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Public Relations Review 37 (2011) 297–304

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Public Relations Review

The role of market-oriented relations in public relations: The differing perspectives of managers and practitioners in the U.S. and Taiwan Yi-Hui Christine Huang a,∗ , Linda M. Hagan b a b

School of Journalism and Communication, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong Doctor ofManagement in Executive Leadership Program, Walsh College, 3838 Livernois Road, Troy, MI 48007-7006, USA

a r t i c l e

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Article history: Received 9 December 2009 Received in revised form 6 March 2011 Accepted12 March 2011 Keywords: Market-oriented relations Marketing public relations (MPR) Public relations value Marketing Taiwan U.S.

a b s t ra c t This study explored the role of market-oriented public relations. The study involved two surveys;one explored the perspectives of business managers and another of the perspectives of publicrelations practitioners,and compared theirviews concerning marketoriented and non-market-oriented relations. While business managers and public relations practitioners of non-market-oriented relations valued the contribution of market-oriented public relations to organizational effectiveness in terms of revenue generation and cost reduction, practitioners of market-oriented publicrelations ascribed their contribution to organizational effectiveness in terms of media publicityand exposure. Thispaper concludes with a discussion of practical applications and theoretical implications. © 2011 Elsevier Inc. All rights reserved.

1. Introduction Public relations and marketing practitioners have generally underscored the premium placed on building successful relationships between organizations and their publics. In the field of marketing, relationship marketing developed into a leading theoretical and practical paradigm during the 1990s (e.g., Aijo, 1996). Empirical research in the field of public relations suggests that public relations increases organizational effectiveness by building stable, high-quality, long-term relationships with strategic constituencies (Bruning & Ledingham, 2000; Huang, 2001b). Despite considerable research on how public relations and marketing contribute to strategic relationship management at the corporate level, there is little agreement on how public relationscontributes to the critical stakeholder relationship (i.e., market-oriented relations). There are two main problems. The firstone concerns the potential overlap between public relations and marketing. At one extreme, Harris (1998)identified public relationsas a keyelement in integrated marketing communications anddefined marketing public relations (MPR) from the perspective of brand management: “The purpose of MPR is to gain awareness, stimulate sales, facilitate communication, and build relationships between consumers and companies andbrands. The principal functions ofMPR are the communication of credible information, the sponsorship of relevant events, and the support of causes that benefit society” (p. 21). In asimilar way, corporate marketer and academic Levens (2012) defined marketing public relations asseeking “toachievespecific marketing objectives by targetingconsumers with product-focused messages” (p. 233). Levens (2012), however, contrasted marketing publicrelations to corporate public relationsand acknowledged that public relations is two-way communication with stakeholders inside or outside the organization, but from the perspective that public relations is a marketing tool, whereby the marketer influencesor is influenced in some way.

∗ Corresponding author. E-mail address: [email protected] (Y.-H.C. Huang). 0363-8111/$ –see front matter ©2011 Elsevier Inc. All rights reserved. doi:10.1016/j.pubrev.2011.03.006

