Conclusions and Recommendations
The firms should have been more innovative and risk-oriented in their work to directly address challenges from a dynamic environment.
Superimposed on the theoretical framework matrix, under the four (04) topics of: organization systems and structure competencies, management orientation and strategy, market and other forces, and business performance, leading to that of “life cycle,” the case of the seven (07) public relations firms exposed factors in the study of management. These tended to answer the question why they failed to live beyond the life of their founding generation.
The findings of this Researcher showed public relations companies or firms, and their founders and management, whether established as corporations or sole proprietorships, that:
Six (06) out of the seven (07) cases of public relations firms which closed shops did not clearly understand the importance and use of the factors of adaptation (even selective) and alignment in their management. These are expected to sustain and assure enduring and productive business operations for themselves. All of the seven (07) firms’ management did not know, comprehend, and even consider the application of the little known “Stewardship Theory” in management as an essential factor to sustain business operations and thereby prolong their life span.
All of the firms’ management did not show preferences for nor inclination to innovation and develop risk-taking propensity at any period of their existence. Five
(05) of the seven (07) firms’ management did not have any clear vision of their firms’ reason for existence and thrust to the future. But in the same topic of management orientation and strategy where the subject “vision” is included, majority of the firms’ management capitalized on their entrepreneurial orientation through their leadership profile, client management, and financial management.
Dynamics of Environment
Under the topic market and other forces, majority of the firms’ management did not do well to deal with the dynamics of external environment which summarily affected their organizational life cycle, exposed lack of organizational blueprint, engaged in half- hearted cultural orientation, and totally failed to keep pace with technological changes. Even with a more positive comprehension and application of the factors in organization systems and structure competencies, more of the firms’ managements replied negatively on the subject of “resources” specifically on
“rareness” and “imitability.” However, all of them claimed that their firms were organized to exploit the full potential of their resources and capabilities.
The firms’ management unanimously understood their internal environment and practiced public relations with unquestionable professionalism and stricter adherence to its code of ethics. In their business performance, five (05) out of the seven (07) firms’ management engaged in financial analysis to ascertain business directions, keep tab on growth and plot development patterns. Their financial statements gave them inputs to further business operations. It was totally in the
subject of market and other forces that the greater majority of the firms’
managements failed to fully comprehend, apply, and utilize.
In the life cycle of the seven (07) public relations companies or firms, the average number of years they lasted in business turned out to be 11.7 years. This encompassed five (05) corporations and two (02) sole proprietorships. The corporations had an average of 11.4 years, while sole proprietorships, tallied 12.5 years. The SEC grants corporations a fifty (50)-year existence. The BTRCP-DTI specifies a five (05)-year life span. On the average, the five (05) corporate firms reached only 11.7 years, very much shorter than the 50-year maximum period of existence allowed them by the SEC to legally operate. The two (02) sole proprietorships survived beyond the maximum five (05)- year requirement. All of these firms however, still lived up to the 12.5-year average lifeexpectancy of firms
(De Geus, 1997)
Predictive Role
The inability of the management to sustain business operations and prolong their firm’s life span, even based on the life expectancy specified by the government instrumentalities, have justified the claim that public relations firms have shorter business life. Their quest for survival and longer life lines evidently depend on their thorough knowledge, application and utilization of the world of management, its concepts, principles and theories, to a continuously changing business environment. The predictive role of management orientation on the life cycle of these firms lies in the eventual adaptation and alignment of business
operations. The requirements of the internal and external business environments should be met. This should then bring about a balance for continuous existence through entrepreneurship and stewardship.
Six (06) of the seven (07) firms’ management failed to use adaptation to account and help their business organizations “change to meet new opportunities and threats in the environments.” Yet they were predominantly concerned only with local clients, how much more when foreign accounts in international public relations call for their services? Changes include research and development, engineering, market research, and other departments for innovation. They also failed to apply the principle of alignment which is, “the act of proper positioning or state of adjustment of parts in relation to each other.”
