Prof. James E. Grunig: Public Relations Research at the Organizational Level

Conceptualizing Quantitative Research in Public Relations. Part 7

At the organizational level, the central concept for planning and evaluating public relations programs is the relationship between the organization and its  publics. The concept is inherent in the term “public relations,” which means managing communication to build relationships with publics. At the organizational level, the public relations staff contributes to strategic decision-making by using formative research as a means of environmental scanning to identify publics with which an organization needs relationships. Staff, too, can do formative research to assess the quality of relationships with these publics before it develops specific communication programs to establish, maintain, or improve relationships with publics. Finally, the staff should conduct regular evaluative research to assess the effects of its communication programs on these relationships with strategic publics.

Formative Research at the Organizational Level

At the organizational level, public relations staff should do formative research as an integral part of the environmental scanning that provides essential information for public relations to participate in the strategic-planning and decision-making processes of the organization. Traditionally, public relations managers have scanned the environment by monitoring the media and political processes. These sources are useful, although there are better methods of environmental scanning. By the time the consequences of a management decision hit the media and become political, it is too late to affect a decision. Then issues management becomes reactive—damage control. After scanning the media and political processes, public relations professionals most often use large-scale public opinion polls. They, too, typically identify issues too late.

What is better? Sources of scanning information can be internal or external— from sources inside the organization as well as from external publics. They can also be personal or impersonal—from published sources or directly from personal contacts. I recommend the following process of environmental scanning:

1. Begin environmental scanning by monitoring strategic decisions made by senior Ask what stakeholders might be affected and what issues they might raise if certain decisions are made.
2. Do qualitative research on activists and personal Set up advisory boards and attend meetings of key stakeholders. Systematically monitor and classify problems, publics, and issues identified through these personal sources.
3. Monitor discussion groups, chat rooms, listservs, blogs, and websites on the Internet related to problems and issues of concern to your organization. Set up your own interactive forum on the web to allow publics to bring problems and issues to your
4. Systematically interview boundary spanners in your own organization— managers with frequent contact outside the organization, other employees with community contacts, and people in divisions or functions with frequent contact with
5. Identify the stakeholders and publics most likely to be affected by and to actively do something about the problems and issues identified in the previous
6. Systematically content analyze and categorize all of the information and put it in a database—classified by type of management decision, problem, public, and issue. Use this database as research evidence to present to management during strategic deliberations and
7. Monitor the media and printed sources to track your effectiveness in dealing with publics and In addition, do research systematically to assess and evaluate your relationships with publics.

Evaluative Research at the Organizational Level

Recently, academic public relations researchers have studied the literature on relationships in related disciplines such as interpersonal communication, and social and organizational sociology to identify key characteristics of relationships and to develop measures for the profession of the quality of long-term organization–public relationships. In the discussion of the program level, I described several process indicators that research shows are likely to lead to quality long-term relationships. To demonstrate that a public relations function has value to the overall organization, however, it also is necessary to develop and use long-term outcome indicators of the quality of relationships. My graduate students at the University of Maryland and I have identified two types of relationships (communal and exchange) and four relationship outcomes (trust, mutuality of control, satisfaction, and commitment) that define the quality of long-term relationships. These indicators can be measured to monitor the overall effect of public relations programs on each strategic public and, therefore, the value that the public relations function has to an organization.

We also have conducted research to develop valid and reliable measures of  the six indicators of the quality of long-term relationships—the two types of relationships and the four relationship outcomes. Details of the research can be found in a report published by the Institute for Public Relations (Hon & J. Grunig, 1999). In addition to quantitative measures that can be used in survey research, we also have developed qualitative measures for the indicators that can be used both in formative and evaluative research on the quality of relationships (J. Grunig, 2002).

Public relations managers can use these measures as indicators of the quality of their relationships with strategic publics, such as community members, journalists, and employees. Although individual communication programs do not usually produce a short-term change in these indicators, communication programs have a cumulative effect on the indicators over time. Therefore, public relations professionals should measure these indicators periodically to monitor the quality of the relationships their organizations have developed with each of their publics and, therefore, the value that the public relations function has contributed to the organization. Ideally, relationships should be measured yearly. Minimally, they should be measured every three years.

