"The media's the most powerful entity on earth. They have the power to make the innocent guilty and to make the guilty innocent, and that's power. Because they control the minds of the masses”Malcom X

Media relation is one the most important part within any corporate communication in the era of 21st century. With the rapid development in technologies such as internet facilities and television, concept and focus on media relation has become more and more serious because of the way the information’s are transferred from one party to another within a very short span of time. With the current situation of overseas business, and globalization, it is very crucial for the company to maintain a healthy and a good relationship with the media. With this they have an advantage because if situation worsens and they have a crisis, things can be handled pretty easily and smoothly without much damage to their image and reputation. In today’s context, consumer generated news, reporters, editors, various social networking events; communication blogs etc plays the most important role in media relations. The most important thing to be kept in mind is that media is not at all interested about fact and positive information’s about a company. Instead, they are more concerned about the negative parts and the bad things that the company usually does.

Current Example in the Business world
We are all aware with the recent crisis that Toyota is going through. In this context, Japanese media has criticized Toyota’s president for giving a delayed and an unclear explanation for the massive recall in the history of any automaker that has hampered its image along with the Japanese corporate reputation. So we can see how much a media can be responsible for shaping the information that the readers get access to. The following web site will provide more information on this.
http://www.industryweek.com/articles/japans_media_lashes_out_at_toyotas_slow_response_21023.aspx

Personal Experience
My dad used to own a plastic pipe factory in Nepal which manufactured PVC pipes, polythene pipes etc. One day during the regular operation hour, a worker stuck his hand on the machine and broke his upper limb. As per the regulation of the company, he was given all the medical benefits along with a paid holiday for 2 months. But the media twisted the story stating that the injured worker had to pay all his medical bills and no supports or benefits were provided by the company. Later, on the press release the worker confirmed that the critics were misleading and there were no such issues.

The power media possesses is beyond expectations. As such dealing with the media is indeed a tough task and is a challenge because we have no control over the news and information’s. The following video shows the strategies for developing a good media relation.

CSR, Corporate Social Responsibility or a "Corporate Sustainability Requirement" - Royal Dutch Shell - BTST 670 - Chapter 5

Corporate Social Responsibility or CSR, is a positive, meaningful but controversial topic that deserves much attention. Paul A. Argenti, author of “Corporate Communication” defines Corporate Responsibility (CR – another term for CSR) as “constituting an organization’s respect for society’s interests, demonstrated by taking ownership of the effect its activities have on key constituencies including customers, employees, shareholders, communities, and the environment, in all parts of their operations. In short, CR prompts corporation to look beyond its traditional bottom line at the social implications of its business.” I sometimes look at CSR as a “Corporate Sustainability Requirement.” In the past, when CSR was still gaining popularity (or becoming necessary), it was a way an organization could distinguish itself from the rest. Today, CSR is more of a norm; that if nonexistent in an organization, the potential for sustainable success is limited.

From my experiences working as a Credit Analyst for Strategic Energy (now Direct Energy), CSR is a facet of a company’s operations that isn’t always evident from the analysis of financial statements, credit ratings, or necessarily the financial savvy of company executives. An organization that practiced CSR, as defined by Argenti, was often viewed as a better client, per se, than a similar company with a similar financial and credit rating. The logic is simple: if the actions of a company are socially responsible in the viewpoint of customers, an end user may choose to purchase a product or service from that responsible company, thus increasing revenue, brand recognition, and reputation of that organization. If an individual feels as though CSR is important, decides to work for an employer that is a CSR enabler, this socially (or morally) responsible individual will fit into the culture, believe in what the company believes in, and work harder as an employee to accomplish company goals. For shareholders, it’s obvious that the primary motivation for an investment is; based on that investment, what the return will be given the level of associated risk. A corporately responsible company may be viewed as less risky, but with an expected return level that is comparable to a similar company financially that may not necessarily be very socially responsible – this gives an arbitrage opportunity for gains (for a given level of risk, a certain return is expected; anything beyond this return expectation at that particular risk level is an arbitrage opportunity). Communities and environment go hand-in-hand when it comes to CSR. If a Multinational Corporation (MNC) decides to add a branch in a community (that may not necessarily want them there) it is their duty and obligation to act in a corporate socially responsible manner in that community. For example, if the Corporation doesn’t care about the environment in that community, how would they expect that region to respect them enough to become customers, supporters or employees? They can’t. On a more positive side, that MNC could bring more job opportunities, community development and economic stability.

