D1W7
Drgraham27
AManagerialLookW7.pdf
In Practice
A Managerial Look at the Interaction Between Internal Communication and Corporate Reputation
Arin Dortok Kesisim Publication and Communication Services, Istanbul, Turkey
ABSTRACT
This paper is based on the hypothesis that there is a correlation between corporate reputation and internal communication. Qualitative research has been conducted based on the hypothesis that com- panies with high reputation and companies with lower reputation differ in their attitudes towards the ‘relation between corporate reputation and internal communication’. This study is based on research called the ‘Most Admired Companies’ conducted annually over the past three years by one of Turkey’s leading business magazines, Capital. In this research, for comparative pur- poses, only the top 10 and the bottom 10 compa- nies listed in the above-mentioned ‘Most Admired Companies’ research have been taken into consid- eration. The research method that was used in this study for the purposes of determining the attitude of senior communication managers toward inter- nal communication was the ‘survey method’. Although the sample size of the survey was limited to the numbers noted above, statistically significant results have been obtained. These include the following: the top 10 companies give weight to internal communication; they consider measurement a significant factor in their activities and believe that ‘commitment’ is a major contribu- tion towards business results; they develop and put into effect internal communication plans more often than the bottom 10 companies; and they believe in the impact of internal communication on corporate reputation. This study states that an
interaction between corporate reputation and internal communication is in effect. The purpose of this paper is to provide a new perspective on the discussions about the subject.
KEYWORDS: business objectives, business results, corporate reputation, employee, internal communication
INTRODUCTION
Today people find themselves in a market environment, where the conditions are con- tinuously changing. The competition is heating up, information is being dissemi- nated faster than ever — thanks to develop- ing technology — and emotional factors are given priority over material values, as pro- ducts and services look more and more alike. Given the changing conditions of the market, it is now a must that not only pro- duction, finance and business processes, but also communication processes are managed strategically. There is now an awareness of the possibility that, with increasing compe- tition, stakeholders — such as shareholders, investors, customers, consumers, suppliers, employees and the general public who can influence the company or be influenced by its operations — can change their decisions anytime. On the other hand, the assumption that a company’s interaction with its stake- holders is what makes up its corporate repu-
Corporate Reputation Review Volume 8 Number 4
Corporate Reputation Review,
Vol. 8, No. 4, 2006, pp. 322–338
# Palgrave Macmillan Ltd,
1479–1889/06 $30.00
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tation and that this interaction has an impact on the company’s business results, has been discussed and confirmed as compelling. Companies are now confronted by a
need to measure the expectations of their stakeholders and to express clearly their own vision, on the one hand, a need to ‘manage the future’ by establishing a con- nection between the two, on the other. ‘It is possible to compare reputation with a
monetary value, but it is not easy’, says Charles J. Fombrun (1996), the Executive Director of the Reputation Institute. His approach towards ‘corporate reputation’ is rather solid: reputation affects how a com- pany gains the support of people and in return is influential on the degree of their willingness to contribute to the company. For listed companies, the only simple mea- sure is to analyze the ‘book value’ and the market value and the difference between them. The result is the ‘intangible assets’ gained by the company from the market and that makes up an average of 55 per cent of the company value. Intangible values consist of two different assets: intellectual capital and reputation capital. The latter is gaining importance as a source of financial value.
1
Corporate Reputation in the Eyes of
Employees
Corporate reputation, which has become a major concern for companies, is now a value that is hard to achieve and yet easy to lose. In order to accurately manage cor- porate reputation, it is necessary to identify and analyze the stakeholders’ expectations and the role they play in a corporate repu- tation. Among the stakeholders who influ- ence corporate reputation and are influenced by it, employees are a significant factor and their significant role becomes increasingly effective every day. Paula M. Angelo’s statement supports this assertion:
‘The reputation of the company is always important in the eyes of its
employees. The employees serve as the perfect source and they are a competitive advantage when sharing the corporate brand with potential customers, existing ones and with other stakeholders.’
