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Subject: AEJ 99 MolledaJ PR Uncovering the support area/in-house agency paradox
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Date:Sat, 11 Sep 1999 09:17:41 EDT
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Uncovering the Support Area/In-House Agency Paradox
with Evaluative Research




Juan C. Molleda, M.S.
Doctoral Candidate
(803)777-9620
Fax (803) 777-0638
[log in to unmask]

and
Lynn M. Zoch, Ph.D.
Assistant Professor
(803)777-3314
Fax (803)777-4103
[log in to unmask]


College of Journalism and Mass Communications
University of South Carolina
Columbia, SC  29208









Submitted to the Public Relations Division,
Association for Education in Journalism and Mass Communication for presentation
August 4-7, 1999, New Orleans, LA.


Uncovering the Support Area/In-House Agency Paradox








Uncovering the Support Area/In-House Agency Paradox
with Evaluative Research


While conducting evaluative research for the corporate communications division
of a large regional affiliate of a national insurance group, the researchers
uncovered a paradox in the way the communication function is viewed by the
division and its "internal customers." The staff of the division see themselves
as a support area of the organization, acting mainly in a technical function by
following the directives of other areas, while the areas with which they work
see corporate communications as an in-house agency and themselves as its
"clients." The researchers determined that one model is not necessarily better
than the other, but the quality of the relationship between the communications
division and its "clients" must depend on explicitly stated conditions and a
clear set of rules and responsibilities of each partner.  This can only be
achieved if the managerial philosophy, the model on which the division is based,
is clear to all.


