The importance of public relations has increased in both private and public sector. Successful implementation of public relation theory improves the performance of the business organisation. In this paper, the researcher has focused on the theory of public relations. The resort has used the example of Volkswagen case to explain, how scandal leads to poor public relations. The researcher has explained the reason behind the poor performance of Volkswagen. It has been shown that such scandal not only affects the performance of the company but to the economy as the whole. In this paper, the researcher has explained various reasons behind poor public relations. Organisation can adopt various methods and strategies for improving public relations. For example, organization can higher right market research analyst. These people are expert in analyzing market situation and recommend on the same way.
The importance of public relations has increased in both private and public sector. Successful implementation of public relation theory improves the performance of the business organisation. This paper focuses on the public relations theory and practices. This paper review public relation and this paper begin with the introduction of public relation and defines how it can be used by the business organisation as a management tool. This paper focuses on the effectiveness of public relations theory on the performance of the business organization. This paper has a critically analyzed public relation of a different organisation. This paper as well recommends methods which can be used to strengthen a public relationship.
German car making company Volkswagen has found to be guilty of showing false diesel emission amount. According to Harpaz (2017), Volkswagen have violated clean air act by making a false claim of their diesel emission, the car produced by Volkswagen produces 40 times more nitrogen oxide than US limit. This car uses software which turned emission control. The International court of justice found Volkswagen top guilty and charged $4.3 billion penalties. Volkswagen has been criticised worldwide and this leads to falling in its share price. Volkswagen was forced to get back 6000000 cars worldwide. This scam has resulted in poor public relations latimes (2017). Volkswagen has produced negative externality, by making money at a cost of global health. Hou (2017) satisfied that this scam has resulted in a loss of 1.5852 billion Euros and 6% decrease in share price. According to Kalinowska et al (2017), the cost of the company has increased from 6.7 billion Euros to 16.7 billion Euros following the scam to rectify the damage. In 2015 the company offers a dividend of 0.11 Euros per share decreasing from 4.8 per share. This scam has resulted in fall of trust among the consumer. People have lost their trust on the company and investors refused to invest in the company. Volkswagen cheated their customers and as well government of the various nationalities. Volkswagen brake guidelines generated to control the problem of global warming and several other rules. According to Lee et al (2016), Volkswagen's act has affected international share market as well the performance of several other business corporations.
Most of the business organization has a department of public relations. The public relation has proved to be effective in improving the performance of the business organization. According to Myers (2016) if an organization fails to maintain good public relations they cannot improve their performance no matter how effective their product is. An efficient public campaign helps the business organization to demonstrate their products and services. It as well helps to enhance brand image.
The public campaign can help an emerging business to represent their product and services to the public. When a new company starts their business it became very difficult to make you're known to everyone. Organisation uses various methods to advertise their product. Good public relation helps business to gain people's trust and make their product famous. It helps the business organization to gain reputation.
When an organization makes better public relations, a positive image is created by the public and other business corporation. This perception attracts other business organization to join them and operate collectively. In this way, organisation can improve their market share Olkhovska and Ab (2017).
Charity and other social work help organization to create a positive environment and to gain people's attention. Most of the business corporation donates some section of their income to a charitable trust. According Sarabia and Sison (2016), this charity produces a positive image of the business corporation and it helps in endorsing their product. It as well attracts customers to purchase their product.
Bad public relation not only affects organizational reputation but their performance as well. For example; in Volkswagen scandal not only affect their reputation among the customers but their net income as well. According to Schonhagen and Meissner (2016) sales of Volkswagen have fallen by 5.3% after diesel emission scandal. The company has faced a net loss of $4.3 billion in 2015. When an organisation commits scandals it distracts investors and customers as well, when investor refused to further invest in the company, it can face huge burden. Moreover, such scandals affect debt taking ability of the company. No of the bank can provide to the company who found guilty in a scam. Therefore origination completely further growth scope can be drastically affected.
Good public relation increase confidence of the employee of a business organization. Public relation decreases moral support of the employees. Employees might not actively participate with each other, they cannot work efficiently and this further decreases organizational performance.
Forming an efficient public relation is the beginning of a successful business organization. However establishing public relation can be costly for a new organization Business organization can use various methods to ensure that their public relation is efficient and cheap.
The business organization is required to communicate with their customers. The organisation can improve the better relationship with customers if they can contact to them. According to Sweetser (2017) communication skills of business organization significantly affect their performance. The business organization can contact with their clients in many forms through Email, phones or through text. Email is regarded as the most formal form of conversation. The business organization uses this kind of methods to communicate with their parents or big clients. Verbal communication can be effective if an organization is dealing with the small product. An effective communication helps organizations gain the trust of the people. Trust is the founding stone of any business organization.
Importance of social media has increased past few years. A business organization can use this platform to improve their market performance. Business organizations use social media to endorse their product and to gain reputation, the Business organization can give an online demonstration of their product this helps in making their product known to everyone Holtzhausen (2013). A large section of the population is now active on social media, people can give their review about this product. This can be helpful at reducing the cost of the organisation. Most important thing is that organisation can contact to the large population at the same time this helps in improving public relations.
A business organization can use blogging for generating trust of the corporation. A business organization can use self-designed websites protocols, this platform helps organizations to contact and demonstrate their product. This type of platform increased trust among the people because they can directly review the product.
