Community Relations

In the early 1960s, any business executive worth his salt would have stated immediately that a company’s job is to make money for its owners. Indeed, Nobel Prize winning economist Milton Friedman argued just that:  that the corporation’s responsibility is to produce profits and that the cost of corporate social goals amounts to a hidden tax on workers, customers, and shareholders.

But Professor Friedman is now in the minority.  Increasingly, companies and other organizations acknowledge their responsibilities to the community: helping to maintain clean air and water, providing jobs for minorities, and, in general, enhancing everyone’s quality of life. This concept of social responsibility has become widely accepted among enlightened organizations. Moreover, strong community relations have the potential of returning significant dividends in terms of community support, especially in a corporate crisis situation.

Today, many organizations accept their role as an agent for social change in the community. For an organization to operate in its community today requires three skills in particular:

  • Determining what the community knows and thinks about the organization,
  • informing the community of the organization’s point of view, and
  • negotiating or mediating between the organization and the community, should there be a significant discrepancy.

It’s Stern And Company’s view every organization wants to foster positive reactions in its community. This becomes increasingly difficult in the face of protests from and disagreements with community activists. Community relations, therefore, requires a severe analysis of the community, that will yield a clear understanding of the community, its makeup and expectations. Without such an approach, it will be almost impossible to communicate the organization’s story in an understandable and uninterrupted way.

Community Components and Expectations

The community of an organization can vary widely, depending on the size and the nature of the business. The mom and pop grocery store may have a community of only a few city blocks; the community of a Las Vegas Strip resort expands throughout the County and frequently much of the world, when one considers all its constituencies.

Who are the principal members of an organization’s community? At the local level, there are several discrete types of community members.

  • Community leaders: These are the shapers of opinion in the commu?nity: public officials, major employers, old?guard families, vocal advo?cates, and, occasionally, informal thought leaders. They can generally be reached through regular contact with influential local groups face to face meetings, and special mailings.
  • Local media: It is important to get to know the local news media for effective community relations. However, attempting to coerce the media by purchasing or canceling advertising should not be contemplated. More practical is getting to know local journalists in an informal, low?pressure way.
  • Civic groups: There are many ways to reach local civic groups: regularly donating to local charities, using radio programs, forming a speakers’ bureau to meet local organizations, filling emergency needs, or providing free movies for use by nonprofit groups.
  • Students, faculty, school officials: Educating young people and informing their mentors about the benefits of the firm is time well spent. Eventually, students will become customers and employees.
  • Municipal employees and local officials: Organizations should en?courage employees to take active roles on the city council and the police or fire commission and in civil defense and other municipal agencies.

Knowing which civic group is influential on a particular issue; which Councilperson holds the greatest sway with the mayor, as well as the Council itself may be of crucial importance to the management of a local organization. Identifying and being able to tap influence networks is a valuable skill of the community relations specialist.

Communities expect from resident organizations such tangible commodities as wages, employment, and taxes. But communities have come to expect intangible contributions, too.


Communities want its businesses and organizations to live in the area. It expects facilities to be attractive, with care spent on the grounds and the plant Government, too, is acting more vigorously to punish offenders and to make sure that organizations comply with zoning, environmental, and safety regulations.
Participating as a citizen of the community, an organization is expected to participate responsibly in community affairs, such as civic functions, park and recreational activities, education, welfare, and support of religious institutions. Organizations should not shirk such participation by blaming headquarters’ policy.


A business that fluctuates sharply in volume of business, number of employees, and taxes paid can adversely affect the community through its impact on municipal services, school loads, public facilities, and tax revenues. Communities prefer stable organizations that will grow with the area.

Any organization that adds tangible and intangible value to the community is a, well, valuable member of the community. In short, communities want firms that are proud to be residents.

On the other hand, organizations expect to be provided with adequate municipal services, fair taxation, good living conditions for employees, a good labor supply, and a reasonable degree of support for the business and its products. When some of these requirements are missing, organizations may pick up and move to communities where such benefits are more readily available.

Research into community relations indicates that winning community support for an organization is no easy task. One study suggested that the goal of compatibility between organization and community “is quite unrealistic in many situations.” Researchers found that conflict often exists between a community and an agency or corporation that is controlled elsewhere. Additional community relations research has shown that a high level of public communication does not always lead to increased support for a newly introduced community relations program.

Such studies indicate something of the difficulty in achieving rapport with community neighbors. One device that is helpful is a written community relations policy. A community relations policy must clearly define the philosophy of management as it views its obligation to the community. Employees, in particular, must understand and exemplify their firm’s community relations policy; to many in the community, the workers are the company.

An organization’s community relations policy may be “played out” in what has been described as either expressive or instrumental ways. Expressive community relations activities are used by organizations to promote themselves and to show their goodwill to the community. Instrumental activities are used by organizations to improve the community itself or to make the community a better place in which to reside. Often, community relations objectives are a hybrid between the two. Typical community relations objectives might include the following:

  • To tell the community about the operations of the firm: its products, number of employees, size of payroll, tax payments, employee benefits, growth, and support of community projects
    o To correct misunderstanding, reply to criticism, and remove any disaffection that may exist among community neighbors
  • To gain the favorable opinion of the community, particularly during strikes and periods of labor unrest, by stating the company’s position on issues involved
  • To inform employees and their families about company activities and developments, so that they can tell their friends and neighbors about the company and favorably influence opinions of the organization
  • To inform people in local government about the firm’s contributions to community welfare and to obtain support for legislation that will favorably affect the business climate in the community
  • To find out what residents think about the company, why they like or dislike its policies and practices and how much they know of its policy, operations, and problems
  • To establish a personal relationship between management and community leaders by inviting leaders to visit the plant and offices, meet management, and see employees at work
  • To support health programs through contributions of both funds and employee services to local campaigns
  • To contribute to culture by providing funds for art exhibits, concerts, and drama festivals and by promoting attendance at such affairs
  • To aid youth and adult education by cooperating with administrators and teachers in providing student vocational guidance, plant tours, speakers, films, and teaching aids and by giving financial support to higher education
  • To encourage sports and recreational activities by providing athletic fields, swimming pools, golf courses, and/or tennis courts for use by community residents and by sponsoring teams and sports events
  • To promote better local and county government by encouraging employees to run for public office or volunteer to serve on administrative boards; lending company executives to community agencies or to local government to give specialized advice and assistance on municipal problems; and making company facilities and equipment available to the community in times of emergency
  • To assist the economy of the community by purchasing operating supplies and equipment from local merchants and manufacturers’ whenever possible
  • To operate a profitable business to provide jobs and to pay competitive wages that increase the community’s purchasing power and strengthen its economy
  • To cooperate with other local businesses in advancing economic and social welfare through joint community relations programs, financed and directed by the participating organizations

About Stern And Company

Stern And Company, based in Las Vegas, develops and implements strategic corporate communications, financial relations and marketing programs for public and private companies.

All of our professionals have extensive senior-level experience as financial journalists with major publications or as communications executives at leading major corporations. Our firm’s practice areas include corporate and financial relations, public relations, strategic and product marketing, crisis communications, transaction communications, restructurings, bankruptcies and litigation support.

Stern And Company
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