1. Tesla: Theoretically speaking
Updated: Jun 14
If nothing else, Elon Musk is a risk-taker. As the founder and head of Tesla, Musk has led the way in developing battery powered cars that can drive on auto-pilot, solar panels that are revolutionizing sustainable energy, and spacecraft that are proving reliable enough to transform space flight.
Along the way, Musk himself has generated a seemingly endless stream of news coverage and social media attention, along with an impressive 45 million followers on Twitter. So perhaps it was no surprise that Musk in late 2020 took yet another risk in managing his dynamic corporate empire.
“Tesla, a Fortune 500 firm, has dissolved its PR department, apparently because its CEO can't tolerate any amount of critical coverage and can't abide employing a single person who does,” a Los Angeles Times reporter Tweeted out.
“The holier-than-thou hypocrisy of big media companies who lay claim to the truth, but publish only enough to sugarcoat the lie, is why the public no longer respects them,” Musk Tweeted back.
Adding to his impressive list of disruptive innovations, Musk had ushered in a new era in corporate public relations. No other major company – and certainly none covered extensively by the press – has operated without a robust PR function since, well, the advent of corporate PR.
For the PR profession more broadly, Musk had touched on an existential question that, to some degree or another, has haunted the field for decades. The PR profession's dementors can take any number of shapes and forms. What is the value of PR? Is PR just a bunch of spin doctors? Does PR generate a return on investment? Has PR earned a seat at the table?
Through our exploration of case studies, we are going to examine these existential questions -- the who, what, when, where, why and how of PR -- through a broader lens of organizational communications. Public relations, at its core, manages communications for companies, causes and candidates. In this course, we will consider communications on three distinct levels:
- Functional: How organizations communicate with various stakeholders
- Tactical: How those communications shape stakeholder perceptions
- Strategic: How those stakeholder perceptions affect organizations.
Let’s start with that framework. At its core, communications is about pushing messages out to various audiences. We might communicate directly, like I am doing right now in writing a blog that you are now reading. Or we might issue a press release to the news media. Post content on a company website. Publish a company announcement internally. Those are basic public relations functions. In this class, let’s think about the process of publishing communications, in whatever form, as Functional Communications.
So what happens next? Communications does not begin and end when we push out a press release or post a blog. There is still an audience to think about. To be effective, our communications need to reach our intended audiences. Consider a press release. Our audience is not the press. Our ultimate audience for a press release – or at least the information contained in the press release – is our customers, investors, employees, stakeholders. Because we do not control the press, we need to be more tactical with the content we create and the channels we use. So in this class, let’s think about the reach and resonance of news with stakeholders, mainly customers, as Tactical Communications.
Are we done yet? Almost. We have defined two dimensions of communications. The first dimension is functional communication – information, for example, disseminated through our blog posts, internal websites, or press releases. The second dimension is tactical communication – the reach and resonance of that information with people. The third dimension of communication involves outcomes. Ultimately, how does information that reaches and resonates with people influence their perceptions about our company, cause or candidate? That is Strategic Communication.
Functional. Tactical. Strategic. We will refer to that framework throughout this class. Which brings us to PR theories.
Theory in practice
Let’s put something on the table and name it. Theories tend to be abstract. That, to some extent, makes them seem, well, boring. Let’s lean into that. Theories create foundations for building a discipline or profession. Consider the physical sciences. For most of us, the Big Bang Theory was a classic sit-com. For physicists, the big bang represents a shared understanding of the universe.
Theories also are pivotal in understanding the social sciences. In economics, we might study Rational Choice theory. In sociology, we might have studied Social Darwinism before the concepts were disproved. In the social sciences, theories form paradigms, a shorthand for understanding observable relationships. Theories also should provide frameworks for measuring those relationships.
To the extent that communications can evolve into a social science, theories would provide foundational paradigms with measurable relationships. Why does this matter to PR? Well, for one, PR for generations has been facing a fairly existential challenge. Namely, what is PR? So maybe our theories can help us answer that question.
First, let’s look at theories that address communications planning. Here are seven examples of PR theories related to communications functions, with sub-bullets describing how each theory is used in practice. We could think of these as functional theories:
Cognitive dissonance: People generally seek out and pay attention to media messages that do not threaten their established values and beliefs.
