I owe my knowledge to dozens of public relations professionals I have met through my professorship at Boston University's College of Communication, contacts as publisher of the weekly pr reporter, work with Ruder & Finn and other consulting firms, and president of the New England Chapter of Public Relations. My former students have been a major source of inspiration and, increasingly, of information.

Among my former students, several are mentioned in this book. Prominent among these is Sabrina Horn, founder and former CEO of Horn Group, a nationally recognized tech public relations agency recently acquired by global communications firm Finn Partners. She was exceptionally helpful in explaining the role of integrating social media campaigns within an overall public relations program and in reviewing the chapter on social media. Flora Hung Baeseake, senior lecturer at Massey University in Wellington, New Zealand, who has explored the importance of relationships in public relations, arranged lectures to students and faculty in Hong Kong, Macau, and Beijing. She also made it possible to address the board of directors of Guangdong Daya Bay Nuclear Power Station on the subject of crisis management.

Others from abroad are Minjung Sung, chairman of the Department of Advertising and Public Relations at Chung-Ang University in Seoul, South Korea, who taught me the subtleties of national cultures. Yi-Ru Regina Chen, an assistant professor at Hong Kong Baptist University, shared her research on the strategic management of government affairs in China. Leda Karabella, from Athens, Greece, who has held top public relations positions in companies such as BP, has been a constant adviser on public affairs, especially negotiations. Beth Boswell, managing director, Southeast Asia at the counseling firm of FleischmanHillard in Hong Kong, described healthcare public relations. Jasper Fessmann, currently earning his PhD, and now Assistant Professor in the Communications Department of the University of West Virginia described public relations in Germany and at Siemens in Berlin.

James A. Morakis, former head of international public affairs at Exxon Corporation, has been a major adviser on the strategic handling of international issues and on the intricacies of corporate diplomacy. Those reporting to him held positions in Europe, Africa, South America, Central America, the Middle East, and the Asia-Pacific region. During several once-a-year seminars with members of his staff, many issues they faced were discussed, along with optimal corporate responses.

Harold Burson, a senior public relations consultant and head of Burson Marsteller, has demonstrated that the real contribution of public relations is problem-solving. Edward L. Bernays, a knowledgeable and shrewd public relations counselor, shared many of his insights with me. Patrick Jackson, head of Jackson, Jackson & Wagner and a former president of PRSA, was a constant source of new ideas in public relations thinking. Ken Kansas, a manager of communications and public service programs at Exxon, frequently shared his thoughts in my corporate public affairs class. Mary Ann Pires, head of the Pires Group, demonstrated her expertise in community relations and corporate counseling. Jane Hiscock of the Farland Group showed the usefulness of consumer research in Europe and resistance in Japan for a woman to handle a press conference.

The value of the social sciences and humanities as key sources of public relations knowledge was demonstrated when I joined the faculty of what was originally called the School of Public Relations at Boston University. It offered the first Master's degree in public relations. Edward J. Robinson, with a PhD in psychology, wrote two influential books: Introduction to Public Relations and Communication, and Public Relations and Survey Research. Bernard Rubin, with a PhD in political science, wrote Public Relations in the Empire State. Albert J. Sullivan, with a background in the humanities, was co-editor with me of Information, Influence, and Communication. Carol Hills, who was studying for a doctoral degree in sociology, had the foresight to offer one of the first courses in international public relations.

I benefited from the lectures and seminars I gave in Australia, Bahrain, Chile, China, Colombia, England, and Pakistan by being exposed to the questions and ideas of professionals in these various countries. I also want to thank the many international students I have taught, including those in Boston University's London Internship Program (where Tobe Berkovitz and I taught Global Marketing Communication) and those at Lasell College. Its chairman of the Department of Communication, Janice Barrett, was a constant source of information about public relations and its contributing fields of organizational communications and international communications.

Finally, I want to thank all the students in my international public relations and global marketing communication classes who inspired me to write this book.

Otto Lerbinger, PhD, Economics Department, Massachusetts Institute of Technology, is Professor Emeritus of Public Relations at Boston University, specializing in corporate public affairs, crisis management, and international public relations. He has taught courses in Economic Behavior, Organizational Structure and Behavior, and Communication Theory. He also served as chairman of what is now the Department of Mass Communication, Advertising, and Public Relation, was Director of Research at the New York public relations firm of Ruder & Finn, and served as a consultant for several public relations firms. He is the initial designee of the Burson Marsteller public relations chair at Boston University. He has given lectures and seminars in Australia, Bahrain, Chile, China and Hong Kong, Colombia, England, and New Zealand.

Part I The Extended Enterprise introduces the role of this organizational function in helping to achieve organizational unity and vitalize and protect its reputation. A corporation is viewed as an extended organization with three zones: primary stakeholders, the socio-political environment, and the international arena. Furthermore, the model of stakeholder management is portrayed, which recognizes an obligation to all primary stakeholders and not only investors. One chapter deals with investors and employees, and the other with the community and consumers. The aim of corporate communication is to build fruitful and enduring relationships.

