McGraw-Hill
Joseph R. Dominick
University of Georgia--Athens
© 2007 The McGraw-Hill Companies, Inc. All Rights reserved.

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved.

Chapter 13
 Case Study – Wal-Mart
 Defining Public Relations
 A Short History of Public Relations
 Organization of the PR Industry
 Departments and Staff
 The Public Relations Program
 Economics
 PR Online
 Public Relations Careers
McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved.

•
Wal-Mart employs 1.2 million
•
3600 stores
•
Global sales in 2004 of $256 billion
•
Target of negative criticism and publicity
•
Sued 6000 times in 2002
•
Opposition and protests from community groups
•
Employees paid poverty-level wages with no health benefits
•
Stock steadily declining
•
Executive dismissed
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Defining Public Relations
--- World Assembly of Public Relations
McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved.

Defining Public Relations
•
PR compared with Advertising
– Both persuade
– Both use mass media
– Advertising is a marketing function
– Public relations is a management function
– Advertising does not use interpersonal communication
– Public relations uses every communication form
– Advertising is sponsored (paid for)
– Public relations messages are usually free
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Defining Public Relations
•
Common practices that are not public relations:
– Press agentry
– staging media events to attract public attention
– Publicity
– attempting to place favorable stories in the media
Extensive publicity and bad public relations???
McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved.

Defining Public Relations
•
What PR people actually do:
– Work with public opinion
– Explain their organization to various publics
– Listen to the publics
– Work with top management to achieve goals
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A Short History of Public
Relations
•
American Revolution
– Boston Tea Party
– Liberty Tree
– Samuel Adams, Thomas Paine, Abigail Adams,
Benjamin Franklin
•
Industrial Revolution
– Initially public completely disregarded
– Muckraking exposés
– Prototypical press agents
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A Short History of Public
Relations
•
Ivy Lee
– Press representative for anthracite coal mine operators and Pennsylvania RR
(late 1900s)
–
Declaration of Principles
– The “humanizing” of business
• Woodrow Wilson’s Creel Committee
– PR tactics in WW I
– “Save food”; “Buy war bonds”
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A Short History of Public
Relations
•
Edward Bernays, Crystallizing Public
Opinion, first book on public relations
(1923)
•
Carl Byoir opens PR agency (1930)
• Franklin Roosevelt’s radio “fireside talks
– Depression
– New Deal reform program
•
WW II – creation of Office of War
Information
McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved.

A Short History of Public
Relations
•
Growth of PR late 20 th Century
– Some companies acknowledge social responsibilities
– Consumerism forces organizations to pay attention
– Organizational complexity necessitates PR department
– Public is more complex
• Population growth
• Workplace specialization
• Job mobility
McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved.

A Short History of Public
Relations
•
PR late 20 th Century
– “Era of Public Relations”
– 19,000 (1950) 
300,000 (2003)
– Public Relations Society of America (1947)
– Code of Standards (1954)
– Public Relations Student Society of America (1967)
– US military operations in Iraq and embedded reporters
– Enron, Arthur Anderson
– One of fastest growing professions in USA
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•
Internal PR Department
– More in-depth knowledge about the company
– Assigned or reassigned on short notice
– Less costly
•
External PR Agencies
– Fresh, objective viewpoints
– More services
– Purchasable prestige
– May cause morale problems in company
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Areas of Public Relations Practice
Business
Entertainment and sports
Government
International PR
Education
Investor relations
Hospitals
Politics
Nonprofit organizations
Crisis management
Professional associations
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Departments and Staff
– No two are identical
– PR director always reports directly to top management
– Three main divisions
1) Corporate communications (internal publics)
2) Community relations (external publics)
3) Press relations (news media)
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Departments and Staff
– More complex
– Five typical main divisions
1) Creative services
– press releases
2) Research
– surveys, focus groups
3) Publicity and marketing
– merchandising, promotions
4) Accounts
– relations with clients
McGraw-Hill
5) Administration
– business aspects of the department
© 2007 The McGraw-Hill Companies, Inc. All Rights reserved.

The Public Relations Program
Step One How much will the company save?
•
Planning
– Strategic
How many workers will be transferred?
• Long term, general goals What about the empty buildings?
• Formed by top management
• Tasks that achieve the strategic goals
Will the people believe the company?
How will it affect the company’s other operations?
– Tactical
• More specific, often short term
– Management by Objective
• “Inform >50% of Cartown about reasons for move”
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McGraw-Hill
• Information Gathering
– Organizational records, books, journals
– Letters, email, interviews
– Formal research techniques
– Program-specific questions:
© 2007 The McGraw-Hill Companies, Inc. All Rights reserved.

•
Communication
– Organization is the source of the communication
– PR requires thorough knowledge of mass media
– Personal communication channels also necessary
–
Example: news conferences, ads, news releases, public meetings (external publics)
– Example: bulletin boards, newsletters, speeches, letters, memos (internal publics)
Example: An automobile manufacturing plant is closing soon in Cartown,
Midwest USA
Challenge: Communicate this to the people of Cartown
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• Evaluation
– “How well did it work?”
– Works with MBO techniques – measurable goals make measurement of success possible
– Measure accomplishment of tasks as well as achievement of desired effect
– Simple measurements: # brochures delivered
– Complex measurements: shift of perception
–
Example: Change in customer loyalty due to move
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Economics
$ Weak economy
 revenues decline 2001+
$ Top 50 USA PR firms: $2B in 2003
$ Industry domination: giants owned by ad agencies
(Hill & Knowlton, Burson-Marsteller) of WPP
(Porter-Novelli, Fleishman-Hillard) of Omnicom
$ Independents
Edelman PR Worldwide
Ruder Finn
$ Fees: fixed, retainer, hourly
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PR Online
•
E-mail used for press releases
•
Internet used to distribute info to the media
•
PR Newswire
•
Corporate website first line of communication with: consumers, shareholders, reporters
•
Crisis management uses corporate website
–
Example: www.saudinf.com
•
Online corporate pressroom
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Public Relations Careers
•
Internships at various firms, or in the media
•
Writing and communication skills very important
•
Business, law, public opinion research, social sciences are useful
•
Editing, writing, speech-making, media production
McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved.