Business Strategy

Business Strategy King Digital Entertainment Company

King Digital Entertainment is the company that developed Candy Crush, which is a globally popular mobile game (Wilhelm). The company has registered rapid growth in the past few years, particularly during the years between 2011 and 2014; the company’s revenue generation grew from USD 63.9 million in 2011 to USD 1.88 billion in 2013. During the same period, the company’s active user count increased from 30 million to 408 million, as of the last quarter of 2013 (Wilhelm). About three-quarters of the revenues of the company accrue from the mobile channel, which demonstrates the centrality of the mobile channel to the company’s business strategy (Chapman). The company employed a very unique strategy in the already saturated games market; it developed and concentrated on a handful of games, which were well received in the market (NBC News). The positive reception and popularity of the games can be attributed to the company’s competitive pricing of its products.

Business Level Generic Strategies

The main business level generic strategies used by King Digital Entertainment include cultivating more competitive advantage over competing companies, through maximizing the value offered to its customers (Kozami). The company does this through increasing the benefits enjoyed by their customers and also offering more service areas, which justify their pricing. In this area, the actions of the company include the development of games with a solidly social nature, the use of cross-platform technology infrastructure during the development process, the utilization of viral channels, and offering highly effective social features. Relevant to this generic business strategy, there is also game longevity and the cross-promotion of new games to the audience, which offers higher value to gaming customers.

The second business level generic strategy used by the company is that of differentiation, where the company has maintained the leadership position in the offering of games with distinctive qualities, which are customer-driven (Kozami). Towards putting this strategy into action, the company maintains a massive layer network, which informs product development and product purchases. The strategy is also informed by the fact that the company spreads the news about the social features of their products through viral channels, which ensure a wide scope of coverage. Additionally, the wide-reaching time-based campaigns help the company to develop products that are reflective of the needs of their customers, which also improves the experience of the customer.

The ways in which functional level strategies support generic strategies

Functional level strategies are the approaches used by the functional centers of a company, towards the realization of business and corporate unit objectives and strategies, through the maximization of productivity and the utilization of resources (Kozami). These strategies support generic strategies by streamlining the resources of a company and its productive capacity towards the generic strategies. For example, towards increasing differentiation, the resources and the productive capacity of the company is channeled towards research into new game designs and incorporating the changing needs of customers (Wilhelm).

Identification and discussion of business-level growth strategies

The business-level growth strategies of the company revolve around the exploitation of the differences of the target customers from the industry-wide balance (Kozami). The company realizes this through isolating a specific buyer classification, isolating their segment, and concentrating on the group to find its niche. In the real world case of King Digital entertainment, it has included diversifying into the mobile game portfolio and broadening the game portfolio through capitalizing on the mobile channel, which yielded 75 percent of the company’s revenues (Wilhelm).

Business Strategy Dissertations
Business Strategy Dissertations

The mission statement of the company revolves around the provision of highly engaging content to the different customer groups, in a way that matches their mobile needs at any time, place and on different devices. This mission statement is encapsulated in the growth strategy of the company, which revolves around increasing app-usage during different times and customer groups (Wilhelm).

The strategic plan of King Digital entertainment revolves around capitalizing on successful brands to foster the growth of newer ones, which increases the uptake of the company’s products within the market (Chapman).

SWOT Analysis


  • Capacity to change strategy; for example, the capitalization on the three leading titles: Candy crush saga, farm heroes saga, and Pet rescue saga to grow other game brands.
  • Focus on research and development, incorporating discrete campaigns.
  • The popularity of their games, particularly Candy crush saga.


  • Dependence on the success of the current game brands to foster growth
  • A streamlined niche market: more than 75% of revenues came from the mobile channel
  • Stagnant global sales


  • Developments in mobile gaming
  • Increased uptake of online and mobile gaming
  • Changing customer needs


  • Issues related to consoles
  • Increases in software copying and piracy
  • Strategic game release dates, to avoid the slowdowns of holidays among other events (Wilhelm).


