PRSA Has Its MBA Initiative Backwards

In the Spring issue of PRSA's The Public Relations Strategist there is an article by Ray Crockett, APR, and Anthony D'Angelo, APR, entitled "PRSA's MBA Initiative." The gist of the article is PRSA is trying to get MBA programs to include "strategic communications" in their curricula. They want MBA students to "appreciate the benefits -- and the perils -- of communicating or not communicating to key stakeholders." An additional benefit they propose is "future generations of executives who will better appreciate PR people and what the profession can accomplish...."

While this is, perhaps, a noble effort, I think they've got it backwards. They should be working to ensure that anyone who works in public relations has a basic understanding of business principles. And if PRSA wants its accreditation program (APR) to be meaningful, it should include a full unit that addresses the different parts of an organization that come together to create its business model.

By way of disclosure, I am very biased on this topic. I have an MBA. I also have been a member of PRSA for many years. I served on the Chicago chapter board of directors and have provided pro bono research support to both the Chicago and San Francisco chapters. However, I am not APR (or ABC).

PRSA's APR Study Guide offers all sorts of great information on the practice of PR, including a rather nice chapter on research. However, when it comes to business understanding, the guide offers a "Business Literacy Scavenger Hunt" in which the authors ask a number of questions regarding the organization for which the student works. This is a nice start, but it doesn't really get at what the components of a business are and how they work together to create the overall business model.

Instead of a scavenger hunt, the curriculum should include a unit on:

1. Business strategy and policy
2. Accounting and finance
3. Research and development
4. Organization behavior and/or human resources
5. Marketing
6. Production
7. How these all fit together to make a successful organization

What initially provoked this entry is an underlying concept that comes from marketing, which was one of my majors when I was getting my MBA: The job of marketing is not so much to educate a target audience about what the organization offers, as it is to understand the target so the organization can develop and offer the products and services the target wants and needs. Even if the organization's product or service is immutable (which suggests the organization will not survive), the goal then should be to find the target audience that wants or needs it.

So it's great that PRSA thinks it should get MBAs to learn about communications. But if PR wants the influential seat at the table we talk about so much, PR people need to understand business and help business managers achieve business goals.

The problem is not MBAs who don't understand communicators, it is communicators who don't understand MBAs.

Link to Excellent Analysis of What Caused the Recent Financial Crisis

Sorry this isn't exactly on topic for my eZine, but I wanted to share with you an excellent analysis of why the 2007 economic crisis, and a number of others, occurred. It is by Timothy M. Koller in the McKinsey Quarterly: http://tinyurl.com/2fw42kl.

My assessment is he really is talking about proper valuation of an equity or credit instrument vs. speculation. However, there is a certain amount of speculation when you assume a continued growth in cash flow or equity for a stock. Koller suggests you can hedge that speculation by assessing whether the company in question has a strong, sustainable competitive advantage.

In the case of credit instruments, he applies the idea of conservation of capital.

It is sort of the Warren Buffet/Benjamin Graham approach of buying because there is inherent value in the stock is the right way to do things, and the dot.com buy because share prices are going through the roof (or real estate prices just keep going up) approach is the wrong way.