Tactical Transparency In The Public Relations Commerce Essay

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In the post-Enron, blog-ridden world we live in, transparency is a concept thrust on public relations practitioners. Our stakeholders accept authenticity as the building block of organization-public relationships. As the first line of defense for any organization, it is the job of these professionals to build an appropriate transparency strategy. If communications professionals are part of boardroom discourse, the tools of transparency will correspond to the company's philosophy. Some choose to embrace transparency as the most ethical strategy while others remain opaque to retain competitive advantage.

The intent of this study is to define what transparency means in the new media millennium, address the implementation of transparency at all levels and types of organizations, and contribute to the ongoing scholarly debate. The information provided will demonstrate the power and efficacy of tactical transparency when embedded into a company's culture. Transparency cannot improve corporate reputation when practiced by only a few representatives. It will not bolster public opinion if adopted only during crises.

Defining "Tactical Transparency"

Tactical transparency is not as ethic-centric as it is based in practicality. The varying degree to which a company shares its leaders, employees, values, culture, business practices, and business strategies determines its level of transparency. [1] Defining transparency is often a contested point for practitioners during the strategic planning process and among public relations scholars, because none of the elements listed above is reasonable in every business situation. Accessibility is important to consumers but some sensitive subjects are not appropriate to share with stakeholders. Sharing product safety information is essential to doing ethical business, but releasing product development information could prove costly.

Scholars tend to identify two types of transparency: financial and governance. Financial transparency is often associated with public companies and includes earnings and profits reporting. Governance transparency involves sharing rules, processes, and executive structure with publics. Although these classifications are indeed applicable to the business environment, public relations professional are more concerned with openness as it applies to corporate reputation. Scholars tend to agree on what transparency is not; it is not full disclosure.

Holtz and Havens defined the four characteristics of transparency as objectivity, purpose, esteem, and navigation. [2] To remain open, employers should ideally use varying degrees of each in times of crisis or an effort to avoid such crises by demonstrating a willingness to share and disclose information.

Honesty and integrity are central to objectivity. Employing multiple channels, informal and formal tactics, and innovative strategies will earn goodwill from publics, but genuineness and objectivity will always win out. Transparency must always have a purpose; it should be accompanied by an action or follow-through. Regaining consumer trust is of course vital to the bottom line, but rebuilding a brand requires consistency and longevity. Former JetBlue Airways founder and CEO, David Neeleman offered a YouTube apology for his airline's cancellation of multiple flights on Valentine's Day 2007. [3] But in addition to the apology, Neeleman helped his management team development and implement a Customer Bill of Rights, empowering stakeholders to become more involved. Suggesting that purpose is the key to transparency efforts, Neeleman later wrote, "Talk is cheap-action is the only thing that really builds your reputation, not just as a person, but as a company." [4] Regardless of the communications efforts a company employs before and after crises, its past track record will most likely determine the esteem in which the company is held. Esteem is based on corporate responsibility (charitable activites, employee treatment) and corporate values. Finally, the way a company navigates crises will help determine future situations requiring transparency. Methods that have worked in the past can be applied quickly and candidly and improve dialogue with publics.

Transparency in the Internet Age

The challenges facing public relations professionals in today's marketplace involve what Holtz and Havens (2009) define as a "convergence of two separate and distinct trends: declining trust in business and increased public scrutiny" both are a result in part of social media trends and the accessibility of real-time dialogue. [5] Declining consumer trust is both a Post-industrialist reality and a current legitimate public fear resulting from closed-door business practices that were exposed in recent headlines. New legislation now forces open deals and consumer expectations have risen to meet new ethical standards. What is good and ethical however will always be a contested point; the fuel behind much of this debate. Organizations can make use of public collaboration to explore stakeholder expectations and ethical requirements while responding to criticism with haste.

If we view transparency from strictly the consumer perspective, it is apparent that corporate responsibility, which encompasses transparency, has become far more important in a tough economy. According to a survey completed by Landor Associates, Penn Schoen Berland and Burson-Marsteller, 75% of consumers felt social responsibility was important and 55% reported choosing cause-related products over those that don't. [6] A 2008 Harris study of government reputation and transparency found "deep dissatisfaction among the American public with both the availability of government financial information and the way it is delivered to the people." [7] CBS's hit television show, Undercover Boss thrives on transparency, giving viewers the unadulterated inside scoop through CEO lens as he/she discovers the real inner-workings. [8] Consumers have reacted to the somewhat risky exposure; some companies featured have reported stock increases and record sales. [9] This suggests that transparency is an effective public relations strategy.

