Abstract
Competition for entry-level jobs in strategic communication will remain competitive, as more than 51,0 00 undergraduates are enrolled in public relations, advertising, and strategic communication programs in the United States. Business Essentials for Strategic Communicators provides a broad overview of the business knowledge communications majors need to navigate the future of corporate communication.
The first chapter describes the transformation of the public relations practitioner’s role from that of technician responsible simply for shaping the company message to that of strategic advisor responsible for developing the message and influencing organizational business decisions. Much of the chapter presents results of the authors’ studies—including one sponsored by the Arthur W. Page Society. For example, 8 out of 10 corporate executives reported undergraduates lack essential business knowledge despite the Commission on Public Relations Education’s (CPRE) recommendation of undergraduate and graduate courses in accounting, economics, management, marketing, and finance.
The ability to understand income statements, balance sheets, cash flow, and shareholder equity is requisite for success. Citing a study of salaries, the authors report MBAs earning higher salaries than professionals with master’s degrees from strategic communication programs. The authors emphasize for the future strategic communicator, communications acumen is secondary to business acumen. Chapter 1 concludes that “business 101” is essential not only for corporate careers but also for nonprofit and government careers.
Chapter 2 provides an overview of economics, the Federal Reserve, and key economic indicators. Ragas and Culp, professors at DePaul University in Chicago, explain that strategic communicators require a working knowledge of the consumer price index, currency exchange rates, U.S. treasury bond rates, Gallup’s economic confidence index, and the Thomson Reuters/University of Michigan consumer sentiment index, as well as spending and forecasting trends in advertising and marketing like ZenithOptimedia and Nielsen.
The importance of Wall Street and the financial and stock markets is covered in Chapter 3. The authors give the reader an overview of stock valuations and the impact of the securities and bond markets on the corporate bottom line. The chapter sketches the differences among the primary U.S. stock exchanges and explains initial public offerings and the role of the Securities and Exchange Commission (SEC) in financial communication with stakeholders. Chapter 3 concludes with a brief overview of exchanges in other countries and identification of the players in the financial markets including investment banks, federal and state regulators, institutional and individual investors, information intermediaries, and proxy advisers to name a few.
Accounting and its role in corporate record keeping and reporting are the focus of the book’s fourth chapter. Income statements, balance sheets, and cash flow statements are defined, and sample income statements and balance sheets are presented in the chapter’s tables. Chapter 4 concludes with an explanation of financial valuation metrics such as market capitalization and price-to-earnings ratios. Each chapter concludes with key terms and discussion questions. A 22-page glossary appears at the end of the book.
Strategic communicators need to understand corporate law and disclosure as well as the relationship between the company and the SEC. Chapter 5 presents a brief historical overview of SEC regulations for public companies and defines “material” information and insider trading. The overview also includes corporate disclosure theories and research and corporate disclosure channels including earnings conference calls and investment conferences. Chapter 5 outlines the risks of forecasting a company’s future financial performance and the risks of preparing earnings guidance for investors and the need to include “safe harbor language.”
Chapter 6 explores intangible assets and nonfinancial information. In addition to tangible assets, contemporary corporate performance can be driven by intangible factors such as a unique brand, the company’s reputation, patents, brands, management strategies, and organizational culture. Intangible assets are defined as knowledge assets. Strategic communicators are tasked with articulating how the corporate vision and strategy affect the bottom line of market performance. Familiarity with key performance indicators (KPIs) supports strategic communicators as they develop, package, and present the intangible asset message or story.
Governance and corporate social responsibility (CSR) are key to the strategic communicators’ understanding of investor and stakeholder relations. In Chapters 7 and 8, the authors explain the relationships among the organization and its shareholders and stakeholders. Ragas and Culp emphasize the importance of monitoring shareholder and stakeholder opinions to maintain and manage dialogue. The book provides brief definitions of board diversity and shareholder rights. The authors define the role of strategic communication as the ethical and social conscience of the organization and describe CSR in terms of corporate initiatives to quantify CSR’s financial benefits. CSR efforts are linked to sustainability rankings such as Newsweek’s Green Rankings.
The book’s final two chapters survey corporate reputation and communication measurement, respectively. Corporate reputation encompasses consumer and stakeholder perceptions of corporate performance, citizenship, leadership, governance, innovation, and production measured by products and services. The authors explain the Harris Interactive Reputation Quotient, Reputation Institution Rep Trak, and the Edelman Trust Barometer as indices of public perceptions and confidence in the United States’ top companies. Chapter 9 concludes with an overview of the variables influencing consumer perceptions, how consumers learn about companies, and how corporate actions influence reputation.
Chapter 10 provides the reader with an explanation of the Barcelona Principles and levels of measurement such as outputs, outtakes, and outcomes. Quantitative and qualitative measures are described within the context of goal and objective setting and measurement. The chapter concludes with a description of return on investment.
Ragas and Culp provide communication educators and students with a well-written account of the importance of “business 101” essentials for strategic communications practice. The book is succinct as the authors synthesize a broad array of business concepts into a single volume. It is a good desk reference for key terms and concepts.
The book provides basic information, concepts, and definitions. However, a reader looking for depth as well as detailed examples and case studies of the application of the concepts will have to look elsewhere. Most of the information presented in the book is available in introductory public relations and strategic communication textbooks. Many communications majors are exposed to the book’s definitions and concepts in business courses. Some topics such as corporate disclosure require more extensive information from legal experts.
It should be noted that the book approaches strategic communications from a normative approach as the authors reference “effective communication and a mutual understanding between an organization and its stakeholders” (p. 10). Although this is the traditionally accepted approach in strategic communications research in the United States, such a worldview does not provide readers with a critical, reflective perspective. In terms of intangible assets, future strategic communicators must understand how corporations perform where human rights, minority rights, gay rights, animal rights, environmental rights, and women’s rights are concerned. Is the corporation’s communication objective truly mutual? The answer is no. Where does persuasion fit into the model? The normative model fails to account for persuasion, and the mere definition of strategic communication means persuasion and not mutual understanding. Instructors may find this book useful as a supplementary textbook in introductory strategic communications and public relations courses.