(Angelo, 2000)
Employees play a key role in helping companies achieve their business results. The relation of the employees with their company is gaining more importance in the achievement of business results such as increasing company profit and in achieving a competitive standing in the market.
‘Companies with good reputations attract good employees, who produce new and innovative products and serve customers well. Earnings grow, employees and customers stay happy, and the strong reputation continues. On the other hand, companies at the bottom of the reputation list with low reputation ratings have their own reasoning. Bad performance causes financial problems. Both the Company and its employees and the customers lose, which makes the bad performance even worse.’
(Vergin, 2003)
The Corporate Communications Survey conducted by Strateji/GfK research in December 2003 among stakeholders from the ‘general public’ sets forth that in the trust/frequency index, the employee ranks in the top three as an information source. (Figure 1)
2
Employees have an influence on other stakeholders. One other survey in support of this assertion was conducted by Wirthlin Worldwide Research for Burson–Marstel- ler. The survey results provided a ranking of five groups of stakeholders with influence on corporate reputation (Burson–Marsteller and Wirthlin Worldwide, 1998: 1). The collective perception of all stake-
holders noted in Table 1 is what deter-
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Dortok
mines whether the corporate reputation is good or bad. Therefore it is crucial for employees to identify themselves with their companies.
‘The reputation of a company is a mirror reflecting what is going on inside the company. If employees identify themselves with their company,
they can work better, pay more attention on their products and this in turn strengthens the corporate culture. Given the opportunity, they can act as ambassadors of the company. Therefore, receiving the support of employees is crucial for sustaining a strong reputa- tion.’
(Fombrun, 1996: 14)
Table 1: Collective Perception of Stakeholders Determining Corporate Reputation
Ask executives
Ask CEOs Ask media Ask board members
Ask consumers
Ask Wall Street
Ask government
Customers Customers Customers Customers Customers Customers Customers Employees Employees Employees Employees Employees Employees Employees The Media The Media The Media The Media General
public CEO Community
Wall Street CEO Community Wall Street The Media Wall Street General public CEO Wall Street General
public CEO Community The Media The Media
Figure 1: Information sources about the benchmark company
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The Interaction Between Internal Communication and Corporate Reputation
The Influence of Intangible Values on
Employees
Having a good corporate reputation and maintaining it is impossible without the sup- port of employees. ‘Without a good internal reputation, your external reputation will not be good either. If your employees do not trust you, they can openly voice their feelings and thoughts to everybody, hence brutally damaging your reputation and invalidating your successes’ (Young, 1996: 11–12). Today, one often comes across literature
expressions such as ‘employees’ commit- ment to the company’ and ‘employees’ pride in being part of the company’ Expres- sions like ‘employee satisfaction’ and ‘custo- mer satisfaction’ are used and ‘reputation’ and ‘employee’ are often used together.
‘The behavior that supports a corporate reputation or brand needs to be more deeply rooted, it needs to rest in the organization’s identity. Employees must feel the message they are sending with their behavior, not just go through motions. Thus, increasingly organiza- tions compete based on their ability to express who they are and what they stand for.’
(Schultz et al., 2000: 80)
The perception of other stakeholders is influenced by the perception of employees about their own company. Therefore it is of great significance that the employees embrace and internalize the company cul- ture, which is only possible through fully embracing and internalizing the intangible and emotional values, and not only the functional and tangible ones. The necessity for employees to act as
their companies’ advocates in order to create a change in the perceptions and behavior of other stakeholders becomes evident. The extent of employees’ relations to their companies can be seen in the Mori Excellence Model (Figure 2). The attitudes laid out in Figure 2 are
valid for all stakeholders and they consti- tute the main subjects of both internal communication and corporate reputation. Various research on reputation points out the possibility of a negative impact created by corporate members on their company’s reputation and in this connection research- ers draw attention to the significance of emotional factors.
‘Since beliefs about organizational identity affect members’ motivation and commitment, protecting and enhancing
Figure 2: The Mori Excellence Model
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the organization’s reputation affect its ability to manage its employees.’