The ease and accessibility of online webcasts has created an atmosphere of "de facto real-time openness," in which companies' crises efforts are expected to be acknowledged instantaneously. [10] BP's 2010 oil spill proved that with greater visibility, comes greater accountability. Following the tragedy, it is likely that market forces will impose transparency regulation for other energy companies working in sensitive ecological environments. Various stakeholders will demand monitoring abilities similar to that BP posted on its website.

The mile-deep live video-feed satisfied stakeholder curiosities but it also set a new standard for "strategic transparency." If we can watch oil spewing from a busted wellhead (the crisis itself) and the underwater vehicles attempting to seal the leak (the crisis response), then what else is possible? Could we watch the automobile mechanic diagnosing a broken vehicle, the preschool teacher administering medicine to a child, or the kitchen staff preparing food? Michael Schrage of the Harvard Business Review identifies disclosure as the "20th Century anachronism of a paper-based age." [11] From this incident, Schrage speculates that tactical transparency will continue to "receive an enormous technical and conceptual boost." [12] 

Supporters of transparency in the workplace identify many elements that could benefit from greater public transparency. Analyzing organizational processes, meeting strategies, office locations, and business functions may reveal web streaming availabilities or more accessible avenues. In some cases, doing so may even support the organization's marketing strategies. In this sense greater visibility and transparency is another opportunity to garner media attention and develop a brand.

If positive public relations are a result of tactical transparency, then its perceived absence could generate negative publicity. A referee error in a recent World Cup game between the US and Slovenia caused a firestorm of public reaction. FIFA regulations prevented the referee from explaining the questionable call, but FIFA's president offered a tweet following the game directing spectators to a previous statement he'd made regarding video replay. A Time.com commentator wrote, "[C]ouldn't he have offered more transparency about this specific incident than a tweet? Especially a tweet that links a boiler plate web page from March?" [13] 

Literature Review

Crises such as the FIFA ruling and the BP oil spill, by definition threaten to damage the reputation of an organization. [14] Benoit explored organizational attempts to rebuild reputations after crisis-damaging events and developed the image restoration theory. Benoit's image restoration strategies included denial, evasion of responsibility, reducing offensive of the act, corrective action, and mortification (an ingenuous apology). [15] Denial is the most defensive of the acts and involves a complete refusal to accept responsibility while evasion of responsibility severely limits involvement but does recognize some amount. Reducing offensiveness is a specific form of strategic evasion that focuses on minimizing the effect of the act on public opinion. Corrective action has implications in the immediate and future responses of the organization; mortification is an immediate and sincere apology for wrong doing, the most transparent approach. Image restoration strategies and the appropriate discourse are chosen, altered, and arranged for the specific crisis or stakeholders. [16] Benoit's research finds that a corporation best serves itself when it takes full responsibility, apologizes, and acts with haste accordingly. [17] 

Transparency can occur in many situations and contexts. Hood refers to four separate applications of openness including event transparency (open information in response to crises), process transparency (open information about business functions and operations that affect crises), and real-time transparency (information released immediately), and retrospective transparency (information released a considerable amount of time after an issue arises). [18] Drew and Nyerges found that the most effective transparency decisions were integrated, accessible to stakeholders, clear and concise, logical and rational, truthful, and accountable. [19] 

Arguments for Transparency in Public Relations. Transparency serves to protect individual rights and organizational involvement. [20] Transparency ensures better behavior on the part of businesses while helping to assess performance, both critical to organizational accountability. [21] The public values transparency and as mentioned earlier, expects it in the digital age. In relation to political transparency, Koppell writes that the "openness of government to regular inspection is so firmly ingrained in our collective consciousness that transparency has innate value." [22] One study found that organizations committed to transparency, also experiences heightened job satisfaction and durations, innovativeness and achievement. [23] Transparent decisions lead to more informed decisions, because transparency "promotes improved access to information as a way to build public confidence in the decision process and strengthen credibility." [24] 