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On the other hand, and adopting the perspective of strategic constituency, which emphasizes that an organization is effectiveto the extent thatit satisfies its stakeholders,Grunig and Hunt(1984) considered public relations to be an independent function inan organization, defining public relations as “management of communication between an organization and its publics” (p. 6). J.E. Grunig (1992) maintained that one ofthe main factors differentiatingthe function of public relations from that of marketing is that public relations is expected to fulfill the need for maintaining positive relationships with various stakeholders or strategicpublics, rather than merelywith consumers, customers or clients. The second area of debate concerns the inconclusive measures for assessing the performance or value of a particular function in an organization. In the discipline of marketing, measuring business performance is complex because of themultidimensional nature of organizational performance (Lenz, 1981). Inthe field of public relations, measuring public relations effectiveness has focused media publicity and coverage exposure (Bissland, 1990; Lindenmann, 1993). Heath’s (2001) theory used two paradigms to define the value of public relations to organizational effectiveness (i.e., revenue generation and cost reduction). Heath (2001) and Huang (in press) further argued that public relations practitioners are interested in a revenue-generating paradigm, whereas scholars are interested in a cost-reducing paradigm, so that the values which are often invisible would be accounted for. These abovementioned considerations suggest a number of interesting questions. From the view of business people and public relations practitioners, what is the value of public relations in general? How does public relations contribute to market-oriented relations in particular? More specifically, how is market-oriented relations associated with the value of public relations with regardto media publicity, revenue generation, and cost reduction? Finally, are there any perception gaps between the perspectives of public relations practitioners who focus on market-oriented relationsand those who do not? Two surveys,which explored perspectives fromboth a business management and publicrelations view, were conducted as part ofthis study. Thefirst sample included 143respondents from an ExecutiveMaster of Business Administration (EMBA) program in Taiwan and the second utilized 225 public relations practitioners who are members of the Public Relations Society of America (PRSA). The Taiwanese executive MBA program, similar to executive business degree programs in the UnitedStates, requires students tohave at least at least eight years of professionalbusiness work experience at themanager or above level when admitted to the program. The PRSA sample was divided further into two independent data sets in order to compare the views of public relationspractitioners who focus on market-oriented relations and those who donot. The research design, depicting a holistic methodology, allowed simultaneous and multi-views tests to secure this study’s theoreticaladvancement in four respects. First, thestudy takes theconcept of public relations effectivenessto a higherconceptual and operational level byillustrating and theorizing the complex correlations between market-oriented relations and the value of public relations. Second, by investigating market-oriented relations, it extends the scope of previous studies which have focused on community relations(Hall, 2006), activist relations (Reber & Kim, 2006), employee relations (Stein, 2006), government relations (Liu & Horsley, 2006; Wise, 2006), and media relations (Reber & Kim, 2006). Third, it extends the theory of marketing public relations (Harris, 1995),as well as enrichesthe theoreticalknowledge of relationship marketing and relationship management. Finally, because it was designed to reflectthe real-worldperspectives (a) of managers and practitioners, and (b) those who work in market-oriented relations and those who do not, its findings provide practical and relevant guidelines for public relationspractitioners. 2. Conceptualization This section conceptualizes the notions of marketing, public relations, marketing public relations (MPR), and marketorientedrelations and explores three dimensions of public relations value. In thefield ofmarketing, Workman, Homburg, and Gruner(1998) acknowledged two perspectivesaffecting thedefinition of marketing, the activity-based perspective (e.g., Kotler & Levy, 1969) and the functional group perspective (e.g., Walker & Ruekert, 1987). The first perspective emphasizes activities traditionally considered as marketing andsales activities (e.g., advertising, product management, market research, sales, and customer service, all of which vary across organizations), whilethe latter focuses on marketing as a distinct organizational entity. Using an activity-based perspective, this study adopted the AmericanMarketing Association’s (AMA)definition of marketing (approved October 2007) as “theactivity, set of institutions, and processes for creating, communicating, delivering, and exchangingofferings that havevalue for customers, clients, partners, and society at large” (American Marketing Association, 2011). Houston and Gassenheimer (1987) defined a market as “the aggregation of the expression of individual needs and wants” (p. 4). They emphasized that “exchange” invariably leads to the concepts of a marketplace and market (Houston & Gassenheimer, 1987). Social exchange, defined as “the voluntary transferenceof some object or activity from one person to another in return for other objects or activities” (Roloff, 1981,p. 21), is often used to explain relationships in marketing. This theory is guided by theassumptions (a) that relationships involve people who areinterdependent, and (b) that people are rational and self-serving, andtherefore calculate rewards and costs based upon the exchange of resources during interactions(Folger & Stutman,1993). One academic view, adopting the perspective of relationship marketing, holds that people in organizational contexts are dependent on each other for the environment, for the division of a particular product market, or for group identity