- Create messages that resonate with people.
Agenda building theory: The news media and well-known people can be leveraged to elevate a cause on the social agenda for potential change.
- Create communications for the press and other influencers to use with their audiences.
Indirect effects theory: Media effects are indirect because they are “filtered” through other people, such as friends and social groups.
- Try to generate favorable reviews or positive news coverage to gain this implicit third-party endorsement.
Situational theory of publics: Building strategic relationships for an organization involves understanding publics.
- Understand the people you are trying to reach and influence.
Framing theory: Journalists and editors can be influenced by public relations “frame strategists.”
- Frame key messages in your press releases.
Agenda setting theory: While the media can’t tell people what to think, the media can be effective in establishing what topics are talked about.
- Publicize your key messages through the press.
Limited-effects theory: The media have limited effects on people because many other factors intervene or mitigate the message.
- Assess media impacts within a broader framework that considers other things that influence stakeholders.
Simple enough. The functional theories provide us with some guidance on what PR does and why. Now, let’s step up our game. Here are seven theories that touch on how we use communications to reach and potentially influence people. These represent examples of tactical theories:
Contingency theory: Organizations behave in a variety of ways depending on the situation.
- This is becoming increasingly visible as companies take varying stands on social issues, partly to enhance their reputations. Now we are starting to think more tactically.
Excellence theory: This is a dominant public relations theory. It calls for symmetrical two-way communication between organizations and publics.
- This one is a bit aspirational – virtually all corporate communication is one way -- but it does consider both the communicator and the audience.
Media uses and gratification theory: People actively select and use the media to find information to make purchasing decisions or to be entertained.
- Make your communications interesting.
Selective processes: People generally seek information that is more attuned to their own values and beliefs.
- Publicize your organization and its products in news outlets that share your perspectives.
Two-step flow theories: Opinion leaders can have an effect on their followers.
- Tap into what are now commonly called influencers, including the press.
Diffusion theory: People make decisions or accept ideas following ordered steps: awareness, interest, trial, evaluation, and adoption.
- PR sometimes aligns to the better-known marketing funnel of awareness, consideration, purchase intent, purchase behavior.
Relationship management theory: Relationships must be mutually beneficial if they are to continue.
- This is a foundational PR theory. Mutual benefits. Keep that in mind.
What’s next? We need to reach for strategic. Keep in mind, we are defining strategic communication as information that reaches and resonates with people and influences their perceptions about our company, cause or candidate. Are there any theories that explain that dynamic? Here are five that come as close as any in terms of strategic theories:
Social learning theory: People use information processing to explain and predict behavior.
Elaborated likelihood model: People make decisions based on their level of involvement in processing a persuasive message; established beliefs are difficult to influence.
Hierarchy of needs theory: People pay attention to messages based on their personal needs, ranging from survival to personal fulfillment.
Systems theory: Organizations cannot survive alone. Stakeholders, such as employees, customers, and government regulators, must be dealt with.
Situational crisis communication theory: Crisis response strategies depend on the threat/crisis type and an assessment of the organization’s crisis history.
Are we there yet? Deep breath. Seriously, take a deep breath. That was a lot to process. Remember, the question on the table addresses whether we can define PR based on our theories. The answer to that question, to a great extent, is yes. And when we look closely, the theories and their applications in the profession expose some longstanding challenges and compelling opportunities.
Let’s start with the functional theories. PR for decades has relied on Agenda Setting theory as a foundation for media measurement. If the media shapes perceptions, so the thinking goes, we measure perceptions by measuring the media. More specifically, volume and tonality of news are proxies for reach and resonance of that news with people. Spoiler alert. Those are two different things.
Working our way to tactical theories, PR over the years has gravitated to Relationship Management theory and the concept of mutually beneficial publics. Some PR pros would go so far as to say the PR function represents the conscience of a company or organization. Assuming that’s true, how do we level that against PR’s reputation for spin? Mutual benefit is, to some degree, aspirational.
