Lerbinger O. Corporate Public Affairs. Interacting with Interest Groups, Media, and Government

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• A level of aspiration, which is the agreement each prefers; for ex

ample, the buyer to obtain a sales price of $100,000 and the seller

to obtain $150,000.

The strategy of negotiating lies between the poles of cooperating and

fighting. Hence a negotiator is faced with such questions as “Am I press

ing too hard?” or “Was my concession too early or too big?”

Although each party wants to withhold information for fear of having

to make concessions, too much reticence renders effective negotiation im

possible. Negotiating skill requires careful handling of what Willem F. G.

Mastenbroek calls the information dilemma—a skill that consists of care

fully bringing about a step-by-step exchange of information that gradu

ally gives shape to realistic expectations on both sides.

Mastenbroek warns of two related dilemmas. One is credibility. This

reminds a negotiator that, at one extreme, trusting the opponent with

out reservation results in a bad deal, whereas mistrusting might seri-

ously undermine the likelihood of an agreement. If, for example, a

negotiator is caught lying, his or her credibility is lost and the relation-

ship between the parties is seriously worsened. The second dilemma is

self-presentation—the identity or image the bargainers present to their

adversaries. They must appear tough but also be flexible and fair. They

must attempt to be conciliatory but not transmit the image of an ap-

peaser. Their concern about losing credibility is one reason they restrain

themselves from bluffing or using deceit or coercion to gain their

objectives.

Being Creative. Negotiation is a problem-solving situation where

the goal is to find solutions that solve not only your own problem, but

also that of the other side. To do this, flexibility and creativity are re

quired. Fisher accordingly advises negotiators to avoid (a) premature

judgment, (b) looking for the single best answer, (c) assuming there is a

“fixed pie,” and (d) thinking that solving the other side’s problem is their

problem (and not also yours).

Media Usage During the Consensus-Building Process

The Hydro-Quebec case described in the Appendix, as well as others, re

quires that a delicate balance be maintained between keeping the af

fected public informed about ongoing dialogue and not, through such

public communication, undermining that dialogue. Susskind and Field

present two common ground rules and a third that is sometimes added.

Participants must agree on the following:

1. Statements may be made to the press about one’s own concerns

and reactions to meetings, but no statements or views should be

attributed to other participants.

82 I CHAPTER 3

2. A participant should immediately inform the group if remarks

made to the media have been misrepresented or misinterpreted.

3. No derogatory or personally demeaning statements about others

in the process should be made.

These rules are a test of whether participants can come to an agree

ment about their own conduct. If they can, the chances increase they

can also agree on substantive matters. Another advantage of these

rulesisthattheyenableparticipantstopresenttheirargumentsand

positions to the press and thereby to influence the thinking of other

participants. Most experts on negotiations believe the process works

best when the parties dispute matters among themselves without ap

peals for media intervention and, perhaps, support. However, the

temptation to do so is strong, especially in the face of a likely impasse.

By following the media rules, the parties at least minimize damage to

the negotiation process.

Dialogue participants need not rely on the mass media to keep stake-

holders informed. Summaries of meetings can be mailed directly to par-

ticipants, the media, and interested citizens. If a community has a local

public-access cable station, videotapes of meetings can be sent so that

they can be broadcast at regularly scheduled dates and times. Citizen

groups can publish their own newsletters or hold public forums. The

growing use of computers allows further communications through

e-mail, home pages, and various electronic bulletin boards.

Sometimes a local newspaper is willing to develop special inserts about

a meeting. The Boston Globe did this when it sponsored, along with Har-

vard University and MIT, a 3-day conference, stretched over 2 months, on

transportation planning in the metropolitan Boston area. Called “Shap-

ing the Accessible Region,” the special 16-page insert included nine rec-

ommendations issued by a jury selected to hear arguments.