Internal transparency has been studied as extensively as transparency for corporate reputation purposes. According to a study sponsored by the public relations firm Fleishman Hillard, twenty-seven percent of the survey pool assessed corporate responsibility based on the organization's treatment and well-being of its employees. In fact, only three percent of respondents associated corporate responsibility with public service and outreach. [25] 

Transparency is linked to other corporate issues including efficiency and long-term cost savings. For instance, transparency can reduce the need for duplicating efforts, the likelihood that decisions will have to be revised (at potentially huge cost), and the risk of potential financial penalties. Building a sense of engagement and involvement among employees goes requires more than compensation. Companies will effective communications departments strategically inform employees of equitable pay structures to maintain enthusiasm and commitment internally and create positive perceptions with external stakeholders. [26] In a world of scrutiny and instantaneous communication it is in the best interest of an organization to treat its workers well.

Arguments Against Transparency in Public Relations. The main challenge facing public relations professionals in the new media millennium is the legitimacy of information provided through transparency strategies. For instance, corporate website must not be the only medium for disclosing important information. Accessibility to the Internet is still a problem facing developing nations and impoverished publics. Those that have access may be overwhelmed with too much information if the website is not well-designed. Increased publicity and transparency may also have an undesired effect-increased negative press. All of these potential effects could undermine legitimacy and create public distrust. [27] 

Another problem arises when tactical transparency strategies are combined with bureaucratic or political requests. In these circumstances, sensitive information may become more creatively controlled, resulting in an evasion of responsibility to the organization's publics. [28] On the other hand, transparency may lead to full disclosure when "herd instincts take over market decisions." [29] Meetings and corporate gatherings, including those webcast may lead participants to dissent based on group discussion. This may cause group members to choose the most popular decisions or concerns, disregarding compromise or negotiation. The final apprehension noted in transparency literature related to accountability. While transparency does open up the organizations to public review and criticism, it doesn't always make these organizations more accountable. [30] Critics argue that the observed organizations will reorient the information to match the demands of transparency without actually disclosing organizational realities. [31] 

Traditionally opaque organizations and their leadership pose the most concerns about adopting tactical transparency strategies. For these companies, overcoming objections is difficult because they have benefitted from withholding information from the public. Typically these objections fall into one of four categories: legal and regulatory (transparency might make it easy to violate internal and external regulation), competitive (the organization may lose its competitive advantage by sharing valuable information), technical (lack of resources and to manage transparency initiatives), and investment (lack of time, money, or infrastructure). [32] 

Legal concerns are paramount in our litigious society. It is the role of corporate council to minimize potential legal risks. Public relations practitioners working for pharmaceutical companies may be most reticent in implementing tactical transparency due to the number of regulating institutions including the Food and Drug Administration (FDA). [33] A blog, for instance could open drug companies to promotion of off-label indicators; a regulation against making drug recommendations for anything other than FDA-approved conditions would penalize the companies and sully corporate reputations. [34] Competitive concerns, often voiced by members of the leadership team, are often related to the potential uses of information by competitors. In other words, if practitioners expose the inner-workings of the organization, how might the competition use this information against them? [35] Technical concerns are often voiced by information technology (IT) representatives, because their responsibilities include putting the infrastructure in place and monitoring the network and websites after construction. In order to introduce social networking sites, blogs, and video-casts to the intranet, time and expenses are spent to test the applications against the existing infrastructure. [36] There is also a risk of virus infection whenever employees have access to networking sites on the Internet. [37] Cost is a dwindling concern because most social networking sites require very little capital, but some major corporations still have bans on open-source software applications. [38] These organizations argue that the benefits do not outweigh the costs of enterprise-level social media tools. [39] 

Case Studies

Transparency as the Right Choice. Every iPod owner recognizes Steve Jobs as the face of Apple, Inc. After his comeback to Apple, Jobs donned a black turtleneck and blue jeans and reestablished Apple as the industry leader in design and innovation. Apple's magic is part design and part strategic secrecy. Dozens of online fans discuss what new technologies Apple will release and when they will hit the market, so much that sites such as iLounge.net, MacRumors.com, everythingiCafe.com are forums dedicated to these discussions. [40] However, in September of 2007 when Apple lowered its price of the iPhone from $599 to $399 to spur holiday sales, online backlash from early iPhone buyers caused a frenzied uproar. [41] The "stupid tax," as the online community nicknamed it, became the act of buying early at a higher price, something loyal Apple customers had been doing to be the first with the newest technologies. [42] 

