Sales Department External Relations
An organization is concerned with maintaining a healthy relationship with suppliers and customers, with whom they interact daily. However, for an organization to be successful, it has to maintain healthy and fruitful relationships with all the stakeholders. These stakeholders may or may not be directly involved in the market. But they impact how the business will function in the market.
The external stakeholders are a large and diverse group.
A simple understanding of stakeholder is anyone or anybody who gets affected and or affects the actions undertaken by the organization.
Government Relationships
All organizations are affected in some way or the other by the government and legal bodies in for legislation, acts or tax policy. These bodies could be operating at the national level or at the local level or the international level.
The amount of impact of these bodies on the organization is dependent on the sphere in which it operates i.e. local market, national market and international market.
Any government’s economic policy or central bank’s monetary policy has an indirect or direct impact on the organization. A direct impact would be passing legislation to break cartels or monopolies or price regulation.
The government’s role is just not restricted to economic and monetary policy, but its sphere of influence includes society, the environment, and the cultural fabric of the country. Regulation around food and health safety directly impacts the function of the organization. For example, cigarette manufacturers anxiously await the budget hoping the government does not increase sales/excise tax, thereby increasing the selling price.
The political environment also plays an important in impacting the functioning of the organization. Any sudden animosity between neighbouring countries can result in the government imposing a trade embargo thereby halting commerce.
Mass Media
In the current world with 247 media and the flow of information, it is very important to pay particular attention to strategies to deal with mass media. Typically, organizations need to develop strategies to tackle news reporters and editors, investigative journalists, and sectorial analysts.
Organizations need to develop a proactive approach to dealing with mass media. By creating open channels of communication with them. This could be achieved by providing them with the actual and crucial business information from the senior management interview or product testing etc.
Industry Associations
Sometimes companies join hands in delivering value to customers. This so-called alliance and collaborations have their own set of challenges. These collaborations can be divided into four categories internal, external, informal and formal
There are so many external relationships, organizations have to deal with. It has to determine which one of them is going to impact it most and develop strategies around that. Relationships with external stakeholders can make or break the success of an organization.
Financial institutions, banks, creditors, and lenders do not serve as a direct customers for an organization, thereby not really forming the inside core of relationship marketing. However, the influence they have on the overall working of the organization makes them an important element of relationship marketing. This aspect of relationship marketing is called Public Relationship or Investor Relationship management.
For an organization, it is important to have loyal and long-term customers, but it is equally important to have loyal and long-term investors who will stay invested in the company. Long-term investors provide financial stability to the organization and also help companies avoid hostile takeover bids.
Financial performance as understood by an external stakeholder like an analyst will also determine the fate of the company. If the analyst expresses a positive response to the financial performance, the company will likely attract steady investors and also keep supplier confidence going. By providing quality company information to financial analysts, the PR team can develop a strong relationship with them.
Consumer Groups and External Pressure Group
Another extension of external stakeholders is public pressure groups like consumer activists, environmentalists, human and animal activists, ideological groups, local leaders etc.
Consumer groups are created to fight for the rights of consumers and sometimes represent a portion of customers. It is generally perceived that the consumer group exists to provide customer satisfaction. However, they may be constituted to take on organizations perceived with too much power or control over the market. These consumer groups can exert pressure through boycotts or protests.
Environmentalist groups like Greenpeace, World Wildlife Fund, and PETA raise issues against companies which they believe are hurting the environment. Some of the issues raised by this group are illegal dumping of industrial waste in rivers, water wastage, plastic usage, and pesticide usage.
Some ideological and animal rights groups are difficult to deal with and negotiated with. It requires a different PR strategy from the company to protect its interest.
Public opinion leaders, civil rights leaders, and TV Hosts are high-profile individuals who command substantial public support. Any opinion expressed by them against any company can generate a negative environment for the company.
Essentially, companies are left with two options in dealing with pressure groups. The first option is to go alone and develop its own corporate social responsibility agenda and develop wider public acceptance. The second option is to develop working relationships with pressure groups and gain their favourable opinion.
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