Linking External Communication & Organizational Effectiveness

By Saunders, Martha | Organization Development Journal, Winter 1999 | Go to article overview

Linking External Communication & Organizational Effectiveness


Saunders, Martha, Organization Development Journal


The first stage of the organizational development process often includes a review of external communications as well as other archival data (Gordon, 1987). Although the assumptions of systems theory hold that companies that practice good external communication are very likely to practice good internal communication, there is little research to support that thesis. Yet, if effective diagnosis is to take place, it would be helpful to create as many linkages as possible between specific organizational activities and long-tenn effectiveness. This study summarizes the first phase of a research project exploring the relationship between external communication and long-term corporate success. We measured activities of companies identified in a national CEO survey as "visionary" with a comparison group. Findings revealed significantly greater external communication activities in the visionary companies. This research should interest O.D. specialists for two reasons. First, it facilitates the diagnostic approach by providing important linkage between external communication and overall organizational effectiveness. Second, it explores a method for gauging the relative importance of a variety of organizational events, behaviors, or attitudes. This research is unique in that it employs overall organizational success as its independent variable. As a result, it provides a promising connection between two important concepts. Relevant Literature By definition, external communication focuses on audiences outside the organization-neighbors, consumers, investors, regulatory bodies, and so forth. Typical tactics include news releases; factsheets; press kits; newsletters; company magazines; brochures; and annual reports. Other communication tactics directed to external audiences include speeches; news conferences; open houses and tours, and philanthropic donations to public projects. (Wilcox et al, 1995). To be sure, there is a generally held assumption that external communication activities contribute significantly to a company's bottom line. Surveys have shown that CEOs routinely identify such activities as vital to their companies' success (Winokur & Kinkead, 1993), but most are generally unable to account for their impact (Campbell, 1993). One explanation may be, for the most part, that effectiveness of communication activities have been measured exclusively by the extent to which they meet communication goals such as increased awareness, positive attitudes, and supportive action (Hon, 1997). As a result, we are left with little understanding as to whether these efforts contribute meaningfully to overall company soundness. Successful Habits of Visionary Companies

An important study influencing the present research emerged from a sixyear project at the Stanford University Graduate School of Business. There, James C. Collins and Jerry 1. Porras (1997) set out to: * identify and systematically research the historical development of a set of visionary companies;

* examine how the visionary companies differed from a carefully selected control set of comparison companies; and,

* discover the underlying factors that account for the visionary companies' extraordinary long-term positions. Intrigued with the concept of corporate vision, the authors attempted to identify the underlying characteristics and dynamics common to highly visionary companies. A representative sample of 700 CEOs from Fortune 500 industrial and service companies, Inc. 500 private companies, and Inc. 100 public companies provided the names of 18 visionary companies for the study. All of the visionary companies were (1) premier institutions in their industry; (2) were widely admired by

knowledgeable business people;

(3) had multiple generations of chief executives;

(4) had been through multiple product (or service) life cycles; and

(5) had been founded before 1950. Collins and Porras then selected a comparison company for each visionary company, matching them according to the founding era, founding products and markets. …

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