CONCLUSIONS

Mediation and negotiation—and their many expressions in consensus

building and collaborative planning—show enormous promise as a way

to resolve issues among contending parties before they escalate into

broader public or legislative issues. Many managers are now trained in

conflict resolution, even in the international sphere, as stated by Joseph

Duffy, director of the U.S. Information Agency: “The new information

technologies are transforming international relations, opening up new

possibilities for conflict prevention, management and resolution.”

However, the use of conflict resolution has to be based on more than a

hopeful assumption that because harmony among human beings is

more natural than conflict, all we have to do is make the parties in con

flict talk with one another. One might expect, however, that as the level

of mistrust declines and mutual understanding increases, the conflict

will diminish.

CONFLICT RESOLUTION I 83

APPENDIX

CASE STUDY: HYDRO-QUEBEC DISPUTE

WITH NATIVE PEOPLES

Hydro-Quebec, a giant hydroelectric complex owned and operated by

the Quebec government, was embroiled in controversy over its plans to

build more dams. Having completed Phase I of the Hydroelectric Project

begun in 1973, the utility was ready for Phase II, which included plans

to dam eight more rivers north of the LaGrande River, including the

Great Whale River. Thus called the Great Whale project, plans required

the flooding of thousands of acres of land in the James Bay region of the

Canadian sub-Arctic.

Environmentalists were concerned about the devastation of the wil

derness and possible extinction of local seals. Native Cree, Inuit, and

Naskap Indians, who have lived in this huge wilderness for thousands of

years, feared the loss of their traditional homeland and native way of

life. Their livelihood has largely been based on hunting, fishing, and

trapping. Furthermore, the upheaval caused by the project had already

released mercury into the rivers and flooded waters of the area, making

the fish inedible.

To help stop or limit the size of the project, the Cree Indians hired Hill &

Knowlton of Toronto, Canada. As stated by the Ottawa Citizen newspaper:

The Cree strategy was simple:

1. Fight the billion-dollar project on the international stage.

2. Quietly use public relations consultants while maintaining a very

visible grassroots campaign.

3. Identify Hydro-Quebec’s markets in the United States and con-

vince them to say no to cheap electricity.

4. Push an alternative energy policy.

5. Attract sympathetic celebrities like Robert Kennedy Jr. to the cause.

6. Run high-impact ads. Target the utility’s investors, especially U.S.

colleges such as Dartmouth.

One objective was to convince the legislature of New York State and

Governor Mario M. Cuomo not to proceed with a $17 billion deal to pur

chase electric power from Hydro-Quebec. The Indians were encouraged

by Maine’s cancellation of a $4 billion deal. Without this and the mar

kets of Massachusetts, Rhode Island, and Vermont, the Great Whale

project could not be financed.

To help put the Great Whale project back on track, Hydro-Quebec

hired PR giant Burson-Marsteller. The key objective was to counter Hy

dro’s bad image in the United States and to convince the legislatures of

New York and the New England states to stick with their plans to buy

power from Hydro-Quebec. One of the Cree claims Hydro wanted to

discredit was the statement that the Great Whale project would destroy

84 I CHAPTER 3

a wilderness the size of France. (Cree leaders said they meant to say an

ecosystem approximately the size of France would be affected by both

the Great Whale and the already built Grande River project.)

In April 1990 the Cree and Inuit Indians achieved a publicity success

by paddling a native vessel called an odeyak, half-canoe and half-kayak,

down the Hudson River to New York City where the 50 paddlers arrived

just in time for Earth Day celebrations at Times Square. Furthermore,

Greenpeace, the Sierra Club, and the National Audubon Society spon

sored a full page in the NewYorkTimesthat showed pictures of dead cari

bou in an area previously flooded by Hydro, questioning Hydro’s

contract with New York State.

Ultimately Hydro-Quebec postponed the project indefinitely, demon

strating that the utility’s traditional ways of resolving confrontations

were outmoded. Susskind and Field point out several errors in the be-

havior of Hydro and the Province of Quebec. One is that they stone

walled over the disclosure of a secret sweetheart deal with multinational

aluminum-smelting plants whereby power costing 2.4 cents per kilo-

watt-hour to produce was sold at 1.5 cents.

