H&M and its communication strategy

The characteristics of the corporate communication of an organisation depend upon the standards and the structure of market it is competing with. This report provides a critical analysis of H&M’s Corporate Communication Strategy taking different frameworks and models into consideration and successfully applying it on the organisation. Today H&M has about 2206 stores widespread over 38 countries all over the globe. So it becomes really very significant for the organisation to have an efficient communication strategy. This report portrays the efficiency of communication strategy of H&M.

Introduction

According to Joep Cornelissen (2004, p.23) “Corporate communication is a management function that offers a framework and vocabulary for the effective coordination of all means of communications with the overall purpose of establishing and maintaining favourable reputations and stakeholders groups upon which the organisation is dependent” .In other words we can say that the Communication strategy of an organisation performs an essential role in the growth, unification and maintenance of different stakeholder groups, its Image, Reputation and Identity. Cornelissen has summarised corporate communication via historical vista. He viewed that every organisations engaged through communication with the number of groups in environment to stay economically afloat in the early 1900s. In the 20th century, the job of managing communications had been determined principally via public relations and marketing functions. But this being an intrinsically parochial approach, the contemporary figures of communication management have consolidated these divisions into the extensive corporate communication function. Moreover due to the shift from inflexible to flexible market scenario and growing competitive marketplace, this jointly with the greater call from society for ‘corporate citizenship’ has resulted in thrusting many organisations into stakeholder management strategies. He specified corporate communication to be the management function that has come to fulfilment in this stakeholder era and to establish and administer relationships with the stakeholder groups upon which the organisation depends economically and socially.

Riel(1995,p.26) has defined “Corporate Communication is an instrument of management by means of which all conscious used form of internal and external communications are harmonised as effectively and efficiently as possible, so as to create a favourable basis for the relationships with the groups upon which the company is dependent”

H&M opened its first Hennes store in Vasteras, Sweden in 1947. At first it sells only women’s clothes but in 1968 with the takeover of Mauritz Widforss, it began to sell both men’s and women’s clothes and the name were changed to Hennes and Mauritz.

Corporate Communication Strategy of H & M

At present H&M is operating in 38 countries having 2206 stores (30 Nov. 2010) with 76000 employee working on the same philosophy i.e. to provide fashion and quality at the best price. H&M carry out its strategy by focusing on three main characteristics of business ((AR1 2008) :-

Price: – H&M controls price by limiting middlemen, buying in outsized quantity and appropriate merchandise and sustaining effectual distributing process.

Design: – The designing of the products is done in-house and production is totally outsourced.

Quality: – Main focus is on superiority with widespread testing and warranting less environmental harm.

The Corporate Communication strategy of H&M can also be well explained by “The total communication domain” model by Aberg, L., (1990). The model looks like a wheel having four sections:-

1 Support of Core Operating:-

H&M most valued assets are its employers working in the organisation which could be well understood by the statement issued by its CEO. He said that it is only its employee who makes its corporate strategy possible. He stated that H&M delegate a lot of corporate responsibility on its employers and they boost people to take own steps and initiatives. (AR1, 2008)

2 Profiling

H&M arrange a seminar both at home and abroad in order to understand various cultures, arrange exhibitions and inspires employees to study fashion magazines, watch movies and many more things.

3 Informing

H&M informs the stakeholders about the rectifications of internal as well as external information regarding the activities.

4 Socialising

H&M cheers its employees of various ethnic groups to work collectively and to gain experience and acquaintance from one and all.

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External and Internal Communication

External communication is the method of information outside the organisation.

Bovee and Thill, 2005 “The external communication links the organisation with the outside world of customers, suppliers and investors”. H&M use the following model for the effective external communication. H&M conveys all the newly made products to the customers by the medium of Newspapers, Magazines, and Websites etc. H&M don’t have any industries but it works with 800 suppliers and around 2700 production units. H&M keeps transparency by publishing monthly, quarterly, half yearly and annually the financial reports. It organises general meetings annually.

Customers

Suppliers

Investors

H&M Stakeholders

Environment and Community

Internal Communication is a method by which the exchange of information takes place within an organisation. Every employee of an organisation is it the director or a small employee has some information that needs to send both internally and externally. The internal communication system has transformed to downward, upward, horizontal and diagonal communication from the downward communication. H&M everyone is approachable to one another and that clearly shows that everyone has got equal status in H&M. This is known as Lateral or Horizontal Communication.

H&M’s Internal Communication model can be explained by using Evan,1990 model.

