Stakeholder loyalty: an exploration of the dynamics of effective organisational communication

Abstract

The perception that an organisation wants its stakeholders to have is its desired identity. Its actual identity is what the stakeholders actually know or think about the organisation (Walker, 2010: 366). Stakeholder loyalty is an invaluable and positive consequence of any organisation’s effective communication. An organisation’s management should be proactive in the face of any negativity (finding its way into businesses and in the fragile and sensitive circumstances of stakeholder relationships). There is a gap between organisations and their specific stakeholders as a cumulative result of misinformation or lack of information. Organisational communication, especially via the press, enhances sustainable stakeholder loyalty, which contributes to an organisation’s advantages and economic essences. The purpose of this study is to explore the dynamics of stakeholders’ effective organisational communication via the press and media reports on Eskom, and to identify and isolate critical elements in this dynamic process. Although the study is primarily explorative and descriptive, public press reports will be analysed to contribute to the larger purpose of exploration and description. This research draws on the aims of corporate reputation to assist organisational insiders and external stakeholders to activate positive organisational behaviour with consideration of media interpretations in order to answer the problem statement. The fact that Eskom is a government parastatal which was established to supply and regulate electricity with no other competitors does not imply that they do not have to work on a positive brand image, perception and stakeholder satisfaction. This is even more pertinent when it is argued that the taxpayer’s money is used for much of the excessive spending that the senior employees ostensibly enjoy. Whether an organisation is small or big, its priority of relevance is not placed on competitive success, but on its image with all its stakeholders at all times. In considering stakeholders’ perceptions, there are huge business expansion possibilities for corporate bodies and organisations whose business mission statements reflect stakeholders’ satisfaction and retention. This research applied content analysis, which exhibits both qualitative characteristics (description of variables and categories) and quantitative features (numeric evaluation of data) in the investigation, description, discussion and analysis of the collected data. The data comprised media reports on Eskom, as presented by the Cape Times, the Mail and Guardian and the City Press - three reputable South African newspapers. These reports were gathered within a period of one year: 1st July 2010 to 30th June 2011. A semi-structured interview was

used to substantiate Eskom’s stakeholder values and concerns against the backdrop of the newspaper report claims. The outcome of this study points to the need for organisations to effectively communicate with stakeholders in and through the media on trends within the organisation, prevailing issues, management policies, change of prices and costs of goods and services. This collectively re-defines and strategically re-positions the mutual relationship of organisations and their key stakeholders by drawing strong links between the literature survey and the provisions of appropriate findings and recommendation imperatives for corporate communication specialists. This research could be useful to academics and practitioners, as it highlights the importance of effective organisational communication as a precursor to stakeholder loyalty. The findings of the study revealed that while Eskom, as an organisation, was making huge profits and sharing surplus bonuses, they remain insensitive to the complaints of their stakeholders. Effective organisational communication was discounted and compromised, as the stakeholders were deprived of proper information that could stimulate and sustain their loyalty towards the organisation.