A real-world example of a corporate socially responsible company is Royal Dutch Shell (though it may seem like an oxymoron – “This oil company is corporate socially responsible”). Shell is actually ranked number three in Fortune’s “Global 500 Rank” (http://money.cnn.com/popups/2006/fortune/g500_accountability/3.html). This article highlights Shell’s level of CSR. “…its CSR process has led to a program to help relocate communities in China whose access to water have been cut off by a petrochemicals plant. Shell has also sunk significant investment into liquefied gas as an alternative fuel to gasoline and has been an active trader on Europe's carbon emissions markets. But as many may expect, Royal Dutch Shell wasn’t always considered and advocate of CSR. In 1995, an Ethical Consumer Magazine article shows this lack of CSR. It talks about how in 1995, “the anti-corporate backlash” reached its highest point. That year, Shell was accused of involvement in the execution of Ken Saro Wiwa and eight other activists in Nigeria. They were also being pursued by Greenpeace over their decision to sink the Brent Spar oil platform in the middle of the sea. That pursuit led to future decisions by Shell to undergo on-shore disposal options, as favored by Greepeace and its supporters.
(http://www.ethicalconsumer.org/CommentAnalysis/Features/CorporateSocialResponsibility.aspx). In that time period, Shell lost the confidence of the public and also investors; but only temporarily. This era opened the eyes of many in the business world, bringing the realization that public reputations are very important; and campaigners have the ability to damage them. The article emphasizes that strategically, it was essential that companies persuade the public that corporations played “an important and meaningful role in society.” Shell became the first major company to publish a Corporate Social Responsibility report in 1998 based on Shell ‘Profit and Principles – Does there have to be a choice? The Shell Report 1998’.

The Legend of 'ZARA' - Chapter 4 - BTST 670

Zara was the brainchild of Amancio Ortega, President of the Inditex Group. The brand may not be the most discussed in fashion magazines but the success sure created a lot of activity in the minds of its competitors.

Ortega, with a vision to fulfill the needs of the customers and being 'flexible' in all its literary sense is now the President of a Corporation with one of the largest distribution networks in the world. 30 Years ago, when the brand started off with a vision to cater to the needs of the customer with the latest fashion at affordable prices, the investment banks refused to finance the corporation stating that the 'model is most likely to fail'. Now, with its presence in more than 50 countries at most of the fashion hubs in the world; Zara is acclaimed to be one of the most innovative brands of the world.

The philosophy of the brand is quiet unusual, a great disbeliever of advertising and promotions, the brand seeks opportunity in every bit of its business uncertainty. Zara operates from La Coruna, Spain in a manner that most of the items are designed and produced at its Head Quarters leaving less than 50% (most of them being shirts and jeans) being outsourced to Asia.

The store manager (at every single store), at the end of the day reports to the head quarters at La Coruna about the collections being sold, stocks being depleted etc., giving the designers all the information about which trend to follow.

An average customer of Zara visits the store about 17 times in an year. The advertising strategy of the Brand is quiet different from its competitors; there is no advertising strategy. It is almost impossible to point out a Billboard or an advertisement of Zara except for some countries in Europe. The absence of an online store also creates an urge for the customer to pay a visit to the nearest Zara store.

The image of the brand is totally influenced by the physical retail stores whose windows are designed by the designers in La Coruna. The price of the items in every store are kept at a minimum and the shelves are replaced with latest items at their earliest making the customers pay more visits to the store. The competitors, namely H&M (Swedish Retailer) and Gap are the only ones that can compete with the fast paced brand.

The reputation of the brand is built strongly not to portray a cheap facade neither an image that is too expensive to be afforded by a middle class worker. Leaving no stone unturned, 1200 styles are produced annually leaving all the competition behind.

Toyota Crisis (BTST 670)

TOYOTA CRISIS

The first thing that came to my mind with Toyota was the quality and durable vehicles. But, the situation is not same now. Toyota now reminds me of recalls. Worlds' largest car manufacterer can be so negligent amazes me.

Its not just a defect its number of defects. Started with the floor mats getting stuck with gas pedal and then came the unwanted acceleration of gas pedal. Also, Automobile engines disruption caused by power lines/other sources and brakes on Prius hybrid 2010 are the latest probables.

7.6 million cars recall from nearly 5 continents with such a fatal defect has greatly hampered the reputation of Toyota of building safe and durable vehicles. Adding fuel to the fire was the silence of the Akio Toyoda, President and grandson of founder of Toyota Motor Corp.

After enough of buzz comes his apology statement in the press conference held on friday, Feb 5, 2010. Mr. Toyoda during the press meet put the emphasis on building safe and quality vehicles rather than sales and profit. Toyota now faces long-term challenge about its profitability and more impotantly the challenge to regain the trust of the customers in coming future.