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Monday, January 4, 2010

PR Firms Gone Wild: Ethical Lapses Oveseas


This may be an incongruous-sounding topic: PR firms and ethics. Before you say "wait a minute, that's like military intelligence, fer chrissakess," hear me out. The large PR firms (Edelman, Hill & Knowlton, Burson Marsteller, Weber Shandwick, et al.) spend MUCH time these days talking about how ethical and transparent they are. They all throw lots of info up on their websites about how ethical they are. They make lots of sounds about "building trust" and all that hoo ha. AND THIS IS what they tell their clients to do. CSR, transparency, all that hoo ha!

The PR guys REALLY dedicate lots of effort to this after they get caught in a MAJOR ethical lapse, such as Edelman with the Wal Mart fake blog thing.

ANYWAY, they SAY they believe in the "highest standards" and ethical b.s. HOWEVER, based on my experience, they fall very short on this front OVERSEAS. It's as if once outside the confines and borders of the U.S., these firms and their minions go wild.

The big firms, and many others (in PR, marketing, advertising, etc.) have EXTENSIVE operations in Asia. It was there that I had experience working in a senior-level capacity with them. It was SHOCKING how little attention was paid to acting ethically (or simply appropriately) in Asia, while the HQ and leadership back home would pay lip-service to acting responsibly, transparently or (insert meaningless "value" here). While I'm not sure if these firms are violating the letter of the Foreign Corrupt Practices Act, they may be acting without regard to the SPIRIT of the law governing the behavior of American firms overseas.

The following are some examples witnessed of bad behavior by PR firms overseas. I'll leave it up to you to judge whether the situation described was unethical, immoral, distasteful, or simply just inept:

1. Making an under-the-table cash payment to officials of a state-owned internet service provider in China. This was to keep service "running" on behalf of a major U.S. beverage manufacturer doing an event there.

2. Making payments to a "middleman" to arrange meetings with the top officials of a state-owned company. It was understood that some of these funds would go in the pockets of the officials.

3. A manager at an Asian office of a U.S. PR company created a hostile work environment, akin to something out of the Tailhook scandal. The regional leadership was made aware of the situation through written communications and did nothing about it, save promoting the individual. In this case at least,  the inept regional head was eventually replaced.

4. A supervisor at the overseas office of a U.S. PR firm channeled a contract to build a website for a client (a tourism bureau) to a family member.

5. The CEO of one of the largest U.S. PR firms was asked about a recent article about corrupt media practices in China. The CEO avoided the question. Leadership of the company (heads of Asia offices for the firm) strongly criticized the questioner for bringing this up. Much like the Wizard of Oz, they didn't want the curtain pulled back.

6. U.S. PR firms routinely provide "taxi money" to journalists in China and other countries, in exchange for attendance at press conferences, briefings and other events. These envelopes of up to US$200 are ostensibly for covering "transportation."

These are but a few examples. It is interesting to try and understand WHY this happens.

There is to some degree an "out of sight, out of mind" attitude among the HQ leadership at these companies. As long as the overseas regions continue to deliver results, they are pretty much left on their own. While for most firms, Asia-Pacific only delivers 8%-12% of global revenues, their operating margins are high (due to lower labor costs, etc.). MANY firms, not just PR firms, function this way. "Just deliver, don't cause a major scandal, and carry on."

Some of these Asia offices are run by long-term expats. Many of these folks are Brits/Aussies who have been in Asia FOREVER and have gone "tropo" (as the Aussies like to say) or have "gone local." The local markets often have few or any ethical standards for PR firm/corporate behavior, let alone ANYTHING resembling U.S.-style workplace harassment rules. It can be very tempting for a foreign boss, given a fiefdom in a far-off land, to act like an emperor. Just think of the line from Apocalypse Now: "Out there with these natives it must be a temptation to be god."

At the same time, there is also a lot of pressure among the local office leaders to JUST DELIVER. Get revenue, build the pipeline. If you are a foreign manager or a local who is running a country or city office, this is your NUMBER ONE concern. How much are you really going to be thinking about ethics when your regional president is screaming at you to increase your revenue?

We'll continue to explore this issue further. Feel free to share your examples of PR firms gone wild.
Thanks for reading.
-Jonathan

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