(Schultz et al., 2000: 80)
Employees are in need of a feeling of trust for their companies; they want to acquire company related information directly, to contribute to the future decisions of their company and to be proud of the company they work for. In their paper: ‘Gaps between the internal and external percep- tions of the corporate brand,’ Gary Davis and Rosa Chun of the Manchester Business School explain employee satisfaction as follows: ‘Employee satisfaction here refers to the degree which an employee has posi- tive emotions towards the ‘‘organization’’, not towards the ‘‘specific work role’’, which is relevant to ‘‘job satisfaction’’ ’ (Davies and Chun, 2002). In that paper, the authors assert that while satisfaction has two aspects — rational and emotional — during the study branding activity was focused on the emotional aspect. The emotional aspect is described by such concepts as ‘happy’, ‘pleased’ and ‘proud’.
Among the most significant factors that help employees perceive their companies and act as the company’s advocates are the intangible values. Today, tangible factors such as salary and bonus that can be described as functional are considered ‘default’.
‘There is increasing evidence that the good employees demand more from their place of employment than a competitive wage, professional develop- ment, and a career path. Bright, dynamic, independent, and creative employees want to feel that the corporate values, that the organization provides them with an arena for meaningful work and personal develop- ment and that they can be proud of their place of work.’
(Pruzan, 2002)
Figure 3 provides examples of significant intangible values that are influential in encouraging employees to be proud of their company and to become their compa- ny’s advocates.
3
Intangible factors that can help employ- ees become advocates of their companies and affect other stakeholders can be mana- ged by internal communication, which in turn is related to corporate reputation.
When the studies are examined about employees and corporate reputation in an attempt to analyze the interaction between internal communication and corporate reputation, it is seen that employees are important stakeholders in corporate reputa- tion and influence the business results. Employees, on the other hand, are them- selves positively influenced by good corpo- rate reputation.
Below is a summary of Capital’s ‘Most Admired Companies’ research which has been an inspiration for this study on the interaction of internal communication with corporate reputation. While this study pre- sents an outlook on general opinion, a sub- sequent study, ‘A Managerial Look at the Interaction between Internal Communica- tion and Corporate Reputation Research’, reveals the correlation and the interaction between corporate reputation and internal communication.
CAPITAL’S ‘MOST ADMIRED COMPANIES’ RESEARCH
4
The methodology that the Capital maga- zine applied in its ‘Most Admired Com- panies’ research, which has been used as a source for this research on the relation between corporate reputation and internal communication, is as follows:
— Turkey’s most admired companies of 2002 as well as the most admired companies from 38 different industries were identified
— In total 550 of the companies listed
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The Interaction Between Internal Communication and Corporate Reputation
under the 38 most admired industries, including their 1,329 senior and junior managers, were contacted via tele- phone, e-mail, fax, mail and the internet
— First, the managers evaluated 18 criteria that can potentially generate admira- tion for a company, over a scale of ten. Following this, without differentiating the industry in which a given company operates, they identified the company they admired most and provided their reasons
— After identifying the ‘Most Admired Company of Turkey’, leading figures from 38 different industries were asked to identify the three companies they admired most, on the conditions that they exclude their own companies, choose companies in their own industry and state their reasons for their choice
— Managers were allowed, however, to evaluate the companies they work for within the same 18 criteria
— The field study took place between August 2002 and September 2002; the data analysis and reporting were done in October 2002.
Research criteria were as follows:
1 Information and technology invest- ments
2 Quality of service or product 3 Financial reliability 4 New product development, innovation 5 Quality of management 6 Social benefits and rights of employees 7 Payment policy and wage ranges 8 Improvement of employee qualifica-
tions 9 Marketing and sales strategies
16.3
88.5
90.4
79.0
62.9
89.7
85.3
94.2
1 .7
1 .2
3 .1
0 .9
2 .0
2 .8
4 .9
7.5
19.9
9.6
8.4
17.7
12.7
0 .9
0 .2
0 .3
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I would purchase its products/ services in new areas
Is a company I trust
Is a company I am proud of
I would buy shares for the long term if/ when I have money
Is a company I would like to work for/ I would want my child to work
for
I would support every kind of social activity
I would support every kind of commercial activity
Do not agree Neither agree nor disagree Agree No opinion
Figure 3: Business results (%) — Benchmark
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10 Communications and PR 11 Employee qualifications 12 Ethics in competitive behavior 13 Employee satisfaction 14 Customer satisfaction 15 Management and company transpar-
ency 16 Creating value for the investor 17 Social liability 18 Integration into international markets.
