The changing role of strategic communication management
within the greening of the banking sector
Graduate School of Communication, University of Amsterdam Master Corporate Communication (MSc)
Master’s Thesis
Jelle Johannes Gabriëlse Student number: 11111305
Graduate School of Communication
Master’s Programme Communication Science Supervisor: Dr. Lise A. van Oortmerssen Date of completion: 24-6-2016
2 Abstract
Nowadays, sustainability is the primary moral and economic obligation of this century within the banking sector. Concepts such as reputation, trust, legitimacy, transparency, governance, socially responsible behaviour, and sustainable development are key concepts within daily strategic conversations for banks all over the world. These topics are increasingly becoming key strategic priorities for banks and show that PR is moving away from its tactical role towards a more strategic role. This new form of PR is called strategic communication management. Thus far, only qualitative, exploratory, non-empirical literature reviews were executed, in which the phenomenon of strategic communication management has been conceptualized. By asking employees and their managers how they would describe the changing field of strategic communication management, this study aimed to conceptualize the strategic communication management in the development of strategies in its field of practice. Four managers and four employees from five different banks within the sustainability department were interviewed about the changing field of strategic communication management practices. This study provides unique practical and theoretical understanding and shows that strategic communication management within the field of sustainability is a multifaceted phenomenon. By confirming and deepening the knowledge of the reflective and expressive role of strategic communication management, the dialogical role in this study provides new insights in conceptualizing the theory of strategic communication management. Suggestions for future research are to include all Dutch banks and investigating their internal communication structures. Followed by looking into differences between various types of banks and finally comparing the Dutch banking sector with other countries and finally looking into differences between various types of banks.
Key words: Strategic communication management, sustainability, transparency, trust, reputation, Triple Bottom Line, strategy, reflectivity, dialogue, social responsibility.
3 The collapse of the financial system and the global economic crisis of 2009 was a shock that resonated throughout the entire world, which called for a new model of operating in the banking sector (Eccles & Krzus, 2010). Nowadays, European institutions are inspected to take the lead in showing the serving role of finance in order to create markets that are sustainable on the long-term (de Graaf & Kidney, 2016). If this is to be successful, the stakeholders, the government and the banks together need to tackle social and environmental issues in a financial way (de Graaf & Kidney, 2016).
Before, the financial sector used to define corporate social responsibility (CSR) management as a long-standing community which was responsible for business conduct to ensure market stability and probity (Gond & Moon, 2011), responsible investments (Kurtz, 2008) and accountability (KPMG, 2005). However, negative direct social and environmental impacts were not associated with the financial sector (Coulson & Dixon, 1995). Nowadays, sustainability is the primary moral and economic obligation of this century in the financial sector (Steyn & de Beer, 2012b). Concepts of sustainability are receiving attention in all sectors of the economy and academia and this is a new way to show the responsibility of an organization in order to restore trust in them (Steyn & de Beer, 2012b). A way to restore trust in business is through ideas and processes that demonstrate that business cares about more than just profit alone. More specifically, corporate governance and sustainability approaches to strategic management demonstrate that profit can go hand in hand with caring about employees, communities and the planet (Steyn & De Beer, 2012a).
In its latest theoretical developments and best practice, the field of public relations (PR) or corporate communication management can offer more insights in bringing about the changes referred to previously. In the current business paradigm, concepts such as reputation, trust, legitimacy, transparency, governance, socially responsible behaviour and sustainable development are key concepts within daily strategic conversations for organizations all over the world (Steyn, 2009). Societal issues have a high priority within these daily conversations and show that PR is increasingly moving away from its tactical role to a more strategic role at societal level (Steyn, 2003; 2007) that goes beyond the two-way symmetrical communication from Grunig and Hunt (1984). More specifically, this means going from persuading target audiences through one-way communication to helping organizations to achieve a balance between economic and social goals. This new form of PR is called strategic communication management (Steyn, 2009). Although new PR approaches, theories and practices, such as strategic communication management, has much to offer in its latest theoretical development (De Beer & Rensburg, 2011a, 2011b; De Beer, Steyn & Rensburg, 2013; Gregory & Willis,
4 2013; Falconi, 2010; Steyn & De Beer, 2012a, 2012b). Previously described literature suggests that their theoretical framework should provide a platform for further investigation into this phenomenon. So far, only qualitative, exploratory, non-empirical literature reviews were executed while conceptualizing the phenomenon of strategic communication management. By doing qualitative interviews within the banking sector, this article seeks to offer in-depth insights in the experiences, feelings and thought processes around strategic communication management focusing on sustainability. No prior empirical research has been executed. In addition, literature (e.g. Steyn & De Beer, 2012b; Global Alliance for Public Relations and Communication Management [GAO], 2010; 2012) suggests that these new approaches of PR, such as strategic communication management, are largely unknown in the management domain and in its field of practice. This study will provide unique practical insights in the concept of strategic communication management and to what extend it is truly unknown in its field of practice. Furthermore, it can make a substantial contribution to current challenges faced by business.
This study aims to conceptualize the changing strategic role of communication management focusing on sustainability within the banking sector. Based on previous literature, the following research question arises:
‘How would sustainability employees and their managers within the banking sector describe the changing field of strategic communication management?’
Theoretical framework
In the 21st century, an era characterized by a focus on sustainability, the license to operate is obtained from society (Steyn & Niemann, 2014). With this, banks have to adapt to societal and stakeholder expectations and values and norms in order to maintain a good reputation. In addition, they need to be regarded as socially, environmentally and economically responsible and sustainable, trustworthy and above all as a good corporate citizen (Steyn, 2003; 2007; 2009). Next, a theoretical framework will be developed in order to identify the theory and narrow this down to the role of communication management. Although communication management and public relations are equal to each other (Dozier, Grunig & Grunig, 1995; Grunig, Grunig & Dozier, 2002; White & Mazur, 1995), this study uses solely the term communication management. Within Europe, communication management seems to be the more common denominator in both academia and practice (Van
5 Ruler, Verčič, Buetschi & Flodin, 2000; Van Ruler & Verčič, 2002; Verčič, Van Ruler, Bütschi, Flodin, 2001), while public relations appears to be the more common term in the USA.
