples of such groupings are between trade associations and the trade press, between environmental publications and direct contact with environmentalists, or between direct contact with government officials and government publications. The second classification suggested that executives regardless of their department tended to prefer impersonal information media over direct sources. Two rough source clusters seemed evident in that several popular and professional press sources, such as Tile Nezo York Times, the Harvard Business Review, trade publications and the broadcast media, were inversely related to sources such as the use of trade associations, trade contacts, internal sources and environmentalist contacts. Within each of these clusters we found positive relationships for primary and secondary sources. Table 3 shows this ranking of preferred sources. The values on this list are widely distributed and a comparison of the values of the top third of the list to the bottom third suggest that the general order is significant. Attention. The next two receptor dimensions were constructed from an analysis of department descriptions of the purpose of their boundary-spanning activity. It is clear from the data in Table 1 that the total amount of public affairs boundary-spanning activity was more highly rated by government relations, and general management executives. Thus, these departments gave greater attention to public affairs issues. Further insight can be gained through the more detailed breakdown in Table 4. First, we see that the lawyers tended to lag behind the other public affairs departments in the intensity in which they engaged in each of these boundary-spanning categories. The lawyers seemed less inclined to span the company boundary on their own initiative. Second, the non-public affairs departments only excel in their performance of transacting activity for market-relevant resources. This distinctly different set of findings for "transacting" versus the other boundary-spanning activities is consistent, then, with the findings of the boundary-spanning role correlation matrix. This matrix showed a moderate correlation with pairs of the first five public affairs boundary-spanning dimensions, but a lack of significant relations to "transacting." Listenership. The general outw,'trd focus manifested by the attention scores of public affairs departments can be further analyzed by examining the information flow from the outside to the inside. While executives may 11

Public Relations Review TABLE 3 Rank Order of Value of Information Sources

Average Rating Rank Order 1. 2.

Information Sources Within the Company Trade Associations

Consultants

4.021 3.246 3.207 2.761 2.619 2.556 2.546 2.526 2.481 2.478 2.256 2.234 2.328 2.321 2.210 2.197

New York Times Duns

2.09 2.007

Public Interest Groups Environmentalist Publications

1.985 1.978 1.884 1.733 1.706 1.453 1.380

3.

Wall Street Journal

4.

Trade Contacts

5.

Business Week

6. 7. 8. 9. 10. ll. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.

(1 = low, 5 = high)

Professional Press Broadcasting Government Contacts Popular Press Business Research Organizations Books Fortune Government Publications Trade Press

Forbes

Harvard Business Review Investor Community Environmental Contacts Labor Contacts Labor Publications

TABLE 4 Boundary-Spanning by Department

Department Legal Finance Planning General Management Government Relations Line Public Relations H u m a n Resources Technical Public Affairs

F value Degrees of freedom Significance

12

Boundary-Spanning Activities Representing Protecting Monitoring Scanning Transmitting Transacting 2.90 3.92 4.00 3.35 4.27 2.80 4.61 2.95 3.14 4.13