In contrast to our emphasis on relationships in explaining the value of the public relations function, many business scholars (e.g., Fombrun, 1966; Fombrun & Van Riel, 2004) and research firms (for a summary, see Jeffries- Fox Associates, 2000a, 2000b) have argued that public relations has value because of its influence on the reputation of an organization. These researchers also have developed measures of reputation that can be used to demonstrate this value. J. Grunig and Hung (2002) reviewed the literature on reputation and concluded that existing conceptualizations of the concept are confused and that measures of it more often measure attitudes or evaluations than reputation.

J. Grunig and Hung defined reputation as a cognitive representation—what people think, and subsequently say, about an organization. They measured reputation with an open-end question that asked participants in a survey to indicate what comes to mind when they hear the name of an organization. Using this measure, J. Grunig and Hung (2002), Yang and J. Grunig (2005), and Yang (2005) demonstrated that relationships are affected more strongly by communication with publics than is reputation and that relationships also affect a public’s evaluation of organizational performance more than reputation. In addition, they showed that differences in reputation could be explained by the quality of relationships with a public.

Although we have provided a great deal of evidence that the value of the public relations function can be measured by measuring the quality of relationships with different stakeholder publics, many public relations professionals and researchers insist that we must be able to measure a monetary value of the relationships to demonstrate the ROI of the function. Indeed, the pursuit of the ROI of public relations currently occupies a great deal of time and attention among public relations researchers. As I mentioned in the discussion of measuring behavioral outcomes at the program level, it is sometimes possible to measure the financial values of behaviors that result from individual programs, such as a marketing communication program, as long as variables other than communication that affect behavior are included or controlled in the analysis. However, the ROI of the overall public relations function can be measured only at the organizational level. Even still, measuring the monetary value of relationships is difficult for the following reasons:

• Relationships (and their product reputation) provide a context for behavior by consumers, investors, employees, government, the community, the media, and other strategic constituencies; but they do not determine this behavior The behavior of these constituencies affects financial performance; but many other factors, such as competition and the economic environment, also affect that performance.
• Relationships save money by preventing costly issues, crises, regulation, litigation, and bad publicity. It is not possible, however, to determine the cost of something that did not happen or even to know that the negative event or behavior would have happened in the absence of excellent public
• The return on relationships is delayed. Organizations spend money on relationships for years to prevent events or behaviors such as crises, boycotts, or litigation that might happen many years down the
• The return on relationships usually is lumpy. Good relationships with some constituencies such as consumers may produce a continuing stream of revenue, but for the most part the return comes all at once—e.g., when crises, strikes, boycotts, regulation, litigation, or bad publicity are avoided or Similarly, relationships with potential donors must be cultivated for years before a donor makes a major gift. As a result, it is difficult to prorate the delayed returns on public relations to the monies invested in the function each year (L. Grunig et al., 2002: 105).

Accountants tell us that an organizational function such as public relations has value if it (1) increases revenue, (2) reduces costs, or (3) reduces risk.

Good relationships produced by public relations may result in one or more of these three sources of value. The greatest contribution of public relations, however, most likely comes from reducing costs and risk, other than from marketing communication programs. For the reasons just mentioned, however, it is difficult to measure reductions of costs and risk in monetary terms.

In the Excellence study (L. Grunig et al., 2002), we used the technique of compensating variation to estimate the value of relationships cultivated by public relations to the organization. Ehling (1992) developed the rationale for using this technique in the first Excellence book. With compensating variation, the researcher simply asks the people who benefit most from an activity to estimate its value to them. We asked CEOs to estimate the value of public relations, using several measures, and were able to show that CEOs valued excellent public relations functions more highly than less excellent functions. Although we could not measure ROI directly, our interviews with CEOs and senior public relations officers revealed numerous examples of how good relationships had reduced the costs of litigation, regulation, legislation, and negative publicity caused by poor relationships; reduced the risk of making decisions that affect different stakeholders; or increased revenue by providing products and services needed by stakeholders. Those examples provided powerful evidence of the value of good relationships with strategic publics. I doubt, however, that researchers will ever be able to place a precise monetary value on this evidence of the value of relationships. With the strong conceptual and empirical evidence we have produced of this value, it is not necessary to measure a monetary ROI to establish the value of public relations to an organization.

In the next chapter: Public Relations Research at the Functional Level

Read Part I, Part II and Part III, Part IV and Part V and Part VI

Grunig, J. E.: Conceptualizing quantitative research in public relations. In B. Van Ruler, A. Tkalac Verčič, & D. Verčič, (Eds.). Public relations metrics (pp. 88-119). New York and London: Routledge, 2008. Republish with the permission of author.