If an organisation has effective contact with journalist and news reports it can help them to gain reputation. According to Grunig (2017), Journalist and news anchors help business to represent one big platform. Most of the business entrepreneurs were asked to face news interview, this platform helps the organisation to present their view. This can be used to introduce the upcoming product, this produces a positive image of the corporation.
The business organization faces various barriers in implementing their public relations. It becomes difficult for the business organisation to communicate with their customers.
Lack of financial and human resources restricts business organization to communicate with their customers. According to Xu et al (2017) lack of communication raises risk of lost market share and therefore decreasing market performance. When organizations do not have the required amount of financial support they cannot effectively form public relations department. Most of the time lack of proper human resources as well leads to lack of communication.
Vision When there is a lack of strategic vision business organization cannot form effective public relations. Management of the company fails to form a better strategy to deal with the public relations. Some time management doesn't feel the importance of public relations, therefore they didn't pay attention to strategic vision.
Most of the time organization fails to measure the importance of public relations. Organisation did not actively monitors public relation department and therefore fails to analyze ist requirement and effectiveness
Some time business organization faces difficulties because of strict industrial regulation. This type of barriers restricts organization to perform efficiently. Because of these regulation barriers, the organisation cannot actively communicate with the public. this decreases there effectively to form public relation. Strict barriers of the industry make it difficult for an emerging business organisation to from better public relation and it hampers their growth possibility continuingstudies.uvic.ca (2017).
Some time organization internally refused to pay for public relations. Zerfass (2016), have stated that organisation focuses on their profit only and they did not pay attention toward the public. This was observed in case of Volkswagen where this German car making company cheated public and government. This company has shows wrong information about their emission standard, This company was found to be guilty of not paying attention towards public's health and nature. This company has not given importance to public relations and as result, the organization has faced huge loss in just one year. People have lost trust on this organization and deduction in the customers has been observed worldwide. Other problems are subject to market but this factor is entirely the result of business organization.
Figure 1: Barriers in implementing efficient PR practice (Source: Researcher)
The main focus of business organization lies in demonstrating and expressing survives of the company. The business organization focuses to attract customers; however, most of the time business organization commits common mistakes which can harm their reputation. Organisations need to maintain better public relation, which can result in lack of trust and poor market coordination.
Following are the common mistakes that organization has to overcome to strengthen public relation:
Table 2: Common Mistakes of business organization (Source: Researcher)
Timing is the most crucial is in business. When organisations were not punctual they can lose the chance of making profit. for example: when a business organization does not know, when to advertise the particular product or when to launch the business magazine, it can result in lack of coordination with the public swinburne.edu.au (2017.
Talking sense plays very important role in business, when an employee uses jargon and buzzwords it distract customers. Cardwell et al, (2017) have stated that if a salesperson doesn't know how to with their customers they can not impress them. Business runs on the tactics of impression and politeness. Santos (2016), motioned that the business organization uses communication tricks to attract their customers and it has been found customers are more attracted towards that business who respect their customers.
If an employee misbehaves with their costumes it creates the negative image of the company. According to Galloway (2016), If the Business organization fails to make a friendly environment with their customers they can not improve their market performance. Business organization has to focus on customer satisfaction. It has been observed that employees of certain business organization misbehave with women's. This act distracts customers and it affects the organizational image.
When business organization full fills all government rules and regulation, they increase customers trust. It has been observed that those organisations follow proper guidelines provided by the government they can achieve customer's trust and it helps them improve their market position. Ginesta et al (2017), point of view if business organization respects government rules and customers health they can achieve their trust. As it has been observed in the case of Volkswagen, the company cheated their customers as well government organisation this leads to lack of public trust and it reduces their market performance drastically.
In this paper, the researcher has focused on the theory of public relations. The resort has used the example of Volkswagen case to explain, how scandal leads to poor public relations. The researcher has explained the reason behind the poor performance of Volkswagen. It has been shown that such scandal not only affects the performance of the company but to the economy as the whole. In this paper, the researcher has explained various reasons behind poor public relations. The researcher has explained the importance of public relations. It has been explained how good public relations can help an organization to improve their brand image and increase their business. In this paper, the researcher has provided some methods which can be used to strengthen public relation.
The business organization is required to improve their relationships with customers, This can help organisations improve their image. Performance of an organization depends on its ability to attract customers. If an organization involved in any scam or scandal it future growth scope is greatly affected. Organisation can adopt various methods and strategies for improving public relations. For example, organization can higher right market research analyst. These people are expert in analyzing market situation and recommend on the same way. They can help in strengthening a public relationship because they understand people requirement. Understanding people's demand is the key factor of strengthening public relation, moreover, this analysis can help in designing system better coordination among the employees because can analyze each employee's performance. If each business organization adopts the strategy to focus public relation they can improve their market condition. In the world economy regulation related to business always changes and each of this change affects market outcomes business organization are required to analyze these changes and adjust their policy according to them. Such a case was observed when volkswagon did not adjust their emission standard according to U.S standards and therefore they refused to make changes. It resulted in big scandals, the burden of which fall on the whole economy. The market research analyst is expert in analyzing this change. They can recommend the best alternative. Hence, organisations can reduce the loss of the organization.
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