Uncovering the Support Area/In-House Agency Paradox





Uncovering the Support Area/In-House Agency Paradox with Evaluative Research

     Interest in evaluative research in corporate communications has grown in
the 1980s and 1990s. This research orientation includes evaluation of internal
communication practices and services as well as evaluation involving how well
the department reaches and communicates with its publics. "Implicit to all the
evaluation steps . . . is that evaluation criteria refer to both inside and
outside the organization" (Cutlip, Center & Broom, 1994, p. 431). With that
concern, the authors of this paper undertook a project to evaluate the corporate
communications division (hereinafter Communications) of a large regional
affiliate of a national insurance group.  The study consisted of assessing the
level of satisfaction of the Communications division's "internal customers" and
their perceptions of the effectiveness of the work Communications does for them.
In addition the researchers interviewed staff within Communications to identify
issues that affected their interaction with internal customers.
     The organization is experiencing an impressive growth and diversification.
These factors increase the demands on Communications to continuously improve
creativity and effectiveness. As Malloy (1998) explains:
     There are certain beliefs accepted as gospel in a large organization.
     Among them is the myth that services from inside can never be as good as
     those supplied by an outside vendor, particularly creative services. . . .
     In an industry suddenly hotly competitive [he refers to telecommunications,
     but the insurance/health care industry also faces a very competitive
     market], every support cost came under intense scrutiny (p. 33).
     In undertaking this study, the researchers first went through the
systematic process of reviewing the literature regarding the relationship
between communication services providers and clientsDboth in-house services and
outside agenciesDas well as evaluative research in public relations. Second, we
designed the research project and instruments for evaluation, gathered and
analyzed data, and presented findings and recommendations for improvement to
Communications' managers.
     Although the qualitative and quantitative evaluation was positive for
Communications' staff, services and overall performance, a clear paradox emerged
within the department between two managerial approaches: communication
departments as support areas and/or communication departments as in-house
agencies. What the researchers discovered is that each of these models for the
structuring of work relationships between the communication department and its
internal publics appears to affect its interactions with those other areas in a
different way.
The Support Area/In-house Agency Paradox: Are There Truly "Internal Customers?"
     Internal communication efforts, including the production of promotional and
informational materials, are increasingly used as management tools to support
organizational objectives (Merryman 1996, Schoepped 1996, and Gordon 1998).
According to Merryman (1996), internal communication practices flow from
business strategies, serves an added value objective, and support the
organizational vision.
     To meet the organizations' expectations and demands, communication
departments of public or private organizations, including public relations and
advertising units, can function as support areas or as full in-house agencies. A
combination of both managerial approaches can also exist. Whatever the
perspective taken, the bottom line is to generate and maintain a sufficient and
quality flow of information. This, in turn, helps those organizations to
initiate and consolidate relationships with internal and external publics.
     The two modelsDthe support area and in-house agencyDappear to take the end
positions on a continuum with varying degrees of technical specialization and
degrees of utilization of outside vendors, agencies, creative boutiques and
consultants. With relation to the technical specialization, an aspect that
increases the complexity of a communication department is the degree to which
the integrated marketing communication (IMC) function is embraced. The tendency
to use the IMC approach in organizations is the reason the authors refer to
organizational communication services as "communication departments" instead of
naming them as public relations, public affairs, marketing or advertising. Each
department may include a variety of communication functions or specialty areas.
     The position a communication department takes along the support
area/in-house agency continuum may determine the type of interactions it has
with other areas within the organization, or "internal customers." Each of the
two ends of the continuum, or management models, will impact in different ways
how well a communication department succeeds in assisting the organization to
meet its ultimate corporate/business goals, including the reach and achievement
of loyalty of the final "external customers."
     Cutlip et al. (1994) state that having an internal communication department
offers at least four advantages to an organization: team membership, knowledge
of the organization, economy to the organization for many on-going programs, and
availability to associates. They explain that the "staff can advise when and
where needed, conciliate, and provide a full range of services while taking into
account the organizational history and culture of which they are a part" (p.
65).
     They further set out two organizational structures in communication
departments: a decentralized structure, with specialists assigned to each
operating unit, or, as in the object of this study, a centralized function which
"operates from headquarters much in the fashion of an outside firm, treating
operating units and other departments as 'clients.' The difference . . . is that
the on-site internal staff members are relatively handy for consultation"
(Cutlip et al., 1994, p. 65).
     There are also disadvantages to having internal communication departments,
such as extreme loyalty, loss of objectivity, domination and subservience.
Loyalty can lead to being exploited: "Availability can cast the function as a
catch-all without clearly defined roles and missions" (Cutlip et al., 1994, p.
65). A consequence of being readily available could result in confused roles,
mission and objectives.
     In relation to the loss of objectivity, Cutlip et al. state that this
"happens ever so slowly and unwittingly as practitioners become part of the team
and are subject to day-to-day forces in the work place" (1994, p. 65). Finally,
domination and subservience result "when the function is coopted" and the
communication department becomes a group of 'yes' men and women in its staff
support role (p. 66).
     In contrast, communication departments that operate as in-house agencies
and provide services or produce specific products for internal customers are
increasingly competing with external contractors or vendors for the privilege of
being selected as their company's supplier of choice (Ouellete, 1993). A
company's preference for outsourcing could be due to financial or quality
issues, among other causes. Although Ouellete (1993) focuses on the role of
corporate information systems departments as internal consultants, his arguments
can easily be transferred to the work communication departments do as in-house
agencies.
     One advantage to approaching other areas within an organization as
"internal customers" is, as explained by Lewis (1996a) who looked at information
systems departments, that the term "[i]nternal customer is useful shorthand that
refers to whoever creates the specifications" (p. 64). But in contrast: "When
employees believe in internal customers, they look no further than the needs of
the next person in line. Only a few employees worry about the needs of real
paying customers" (Lewis 1996a, p. 64). For a communication department this
generally means the ultimate external audience.
     Lewis could have been writing about communication departments when he
explains that the real responsibility of an information systems department is to
help its organization to succeed, not to please internal customers. He stresses:
"The traditional role of the . . . department has been to help the rest of the
company succeed . . . We get involved in everything the company does, always
looking for ways to help it improve" (1996b, p. 58).
     Lewis further argues that "managers who adopt the internal customer
philosophy lay the groundwork for outsourcing their function. They're acting
like outsourcers, not employees, and that invites a comparison with external
service providers" (1996c, p. 73).
     The threatening aspects of approaching the in-house agency side of the
continuum are of concern in other areas besides communication within
contemporary organizations. Information systems, legal and human resources
departments are also facing the paradox.  As an in-house agency you find
yourself in competition with outside vendors who may be able to provide the
service better or at a lower cost to the organization.  You must constantly
