USE a print media issue. However, with the need

USE OF CORPORATE
COMMUNICATION STRATEGIES IN THE MANAGEMENT OF STAKEHOLDER RELATIONS BY DANA
AIRLINES IN THE AFTERMATH OF ITS 2012 CRASH

 

CHAPTER 1

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1.1 BACKGROUND OF THE STUDY

Corporate
communications evolved from public relations (PR) which initially used to be a
simple function where companies responded to media queries or simply to protect
the management of the company from media attacks. Initially, companies had no
strategy for communication, it was simply a matter of choice to either respond
to external queries or not and when they did, it was best done more or less to
protect the management from media attacks or to spin damaging news into a
positive light. The department that was responsible for handling these
responses to the media and external constituents was called public relations or
public affairs.  

However
this function changed as consumers became more responsive to the products and
services that were being offered to them, they became more challenging and more
inquisitive. They demanded more from the companies and organizations. These
consumers formed groups and as a result, they became more powerful. Some of
these consumer groups and special interest groups focused on specific areas
that affected them. For example, there were those that focused on the
environment, some focused on climate, some on health matters, some on family
and children. Some of these special interest groups became really powerful and
challenged these corporate firms and organizations. For example, many oil
companies were challenged by interest groups on environment and climate. Some
television networks were challenged on their content if it contained too much
violence or nudity and was not suitable for children or family. Tobacco
companies, beef companies, pharmaceutical companies etc. are some of the
companies that came under the scrutiny of these consumer groups.

These
attacks on companies by these consumer groups made companies realize that communication
had to go beyond the simple public relations activities which they initially
engaged in. Companies started becoming strategic in their communication;
responding to external queries became a new focused and strategic action.
Companies had to recruit newly trained communication experts unlike before when
it was mostly journalists that were employed because it was more of a print
media issue. However, with the need for better communication strategies, the
companies began to focus on recruiting communication experts and also spent a
lot of money on training staff to handle company communication.

The
public relations functions of organizations changed and expanded to include new
areas such as managing stakeholders, engaging in corporate social responsibility,
media relations, government relations, crisis management, brand and image
building, investor relations, internal communication (also known as employee
communication). The expansion into this new function was the beginning of
corporate communications.

Corporate
communication is still quite a recent field, unlike its predecessor, public
relations and there is still research being done in this area. As a result, a
centralized definition is yet to be created. Several authors have defined it in
several ways. Some of these definitions are:

Jackson,
1987 defined corporate communication as the total communication activity
generated by the company to achieve its planned objectives. Blauw, 1994
characterized it as a way to deal with all communication created by an
organization, coordinated for applicable target audiences. Every item of
communication must accurately pass on and accentuate the corporate identity.

Van
Riel and Fombrun, (2007) however were of the opinion that corporate
communication is all the activities involved in the management and organization
of all internal and external communication aimed at creating a favourable
outlook on the part of the stakeholders who the company relies on.

Cornelissen,
(2008) sees corporate communication as a management function that offers a
structure of the effective organization of fall internal and external
communication with the general aim of establishing and maintaining a good
reputation among the different stakeholders of the company.

Who
is a stakeholder?

A
stakeholder is any individual or group that either positively or negatively,
impacts or is affected by the activities and decisions of an organization. It
can likewise be described as an individual or group who has a personal stake in
the results of an organization’s activities. Stakeholders are classified in
view of the degree to which the choices of the company influence them. There
are the individuals and groups who are directly influenced by the choices of
the organization, and there are those who are not. 

Examples
of direct stakeholders include employees (including managers &
non-managers), investors, shareholders, customers, clients, vendors, among
others. While examples of indirect stakeholders include: government,
surrounding community, NGOs, unions, trade associations, among others.

Stakeholders
can also be classified as internal and external. Internal stakeholders are the
individuals directly involved in the business (e.g., employees, managers, etc.)
while external stakeholders are elements that are not within the business but
rather think about or are influenced by its execution (e.g., consumers,
suppliers).