First, two overarching thoughts will be expounded which are relevant for the way strategic communication management needs to be understood. They are called the Triple Bottom Line and strategy formulation. Subsequently, the theory of strategic communication will be narrowed down.
Triple Bottom Line
The Triple Bottom Line (TBL) serves as an overarching paradigm for the theories concerning strategy, stakeholders and sustainability, in order to develop a theory of the societal function of communication management. The core assumption of the TBL is that the focus of business banks is not only on the economic value they add on their financial services and activities, but also on the environmental and social value (Elkington, 1999). TBL is envisioned as an approach to decision making that includes the whole set of values, ethics, societal expectations and processes that a bank must comply to in order to create economic, social and environmental value (Steyn & Niemann, 2014). By integrating the principles of the TBL into daily operations, an organization shows concern and sensitivity to all three dimensions of societal responsibility, namely economically, environmentally and socially (Elkington, 1999). Moreover, a TBL approach to strategic management is a requirement for developing non-financial goals within the enterprise strategy. This will ensure that organizations consider both the sustainability and business opportunities within organizational strategy (Steyn & Niemann, 2014). Next, strategy formulation will be explained to clarify the differences between financial and non-financial goals of an organization.
Strategy formulation
A strategy is defined as to what extend an organization fulfils both the non-financial and financial activities to its stakeholders and society (Digman, 1990). A distinction can be made by looking at the strategies of an organization. The first strategy concerns a broad set of issues around values, social issues and stakeholder expectations which is called ‘enterprise strategy’. The second includes a range of possible financial business opportunities for an organization and rests on an understanding of how stakeholders can affect each business area, called the ‘corporate strategy’ (Freeman, 1984). On the one hand, enterprise strategy refers not only to the role that an organization has in society with its stakeholder approach, but also
6 focusses on non-financial goals. On the other hand, corporate strategy addresses strategic decisions regarding the achievement of financial goals (Steyn & Niemann, 2014). Both strategies are reflected in an organization’s vision, mission and values.
Looking at sustainability, enterprise strategy with its non-financial goals can provide a basis for developing ecologically and socially responsible strategic management strategies that will satisfy the demands of stakeholders who are concerned with, for example, the protection of the environment, human rights and fair labour (Freeman, 1984). To meet these demands, organizations need to listen and align their goals with those of its stakeholders. Stakeholders need to participate in developing and achieving an accountable and strategic response to sustainability (AccountAbility, 2011). Accepted outcomes can be achieved when relevant stakeholders are engaged and included in the process of developing sustainable policies and strategies. More specifically, one needs to identify, understand and respond to sustainability issues, but also report, explain and be answerable to stakeholders for the way organizations operate and perform (Steyn & Niemann, 2014).
In short, the development of an enterprise strategy with non-financial goals, and therefore sustainability goals, necessitates continual scanning and monitoring of the macro and internal environment,in order to align with the expectations, values and norms of societal stakeholders and other interest groups (Steyn & Niemann, 2014). Additionally, the strategic role of communication management can contribute developing an enterprise strategy in combination with the achievements of the organization’s non-financial goals (Steyn & Niemann, 2014). Next, the strategic role and subsequently the reflective role of communication will be presented.
Strategic communication management
In the plethora of definitions that relate to organizations, management and communication, one generic principle exists about communication management, which is all about maximizing, optimizing, or satisfying the process of meaning creation in order to solve managerial problems (Van Ruler & Verčič, 2003). Additionally, strategic communication means a goal oriented activity and other actors inside and outside the organization are taken as a starting point for communication. The grounds for the theoretical framework and the insights about strategic communication management are based primarily on Van Ruler and co-authors (2000; 2002; 2003; 2005) and Steyn and co-authors (2003; 2007; 2009; 2012a; 2012b; 2014). This study leans heavily on their former work. The theory of strategic communication management is based upon reflectivity. Therefore, both founders use the
7 terms strategic communication management and reflective communication management indiscriminately. In order to clarify the reflectivity component of strategic communication management, the following paragraphs will use the term reflective management.
Four models of communication management can be identified when focusing on organizational, managerial and communication approaches: informational, persuasive, relational and discursive (Van Ruler & Verčič, 2003). These models can be seen as strategies that offer solutions to certain problems, aimed at long-term survival in society (Van Ruler & Verčič, 2003). Here, informing and persuading are controlled one-way communication with the goal to announce, inform and persuade the public. Relational and discursive are two-way communication strategies used to build relationships and maintain dialogues (Verhoeven, Zerfass & Tench, 2013; Grunig & Grunig, 2002). These four strategies together form the strategic communication grid.
In order to understand when these strategies are suitable in various circumstances, a more sociological approach to communication management is needed. Previously described theories of communication management focused mainly on the relationship between organizations and certain individuals or groups of individuals (e.g. stakeholders) (Van Ruler & Verčič, 2003). Instead of focusing on a short-term survival that only looks at superficial relationships, a societal perspective can offer a more profound view of communication management, which is necessary for long-term survival. This is called reflective communication management.
Underlying thoughts of reflective communication management
Reflective communication management looks at organizations as institutions that construct their societal legitimacy in an ongoing reflective communication process (Van Ruler & Verčič, 2003). It is a strategic process of viewing an organization from the outside or public view. Next, this broader underlying view will be outlined by means of institutions, legitimacy and reflectivity. Last, this view will be narrowed down to the organizational level and a more specific definition of reflective communication management will be conceptualized.
