Published November 20, 2014
Whether it's corporate fraud, the Gulf oil spill, shoddy products or even the recession and weak recovery, capitalism's reputation is taking a beating, but public relations executives hope they have a fix for America's future CEOs.
The Public Relations Society of America has launched a pilot project at five business schools to teach MBA students how to handle crises and preserve corporate reputations.
"CEOs have made egregious mistakes in transparency and governance," said Gerard Corbett, chairman and CEO of the public relations group. "This initiative is to get executives at the beginning of their careers and understand the nature and purpose of good reputation management."
Dartmouth College's Tuck School of Business, the University of Maryland's Robert H. Smith School of Business, Northwestern University's Kellogg School of Management, Quinnipiac University's School of Business and the University of Texas at El Paso's College of Business Administration are participating in the pilot project.
The schools will offer a public relations course in their MBA programs in the 2012-2013 school year and document what works best in subject matter and teaching methods. Teaching corporate communications is not new, but the pilot program intends to develop a model course offering lessons on establishing a brand, social responsibility, using the media and other subjects that will be part of a course adopted by business schools across the U.S.
Paul Argenti, who teaches corporate responsibility and corporate communications at Dartmouth's Tuck School, said company executives need to know how to communicate to staff, communities, investors, regulators and others about a range of issues.
"If you're downsizing, don't try to make it look better than what it is, but communicate what we're doing and why we're doing it," he said.
Matt O'Connor, dean of the business school at Quinnipiac University, said MBA programs are stepping up public relations training to give future business officials a new skill.
"If you're the executive hiring the public relations firm you'd like to know a little about public relations," he said.
Kathy Fitzpatrick, a professor of public relations in the School of Communications at Quinnipiac University, said the business school courses will reflect that the field has moved from communications to counseling executives on how to manage problems.
"It's not about sugar-coating and preserving happy images and smiling faces," she said.
The courses will be electives, but because 80 percent of MBA programs have no public relations course, just offering the course as an elective "is a critical first step," said Joe Cohen, a board member of the public relations society and senior vice president of MWW Group, a public relations firm.
The drive to improve PR education in business schools coincides with a projected 21 percent increase in the number of public relations jobs from 2010 to 2020, according to the U.S. Bureau of Labor Statistics. That's faster than average job growth and is a response to businesses and government agencies responding quickly to news and information that move fast on the Internet and social media, the labor agency said.
O'Connor said business schools typically use case studies such as BP's handling of the 2010 oil spill in the Gulf of Mexico, deaths in Chicago caused by Tylenol tampering in 1982 and Union Carbide's lethal gas leak in Bhopal, India, in 1984. The new course will teach MBA students how to use public relations to respond to everyday issues, he said.
"There have always been cases in the MBA curriculum that dealt with handling disasters or bad news or some problem that arises in the firm, but I don't think many business school professors have real expertise in public relations," he said.
Corporate fraud also gives businesses a black eye. The FBI said it was pursuing 726 corporate fraud cases nationally in 2011, and in several cases, each involved losses to public investors of more than $1 billion.
And thousands of trial lawyers are at work every day, suing businesses over allegations that their products are faulty or dangerous. Christopher Scholl, spokesman for the American Association of Justice, previously the Association of Trial Lawyers of America, said public relations has no bearing on product liability issues being litigated in court.
"I don't think there's any real connection there," he said.
Environmentalists, too, say PR has its limits. Bob Deans, spokesman for the National Resources Defense Council, said businesses are doing a better job showing that they are better stewards of rivers, streams and other resources.
But the BP oil spill was an environmental and public relations disaster, he said.
"You couldn't whitewash the fact that the spill impacted wildlife tragically," Deans said.
Argenti said business executives also face an angry public because of problems beyond their reach such as the state of the economy. The downturn that started with the Great Recession in late 2007 and the weak recovery that followed have soured Americans on private enterprise, he said.
Bethany Kraft, deputy director of the Gulf Restoration Program for Ocean Conservancy, an environmental group, said public relations is effective when a company demonstrates it's fixing a problem.
"PR becomes a problem when it's clear a good image is more important than making things right," she said.