Chapman, Llizette. IPO-Minded Gaming Co. Kabam Buys Phoenix Age; Largest Buy Yet. Business Strategy – The Wall Street Journal. 10 Mar. 2014. Web. 17 Mar. 2014.

Kozami, Azhar. Business Policy and Business Strategy Management. Second Edition. New Dellhi: Tata Mc-Graw-hill Publishing Company, 2006.

Wilhelm, Alex. Inside The IPO of Candy Crush Maker King Digital. Business Strategy Techcrunch, 13 Mar. 2014. Web. 17 Mar. 2014.

NBC News. Candy Crush Game Maker Aims to Hit $7.6 Billion IPO Sweet Spot. 2014. Web. Business Strategy Snapshot. 18 Mar. 2014.

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HR Performance Motivation

HR Performance Issues and Motivation

“Do not discipline employees who are unable to perform a task. Discipline those who are able to perform a task, but are unwilling or unmotivated to succeed” – SANS Leadership and Management Competencies course book in HR performance.

Understanding HR performance and the motivations of employees in order to identify and correct performance issues is fundamental to effective Human Resource management. Because of this, there is a wealth of research related to understanding the underlying causes and effects of good and bad employee performance.  The goal is to figure out where the problem originates and to develop ways to correct those problems.

HR performance and Motivation theories are abundant but all originate from the experts considered to be fathers of motivation theory; Maslow and Herzberg.  Early motivation theorists like Abraham Maslow and Frederick Hertzberg, laid the foundation upon which modern motivation theory is built.  Their work has guided research in this area of study since the late 1950’s and early 60’s (Hendriks, 1999).

Yet as the workplace has evolved and diversified over the last several decades, so have the perspectives on motivation theory.  The foundation has remained the same, but the perspectives are changing and elaborating what was original hypothesized by Maslow and Herzberg.

Take for instance Maslow’s need hierarchy theory. Maslow theorized that human motivation is driven by five needs: the need for shelter or safety, food and water, love and respect, recognition and fulfillment. These needs are organized in a hierarchy based on basic needs and “higher-order” needs; food and shelter are basic needs, recognition, love, fulfillment and respect are higher-order needs (Hendriks, 1999).

Hertzberg, on the other hand, proposes just two categories in his motivational theory.  Herzberg concludes that people are motivated by either extrinsic or intrinsic motives (Gagne’ & Deci, 2005).  Mainly, this theory says that either a person is motivated because they like what they are doing, or, they are motivated based on the expectation that they will be rewarded in some way for the work they are doing, this is key to promote good HR performance.

Both theories suggest that employee satisfaction is important to motivation and that in order to keep employees motivated, their needs must continue to be satisfied. Maslow’s theory falls short of prescriptive answers to questions of employee motivation, whereas Hertzberg suggests that employers can maintain employee satisfaction by considering the intrinsic and extrinsic motives of their employees when adopting rewards incentives and HR performance (Davoren, n.d.).

While Maslow and Herzberg’s theories in their broader applications have become less applicable as the workforce and workplace has changed, the fundamental basis of these theories is still sound and relevant to current motivational and HR performance theory.

Among some of the more recent expansions on motivation theory include the Commitment and Necessary Effort (CANE) motivation Model, Self-Determination Theory (SDT) and the Cognitive Evaluation Theory (CET).  Motivation theory has been applied to understanding motivation in many different areas, including in sports, academic achievement and business.  These theories applied in business can help solve HR performance issues and improve employee motivation.

The CANE motivation model tries to incorporate the many different aspects of motivation theory.  It takes the best approaches of modern research, and combines them into one all-encompassing theory that can be used to understand the motivations of professionals with knowledge based jobs (Clark, 1998).  These types of jobs, white collar jobs that require some expertise and professional knowledge, usually involve incentives for attracting highly educated professionals.  Understanding the interaction of rewards systems and motivators that guide those professionals is very important for HR recruitment.

