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Using Empirical Evidence, Discuss the Importance of External Communication within Organizations

Pitman Nkuta

Unicaf University

UU-PSY-702: External Communication Management

Rina Charalambous

31 May 2020
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Using Empirical Evidence, Discuss the Importance of External Communication within Organizations

Communication is the backbone of every organization. Without communication, no organization would

exist. Every activity in the organization is accomplished by means of communication. Just as internal

communication is important for the flow of the organization, so is external communication to organization’s

growth and performance. Therefore, external communication within organizations is inevitable. This essay is

going to discuss the importance of external communication within organizations. The essay will begin by

defining key terminologies used in the question. Additionally, it will develop the main body and use empirical

evidence to show the importance of external communication within organizations. Lastly the essay will draw

the conclusion.

.According to Kreps (1986, p.5), organizations are “social collectives in which people develop ritualized

patterns of interaction in an attempt to coordinate their activities and efforts in the ongoing accomplishment of

personal and group goals.” From the definition of the organization, it can be seen that the organization has to

coordinate its activities in order to achieve its goals. One of these goals is external communication. External

communication is the exchange of information between the organization and the outside audiences

(Saunders, 1999).Therefore, importance of external communication within organizations cannot be

underestimated.

External communication enables the organization to market, advertise, and promote its product and

services. An organization also engages in external communication to protect its corporate image and

reputation among its publics. The organization also engages in external communication in order to create a

positive public image of the goods and services. A public refers to any part that has interest in the

organization and thus exerts an impact on its ability to achieve its objectives. In other words, publics include

different stakeholders of the organization (Cornelissen, 2008).

The organization stakeholders include government, customers, suppliers, financial institutions,

shareholders, employees, investors and the community in which the organization operates. Freeman et al

(1984) defines stakeholder as “any group or individual who is affected by or can affect the achievement of an

organization’s objectives.” Through effective external communication, the organization strives to build a good

corporate image and thus presents itself in the favorable light among its stakeholders (Philip, 2017). External

communication is also important as it enables the organization to manage its media relations.
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Media relations has to do with the production of positive news to attract attention to the corporate

image, product image as well as services (Kayode, 2014). One study found that there is a correlation between

media agenda and public agenda. Media agenda refers to the topics that are given so much emphasis on the

media while public agenda refers to the judgments formed by the audience on the importance of issues

presented on the media. The media influences public perception simply by the way it sets the agenda and

frame the news about a particular organization (McCombs & Shaw, 1972). Nonetheless, the extent to which

the media set the public agenda has come under debate. Recent studies have indicated that if viewers do not

find a particular media to be credible, they are likely to consider the issues presented on the media with less

importance (Littlejohn & Foss, 2009). External communication also helps the firm to create and sustain good

relationship with the government.

Forming a positive relation with the government is of great importance to an organization. This is

because the government makes rules and regulations that are binding on all business players. Government

regulations often exert great pressure on the operations of the organizations (Haveman, Russo, Meyer,

2001).Therefore, through its external communication, the organization uses such activities as lobbying to

persuade government from enacting laws that are detrimental to its operations. (Boyes-Watson,

2005).Through external communication, the organization carries out marketing public relation functions.

According to Harris (1998), “marketing public relation functions are activities designed to aid marketing

objectives”. Some of the marketing objectives supported by public relations activities include, informing,

educating, raising awareness, building trust, giving consumers a reason to buy and gaining consumer

acceptance. Smith and Taylor (2004) noted that the roles of public relations in the external communication

includes product publicity, product placement, third party endorsement, involvement in trade shows, and

cause related marketing. Through its Marketing public relations, the organization also engages in event

management. Event management refers to development of events such as product launching, press

conferences, conventions and sports, corporate meetings and festivals. By identifying itself in the media as

the official sponsor of a certain event, the organization gains public support and goodwill (Preston,

2012).External communication is important because it enable to have mutual relation with the community.

An organization maintains the mutual relationship with the community by taking an active interest in

the well-being of people in the community. By so doing, the organization wins community support, loyalty and

goodwill. Desatnick (2000) noted, “Community relations builds public image and employee morale, and foster

a sense of teamwork that is essential to long-term success.” She goes on to argue that having a good
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reputation in the community enables the organization to attract highly qualified staff, get finances for

expansion and gain flexible treatment when it comes to paying taxes. External communication is important

since it helps the organization develop and enhance long-term relationship with customers.

