USE OF THE STUDY Corporate communications evolved from public

USE OF CORPORATE COMMUNICATION STRATEGIES IN THE MANAGEMENT
OF STAKEHOLDER RELATIONS BY DANA AIRLINES IN THE AFTERMATH OF ITS 2012 CRASH

 

CHAPTER 1

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1.1       BACKGROUND OF THE STUDY

Corporate
communications evolved from public relations (PR) which initially used to be a
simple function where companies responded to media queries or simply to protect
the management of the company from media attacks. Initially companies had no
strategy for communication, it was simply a matter of choice to either respond
to external queries or not and when they did, it was best done more or less to
protect the management from media attacks or to spin damaging news into
positive light. The department that was responsible for handling these
responses to the media and external constituents was called public relations or
public affairs.  

But
this function changed as consumers became more responsive to the products and
services being offered to them, they became more challenging and more
inquisitive. They demanded for more from the companies and organizations. This
consumers formed groups such as consumer groups, special interest groups, focus
groups and with this they became more powerful. Some of these consumer groups
and special interest groups focused on specific areas that affected them. For
example there were those that focused on the environment, some focused on
climate, some on health matters, some family and children. Some of this special
interest groups became really powerful and challenged this corporate firms and
organizations. For example many oil companies were challenged by interest
groups on environment and climate. Some television networks were challenged on
their content if it contained too much violence or nudity and was not suitable
for children or family. Tobacco companies, beef companies, pharmaceutical
companies etc are some of the companies that came under the scrutiny of these
consumer groups.

These
attacks on companies by these consumer groups made companies to realize that
communication had to go beyond the simple PR which they initially engaged in.
companies started becoming strategic in their communication; responding to
external queries became a new focused and strategic action. Companies had to
recruit new trained communication experts unlike then when it was mostly
journalists that were employed, because it was more of a print media thing, but
with the new strategy towards communication, companies focused on recruiting
communication experts and also spent a lot of money on training staff to handle
company communication.

Companies
PR functions changed and expanded to now include new areas as managing
stakeholders, engaging in corporate social responsibility, media relations,
government relations, crisis management, brand and image building, investor
relations, internal communication (also known as employee communication). This
expansion into this new function was the beginning of corporate communications.

Corporate
communication is still quite a recent field unlike its predecessor PR. There are
still a growing number of researches in this area. There is yet to be any
centralized definition for it. Several authors have defined it in several ways.
Some of these definitions are:

Jackson
in 1987 defined corporate communication as the total communication activity
generated by the company to achieve its planned objectives.

 

Blauw,
1994 characterized it as a way to deal with all communication created by an organization,
coordinated for applicable target audiences. Every item of communication must accurately
pass on and accentuate the corporate identity.

Van
Riel and Fombrun, (2007) however views corporate communication as the activities
involved in the management and organization of all internal and external
communication aimed at creating a favourable outlook on the part of the stakeholders
who the company relies on.

Cornelissen,
(2008) sees corporate communication as a management function that offers a structure
of the effective organization of fall internal and external communication with
the general aim of establishing and maintaining a good reputation among the
different stakeholders of the company.

 

Who
is a stakeholder?

A
stakeholder is any individual or group that either positively or negatively,
impacts or is affected by the activities and decisions of an organization. It can
likewise be described as any individual or group who has a personal stake in
the results of an organization’s activities. Stakeholders are classified in
view of the degree to which the choices of the company influence them. There
are the individuals and groups who are directly influenced by the choices of
the organization, and there are those who are not.  

Examples
of direct stakeholders include: employees (including managers & non-managers),
investors, shareholders, customers, clients, vendors, among others. While
example of indirect stakeholders include: government, surrounding community,
NGOs, unions, trade associations, among others.

 

Stakeholders
can also be classified as internal and external. Internal stakeholders are the individuals directly involved in the business (e.g.,
employees, managers, etc.) while external
stakeholders are elements that are not within the business but rather
think about or are influenced by its execution (e.g., consumers, suppliers).