account for your actions. As Stewart (1997) points out:
     What's wrong with the notion of internal customers? Simply this: They
     don't exist. They are figments of the ever-perfervid management
     imagination, a well-meant fiction that easily, through the law of
     unintended consequences, turns into ill-winded fact. There are only real
     customers, people with real money in real hands, which they will give you
     if you do what they want (p. 119).
     The objective of this paper is not to determine which is the best approach
in offering communication services in an organization, but to present both views
and explore the potential for possible conflicts between a communication
department and other areas within an organization.  What we propose instead is
that the key to avoiding having one or the other management philosophy (in-house
agency or support area) negatively affect the interactions between the
communication department and other areas within the corporation is simply
thisDclarity.  The problems we found concerned not whether a department
organized in one way or the other, but rather the need for clarity in operation
and behavior once a philosophy is determined.  In this study, evaluative
research assisted us in understanding the implications of the support
area/in-house agency paradox.
Agency - Client Relationships
        Very little literature exists that deals with the relationship between an
in-house communication agency and internal customers. Most of the available
literature explores the interaction between advertising agencies and their
clients, but the applicability of these studies is significant in understanding
the performance of in-house communication agencies that embrace IMC.
     When the interaction is between a support area and other units within an
organization, relationships are mainly based on the contribution that each area
makes to the achievement of the organization's overall goals. When the
interaction is between an in-house communication agency and its internal
customers, relationships are based on the quality, timely delivery and
effectiveness of the services and products provided by the in-house agency to
the client.
     Whether a communication department chooses to behave as a support area or
an in-house agency, a key factor for the success of the interaction and
performance is cooperation and mutual respect. According to Cutlip et al.
(1994):
     Unless support is earned, there will be conflict, not coordination and
     cooperation. Conflict soon begets friction and frustration. Support and
     understanding develop with time and on the basis of a track record of
     achievements that contribute to organizational success (p. 60).
     Michell (1986) developed an auditing system for advertising agencies after
exploring reasons why advertisers switch their agencies, and compared the U.S.
findings with a similar study conducted in the United Kingdom. According to
Michell, the main implication of the analysis of both studies is that agencies
need to develop a greater marketing orientation toward their clients and become
more sensitive to signs of client dissatisfaction.
     The utility of Michell's audit is to provide an evaluation to reinforce the
relationship with clients and avoid a possible break-down of the business
relation.  The audit includes five sets of variables that influence the
relationship between an agency and its clients. The variables are: environmental
constraints, which include external political and economic forces, interacting
organizations and social systems; interorganizational variables, which include
objectives, interactions, coordination, open style organization, level of
authority and credibility; interpersonal variables, including aspects such as
compatibility, integration and flexibility; intra/inter-functional variables
such as cohesion, supervision and peer approval; and finally individual
variables such as leadership and personal responsibility.
     Croft (1997) presents a similar "PR Agency Performance Audit" to assist
public relations agencies in measuring their actions and operations. The audit
could be adapted to evaluate in-house communication agencies because it helps to
assess how well an agency is serving clients and, in general, managing its
business. Croft lists a set of criteria for public relations agencies to use to
evaluate themselves and to determine the actions required to improve each area
on which they scored low. Nevertheless, he states that "the best way to find out
how well you're serving your clients is to ask them" (p. 6). This study explores
the relationship between an in-house communication agency and its internal
customers by gathering opinions and information from both Communications staff
and customers.
     Cagley (1986) studied the factors that advertisers use to assess
capabilities of advertising agencies and compares them with those considered by
agencies as relevant in the selection process. In the evaluation/selection
process, the quality of people assigned to the account was the criterion rated
the highest for both advertisers and agency participants; second was creativity.
     Wackman, Salmon and Salmon (1987) measured the factors that lead to the
satisfaction of advertisers with their advertising agencies at different stages
of the relationship. They argue that advertisers appear to select an agency on
the basis of work-product factors, including creativity, knowledge and market
experience. Other factors that seem to be taken into consideration by
advertisers in the selection of an agency are reputation, size, location and
services provided. Their study found that in the development/maintenance phases
this changes and the most mentioned factors affecting the interaction are the
relationship itself and work patterns. Wackman et al. conclude that "the
day-to-day work patterns that occur and the relationships that grow out of this
work become increasingly significant in shaping the client's judgement of the
agency's work and their client's overall satisfaction with the agency" (p. 28).
Thus, for an in-house agency, which by its very nature is built on long-term
relationships, these day-to-day work patterns increase in significance.
     Lawrence and Wiswell (1998) define internal organizational areas as
customers. According to them, a customer is "the party that arranges for a
service or product or the party that will receive it" (p. 45). In contrast, a
contractor is "the party responsible for producing and delivering a finished
product to a customer in accordance with the terms set by the two parties" (p.
45). They state that each side serves two interchangeable roles, giver and
receiver, but they do not perform them at the same time:
     A customer serves as a supplier when providing raw material to a
     contractor. The quality and timeliness (italics added) of the raw material
     are crucial to the work that a contractor will do. A contractor serves as a
     recipient-customer in that it specifies the requirements of the raw
     material and judges its quality; a contractor's work depends on those facto
     rs (p. 45).
     The characteristics of a finished product depend largely on the kind of raw
material provided by a customer. Hence, Lawrence and Wiswell (1998) emphasize
that internal customer service has to be a two-way approach (one of the
prerequisites for excellence in public relations, see Grunig 1992) to be
beneficial for both parties. They list some guidelines to support such a
partnership:
     y Maintain a constant dialogue to build trust and openness. Ask
      questions and suspend judgement.
     y Listen effectively to improve mutual understanding. Share
      information, questions, and concerns.
     y Work jointly to set goals, establish boundaries, and plan action
      steps.
     y Streamline the time it takes to deliver services and material
      through action teams.
     y For the teams, select key people who are accountable for maintaining
      product and service quality.
     y Publish procedures so that suppliers and other parties can commit to
      achieve quality checkpoints.
     y Monitor changes to the customer service process, people, and tasks
      so you can make the necessary adjustments.
     y Use quality assurance and measurement control to attain and maintain
      standards.
     y Apply two-way feedback each step along the way (p. 47).
     Researchers maintain that agencies and clients do not always communicate
their priorities clearly. In other words, they note that both sides engage in
guesswork rather than on a systematic examination to accurately assess their
counterparts' goals and priorities. Murphy and Maynar (1996) write: "the
give-and-take between agency and client ideas is important . . . such
negotiation works best when the two sides share major priorities and know where
their partners stand . . . [thus] if agencies and clients clearly defined their
own judgement values, and clearly understood their counterpart's values, their
teamwork, and campaign success could be enhanced" (1996, p. 21).
     Bourland (1993) conducted a meta-analysis of research on conflict between
advertising agencies and clients. She identifies poor communication as the major
client complaint, with agencies' poor listening skills as an additional