The Scope and Course of the ‘Most
Admired Companies’ Research
— Ranking of the criteria (18 criteria that can potentially generate admiration for a company)
— The most admired company of Turkey and their reasons for their choice
— The top three most admired companies in the industry with reasons (according to the degree of fondness)
— Evaluation of the most admired company in the industry he/she oper- ates within in each criteria on a scale of 10 (18 criteria that can potentially generate admiration for a company)
— Evaluation of his/her own company in each criteria on a scale of 10 (18 criteria that can potentially generate admira- tion for a company)
— Profile: age, gender, degree of educa- tion, title, years spent in the company, favorite magazines and papers, ISP, cell phone make and model, favorite soccer team, favorite commercials and promo- tional campaigns.
‘A MANAGERIAL LOOK AT THE
INTERACTION BETWEEN INTERNAL
COMMUNICATION AND CORPORATE
REPUTATION’ — THE RESEARCH
The Subject of the Research and the
Problem
The interaction between corporate reputa- tion and internal communication has been identified by several studies undertaken
throughout the world. The subject of this research is the approach of managers responsible for communication towards the interaction between corporate reputation and internal communication. The question for the research was as follows: ‘In compa- nies with high and relatively low reputa- tion, what is the extent of the weight given by senior managers in charge of communication to the interaction between corporate reputation and internal commu- nication; and what is their attitude when facing this interaction?’.
The Purpose of the Research
The purpose of this study’s research was to obtain the opinions of senior managers in charge of communication in companies with high and relatively low reputations about ‘the interaction between corporate reputation and internal communication’ and to use this data for concluding whether such an interaction exists or not.
Main hypotheses
H1: There is an interaction between corpo- rate reputation and internal communica- tion.
H2: The approach of the top and bottom 10 companies to internal communication differs from one another.
The sub-hypotheses tested in the study
— Companies with a high reputation give more importance to internal communi- cation compared with companies with lower reputation
— Companies with a lower reputation have a stronger belief in the necessity for an ideal company to have an internal communication plan than companies with a high reputation
— The possibility of maintaining an internal communication plan in a company is greater in companies with
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The Interaction Between Internal Communication and Corporate Reputation
a high reputation than it is with com- panies with a lower reputation
— The top 10 companies assign greater significance to communication plans as an impact on company reputation than the bottom 10 companies
— Companies with a higher reputation consider measurement of internal communication plans with greater significance than companies with a lower reputation
— The rate of measurement of internal communication activities that actually take place is greater in companies with a high reputation than it is in compa- nies with a lower reputation
— The belief that a company should main- tain a permanent team exclusively responsible for internal communication is a belief more commonly shared in companies with a high reputation than it is in companies with a lower reputation
— The possibility of maintaining a perma- nent team exclusively responsible for internal communication is greater in companies with a high reputation than it is in companies with a lower reputa- tion.
The t-tests and w-square tests were used to see the statistical differences between the top 10 and bottom 10 companies using a 90 per cent confidentiality level.
The Methodology
Because the question of interaction between corporate reputation and internal communication in companies — and parti- cularly in companies that are included on the reputation list — has hitherto been overlooked in the literature, this paper aims to lay out a framework for a discus- sion. Based on the ‘Most Admired Com- panies’ research of Capital magazine, this research is limited in its scope to a compar- ison of only the top and the bottom 10 companies on Capital’s list and is also lim-
ited in its field study of Turkey. Despite its relatively small sample size, tests were applied to prove that the results are statisti- cally significant. Any evaluation apart from this is the author’s personal qualita- tive comment. The following headlines have been used
to prepare the questions:
— Importance of internal communication — Measuring the internal communication
activities and the frequency of measure- ment
— Contribution of internal communication towards reaching the business objectives
— Contribution of internal communica- tion to the business results of the company (which also affect the reputa- tion)
— Contribution of internal communica- tion to corporate reputation
— Priorities of internal communication tools
— Existence of an internal communication team
— Communication revenues — The share of internal communication
within communication revenues.