Developing and enhancing long-term relations helps the organization to create a pool of loyal

customers. Having loyal customers gives the organization a competitive advantage. Research on loyalty has

shown that loyal customers have the eagerness to pay a premium for a particular brand and try new

products under the brand name. Loyal customers also pay less attention to competitor’s products, give

preference to a brand and are less sensitive to price differentials (Reicheld & Teal, 2001; Aaker, 1998).

Therefore, loyal customers are likely to trade with the same organization for longer periods thereby giving an

organization an edge among its competitors. External communication is also important as it enables the firm

to be in touch with suppliers.

Having a good relationship with suppliers is a big competitive differential .The suppliers provide the

organization with inputs to be used in the production process and tools such as equipment. To maintain a

continuous flow of operation, a good relationship with suppliers is vital so that they continue to supply the

organization with the needed resources (Zaheer, 1998).Therefore; the organization must build and maintain

sound relationships with the suppliers. Nevertheless, in order to survive in a competitive business

environment, the organization should keep itself abreast with the activities of its competitors using a process

called boundary spanning.

Boundary spanning enables the organization to gather information from outside the organization. The

firm gathers information about competitors and thus places itself in a position where it would be able to deal

with the threats posed by competitors. Gathering information from outside also helps the organization to have

knowledge about customers’ tastes and preferences (Johlke & Stamper, 2002). For example, events such as

trade shows enable the organization to see its competitor’s products and the mode of marketing for those

products. This information enables decision makers in the firm to create new products and generate new

marketing strategies. Nevertheless, organizations face ethical issues as they try balance their goal of

promoting their products and telling customers the truth about the strength and weaknesses of their product in

comparison to the competitor’s product (Chonko & Burnett, 1983).

External communication allows the firm to advertise its product to both local and international

consumers. Advertising is paid promotion by an identified sponsor aimed at informing and persuading a large

audience of people about the organization’s products, idea and services (Belch & Belch, 2004). During
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advertising, the organization chooses the media depending on the characteristics of the product and target

market. However, not all adverts lead to the increase in sales volume. This is because consumers are unable

to process and pay attention to all advertised material. Therefore, organization needs to ensure that adverts

are vivid and memorable. Feldwick (1990 as cited in Janssons-Boyd, 2010) noted adverts that are

memorable increase sales as much as 20 times. Nonetheless, Green (2007 as cited in Janssons-Boyd, 2010)

argues that such large increases in sales are not common. Green’s does not deny that adverts that are

remembered increase sales. His argument borders around the extent to which it does. Therefore, at any rate,

memorable adverts lead to an increase in sales. In view of this, organization should excel in this aspect of

communication to increase sales revenue. So important is external communication that it also enables the firm

to create and manage its own brand.

Through external communication, the organization creates a product or service brand. Branding is a

“name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of

one seller or group of sellers and to differentiate them from those of other sellers” (American Marketing

Association, 2007).By differentiating its products from other manufactures, the organization builds a brand

image. Keller (1993 as cited in Martinez & De chernaton, 2004) defines brand image as the perception of the

brand reflected in the consumer memory associations. A study conducted by Lucidpress show that a well-

managed brand leads to an average increase of 33% in revenue. However, consumers evaluate brands

before buying them. They tend to have a positive attitude towards brands that help them to meet certain

goals. Strong attitudes have great influence on consumers’ behavior and thus likely affect their product

choice (Bizer & Krosnick, 2001). Therefore, when coming up with a brand, an organization must understand

how consumers’ attitudes affect their choice and how they can change them. Another importance of external

communication can be seen in the organization’s marketing of products and services

According to Shaw and Jones (2005), marketing is about generating demand for products and

services. Marketing strategies may involve making the products and services so appealing to consumers that

they are persuaded to buy. Nonetheless, consumers form perceptions about products and services based on

their previous experiences, beliefs and disposition. The Consumers’ perception may affect their buying

decisions whenever they engage in business. As consumers make their buying decision, they also focus on

the price of product in relation to its quality (Littlejohn & Fox, 2009) External communication is important as it

enable the organization to communicate the price of its products.