Clark argues that some strategies in the area of organizational development overestimate the effect that employee incentives like contests and performance recognition have on employee motivation (Clark, 1998).  These strategies are widely used as a means to increase worker productivity.  However, some research studies have suggested that studies that show that these strategies work to improve motivation are “fatally flawed” and that these strategies may not have as much power to influence employee behavior as previously thought (Clark, 1998).

The CANE Model says that motivation and HR performance is two-pronged and intertwined.  First, motivation is based on commitment to a goal.  The second is the amount of effort that goes into achieving that goal (Clark, 1998).  If an employee is motivated by a commitment to achieving their goal, he or she will remain focused on that goal even if they are tempted to focus on other less important goals. Once that level of commitment is achieved, the effort needed to achieve the goal, or the “Necessary Effort”, will sustain the motivation to complete the task.  If the task is perceived as important, then the necessary effort to complete the task is tied to its importance.

Though Maslow and Herzberg’s theories are becoming outdated, the CANE Model falls short of unifying motivation theory into one model because of its limitations in broad application.  It is too broad to explain the nuance effects that culture and diversity have on individual definitions of commitment, effectiveness and control (Clark, 1998).  Not to mention that broad solutions to problems of motivation in the workplace can only be identified by this model; applying those solutions to specific job  performances is more difficult and requires more specialized solutions.

Self-Determination Theory has evolved not only through theoretical analysis but has also held up in empirical studies.  SDT relies heavily on needs based theory, but the needs are more psychological in nature.  Satisfying these psychological needs, according to Self-Determination Theory, motivates behavior and also elucidates the processes that direct action (Gagne’ & Deci, 2005).

In this theory, by determining underlying psychological needs, employers can appeal to the intrinsic motivations of employees to correct performance issues and to increase motivation.  Intrinsic motivation is driven by internal satisfaction.  This involves the motivation that comes from being engaged in an activity that brings personal satisfaction.  It is unrelated to any material reward.  An employee is motivated by a psychological need to be challenged or to feel a sense of accomplishment (Ryan & Deci, 2000).

Since all behaviors are at their core driven psychologically, research in the area of Self-Determination Theory has tried to discern which of these psychological needs are being fulfilled by intrinsic motivation.   What has been concluded is that intrinsic motivation can be encouraged and facilitated by environment since intrinsic motivation is not caused but rather “catalyzed” into action when the conditions are right (Ryan & Deci, 2000).”

HR Performance
HR Performance

Lastly, Cognitive Evaluation Theory (CET) which is one aspect of Self-Determination Theory finds that intrinsic motivation can be produced by offering encouragement and feedback that satisfies a sense of accomplishment and competence in employees (Ryan & Deci, 2000).  This can be done using rewards for achievement; a bonus for timely turnaround or for reaching a sales goal.  But employees can also be intrinsically motivated by words of encouragement that satisfy the same psychological need for feeling competent; a pat on the back or a ‘good job’ goes a long way.

Work performance is directly affected by job satisfaction and motivation.  The work performance is the outcome.  When working from the intrinsic motivation model, appealing to the internal psychological needs of employees can increase job satisfaction, which in turn sparks motivation and finally produces an improved work performance.  Understanding the means to increase job satisfaction is the crux of resolving performance issues and positively motivating employees.

Solutions to performance issues should be evaluated at all levels.  Just because an employee is not performing satisfactorily doesn’t mean that the problem lies with the employee.  Sometimes, the problem is in management style or a lack of resources to do the job right.  These things can exacerbate poor performances when the employee feels that they are not being given the proper tools to complete their job or receiving the necessary feedback to do the job correctly (Lister, n.d.).  By simply rewarding exceptional behavior or providing constructive feedback for poor performance, an employer can improve job satisfaction and thereby resolve performance issues.

