Journalism Studies, Volume 1, Number 2, 2000, pp. 303–321

Public Relations in Strategic Management and
Strategic Management of Public Relations: theory and evidence from the IABC Excellence project
JAMES E. GRUNIG AND LARISSA A. GRUNIG

University of Maryland, USA

ABSTRACT This article establishes the case for public relations as a critical component of an organization’s strategic management processes and of the subsequent strategic management of public relations in an effective organization. The article begins with an elaboration of a theory of the value of strategic management in public relations. Qualitative and quantitative results of the
IABC Research Foundation’s Excellence project, presented next, con rmed the importance of …show more content…

Most of the studies of— and books on—excellence searched for attributes of excellent management, but they de ned excellence in different ways. Most researchers began with a dependent variable, an indicator of organization effectiveness, to identify organizations for study. They then worked backwards to identify management characteristics these “effective” organizations had in common.
Peters and Waterman (1982), for example, used six nancial criteria to identify excellent companies for analysis: compound asset growth, compound equity growth, average ratio of market value to book value, average return on total capital, average return on equity and average return on sales.
Hobbs (1987) identi ed his excellent companies by measuring return on sales and return on owner’s invest-

PUBLIC RELATIONS IN STRATEGIC MANAGEMENT

ment. Paul and Taylor (1986) used similar nancial measures to identify the 101 best-performing companies in
America.
Carroll (1983), in a review of Peters and Waterman (1982, p. 79), criticized the use of nancial measures for identifying excellence in management. He pointed out that several independent variables other than management also affect nancial performance: “… such factors as proprietary technology, market dominance, control of critical raw materials, and national culture and policy also affect nancial performance, regardless of the excellence of management”.