COMPLETE SCHOOL PROJECT TOPICS & MATERIALS :
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CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Public Relations could be looked at from a variety of perspectives. The perspective that is emphasized at any point in time will reflect the orientations of the people involved and the uses they want to put it into. But in doing so, there are some universally accepted angles from which we can look at the issues at hand. To that extent, the British Institute of Public Relations (1982) defines public relations as the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its public.
A critical look at this definition will communicate the deliberate nature of public relations practice. It is not done in a haphazard manner. One must think through what is desired and choose methods carefully, making sure that systematic approaches and solutions that best suit the circumstance are built into the system, in order to increase capacity to produce excellent results in efficient manner. Furthermore, thedefinition reveals that this job is not meant for lazy people who lack sense of continuity. It is a continual exercise employing a variety in an effort to avoid any gap in communication. The emphasis here is sustenance of good corporate image as applicable to the banking industry.
The banking industry has a very large public that spreads across various segments of the society. This public includes other corporate bodies, organizations, personalities and communities. It is also an established truth that the banking industry embodies commercial, industrial, cooperative and lately, community banking. Since banks render financial services to their customers, it is necessary to sustain their customers trust, satisfaction, commitment and good customer relationship on daily basis through good public relations services. Huge financial resources of customers are usually committed to the coffers of the banks. Customers have diverse reasons for trying to remain with banks of their choice, where they can do business on a continuous and sustainable basis. This is the reason why banks do create competent public relations departments to take care of their image.
The breakdown of communication creates loopholes that can nourish avoidable problems. The definition by the British institute of Public Relations further exposed the fact that public relations is result orientated, and normally focuses on the achievement of a robust
reputation and good image, made possible by free flow of information. It removes the problems that can be induced by ignorance and rumour mill. In other words, when public relations are applied effectively, it brings about two-way communications that result in the organization being understood by its public while 1t also understands them through the feedback they receive.
Theaker A. (2004) opined that managing corporate image is about identifying the right image for an organization and communicating it effectively. John F. (2003) emphasized that levels of trust are declining world-wide and surveys have pointed out that trust is lowest in national legislative bodies, financial institutions and large corporate bodies. Balmer et al (2003) acknowledged the cardinal importance of corporate communication, image and branding to a contemporary organization since image is a powerfuldriver in the consumer decision. The importance of building and sustaining a corporate image with social initiations is good and beneficial to growth and good governance if the organization commits them to its cause of corporate achievement. All these thoughts are relevant to the concept of public relations as a discipline especially at a time like this when the banking industry is struggling with image problem, sustainability and challenges of capitalization. Public relations ought to build this sustainable good corporate image in the banking industry in Nigeria as a matter of urgency and sense of responsibility.
1.2 Statement of the Problem
The present image crisis in the banking sector is one that should be given utmost consideration. This is because virtually everyone has one relationship or the other with the banks. In 2005, during President Olusegun Obasanjo’s second term in office, a bold step was taken to reform the banking sector through the regulatory authorities supervised by Prof. Chukwuma Soludo, the then Governor of Central Bank. Before this period, there were myriads of malpractices andunconventional acts meted by the sector. Some of these acts sometimes have embarrassed the federal government of Nigeria at various times. Before 2005, over twenty six banks were liquidated while billions of investor’s funds were lost in the process without any one prosecuting the defaulters. This created bad image and mistrust for the entire banking sector in Nigeria.
A good number of them failed to settle outstanding liabilities or to account for their misdeeds. Some of the banks were mere family ventures that existed to trade on interbank instruments and were deeply involved in foreign exchange round-tripping which put considerable pressure on dollar-naira exchange rates. Some interbank placements were written off as bad and unrecoverable in spite of the continued existence of the debtor banks. Loans and advances were given out to friends and associates without reasonable appraisals and these went badly.
Politicians used depositors’ funds in their banks for campaigns and never paid back, leading to the collapse of some of them.
The above stated problems led to the crisis in the banking industry which brought about the banking reforms of 2005, which were aimed at bringing sanity to the sector and as part of a policy to squeeze weak or failing banks out of business through the CBN’s increase in capital requirement to 25 billion naira. It was an exercise that resulted in the reduction of Nigerians motley groups of mainly anemic 89 banks to 24 bigger, stronger and more resilient financial institutions.
In a bid to salvage the image of the sector, Mallam Sanusi L. Sanusi removed and prosecuted the bad CEOs and their Board members, and carried out the recapitalization of fragile banks, the establishment of Asset Management Company of Nigeria (AMCOM) to buy up bad Loans and to help recapitalize the distressed banks. The banks involved were Union Bank Plc, Oceanic Bank Plc, Fin Bank Plc, Intercontinental Bank Plc and Afri-Bank Plc. These banks had a combined toxic asset in excess of N2.2 trillion (CBN 2010).
This problem has severely dented the image of the banking industry and has created a sense of despondency among the various stakeholders and the public. Their publics have lostconfidence in their ability to perform their duties, and safeguard their interest and investment in the banks. Consequently, this has caused a lot of mixed feeling in the mind of people especially the common people that have meager amount of deposit in these banks. Both the management and staff of those banks were also affected as their means of livelihood were stifled thereby pushing a lot of families into undue emotional set-backs which in turn have affected their children and society at large. This has left so many unanswered questions and doubts in the mind of people.
1.3 Objectives of the Study
The broad objective of this research is to investigate the serious issues of customers lack of trust in banks and restore the public confidence in the banking industry through public relations practice.
