Introduction
The global oil and gas industry is currently under substantial social and competitive pressures. The public concern for climate change intensifies, and the trends of renewable energy and green technology use go upwards. Thus, there is a need for Aramco as a global leader in oil production to communicate to stakeholders the significance of the oil and gas industry to modern society and protect organizational interests. Considering this, the establishment of a public relations (PR) department in Aramco is important, and the present report aims to demonstrate why the launch of such a unit can provide the company with advantages in dealing with the identified issue.
The report comprises five major sections that discuss roles and tasks of PR, a rationale for the establishment of the department, stakeholders whom it will address, specialists whose involvement will be required, and potential outcomes. Information provided in these sections will explain which functions PR has, why they are important for Aramco, whom they must target, and which factors should be considered to make PR’s work more effective. Lastly, the report will outline possible favorable impacts of PR on the company’s long-term performance. To attain this, evidence from scholarly resources and interviews with Aramco’s management will be used.
Role and Tasks of PR
PR is an essential part of change management, and it is all about communication, maintenance, and improvement of organizational reputation and image. PR is defined as “the planned and sustained effort to establish and maintain good relationships, mutual understanding, sympathy and goodwill with secondary target groups” (Pelsmacker 2010, p. 339). The fact that the practice is not targeted at immediate consumers but works with the perceptions of secondary stakeholders differs it from marketing, which aims to communicate corporate messages to customers and promote goods.
Besides, PR is a long-term strategy and involves such tasks as
Creation and communication of corporate vision and mission,
Implementation of corporate social responsibility (CSR) initiatives,
Maintenance of positive relations with media,
Promotion of involvement of internal stakeholders in the realization of the company’s vision (Pelsmacker 2010).
In contrast, marketing communication strategies are usually short-term and primarily concerned with the issues of profitability. In spite of the differences between PR and marketing, it is essential for both departments to cooperate to ensure that neither the long-term reputational interests of Aramco nor its short-term commercial interests are compromised.
The rationale for the Establishment of the PR Department
As the discussed PR roles and practices indicate, the major purpose of the proposed department will be the management of corporate image and reputation in the long term. These objectives are particularly important for Aramco nowadays since the oil and gas industry is facing a “crisis of perception” (Vaughan 2019, para. 1). The major challenge that every firm in the sector has to overcome is that a large number of stakeholders, including policymakers and investors, tend to believe that oil and gas enterprises have no future (Vaughan 2019). However, such an outlook contradicts Aramco’s forecasts and vision.
The company acknowledges the importance of reducing carbon dioxide emissions and the necessity to explore renewables. However, it is clear that if Aramco stops investing in petrochemicals at the present moment, the world will experience an energy crisis (Vaughan 2019). Thus, the PR department will facilitate the establishment of a dialogue with the public regarding the future of the oil and gas industry and Aramco’s potential investments in cleaner energy sources.
Stakeholders
The primary publics that the department will address include consumers, policymakers, and investors because the sentiments held by these stakeholder groups have a direct impact on Aramco’s financial performance.
Consumers tend to buy only those goods and services that add a certain value to their lives and are in line with their preferences and interests (Newsom, Turk & Kruckeberg 2013). Therefore, if consumers’ environmental interests are stronger than the need for energy products, the company will bear losses. The same applies to investors since if they stop seeing the revenue potentials in the oil and gas industry, they will switch to alternative options.
National and international policies and regulations may either support or restrict certain organizational operations. Therefore, it is pivotal to ensure that regulators and policymakers have a realistic view of energy demand and oil and gas production.
Specialists
To tackle the problem of negative perception, the PR department will need to conduct comprehensive environmental research. There is a need to access high-quality, rigorous statistical data and forecasts concerning such issues as oil and gas demand, energy consumption rates, and the ability of renewable energy and the oil and gas industry to meet energy needs. Thus, analysts should be involved in the department’s work frequently.
Expected Impacts
Greater public awareness of the significance of the oil and gas industry at the present stage of global community development,
Greater attractiveness of the industry and the company for potential investors and consumers,
Better risk and opportunity management due to PR’s ability to anticipate issues and identify new possibilities through extensive environmental research,
Establishment of greater public trust through the development and implementation of CSR and sensitive handling of communications with various stakeholders,
Improved long-term strategic decision-making through the alignment of multiple organizational and stakeholder needs (Swann 2008; Moloney 2005).
Conclusion
The analysis revealed that the oil and gas industry is currently facing a perceptional crisis and that an increasing number of people, including policymakers and investors, consider that the firms operating in this sector cannot survive in the long run. This problem makes the establishment of the PR unit an important task.
The launch of the PR department will provide Aramco with a competitive advantage. The main goals of the unit include the long-term management of organizational reputation and relations with multiple stakeholders whose opinions and actions can directly affect the firm’s performance. Expected outcomes of the PR work are improved company image, reduction in reputational risks, increase in attractiveness of the firm to both consumers and investors, and better coordination of disparate corporate and stakeholder needs and interests.
Recommendations
The establishment of the PR department is important for the effective management of the perceptional crisis.
For better outcomes, it is important to ensure that PR specialists regularly collaborate with marketing professionals and analysts.
PR must address consumers, investors, and policymakers as primary stakeholders since their behaviors affect Aramco’s performance.
References
Moloney, K 2005, ‘Trust and public relations: center and edge,’ Public Relations Review, vol. 31, pp. 550-555.
Newsom, D, Turk, JV & Kruckeberg, D 2013, This is PR: the realities of public relations, Wadsworth Cengage Learning, Boston, MA.
Pelsmacker, P de 2010, ‘Public relations,’ in P de Pelsmacker, M Geuens & J van den Bergh (eds), Marketing communications: a European perspective, Financial Times Prentice Hall, Harlow, UK, pp. 338-367.
Swann, P 2008, Cases in public relations management, McGraw Hill, Boston, MA.
Vaughan, 2019, Saudi Aramco says the oil industry faces a’ crisis of perception’. The Guardian, Web.