Risk-Taking Propensity
All the firms’ management were not familiar with the “Stewardship Theory”
in management. It could serve as the veritable life force in their business operation, hence, their prolonged existence. In this theory, company executives serve as stewards. They are motivated to act in the best interest of their principals. More importantly, these stewards believe that “their interests are aligned with that of their corporation and its owners. Thus, the steward’s interest and utility motivations are directed to organizational rather than personal objects.” A balance could be ideally struck with entrepreneurship as envisioned by Mintzberg in terms of structure, context and strategy.
All of the same management did not show preferences for nor inclination to innovation, and developed risk-taking propensity throughout their existence. They maintained status quo and apparently relied on the routine-kind of operation and style of management which stunted their organizational system. This situation was forseen:
“Only companies that change at the pace of the market can hope to match or exceed the overall market’s performance. Unless companies change at the pace and scale of the market, their performance will almost inevitably slide into mediocrity.” (Foster & Kaplan, 2001)
The preferences to innovate and willingness to take risks in business are upheld by management authorities as “hallmarks” of a firm’s capability to accept challenges and overcome adversities. This should be done to nourish its growth, development, and lay the foundation for prolonged business life.
It may be a bit of a phenomenon, but while the company vision of five (05) out of seven (07) firms’ management seemed unclear, they still capitalized on their entrepreneurial orientation through leadership profile, client management and financial management. It appears that their management have a vague understanding of what “vision” stands for, that it should ideally stem from their leadership profile which in turn, is manifested in excellent client and financial management.
From all indications, majority of the firms’ management did not do well to deal with the dynamics of external environment which included factors on
adaptation (selective) and inevitably, alignment of the same. This matter involved the firms’ life cycle, organizational blueprint, cultural orientation and technological changes. It is in this stage where the performance of the firms’ management strangely declined. Failure followed, which ended business operations and completed dissolutions of their companies, prematurely or unexpectedly.
With the foregoing recommendations specific to the operating public relations firms, this Researcher further submits the following additional recommendations which should not only concern them but also those which will most likely organize public relations firms in the future.
The management of public relations firms stopped business operations and closed shops due to their inability to muster market and other forces and use effective management orientation and strategy. These factors contributed much to shorten their business life cycle and eventually led to their dissolution.
This study exposed the causes and effects on why public relations firms in the Philippines fail to live beyond the life of their founding generation. In the process, the predictive role of management orientation on the life cycle of public relations firms emerged from the cases on failed ones and highlighted by the questionnaire to the respondents who are the survivors.
The operating public relations firms are the survivors. They keep apace with the dynamic market and other forces to steer well through the known external
environment. They keep abreast of their organizational life cycle by means of organizational blueprints for updates, interest in cultural orientation and judicious application of technological changes.
Selective adaptation is resorted to, so that alignment with very satisfactory if not excellent business performance can be attained, to assure themselves of longer life cycle.
The firms survive on the strength of their organization, systems and structures and competencies alone, which can directly bring on longer life cycle.
But even the masterful application of innovative management orientation and well-plotted strategy, which combines entrepreneurial orientation and stewardship, the resultant business performance still serve as determinant to what makes up as the life cycle.
The failed firms are those whose management took for granted or ignored the essential requirements for a healthy and robust business concern. Deviations from the factors of entrepreneurial orientation and stewardship, and control of elements in the internal and external environments, generally lead to failures.
Public relations firms have generally shorter life cycle. They fail to extend themselves beyond the life of their founding generations. They do not last at all to the succeeding ones. This was proven by the impressive numbers of their kind which rose, survived and failed during the 1950s up to the year 2000. About less
than fifty (50) of these firms ended up as business failures. Many of them left no traces at all of their existence. However, a good number emerged as new players, but they are generally new ones and not those which persisted to operate since the 1950s which still failed in the process.
