I came to this personal reflection as I witnessed rapid and unstoppable environmental changes I believe have influenced public relations practices worldwide. There is no doubt the public relations practice has become multinational and multicultural in nature, due to internationalization and globalization. But something keeps bothering me: are we, as public relations professionals, ready to face these challenges?
Over the last couple decades, the number of multinational corporations as well as its employees has significantly increased. From only 24 million employees working at multinational corporations in 1990, the number increased to 54 million in 2001 and reached 69 million in 2011 (UNCTD, 2002, 2012). While there were approximately 65,000 parent corporations controlling 850,000 foreign affiliates in 2001, this number had reached 103,000 parent corporations controlling more than 890,000 foreign affiliates across the world in 2011 (UNCTD, 2002, 2012). These multinationals, of course, have to deal with employees, governments, partners, suppliers, and customers from different cultural backgrounds. But have we developed the ability to both recognize cross-cultural differences and adjust to these differences?
In line with the growing number of multinational corporations, there is increasing economic activity in some countries. Despite the global economy crisis in 2008-2009, global foreign direct investment flows rose by 16% in 2011 with more than 50% of the investments going to developing and transitioning countries’ economies (UNCTD, 2012). The World Investment Prospects Survey conducted by United Nations Conference on Trade and Development (UNCTD) revealed that multinational corporations’ executives chose 6 developing and transitioning countries’ economies among the top 10 prospective destinations for investment plans in 2012 to 2014. These are China (1st), India (3rd), Indonesia (4th), Brazil (5th), Russian Federation (7th), and Thailand (7th). For the first time, Indonesia entered the top five destinations, which raised two levels from 2011 survey. The other four destinations are developed countries, i.e. United States (2nd), Australia (6th), United Kingdom (6th), and Germany (7th). As we are increasingly being forced to enter new markets such as Asia? How will we predict or even decide which strategy might work well in one country and not in another?
Combined with the globalization movement, democratization in many parts of the world at the end of 20th century has also urged organizations to allocate more resources to manage relationships within its diverse publics. In the early 1990s there was no country that could be considered a democracy. However, since the fall of Nazism and Fascism and more former Soviet bloc countries moving toward a more pluralistic society, the number of countries that embrace civil liberties and free societies has increased. In 1950, there were 33 free countries and in 2011 that number reached 87. As a result, emerging democracies around the world have led to the growth of public communication, which has impacted to the need of more skilled public relations practitioners. Are we also ready for this?
To fulfill the needs of vast multinational corporations’ operations, global public relations agencies are growing. In 2006, the global public relations agency business was estimated to have been worth $7 billion and employ more than 50,000 people worldwide (The Holmes Report, 2007). The latest report shows the business keeps growing. It has reached $10 billion in 2011 and employs more than 66,000 people worldwide, with 107 countries (this is more than half of the total number of countries in the world, i.e. 193 countries including Taiwan) having a representation of at least one of the top ten global agencies.
These figures clearly show public relations has become a significant global business. The trend also shows a significant global public relations development in Asia, with some countries such as China, India, Japan, South Korea, Indonesia, Malaysia, Thailand, Singapore, and Taiwan having at least eight offices belonging to different top ten major global public relations agencies. This may be due to increased economic activity and investment in Asia. In spite of this growth, there is still a lack of strategy applied by global public relations agencies that suits local conditions, as most agencies continue to replicate other global strategies.
So, within this situation are we, as public relations professionals, prepared to practice effectively across borders? With a more globalized world, how should we develop understanding and skills that enable us to conduct public relations practices across cultures, languages, time zones, and other complexities? Has public relations scholarship provided adequate models and information we can follow? This remains to be seen.
By Gregoria Yudarwati
Scholar in Residence