First, when looking at the underlying thoughts, reflective communication management uses the lens of organizations as institutions. Institutions are defined by traditional and collective patterns of behaviour, ways of acting, thinking, and feeling (Van Ruler & Verčič, 2003). Whereas for human beings social behaviour is essential, institutions, with their traditional pattern of behaviour, rely on the order and security for their actions to be successful (Zijderveld, 2000). In line with this, institutions are made by humans, created in
8 order to survive as social entities for a long period of time. They can therefore only exist and continue to exist as long as society thinks they are meaningful (Van Ruler & Verčič, 2003).
Second, in order to reach corporate social acceptance, legitimacy must be reached. Legitimation is described as the perception by society that proper and civilized behaviour is the natural way of doing things (e.g. the norms and values in society) (Holmström, 2000). In order to reach legitimacy, organizations need to constantly and mutually reflect. This consists of a reflective and expressive task with the outside world. More specifically, the theory of reflective communication management uses the term reflective in a broader sense and in a more narrow sense. When looking at the broader sense of reflectivity, it is about the ability as a person to be able to take the attitude and social processes of another person and the outside world back toward himself and include these into his own social processes and activities (Mead, 1934). Here, an individual is able to consciously adjust himself to these processes and attitudes of the others and to modify these processes to social acts (Mead, 1934).
The reflective task of strategic communication management is inward communication, which is to act as a sensor and provide the organization with information about what is considered to be socially responsible and sustainable behaviour according to society (Steyn & De Beer, 2012b). This needs to be transmitted back into the organization in order to adjust its behaviour, standards, values, policies and strategies. More specifically, the reflective task serves as a bridging function between organizations and what is happening in their environment and society and this forms the core of strategic communication management (Steyn & De Beer, 2012b).
The expressive task of strategic communication management is outward communication (such as organizational reports) to distribute information about the organization into the external environment (based on reflection). This is to maintain a socially responsible image of the organization, strengthen public trust and be socially accepted (based on the organization’s behaviour and strategies). Reflectivity is an ongoing process where the expressive part can serve as a feedback loop to the internal and external stakeholders. Organizations are thus able to show their performance based on concerns, values and expectations made visible by stakeholder engagement and dialogue (Steyn & De Beer, 2012b).
Reflective communication management on a practical level
When narrowing it down by looking at the practical level, communication management is primarily concerned with its public legitimation and to get a public license to
9 operate focussing on public opinion. For this, all four communication strategies can be used (Van Ruler & Verčič, 2003). From this point of view, the generic principle of communication management can become more specific: “it is about maximizing, optimizing, or satisfying the process of meaning creation, using informational, persuasive, relational, and discursive interventions to solve managerial problems by co-producing societal (public) legitimation” (Van Ruler & Verčič, 2005, p. 263).
Reflective communication management helps management within an organization to construct the organizational reality in society (Van Ruler & Verčič, 2005). When including the reflective part in the generic principle of communication management, this reflecting can be defined as a skill that can help organizations by counselling discussions on legitimacy, help educate employees to behave in their communications in order to respond to societal demands, help to develop various plans to communicate for maintaining a favourable reputation and finally to execute these developed communication means (Van Ruler & Verčič, 2005). This needs to be done by using the informational, persuasive, relational and discursive interventions from the generic principle of strategic communication management (Van Ruler & Verčič, 2005). The counselling characteristic serves as the core of reflective communication management.
The counselling role is the task of communication professionals who scan the environment of an organization for potential changing norms, values and societal issues by looking at the organization from the perspective of the outside world and society. Next, others within the organization need to be advised, including management and all other members of the organization. This reflective part of strategic communication management comes on top of the other communication strategies, where the changes in the environment and society are being reflected in the organization (Verhoeven, Zerfass & Tench, 2013). Within this strategical and reflective role, the communication professionals help to construct a philosophy that incorporates the vision and the mission of the organization (Van Ruler & Verčič, 2005).
Nowadays, communication management is moving from the technical role towards the strategic communication role. With the TBL as overarching paradigm, organizations show through their enterprise strategy that they care about societal issues and this is reflected in its policies, strategies and behaviour. Enterprises need to preserve their license to operate and their legitimacy in order to strengthen the trust of its stakeholders and society (Steyn & De Beer, 2012b). Through environmental assessment, which includes scanning, stakeholder engagement, dialogue, societal issues and risks, and by contributing to enterprise strategy development as described previously, reflective communication management can enhance the
10 organizational effectiveness. Moreover, through concepts such as an organization’s mission, vision, values, behaviour, responsible and sustainable approaches and enterprise strategy, organizations try to maintain their license to operate and continue to be a ‘good corporate citizen’ (Steyn & De Beer, 2012b).
Finally, in its strategic role, the managerial reflective strategist advises top management on organizational priorities to be communicated and strategic issues to be addressed (Steyn & Niemann, 2014; Van Ruler & Verčič, 2003; Steyn & De Beer, 2012b). However, it seems more important to integrate this dimension into every communication professional’s role (Zerfass & Franke, 2013). In order for strategic communication management to be effective, every communication professional and therefore not only managers need to fulfil this role, regardless of his or her hierarchical position (Zerfass & Franke, 2013).
Method Interviewees
Managers and employees (N = 8) within the sustainability department of five different banks were interviewed about the changing field of strategic communication management practices. These different banks were selected because they represented the banking sector in the Netherlands. These banks differed in type of bank (e.g. commercial bank, investment bank, private and corporate bank), amount of investments and productivity as well as their national or international orientation.
Interviews came from two managers and one employee of the first bank. From the second bank, two employees were interviewed. From the last three banks, one manager per bank was interviewed. To find out whether consensus exists to the extend that the reflective communication task needs to be executed by every communication professional or solely by the manager, both managers and employees were selected in the current sample. In table 1, an overview of the number of managers and employees per gender that were interviewed can be found.
11 Establishing variation in the sample: gender (male N = 4, female N = 4), age differences (varied between 26 and 48 years), function (managers N = 5, employees N = 3), the amount of time working within a sustainability department (varied between 4 and 15 years).