Stakeholder
engagement has been defined as the way in which a company interacts with its
stakeholders in order to achieve its goals and objectives and enhance their
response to them (Bal et al, 2013). Other benefits of engaging with
stakeholders include: it helps enhance sustainability and profitability of the
organization, build trust, manage risk, Brand Enhancement: Improved
Productivity creates Strategic Opportunities and Partnerships creates room for
Increased Investment:

In
general, the stages of a typical stakeholder engagement include: Identify
Stakeholders and Key Issues, Establish Objectives and Process, develop a plan,
Implement Plan, Review and Report.

On
June 3, 2012, a Lagos bound flight from Abuja; Dana Air Flight 992 crashed into
a furniture works and printing press building in the Iju-Ishaga neighbourhood
of Lagos and killed all 153 people on board and 10 more people on the ground. Following
the crash, the Dana airline company was banned for a period of time from
carrying passengers or operating on Nigerian airspace. The ban was lifted on the
5th of September 2012 barely three months after the crash. Dana airline has
gone on to operate in Nigeria and still commands a good number of passengers on
its flights in Nigeria. The author believes that Dana airline was able to
manage its reputation and make a quick comeback through the use of corporate
communication strategies and effective stakeholder engagement. What this study
seeks to discover is what these corporate communication strategies that were
adopted by Dana airline were, their level of success and how they used these
strategies to manage their stakeholders’ relations.  Getting answers to these questions is the
goal of the study.

 

1.2 STATEMENT OF THE PROBLEM

On
the 18th of October 2017, the Nigerian Stock Exchange (NSE) placed a ban on the
trading of Oando shares following the directive from Security Exchange
Commission (SEC) that Oando misrepresented its financial report. However, on the
24th of October, the ban was partially lifted and trading continued.
In November 2015, NCC placed a huge tariff on MTN for faulting its directive.
After several negotiations, the tariff was reduced and a payment plan was
developed. There have been series of such scandals in Nigeria including a Bellview
airline which crashed in October 2005, and after few months the ban placed on
them were lifted and they have gone on to command a good number of passengers
on their flights. Scandals and shocks ordinarily can topple a company. The
Enron and WorldCom scandal toppled the company and the company has never
recovered from it. However many companies have been able to manage scandals and
shocks through the adoption of different corporate communication strategies in
managing their stakeholder relations. The extent to which these corporate
communication strategies have been effective in the management of stakeholders’
relations with a keen focus on Dana airlines is the problem of this study.

 

1.3 RESEARCH OBJECTIVES

The
purpose of the study includes:

1.      To
examine the corporate communication strategies adopted by Dana airline in the
aftermath of its 2012 crash.

2.      To
ascertain how effective these strategies were.

3.      To
examine how these corporate communication strategies adopted were used to
manage stakeholder relations.

 

1.4 RESEARCH QUESTIONS

The
research questions are as follows:

1.      What
were the corporate communication strategies adopted by Dana airline in the
aftermath of its 2012 crash?

2.      How
effective were these strategies?

3.      How
were these corporate communication strategies adopted used to manage
stakeholder relations?

 

1.5 SIGNIFICANCE OF THE STUDY

The
study will be significant to organizations as it will help them to learn how to
incorporate appropriate corporate communication strategies when handling
scandals and shocks. It will serve as a reference point for many companies and
organizations seeking for the best ways to manage their stakeholders. The study
will also be relevant to scholars and researchers as there are not many studies
on this subject matter.

 

1.6 SCOPE OF THE STUDY

The
scope of the study is Dana Airline Nigeria; they only operate local flights in Nigeria.

 

1.7 LIMITATIONS OF THE STUDY

The
study will be limited by time and finance.

 

1.8 DEFINITION OF TERMS

Corporate communication: This
is an administration function that offers a structure for the effective
coordination of all internal and external communication with the general goal
of building up and keeping a good reputation among relevant stakeholder groups.

Stakeholder:
A stakeholder is any individual or group that either positively or negatively,
impacts or is impacted by the activities and decisions of an organization

Internal stakeholder: These
are the entities that directly influence a business (e.g., employees, the board
of directors).  

External stakeholder: These
are entities not within a business itself but who care about or are affected by
its performance (e.g., consumers, regulators, investors, suppliers).

Stakeholder engagement: This
is a company’s strategy for interaction with its relevant stakeholders for the
achievement of company goals and responsibilities to these stakeholders.

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