These averages compare substantially with the finding of Arie de Geus of Harvard University who wrote in his book “The Living Company,” where he cited a recent study by Ellen de Rooij of the Stratix Group in Amsterdam:
“… The average life expectancy of all firms, regardless of size, measured in Japan and much of Europe; is only 12.5 years … there exists a gap which represents the wasted potential in otherwise-successful companies. The damage is not merely a matter of shifts in the Fortune 500 roster; work lives, communities, and economics are all affected, even devastated, by premature corporate deaths… Why, then, do so many companies die prematurely? … Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations; true nature is that of a community of humans… The legal establishment, business educators and the financial community all join them in this mistake.” (De Geus, 2002)
To ensure longer life cycle of public relations firms in the Philippines, this Researcher recommends that: There must be a paradigm shift in the strategic management process of adaptation. Managements of public relations firms should necessarily align management forces as warranted, so that the framework of strategy, system and structure are in tangent with each other. Creative destruction of non-essentials should be effected. They could adapt other specializations in public relations, consider investor relations and delve into management consultancy work.
More than just realignment and or adapting to change, public relations firms must take all necessary precautions or actions to prevent their premature demise because, “demise is such a waste of organization and efforts limited resources, unlimited human skills and talents and loss of opportunity from the dynamics of market forces.”
Management of public relations firms must always keep abreast of the strides in modern management. They should ascertain the wisdom of utilizing the spirit and intent of the “Stewardship Theory.” If they are to contribute to the nation’s socio-economic-political development, they should redirect their business operations to stronger and more meaningful thrusts toward aproductive, profitable, and longer life expectancy.
A balance of sustainability should be struck, and achieved in management.
The “Stewardship Theory” should infuse a balance with entrepreneurship to bring about a healthy life cycle and upgrade public relations firms. The equation of the concepts of entrepreneurship and stewardship should magnify the real nature of public relations which is preventive and proactive.
The life cycle of public relations firms is directly depended on the acknowledged personalized management styles of their owners or heads (presidents, chief executive officers or chief operating officers). These firms are associated with their founders. These top company men, who are generally non- businessmen or those not cut out for business, should fully study and reorient
themselves, with the intricacies of business management, and the dynamism which characterize their preoccupation.
Management of public relations firms should consistently conduct surveillance and analyses of developments in the external environment to uncover new and applicable business trends. The nature of the external environment is predominantly dynamic, and very unpredictable. If at all the firms’ management should be reoriented to adaptation and alignment of forces in their operation, they have to be innovative enough to do business and fearless in taking well-calculated risks. Routine- like types of management have no room at all in the firms’ business undertakings.
The public relations firms’ management must fully grasp the meaning of
“vision” and understand the framework that goes with it, with two major components: core ideology and envisioned future of the company. The core ideology is made up of values and purpose, while the envisioned future is composed of the 10-30-year goal and vivid description of what it is to be like when the organization achieves the goals. Vision should “lay the groundwork for the company to evolve past dependence on a few key officials.”
Onsman (2004) even summarized that “vision, mission and values statements form part of a hierarchy of tools in determining strategic intent.” He disclosed that:
“Mission statements were the first attempt to sum up what an organization is in business for … Vision statements followed in the 1980s, arising from new ways of looking at leadership that emerged at about that time… At about the same time, managers were urged to examine the
‘culture’ of their organizations… culture was based on shared values of those within the organization… all those statements share the characteristic that they are an effort by management to create alignment.
There is no common organizational management criteria which could easily distinguish the living public relations firms with the defunct ones. For instance, the period during which they operated or have operated were different—socially , economically, and politically. The management of firms, regardless of products and services, cannot help but operate realistically in the various situations that they find themselves in. The dynamism which characterizes local and international trends in different societies have consistently demanded resiliency from the firms. While imperical data on this matter were hard to come by from the surviving firms, the case of one or two of the defunct public relations firms speak eloquently on the influence of the environment on their life cycle.