Therefore, assessing the needs of the group can allow employers to predict how those assessments will effect “job satisfaction and work outcome” (Gagne’ & Deci, 2005).  Also, evaluating the types of needs that are being satisfied can affect job satisfaction and outcome.  Herzberg presents two different factors in employee motivation.  There are hygiene factors, the more superficial needs, and the motivation factors, which include more intrinsic motives.

Among hygiene factors that Herzberg identified are things like salary and work conditions.  Motivation factors on the other hand, include things like personal achievement, opportunities for promotion, and a sense of responsibility (Hendriks, 1999).  These factors have a direct and indirect effect on job satisfaction and performance.  Hygiene factors according to Herzberg’s theory mostly affect motivation in a negative way; by the very absence of things like good working conditions and status, job satisfaction is decreased (Hendriks, 1999).

Consider a garbage man whose job performance has gone down.  His work has slowed and he seems clearly dissatisfied with his job.  Upon evaluation, HR has discovered that the employee is dissatisfied with his salary.  He has been on the job for several years without promotion and without pay increases.  According to both Maslow and Herzberg’s theories of motivation, his job dissatisfaction is rooted in one of his intrinsic and basic needs not being met; salary, food and shelter.

But further analysis supports Herzberg’s theory that there is a second prong to this employee’s dissatisfaction and poor HR performance.  He has not received a promotion, which is more than mere dissatisfaction with his salary; it implies that he is dissatisfied because he is not receiving the recognition that he feels that he deserves for the time and commitment he has given to his employer.  By not relating to the psychological need for recognition, which has its own intrinsic reward for the employee, the employer is partly to blame for the performance issue and lack of motivation.

To resolve any HR performance problem, the employer must first identify the causes of the problem and then seek to improve job satisfaction through proper motivation.  In this scenario, showing that management cares about his input and recognizes his many years of contribution by giving him a raise or a new promotion or job title, can help to resolve those performance issues by appealing to the intrinsic and extrinsic motivations of the employee.

Works Cited

Bong, K. (n.d. ).  HR Performance Management Laboratory.

Clark, R. E. (1998). Motivating HR Performance – Diagnosing and Solving Motivation Problems. Performance Improvement. Los Angeles: University of Southern California.

Davoren, J. (n.d.). What Types of Rewards Would Motivate Workers in an Organization?

Gagne’, M., & Deci, E. L. (2005). Self-determination theory and work. Journal of Organizational Behavior, 331-362.

Hendriks, P. (1999). Why Share Knowledge and HR Performance? The Influence of ICT on the Motivation for Knowledge Sharing. Knowledge and Process Management , 91-100.

Lister, J. (n.d.). Examples of a Motivational and HR Performance Issues in an Organization.

Pintrich, P. R. (2000). An Achievement Goal Theory Perspective on Issues in HR Performance and Motivation Terminology, Theory, and Research. Contemporary Educational Psychology, 92-104.

Ryan, R. M., & Deci, E. L. (2000). Intrinsic and Extrinsic Motivations: Classic Definitions and New Directions of HR Performance. Contemporary Educational Psychology, 54-67.

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Sainsburys Operations Management

Sainsbury’s Operations Management

The major role of operations management is to make use of company strategies by ensuring that they are put into action, through various ways (Misra, 2008, p. 895. Sainsbury’s is one of the leading global retailers, competing with regional heavyweights such as Tesco, among others. The company was started in 1869, and right now it has about 1,200 supermarkets and stores around the globe, it has about 161,000 employees, better called colleagues (J-Sainsbury’s, 2014). Sainsbury’s has a team of managers, who are responsible for the implementation of important company strategies on a daily basis. Figure 1 below shows Sainsbury’s financial position in 2014.