irritant. For their part, the most cited grievances stated by agencies included
lack of information from clients and indecisiveness.
     From this review of research on the agency-client relationship we
identified three areas that determine the quality of the relationship between
agencies and clients. Personal factors include listening skills, ability to
reach consensus and cooperation, and openness to ideas and new concepts. This,
in turn, assists in building a climate of cooperation and mutual respect as well
as earning organizational support and understanding.
     Professional factors are production quality control, timely delivery,
services and products offered, budget management, advising, creativity, and
market knowledge. These aspects reinforce clients' confidence in the work
professional communicators do and, therefore, influence the overall perception
of agencies and their accounts.
     Organizational factors include changes in clients/agencies' policies, work
patterns and procedures, and level of bureaucracy. It seems that the success of
the relationship is greatly influenced by how clearly the contribution and
responsibility of both parties are stated, as well as the quality and timeliness
of information supplied by both clients and agencies. The key appears to be
keeping a constant dialogue in every stage of the relationship.
     Although previous research has identified aspects that positively or
negatively affect the relationship between agencies and clients, it is important
for agencies to be sensitive about their clients' level of satisfaction. A
well-administered evaluation of the relationship could reinforce the
interactions and overall performance. To obtain a clear assessment of the
client-agency relationship, feedback from clients should contain the three
aspects identified in this section: personal, professional and organizational
factors.
Evaluating Communication Effectiveness
     Management and staff of communication departments that work as support
areas or in-house agencies must operate as internal consultants, obtaining
periodic feedback from other operating areas or "internal customers" and
constantly improving the quality of their services.  "Research initiates,
monitors, and concludes the problem-solving process. It is the essential
ingredient that makes public relations a management function, as well as a
managed function" (Cutlip et al. 1994, p. 433).
     The current management trend regarding quality, accountability and
competitiveness supports that notion of internal consulting. Richter and Drake
(1993) explain: "as organizations continue tightening their belts and management
demands proven quality results, research will continue to grow in importance. It
will become more and more vital to adopt a public relations 'measurement
mindset' to track progress toward that goal" (p. 32).
     Research is essential to move beyond the tactical function of communication
(Block, 1998), especially evaluative research that could scrutinize strategies
and guide professionals to higher and more effective standards of performance.
Hon (1998) summarizes research on public relations goals and objectives as well
as research on public relations evaluation:
     Measuring the outcomes of public relations programs provides data to
     demonstrate that public relations helps organizations and clients meet
     their performance goals. ... [P]ublic relations itself encompasses so many
     different activities that goals and objectives will vary, depending on
     organizational priorities. ... [Thus,] no single evaluation formula will be
     appropriate for all programs and organizations (p. 128).
     Despite the specific characteristics of different organizations, evaluation
research can follow some common guidelines. According to Cutlip et al. (1994),
evaluative research of public relations programs consists of three levels:
preparation, implementation and impact.
     Little academic research has looked at what public relations does for
organizations. The attention has mainly been devoted to evaluation of public
relations programs and not the contribution to the achievement of organizational
goals (Hon, 1997).  Articles that introduced methods and studies regarding
evaluative research for public relations programs and campaigns in the last
decade are Bissland (1990); Dozier (1990); Dozier and Ehling (1992); Fischer
(1995); Fleisher and Mahaffy (1997); Freitag (1998); Hauss (1993); Lindenmann
(1997a, 1997b, 1993, 1990); and Tortorello and Dowgiallo (1990).
     Although most evaluative research deals with programs' outputs and
outcomes, research principles and methodologies can be adapted to evaluate the
level of satisfaction and perception of communication effectiveness that areas
within organizations have about the work internal communications departments do.
Particularly, Hon's (1998) four level of effectivenessDindividual practitioner,
program, organizational, and final customerDcould provide a complete picture of
the quality of the relationship between a communication department and those
areas that it supports or serves.
The Evaluative Research Methodology
     The communication division of the insurance corporation that sponsored this
study operates as a public relations/advertising agency according to its
managers, and its "internal customers" are other departments, branches, and
sister companies within the corporation. Management was interested in assessing
the level of satisfaction of its internal customers concerning the work those
units receive from Communications. The technical assistance includes production
of print and audiovisual materials, such as brochures, posters, industrial
videos, newsletters, magazines, annual reports, etc.  Communications also
supports the company's business through advertising campaigns, event
organization, media relations, community relations, and government relations.
     The research used both qualitative and quantitative methods to accomplish a
comprehensive evaluation of the work that the corporate communications division
does. First, six in-depth interviews with Communications staff and three focus
groups, two with Communications staff and one with internal customers were
conducted. Second, this study used a three-wave mail survey of a census of
internal customers who currently work with Communications, to ascertain their
satisfaction with, and perception of, effectiveness of the support they receive
from this division.
     The interviews were conducted with writers, editors and designers. The
objective of these interviews was to identify the most salient issues that
affect the interaction between Communications and other areas of the
corporation, including procedures, ideal and problematic projects, management
style and interpersonal interactions. We identified these factors as
organizational, professional, and personal factors from the literature.
Interviews lasted from 30 to 45 minutes.
     Three focus group sessions were conducted. Six staff members of the
communication department participated in each of two sessions. The first focus
group with Communications staff emphasized discussion of their working
relationship with other areas and the second session emphasized the division's
procedures and quality of interactions between the two departments within the
division. The main criterion for the selection of the participants was their
high level of interaction with internal customers. The third focus group
consisted of eight participants who represented internal customers with the most
interactions with Communications. The levels of interaction were determined by
looking at the number of projects the division has produced for each internal
client in the last year. Participants represented different divisions and
companies within the corporation as well as different levels of authority.  Each
focus group lasted 90 minutes.
        Findings from the literature review, in-depth interviews and focus groups
assisted with the design of the survey instrument. The final questionnaire
included four sections. The first section consisted of a fifteen-item index to
evaluate the performance of the Communications staff.  Items included aspects
such as interpersonal skills and mastery of production process. These are
considered personal and professional factors in the literature.
     The second section evaluated four distinctive services that the
communication department provides: advertising, public relations, print and
audiovisual materials. Each service area was evaluated by using a nine-item
index. Statements within the index used a five-value scale from strongly
disagree to strongly agree.
     The third section explored whether customers have worked with an outside
agency that provides communication services and, if they have, what benefits
they derived from an outside agency that were not available using
Communications. This section also included three open-ended questions to allow
participants to voice their evaluation, complaints and suggestions for
improvement. Finally, the section included a close-ended question asking
participants if they wanted information about Communications and in what way
they would like this information delivered.