The company convinced

the provincial government to support it by forbidding the Quebec press

to make mention of this deal.

Another error is that by ignoring or belittling the opposition, the util-

ity created misunderstanding, polarized opinion, and increased criti-

cism.

For example, responding to the opposition’s ad, Robert Bourassa,

then the Quebec provincial leader, asked, “How can you seriously con-

sider those ads in the New York Times?” He also commented, “Seven mil-

lion Quebecois can’t be wrong”; this was seen as an insult to the Cree

nation.

Hydro should have considered the evidence the Cree had sub-

mitted, by following this prescription: “Keep an open mind, be open to

reason, and consider carefully that you might be wrong.”

Hydro also refused to listen to other critics. When a New York legislative

committee met to review the state’s $17 billion contract with Hydro-

Quebec, the company refused to attend the meeting, with one company

spokesperson saying, “The contention that Canada can’t conduct its own

economic review is not only insulting, but it has no basis in fact.”

The impact of the project on indigenous peoples was not given

enough weight. Massive damming of their hunting and fishing territo

ries and disturbance of their way of life deteriorated their health. Cases

of obesity, heart disease, and diabetes, previously almost unknown, in

creased. Various social problems also rose dramatically: alcohol and

drug abuse, spouse abuse, unemployment, and teenage suicide. Typify

ing Hydro’s attitude was that when the native population complained

that high mercury levels put their eating of fish at risk, the general sec

retary of the utility said, “All they have to do is change some of their

fishing habits for a while.”

To sum up, perhaps Mercredi, the chief of the First Nations Assembly,

said it best: “The problem with this province [and presumably Hydro-

Quebec] is that there is no debate, there is no dialogue.”

As Susskind

CONFLICT RESOLUTION I 85

and Field emphasize, the mutual gains approach asks that one talk with,

not at, the other. One of the prescriptions they advocate in this approach

is: “Search for shared or overarching principles on which to base a con

tinuing dialogue.”

When a package is agreed on by the stakeholder ne

gotiators, the entire community should have a final say by means of a

vote, referendum, or similar means of approval.

Everyone must, how

ever, be informed about the voting process and the arguments for and

against the package.

ENDNOTES

1. Program on Negotiation at the Harvard Law School, “Dealing with an Angry

Public,” 1987. The 1997 brochure refers to strategies for resolving conflicts

and disputes with dissatisfied customers, potential litigants, and concerned

interest groups.

2. For example, in 1972, David Finn, chairman of Ruder & Finn, explained that

his job was to get people in disagreement to “talk together constructively, as

never before, to find the solutions which will enable us to save our society.”

Speaking about the role of the public relations counselor, Finn said, “He is no

longer primarily a communicator: he is a sort of moderator whose job it is to

try to prevent the crisis from getting out of hand.” From a monograph,

“Modifying Opinions in the New Human Climate.”

3. “Pilot Program Teaches How to Negotiate,” PRSA News, May 1989, p. 1.

4. Roger Fisher and William Ury, with Bruce Patton, editor, Getting to Yes: Negoti-

ating Agreement Without Giving in (Boston: Houghton Mifflin, 1981).

5. Deborah L. Jacobs, “Controlling Litigation Costs With a Neutral Third Party,”

New York Times, September 23, 1990, p. F12. Several organizations provide

ADR. services. A partial list is issued each year by the Bureau of National Af-

fairs. The following qualifications should be considered before retaining an

ADR provider:

1. Number of cases it has handled, and percentage of cases resolved

through ADR. Ask for a client list.

2. Ability to offer neutral parties nationwide.

3. Ability to provide ADR training for managers.

4. Provides a fee structure. (The American Arbitration Association bases

its fee on the amount at issue and charges between one tenth of 1%

and 3% of that sum, depending on the size of the case.)