Amount £357Million 14.5% 16.7% £12.7 billion 24 million 161,000
Description Underlying half year pre-tax profit Underlying half year basic earnings share The market share Group Sales (Half Year) Weekly customer transactions Employees (Colleagues)

Operational Context

At the helm of the operations board is the Chief Executive (Mike Coupe), then the following heads: John Rodgers (Chief Financial Officer); Helen Buck (Business Development Officer); Rodger Burnley (Retail and Operations Officer); Tim Fallowfield (Company Secretary and Corporate Services Director) and Peter Griffiths (CEO Sainsbury’s Bank), among others (J-Sainsbury’s, 2014). Most of the operations led by various managers in the company are aimed at enhancing the company’s position in the market, and making it more appealing to its clientele in the end. For instance, the retail company works on an ecosystem-related operations management plan, which aims at enhancing the conservation of fisheries (Sainsbury, Punt & Smith, 2000, p. 731). The company uses the Management-Strategy-Evaluation design as a way of focusing on all the important details that enhance effective operations management (Sainsbury, Punt & Smith, 2000, p. 731). Figure 2 below shows the operational data in terms of environmental conservation, even as the company continues to expand.

Description Annual Carbon emission reduction Electricity supply from green power Stores with natural refrigerant Solar Panel installed
Amount -2.4% 13.5% 166 107,396

External Influences

There are many factors affecting the performance of any business, such as Sainsbury’s, and most of them are external. One such factor is the availability of strong competitors such as Tesco. Market entrants also divide the market share, as they come up with brilliant strategies to win their customers. Just as it is for other competitors in the market, it is the aim of every operations manager to ensure that the major objective of each activity is high consumer satisfaction (Parker, 2012, p.45). Economic stability of different nations is yet another factor influencing the decisions of Sainsbury’s, especially in terms of expansion. Economic meltdowns, for instance, affect customers’ purchasing power, and this also applies to political instability. The power of the customers due to the availability of competitors and substitute goods also influence Sainsbury’s prices. This is the case too where the suppliers have an increased power, as a result of supplier collusion, among other factors.

The role and importance of effective operations management

Supporting the Company’s Strategies

That operations management is an essential part of a business is a fact, and this manifests itself in a number of ways. For instance, it is the role of the process of operations management to support strategies that are developed by the board of directors (Pycraft, 2000, p.43). In this approach, it is the work of the operations management to come up with the essential resources that are going to make it possible for company strategies to be realized at the end of every operation (Pycraft, 2000, p.43). It is the work of the operations management to come up with ways that will ensure the most sustainable production processes, which ensure maximum cost-cutting for the company, as much as the strategies would allow.

Operations Management Dissertation
Operations Management Dissertation

Product Positioning

It is the work of the operations management to ensure that the final product stand out in the market, as a better option among many. One thing for instance, is ensuring that the product is made through green processes, and that it is of high value, such as the fish. This positioning of products will come in the form of differentiation, where a company like Sainsbury’s sells the same product as Tesco, but makes it look different to attract more consumers. This will ensure more unique product details, and better prices, making it possible for the retailers to make more profits (HSC, n. d).

Product Differentiation for Varying Consumer Demands

The use of an effective operations management plan ensures that the business focuses on different customer demands (HSC, n. d). For instance, Sainsbury’s is a major retailer that deals in a huge amount of products, which target many different categories of consumers. In order for the company to focus on various consumers as effectively as possible, there is a need to ensure that a blanket strategy is developed, and implemented for the same. Such a strategy is then shared among the many departments of a company such as Sainsbury’s as seen above. Moreover, it is the operations management team that is responsible for the management of production processes up to when products reach the clients. For example, in the fisheries management plan stated above, it is the work of Sainsbury’s to manage fish rearing up to when various finished product are sold to customers (Sainsbury, Punt & Smith, 2000, p. 731). This is an effective way of enhancing product quality; hence, positioning products as of high value in the market.