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in intergroup relationships (Morgan & Hunt, 1994). Adopting a similar view, Broom, Casey, and Ritchey (1997) defined relationships in public relations as “the dynamic results of the exchanges and reciprocity that manifest themselves as the relationships develop and evolve” (p. 95). Huang (2001a) defined organization–public relations (OPR) as relations likely to be considered functional “to the degree that the organization and market-publics trust one another, agree on who has rightful power to influence, experience satisfaction with each other,and commit themselves to one another”(pp. 633–634). This study draws on these views, andconsiders market-oriented relations as adistinct areaof relations fromother strategic relations. It thereforedefines them as the relationshipbetween anorganization and its market-oriented publics, particularly customers, consumers in general, andclients. Previous studies have suggested that measuring public relations performanceis complex because of its multidimensional nature (Hon, 1997; Huang, 2001b, in press). This study examined the value of public relations in termsof its various effects. Researchers have long investigated the communication effects of public relations with respect to communication output or media exposure, for example, quantity of output, number of mediacontacts, and quality andquantity of media placements (Bissland, 1990; Lindenmann, 1993). In the field of practical publicrelations, the most frequentlyused evaluation measures are communication outputsand media exposure (Bissland, 1990). Kim (1997) provided empirical evidence of the positive relationship between a company’s public relations andthe organizational returnsacross different industries and companies, and argued(Kim, 2001) that public relations exerts influence on organizationsby increasing financial performance and company revenue. Hon (1997) also concluded that effective public relations helps organizations survive, make money, save money and even save lives. Grunig, Grunig, and Verc¸ic (1998) held that public relations practitioners or boundary spanners increase organizational effectiveness by helping to build stable andhigh-quality relationships and by reducing the cost of conflict that results from regulation, pressure, and litigation. Huang (2001b) demonstrated empiricallythat public relations could indeed reducethe conflict between an organization and its publics by means of favorable organization–public relationships. Research also suggests that public relations contribute to organizational effectiveness via crisis management and crisis communications (Marra, 1998). Appropriate response strategies help organizations surmount the challenges of media pressure and public criticism during crises (Benoit & Brinson, 1999; Hagan, 2006). Thepurpose ofthis research,therefore was twofold:(1) to explore theroles of market-oriented relations that exist within public relations and which are associated with the perceived value of public relations in terms of revenuegeneration, cost reduction, and media publicity; and (2) to compare the views from business managers and public relations practitioners focusing on market-oriented and non-market-oriented relations. Because there has been little previous study of public relations andmarket-oriented relations, the studyposed research questions rather than research hypotheses. 3. Research questions 3.1. RQ 1 To what extent is public relations valued by business managers and public relations practitioners in terms of media exposure, revenue generation, and cost reduction? 3.2. RQs 2-1 to 2-3 To what extent do businessmanagers, public relations practitioners who focus on market-oriented relations and public relations practitioners who focus on non-market-oriented relations, associate market-oriented relations particularly with media exposure, revenue generation, andcost reduction? 4. Methods To enhance thegeneralizability of the research findings, a co-orientation-oriented research design was adopted (Huang, 2004), which includes data from public relations practitioners’ self-assessing public relations values and from business managers. The study adopted two stages of data collection for answering thestated research questions. 4.1. First stage: EMBA respondents Business people enrolled in an executive MBA program (EMBA) at National Chengchi University in Taiwan in 2007 were surveyed utilizing a paper-and-pencil questionnaire. It is important to note that the Taiwanese executive MBA program is similar to executive business degree programs in the United States, which require students to have eight or more years of professional work experience at the manager and higher rank when admitted to the program. A total 143 valid questionnaires were returned. Respondent demographics indicated 71.1% male, 28.9% female, and age range: 31–40 years 32%, 41–50years 52%, and 51–60years 11.4%. Most ofthe respondents (88%) had morethan 10 yearsof professionalbusiness experience. More than half (57%) oftheir companies ororganizations had an independentpublic relations (or public affairs)