The survey consists of three main parts. First, demographic information of partici- pants: title, age, gender, years spent in the company and the industry of the company. Secondly, participants’ definition of an ideal company: their opinion about the concept of ‘interaction between internal communi- cation and corporate reputation’ for an ideal company. Thirdly, participants’ description of the current situation in their companies: their remarks about ‘interaction between internal communication and corporate reputation’ in their company. Questions for the survey were prepared
in a way suitable for comparative evalua- tion. A scale of 5 (1: not important at all; 5: very important) has been preferred over a scale of 10 or 7 in order to make the
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comparison easier. The answers given to the questions have been evaluated in per- centages. Two questions that were aimed at finding out the communication budgets have been prepared with open ends. The survey was carried out both face-to-face and through e-mail/fax.
The report of Capital’s ‘Most Admired Companies’ survey lists only the companies in top 20 positions. Table 2 gives informa- tion about the top 10 and bottom 10 com- panies with which the survey was conducted.
The Research Calendar and its
Application
The questions of the survey used in the research have been prepared after the com- pletion of the first two chapters, which include the literature study, relevant studies made in the world as well as Capital’s ‘Most Admired Companies’ research. The research was completed between March 1, 2003 and August 31st, 2003, a period of five months.
Table 2: List of Participants in the Survey ‘A Managerial Look at the Interaction between Internal Communication and Corporate Reputation’
Title Age (years)
Sex Industry Years spent at the company
Top 10 or bottom 10
Communication coordinator 35–40 Male Food 8 Top 10 Deputy general manager responsible for HR
35–40 Male Banking 6 Top 10
General manager 40–45 Male Durable consumer goods
4 Top 10
Head of corporate communication department
35–40 Female GSM 1.5 Top 10
Director of advertisement and PR
35–40 Female Conglomerate 12 Top 10
Director of corporate communication
50–55 Male Durable consumer goods
6 Top 10
President responsible for corporate communication and external relations
50–55 Male Conglomerate 28 Top 10
Deputy coordinator of corporate communication
35–40 Male Medicine and health services, construction materials, consumer goods, finance, information technologies
15 Top 10
Director of HR and administration
35–40 Male Food 3 Bottom 10
Director of PR 35–40 Female Textile 8 Bottom 10 HR officer 25–30 Female Construction 3 Bottom 10 Sales manager 35–40 Male Import 5 Bottom 10 Director of HR and personnel
40–45 Male Food 1 Bottom 10
HR officer 40–45 Female Finance 8 Bottom 10
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The Interaction Between Internal Communication and Corporate Reputation
Evaluating the Findings
One of the most remarkable findings is that companies with high reputations attached more importance to internal com- munication compared with companies with lower reputations (independent sample t-test and w-square test; 90 per cent confidence level). Ideally, both the top 10 and the bottom 10 companies shared the idea that internal communication is impor- tant. Both groups, however, stated that the importance given to internal communica- tion in their company was lower than it should be. Also, the importance attached to internal communication by the bottom 10 companies was relatively lower compared with the top 10 companies (Figure 4). Another finding supporting this is that
all of the top 10 companies had an internal communication plan. Both the top and the bottom 10 companies shared the idea that an ideal company should have an internal communication plan. Nevertheless, whereas all of the top 10 companies had
such a plan, the ratio is not higher than 66.7 per cent for the bottom 10 companies (independent sample t-test and w-square test; 90 per cent confidence level). Another result is that the top 10 companies matched the definition of an ‘ideal company’ (Figure 5). The question that was posed only to
those companies with an internal commu- nication plan leads to the conclusion that, although this difference is not statistically significantly different, the bottom 10 com- panies considered their plans sufficient, which is not the case for the top 10 compa- nies (Figure 6). Companies with high corporate reputa-
tions paid more attention to the measure- ment of internal communication activities compared to companies with lower reputa- tions (independent sample t-test and w- square test; 90 per cent confidence level) (Figure 7). Companies with high corporate reputa-
tions stated that internal communication was playing an important role in achieving their business objectives and they had per-
4.63
4.25
5.00
4.17
Top 10 Bottom 10
Ideal
Present
Average
Figure 4: Importance of internal
communication
Question 1: How much importance do you think should be given by companies to internal communication? Question 13: Generally, how much importance does your company give to internal communication? 5. Should give highest amount of importance 4. Should give high importance 3. Neutral 2. Should give low importance 1. Should give lowest amount of importance
100.0
100.0
100.0
66.7
Top 10 Bottom 10
Necessity
Present
Figure 5: Necessity/importance of internal
communication plans
Question 2: How necessary do you think are the internal communication plans for companies? 5. Very necessary 4. Necessary 3. Neutral 2. Less necessary 1. Not necessary at all Question 14: Does your company have an internal communication plan? 1. Yes 2. No
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sonally experienced this in their companies (Figure 8).