Data collection
Semi-structured interviews were conducted by a student who was trained in a research seminar on qualitative interviews. Professionals were interviewed instead of forming focus groups, allowing everyone the same amount of speaking time (Flick, 2009) as well as the fact that it was impossible to find a suitable time slot for all the professionals to be available at the same time, due to their busy schedules. Recruitment of the interviewees took place by face-to-face contact, per email or per telephone. The researcher worked at the sustainability department of one of the banks and because of this, the researcher was allowed and enabled to make personal appointments with both the interviewees from his own bank as well as those of other banks.
The interviews were held in a closed meeting room, allowing an uninterrupted interview. Seven interviews were executed in Dutch, with the exception of one, which was in English. All interviews were audio-taped and transcribed verbatim. For the interviews, the researcher used an interview guide (Flick, 2009), which is attached in the appendices as appendix A. The guide contained three topics. First, a description of the sustainability department of the bank where the interviewee worked was asked including a follow-up question about the structure of the communication within the department. Second, after being informed about the theory, questions were asked about the reflective and expressive task of strategic communication management. An example of a main question is: ‘if we look at the reflective task, how are various signals (such as changes in norms, values and socials issues) of different stakeholders being picked up and internally integrated in your own process’. Follow-up questions about the challenges and personal examples took place between the main questions. Third, more in-depth questions were asked about the changes within strategic communication management over the last couple of years e.g. ‘what do you think is a key factor that makes sustainability so important nowadays’ and (after explaining the theory about moving from a tactical to a more reflective and strategic role) ‘is it moving from a tactical role to a more reflective role’. In between these questions, personal experiences and anecdotes were asked and told. Last, questions about the structure and the role of the manager within strategic communication management were asked, such as for example: ‘do you agree with
12 the thought that it is more the responsibility of the manager or the whole team or department nowadays’.
Analysis
Guidelines for the analysis from qualitative methodological literature has been used (Charmaz, 2006; Strauss & Corbin, 1998). The first step was open coding (Strauss & Corbin, 1998). The researcher broke the interviews down into fragments and assigned codes to them. In addition, an inventory was made in which the sensitizing concepts of stability and change have been included. The computer program Atlas.ti was used in this phase of open coding. The second step is referred to as focused coding (Charmaz, 2006). Focused coding means that possible dimensions within this inventory of the sensitizing concepts are made. The third step was to specify the relationships between various concepts (Strauss & Corbin, 1998). To understand the relationship between stability and change in the field of strategic communication management, a schematic overview was made which reported what each interviewee told about stability as well as change.
Validity and reliability
Numerous measures have been applied in order to assure both internal and external validity. The first measure was peer debriefing. A fellow student who joined the qualitative method seminar discussed the coding, categorizations and findings with the researcher. This resulted in consensus between the various dimensions that were found and in the way the coding was executed. The second measure was the use of thick descriptions. In the findings section, one can find quotations of the relevant information given from the interviewees. The third measure consisted of extensive engagement with three of the interviewees. The researcher did an internship of six months at the sustainability department and was in contact on a daily basis. Because of this, the researcher had profound knowledge of various practices concerning sustainability and this contributed in insights and a well understood notion of terms and processes.
Ethical considerations
The interviewees were informed about the study in written and verbal form. They were informed that participation in this study was voluntary and completely anonymous. In order to guarantee the anonymity of the employees, every interviewee is indicated by a letter. They were aware that the interviews were recorded on tape and if an interviewee wanted to destroy
13 the tape after the study, they were allowed to do so. Finally, they signed an informed consent document in which they agreed to participate in the study.
Results
During the analysis of the data, various dimensions were found that show that strategic communication management within the field of sustainability is a multifaceted phenomenon. Before beginning to address various dimensions which outline the changing field of strategic communication management, two underlying thoughts that had an impact on the way employees within the banking sector work and look at strategic communication management need to be clarified. These two key insights can be linked with the Triple Bottom Line (TBL) and strategy formulation. In the first part of the results section, these two key insights will be outlined. The second part of the results will describe the various dimensions which explain the changing field of strategic communication management. As explained in the method section, every interviewee is indicated by a letter, in order to guarantee the anonymity of the employees.
Two underlying thoughts
Triple Bottom Line. The first underlying thought is that of the overarching paradigm of the TBL. Employees described that they do not specifically see an obvious link between the financial crisis and the way how banks reflect on societal issues. They experienced that these are two trends that are related to each other, but they perceived that banks have not put sustainability higher on the agenda or put more effort in it because of the crisis. Employees and managers described that over the last couple of years, bigger issues in society are causing an increasingly higher interest in sustainability. Interviewee E gave the Volkswagen case as an example, where interviewee F aimed at the climate summit in Paris. In line with these examples, interviewee H explained it as follows:
H: People are starting to see, if you take the climate issue, starting to see that the fact that: hey, we got a 27 degree day happening and a series of days happening in mid-May. That has never happened before. You are talking about changes that are visible from that perspective. With this, employees and managers reported that the financial crisis could have caused an increasing attention of stakeholders. Interviewee B felt that, due to the financial crisis, the banking sector is under intense scrutiny of stakeholders. He explained that after the financial crisis, the banking sector was no longer trustworthy and they had to learn the hard way. The banks are now being questioned to show responsibility for the things they do and employees
14 and managers experienced that people are more interested in the long term fulfilment of sustainability. According to the employees and managers, because of those bigger issues such as the climate summit in Paris, more attention is being paid to amplifying those climate goals and the contribution of the private sector. Interviewee A saw the criticism from the outside world on the banking sector as something positive because more attention is being paid to who is accountable for certain sustainable issues.
As a consequence, employees and managers reported that because of these bigger societal issues in the world, the government increases the importance of sustainability. Interviewee B said that looking at Dutch politics, he provided an example where, in the old days, people voted for the political party called GroenLinks if they thought sustainability issues were important. Nowadays, every political party has sustainability as a topic high on their agenda. In line with this, interviewee E explained that these sustainability issues obtained from society are discussed more intently within politics:
E: And really look around us like: hey, what does society actually want and this is reflected in, for example, Parliamentary debates.