Operating Firms
With the foregoing findings that this study has revealed on the operations of existing public relations firm, this Researcher submits the following recommendations:
To ensure comparatively greater stability and assure themselves of longer life span, public relations firms which are still operating as sole proprietorships, need to incorporate themselves. The corporation as a type of business organization appears to be most ideal for public relations firms.
Public relations companies must always maintain a flexible and resilient organization.
Operating public relations firms performing services to their clientele in the areas of corporate public relations and other specializations, must always be ready to answer their clients’ demands in any field of public relations specialization.
Public relations firms should take pains to fully and effectively re-orient their clients’ mistaken notion that public relations work is nothing more than publicity and media relations. Their advise and counsel should serve as means for them to re-educate their clients to the real reason for existence of the discipline known as public relations as a discipline.
Consultants on special areas of concern should be employed by public relations firms. Although certain management studies have shown that the use of consultants is an indication of weakness in management skill or knowhow, it has been proved to be useful to the operating public relations firms.
The firms should be more open in the articulation of their mission for the management of their firms. It is important for them to spell out the vision for their companies.
There is a pressing need to have a breed of well-educated, degree holders in public relations and allied courses, from the undergraduate to graduate studies.
Educational institutions should avail of the services of public relations practitioners that will further enrich the profession.
Management Succession
The management of public relations firms should in some ways, muster a succession plan to ensure continuity of operations. This is not only true for sole proprietorship type of business organization, but also corporations in regard to their hierarchical setup.
There is a need for the firms to define and spell out their unique selling proposition, especially as the field of specialization in their profession and business, open wider and greater avenues for growth and development.
The dynamism which characterizes the environments where client companies operate should necessarily call for adaptation in terms of alignment of structures, systems, and strategies.
Public relations firms must uncompromisingly adhere to the Code of Standards for the Practice of Public Relations, to provide for a much more refined kind of practice and bring about profitability, growth and development in public relations as a discipline and profession.
In the life cycle of the firms, the general public’s growing demands for their services have opened wider and much more challenging avenues in their field of specialization. Senior PAPRC public relations counselors observed that before, the firms’ businesses called for marketing, public affairs (advocacy), educational institutions, media relations, and even sports public relations. But, it has always been corporate public relations which have preoccupied the firms’ management.
For the practitioners however, the realm of international public relations have become a prized specialization, money-wise or otherwise.
Joe Epley, former president of the Public Relations Society of America, identified these reasons which underscored the need for international public relations:
“1. The expansion of communications technology has increased the dissemination of information about products, services, and lifestyles around the world, thus creating global demand.
2. The realignment of economic power, caused by the formation of multinational trading blocs, such as the North American Free Trade Agreement (NAFTA), Asia Pacific Economic Conference (APEC), Organization of African Unity (OAU), and the European Economic Community (EEC). Such alliances have brought global producers and consumers closer.
3. People around the world are uniting in pursuit of common goals, such as reducing population growth, protecting the environment, waging the war against terrorism, and fighting disease, particularly AIDS.
(Sietel, 2004)”
It was cited that public relations, “has become a global phenomenon” in the 21st century. Seitel attributed this to the:
“Major political shifts toward democracy throughout the world, coupled with the rapidity of worldwide communications and the move to form trading alliances of regional nations, have focused new attention on public relations. The collapse of communism, the coming together of European economics, and the outbreak of democracy everywhere from Eastern Europe to South Africa have brought the global role of public relations into a new spotlight.”
Public relations firms today face a new and greater challenge to prolong their life cycle. International public relations, in line with the philosophy of “social responsibility,” is in effect calling on the practitioners to uncover newer ideas in public relations and further discover its potentials as a catalyst of change.
In the sphere of development studies, public relations has been proving itself as a highly potent weapon, even in the quest for globalization as a prime mover in