NEW YORK (February 11, 2005) - At a time when corporate reputations are more significant than ever, with scandals and financial downturns sapping shareholder support, undermining consumer confidence and tarnishing some of the most trusted corporate brands, a new study indicates that MBA students are receiving little if any preparation on how to manage corporate reputation issues.
A study to identify currently available coursework in reputation management in the curricula at leading U.S. MBA programs was conducted by the Public Relations Society of America (PRSA), in cooperation with the Newhouse School of Public Communications at Syracuse University.
"Corporate America has come to realize the value and importance of public relations in managing corporate reputation," said Judith T. Phair, APR, Fellow PRSA, president and CEO of PRSA, the world's largest organization for public relations professionals with more than 28,000 professional and student members. "While we are continuing to expand the pool of professionals with graduate degrees to serve in public relations positions at businesses and corporations, it's now time for the MBA programs to prepare their graduates to understand the role, value and process of maintaining and sustaining corporate reputation management," Phair noted.
Only 7 of 19 top programs offer corporate reputation coursework
"We were amazed to find that of the top 19 MBA programs ranked by the Wall Street Journal survey of corporate recruiters, only seven offered any coursework in the core tools of reputation management - corporate communications and public relations," said Michael Cherenson, APR, vice president of The Cherenson Group, Livingston N.J., and a member of the PRSA Board of Directors. He noted that in contrast to the small number of corporate communications courses, 11 MBA programs offered coursework relating to social responsibility, while all of them offered courses in management communications and offered many courses in marketing.
The project's co-chair, Kathleen Larey Lewton, APR, Fellow PRSA, senior vice president Waggener Edstrom in New York, said that the disparity between reputation and marketing courses is a critical gap. At the top MBA programs, she noted, there are more than 200 marketing courses offered, compared to only seven that relate to corporate reputation. "It seems that these students are being extremely well prepared to develop and sell products, but very under prepared to manage the reputation of their companies - reputations that do and will have a profound impact on sales and other key performance variables," Lewton commented.
Some programs include reputation management in broader course topics
Maria Russell, professor of public relations and director of new initiatives in public relations education at Syracuse University's Newhouse School of Public Communications, who managed the audit of MBA curricula, said that even at the MBA programs that do offer reputation management preparation, there is only one course available at each school. "And in several of those courses, corporate communications and PR strategies are covered only partially, as part of courses that focus on broader topics such as corporate governance."
The two MBA programs that offer a course in corporate communications are Darden School of Business at the University of Virginia and Tuck School of Business at Dartmouth College. Two other programs had a course in crisis communications, a course which, Russell noted, provides good training, but focuses only on handling crises, and not on the equally important topic of building and sustaining a positive reputation. At three other programs, the available courses touch on corporate reputation and public relations, while covering broader subjects like governance, persuasion and values and crisis decision-making.
Russell also said that the audit found that courses that sounded like they might cover corporate reputation management, with titles such as "management communication" or "persuasive communication" actually focused on topics such as writing reports, making effective presentations, and managing interpersonal communications in corporate settings.
Cherenson noted that there is ample evidence that reputation management is a critical issue for today's corporations and organizations. "Business publications such as The Wall Street Journal, as well as numerous surveys of CEOs and business influencers have found that executives believe that managing the corporate reputation is a strategic imperative and a key responsibility of senior management. The U.S. Federal Reserve recently noted that as much as 47 percent of American companies' net worth is tied up in intangible assets like brand equity and reputation."
Survey shows CEOs consider reputation an important factor
A recently published 2004 survey of 800 CEOs and corporate leaders in the United States and Europe, conducted by Hill & Knowlton, found that 79 percent of CEOs believe that investors and lenders consider reputation to be important or extremely important and 63 percent said they believe corporate reputation is one of the top three factors investors assess before investing in a company. Some 93 percent of the executives surveyed also said they believe that corporate reputation is important or extremely important to customers and consumers.
"Increasingly, today's C-suite executives understand the growing importance of reputation management as a discipline that requires senior-level attention, accountability and intellectual rigor…. Corporate leaders around the world place a high priority on senior-level oversight of corporate reputation and corporate social responsibility functions and view a good corporate reputation as having tangible benefits, including a positive impact on sales," said H&K executive Harlan Teller.
Two other surveys conducted by Burson Marsteller, one of 1,040 business influencers, and another of 108 CEOs, both support the contention that organizational reputation is a corner office responsibility and reputation management is a CEO mandate. According to the CEO survey, 72 percent are concerned about threats to corporate reputation and 96 percent said communications are important in enhancing corporate reputation.
Gap exists between what CEOs need to know and are being taught
"All of these surveys found that CEOs are increasingly being held responsible for their companies' reputation," said Lewton, "which argues even more forcefully for making sure that the business students are exposed to the art and the science of corporate reputation management during their MBA training. There's a huge gap between what's going to be expected of tomorrow's business leaders and the training they're receiving in leading MBA programs."
Cherenson noted that MBA programs have responded to changes in the business environment in recent times, adding more emphasis on practical business skills in response to criticism from employers, and adding ethics courses in response to Enron and other scandals. "It's encouraging to see that 11 of the top 19 offer courses in topics relating to social responsibility," he noted. "Now the increasing awareness of C-suite responsibility for reputation management poses an equally compelling case for business schools to embrace reputation management and public relations in MBA programs."
Public relations leaders offer to help bring reputation management training to MBAs
To address the near absence of corporate communications and public relations coursework for MBA students, leaders of PRSA have begun contact with the deans of leading MBA programs in order to explore ways the Society and its senior members, many of whom are corporate PR executives at major companies, can provide resources and support in helping to develop appropriate coursework and training. "There are many ways in which public relations and corporate communications principles and strategies can be incorporated into MBA programs," said Russell. "The alternatives include providing an experienced PR professional who can teach in an adjunct or visiting faculty capacity, working with MBA faculty to create curricula that can become part of the MBA coursework, incorporating PR faculty or courses into the MBA programs, or having PRSA create a 'PR for MBAs' seminar that could be taught at many campuses."
Cherenson concluded that "There's a compelling case for the need to train business leaders who not only understand the value of corporate reputation, but also understand how to make it happen. It's incumbent upon the corporate communications and public relations profession, working through PRSA, to provide leadership to MBA programs to ensure that this kind of training is available."
About the Public Relations Society of America (PRSA)
The Public Relations Society of America (www.prsa.org), based in New York City, is the world's largest organization for public relations professionals. The Society has more than 28,000 professional and student members. PRSA is organized into 114 Chapters nationwide, 19 Professional Interest Sections along with Affinity Groups, which represent business and industry, counseling firms, independent practitioners, military, government, associations, hospitals, schools, professional services firms and nonprofit organizations. The Public Relations Student Society of America (PRSSA) has 255 Chapters at colleges and universities throughout the United States.