6. Ann Davis, “For Dueling Lawyers, the Internet Is Unlikely Referee,” Wall Street

Journal, May 12, 1999, p. B1. Also see Cybersettle’s press release, June 20,

2003 on its website, Cybersettle.com.

7. Walter J. Gershenfeld, “Presidential Address: Future Industrial Relations:

Guide for the Perplexed,” in Industrial Relations Research Association Series,

Proceedings of the Forty-Eighth Annual Meeting, ed. Paula B. Voos, January

5–7, 1996 (Madison, Wis.: University of Wisconsin, Industrial Relations Re

search Association), pp. 4–5.

8. Lawrence Mosher, “EPA, Looking for Better Way to Settle Rules Disputes, Tries

Some Mediation,” National Journal, March 5, 1983, p. 504. The mediators

were financed by a Ford Foundation grant.

9. Neil Ulman, “Unlikely Allies: Pact for River’s Use Unites Conservationists and

a Power Company,” Wall Street Journal, May 20, 1996, p. A9.

86 I CHAPTER 3

10. “Public Participation Requires 2-Way Communication as Demonstrated in

Environmental Issues,” tips & tactics (a supplement to pr reporter), Vol. 34,

July 15, 1996, p. 2.

11. “Public Pressure, Not Science Behind McDonald’s Decision,” Chemecology,

February 1991, p. 6.

12. Ibid.

13. Ibid.

14. Kenneth D. Kearns and Anna L. West, “Innovations in Public Affairs Pro

gramming: Collaborative Planning and Beyond,” in Practical Public Affairs

in an Era of Change: A Communications Guide for Business, Government, and

College, ed. Lloyd B. Dennis (Lanham, Md.: University Press of America,

1996), p. 358.

15. Ibid., pp. 356–357.

16. “Oregon Voters Reject Measure to Close Trojan Nuclear Unit,” Electric Utility

Week, November 12, 1990, p. 3.

17. Marla Williams, “Nuke-Plant Troubles Could Lead to Closure—Idle Facility

May Bring Rate Boosts, Blackout,” Seattle Times, November 14, 1991, p. C1.

18. Kearns and West, op. cit., pp. 359–363.

19. Lawrence Susskind and Patrick Field, Dealing With an Angry Public: The Mu-

tual Gains Approach to Resolving Disputes (New York: Free Press, 1996).

20. Ibid., p. 13.

21. Ibid. Principles are summarized from pp. 13, 36–42.

22. Ibid., p. 223.

23. Ibid., pp. 223–224.

24. Ibid., see pp. 154–155.

25. Gerald W. Cormick, “The Myth, the Reality, and the Future of Environmental

Mediation,” Environment, Vol. 24, September 1982, p. 16.

26. Ibid.

27. James P. Ware, “Bargaining Strategies: Collaborative Versus Competitive Ap-

proaches,” Harvard Business School (HBS Case Services, No. 9-480-055),

April 1980.

28. Gerard I. Nierenberg, The Complete Negotiator (New York: Nierenberg & Zeif,

1986), p. 16.

29. Ibid., p. 34.

30. Lawrence Susskind and Alan Weinstein, “How to Resolve Environmental

Disputes Out of Court,” Technology Review, Vol. 85, January 1982, p. 40.

31. Fisher and Ury, op. cit., pp. 10–11.

32. Ibid., p. 42.

33. Ibid., p. 45.

34. Nierenberg, for example, devotes a whole chapter to “How to Recognize

Needs,” op. cit., 145–153. Fisher and Ury also provide a list of human needs.

35. These conditions are discussed in Ware, op. cit.

36. Susskind and Weinstein, op. cit., pp. 41, 46–47.

37. Cormick, op. cit., pp. 17, 37–38.

38. James T. Tedeschi and Paul Rosenfeld, “Communication in Bargaining and

Negotiation,” in Persuasion: New Directions in Theory and Research, eds. Mi

chael E. Roloff and Gerald R. Miller (Beverly Hills, Calif.: Sage, 1980), pp.

