The Effectiveness of Public Relations in the Banking Industry

THE EFFECTIVENESS OF PUBLIC RELATIONS IN THE BANKING INDUSTRY (A STUDY OF FIRST BANK PLC, EKWULOBIA)

The seemingly death of adequate relevant literature of effectiveness of public relations in the banking industry had left the researcher in option of using some  related literature in the field of public relations, only one book was written on strategy and public relations.

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According to Adegboyega Ogunsanya (1991 p.395) writing on strategy and public Relations discovered that public Relations achieves understanding and acceptance through strategic communications as important requirements toward ensuring long term survival and growth and that it makes deliberate attempt to unify all of such goals and objectives of the enterprise in a manner that is constant with the desired corporate image.

A.W. Jensen (1983. P 53 – 64), writing on the status of public relations in major united banks discovered that public Relations in United Banks is more functionary. In more cases, the public relations department and its director have a lower level of mobility (status) than the marketing.

Director and the P.R. Director has less opportunity for consultation with executive management on areas, according to Jemsen’s findings the major banks in the united banks have their P.R. Director concerned most with media relations. They are also not as well as educated and as well paid as the marketing Directors.

According to    Wright(1979.p.20-23) used communicator analysis methodology to guage P.R. professionals’ level or orientation toward the concept professionalism and social responsibility. The author contends that the question of whether public relations is professional should be asked in terms of the individual and not the practice. His result indicate that professionalism and social responsibility are not the same thing in P.R. public relations practitioners vary greatly in levels of professionalism and degrees of social responsibility. Wright’s data indicate that it is possible to be a professional without being very socially responsible and some socially responsible people are not very professional.

According to J.B. Manheim and C.B. Pratt (1986.p.9-18) note that corporations in recent years have not communicated effectively the significance of their contribution to community life, for this reason, the corporations have benefited less from some of their programmers than they might have.

The authors advocate a strategy of social-responsibility activities and communication designed to maximize the returns on corporations P.R. ventures.

William Nielander and Raymond Miller (1951.p.22-23) agree that public Relations should involve the necessary communication. To them the science of communication is the basis for all public relations, workers. The instrumentalities of public relations, from a hand shake to the most elaborate publicity programme are success or failure on the basis of how well they are understood.

Interpretation is more than semantics. Words must be assembled so that they make the both interesting and understandable while reading.

According to    Cookman et al (1968.p.241) propounded a six point philosophy on public relations communication. This philosophy states that:

  1. We shall in all case, communicate forth rightly with our employees and by doing so, earn the reputation for believe ability.
  2. We shall in all cases, communicate promptly with our employees rather than wishing the problem would go away, or letting the problem take care of themselves or letting rumour to move in.
  3. We shall not endow our communication with attributes of paternalism.
  4. We shall encourage all level of management to communicate effectively.
  5. We shall learn by listening, by asking our associates in this enterprise what they think, what they can contribute to our growth, profitability and well beings.
  6. And we shall practice that which is preached above.

Edward Robinson (1982.p.1-2) says public relations are an applied social behavioral science and that it does the following functions:

  1. Measures, evaluates and interprets attitudes by various relevant publics.
  2. It assists management in defining objectives for increasing public understanding and acceptable of the organizations product, plans.
  3. Equates these objectives with the interests, needs and goals of various relevant publics and
  4. Develops, executes and evaluates programmes to earn public understanding in a broad sense. Burso (1973) believes that the function of the public diator between the organization and the society. In a lecture which he presented at the Columbia University Graduate school of Business, Burson underlines four major responsibilities.

They include:

  1. The early Warner
  2. The corporate science
  3. The corporate communication
  4. The corporate monitor

Igben H.G.O. says that public Relations is management function and performs the following roles:

  1. Counseling
  2. Analysis future trends and predicting their consequences.
  3. Researching public opinion, attitudes and expectations and advising on any necessary action.
  4. Establishing and maintaining two-way communications with the internal and external publics.
  5. Attracting good personnel and reducing labour turnover.
  6. Promoting of products and services.

Many writers on this discipline devote a large chunk on space to employee relations. Williams Nilander and his co-author (1951.p.37) record that good employee relations means that a real partnership exists, with each employee actually feeling that he has a specific, tangible and essential part in the organization and that the job he is doing makes an important contribution to his fellow men.

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They argue that it is the function of the public relations worker to know that what constitutes a workable philosophy and then to device a practical programme and put it into effect He represents both management and employee objectively and may serve to start negotiations or later help to complete them. He serves management and employees by combining them into a workable whole” writing on the subject Etukudo (1986.p.154) notes that progressive forms realize that the success of their firms with the outside world depends greatly on the performance and satisfaction of their own staff and so consider good public relations as what should begin at home – with employee relations.

According to the author, the risk of employee relations is to encourage worker to give their best by ensuring that they enjoy necessary incentives and have joy in their jobs.

Etukudo says that good communication greatly enhances good employee relations by seeing that employees know about their company, its policies and the part of workers should play.