When asked about which business results were influenced by internal communication, the top 10 companies rated themselves lower than the ideal, whereas the bottom 10 companies rated themselves higher than the ideal, which is a remarkable result. It can be seen, however, that the concepts of ‘com- mitment’ and ‘pride’, which were men-
tioned by the top 10 companies as important business results for them and the ideal company, can also be found in the foreground of research on corporate reputa- tion. These business results match with some components of corporate reputation, ie ‘employees’ commitment’, ‘a good place to work’ and ‘value attached to employees by the company’. When this connection is taken into consideration, answers given by the top 10 companies can be evaluated more realistically. Another important finding from this question is that internal communi- cation was mentioned to be important for the ‘commitment’ business result more by the top 10 companies than it was mentioned by the bottom 10 companies (Figure 9).
Although there was a perfect consensus about the contribution of internal commu- nication to corporate reputation, the degree of perceived efficiency of the com- panies’ own internal communication activ- ities affecting their reputation was greater for the top 10 companies compared with those in the bottom 10 (independent sample t-test and w-square test; 90 per cent confidence level) (Figure 10).
As a tool of internal communication, the ‘annual meetings’ were more common in the top 10 companies. Sharing corporate strategies, business objectives and future plans with employees was more important for companies with high reputations. This evaluation is supported by the fact that ‘internal publications’ and the ‘intranet’ were vital tools for the top 10 companies (Figure 11).
The top 10 companies attached more importance to the measurement of internal communication activities compared with the bottom 10. Two interesting points are that the bottom 10 companies believed that the measurement should be done for both abstract (loyalty, recommendation etc) and concrete values (financial indicators etc) and that the current situation indicated that there was only a narrow and insignificant
3.50
3.75
Top 10 Bottom
10
Figure 6: Sufficiency of the internal
communication plan
Question 15: If you have one, do you think that your company’s internal communication plan is sufficient? 5. Very sufficient 4. Sufficient 3. Neutral 2. Not sufficient 1. Not sufficient at all
4.63
3.83
Top 10 Bottom 10
Importance level
Average
Figure 7: Importance of measuring the
efficiency of internal communication activities
Question 3: Do you think that it is important to measure the efficiency of companies’ internal communication activities? 5. Very important 4. Important 3. Neutral 2. Not important 1. Not important at all
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The Interaction Between Internal Communication and Corporate Reputation
4.25
4.13
4.33
3.83
Top 10 Bottom 10
Ideal
Present
Average
Figure 8: Influence/contribution of internal communication to achieving business objectives
Question 4: What is the influence/contribution of internal communication to achieving business objectives? Question 17: What is the influence/contribution of your company’s internal communication activities to achieving your business objectives? 5. Very influential 4. Influential 3. Neutral 2. Not influential 1. Not influential at all
4.75
4.50
4.38
4.25
4.00
4.00
3.83
4.00
3.67
3.83
4.17
4.38
Top 10 Bottom 10
‘Commitment’
‘Pride’
‘Efficiency’
‘Recommendation’
‘Satisfaction’
In companies In your company 4.38
4.25
4.13
4.25
3.88
4.00
4.17
4.33
3.83
4.33
4.17
4.13
Top 10 Bottom 10
‘Intellectual value added’
Figure 9: Influence/contribution of internal communication to business results
Question 5: What is the influence/contribution of internal communication to business results listed below? Question 18: What is the influence/contribution of your company’s internal communication activities to business results listed below? 5. Very influential 4. Influential 3. Neutral 2. Not influential 1. Not influential at all
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gap between the top and the bottom 10 companies. Other findings have to be taken into consideration in order to make a correct evaluation (Figure 12).