Because of an increasing attention for sustainability, both from stakeholders as well as the government, employees and managers reported that this changes the way how banks incorporate environmental, social and economic principles. Interviewee H stated that in the Netherlands there is a national champion of sustainable development who works at the Ministry of Foreign Affairs. According to him, this person develops, with of people, the national priorities. Interviewee H explained that this might set the tone for what might become a top priority for banks.
Subsequently, with these national priorities and the increasing influence of the government on the way how certain sustainability topics are being brought forward to various stakeholder groups, employees and managers felt that this is changing the way how banks communicate with their stakeholders. As sustainability climes higher in awareness on a national level, the banking sector as a sector is in dialogue with the government. Interviewees felt that this created a unique situation. Interviewee C explained it as follows:
C: … A whole new mechanism, which generates an exchange of all kinds of other knowledge and ideas… Those NGO’s also join forces on environmental issues. So Pax, Environmental Defense, Oxfam, Amnesty, who are all focusing on environment, they combine their comments and questions in such a sector dialogue… Thus, a part of our stakeholder dialogue can be held via sector dialogues.
15 Strategy formulation. The second underlying thought that had an impact on how banks practice strategic communication management, can be found within the strategy formulation of a bank. Employees and managers experienced that sustainability is increasingly seen from a business perspective. People tend to talk more easily about the business opportunities and the commercial aspect of sustainability. Interviewee F reported that both stakeholders and the banks realize that the banking sector is a for-profit sector, but both parties do not feel a tension between sustainability and making profit. He said:
B: We are a for-profit bank and money needs to be earned. We can do that perfectly by fulfilling a social role and at the same time earning money.
Employees and the managers reported that financial and non-financial factors are becoming more and more intertwined with each other, as the borders between both strategies appear to blur. Sustainability issues can be seen from a corporate angle and this can be done on a for-profit basis. Interviewee E explained this by recalling a model by a scientist called Michael Porter. She explained that nowadays the long-term goal of banks is to get to CSR 3.0. Here, CSR 1.0 is known as philanthropy, whereas CSR 2.0 is about clean and transparent hygiene and having a sustainability policy. Striving for CSR 3.0 is about how to be both making a profit and get a social return, something that, according to her, goes hand in hand. In line with this, interviewee F said:
F: …So the stability of the financial system appears to depend on much more dependent factors, factors such as CO² emissions, of which we previously might have said: ‘this part belongs to people-planet-profit’, but are now just entangled with the business.
These two underlying thoughts and processes, namely the overarching paradigm of the TBL and the financial factor of sustainability had an impact on how banks within the banking sector practice and experience strategic communication management. Next, various dimensions of the changing field of strategic communication management will be outlined.
Dimensions of strategic communication management
For an overview of the various dimensions that were found in this study, the concept-indicator model is attached in the appendices as appendix B. The interviews showed three dimensions in which the changing field of strategic communication management can be clarified, i.e. the meaning of the reflective role, the dialogical role and the expressive role. Here, sensitizing concepts of stability and change were profound within the dimensions.
16 The meaning of the reflective role of strategic communication management. Looking at the reflective role of strategic communication management, the interviews showed two ways in which the reflective role of strategic communication management is explained. First, how banks approached societal issues and second, how stakeholders perceived the managerial role.
How societal issues are approached. With the two underlying thoughts of TBL and
strategy formulation, employees and managers reported a change in the way how banks approach societal issues in order to reach CSR 3.0 and that it is allowed to make profit.
Stability of reactive monitoring. For employees and managers, traditional stakeholder management is set up in a defensive manner and it is used as a precautionary tool to avoid problems or difficult issues. The interviews showed a stability in how banks reflect on these societal issues. Interviewees experienced that the traditional stakeholder management and selecting information on what is considered socially responsible, is still being executed in a reactive and monitoring way. They felt that traditional stakeholder management is set up in a defensive manner, where problems or potential problems are being projected by stakeholders and is something that, according to these stakeholders, the banks are not doing right. Interviewee D used the following description:
D:… Imagine you are at the front page of a newspaper and how do you manage that issue. Or this is likely to happen and how do you manage that problem… Now, stakeholder management often is used as some kind of precautionary tool in order to prevent trouble… or that you discover trouble in an early stage so it is possible for you to manage that problem better. In line with this, interviewee E explained that this form of stakeholder management is embedded in daily activities and is common practice, but nonetheless important and subsequently leads to great results. As an example, she felt that stakeholder dialogue is more about giving a summary of what a bank is doing and where they want to obtain sustainable redress.
Change towards a more proactive approach. With a need to go beyond reactive and passive monitoring, employees and managers experienced a shifting mindset in terms of ways to think about certain issues. They reported a more proactive approach where banks determine their own points on their agenda. Here, banks proactively look at bigger societal issues that occur in society and adjust their strategic agenda. Interviewee D provided an example of circular economy, where banks, all by themselves, created something which is important for their stakeholders. In the appendices, another example from interviewee H with a proactive approach is attached as appendix C. Here, interviewee H summarized this example by saying that because of this proactive approach, stakeholders made it clear to the banks that they were
17 waiting for such an approach. Moreover, employees and managers felt that nowadays, banks are searching more for opportunities as a bank to create value. Interviewee G provided an example in which her bank proactively looked, together with a NGO, at the relationship and activities between both parties. Here, she said:
G: And together with [NGO], we looked at: ok, so what is important for you, what are the challenges according to you and what type of value, experience or skills can we offer you as a bank? A joint thought about what type of topic would be good for such a partnership? And this is how we figured that out. And that was pushed forward from our side.