According to Nielander and Miller (1951.p.112) argue that the most importantly people in the world of business are customers and prospective customers and that good public relations are seriously threatened whenever customers become dissatisfied. They counted that the major reason for business failure is neglect of customers.

Cookman et al (1968.p.443)    have the same view for they comment that;

A company effort to practice public relations is reflected most conspicuously and most widely in its relationship with customers, it is rare to find companies deliberately neglecting to cultivate the goodwill and confidence of those with whom they want to carry out business with.

Bowman and Ellis (1986.p.194-196) state that if the promises of a company remain fulfilled, the relationship with the customers will be strained. If a company fails to dispose of or sell its products, or services, it folds up; if it costumers or prospective ones think ill of a company, they will withdraw their patronage. Customers are therefore of immense importance to the public Relations man and he should strive constantly to see that they are treated as the key public of the company.

Nielander and Miller (1951.p.279), comment on public relations, advertising and state that institutional advertising is the most important part of the advertising aspect of public relations. It is designed to sell the constitution and its policies and not a specific product.

From the above, one could summarize that public relations is the totality of an organizations or individual’s performances aimed at earning public favourability which result in continued growth mutually beneficial to the organization or individual         and the society within which it operate.

 

That is why Gruming and Hunt (1984 P.250) wrote that

Public relations’ is the management of communication. In the face of all these, it becomes expedient to acknowledge that customers and intending customers are the most immediate representative of the general public whose goodwill is essential for the success and survival of the business.

 

The organization must maintain a level of communication with them. Get them informed about some of the activities of organization that is necessary for them to be aware of.

Also, whatever might be the task of public relations stressed above, strategy formulation, counseling, staying and managing events, it should ensure that this organization is a source of national price. The performance of an organization must be good in any given area of corporate endeavour if the company is to win and retain public regard in that area.

 

  • THE SEARCH FOR ALTERNATIVES

The need for search raises the problem of choice and all the problem associated with valuing the costs of our choice of action and the result benefits. The search process consists the following steps.

  1. Identification, definition and quantification of objectives.
  2. Identification and evaluation of alternatives.
  3. Selection of measurement for evaluating cost and benefits.
  4. Choice of decision criteria.
  5. Selection and creation of decision model

IDENTIFICATION, DEFINITION AND QUALIFICATION OF OBJECTIVES

The search for opportunities and identification of problems is constrained and defined by the organizations environment and markets and its strategic plan. When productivity begins to fall in a bank, absenteeism begins to increase and the number of grievances between employees and the bosses in particular increases, the easy conclusion form an observation of such happening is that morale is low in the organization. Similarly when the rate of loan defaulters in a particular area or state begin to rise, the first line of attack is the inefficiency of management with moral, efficiency and similar intangible terms that may form the objectives of programmes of the bank we usually encounter the problem of definition.

To be certain we are channeling our resources to achieve the right objectives, it is necessary to identify clearly our targets, one would be inclined to suggest that objectives are better identified at the grassroots of the problems.

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IDENTIFICATION AND EVALUATION OF ALTERNATIVES

The alternatives represent competing and sometimes conflicting approaches for accomplishing stated objectives. In the main time the human and material resources available to an industry plus the strategies that could be employed in the given circumstance come under this definition of alternatives. In some companies, brain-storming exercises are a device for involving more people in the process of listing alternatives, with the ambition of beating the constraints imposed by bounded rationality as much as possible, monetary, recognition and other incentives given to people to generate ideas         in business and non-profit making organizations to achieve the objectives of a thorough search for alternatives         .

It is also becoming a popular practice in the banking industry to establish units called planning or research departments or strategic banking units. These units usually engage in the job of scanning the environment for strategic information as part of the overall process of research for alternatives uses of the organizations resources e.g. where new loans and other advances are to be directed. The big advantage in this practice is that overtime, members of this unit become skilled at identifying the right kind of information which is necessary for strategic decision making in these and similar ways the search for alternatives is made much more practical and comprehensive.

SELECTION OF MEASUREMENT FOR EVALUATING COSTS AND BENEFITS

In view of the externalities associated with investment programmes in both the private and public sectors, it is not adequate to measure or terms only. The ideal may be to have single quantitative measure of costs and benefit. But as this is not always possible, analysis invariably turn to the use of indicators for example in the case of a programme established to improve employees’ morale, reduction in absenteeism, improved quality of work, reduction in lost man hours due to feigned as opposed to genuine sickness, can all be measured as indicators of increased morale. Similarly other writers have suggested the use of surrogates for the real    output of programmes. For instance, a branch manager’s output can be measured in terms of the number of and amount of defaulted loans recovered as well as the number of clients or customers attended.

CHOICE OF DECISION CRITERIA

In view of the problems related to identification, quantification and evaluation of alternatives discussed above, it should probably not be difficult to see how the selection of decision criteria can be very difficult. It is perhaps obvious that a wrong choice of criteria. Leads automatically to a wrong choice of alternative which in turn leads to sub-optimization of opportunities available.