Interdepartmental Integration

The availability of an operations management plan makes it possible for the business to integrate various departments (HSC, n. d). Just as stated above, the Chief Executive comes up with a strategy, which ensures that the various involved departments know their roles towards the company goals in each project. The manager divides work among the departments and shows them where they need to integrate with other sectors and how they would be able to do it. Without a well-strategized operations management, it would be difficult for the departments to realize how they are supposed to contribute in various roles during the processes involved. This merit makes operations management an important tool of avoiding conflicts and saving time in the process of product development.

Performance Objectives of Sainsbury’s

  • Great food
  • Sourcing with integrity
  • Respect the environment
  • Sound Community Social Responsibility
  • Great workplace for the “colleagues” (J-Sainsbury’s Annual Report, 2014)

4 Vs of Operations Management

  • Volume: Sainsbury’s provides more food for less money
  • Variety: Sainsbury’s provides different types of products in varying tastes
  • Variation: services can be online or on-site, and there are delivery services too.
  • Visibility: product labelling and shelf positioning makes it possible for store shoppers to see what they need. This is the same on the online stores. (Managers Door, 2013).

The operations performance objectives of organisations

Every organization has its own objectives when it comes to operations performance. For many retailers like Sainsbury’s customer service delivery is at the top of everything. For Sainsbury’s, for example, this all begins with the perfect treatment of its staff, using the slogan, “How we manage is how we serve” (Lewis & Trevitt, 2000, p. 6). According to this strategy, a satisfied staff member is usually capable of offering quality services to clients at all times. Therefore, the goal of high quality service delivery for customers becomes realisable. It is also the objective of organisations to ensure that the clients not only get quality services, but also receive quality goods every time they do transactions. For Sainsbury’s, this has been done through effective operations management, for instance through the fisheries management plan, where the production of high quality fish is ensured right from the farm level (Sainsbury, Punt & Smith, 2000, p. 731).

Colleagues who are satisfied always ensure that company goals succeed. Sainsbury’s has always wanted to ensure that its clients come back at all times. In a situation where delivery services are required, happy colleagues will always ensure time is kept (Annual Report, 2011). Through this annual report of 2011, the company found out that it was able to record at least 21 million transactions on a weekly basis, in the food sector, and this was higher than its previous fiscal year (Annual Report, 2011). This was a sign that the operations management’s goal of reduced prices and enhanced product quality worked perfectly, thanks to making Sainsbury’s a “Great Wok Place”.

Businesses also have the goals of enhancing their competitive advantage through growing in other ventures. Sainsbury’s has focused on this by developing non-food sectors to get a larger share of the market (J-Sainsbury’s, 2014). For instance, it developed the banking services as a way of grasping the financial market, to increase its growth. Moreover, other sectors such as the clothing brand, made it possible for the company to multiply its sales, according to the 2011 Annual Report. With these objectives, Sainsbury’s has been able to survive tough competition from many huge and small market entrants, to remain a force in the market, for many years. This is a sign of the important role an effective operations management strategy plays in the development of any business.


HSC., (n. d) Part 1: Role of Operations Management.

J-Sainsbury’s. (2014) Board Management

J-Sainsbury’s., (2014) Annual Report and Financial Statements, 2014.

Lewis, R., & Trevitt, R. (2000) Business: Vocational A level. Cheltenham: Stanley Thornes.

Managers Door., (2013) Top 5 – The Four V’s of Operations Management.

Misra, K. B. (2008) Handbook of performability engineering. London: Springer.

Parker, D. W. (2012) Service operations management: The total experience. Cheltenham: Edward Elgar.

Pycraft, M. (2000) Operations management. Cape Town: Pearson Education South Africa.

Sainsbury, K.J., Punt, A.E, & Smith A.D.M., (2000) Design of operational management strategies for achieving fishery ecosystem objectives. Journal of Marine Sciences, 57, 731-741.