     The last section was demographic and consisted of four independent
variables that could affect responses: company, location, tenure, and number of
people and levels of management involved in revision and approval procedures.
The questionnaire was pre-tested by the customers who attended the focus group
session. Communications management and staff provided constant feedback during
the survey's development.
     Communications management provided a list of current internal customers for
the survey research. The list included 111 customers from different divisions
and sister companies of the corporation. A three-wave mail survey was used to
maximize response rate. The first mailing consisted of a personalized cover
letter, survey, and a postage-paid return envelope. The second wave, one week
later, was a personalized reminder/thank you postcard mailed to all respondents.
The third wave was identical to the first wave except for a modified cover
letter, and was sent two weeks after the first wave to all subjects who had not
responded to the first two waves.
        This three-wave mail survey resulted in 75 completed, valid surveys, for a
response rate of 71 percent. Five participants were dropped from the original
list because they had not worked with Communications.
     All quantitative data were input into an ASCII database. Data were then
analyzed using the SPSS for Windows (v.8.0) computer program. The main
statistical procedures were: frequencies, descriptives, factor analysis,
reliability analysis, and different types of cross-tabulations.
Findings
     Interviews. Six staff members of Communications were interviewed to
identify the main issues they perceive to positively or negatively affect the
interactions with internal customers. The main concerns expressed were the lack
of knowledge and understanding that customers have about how Communications
operates, the range of services it provides, and the cost and technology
involved in production. According to the Communications staff, internal
customers constantly express dissatisfaction about the time it takes to finalize
a project, the cost charged, the lack of knowledge writers have about their
business and "certain issues of internal political structure
[bureaucracy-power/control games] that surely affect the attitude of some
internal customers" (personal interview, June 5, 1989).
     Communications personnel feel that their recommendations and advice are not
taken seriously by customers. According to the interviewees, this could be due
to the lack of credibility and authority the division has. A respondent
explained one of the possible causes:
     The biggest problem we face is the clients' perception that because we
     are an in-house agency we are not professionals. Some of them say, "I could
     get better service with an outside agency that works full-time." I explain
     to them that we work full-time too (personal interview, June 5, 1998).
     If they are to act as a true agency, credibility and authority are
essential. While their clients appear to consider Communications to be an
in-house agency, the perception of the Communications staff is somewhat
different.  They cannot see themselves as an agency if their recommendations and
advice are not taken by the clients as coming from professionals.
     The respondents suggested that one of the solutions to informing customers
about what Communications does is to produce brochures about specific services
provided, such as multimedia presentations, the process of color printing, etc.
The limitation to implementation of this plan is that "there are other
priorities and the production of these educational materials are delayed"
(personal interview, June 4, 1998).
     Interviewees were asked to explain what causes a project to fail, to be
difficult to carry out, or to negatively affect the interactions with customers.
They stated that some project areas do not provide accurate information, they
revise and approve materials without paying attention to details (i.e., content,
tone, narrative flow, etc.) and then in the designing stage they make "massive
changes" affecting the layout and delaying the process. One of the interviewees
summarized the main problems faced on a project:
     The client assumed that I knew all about the product; gave little
     information and expected plenty of details; made fast and not detailed
     revision, made massive changes in content, photographs and design; paid
     extra money because of multiple revisionsDwe used an outside agency for
     being short in the graphic departmentD; sat on the work in some steps of
     the process; and didn't understand the time that it takes in the designing
     [and printing] stage (personal interview, June 5, 1998).
     It would appear from these statements that Communications personnel are
willingly acting as technicians and not strategists. They blame their clients
for not giving them enough information, while they are acting as a support area,
not the in-house agency they purport to be.  They do not feel they have enough
authority to say "I can't work with you without more information." Simply taking
what is given to them, not asking questions or setting boundaries, failing to
provide the client with information about their procedures that might preclude
wide-scale changes, and overall making little effort to take control of the
relationship automatically puts them in a technical or support role.
     Interviewees also presented solutions. They told the interviewer problems
could be avoided if, when taking the order, every aspect of the project is
clarified and "after listening to the client's request, we should look for
better ways to do the job or to develop the specific material, critically ask
whether it will work and what the options are" (personal interview, June 8,
1998). Better communication within the division could help too, as one
interviewee elaborated: "To do an effective design, writers, designers,
photographers and any person involved in the process should interact frequently
and share ideas. Each person has a different perspective according to his/her
function, which complements the overall outcome" (personal interview, June 8,
1998).
     Asked to think about a project that went smoothly, respondents highlighted
several causes for a successful outcome: good interpersonal relations; the
client provided timely, sufficient and accurate information and quick turnaround
of carefully done revisions and approvals.  Other aspects that characterized a
good project are: participation in meetings with the committee in charge of the
project, customer's trust, management support, customer's understanding of costs
involved and willingness to spend resources, tracking projects with a status
report and meeting deadlines.
     From these interviews the researchers determined that Communications staff
members are aware of the aspects that affect their interactions with other areas
within the corporation, and are perhaps even aware in some ways of the paradox
they face. While they are not fully operating as an in-house agencyDthey don't
conduct briefings with their clients, don't do creative presentations or confirm
with the clients that they're on target before precedingDthey recognize that
they aren't performing as their internal clients want them to.
     Focus Groups. Three focus groups were conducted, two with the participation
of six staff members each from Communications, including one manager, and
another with eight representatives from project areas that have the most
interaction with Communications.  The comments expressed by both Communications
staff and representatives of project areas were classified into three groups:
aspects that influence an excellent working relationship; aspects that cause
deterioration in the working relationship, and suggestions for improvement.
     In relation to the aspects that influence the working relationship,
participants coincided in their beliefs that an open relationship where the two
sides listen to each other and try to reach consensus (two-way symmetrical) is
preferred (See Table 1).
     Participants of all focus groups also agreed that the working relationship
deteriorates when conflicts between upper management affect the staff.  Where
they disagreed was in discussion of the technical aspects of the relationship.
Each groupDclients and Communications staffDlaid the blame for any failure with
the other group, although Communications staff were more able to see areas where
they are at fault (See Table 2).
     The researchers see here the confusion mentioned earlier. Communications
staff frequently blame clients for areas that, if they truly operated as an
in-house agency, would be their responsibility. From the comments collected in
the focus groups it became even more apparent that their internal clients are
expecting Communications to operate as an in-house agency. Finally, participants
of the focus groups made suggestions for ways to improve both the relationship
between areas and the quality of the finished product (See Table 3).
     Quantitative Survey Results.  On a scale with five values (i.e., 1 strongly
disagree, 2 disagree, 3 neutral, 4 agree and 5 strongly agree) survey
respondents' overall evaluation of the Communications' staff was positive (mean
