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Chapter
2
Public Affairs Management

Public Issues
 Managing the Public Affairs Function
 Issue Management
 Crisis Management
Public issues



Public issue
An issue that is of concern to an organization’s stakeholders.
Stakeholder expectations
A mixture of people’s opinions, attitudes, and beliefs about what
constitutes reasonable business behavior.
Performance-expectations gap
A gap between what stakeholders expect and what an
organization is actually doing.
Figure 2.1
A stakeholder network focusing
on a public issue
Stakeholders
with a shared focus
on an issue
Stakeholders
Stakeholders
with a shared focus
with a shared focus
on an issue
on an issue
Stakeholders
Stakeholders
with a shared focus
with a shared focus
on an issue
on an issue
Phases of the public issue life cycle




Phase 1: Changing Stakeholder Expectations
When a performance-expectation gap emerges, the seeds of a
public issue have been sown.
Phase 2: Political Action
When a problem is placed on the agenda for government action.
Phase 3: Formal Government Action
When legislative proposals or draft regulations emerge.
Characterized also by an increased number of people involved in
the conflict.
Phase 4: Legal Implementation
When a new law or regulation is implemented and companies
are forced to comply with the law.
Figure 2.2
The public issue life cycle
High
Phase 1:
Changing
Stakeholder
Expectations
Phase 2:
Political
Phase 3:
Formal
Government
Action
Implementation
Action
Life Cycle of Issue
Management
Management
discretion
to resolve
the issue
Discretion
Low
Phase 4:
Legal
Time
Public affairs activities

External forces
 Loss
of public trust institutions
 Globalization of world markets
 Rise of the Internet

Internal forces
 Better
communication within organizations
 More experience dealing with significant change and complexity
 Growing focus on the interplay between the organization, its
environment, and its strategies

Public affairs management
The active management of a company’s external relations, especially
its relations with external stakeholders such as government and
regulatory agencies, customers, investors, and communities.
Table 2.1a
Corporate public affairs activities of
250 companies
Activity
Percentage of Respondents
Political action committee
89%
State government relations
84%
Issue management
84%
Local government relations
77%
Direct corporate contributions
75%
Community relations
75%
Business/trade association membership
73%
Public policy group relations
73%
Grassroots communication
71%
Corporate foundation
71%
Table 2.1b
Corporate public affairs activities of
250 companies
Activity
Percentage of Respondents
Employee volunteer programs
66%
Media relations
64%
Public relations
61%
Employee communications
59%
Strategic philanthropy
55%
Regulatory affairs
43%
Educational relations
34%
International public affairs
32%
Environmental affairs
23%
Stockholder relations
21%
Figure 2.3a
Public affairs management’s relevant
stakeholders and functions
Public Affairs
Management
Government
Stockholders
• Public policy
• External and internal audit
•Lobbying
• SEC filings, compliance
•Political action
• Communications
• Trade associations
• Proxy election management
• Advocacy ads
• Grassroots mobilization
Figure 2.3b
Public affairs management’s relevant
stakeholders and functions
Public Affairs
Management
Employee
Customers
• Communications
• Customer service
• Union negotiations
• Total quality management
• OSHA, EEOC, and labor law
compliance
• Liability lawsuit defense
• Diversity and family-work
programs
• Recall management
Figure 2.3c
Public affairs management’s relevant
stakeholders and functions
Public Affairs
Management
Environment
• EPA and state environmental
compliance
• Internal environmental
auditing
• Recycling, take-back
programs
Community
• Corporate philanthropy
• Partners with schools, NGOs
• Volunteerism, employee time
contributions
Figure 2.3d
Public affairs management’s relevant
stakeholders and functions
Public Affairs
Management
Media
Activists, General Public
• Public relations
• Environmental scanning
• Executive speeches
• Stakeholder dialogue
• Image advertising
• Social reporting
• Crisis management
• Social monitoring
• Web page management
An effective public affairs function must:

Manage public affairs as an ongoing, year-round process.
 Cultivate and harvest the capability to build, develop, and
maintain enduring stakeholder relationships.
 Influence stakeholders using refined information.
 Recognize the importance of managing the grass roots.
 Communicate in an integrated manner.
 Continuously align its values and strategy with public’s interests.
 Improve its external relations using the accepted facts of
contemporary management practice.
Issue management


A structured and systematic process to aid organizations in
identifying, monitoring, and selecting public issues that warrant
organizational action.
Environmental intelligence
The acquisition of information gained from analyzing the
multiple environments affecting organizations.








Customer
Competitor
Economic
Technological
Social
Political
Legal
Geophysical
Figure 2.4
Eight strategic radar screens
Customer
Geophysical
Environment
Competitor
Environment
Environment
Legal
Seeking
Economic
Environment
Environmental
Environment
Intelligence
Political
Technological
Environment
Environment
Social
Environment
Figure 2.5
The issue management process
Research
Performance
evaluation
Issues
Identification
Issues
Analysis
Judgment
and priority
setting
Policy
Options
Results
Implementation
Program
Design
Policy and
strategy selection
Crisis management

Corporate crisis
A significant business disruption that stimulates extensive news
media coverage.
 Crisis management
The process organizations use to respond to short-term and
immediate corporate crises.
An effect crisis management plan involves:

Preparing for action by creating an internal communication
system that can be activated the moment the crisis occurs.
 Communicating quickly, but accurately.
 Using the Internet to convey the public affairs message.
 Doing the right thing by not minimizing the seriousness of a
problem nor exaggerating minor incidents.
 Following up and, where appropriate, making amends to those
affected.
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