With non-financial goals being intertwined with the business and this new approach towards societal issues, mostly managers felt the need to take it one step further when talking about strategic communication management. They strive for the fourth or fifth level of strategic communication management in which they proactively look, as a corporate organization, how to carry out bigger issues in society. Within this line of thinking, interviewee H thought of human rights, where interviewee E thought about asylum seeker policy in the context of their business. Here, they feel that with this approach, they can create real impact where people’s lives are truly changed and a real discussion takes place. Interviewee E continued with asylum seeker policy:
E: No director, banking director would be like: ‘refugee, come here, you can open your own banking account’. Which is true of course. No one is going to make that difficult, but it is a theme you need to work on.
As a consequence, in order for reflectivity to work, to act as a sensor where information about societal issues is selected, employees and managers experienced that nowadays, a balance needs to be found between the traditional reactive monitoring and the proactive and strategic approach. Interviewee D explained this by saying that on the one hand there is stakeholder management, where the environment determines what a bank can do. He used the metaphor of a compass, in which a bank would be completely guided by its environment. On the other hand, a bank can totally ignore what is happening in the world around it and follow its own compass. With this he said:
D: And both extremities are not good, you need to scan your environment and.. based on who you are, who your clients are, what your capabilities are, which markets are active, then you determine a certain strategy.
How the manager is perceived. The counselling role, where information is selected in
order to span the boundary between the organisation and its environment was allocated to be a managerial role. Here, the interviews showed two ways in which the manager is perceived, a stable role as an ambassador and a changing one in the counselling role.
18 Stability of being an ambassador. The interviews showed that there is a stability in how both internal and external stakeholders perceived the role of the manager. For both employees and managers, it means that the manager serves as an ambassador who needs to visibly embrace and express sustainable behaviour, in order to maintain a license to operate. The managers seem to be a role model whom employees are looking up to and this, in turn, empowers people. Interviewee D gave an example in which this role model is not being fulfilled. Here, he received a phone call where someone said:
D: Well, I wonder if thing are really changing there, because my regional director [of the bank] is still driving an Audi A6… [And] he is still driving a Diesel car.
Similarly, interviewee H brought up an example in which someone who is advocating for climate control issues, such as less emissions, was smoking outside his office. They reported that if it is not core behaviour, not changing and not taken fully on board, problems will come along the way. If managers succeed in fully incorporating a complete overhaul in attitude, employees described that his will eventually lead that inside the banks other ambassadors will follow. Things such as managers not only turning off the lights at the end of day, saving on printing, and using coffee cups twice a day, but also as managers ask their employees about the meaning of sustainability in their core business seems to be a powerful and effective way of being an ambassador. In line with this, interviewee F explained:
F: That type of leadership helps, that visibility. But I think that the most beautiful thing is that if you not only see it embraced at the top, but more so when everybody working at the bank, has the freedom and is enabled to do something with it.
Change in the counselling role. The reflective role used to be the role of the manager. With a more proactive approach toward societal issues, employees reported that the role of the manager changes over time and the counselling role becomes an increasingly more joint function of the bank and its employees. Employees and managers acknowledged that various teams have their own area of interest and expertise and therein teams are allowed to decide on their own considerations. Employees and managers experienced that this changing role helps the banks to be more effective to determine possible trends, concerns, interests or issues by various stakeholders. In addition, all teams need to have a clear picture of both issues and opportunities, in order to be effective. They appreciated the role of the manager in this, as interviewee A said:
A: … And of course the advantage of management is in that sense that you have a well determined view, so you know better what is going so you can make deliberate choices… But I do not think by definition that that is the role of the manager.
19 But for a bank nowadays, employees and managers felt that in order to make well-considered decisions, teams need to use their own expertise and knowledge for their specific stakeholder groups. By doing so, they can constantly measure where certain issues are shifting. By active monitoring on the basis of issue management, political monitoring and monitoring with relevant parties, they feel that more insights can be generated. As interviewee F said:
F: … And we translate that back to: what is going on here, how does this fit in what we are doing right now and how are we going to react on that.
The meaning of the dialogical role of strategic stakeholder management. Nowadays, employees and their managers experience the importance of having a dialogue with their stakeholders. By having a dialogue, employees and managers felt that they can generate customer intimacy with their own clients, but it needs to be done professionally. By thinking about how knowledge can be shared and improved as a collective by having a dialogue, they reported that it leads to more in-depth discussions. Examples that dialogue is more than just mentioning criteria within the press and more than public affairs were provided by interviewee C. Interviewee A explained that with such a dialogue, people can talk about which teams are relevant to the stakeholders and where should a bank exercise its activities. According to interviewee A, based on these insights, obtained from having a dialogue, a bank should report their plans. She said:
A: And subsequently you are going to report on these expectations like: what are you doing in a decisive manner. And that is a continuing process of….
In line with this, interviewee D explained that with a dialogue between the banks and its stakeholders, two lines of thinking are taking place between what the outside world thinks is important and what the banks think is important and this subsequently shows what a bank is doing with this. The interviews showed two ways in which the dialogical role of strategic communication management is explained, i.e. stability of different contexts and a change in the level of dialogue.
Stability of different contexts. During the interviews, managers and employees
acknowledged that during the dialogue between banks and its stakeholders, both parties can approach societal issues from another angle and can therefore have a different point of view about any social issue. They experienced stability in the way banks are having a dialogue with their stakeholders, because each bank looks at an issue within its different contexts. Interviewee C explained this by saying that knowledge, points of views and a dialogue is always contextually related. Every dialogue consists of multiple contexts. As an example, he gave one involving a tiger:
20 C: What is the purpose of a tiger? The purpose of the tiger is what you want it to be. Is it a beautiful animal that needs to be protected in nature, or is it…?If you are a hunter you will look at a tiger from a different point of view… then you think: yeah that is a beautiful tiger, shoot it. Whereas if you are in a zoo, then you think it is fun to be amused by a tiger. And this counts for all things important, it all depends on where you come from.