On one hand, the top 10 companies were attaching more importance to the measure- ment of internal communication activities on both an annual and a project basis
4.50
4.25
4.67
3.83
Top 10 Bottom 10
Ideal
Present
Figure 10: Influence/contribution of internal communication to corporate reputation
Question 6: What is the influence/contribution of internal communication to corporate reputation? Question 18: What is the influence/contribution of your company’s internal communication activities to your corporate reputation? 5. Very influential 4. Influential 3. Neutral 2. Not influential 1. Not influential at all
17.8
17.1
15.8
15.8
8.6
3.3
2.6
2.0
0.7
9.6
11.4
1 4.0
20.2
12.3
8.8
9.6
11.4
2.6
0.0
16.4
Top 10
Bottom 10
Annual meetings
Oral/written messages from
the top management
Intranet
M eetings with the managers periodically
Internal publications
Reward ceremonies
Announcement boards
Inter - departmental m eetings
Activities ( like p icnics )
Contests
Ideal Present 22.4
9.9
12.5
17.8
6.6
6.6
2.6
2.0
2.6
8.2
19.1
19.1
16.4
10.9
5.5
9.1
7.3
2.7
0.9
17.1
Top 10
Bottom 10
Figure 11: Tools that should be used for internal communication
Question 7: Which of the below should be used for internal communication with priority? Question 20: What are the internal communication tools you are using most in your company?
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The Interaction Between Internal Communication and Corporate Reputation
compared with the bottom 10 companies and, in fact, they made regular measure- ments (Figure 13). On the other hand, some of the top 10 companies mentioned that they
measured once every 6 months, 3 months or 2 years, whereas 20 per cent of the bottom 10 companies did not make any measurement at all (Figures 14 and 15).
25.0
75.0
0.0
100.0
Top 10 Bottom 1 0
Business results that are no n - financial like l oyalty ,
recommendation , sati sfaction etc
Both financial and n on - financial business results as l oyalty ,
recommendation , sati sfaction etc
Ideal Present
37.5
62.5
40.0
60.0
Top 10 Bottom 10
Figure 12: Methods of measuring companies’ internal communication activities
Question 8: How do you think the results of companies’ internal communication activities should be measured? Question 21: How do you think the results of your company’s internal communication activities should be measured?
12.5
12.5
37.5
33.3
33.3
16.7
16.7
37.5
Top 10 Bottom 10
Annually
On the basis of internal
communication projects
Both
Other
Figure 13: Ideal frequency of measuring the
internal communication activities
Question 9: How often do you think companies should measure their internal communication activities?
62.5
37.5
20.0
60.0
20.0
0.0
Top 10 Bottom 10
Yes, every year
Yes, from time to time
Never
Figure 14: Frequency of measuring the internal
communication activities annually (present)
Question 16a: Does your company measure its internal communication activities?
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Consequently, measurement was more important for the top 10 companies com- pared with the bottom 10 companies and they evaluated their internal communica-
tion activities through measurements in certain periods.
Another crucial finding is that half of the companies in both groups agreed that there
0.0
87.5
0.0
80.0
20.0
12.5
Top 10 Bottom 10
Yes , after every project
Yes, after some
projects
Never
On Project Basis
Figure 15: Frequency of measuring internal communication activities (present)
Question 16b: Do you measure the effectiveness of internal communication activities in your company?