3.7). One skill is perceived as more outstanding than the rest: "attentively
listens to my requests" (mean 4.19). In contrast, other aspects of job
performance were more poorly rated: designing time (mean 3.45), delivery time
(mean 3.43), and providing information about what Communications does (mean
3.36) (See Table 4).
     To gain further insight into whether any response patterns exist among
respondents, the statements in the first index were factor analyzed, grouping
together items which had similar responses (high or low) across all respondents.
Although a two-factor solution (explaining 72 percent of the variance across all
fifteen items) was determined to be the optimal solution, two-thirds of the
variance is explained in the first factor with an Eigenvalue of 10. This means,
according to this exploratory factor analysis, that the index only measures one
dimension. The next step was to conduct a reliability analysis to test the
consistency of responses across respondents. The result was a coefficient Alpha
of .96, which means that respondents tended to answer all statements the same,
either high or low.
     The four services/products Communications offers also received an overall
positive evaluation from respondents.  Respondents were asked identical
questions for advertising, print and audiovisual, and slightly different
questions for public relations. The production of audiovisual materials (mean
3.96) and public relations (mean 3.95) received the best rating, followed by
advertising and production of print materials (See Table 5).
     Most items fell in the "agree" category with a mean above 3.50. Although
means above 3.00 represent a positive evaluation, statements with a mean below
3.50 (closer to the neutral value) or with a mean of 4.00 or above, need a
different interpretation. The only item that obtained a mean under 3.50 was
"produced in a reasonable time" regarding print material. This criticism is
understandable because this is the type of service most requested, and one that
involves the most interactions within the division and with other areas of the
corporation. The request for faster turnaround is also expressed on the
open-ended questions' responses.
     In contrast, two statements obtained the most favorable evaluation
regarding advertising, print and audiovisual materials production: "was directed
to a specific audience" and "featured a satisfactory overall production
quality". The latter statement correlates with the overall evaluation that
Communications obtained (mean 4.88).
     Looking closely at the evaluation of public relations, four statements
obtained the most favorable evaluation: "enhanced relationships with publics"
(mean 4.00), "increased understanding" (mean 4.00), "created desired image"
(mean 4.04), and "organized in a reasonable time" (mean 4.00). The rest of the
items obtained a mean above 3.50, which represents an overall positive
evaluation. No statement received an outstanding evaluation (i.e., a mean close
to 5.00) (See Table 6).
     Only 29 out of 75 respondents (39 percent) have used an outside agency for
communication work. The main benefits respondents associated with working with
an outside vendor are faster turnaround time, advice provided, the fact that
more than one creative concept was presented, and the vendor's experience with
other clients. For this question only responses from those who had used an
outside agency were calculated. Percentages above 40 were considered significant
for the analysis of this finding (See Table 7).
     The overall work that Communications has done for other areas in the last
year obtained a mean of 4.88, which means "good." Twenty-four percent of the
responses fell in the "outstanding" evaluation.
     As discussed in the focus groups, respondents indicated they would like to
receive information about how Communications operates (N45, 60%). Their main
interests were to have information about services offered (N39, 87%),
organizational structure (N31, 69%) and production procedures (N30, 67%).
Respondents want  this information delivered by brochures (N27, 60%) or
newsletters (N18, 40%).
     Demographics. More than half of the respondents work for the main company
of the insurance consortium  (N43, 57%) and are located at the main office (N66,
88%). The mean number of years respondents have been working for the company is
10.76. We found no significant relationship between these variables and the
participants' responses.
     Respondents were also asked the number of people and levels of management
involved in revision and approval procedures. The three options for responding
were 1 (1-2 people/levels), 2 (3-4 people/levels), and 3 (5+ people/levels). The
findings showed the mean number of people involved in revisions was 1.77, levels
of management involved in revisions was 1.34, number of people involved in
approval procedures was 1.66, and levels of management involved in approval
procedures was 1.42. We also found no significance between these findings and
the participants' responses.
     Qualitative Survey Results.  Open-ended responses were analyzed using three
steps. First, the responses and comments written in different sections of the
instrument were transcribed individually. Second, for each question, responses
were classified in five categories: suggestions for improvement, positive
evaluations, negative evaluations and complaints, mixed evaluations, and
requests for information.  Finally, positive or negative evaluations expressed
by the same respondent on the different sections of the survey were considered
as only one extended opinion to facilitate the calculation of percentage of
comments per category and overall count of opinions.
     Of the 92 responses to the open-ended questions, suggestions for
improvement counted 33, which represents 36 percent of the opinions expressed.
Primarily respondents suggested that Communications' personnel should improve
turnaround time (N11, 33%) and retrieve as much up-front information as possible
before starting a project and then clarify that information during the
production process (N7, 21%). They also would like to receive more than one
creative concept and information about Communications' operations and
procedures.
     Twenty-eight statements we coded as positive were written on the valid
surveys, which represents 30 percent of total responses to the open-ended
questions. This reinforces the "good" overall evaluation the division received
by respondents. Written comments highlight how Communications' staff is very
cooperative, efficient, fast, courteous, meet deadlines, are creative, and so
on. Both staff and projects accomplished seem to have earned the appreciation
and respect of respondents. Specific names were mentioned, which could be
interpreted as the extension of the working relationship to a more personal one
and/or just the recognition of excellent job performance.
     Out of the 92 written comments only 14 (15%) corresponded to negative
evaluations. Negative evaluations and complaints range from interpersonal issues
to professional considerations, but time spent in finalizing a project seems to
be the main criticism, which involves other issues as well: "revisions are
always slow . . . delaying the project," "volume of work . . . causes backlogs
and delays," "production schedules seem long," "timeliness is a problem,"
"videotapes seem to take an extra long time to produce," "allocations for time
spent ... are often questionable," and so on. This category, together with
suggestions for improvements and mixed evaluations, should be looked at
carefully and critically. They may become a good source of ideas and
opportunities for enhancing the relationship with other areas within the
corporation.
     Some written comments contained both positive and negative evaluations and
were considered "mixed." These mixed responses comprised 16% of the total
opinions stated. Two participants also requested information in the open-ended
questions. These requests were for information on how Communications spreads
costs and allocates available time, and for Communications to provide detailed
information regarding services, procedures, timelines, frames, etc. when a
customer requests it.  The same respondent indicated Communications should
always give customers general and brief information about these issues if they
don't request it.
Discussion
        The key to a communication department gaining and maintaining trust, authority,
a good reputation, credibility, and support from upper and lower management as
well as the rest of an organization's personnel, is to properly use the
knowledge accumulated about the organization's business and goals; human,
financial and technological resources; services and products offered by outside
vendors; and communication strategies to reach the final clients of the
organization. In summary, communication departments should set as their main
goal gaining and maintaining cooperation and mutual respect with other areas of
the organization. This in turn will contribute to effectively accomplishing
strategic organizational plans.
        It also seems that the quality of the relationship between a communication
agency and its clients greatly depends on the explicitly stated conditions of