To that extent, the specific objectives are as follows:
- To examine the corporate image of the banking sector against public view;
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To determine the publics’s trust and confidence in the Nigeria banking industry;
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To evaluate the contributions of public relations practice as a means of communicating with the publics;
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To determine relevant PR tools that could improve recapitalization policy and the image of the banking sector.
1.4 Research Questions
(1) Do the banks still possess sustainable corporate image after the crisis they faced?
(2) What is the publics trust and level of confidence pertaining to the Nigerian banking industry?
(3) How do public relations contribute to communication with the public?
(4) What are the relevant PR tools needed for improvement of
recapitalization policy and the image of the banking sector?
1.5 Research Hypotheses
- The banking industry does not possess good corporate image after the recapitalization policy of the CBN.
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Public trust and confidence in the banking industry seems not to be high after the recapitalization exercise.
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PR as a means of communication with the public have not contributed to the banking industry.
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The capitalization policy of the CBN has not helped to restore publics’ interest in the banking industry.
1.6 Scope of the Study
This study covers the banking sector of Nigeria. It is as study into the application of PR in sustaining good corporate image in the banking industry. It covers PR as a means of restoring corporate image, confidence and restoration of public trust in this degrading sector.
1.7 Significance of the Study
There are numerous benefits accruing to this study and that makes it very significant in every respect. However, a few of the benefits are enumerated below, thus:
The result of this study is going to enlighten the user more on the relevance of public relations as a means of creating more communication bridges between banks and customers. This part is significant beyond imagination because breakdown in communication can create anarchy, distrust, gap, and misinformation and even erode credibility. Public Relations are supposed to be a bridge builder in crisisthat emerged during the crisis. So, it’s significant to use this study to inform users of the role PR plays in the banking industry.
The information that will be revealed by this study will assist the banks to work harder in order to sustain their good corporateimage. Many of the banks that survived the awesome bank recapitalization exercise will not like a repeat of that bad experience. The management of any organization that wants to stay in business will not toy with the idea of adopting the industry’s best practices, and cutting down on risks and costs for maximum efficiency. The results will help in making informed decisions thatwould ultimately sustain the banking industry.
Many users of this information will be interested in developing or creating a career that is excellent and problemsolving. To that extent, this study is capable of making interested user to decide on choosing public relations as a profession. Just like many other professions, public relations usually complement the services of other desirable professionsin our fast-moving world where a conglomerate of ideas is needed to succeed.
This study is also beneficial to those whose interest is to research further into the concept of public relations. No research can serve as the final answer to human, society problem. This concept is going to bring up better and more appreciable solutions to challenges that face the banking industry and the practice of public relations in general.
This research work will also serve as a wakeup call to existing and would be practitioners of public relations in the banking sector to be on the watch out for mistakes of the past, where some were simply complacent and negligent or insensitive to the feelings of their customers and the general public. It is now common knowledge that only the best in the industry will stay afloat when the chips are down.
1.8 Limitations of the Study
This study is limited by Lack of co-operation by some respondents in supplying the needed information; in addition to that, considerable amount of difficulties were also encountered in using both primary and secondary data; and finally financial constraint was much of an issue considering all the expenditures on logistics, supplies and reproduction of materials.
1.9 Conceptual Definition of Terms
For better grasping of certain terminologies by users of this information, the following terms are explained. Each concept has a unique meaning and application in every study. To that extent, these terms include the following:
Communication: -(from Latin “Communies”) is the activity of conveying information through the exchange of thought, message or information as by speech, visual signals, writing or behaviour. (Source: Google Dictionary Retrieved on the 6th of Nov. 2013)
Business Communication: – For a business to flourish, all objectives of the organization should be effectively understood and communicated. This implies that for efficiency to occur, all the staff of the organization must be able to convey their message properly. (Source: Google search;
Retrieved on the 6th of Nov. 2013)
Reforms: – This means an improvement or amendment of what is wrong, unsatisfactory etc. It also means redressing serious wrongs without altering the fundamentals of the system.
Reforms seek to improve the system as it stands never to overthrow its whole sale.(Source: Oxford Advanced Learners Dictionary, Eight Edition) Corporate Image: – Mental picture that springs up at the mention of a firm’s name. It is a composite psychological impression that continually changes with the firms’ circumstances, media coverage, performance, pronouncement, etc. (Source: Gray D.(2009) Corporate Reputation and Competition, London: Routledge Publications)
Firms Reputation: – Public perception of the firm rather than a
reflection of its actual state or position. (Source: Gray D.(2009) Corporate Reputation and Competition, London: Routledge Publications)
Public Relations: -The practice of managing the flow of information between an individual and an organizations public. It is also a management function, which tabulates public attitudes; define the policies, procedures and interest of an organization, followed by executing a programme of action to earn public understanding and acceptance. (Source:Theaker, A(2004): Public Relations Handbook).
REFERENCES
Anyanwu, M. (2009): “Impact of Banking Sector Recapitalization Exercise on Nigeria Economy’’A Paper Presentation by British Institute of Public Relations(IPR) (1982)
Google search; Retrieved on the 6th of Nov. 2013)
Google search – “Banking Crisis- www.compassnewspaper.org/home>specialdesk>moneymarket downloaded on the 21st day of January, 2013
“Banking Reform” www.synthesisips.net/blog/banking downloaded on the 21st of January, 2013.
Gray, D. (2009): Corporate Reputation and Competition.London: Routledge, Publications