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departmentwith about 60% of their public relations departmentsin existence for more than 10 years. Only one-fifth(20.9%) of the respondents’ organizations, used outside public relations firms. 4.2. Second stage: PRSA respondents A randomly chosen 3,000 practicing members of the Public Relations Society of America (PRSA) were contacted by e-mail to participate in an online, self-administered survey concerning the practice of public relations. A total 225 valid questionnaires were returned, yielding a response rate of about 7.5%. Respondent demographics indicated 38.1% male, 61.9% female, and an average age of 40 years. Of the respondents, 47.7% worked in public relations agencies and 38.2% were corporate public relations workers. Most of the respondents had beenwith their currentcompanies less than 10 years (84.2%). However, nearly half(49.1%) of the respondents had been working in public relationsfor over 10 years, and 74.2% of theorganizations theyworked for hadan independent public relations (or public affairs)department. More than half (61.7%) of these public relations departments had existed for more than 10 years and 65% of respondents’ organizations utilized outside public relations firms. 4.3. Instrumentation The studyused a judgmental measure. The study asked participants to assessthe examined measures because significant evidence indicates a close association between objective and perceptual measures of business performance (e.g., Dess & Robinson, 1984). The public relations practitioners from the PRSA were asked to identify thepublic they had contacted most frequently. The participants read, “Listed below are several publics with whom organizations often interact. Please indicate the three publics with whom you interact most frequently by usingthe numbers: 1, 2, and 3. ‘1′ indicates the public with whom you most frequently interact.” Of the 225 PRSA respondents, 56 marked the customer/consumer/client area as ‘1′ . For further investigation, the sample was then divided into two independent samples, public relations practitioners mainly involved in market-oriented relations (n = 56) and public relations and non-market-oriented relations (N= 169). Previous studies (Broom, Casey, & Ritchey, 1997) have suggested that a “relationship” is formed based on individuals’ “perceptions”. Following the logic of perception assessment, one item was used to measure public relations’ contribution to market-oriented relations: “In your organization, how much does public relations contribute to the establishment and maintenance of customer/consumer/client relations?Please indicate the degree as a percentage from 0% to 100%. (For each relationship, 0% means public relations does not contribute, and100% means maximum contribution.)” The items adopted in thisstudy have demonstratedsatisfactory measure reliabilityand validity in a number of reported studies (Bissland, 1990; Grunig, Grunig,& Dozier, 2002; Huang, 2001b; Kaplan & Norton, 1996; Lindenmann, 1993, 1995). A Likert-typescale graduated as (1) not at all contributive to (4) very contributive was used in the measuresof public relations value. The values of the coefficient alpha for media publicity/exposure, revenue generation, and cost reduction were .84, .76, and .89, respectively,in EMBArespondents, and .51, .74, and .89, respectively, in U.S.-market-oriented public relations respondents. Table 1 summarizes the EMBA and the PRSA data sets, the measure items, the mean and standard deviation pertaining to the 12 items, and alphavalues involving thethree effect measures. Except for media publicity/exposure in the EMBA sample, all measured constructsreached the scale’s“satisfactory” standards. 5. Results Research question 1investigated the extentto which public relations is valuedby business managersand public relations practitioners whofocus on market-oriented relations,and public relations practitioners who donot focus onmarket-oriented relations. The differences within and between groups are compared. Table 2 provides an overview of the means, standard deviation, and correlationsof the measured constructs in three independent samples. The results revealed that, across the three samples, media publicity/exposure was always rated as the greatest value that publicrelations can contribute to an organization (EMBA: M = 3.39, SD= .57; market-oriented publicrelations: M= 3.70, SD= .39;non-market-orientedpublic relations:M = 3.73, SD = .42).Beyondmedia publicity, for theEMBA sample,cost reduction was rated second in respect to its public relations contribution (M= 2.93, SD = .59), followed by revenue generation (M= 2.62, SD =.61). In contrast,except for ratingmedia publicity as the highestcontribution, both market-oriented andnonmarket-oriented public relations practit...