Corporate Communication Notes

Unit 1: Understanding Corporate Environment

1. Contemporary Corporate Environment: an overview
Contemporary: It means belonging to the same period, same age or to a stated period in the past.
Existing or happening now, living or occurring in the same period of time and therefore seeming
modern. Contemporary music/literature/art/fashion. Although the play was written hundreds of years
ago, it still has a contemporary feel to it.

Corporate: The word Corporate originally stems from the Latin word for Body (Corpus) and for
“forming into a body” (corporate. Corporate means an identity or organization whose motive and
purpose of its existence is to earn profit. It can be business houses, MNCs, NGOs, Public Undertakings,
Trading Houses and others.

Business Environment: The term “Environment” refers to anything which surrounds a system.
Therefore Business Environment means the surroundings (including human beings) in which business
exists. The business environment can include factors such as: clients and suppliers; its competition, and
owners; improvements in technology; laws and government activities; and market, social and economic
trends.

Business Environment defined as ‘the forces, factors and institutions with which the businessman has to
deal with to achieve its objectives’.

Business Environment is the sum total of all external and internal factors that influence or affect a
business together.

The formula for business success requires two elements – the individual and the environment.

Corporate Environment is defined as the combination of internal and external factors that influence a
company’s operating situation, including employees, customers, management, supply and demand and
business regulations.

Every corporate operates in a particular environment and each corporate unit has its own environment.
A change in environment presents opportunity to some and threats to others.

Corporate environment being a dynamic concept or a phenomenon what with emerging trends in
business ethics, corporate social responsibility, corporate governance, consumer citizenship etc. every
firm/manager.

Most of the factors influences and interdependent on each other. For instance, a healthy and safety
regulation is an external factor that influences the internal environment of business operations. You
should keep in mind that external factors and internal factors could influence each other and work
beyond your control. External factors are often called external constraints.
Contemporary Corporate Environment: The contemporary corporate environment refers to the
present-day business landscape, characterized by rapid technological advancements, increasing
globalization, and heightened competition. In this environment, businesses must navigate a complex set
of challenges and opportunities to remain relevant and competitive. The contemporary corporate
environment is a dynamic and complex landscape shaped by several factors.

The contemporary corporate environment is complex and constantly evolving. Businesses that can
adapt quickly to new challenges and opportunities are most likely to succeed in this environment. By
prioritizing sustainability, diversity and inclusion, and technological innovation, companies can position
themselves for success in the years ahead.

Globalization: The rise of the internet and global trade has made it easier for companies to expand
their operations across borders. However, this has also led to increased competition from businesses
around the world. Companies like Amazon, Apple, and Google have expanded their operations
worldwide, taking advantage of the internet to reach customers in different parts of the world.

Technological advancements: New technologies such as artificial intelligence, machine learning, and
the internet of things are transforming the way businesses operate. Companies that fail to keep up with
these technological advancements risk being left behind. Companies like Tesla, Microsoft, and IBM are
at the forefront of developing new technologies, such as electric cars, cloud computing, and artificial
intelligence.

Sustainability: More and more consumers are demanding environmentally sustainable products and
practices from businesses. This trend is likely to continue, and companies that do not prioritize
sustainability may struggle to remain relevant. Companies like Patagonia, Tesla, and Unilever have
prioritized sustainability in their business practices, promoting environmentally friendly products and
practices.

Diversity and inclusion: Companies are increasingly recognizing the importance of diversity and
inclusion in the workplace. This includes hiring a diverse range of employees and promoting a culture of
inclusivity. Companies like Microsoft, TCS, and HP have implemented diversity and inclusion initiatives to
promote a culture of inclusivity in the workplace.

Remote work: The COVID-19 pandemic has forced many companies to adopt remote work policies. As
the pandemic subsides, many companies are likely to continue to offer flexible working arrangements,
which will require new approaches to management and collaboration. Companies like Zoom, Slack, and
Microsoft Teams have become essential tools for remote work, facilitating communication and
collaboration among team members who are not physically present in the same location.

Social media: Social media has become an essential tool for businesses to connect with customers and
build their brand. However, it also poses significant risks, such as reputational damage from negative
reviews or social media backlash. Companies like Nike, Coca-Cola, and McDonald's have leveraged social
media to connect with customers and build their brand, creating engaging content that resonates with
their target audience.

Cybersecurity: As businesses become more reliant on technology, they also become more vulnerable to
cyber-attacks. Companies must invest in robust cybersecurity measures to protect themselves and their
customers. Companies like IBM, Cisco, and McAfee provide cybersecurity solutions to businesses to
protect their data and systems from cyber threats.

2. Forms of Contemporary Constituencies

There are several forms of corporate constituencies that a corporation must consider and balance to
ensure its long-term success and sustainability.

Shareholders: These are the owners of the corporation and have a financial interest in its performance.
Shareholders invest in the company with the expectation of returns, primarily through dividends and
stock price appreciation. They engage themselves in shareholder meetings, exercise voting rights, and
monitor financial performance.