Corporate Identity, Image and Reputation:-

Corporate identity is described as the tangible manifestation of the personality of a company. (Gregory and Weichmann, 1999, p.64) has defined Corporate Identity to be ‘a visual statement of who and what a company is’. The Berkigt and Stadler model of corporate identity (Cornelissen, 2nd edition, p.67) explains the H&M’s corporate identity. The model illustrates H&M’s organisational culture, its mission, vision and how it wants to be recognised as by the stakeholder groups outside organisation. The H&M communication aspires to assemble the brand in the long and the short term as well as communicating its offer. Costumers should be acquainted with what H&M stands for, i.e. ‘Fashion and Quality at best price’. H&M do a lot of heavy marketing of its diverse products to attract its targeted audiences and convey them what H&M stands for.

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The Birkigt and Stadler model of corporate identity

According to Dowling, 1986, Corporate Image can be defined as ‘a set of meaning by which an object is known and through which people describe, remember and relate to it as a result of interaction of a person’s beliefs, ideas, feelings and impression about an object’. The corporate image of H&M can be explained by applying the corporate image model of Dowling. H&M provides its employees an open door policy in order to put forward any work related issues to the management H&M consider open and constructive dialogue with the trade unions as an essential aspect and it has a positive experience of it. Examples include its agreement with Union Network International and European Works Council (AR1, 2008).

H&M gives key focus on skill development of its employees by providing training on customer service, CSR, garment handling etc. (H&M, CSR, 2008, p.47).

Formal Communication Policies

Employee’s image of the company

External group image of company

Organizational culture

External interpersonal communication

Previous product experience

Support by the members of distribution channel

Marketing media communication

According to Balmer, 2001 Corporate Reputation is “enduring perception held of an organisation by an individual, group or network”. H&M uses its brand image and reputation for taking advantage over its competitors and to satisfy the different stakeholders.

Internal- The Role of HR and corporate communication

It is always seen that the work of role of HR is never given much prominence in wider communication strategies. HR departments are mostly excluded from the spheres of departments of communications.

H&M is operating its business in 38 countries and their staffs come from culturally widespread background. Whenever H&M opens any new store anywhere, it employs the local staff. Right form the process of recruitment to the process of rotating jobs, rewarding employees, developing guidelines etc, HR plays an important role. Turner (2003, p20) has given a model that links HRM with performance. Here the author has suggested good communication to attach the HR policies and HR strategies. For the HR practises the author has suggested effective management of people to the line managers and for performance he has suggested effective communication of good people practise which is quite important for H&M which is a big MNC.

Role of technology in corporate communication:-

Oliver (1997, p128) has given a communication framework related to the IT technology. The framework shows the cultural values and beliefs aligned with the vision of the organisation. He has put forward a model which is designed by Goldberg and Sifonis named as “Communication Framework” which depends on hypothesis of management taken on intuitive ground and should be imparted using internal and external stakeholders. H&M is using smart technology like semacode bar through their mobile phones so that they can products shown in the advertisements instantly. It is an outstanding utilization of the technology.

Culture and its influence in corporate communication

The culture clarifies the models of hypothesis and behavioural statements by humans for their environment whether it is a state, a local community, a market or an industry. No doubt a firm render guidelines, hand-outs and norms in the indigenous language but still it requires more than just the translation. To tackle it H&M chose and recruit present and future employees on the basis of culture where it is operating. This help in creating organisational culture in H&M which in turn helps in efficient management, inspires employees for effective teamwork and provides opportunities to them for growth. H&M venerates the local customs. H&M has a task oriented culture. It pays much emphasis on local recruitment so as to fit in the countries organisational culture. “Think globally and Act locally” is the success reason for H&M or we can say H&M is Glocal.

Determinants of Effective Communication of H&M can be demonstrated as (Linda Beamer, Iris varner 2001 p,351):-

1 H&M trains Employees at different level so as to enhance their intercultural business communication skills.

2 H&M send top employees to foreign subsidiaries which is more productive.

3 H&M starts training employees from the age above 16. This means the employees are more flexible and easy to afford.

4H&M carefully looks for employees not just with the technical skills but also the one who can fit in the culture and stimulating frameworks.

5 More important, H&M creates an atmosphere where the employees much freedom to express, speak and be open minded.

Determinants of Effectiveness of Message

Conclusion

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The various Frameworks, the models and the Approaches shows the advantages and the disadvantages which depends on the organisation on which these frameworks and models are applied. H&M functions in a very high competitive environment. H&M enjoys outstanding corporate identity, image and reputation. The various frameworks and models used evaluates the effectiveness of H&M’s communication policies and its communication internally and externally. They also reflects the comprehension of the various communication policies and reflects the requirement for efficient communication in modern era. H&M is using latest technology for its effective corporate communication. H&M is a glocal brand that works globally but acts locally.

To conclude wecan say that H&M has a very effective operational communication model to administer near about 76000 employees from 38 countries working in 2206 stores.