227–228.

39. Willem F. G. Mastenbroek, “Negotiating: A Conceptual Model,” Group and

Organization Studies, Vol. 3, September 1980, p. 329.

40. Fisher and Ury, op. cit., pp. 57–58.

41. Susskind and Field, op. cit., p. 218.

CONFLICT RESOLUTION I 87

42. Irving Kristol, “Conflicts That Can’t Be Resolved,” Wall Street Journal, Sep

tember 5, 1997, p. A12.

43. Jack Aubry, “The Beaching of a Whale: The Crees Spent $8.2 Million to Fight

the Great Whale Project on Environmental Grounds. This Week Their Deter

mination Paid Off When Quebec Harpooned the Project,” The Ottawa Citizen,

November 26, 1994, p. B3.

44. Susskind and Field, op. cit., p. 163.

45. Ibid., p. 177.

46. Ibid., pp. 162–163.

47. Ibid., p. 168.

48. Ibid., p. 163.

49. Ibid., p. 161.

50. Ibid., p. 164.

51. Ibid., p. 166.

52. Ibid., p. 174.

88 I CHAPTER 3

III

Media Strategies

When an emerging issue progresses to the public involvement stage, the

mass media play a critical role. By drawing attention to an issue and

possibly influencing the way people think about it, the media set the

agenda of what people talk about. Managers know that once public

opinion is crystallized, it is more difficult to change. Thus, if an issue is

important to a company it quickly endeavors to shape public discussion

in its favor. If an unwelcome issue is initiated by government or an in-

terest group and there are indications that the issue cannot be con-

tained, a corporation or industry group would try to jump the gun and

move to the public involvement stage as quickly as possible.

The news media are a major force in the business environment be-

cause of their reputed power to reach most people and sometimes influ

ence attitudes and behavior. A 2004 annual report on American

journalism reports that by a 55% to 29% margin, most Americans say

the media’s influence is growing, a view held consistently since the

mid-1980s.

Public relations practitioners are heavily engaged in media

relations because they generally believe that the news media are the

most powerful outside force in the life of a business executive. As inves

tigative journalists Bob Woodward and Carl Bernstein demonstrated in

Nixon’s Watergate scandal and incessant media coverage of the Clinton–

Lewinsky sex scandal dramatized, even the president of the United

States could be unseated. Thus, could not the heads of major corpora

tions face a similar fate?

The answer came with the bankruptcy of Enron Corporation in De

cember 2001 and the subsequent media concentration on corporate vio

lations of the “full and timely disclosure” requirements of the Securities

and Exchange Act. Many CEOs were subsequently unseated: Imclone’s

Samuel Waksal, Adelphia Communications’ John Rigas, Tyco Interna

tional’s Dennis Kozlowski, and WorldCom’s Scott Sullivan.

Further

more, with continuing media coverage of corporate deception and

wrongdoing, public attitudes toward business soured and led to greater

government intervention in business affairs, as symbolized by passage

of the Sarbanes-Oxley Act (see chap. 14). These events proved that the

news media play a major role in influencing public opinion and stimu

lating government action, even though they faltered in their watchdog

function of exposing business wrongdoing. There is no doubt that busi

ness reinforced the reality that the media are one of the major forces in

their sociopolitical environments.

Business news has been the fastest growing editorial segment in

newspapers, both among metropolitan giants and hometown dailies.

Business news has also become a staple of mainstream television, said a

cover story in USA Today during the first month of the new millennium.

It reported that in the last 3 months of 1999, the financial news cable

network CNBC attracted more viewers than general news network CNN

on weekdays from 5:00 a.m. to 7:30 a.m. This trend prompted CNN to

boost its weekday business news programs to 5.5 hours a day from 2.5.

