The Role Of Communication In Corporate Management

This present study is established against the background that communication is strategic in driving effective and efficient corporate management of stakeholder presence and participation.

Van Riel and Fombrum (2007), emphasized communication as the lifeblood and therefore at the heart of organizational performance. Isohookana (2007), also corroborates this by stating that the purpose of communication is to initiate, maintain, develop and foster dialogue between an organization and its stakeholders. An organizations’ success is thus hinged on the mutual understanding of a clear and coherent communication strategy between the organization and its stakeholders.

The fulfillment of organizational objectives, mission, vision and goals is inherently linked to the level of relationship between the organization and its key stakeholders and the communication strategies deployed for the fulfillment of this purpose. Thus the success of an organization is not only dependent on its shareholders but also on its ability to build, nurture and foster sustainable relationships and engagement with employees, regulators, government, customers, the media and many other stakeholders. Hallahan (2007), opines that in today’s increasingly complex world, organizations (banks inclusive) vie for the attention, admiration, affinity, alignment and allegiance of constituents (stakeholders) of all sorts - customers, employees, investors and donors, government officials, special interest group leaders, and the public at large. The effectiveness of any organization depends on its ability to attract key resources from stakeholders, be they capital, labor, or raw materials, as well as legitimacy and reputation. It is a fact that the banking system is the engine of growth in any economy given its role and function of financial intermediation. As such the success of a bank’s effort to acquire resources and to influence the context within which it carries out its activities depends heavily on how well and how professionally it communicates with its resource holders – stakeholders. The opinion of key stakeholders, such as shareholders, investors, consumers, employees or members of the community in which a bank is based, are all crucial to the long-term success of the bank. Thus Nigerian banks are saddled with the onerous tasks of meeting market demands and fulfilling stakeholder expectations in an environment of permanent change and stiff competition.

To fulfill these levels of expectations, these banks often look to tighten their corporate governance principles as these are very critical to deciding the direction of corporate growth in particular and the bigger economy at large, enhancing welfare, increasing investments, influencing capital market efficiency, as well as the bank’s general performance. While it is true that many private sector-led organizations including Nigerian banks seek to improve their corporate efficiency by upgrading their board’s overall responsibility, qualifications and composition, risk management, governance of group structures, compliance and compensations, disclosures and transparency, among other internal parameters, the strategic role of corporate communications cannot be undermined in this consideration.

In Nigeria today, the society and government are demanding more from Banks than just declaring profit and paying taxes, as these Banks must be socially responsible, morally upright, transparent and accountable in behavior and activities because they are answerable to a variety of stakeholders, while at the same time, expected to meet the social and economic needs of many interest groups. It is thus imperative that the communication activities of these Banks must be properly managed and inclusive as part of their organizational strategic planning. As without an effective and a well-managed strategic communication model, achieving this may become highly challenging. Communication is the tool that internal and external stakeholders use in comprehending the vision and direction of organizations hence the communication system of a Bank is an important tool for guiding and executing its corporate strategy, therefore a Bank is positioned strategically through communication and can only attain its goals through effective communication. Following post consolidation, Banks in Nigeria have come up with different methods for engaging and communicating with their stakeholders. In the recent past, Nigerian banks, used the traditional one-way method of communication to communicate with their customers, promote their products as well as engage stakeholders. Communication in the banking sector was very simple and forms of stakeholder engagement were limited to traditional models. Banks dealt with customers and stakeholders using monologue. To ensure brand positioning and achievement of organizational aims, these banks employed public relations (PR) tools and activities to build up their reputation and stakeholder’s loyalty and retention. Banks relied heavily on media strategies which focused on circulating messages through traditional media outlets; electronic and print media through which information is communicated to stakeholders. Closely following public relations is the use of advertorials. Many banks employ advertising as a communications tool and engage advertising or marketing professionals to help them develop TV, Radio and print media adverts. Other tools of communication and engagement with stakeholders include Newsletters, Annual General Meeting Reports (AGM), Sponsorships or Partnerships, Community relations, Employee relations, Brochures and catalogs, Business events,etc.

However, due to stiff competition, stakeholder claims, government interference and reputation damage, Nigerian banks have realized that, now more than ever before, they need to attend to a wide range of stakeholder groups successfully in order to avoid certain stakeholder groups raising issues that could cause reputational damage. As Scholes & Clutterbuck(1998), confirm that, the growing power of stakeholders and the complex interrelationships between them are driven by a number of factors including; • globalization• the rise of the professional investor• the rise of the sophisticated customer• the rise of the empowered employee• the information revolution• a rising awareness of the influence of business on society• an organization’s wish to influence society and• government support.

It is a fact that, most product offerings and services by Nigerian banks are homogenous, thus, placing the need for these banks to also invest in their corporate profile, brand and identity instead of their product offerings alone. Today, in the Nigerian Banking industry, communication to each constituent needs to be aligned, integrated and strategic as banks must portray their corporate identity through their corporate communications strategy to each stakeholder as to how it aims to be known/identified by these groups in terms of the corporate images and reputations they hold of them. These banks have a mandate to identify their different stakeholders and provide each group with the type of information about their operations that they have a proclivity for. As Cornelissen (2014), rightly states that, existing and prospective customers need to be supplied with information about products and services (e.g. advertising, sales promotions, in-store communications), financial investors and shareholders need to be served with financial information concerning the organization’s strategy and operations (e.g. via annual reports, shareholder meetings etc.).