Part II Strategic Application of Communication Practices: describes five disciplines associated with corporate communication:

1. public relations – informing and persuading;
2. public affairs – building and applying power;
3. global marketing communication – facilitating transactions and strengthening consumer relationships;
4. social media and big data – expanding the ever-widening range and variety of relationships;
5. digital and social marketing – extending marketing practices and influencing behavior.

Part III International Perspective: discusses the status of globalization and implications of the different political, economic, social, and cultural features among countries. The relevance of the nation brand is compared with a produce brand and company brand.

Part IV Pivotal Issues Facing Management: explores the increasing relevance of these issues and applies the issues of management process. The new communication settings of science and healthcare are examined and the continuing problems of intellectual property rights and importance of science writing.

Part V Corporate Communication Contribution to Management: explains and illustrates the relevance of a management perspective. Consideration of corporate social responsibility is applied to global interactions and five ways in which corporate communication contributes to corporate governance are presented.

Participation on the executive level is more likely on the global level because of the complexity in dealing with other nations, supranational organizations, and non-governmental organizations (NGOs). Specialists such as lawyers, bankers, and international relations all play a role. But chief communication officers (CCOs) are in the advantageous position of seeing a situation as a whole because they are trained to be generalists and consider the effect on corporate goodwill and reputation. They reflect the view of Rafael Reif, president of the Massachusetts Institute of Technology (MIT), who states the institute's focus on problem-solving means that it stops “worrying about boundaries between disciplines and focus instead on what it takes to solve the problem…”¹

Corporate communication is the most accepted organizational designation of public relations when used by business organizations, in contrast to the designation by government and nonprofits. The purpose of corporate communication is to strengthen communications between management and its internal and external constituencies. Professionals who conduct corporate communication activities call these constituencies stakeholders, while public relations professionals prefer the traditional term publics. Both terms refer to any group that can affect the welfare of an organization and, in turn, can be affected by it.

The definition of public relations by the Public Relations Society of America's (PRSA) refers to publics: “Public relations is a strategic communication process that builds mutually beneficial relationships between organizations and their publics.”¹ Because of the early association of public relations with public opinion, an organization could go beyond the opinions of the general public and also consider the opinions of discrete groups of people, such as customers, employees, and community citizens, which were called publics.

Companies that refer to stakeholders adopt a stakeholder relations model for running their operations. This model proposes that a company not be run exclusively for the benefit of its stockholders but also to satisfy the needs of other stakeholders. The former is called the classical creed and the latter the managerial creed. The latter is called the stakeholder management approach by James R. Emshoff and R. Edward Freeman of the Wharton School's Applied Research Center. They popularized the term stakeholders and stated that the aim of stakeholder management is to “achieve maximum overall cooperation between the entire system of stakeholder groups and the objectives of the corporation.”² This aim is best satisfied by viewing a company as an extended enterprise.

The Extended Enterprise

A corporation was originally defined as a group of managers and employees organized vertically by the scalar system of different levels of authority – such as president, vice president, and manager – and horizontally by specialized areas of activity, such as treasurer, engineering, human resources, and marketing. Contractual exchanges governed the relations among firm's employees, owners, and others.

A better model for corporate communication is the “extended enterprise.” This approach was used by James E. Post, Lee E. Preston, and Sybille Sachs, who envisioned three zones surrounding a corporation: resources, industry structure, and socio-political setting.³ This book adopts the idea of the extended enterprise but describes each zone differently to suit the needs of corporate communication. As shown in Figure 1, the three zones are as follows:

1. Zone 1: Primary Stakeholders. These have been the focus of public relations. They include investors who provide capital, employees who provide labor, and local communities that provide “land” and accompanying infrastructure. Collectively, they represent the economist's “factors of production.”

   These stakeholders are only partly reflected in a company's formal organization chart and balance sheet, which shows assets, liabilities, and capital (net worth). The organizational chart includes only managers and other employees. The balance sheet excludes employees as an asset even though they are as important as buildings and equipment that are listed.

   The factors of production are paid dividends and interest. Wages, and rents from the revenue flow from consumer. It was Chester Barnard who observed in his classic The Function of the Executive, that customers had not been included as part of a company even though they are essential to an enterprise's success.⁴ Public relations and corporate communication overcome this deficiency by recognizing all stakeholders, including consumers.

2. Zone 2: Socio-Political Environment. This term is used by the Public Affairs Council, a Washington, DC professional society, to define public affairs. Included are government on all levels, advocacy groups, and the general public. The attitudes and actions of these constituents constitute a company's “license to operate.” The sociopolitical environment is especially important for companies that are highly regulated and are targets of advocacy groups.
3. Zone 3: International Arena. This zone is of special importance to global corporate communication and includes other multi-national corporations (MNCs), supranational organizations such as the United Nations, international organizations such as the World Bank and International Monetry Fund, and other nation states.

Chapters 2 and 3 of Part I discuss the stakeholder groups of Zone 1. The socio-political environment of Zone 2 is the subject of Part II's Chapter 5 on public affairs, and because this book takes an international perspective, the five chapters of Part III discuss Zone 3, the international arena.