When I was first given the opportunity to write in the Public Affairs Corner of PR INDONESIA magazine five years ago, I began the series by explaining the theoretical and conceptual underpinnings of Public Affairs followed by concrete examples in practice, reflecting my belief that theory and practice must go hand in hand.
Given that the current concept of Public Affairs has not been widely discussed in Indonesia at the time, many of the examples I provided were about the practice in advanced industrial countries where this field has been established earlier. On the theoretical side, much of the groundwork on Public Affairs I referred to are included in The SAGE Handbook of Corporate and Public Affairs (Phil Harris and Craig S. Fleisher, editors, 2017), Corporate Public Affairs: Interacting With Interest Groups, Media, and Government (Otto Lerbinger, 2007), and Public Affairs-Management von Großunternehmen: Markt- versus Nichtmarktstrategien (Jan Siedentopp, 2010).
Over time, questions have again arisen about the essence of public affairs and how it relates to public relations. The short answer is, public relations and public affairs are both part of the corporate communication function, they differ in their respective area of focus. Public relations is mainly concerned with content and delivery of a corporation’s messages, while public affairs concentrates on the social, political and cultural context in which these messages are delivered.
Both fall within the realm of corporate communication, which refers to communication activities conducted by business organizations that are generally in the form of corporations. The need for more differentiation in corporate communications is in line with the increasing complexity and sophistication of business and the organizations that accommodate them. As societies become more diverse and complex, they require specialized knowledge and skills in running businesses, including in the corporate communication function. One of these specializations is public affairs, which was originally identified with everything related to government but has evolved to include non-market factors that companies face in conducting business.
In small organizations, both functions may reside within the same department. However, the larger a business organization or company, the more complex and varied its corporate communication activities, reflecting the more varied and diverse stakeholders that impact on and are impacted by the company’s operations. Under these conditions, the public affairs and public relations functions are often separated but remain under the same coordination at the Board of Directors level to ensure that they do not operate at cross-purposes.
Navigating The Environment Like a Fish
The public affairs context is highly dynamic as a result of interactions with stakeholders. In the diagram below, I depict this dynamic within the framework of stakeholder management. The company is likened to a fish swimming in a vast ocean of business opportunities that needs skills and acumen to successfully navigate in pursuit of sustainable business.
The most influential stakeholder is government, because legislative and executive bodies create the legal framework that defines the space and activities that are allowed and spells out the positive law that must be complied with by business players. The government also conducts oversight to prevent violations of the established legal framework.
On one side stakeholders, comprising suppliers, competitors, customers, and local communities, interact with the company in economic terms, creating Economic Dynamics. The media, political parties, civil society organizations including the academic world and local communities also interact with each other and with the company in social and political areas, giving rise to Social-Political Dynamics. Both dynamics create ripples that occasionally grow into large waves in the ocean of business opportunities that may disrupt company operations. All these stakeholder activities must be closely monitored as part of risk management so that disruptions and turbulences may be kept to a minimum.
The company’s goal is Sustainable Business, and in addition to the right strategy and organizational makeup, Reputation greatly influences the company’s ability to reach this goal. The dorsal fin of the fish in this diagram depicts Reputation Management that provides direction to the company in this area, referring to the formula Reputation = Performance + Behavior + Communication, as expressed by Doorley & Garcia.
The dynamics of the economic and social-political factors may create cross-sectoral issues that affect business in general, sector-specific issues that are unique to the particular business the company is in. Sometimes companies are affected by local issues and if they venture into international business, there are cross-border issues to be dealt with. All these issues must be closely monitored to prevent them from getting out of control and plunge the company into a crisis. Furthermore, every company will always experience internal issues that must be resolved as it navigates the sea of business opportunities. All of these issues interact with, and affect, the dynamics of the economy and social politics, that in turn trigger reactions from stakeholders.
The greenish field that surrounds the fish represents stakeholder management. This is where the main role of public affairs comes into play in the interaction between the company and the social, political, and cultural environment, or nonmarket factors that affect the company. Stakeholder management is analogous to the function of an aircraft’s radar that scans the skies for potential risks during a flight or sonar that is used to probe the underwater situation beneath a ship that is invisible to the naked eye.
Through cooperation between public affairs and public relations, the company monitors the risks that it may encounter in its journey through the ocean of business opportunities and develops appropriate messages as part of its communication strategy. The work is not done yet. A further task is to assess the effects and efficacy of its communication activities that feed into the company’s strategy in dealing with the non-market issues it is facing. Business and communication strategies are constantly interacting in a continuous cycle and need to be aligned at the highest levels.
Two factors that must not be overlooked in the company’s environmental scanning from a communication perspective are Technological Developments, especially those related to Corporate Communication activities such as social media and artificial intelligence (AI), and Culture and Norms (local, national, and international), which are placed near the tail in the diagram. The diagram that analogizes the company as a fish is expected to provide a comprehensive visual representation of public affairs in simple terms.
Chairman & Chief Consultant, Kiroyan Partners
This article has been published in PR Indonesia magazine 96th edition issued on March 2023, page 76.
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