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In instances of economic hardships where consumers prefer tight budgets, price becomes the major

factor in their buying decisions. To respond to this trend in consumer buying behavior, many firms have

embarked on price-cuttings.This strategy is aimed at lowering prices for their customers to induce them to

buy. Nevertheless, Kotler (2011) observes that lowering prices is not sufficient to build a viable business. The

company also needs to enhance the quality of products and services in order to give the customer value for

money. At any rate, the organizations should strike a balance between cutting prices and enhancing the

quality of products and services. Even lowering prices and enhancing product quality is not a guarantee for

organizational success if consumers are not buying them. To succeed, the firm must use strategies aimed at

enticing and persuading customers to purchase its product or services.

To persuade and entice customers to buy the product, organizations use the psychological laws such

as proximity and similarity by placing products that are similar close to one another. For example, toothpastes

may be placed close to toothbrushes as a strategy to persuade consumers to buy both products. Similar

products are placed together in shelves, as consumers perceive them to be the same (Jansson-Boyd, 2010).

Organizations also use persuasion techniques connected to emotions such as fear, sadness and excitement

to induce customers. For example, a company dealing in hand sanitizers may depict the negative

consequences of not using this product by employing the emotion of fear. They may describe the

unprecedented rate at which the Corona virus is spreading and stress the fact those who want to survive,

have no option but to use the hand sanitizer. Nonetheless, since products have different characteristics, the

organization must choose the emotion that not only matches the type and characteristics of the product but

also appeals to the consumers’ emotions (https://coschedule.com/blog/psychology-in-advertising).Advertsing,

marketing, building relationship with various stakeholders are not the only functions achieved through external

communication.

Through external communication, the organization also manages crisis communication. Factors

beyond the control of the organization such as the death or resignation of the CEO, failure of product launch,

sexual harassment and financial difficulties can drag the organization into an unexpected situation. Such

unexpected occurrences attract media and public attention. The organization has to use its external

communication mechanism to respond and calm the situation. Failure to manage crisis communication can

tarnish the reputation of the organization (Muntean, 2014). According to the Situational Crisis Communication

theory, the firm can use response strategies to restore the reputation it once enjoyed among its stakeholders.

One of the strategies commonly used is the bolster strategy that involves reminding the stakeholders of its

former good activities (https://blog.hubspot.com/service/situational-crisis-communication-theory). However,

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even with the aforementioned external communication activities, the organization cannot achieve the

intended objectives if does not choose properly the media through to convey its messages. To ensure that its

external communication messages reach the audience, the organization has to use a variety of media.

The Media available for external communication includes press releases, newspapers, magazines,

billboards, Radio, Television, Internet blog, social media such as facebook, twitter and LinkedIn (sunborn,

2013).The reasoning behind using more than one media is that if consumers find that one media is not

credible, they can find one that is credible among the alternatives. Nevertheless, since consumers are flooded

with large volumes of adverts, they engage in selective attention. This means that they choose to focus on

something in which they have interest while neglecting other things (Littlejohn & Foss, 2009). To ensure that

the media attracts the attention of consumers; audience involvement is required (Krugman, 1965).

The elaboration likelihood model by Petty and Caccioppo (1981) explains how the audience gets

involved. According to the model, the route by which a message persuades consumers depends on how they

elaborate the message. In the central route, the consumer possesses both the ability and motivation to

evaluate and process the message. In the peripheral route consumers lack the motivation and ability and thus

depend on the credibility and attractiveness of the source (Petty & Caccioppo, 1981).In line with the peripheral

route, using a credible and attractive model besides the products is likely to persuade consumers to buy the

product. On the contrary, using an attractive model without credibility may have negative consequences.

Therefore, the firm needs to strike a balance between model attractiveness and credibility to achieve good

results (Littlejohn & Foss, 2009).

In conclusion, the essay discussed how external communication helps the organization to develop,

sustain and enhance positive relationships with its various stakeholders. The essay looked at different

categories of external communication such as public relations, marketing, advertising, media relations,

community relations, supplier relations, customer relations and crisis communication. By using empirical

evidence, the essay discussed how the organization use these different aspects of external communication to

build its public and corporate image, create its own brand, advertise its products, form relationship with

suppliers and customers, gather information relating to competitors and manage crisis. The essay outlined the

different types of media through organization can transmit its messages to different audiences. It also

discussed the importance of using psychological principles such as attention, perception, attitude, behavior

and decision making of consumers to make external communication more effective. Most undoubtedly,

external communication is the backbone of every organization.

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