the business interactions that take place. We are talking about the contract of
services in which the contribution of each party is clearly stated for the
ultimate achievement of communication goals and objectives, and in which the
expected day-to-day interaction is set out.
        A confusion of roles or the emergence of the support area/in-house agency
paradox could be minimized or avoided altogether if the relationship is based on
a clear set of rules and responsibilities of each partner. This can only be
achieved if the managerial philosophy, the model on which the department or
division is based, is clear to all.
        Clarifying communication department functions will help other areas to
understand the contribution of communication staff to the rest of the
organization. At the same time, communication staff should understand other
areas' functions to assist them better. Periodic evaluation of other areas'
needs and their perception of the work communication department do may increase
mutual understanding and improve the working relationships. Personal,
professional, and organizational factors are relevant aspects to include in any
evaluation effort.
     Despite the overall positive evaluation that came through in the
quantitative parts of this study, qualitative findings indicated participants in
the study demanded a more customer-oriented approach, creativity and better
budget management from the communication department. Communications staff
reacted defensively by expressing the unwillingness of "other areas" to
cooperate and understand the work they do.  In so doing they positioned
themselves as a support area by not acknowledging the customer-orientation
required to deal with "internal customers."
     Indeed, Communications staff indicated to the researchers they think their
division is not really an in-house agency because they do not solicit work or
conduct outreach to other areas to ask what they are doing, and then act as
consultants on how to approach specific projects. A Communications staff member
who participated in the second focus group session expressed this concern in the
following comment:
     This whole concept of they are the clients and we are supposed to
     cater to them the whole . . . way, I just don't understand it. We all work
     for the same company, we're not working for them, we're working for [the
     consortium] and its companies and we have just as much right to go into
     those meetings [e.g., committees] and say that's how our area works, this
     is what you'll do, this is who you'll contact, here is the number to call .
     . . We have procedures and they [other areas within the corporation] have
to
      follow our rules too (Focus group, August 11, 1998).
     According to Malloy (1998), if a communication department chooses to truly
be an in-house agency, it would have to offer internal customers above-market
creativity at below-market costs; it would have the ability to gather and track
costs, bill effectively and collect payments; it must initiate an effective
marketing function or a proactive approach in which the in-house agency seeks
its customers and proves itself constantly; it must show a high level of
creativity; and it must develop clear procedures from the start. Moreover,
Malloy states that management should avoid enforcing a corporate mandate that
internal customers must exclusively use the in-house agency's services, which
"would lead to complacency and stifle creativity" (p. 35). Thus, the in-house
agency would always be facing competition from outside vendors.
     Gloria Gordon (1998), editor of Communication World, reports interviews
with three panelists at the Target Vision Employee Communication Exchange
conference, held in Panama City, Florida, June 1998. One of the participants,
Margot Myers, manager of employee communication and creative services at the
U.S. Postal Service in Washington, D.C., clearly states the effort that goes
into a department or division positioning itself as an in-house agency:
     We've put a lot of effort into teaching our colleagues in other parts
     of the Postal Service what we can do to help them become successful through
     targeted, strategic communication. We are usually in the thick of
     information flow from a variety of sources: meetings, memos, committees and
     calls. Our 'clients' in other departments are accustomed to coming to us to
     ask for a strategic communication plan when they are preparing to launch a
     new product, introduce a new program, break good or bad news. The current
     systemDwhich uses three "voice managers" who keep in close contact with
     other departments, similar to an account manager in a PR firmDhelps keep us
     in the loop (p. 11).
     Thus, the question is, does a communication department want to be seen as
an in-house agency, a support area or a bit of each? There are some critics who
say it is not convenient to see other areas or people within the corporation as
"internal customers." On one hand, if they are approached as customers, they
will demand more participation in the production process and insist their ideas
are taken into consideration. The weakness with this approach is that most of
the time people working in other areas lack the knowledge and expertise to
actively participate in the creative and technical processes involved in the
production of communication materials.
     On the other hand, if a communication department decides to sell itself as
a "support area," its staff must assume a more proactive role as qualified
advisors and experts in this area within the organization. Each area in a
corporation has functions, responsibilities and objectives to accomplish;
communication departments may evaluate those aspects and, if necessary,
reformulate them. Neither approachDin-house agency or support areaDcan be
determined to be the best nor the worst. The important point is clarity in
determining first which model management wants to follow, on which end of the
continuum the department will be placed.  Next the division must reorganize its
structure and behave according to the model it has set for itself.
        In general, organizations are demanding more efficiency, creativity,
accountability, and dynamism from all areas. Each area within an organization is
facing significant challenges due to the ever-changing business environment. The
demands communication departments are facing are part of the competitive
environment of the marketplace. The difference between a communication
department and other areas is the visibility of the communication practices.
Communication departments are always in the spotlight. The type of projects or
actions a communication department produces and the success or failure of those
actions determine the perceptions of other internal areas about the work the
department does.  These perceptions will greatly affect the working interactions
between the communication department and the rest of the corporation.
Credibility, authority, and reputation are dependent on perception.  As a
consequence, it is advisable that communications departments manage themselves
as they manage any campaign, strategically, developing a clear identity and
promoting this defined identity to those who demand communication assistance.
        The tendency to include the integrated marketing communication approach in
internal communication departments also increases the complexity of working
interactions between communication departments and other areas within a
corporation. Complexity not only means the offering of different types of
services and products, but also an inevitable overlap or complement in functions
among organizational areas, which produces conflict and, in some cases,
dispersion of communication efforts.
        For instance, the communication department evaluated in this study engages in
constant disagreements with the marketing division. Moreover, some sister
companies of the consortium have communication and marketing committees to deal
with specific issues, such as new product introduction, and Communications staff
are not asked to participate. This overlap, and the lack of coordination of
communication efforts, cause conflict in the working relationship with these
areas. Because Communications does not have a defined identity and its
functions, responsibilities, and authority are not clearly understood by the
organization as a whole, there is confusion over what area is responsible for
which part of the communication function, and power struggles result.
     In this evaluative study we have found that, depending on the managerial
model a communication department uses to organize its operations and to offer
assistance, other areas within the organization may behave differently towards
the communication staff.  More research is needed to further uncover this
support area/in-house agency paradox, which affects the performance and
interactions of internal communication departments. At the same time, the
communication department in the study would benefit by using this evaluation to
rethink its operating procedures and, most importantly, its management
philosophy in dealing with "other areas" or "internal customers" within the
organization.