Stakeholder
engagement has been defined as the way in which a company interacts with its
stakeholders in order to achieve its goals and objectives and enhance their responsibility
to them (Bal et al, 2013). Other benefits of engaging with stakeholders
include: it helps enhance sustainability and profitability of the organization,
build trust, manage risk, Brand Enhancement: Improved Productivity creates Strategic Opportunities and Partnerships creates room for Increased Investment:

 

In general the stages in a typical stakeholder
engagement include: Identify
Stakeholders and Key Issues, Establish Objectives and Process, develop a plan,
Implement Plan, Review and Report

 

In June 3 2012, a Lagos bound
flight from Abuja; Dana Air Flight 992 crashed
into a furniture works and printing press building in the Iju-Ishaga
neighbourhood of Lagos and killed all 153 passengers on board and 10 more
people on the ground. Following the crash, the Dana airline company was banned
for a period of time from carrying passengers or operating on Nigerian air
space. The ban was lifted on 5th of September 2012 barely three
months after the crash. Dana airline has gone on to operate in Nigeria and
still commands a good number of passengers in its flights in Nigeria. The
author believes that Dana airline was able to manage its reputation and make a
quick comeback through the use of corporate communication strategies and
effective stakeholder engagement. What this study seeks to unravel is what were
these corporate communication strategies that were adopted by Dana airline, how
successful were these strategies and how did they use these corporate
communications strategies to manage their stakeholders’ relations.  Getting answers to these questions is what
forms the crux of this study.

 

1.2 STATEMENT OF THE PROBLEM

Recently
in 18th October 2017, the Nigerian Stock Exchange (NSE) placed a ban
on the trading of Oando shares following the directive from Security Exchange Commission
(SEC) that Oando misrepresented its financial report. However on 24th
October, the ban was partially lifted and trading continued. In November 2015,
NCC placed a huge tariff on MTN for faulting its directive. After several
negotiations, the tariff was reduced and a payment plan was developed. There
have been series of scandals in Nigeria, Bellview airline also had crash in October
2005, and after few months the ban placed on them were lifted and they’ve gone
on to command a good number of passengers on their flights. Scandals and shocks
ordinarily can topple a company. The Enron and WorldCom scandal toppled the
company and the company never recovered till today. However many companies have
been able to manage scandals and shocks through the adoption of different
corporate communication strategies in managing their stakeholder relations. The
extent to which these corporate communication strategies have been effective in
the management of stakeholders’ relations with keen focus on Dana airlines is
the problem of this study.

 

 

1.3 RESEARCH OBJECTIVES

The
purpose of the study includes:

1.      To
examine the corporate communication strategies
adopted by Dana airline in the aftermath of its 2012 crash.

2.      To ascertain how effective these strategies were.

3.      To examine how these corporate communication strategies
adopted were used to manage stakeholder relations.

1.4 RESEARCH QUESTIONS

The
research questions are as follows:

1.      What
corporate communication strategies were adopted
by Dana airline in the aftermath of its 2012 crash?

2.      How effective were these strategies?

3.      How were these corporate communication strategies adopted
used to manage stakeholder relations?

 

1.5 SIGNIFICANCE OF THE STUDY

The
study will be significant to organizations; it would help them to learn how to
adopt corporate communication strategies in handling scandals and shocks. It
will serve as a reference point for many companies and organizations seeking
for the best ways to manage their stakeholders.

The
study will also be relevant to scholars and researchers as there are not many
studies on this subject matter.

 

1.6 SCOPE OF THE STUDY

The
scope of the study is Dana Airline Nigeria; they only operate local flights in
Nigeria.

1.7 LIMITATIONS OF THE STUDY

The
study will be limited by time and finance.

 

1.8 DEFINITION OF TERMS

Corporate communication: an
administration function that offers a structure for the effective coordination
of all internal and external communication with the general goal of building up
and keeping a good reputation among relevant stakeholder groups.

Stakeholder: A
stakeholder is any individual or group that either positively or negatively,
impacts or is impacted by the activities and decisions of an organization

Internal stakeholder: entities directly influencing a business (e.g., employees, the
board of directors).  

External stakeholder: entities not within a business itself but who care
about or are affected by its performance (e.g., consumers, regulators,
investors, suppliers).

Stakeholder engagement: the
process by which a company’s communicates or interacts with its stakeholders in
order to achieve a desired outcome and enhance accountability