50.0
62.5
50.0
33.3
Top 10 Bottom 10
Necessity
Present
Figure 16: The degree of necessity of a team responsible for internal communication
Question 10: Do you think that companies should have a team responsible for internal communication? Question 22: Does your company have a team responsible for internal communication?
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The Interaction Between Internal Communication and Corporate Reputation
should be a team responsible for internal communication. The proportion of com- panies that actually had such a team, although not statistically significantly dif- ferent, was higher for the top 10 companies (Figure 16). When findings related to the communi-
cation budget and the share of internal communication within this budget were evaluated, one could not determine a stan- dard figure for the budget, neither in actual cases nor as the ideal. In the current situation, all the companies spent a different portion of their budget on internal com- munication, while some companies refused to answer this question. It is possible to conclude that companies
with high reputations attached more impor- tance to internal communication. They had internal communication plans and they reg- ularly measured the activities carried out within the framework of these plans. They also stated that internal communication con- tributed to business objectives, business results and corporate reputation; in addition, they were using appropriate communica- tion tools.
CONCLUSION
Establishing relations with employees or, in other words, undertaking activities aimed at one-way information flow or increased employee motivation are not enough on their own. Instead, internal communication needs to be undertaken strategically to encourage employees to a ‘value adding’ attitude, thereby taking the company to the future. This is the dominant approach in all the models related to internal com- munication examined. Internal communi- cation is a cycle consisting of a communication strategy appropriate for the future of the company, an internal communication plan aligning employees’ expectations with the expectations of the company, as well as application, measure- ment and evaluation.
On the other hand, the most important point identified is that the employee is the leading stakeholder carrying the corporate reputation, be it good or bad, and influen- cing it. Similarly, corporate reputation influences employees as well. If the com- pany is recommended as a good place to work, employees can work more happily and efficiently and the company gains talented employees. Models and studies of corporate reputa-
tion prove that employees are important stakeholders of corporate reputation and they can influence the company’s business results, directly or indirectly. At the same time employees are positively influenced by good corporate reputation. The following generalizations can be
made about the evaluations made by worldwide studies on the subject:
— Corporate reputation influences employees
— Employees influence corporate reputa- tion
— Corporate reputation affects the perfor- mance of the employee
— Companies with high reputations invest more in internal communication compared with those with lower repu- tations
— There is a strategic relation between internal communication and business results
— With respect to business results, compa- nies with high reputations see commu- nication as a strategic function and associate communication with making a difference in competition and solving strategic problems
— For companies paying attention to reputation, internal communication is also very important
— In Europe: — The most important components
affecting corporate reputation are, in order, ‘products/services’, ‘social
Dortok
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responsibility’ and ‘work environ- ment’
— The most influential factor within the ‘work environment’ component is perceived as ‘a good place to work’
— The extent to which the company is appreciated is affected by the value attached by the company to its employees and the rights it provides for them.
This research: ‘A Managerial Look at the Interaction Between Internal Communica- tion and Corporate Reputation’ has the following conclusions. Compared with those with lower reputations, companies with high reputations:
— Give more importance to internal communication
— Have a well-functioning internal communication plan
— Undertake more frequent measure- ment (on an annual or a project basis)
— Use communication tools for sharing the business objectives with employees
— Believe that corporate reputation has more contribution to/influence on business objectives and results.
Internal communication cannot be taken separately from corporate reputation. Inter- nal communication is the basic component of corporate reputation. This is the conclu- sion of all the studies examined as well as
this paper. This study also has special sig- nificance in the way that it presents a reflection of the current company profiles in Turkey.
NOTES 1 ‘Stakeholder’, Sabah Business Magazine, No. 6,
August 2003, 36. 2 STRATEJIGfK Corporate Communications
Survey, December 2003, Istanbul, Turkey. 3 STRATEJIGfK Corporate Communications
Survey, December 2003, Istanbul, Turkey. 4 ‘Most Admired Companies’ Capital Magazine,
Istanbul, Turkey, 2002.
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