Uncovering the Support Area/In-House Agency Paradox














Tables



Uncovering the Support Area/In-House Agency Paradox




Table 1
Communications Staff's Comments
Project Area Representatives' Comments
Excellent working relationships result when:
y               Both parties are open minded to understand and respect both customers'
  and Communications staff's views and ideas.
y               Customers are open to suggestions with trust and support.
y               Customers revise and approve materials in a timely manner.
y               Customers allow time for creation and production and provide sufficient
  and accurate information.
y               Customers have sufficient information about Communications' functions
  and operations.
y               We are flexible in working with different types of personalities.
y               We clearly express creative ideas.
y               We have a clear understanding of the customers' needs.
Excellent working relationships result when Communications:
y               Develops good knowledge of our business, products and services.
y               Generates ideas with customer's participation.
y               Is flexible, creative, and works toward common objectives.
y               Generates more than one creative concept.
y               Maintains collegial relationships versus unilateral relationships.
y               Is open to marketing concepts.
y               Develops customer orientation.
y               Maintains with us permanent interaction along the production process.
y               Produces quick turnarounds.
y               Assigns staff to different areas within the corporation.
y               Reviews request orders with us before starting production.
y               Provides project status updates.




Uncovering the Support Area/In-House Agency Paradox




Table 2

Communications Staff's Comments
Project Area Representatives' Comments
The working relationship deteriorates when:
y               Respect is lost for each other.
y               Time runs out on us, sometimes because the project area doesn't provide
  information, revise or approve materials on time.
y               The work passes from writers to designers and priority changesDthe, the
  project area calls the writer and she doesn't know the project's status;
  customer gets confused.
y               We have to go to management for approval every single step along the way.
y               Customers neither cooperate nor compromise.
y               Customers delay revision and approval procedures.
y               Customers make corrections that do not meet corporate standards.
y               Customers' and upper managers' egos and negative attitudes collide.
y               Customers have a limited budget that does not cover costs of the work
  requested.
y               Customers request work beyond our scope.
y               Customers want to make a lot of changes after design is done.
y               Customers design their materials.
y               Customers sometimes believe that we have to comply with their demands
  and taste forgetting the characteristics of the real customer.
The working relationship deteriorates when:
y               It is difficult to manage expectations of upper management.
y               We assign work to outside vendors.
y               We receive work that doesn't meet our expectations and needs.
y               Communications doesn't provide project status updates.
y               Communications' staff refuses to make grammatical corrections suggested.
y               A creative concept is not accepted and there is no time to create
  another one.
y               Communications doesn't accept our creative ideas
y               Communications doesn't have a customer orientation.
y               Pictures are not shown before designing and then we want to change them.
y               Communications staff's pride of authorship limits the inclusion of ideas
  and changes
y               Communications staff uses technical terminology that we don't understand.



Uncovering the Support Area/In-House Agency Paradox




Table 3

Communications Staff's Comments
Project Area Representatives' Comments
Suggestions for improvement:
y               Produce educational materials to let other areas know what we do and how
  we operate.
y               Make upper management understand the importance of our contribution to
  the company's business goals.
y               Promote our awards as accomplishment of the division's work.
y               Offer solutions to project areas when the working relationship is
  deteriorating.
y               Explain project areas both major and minor changes.
y               Have account executive with authority and control to keep only one
  channel between project areas and us.
y               Improve our understanding of other areas' needs and views.
y               Be flexible in production and delivering schedules.
y               Make writers responsible for every part of the production process of
  small projects and share responsibility with editors, producers and
  designers in big projects.
y               Hold periodic, quarterly meeting for the whole division to know how the
  company and its different areas are doing.
y               Share status reports among us.
y               Evaluate our operational procedures and streamline them.
y               Upgrade our technology and improve our technical knowledge and skills.
y               Function as advisors, consultants, and problem solvers.
y               Inform project areas about our professional credentials to do quality
  work.
y               Suggest project areas to consolidate revision and approval procedures.
Suggestions for improvement:
y               Produce different creative ideas, sell them to us and let us make final
  decision.
y               Be proactive in communicating with us as a support division does.
y               Approach and maintain customer orientationDseek understanding more than
  being understood.
y               Sit down with us to clarify orders because request forms sometimes
  present limited information.
y               Assign people to specific areas and increase familiarity with our needs
  and environments.
y               Let us see pictures, graphics, and illustrations before designing.
y               Accept and support our decision of working with outside vendorsDdo not
  take it as a personal attack.
y               Look at communication areas in other plants or corporations to see how
  they are organized and what are their standards of performance for customer
  satisfaction.
y               Seek outgoing feedback from us, especially after the conclusion of each
  project.
y               Brainstorm and conduct periodic meetings with customers.
y               Avoid sending organizational threats because they deteriorate the system.
y               Offer costs estimates in advance.
y               Circulate information within Communications to facilitate exchange of
  ideas and projectsDinformation could be adapted with few modifications,
  which save time and money.
y               Communications should assume costs when its staff makes mistakes.



Uncovering the Support Area/In-House Agency Paradox




     Table 4
     Evaluation of the Corporate Communications Personnel
Statements
Mean
Attentively listens to my requests
4.19
Is accountable for the quality of materials and services
3.89
Monitors my revision/approval procedures
3.89
Provides me with timely advice and suggestions
3.88
Is creative in developing concepts and campaigns
3.88
Makes necessary adjustments in programs and materials
  to meet my area's needs
3.79
Facilitates my participation in each step along the process
3.69
Supports my area's business goals
3.69
Interacts with me each step along the way
3.65
Sits down with me to clarify a request before getting started
3.65
Understands my area's business goals
3.57
Is flexible in accepting my viewpoints and ideas
3.57
Designs materials/plans in a timely fashion
3.45
Delivers final services/materials in a timely fashion
3.43
Provides me with information about what C.C. does
3.36
Overall Evaluation
3.72

     Table 5:
Evaluation of Services and Products that Corporate Communications Provides
Statements
Advertising
Print
Audiovisual
Disseminated an accurate message about the product's benefits
3.94
3.95
3.95
Contained strong arguments to motivate customers' responses
3.58
3.69
3.86
Provoked the expected responses from the targeted audience
3.61
3.75
4.00
Supported my area's strategic business objective
3.79
3.71
3.91
Was directed to a specific audience
4.00
4.05
4.18
Included graphics/pictures that reinforced overall message
3.85
3.76
4.09
Featured a satisfactory overall production quality
4.06
3.98
4.09
Cost what was originally estimated
3.82
3.63
3.81
was produced in a reasonable time
3.64
3.41
3.64
Overall Evaluation
3.81
3.75
3.96



Uncovering the Support Area/In-House Agency Paradox




Table 6
Evaluation of Public Relations
Statements
Mean
created the desired image for the product/service
4.04
enhanced relationship with targeted public (media, legislators,
     stakeholders, employees, etc.).
4.00
increased understanding of the service, product or idea promoted
4.00
was organized in a reasonable time
4.00
was organized systematically
3.93
was directed to a specific audience
3.92
supported my area's strategic business objective
3.88
provoked the expected responses from the targeted public
3.85
cost what was originally estimated
3.81
Overall Evaluation
3.95


Table 7
Benefits of working
with an outside agency

Frequency
Percent in relation
to positive responses
Faster turnaround time
21
72.4%
Creative concepts
19
65.5%
Advice
12
41.4%
Experience w/other clients
12
41.4%
Professionalism
11
38.0%
Costs approved before production
10
34.5%
Full-time dedication
10
34.5%
Lower costs
10
34.5%
Cooperation
09
31.0%
Account executive
09
31.0%
Other(s)
08
27.6%
Direct mail service
05
17.2%
Ability to diversify/outsource
05
17.2%
New technology
05
17.2%
Research services
04
13.8%


Uncovering the Support Area/In-House Agency Paradox




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