Steve Jobs' response was not overtly apologetic, but did address the discontent on the part of loyal customers and even offered a $100 credit at Apple retail and online outlets to iPhone owners. [43] The apology offered in an open letter to Apple customers read:

Even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price. Our early customers trusted us, and we must live up to that trust with our actions in moments like these. [44] 

Jobs obviously realized that in this case, tactical transparency would hold Apple accountable but not disclose every minutia of business reasons for dropping the price. For a company who employs transparency as a marketing tactic and for competitive reasons, this very transparent action was successful because it was well though out. He apologized for the severity of the price drop, provided minimal details about the decision-making process, and offered store credits, demonstrating that follow-through was an important part of the apology. The company's reputation beforehand (held in high esteem) provides for an appropriate application of transparency tactics. Finally, Jobs as the CEO was able to implement the credit process before the holiday season and therefore retained his highly valued consumer base. [45] 

In the blogosphere, transparent organizations are being heralded on a daily basis for implementing open tactics. GiveWell.org follows charitable organizations and NGOs with ethical frameworks, including those strategic reporting methods. [46] One blog entry called Against Malaria Foundation the "most transparent developing-world aid organization" they'd ever seen. [47] The organization, which distributes mosquito nets in the quest to fight malaria in developing nations, is unique in its publishing of project details. Many organizations purportedly distribute donated nets without follow-up in the regions they service, leading citizens to use the mosquito nets for purposes such as catching fish in local waters. [48] There is also concern about the cost-effectiveness of delivery methods, purchase price, and fund allocation. But the AMF lists all of its programs, by region, date, donors, and status. Website visitors can view fully detailed proposals, post-project reports, and shipping records. Donors' gifts correspond to funded, large-scale projects. [49] 

Many organizations are using micro-blogging services such as Twitter to let people know what they are doing. The ability to monitor public conversations and respond almost immediately has given organizations an ability to insert themselves into dialogue as it occurs, before publics have the chance to become enraged or alert the media. Although these tactics have been perceived as Big Brother actions on occasion, mostly publics are excited that organizations are open to dialoging, listening and reacting to concerns in an authentic manner. [50] 

When popular movie director Kevin Smith was kicked off of a Southwest Flight because the captain made the call that he was too heavy to occupy a single seat, Smith told his side of the story to his 1.5 million Twitter followers in real-time. [51] Southwest had already implemented both a company blog and Twitter account and was able to use both sources to respond to the "Twitter-induced media storm," what some considered a public relations nightmare for Southwest. [52] Southwest acknowledged the event and issued an apology to Smith himself followed by an apology on its blog, Nuts About Southwest.

In a blog post titled "Not So Silent Bob," a public relations representative noted that it was not a customary Southwest method of Customer Relations to work publically through the complaint process, but that the Tweeting outcry had called for a more transparent approach. [53] The post defended the company's initial response, mentioning the personal apology it had issued to Smith via Twitter and a phone call immediately after the issue occurred. It also noted that the flight Smith boarded from Oakland to Burbank was technically standby and that typically Smith purchased two seats on Southwest flights. The most transparent feature of the post was the specificity of the information provided about Southwest's Customer Size policy:

Southwest instituted our Customer of Size policy more than 25 years ago. The policy requires passengers that can not fit safely and comfortably in one seat to purchase an additional seat while traveling. This policy is not unique to Southwest Airlines and it is not a revenue generator. Most, if not all, carriers have similar policies, but unique to Southwest is the refunding of the second seat purchased (if the flight does not oversell) which is greater than any revenue made (full policy can be found here). [54] 

JetBlue Airways corporate communications manager Morgan Johnston uses Twitter and social media tools to interact with customers as well. When asked why JetBlue follows fliers on Twitter, Johnston responded:

With any of the microblogging tools available, people are able to broadcast what they're going through at the moment. If you can tap into and observe those types of activities while they're happening, you can help them much more immediately. Before they have a chance to go home and stew about it, you can help them while they're in the midst of the situation. Isn't that better than trying to recover a situation afterwards? [55] 

Transparency as the Wrong Choice. In some cases, the truth won't set organizations free. Instead, it may cause greater public distrust and criticism. Amy Jussel, founder of ShapingYouth.org, a blog devoted to the impact of marketing on children, recently voiced concerns to Target about an advertising campaign depicting a woman splayed across the famous target pattern, the bull's-eye at her crotch. In response, a Target public relations representative wrote, "Unfortunately we are unable to respond to your inquiry because Target does not participate with nontraditional media outlets. This practice is in place to allow us to focus on publications that reach our core guest." [56] 

The message that social media doesn't count as a Target policy certainly wasn't received well by its devoted client base. Target, whose image as a hip and contemporary, affordable retail outlet was acknowledging indifference of blogs, the hip and contemporary, free media channel. [57] When interviewed for a New York Times article titled "Target Tells a Blogger to Go Away," Amy von Walter, a Target spokeswoman maintained, "We do not work with bloggers currently. But we have made exceptions and we are reviewing the policy and may adjust it." [58] Target's current policy is to focus limited resources and the small public relations team efforts on the big media outlets, confirming its prioritization of marketing over relationship and reputation management. Target did not pull the ad in response to Jussel's concerns or the blogosphere uproar that followed. [59] It may have been smarter to agree to a short interview with Jussel, a representative of it largest consumer, mothers, instead of alienating loyal customers and snubbing social media outlets.

Lack of Transparency as a Pitfall. Social media crisis response tactics have not been studied to full, but will likely become a major sub-specialization in public relations scholarship. Spurring this area of study are pressures from online activist communities and publics. In the spring of 2010, Nestlé was under fire from Greenpeace for buying palm oil and using it in products. Greenpeace's Facebook page and YouTube videos depicted Nestlé as a supporter of deforestation and the cause of Orangutan extinction. [60] Nestlé tried to have one video linking the Kit Kat bar to Orangutan extinction removed, claiming the video violated their trademark. [61] This prompted Greenpeace members to post angry remarks on Nestlé's Facebook page. To protect its page and the company's legal security, Nestlé removed the comments. Although the issue was probably a major corporate concern, Nestlé kept its internal deliberation quiet which translated into a lack of transparency and unconcern. [62] In this case its silence spoke volumes about its disdain for the Greenpeace movement.

If Nestlé had kept its stakeholder public (which included activists) informed of its efforts toward replacing the non-environmentally-conscious products, there might have been a positive social media response. Issuing press released once a week may have worked in the past, but with today's instantaneous information flow, there is no excuse for silence. Although Nestlé's stock price did not seem to be effected in anyway, the corporation must still continue to meet Greenpeace standards and if it falls back on these promises, will likely face a public relations firestorm difficult to overcome. [63] This is one of the first documented cases of successful environmental activism which took place almost entirely in the social media realm. [64] Â 

Astroturfing is a term used in the public relations industry to refer to strategic campaigns designed to appear as spontaneous grassroots efforts. [65] Edelman, the world's largest independent public relations firm recently practiced astroturfing in a popular blog for Wal-Mart titled, "walmartingacrossamerica.com" The posts chronicled the cross-country adventure of a couple visiting Wal-Mart stores and speaking to customers about their shopping experiences. Jim and Laura's first blog post humbly stated: "We are not bloggers, but since our lives have always been more journey than destination we are explorers at heart…. We figured we'd give it a go." [66] Laura and Jim's encounters included meeting Wal-Mart employees, from store clerks to photogenic executives, who all reported loving their employer and work environment. Critics questioned the authenticity of the campaign early on. "Anyone familiar with Wal-Mart and its reputation for being quite stingy with wages and benefits will roll their eyes at such a rosy picture," wrote one Business Week columnist about the astroturfing reality. [67] 

The fact that the venture was funded by Working Families for Wal-Mart (WFWM) was not publically disclosed. In this case, simply stating the fact that the couple was paid would have probably saved the traditionally transparent Edelman from controversy. [68]