Joe’s Journal: Of PCBs and PR

“‘Public Relations’ has acquired a connotation of ballyhoo, propaganda, and whitewashing. To the general public, ‘public relations’ means publicity—essentially an extension of advertising from advertising a product to advertising its producer. But, the emphasis should be on acquainting the broad public with the problems of the enterprise rather than on convincing it of the company’s virtues and achievements.”

                                     –Peter F. Drucker 

Peter Drucker believed that “free enterprise cannot be justified as being good for business. It can be justified only as being good for society.” A crucial part of managing social impacts, especially the negative ones, is covered in Drucker’s view of public relations.[EXPAND More]

Right now, for instance, the public needs to know more about the importance of profits, executive incentives and executive compensation. If executive compensation decisions have been thought through by the board of directors and are deemed fair and competitive, the public ought to understand the board’s reasoning. This might expose areas of weakness in a company’s pay structure that require correction. It might also change the views of those who believe CEO pay is scandalous.

A company should also use its public relations function to inform the public about what the enterprise is doing in certain sensitive areas such as emissions and product safety. I witnessed a controversy between General Electric and various state and national environmental protection agencies over GE’s discharge of enormous quantities of Polychlorinated biphenyls into the Hudson River between 1947 and 1977. I knew as a child that the Hudson River we were swimming in—downstream from the two GE plants in question—was polluted. We simply did not know the harmful effects of these chemicals. GE is now involved in a very expensive dredging operation to rid the Hudson River of PCBs. It has incurred costs of over $1 billion, along with a lot of ill will from citizens in the communities affected. GE would have been much better off to inform the public of what it knew, when it knew it and what actions the company was taking to alleviate problems.

Free enterprise has shown itself capable of increasing living standards enormously. About this, the evidence is very clear. Why risk incurring the wrath of the public, and then subjecting a company to damaging regulation, by failing to engage in the kind of truthful public relations that alerts people to potential dangers and to remedies that an organization is pursing? Isn’t this good for the free enterprise system? Isn’t this good for companies? Isn’t this the right kind of work to be undertaken by the public relations function?

–Joe Maciariello [/EXPAND]