It is imperative to note that, each of these stakeholder groups, on the basis of the stakes they hold, looks for and is interested in certain aspects of an organization’s operations. It is thus important that banks provide each stakeholder group with specific information while at the same time projecting a unified and clear corporate identity to all of them.

With the proliferation of the media, banks now adopt different kinds of communication strategies to engage or communicate with their stakeholders in an attempt to achieve the desired organizational outcomes. Banks in Nigeria today are engaged in on-line and real time transactions. With the changing terrain in the business climate and stiff competition in the Nigerian Banking sector, it has become imperative for each Nigerian bank to overhaul and come up with appropriate communication strategies to engage, create and maintain a favorable relationship with those who have a stake with the banks, with the aim of achieving its organizational objectives. Today, the banks in Nigeria have embraced a paradigm shift in their communication strategies in banking operations and the way they interact with or engage stakeholders to achieve organizational outcomes and gain competitive advantage. Banks in Nigeria now integrate their media so as to present a coherent and consistent image and messages to the different stakeholder groups. Specifically, across the banking world, the pace of change in communications is rapidly accelerating and business models are quickly evolving. Agboola and Ologunde (2009), noted that the revolution has changed the way of banking such that though money is still being handled, information, not money is now the life blood of the banking industry. They further claimed that in the new culture, a bank is defined almost solely by its ability to add value to the customers’ (stakeholders) relationship, which breaks down into acquiring, analyzing, integrating, and leveraging of information about, from and for the benefit of each individual stakeholder. Survival in this brave new world is no longer based on the size of the bank, but rather on its ability to innovate and strategically communicate.

Technology no doubt has impacted how we communicate. This was made possible by the development of digital communication technologies. The traditional one way method of communication, forms of communication and engagement have expanded with the proliferation of the media and communication technologies, leading to greater volumes of activities and enhanced relationships. Communication is no longer one-way, but two-way and interactive in real time.

Organizations including banks leveraged on the opportunities that these digital channels of communication offer. Cornelissen (2000), also corroborates thus stating that, stakeholders receive information from multiple sources like competitors, symbolic communication through employee behaviors, word of mouth etc. and with the proliferation of the media and communications technology, stakeholders have become more informed and responsive, thus making it important for banks to strategize on what it wants to say, to which stakeholder, what medium of communication to deploy, in what manner and to obtain what effect?

Leveraging on ICT, organizations including banks are gravitating towards the concept known as strategic corporate communications which is the purposeful use of communication by an organization to fulfill its mission. However, the banking industry no longer relies solely on traditional public relations or advertising because of its shortcomings. Many Nigerian banks engage in sales promotion and also interactive media activities for instance, First Bank Plc’s “Life is a Movie Campaign”, in which the Bank is requesting its customers to share experiences of exciting moments and adventures in their lives. Some Nigerian banks have also embraced interactive media platforms to communicate and engage with stakeholders. Access Bank Plc digital online TV, called Accelerate TV which is an innovative social interactive platform for youths, GTBank, Ndani TV, an online video content vehicle, Diamond Bank Plc, “The Diamond TV platform” which is a web and mobile platform with which Diamond Bank engages with their customers, showcase their products and offer features with themes ranging from health and fitness, to financial advice, movies, series and music. First Bank PLC’s, Loop by First Bank, a content marketing app that curates content that users are interested in, presenting them on a news feed. With the giant strides in Information Communication Technology (ICT), communications portfolios greatly expanded its scope to;• include a new diverse media platform address myths by providing consistent factual information develop initiatives designed to improve the growth and competitiveness of organizations.

These activities have significantly improved and increased access to organizations’ publications, news releases and other traditional content which raise awareness of an organizations operations such as the banking industry and challenged common misconceptions.The giant strides made in information communication technology, stiff competition, stakeholder claims, government interference and reputation damage have facilitated the adoption of strategic corporate communication by banks in engaging its stakeholders and publics, both internally and externally. In the past, forms of stakeholder engagement was limited but today, organizations can engage stakeholders collectively using dialogue. Freeman (1984), alludes to this that the success of an organization depends on creating dialogue with its diverse stakeholders.

Banks today, are realizing that, to survive in a world of accelerated change, it is imperative to transform from old style business to new order business where people can add more value to the business. This new order business recognizes various stakeholders and recognizes the need to change the traditional models of practice in an organization’s communication strategy. To succeed, Banks in Nigeria have realized that they must therefore develop and maintain healthy interactive relationships with their stakeholders – and also align their communication system to facilitate that engagement. As the success of any organization is tied to how it is perceived by stakeholders. There is thus the need for the Bank’s to take into consideration the stakeholders different needs and the appropriate communication channels to be deployed in addressing these needs. As an overall communication strategy ensures coherence to an organization’s (bank’s) communication plans. The Nigerian banking sector is taken as a primary case in point in this study.

After communicating with a consistency, corporation must assess the results of the communication and determine whether the communication had the desired outcome. For instance, did sales rise in response to an advertising campaign, did organization’s media coverage increase, and was it positive or negative. After determining the results, communication practitioners must determine whether that has affected company’s reputation, and how it affects towards reconstructing communication strategy. In addition the organization needs to analyze consistency responses to determine whether the communication was successful.