With this phenomenon, employees and managers felt certain challenges arising in the way banks and stakeholders tend to look at societal issues. They experienced that looking at these issues within different contexts makes it difficult to reach consensus between banks and their stakeholders and everyone stays within their own mindset. They reported that issues are approached as if someone can only be pro or con a certain issue and more specifically whether or not someone is making the right choice. As interviewee H used the contrast of black and white, interviewee C used the concept of a binary choice to explain this one-way style of thinking. In addition, interviewee C provided an example of marginal genetic modified soy. If people ask if someone is a supporter or is opposed to modified soy, binary choices leave no room for nuance. As an example, he stated whether or not invest in coals, yes or no, in palm oil, yes or no, and clients, yes or no.
Employees and managers acknowledged that a different approach within a dialogue between banks and their stakeholders about societal issues need to take place. They reported that the banks need their environment in which they operate, the trust of their clients as well as the relationship between various NGO’s. Therefore, they felt the need to really listen, instead of only hearing and having two monologues. Interviewee C used the words ‘agree to disagree’, whereas interviewee F explained it thus:
F: From that point on, you can continue sitting on your island and think: well all goes well with (bank), we will see. And that is clearly something we do not do, but embracing these developments, trying to understand them, being part of it, creating partnerships to see how you can change with these developments…
Change in the level of dialogue. With a more strategic and proactive approach from
banks to deal with societal issues and the awareness of various contexts, employees and managers realized that they need to really listen to stakeholders and therefore they notice that the level of dialogue is changing. They reported that they needed to include all the various aspects of an issue into the dialogue in order to hold on to their professional role. Interviewee E said that she and her colleagues started talking with various scientists and wanted to put them all together with important people in the field in order to go more in-depth about what is important and what would people really want to get done. Interviewee D gave an example of the traditional way of having a relationship with the director of the Consumer Association. Here, drinking a coffee with that person twice a year nowadays seems insufficient. He said:
21 D: But that is not a relationship. You need to be sure that a stratification is created… so that there are various levels within that type of relationship. That you understand each other, that you prepare, register, so in that way, you can work more structured and thus more value is generated and that you, eventually, can look at certain possible collaborations…
In addition, some employees and managers experienced that if not only the content is discussed in these dialogues, but that it also includes the process, both stakeholders and banks can benefit. The way how stakeholders are being heard and helped can give new insights and can bring dialogue to another level. Interviewee C used the concept of multi-stakeholder development, in which a bank can learn much from stakeholders, because stakeholders always see things that banks tend not to think of. Interviewee H proposed another way of changing the level of dialogue. He said:
H: We need to.. the moment we begin to challenge vocally and engage in discussion with them [NGO’s] on how they approach things, can create communication at a different level then where we are today… primarily because it also forces them to recognize that these aren’t easy changes to implement.
The meaning of the expressive role of strategic communication management. Looking at external communication, employees and managers reported that sometimes there appears to be a gap between what the goals of the banks are and how these goals are being perceived by stakeholders. Providing this feedback loop as part of strategic communication management sometimes appears to be difficult according to the employees and managers. Interviewee A described that, based on a research about food waste, 70 percent of the Dutch population thought food waste was an important theme for a bank, but that only 9 percent of the population linked and recognized their bank on that particular theme. With this given, she said:
A: So that actually means a communication gap of 61 percent.
The interviews showed two ways in which the expressive role of strategic communication management is explained, namely a stability in the use of traditional ways of communication and a change in seeking new ways of communication.
Stability in the use of traditional ways of communication. Employees and managers
were aware that there are many ways nowadays in how banks can communicate towards their stakeholder groups and their environment. Looking at the more traditional ways of communication, employees and managers acknowledged that they keep making use of these traditional forms of communication. They reported that their way of communicating is still established towards an one-way sending information of messages. Interviewee A gave examples of press releases, a corporate website, the radio and target group communication. Interviewee B extended this list with an annual report. Except for social media, they felt that
22 less interaction takes place and the outward communication is based more on informing and convincing instead of interacting. They concluded that this is nowadays an outdated way of communicating. Interviewee B explained it as follows:
B: But is that sufficient…? Is the way of communicating redesigned well enough compared with what the stakeholder asks from us. And if you then start looking at things that remained the same for too long, then the fact remains that we are publishing our annual events in an annual report once a year.
What’s more, employees and managers experienced that on the receiving end of the feedback loop, the impact of their information on the stakeholder is difficult to determine with the more traditional form of communication. Employees and managers wondered themselves if performance information in their annual reports or on corporate websites are actually being read by their stakeholders and if publishing once a year reaches enough stakeholders at all. Interviewee A reported that it is possible to trace back absolute numbers of all the tools and channels banks used, but she explained:
A: You can say: I published an article and on average 2000 people a day are reading it. But have or have you not truly had a positive influence on them and what do these people expect from us? You are not in direct contact with all of your readers and with all of your target groups. Did you truly change or influence the opinion of people?
Change in seeking new ways of communication. Where bigger societal issues on the
planet are causing an increase in the importance of sustainability, employees and managers reported that the financial crisis has damaged the trust of stakeholders in the banking sector in general. Employees and managers experienced that the openness and transparency is being enforced by stakeholders, way more than it used to be. They explained that before the financial crisis, stakeholders had a low interest but high trust in the banks, but nowadays stakeholders seem to have a high interest but low trust. As interviewee F said:
F: We are not trusted on our blue eyes and we, of course, only have ourselves to thank for that.