Employees: These are the people who work for the corporation and contribute to its success through
their labor. In return employees seek job security, fair compensation, and a positive work environment.
They engage with corporate through unions or direct feedback channels, and their interests include
workplace conditions, benefits, and opportunities for career growth.

Customers: These are the people who buy the corporation's products or services and are essential to its
revenue and growth. Customers aim for quality products or services at competitive prices. Engage
through reviews, surveys, and customer service interactions. Their interests revolve around product
reliability, customer service quality, and value for money.

Suppliers: These are the companies or individuals that provide the corporation with the goods or
services it needs to operate. Suppliers desire stable and mutually beneficial business relationships. They
are engage in ongoing communication regarding supply chain dynamics. Supplier interests include timely
payments, fair contractual terms, and consistent demand.

Creditors: Entities that lend money to the company, such as banks or bondholders, interested in timely
repayments. Creditors expect timely repayment of loans or interest. They engage through monitoring
financial reports, maintaining communication with the company. Their interests are closely tied to the
financial health and creditworthiness of the company.

Community: This includes the wider society and environment in which the corporation operates, and
which may be affected by its actions. Positive impact on the community's well-being. Employment
opportunities, environmental responsibility. Participating in local initiatives, addressing community
concerns.

Government: Regulatory bodies and authorities overseeing the company's compliance with laws and
regulations. Government entities aim to ensure legal compliance and adherence to regulations. Engage
in regulatory reporting, monitoring adherence to laws, and occasional dialogue with the company.
Interests include corporate governance, tax compliance, and adherence to industry standards.

Competitors: Other companies in the industry who may be affected by the company's strategies and
market position. Competitors aim to compete for market share and industry dominance. Engage in
monitoring industry trends, conducting competitive analysis, and formulating strategic responses.
Interests revolve around market dynamics, innovations, and competitive strategies.
NGOs and Advocacy Groups: Non-profit organizations and interest groups advocating for specific
causes, influencing corporate social responsibility. Non-profit organizations and advocacy groups
promote social or environmental causes. Engage in collaboration on initiatives, raising concerns related
to corporate social responsibility (CSR) and sustainability practices.

Global Stakeholders: Investors, customers, and partners with interests spanning international borders,
influencing global business practices. Global stakeholders balance global business interests and
responsibilities. Engage in global partnerships, adhere to global standards, and maintain cross-cultural
communication. Interests involve adapting to diverse markets, complying with international regulations,
and fostering a positive global business image.

A corporation that neglects any of these constituencies may face reputational damage, legal challenges,
or financial losses.

3. Brand Identity, Brand Image & Brand Reputation

Brand is a positive thought that gets created inside the minds of people. Brands serves as a symbolic
representation that influences people by offering them to set of mental association. These associations
are gathered over a period of time from the community, from media representation and social
influences.

Brand positions a highly positive image of the product and services in the mind of the people, thereby
communicating trust, reputation and certain guarantee.

Branding refers to the use of techniques to manipulate perceptions so that people become positively
disposed towards particular products, services or organizations.

David Ogilvy perceived branding as, “the intangible sum of a product’s attributes such as its name,
packaging, price, its history, its reputation, and the way it’s advertised.

Branding has bought about a paradigm shift in the way business is done today. From being product
centric and customer centric, organizations have now become brand centric.

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4. Corporate Social Responsibility

Traditionally, the concept of Corporate Social Responsibility (CSR) implied to what the corporates gave
back voluntarily to the society. It is an act of charity, philanthropy or as being responsible corporate
citizen. The word ‘responsibility’ meant that the giver must identify the task that it was supposed to be
responsible about. Corporate philanthropy and CSR are similar concepts that often overlap in practice.
Philanthropy is integrated into a bigger picture corporate social responsibility plan. Corporate social
responsibility is focused on delivering resources to the community that the corporation serves, while
corporate philanthropy is usually focused on specific causes.
Mallen Baker refers to CSR as “a way companies manage the business process to produce an overall
positive impact on the society.” The World Bank has defined CSR as operating a business in a manner
that meets or exceeds the ethical, legal, commercial and public expectations that society has of
business. Leadership companies view CSR as a comprehensive set of policies, practices and programs
that are integrated throughout business operations and decision making processes that are supported
and rewarded by top management.

5. Difference between Corporate Philanthropy & CSR

Philanthropy is most often seen in the form of financial contributions. The concept behind philanthropy
involves making an effort to drive social change. Philanthropy involves finding a long-term solution
rather than delivering temporary relief. Many corporations simply donate money to causes that are
intended to bring about social change. CSR directly involves the corporation’s business model and its
business practices. It goes a step further than philanthropy by directly involving the corporation in the
causes and in the community. For example, a mining company should implement cleanup programs to
mitigate pollution from the operation. Leaving a polluting mine after the work is done is irresponsible,
and it has negative consequences for the community and for the health of the community.

Philanthropy is simply a way to reinvest wealth in a cause. It can happen at the corporation’s leisure; it is
purely optional. If the corporation does not participate in philanthropy, it will likely not affect the way
the corporation is viewed. Failing to implement CSR, however, will cast the corporation in a bad light.