A further indication of rising interest in business news is that, even on

the three American evening network news programs (NBC, ABC, and

CBS), the number of business stories rose 19% in 1999 to 1,175 from

989 in 1998, according to the Center for Media and Public Affairs. Its

president, Robert Lichter, declared, “The genre of financial journalism

isn’t just a beat. It’s a whole industry of its own.”

Several reasons account for the growth in business news: the long

economic boom of the 1990s, especially the rise of the Internet econ-

omy; the proportion of Americans owning stock, which grew to 80% in

2002; and the spread of globalization.

Furthermore, according to the

results of the 2003 Middleberg/Ross Survey of Media, reports of unethi-

cal or illegal behavior by corporations or individual executives have fo-

cused journalists’ attention on the critical topic of corporate credibility.

Among journalists who regularly cover business and technology issues,

86% say disclosures of unethical behavior on the part of a corporation’s

ruling body sometimes or always affect financial coverage, and 72% say

they sometimes or always affect product coverage.

POWER OF THE MASS MEDIA

News media in the United States are especially powerful because they

are protected by the First Amendment. They represent the fourth es

tate—after the legislative, executive, and judicial branches of govern

ment. Business might question to whom the media are accountable; but

when business or government has sought to interfere with the media,

the courts have defended them by opposing prior restraint of news sto

ries and allowing the press to keep its sources confidential.

The basic function of the news media is to direct public attention to

selected events, provide important information, and offer analysis and

comments. In the United States, as well as in all democratic societies, the

90 I PART III

media serve the surveillance function of warning the public of dangers,

malfunctions, and social transgressions. Stephan Lesher’s Media Un

bound describes how modern journalism “for three hundred years the

people’s gadfly, gossip, town crier, court jester, and sometimes cham

pion—had assimilated sinister power.”

Lesher states, “America has be

come media-minded, believing and acting on journalistic information

more than any other source or institution.”

Most public relations campaigns and other public communication cam

paigns rely heavily on the mass media, on the assumption that they are ef

fective in reaching the general public. This reliance was demonstrated

when the PRSA announced the 1994 winners of the prestigious Silver Anvil

Awards. The awards chairman, Jim Roop, observed that “central to almost

all the programs was extensive media coverage and support, belying the

criticism that public relations is media soft.”

Elaborating on this state

ment, he said, “There has been some criticism that the industry is moving

away from its traditional roots in publicity and going with more con-

trolled media. The fact that so many of the Silver Anvil programs were

based on publicity campaigns suggests it’s not a correct assessment.”

That statement remains valid a decade later. For example, in awarding the

2004 Bronze Anvil Awards for “outstanding achievement in public rela-

tions tactics,” the public relations firm of Jackson Spalding was praised for

its effort in generating more than 16.5 million media impressions, with

more than 2,200 positive stories and coverage on major television affiliates

throughout the United States for its client’s consumer campaign.

Bacon’s

MediaSource, as well as other publicity reference services, remain an essen-

tial part of most public relations offices.

In believing that the mass media continue to be highly effective, Roop

referred to the Silver Anvil entry on Pepsi’s syringe crisis in which some

customers complained that they found syringes and needles in Pepsi

cans.

He commented, “Through mass media Pepsi alleviated fears,”

bringing people back to buy its product. In a second reference, to CARE’s

Somalia effort, he said, “People contributed as a result of CARE’s effort to

raise awareness about the problems in that country and the need for

food and clothing there.”

Roop, however, does not limit the media’s power to crisis situations

that are fanned by the media in the first place. By saying that the mass

media can be effective in raising people’s awareness of tragedies in the

world and prompting them to be generous, he implies that the mass me

dia can be effective in motivating people’s behavior. He thus believes

that the media are effective on all four levels of the hierarchy of effects:

raising awareness, increasing understanding, changing attitudes, and

influencing behavior. This success is rarely achieved.

Interest Groups Use the Mass Media Too

Besides corporations and government, labor unions and social action

groups recognize the importance of the news media. Although ques

MEDIA STRATEGIES I 91