In line with this, both interviewees F and D used the metaphor of the bank as a black box. No one seemed to care, but nowadays stakeholders know that it is important. Employees reported that this changes the expectations stakeholders have of the banking sector. Instead of only reporting on what the banks are doing, employees and managers noticed that stakeholders want to see actual performance of their activities. According to the employees and their managers, this means that the performance needs to be as transparent as possible in order to build trust. Interviewees E and F described an example of transparency about the sustainable investments from people’s savings. What banks are financing with this money and what happens next with their money? Banks increasingly need to publish more in detail on their
23 communication platforms. Interviewee B explained it based on an example about a strategy for food waste:
B: If you communicate that types of goals, and these are relatively big goals [for the stakeholders]… and performance remains opaque, are you then not putting your stakeholder on the wrong track?... And this is an important goal to rebuild trust. That is only going to work if you are really transparent about what is going on and how you manage that, the choices that you make by doing so.
Looking at the more traditional forms of external communication, some managers described some ideas on how to communicate various targets and performances. One interviewee reported a neutral climate balance, where one measures the CO² emissions of every point on the economic balance sheet, whereas another interviewee described the possibility of looking at the total investment trading activities and map them against sustainable development goals. With examples like that, interviewee H reported what the value of transparency on targets and performances is:
H: Which shows how it is being steered going forward, and I don’t think it has to be complicated, because if you show a couple of things like that, within the report, maybe that adds two pages to a total report. It gives everybody a clear picture of where they are today and how they’re steering forward…..
Employees and managers experienced that in a time where stakeholders want to see actual performances from the banking sector and where banks generate new ideas to show their transparency and impact, the traditional ways of external communication cannot meet these expectations. Three interviewees gave the example where publishing an annual report once a year, or publishing information on a corporate website, seems insufficiently transparent. Interviewee B described it by using the metaphor of going to the supermarket. By saying that if someone is shopping for food, that person wants to know if a product is sustainably produced or not. With banking services, he noticed that such up-to-date information about sustainability is not available at a bank.
In addition, due to various factors, the information is often not read by stakeholders. In one example, one interviewee described the annual report as a thick book with over 500 pages, while another interviewee described it as a book the size of a bible. Employees and managers felt the need to provide constant transparent and on topic information and they realize that more modern ways of communicating need to be included in their communication strategies. Public information, real live information and actual information was used to describe future plans and goals by interviewees. As an example, two interviewees suggested the use of social media platforms, where according to them, more interaction and transparency is created. They said that with the help of social media, internal communication can become
24 external communication. They felt they needed to control multiple markets at the same time. They even considered this transparency a positive thing to rebuild trust of their stakeholders.
Moreover, several managers reported that new platforms are created to be able to respond to meet the needs of their stakeholders. Such a new platform is explained by interviewee E:
E: We want all financial institutions to work with this idea. We have also created a platform for it; PGM, APG, [bank] have joint. It is called PKAF. Where we, together,… and we actually want all financial institutions to do this… to be transparent about their climate data and investments, but also how they operate. And we are working on that to make it a joint effort.
In line with this, interviewee H described an application, a paying application of a bank, which is now still closed off to the public. He believes that in the future such an application will move more towards an open source. Finally, interviewee D described a future in which the challenge arises that will increasingly let the outside world enter the inside world of the banks. Using the wisdom of the crowd during product and services development, in order to become an organisation where information and knowledge becomes more fluid.
Discussion
The aim of this study was to provide insight in how employees and their managers within the banking sector would describe the changing field of strategic communication management. The interviews show that strategic communication management has a variety of meanings as the field changes. The meaning of the reflective role includes approaching societal issues that changes towards a more active approach, while the more traditional reactive monitoring still is thought to be of importance. How the manager is perceived is changing, whereas a change in the counselling role causes societal issues to become a more joint decision. However, the manager is still perceived as a role model and ambassador for employees. Next, employees and managers notice that the meaning of the dialogical role becomes more important over time. During a dialogue, employees and managers feel that various contexts and points of view are always play a role, but really listening and building a relationship with stakeholders is changing this level of dialogue. Regarding the meaning of the expressive role of strategic communication management, employees and managers feel that their banks need to be hyper transparent and the more traditional forms of communicating, such as an annual report or press releases, cannot fulfil these expectations. With a change in expectations of their stakeholders, employees and managers experience that they need to adapt to new ways of communicating.
25 Theoretical implications
These findings on the meanings of the reflective, dialogical and expressive role are helpful in interpreting results from previous research on strategic communication management. Several of the findings of this study are understandable in the light of recent research.
Two underlying thoughts. First, employees and their managers described that, due to bigger issues in society, sustainability is increasingly becoming more important in the eyes of stakeholders and society as a whole. They notice that the government appears to change the priorities of the banks and the way how they incorporate environmental, social and economic principles. Here, they agree that the financial crisis serves as a magnifier, where banks are being watched on how they fulfil these principles vigorously. According to the literature, a TBL approach to strategic management is a requirement for developing enterprise strategy and will ensure the consideration of both the sustainability and business dimensions of organizational strategy (Steyn & Niemann, 2014). Employees and managers are aware of the TBL and acknowledge that it is anchored in the overall strategies and policies of banks.
Second, because of the changing way how the banking sector incorporates the TBL, the separation between all three dimension of TBL, namely economic, environmental and social (Elkington, 1999), seem to increasingly intertwine with each other. Employees, managers and stakeholders agree that the banking sector is a for-profit sector and because of this, employees and managers experience that there can be a full alignment between sustainability and making profit. Based on previously described literature, enterprise strategy refers to a bank’s societal role and stakeholder approach, and it is developed to achieve non-financial goals. Corporate strategy addresses strategic decisions with regards to the achievement of financial goals (Steyn & Niemann, 2014) and both strategies are developed within the vision, mission and values of the bank. Where sustainability activities of a bank in the past were often seen as non-financial goals in order to maintain a license to operate, this study shows that both the banks and the stakeholders experience that consensus is found with the thought that banks can perform sustainability activities and make a profit. This new insight, compared with previously described literature, includes that nowadays employees and managers within the banking sector describe that the enterprise strategy of a bank can be combined with the corporate strategy because they experience that the financial goals depend on non-financial activities. More specifically, the strategic role of communication management can therefore not only contribute strategically to enterprise strategy