 

 

DECISION MODEL

To make a rational choice, we need a model to stimulate the situation and provide us with results that will emerge from the choice of different alternatives and variations in levels and different dimensions of output.

The process commences with the recognition and definition of the problem and objectives, their selection and implementation. The result of this appraisal will provide new ideal that will hopefully help a dearer redefinition of problems and objective.

 

  • R. ACTIVITIES

It can be said, happily that this is one area of management activity in which the banking industry has not lacked behind in terms of embracing the approach and up-dating the ideas. One may be tempted to ask what kind of activities do they engage in?

Public relations activities can be divided into two primary aspects. First giving good service and second informing the public about these services. The first is by far more important than the second whereas, public relations activities would succeed considerably if a bank performs effectively and efficiently, although this may not be widely known if the public is not well informed, no amount of high pressure, sophisticated and impressive publicity and advertising can hide the inadequacies of a bank for long.

To succeed in the first aspect, banks pay special attention to their liquidity, capital adequacy, sound lending policies, profitability, efficient and courteous service.

Additionally, a bank is ordinarily expected to meet the legitimate credit need of its community, if it claims to be adequately liquid. If a bank is able to meet these two needs, it would be succeeding in retaining the confidence of the public including the monetary authorities which specifies minimum appropriate levels of liquidity and consequently improving on its public image.

CAPITAL ADEQUACY

This is similarly essential for confidence. A bank that ensures this through prudent ploughing back to distributable profit is seen by the public at large as worthy of patronage firstly. These give the impression that the management is not only forward looking but also has confidence in the future of the bank. Secondly, such product acts enhance the financial resilience and ability of the institution to weather storms.

COMMUNITY RELATIONS

The most important service that a bank can render to it community is commercial credit – one that is adequate in amount terms and thing. In Nigeria where the banking industry dominates financial intermediation activities, the need to perform well in this regard assumes a crucial dimension. In all capitalist economies where a significant role is assigned in economic development to financial intermediaries, there is little doubt that unprogressive banks can actually retard the growth of their communities just as a weak heart will curtail the activities of the human body.

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QUALITY SERVICE

The quality and usefulness of bank services are to a great extent defined by the manner of delivery the timeliness, the courtesy, the appropriateness. A polite and efficient staff by his action and without saying one word to that effect, invites you to introduce his bank to your friend. On the other hand, however, a good image of a bank that is built up by advertisement and publicity, a contact with a rude and inefficient staff of the bank removes and at best, badly dents their image. Moreover, the customer must not be made to feel that a banker is doing him a favour. In summary, no amount of lip service, advertising or gimmicks can be a substitute for a good performance and service which pleases the customer.

INFORMATION

Another major area of a bank PR is concerned with informing the public about its good performances and its service. It can take the form of advertising and publicity.

Advertising and publicity will only be effective and embrace the image of the bank if the bank is able to perform its functions well in the community and in an acceptable manner too.

  • EMPIRICAL REVIEW

Banking as an industry cannot operate in non monetized economy. The growth of the banking in Nigeria started as a British Colony with the introduction of the British Co image and currency system in the late 19th century.

The establishment of first bank of Nigeria Plc predates the birth of the Nigeria nation as a sovereign nation. Bank of British West Africa (BBWS) as a matter of fact was the first bank to be established in Nigeria. The name first bank, which was eventually adopted in 1979 is appropriate, having been conferred on the bank by history.

The truth however, was that the bank was the first successful bank to operate in Nigeria. Being truly the first bank to be successfully set up and managed in Nigeria soil, it also has endured a steady but tough banking twain.

Banking industry in the country started through the efforts of Alfred Lewis Jones and George William Nevile. They are also seen as the founding fathers of BBWA, now First Bank. The banking industry came or started in their (i.e. the founding fathers) quest to protect the interest of their company a sole shipping agent of shilling of West Africa from London.

Since the existence and establishment of the bank (BBWA) in 1894 and its adoption of the bank in 1979, the bank has continued to exist with the rigors within and round the country and has been able to set up other branches.

  • THEORETICAL FRAME WORK

The most ideal theory for this work is the social responsibility theory.

According to Ofor (2015, P.210) the main watchword for this theory is “individual and national consciousness. The media owes the audience viz: the governed and government, a very onerous responsibility. In this study, the effectiveness of public relations in the banking industry, the first bank should be responsible and maintain a mutual relationship with its customer, even among all the sectors in the banking industry. The First Bank Plc public relations officer should enlighten their customers on the need be patriotic and must not also disseminate information without bearing a goodwill in mind.

Ogbiten B. (2011. P.1) Public relations is generally believed to influence public opinion or attribute in the positive direction that would ensure goodwill, understanding and acceptance. The bank public relations officer should try to establish and maintain a two-way communication between their organization and their customers in order to win cooperation. The survival of the masses and the various hearty beat of the society should be the media’s sole prerogative” (Ofor, 2004, P.14).

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