5.81 9,130 p<.001

3.50 3.00 2.00 3.42 4.42 2.80 3.72 3.15 3.71 3.86

3.80 3.08 3.50 3.86 4.64 3.00 3.83 3.45 3.06 4.29

3.14 5.49 1,130 9,136 p = .002 p<.001

3.70 3.33 4.56 3.57 4.42 3.20 4.00 3.75 3.64 4.14

3.90 3.00 3.00 3.46 4.50 2.00 3.88 3.40 3.50 4.14

2.60 2.73 2.56 4.06 1.73 2.80 1.89 1.75 2.36 2.29

2.31 9,130 p = .019

4.18 9,129 p < .O01

6.86 9,129 p < .O01

Public ,~ffairs Execs devote a good deal of their attention toward public affairs activities, their attention could be directed toward information receiving (listening) or toward information sending (projection). The relative magnitude of these listenership activities can be ascertained by comparing listenership activity to projection activity. Thus a ratio of information-receiving-to information-projecting activities can serve as a helpful index; a lower figure would indicate that the unit in question functioned more as a corporate orator than as a listener. The scores on this variable, as presented in Table 1, suggested that public affairs executives (with the exception of lawyers) tended to be worse listeners than non-public affairs executives. Thus, those charged with understanding public constituencies may have a more distant comprehension of data. Discussion Several interesting departmental differences in stakeholder contact and information sources were suggested. Departments were compared by 1) the time spent in contact with outsiders, 2) the breadth of contact with different outsiders, 3) the appreciation of outsiders as information sources and 4) two quantities of departments' boundary-spanning efforts--the overall conscious attention to the outside and readiness to listen to outside signals. Great time was put into trade association legislator contact by most departments, while state regulators, unions, and professional associations were given relatively little time. We further saw a likely preference for impersonal outside sources among the executives. This report should not, however, obscure the observation that public affairs activities were far from incidental to any type of executive. No department alloted less than 25 percent of the average work week to stakeholder interactions. Each department maintained contact with at least seven stakeholder groups. Finally, every department reported that it recognized more than a fair amount of responsibility for public affairs boundary-spanning activities. On the other hand, some of the sharpest differences, appeared between public affairs departments (government affairs, public affairs, legal and public relations), and non-public relations departments (general management, h u m a n resources, engineering, and finance). Public affairs executives tended to spend far more time in interactions with outside stakeholder groups and maintained contact with many more outside constituents. Furthermore, public affairs executives recognized a greater responsibility for public affairs boundary-spanning activities. Non-public affairs executives were more "issue specific" in their stakeholder interactions. They also tended to be more likely to acquire information from their efforts, for two reasons. First, non-public affairs executives attributed a higher source value to their interaction time. Second, non-public affairs executives tended to see their public affairs role more as that of a listener than as a disseminator. Such different behaviors may be a result of intentional role distinction or the result of professional socialization. 13

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Department ~From Table 7-1, F = 3.64, df = 9,138, p < .001.

It appears that this differentiation brings company executives into contact with public affairs issues for different reasons and in different ways. Public affairs executives, as protectors of the institutional interface, may have a more general interest in stakeholder challenges. Non-public affairs executives, however, have different functional concerns (e.g., marketing, operations, engineering, etc.), and hence may be more interested in the resolution of only the particular issues which interfere with these concerns. A company should desire strong performance in both of these types of receptor orientations. Qualities such as a broad view of the public affairs environment as well as the ability to listen carefully to specialized challenges should not be mutually exclusive qualities, even if company departments are not generally equally strong in these areas. In this industry, effective management of public affairs cannot be anchored strictly in ties with the 14

Public Affairs

Execs

FIGURE 4 Information Appreciation by DepartmentI E

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Department XBasedon Table 7-1, F = 2.57, df = 9,113, p <: .05. trade associations a n d the general press at the expense of attention to regulators, unions, and o t h e r interest groups. Thus, w e h a v e d e m o n s t r a t e d that various c o m p a n y d e p a r t m e n t s , like specialized s e n s o r y receptors, act to detect different signals from the envir o n m e n t . Such biased readings of the e n v i r o n m e n t are u n d e r s t a n d a b l e , given the differences in executive training, stakeholder exposure, a n d organizational responsibilities b e t w e e n these d e p a r t m e n t s . This sort of differentiation m a y capitalize o n internal expertise, but if this information w e r e to r e m a i n in these receptor units, c o m p a n y - w i d e perceptions of the outside w o u l d be f r a g m e n t a r y a n d distorted. As with a living sensory system, this information must eventually be centrally coordinated. Future research should s t u d y h o w c o m p a n y differences in external social performance differences relate to differences in internal c o m p a n y organization. References

q~4cGrath, P.S., "Managing Corporate External Relations," Report No. 679, 1976; "Action Plans for Public Affairs," Report No. 733, 1977;and "Redefining Corporate Federal Relations," 15

Public Relations

Review

Report No. 757, 1979. All published by The Conference Board, New York. Also, J.K. Brown, The Business of Issues, The Conference Board, 1979; and S.L. Holmes, "Adopting Corporate Structure for Social Responsiveness," California Management Review XXI, No. 1 (1978), pp. 4254. 2Dearb0rn, D.C. and H.A. Simon, "Selective Perception: A Note on the Departmental Identification of Executives," Sociometry 21 (1958), p. 153; Lawrence, P.R. and J.W. Lorsch, Organization and Environment. Homewood, Ill.: Irwin, 1967; and Cyert, R.M. and J.G. Marsh, A Behavioral Theory of the Firm. Englewood Cliffs, N.J.: Prentice-Hall, 1963. 3Sonnenfeld, J., "Executive Apologies for Price-Fixing: Role-Biased Perceptions of Causality," The Academy of Management Journal 24 (1981), pp. 192-198. 4Sonnenfeld, J., CorporateViews of the Public Interest: Perceptionsof the ForestProducts Ind,~stry. Boston, Mass.: Auburn House, 1981. SMiles, R.H., Macro Organizational Behauior. Santa Monica, Calif.: Goodyear, 1980.

Informing The People: A Public Affairs Handbook Edited by Lewis M. Helm. Ray E/don Hiebert, Michael R. Naver and Kenneth Rabin

The First Volume in the New Longrnan Series " in Public Communication

Longman "~

Informing The rup,'e--'e

is a handbook that bringspubllc informa,on practice up-to-date for the

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I6

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