Now let’s get into the strategic theories. This is where we will align communications outputs to organizational outcomes. The father of PR, Edward Bernays, operated in this strategic space, doubling the size of the market for cigarettes, and unapologetically leveraging the mass media to reach and influence customers. That’s Systems Theory, sort of. On the flip side of that coin, news-driven crisis events have corresponded to inverse impacts – cutting sales in half in some cases. That’s Situational Crisis Theory, sort of.
Why sort of? Here’s the rub. When it comes to PR theories, there is still a critical gap between communications outputs and organizational outcomes. Intuitively, we know that news shapes perceptions that people have about a company, a cause of a candidate. But these theories do not explain that dynamic in ways that are measurable.
Bridge the gap
In class, we are going to plot these theories on a grid. On the vertical axis, we will look at communication outputs. Functionally, we communicate by crafting and publishing messages. We then drive those messages through channels – websites, the news media, even advertising – in an attempt to reach our audiences. Ultimately, some of that noise breaks through. Signals.
On the horizontal axis, we could plot communications outcomes. Those outcomes would include media that we generate – news, blogs, ads. Then we would consider stakeholders we reach – customers, supporters, voters. Then, ultimately, we would consider the impacts of the communications on our organizations – companies, causes, or candidates.
Will we find that PR theories explain what PR is and does? Yes, but. Because PR theories are largely pegged to communication outputs -- press releases and resulting news coverage, for example -- organizational outcomes are imputed. Ultimately, until we are unable to align communications outputs to organizational outcomes, PR at best would be considered a tactical function, theoretically speaking.
That’s not a criticism. That’s an opportunity. Theories have established our understanding of the physical sciences, and elevated applications of the social sciences. In the same way, theories that explain the relationships between Messages and the Media will elevate PR functions. Theories aligning Stakeholders and Channels will elevate PR tactics. PR theories the align communications-driven stakeholder Perceptions to organizational Outcomes will elevate PR strategies. That’s one way we can put theory into practice.
If this is all still too abstract, let’s make it real. Back to Elon Musk.
Tesla's PR problem
For a company the size and prominence of Tesla, PR at a minimum would manage an online newsroom for posting press releases and an investor relations page for publishing financial releases. Large companies also typically have blogs featuring stories about the company and its products, a landing page for journalists, and a page of executive bios and photos that could be downloaded by the press.
Tesla as of this writing maintains a minimalist external communications function. Its web site includes links to the required financial disclosures, a blog updated once a month, and photo stock of its products. Stories that typically would be written by PR staff are instead contributed by engaged customers. Online forums about the company’s iconic cars, solar panels and energy products are read-only, and largely consist of how-to advice and operating manuals.
In our framework, Tesla’s communications today could be characterized as bare-bones functional. The investor relations press releases meet regulatory requirements to disclose financial information. The press page consists solely of stock photos available for download “at your own risk.”
So, what happens when Tesla is in the news? In April 2021, that’s exactly what happened. The owner of a Tesla Model S hopped into his battery powered car along with a friend, and drove out of their cul de sac in a gated Woodlands, Texas neighborhood. Barely a quarter mile down the road, approaching a gentle curve, the car steered straight into a tree.
The high-voltage lithium-ion battery case under the hood caught fire, sparking an inferno that killed the two occupants, completely destroyed the vehicle, and triggered national headlines about the dangers of self-driving vehicles and battery fueled fires.
Reporters immediately reached out to Tesla for reactions to concerns raised by the crash, including what at that point was speculation that the car was being driven on autopilot, and misperceptions that the resulting fire could not be contained by the local fire department for hours. Who was on point to field the reporters’ questions?
Elon Musk, through his Twitter feed.
And that’s the rub. Elon Musk did not shut down Tesla's PR. He shut down a communications conduit for the press, which he seems to view as a constant antagonist,. Ultimately, Car and Driver set the record straight on the accident and issues surrounding the highly volatile batteries.
Clearly, Tesla has a PR problem. And how did the PR profession respond to this snub? With a grave warning about setting an “extraordinarily dangerous precedent” with “dramatic reputational ramifications” threatening the “public’s fundamental right to know.”
During class, we’ll talk about how Elon Musk's decision to dismiss his media relations team and marginalize PR has played out for Tesla – and for PR.
Welcome to PR Case Studies.
So here’s a question for you:
Does Elon Musk need PR?
Post your response under either the yes or no thread below, and tell us why.