Editorial - Leaner, meaner globalised firms

Anyone curious about how globalisation is affecting PR people need look no further than two items in the news this week. Eastman Kodak is looking to appoint a single director of communications to cover the Europe, Middle East and Africa region, following its commitment to cut group overheads by 20 per cent; while 18 communication staff at the UBS London HQ are to lose their jobs as a result of the SBC merger.

Anyone curious about how globalisation is affecting PR people need

look no further than two items in the news this week. Eastman Kodak is

looking to appoint a single director of communications to cover the

Europe, Middle East and Africa region, following its commitment to cut

group overheads by 20 per cent; while 18 communication staff at the UBS

London HQ are to lose their jobs as a result of the SBC merger.



Mergers almost always rely on a rationalisation of resources in order to

make the deal worth doing in the first place. With that in mind,

in-house PR people working in hot sectors like banking and

pharmaceuticals will be keeping a wary eye on the horizon at the moment.

But in an increasingly competitive global market, even companies which

are not planning mergers are searching for ways to reduce central costs.

Inevitably, communications functions will be one of the first places the

bean counters look for savings.



Globalisation and the need to trim costs are factors in shaping the

plans of the larger PR consultancies too. In recent years, most global

agencies have set their sights on big multinational accounts, because

this is where they expect to find the high-value, high-margin work they

need to fuel their own growth. This strategy also reduces their

vulnerability to competition from smaller niche players in local

markets.



The ability to muster cross-border, client focused teams is an obvious

first requirement in winning this kind of business, which has led to

consultancies making changes of their own to match client structures. At

the same time agency groups have also recognised the need to manage

their own businesses more efficiently, mirroring the lean corporate

superstructures being adopted by clients. Hence, for example,

Shandwick’s recent head office clearout.



None of this is bad news for the PR industry. By rising to the challenge

presented by globalisation a more efficient and profitable PR business

is likely to result. There is even a positive side-effect to all this

merging and paring of both agency and in-house PR functions: a fresh

influx of experienced practitioners on to the market, bringing some

relief to an industry which has found itself struggling to recruit

quality staff in sufficient numbers.



But with greater efficiency being demanded across the board,

restructuring and cost cutting is only part of that challenge. As the

pressure on PR people to prove the effectiveness of what they do

increases, the need to improve standards of research and evaluation will

become the biggest issue facing all PR practitioners.



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