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IT Outsourcing Commercial Banks China

IT Outsourcing For Commercial Banks in China

The issue of outsourcing has gained significant attention in recent years, in different industries. The different industries have varied factors that influence the scope and nature of outsourcing. China has been one of the most active destinations for outsourced processes and activities. This study focuses on the decision-making models and processes considered by bank managers in developing IT outsourcing strategies, in China. This is based on the increasing use of IT outsourcing in the banking and financial services industry in order to meet customer demands. China was selected because of the challenges it may present for decision makers. Its research objectives are to determine and assess the potential risks for Chinese commercial banks that want to engage in IT outsourcing activities.

The study seeks to assess the key decision factors that Chinese commercial banks consider in their IT outsourcing strategies. The methodology employed focuses on the strategic model, as well as the criticality of outsourcing to financial institutions and management attitudes. Analysis of the findings utilizes two constructs to assess the decisions made by commercial banks regarding outsourcing in China. The study proposes to accomplish its objectives using a qualitative study design that utilizes face-to-face interviews to collect data. The data will be coded and assessed using the two constructs of perceived risk and benefit in order to develop a new model. The findings of the study will be highly relevant and significant to medium-sized commercial banks and outsourcing services vendors.

The Global Outsourcing Landscape

The issue of outsourcing has grown significantly in the global economy. Firms are subcontracting an ever-increasing number of activities ranging from marketing, customer care, research and development, as well as manufacturing. As a result, some organizations have developed into virtual manufacturers that own the designs, but do not make any of the products. Vertical disintegration has become a significant aspect in international trade. The production of particular cars in the US includeonly 37% of their value generated within the country while the rest is from different places. When most people refer to the issue of globalization, they think of a manufacturing process that takes place across different geographical locations.

The purchase of raw materials and development of standardized products was the initial view of outsourcing, but it has changed significantly with time. Today, it refers to the selection of strategic partners to establish bilateral relationships in order to undertake investments that enable it to fit into the firm’s particular needs. As a result, outsourcing involves more than just purchasing goods and partners have to act with care. These complexities have made outsourcing difficult to measure at an international level (World Trade Organization, 1998). Some scholars on the topic have used trade in intermediate inputs or components as a proxy for what they have termed as global production sharing or intra-product specialization (Rapoport & Yi, 2001).

Although the measures used in assessing the growth of international outsourcing are imperfect, they show rapid expansion. The rapid expansion in outsourcing has been in key sectors and industries such As textiles, machinery, electrical equipment, and footwear. Outsourcing in intermediate products and business services are some of the principal areas that have received the most attention in relation to outsourcing (Baldwin, Irani, & Love, 2001).

IT outsourcing is one of the key growth areas in today’s business environment. This is because of the increasing significance of ICT to the operation and success of businesses. The size of the global outsourcing industry was estimated by Dataquest to be more than $100 billion in 2001 and growing at the rate of 20% per Annum. A survey of the FTSE index in the London Stock Exchange found a significant correlation between high levels of outsourcing and stock market performance. This highlights the significance of outsourcing and suggests that companies that manage it best are likely to reap the benefits. According to the research company Gartner, the worldwide IT outsourcing market is expected to reach $288 billion by the end of 2013, a 2.8% increase from 2012.

Definition of Outsourcing

Outsourcing simply refers to the contracting of work to outside firms. These firms can be domestic or foreign, and they enable the outsourcer to concentrate on key competencies. It involves business processes that the outsourcing firm feels can be accomplished more effectively by the outside firm as opposed to in-house. It involves different processes that may include manufacturing or the provision of services such as customer care, or marketing. Most companies engage in outsourcing in order to address challenges regarding the availability of skills and resources. They seek efficient and highly qualified outsourcing companies to provide services for their customers or internal operations.

Today outsourcing is used as a means of reducing costs and achieving strategic goals. Different models are applied depending on the focus of the organization. The changing waves of outsourcing are developed in response to changes in the business environment. The three main segments of outsourcing applied in today’s world are business process outsourcing, information technology outsourcing, and knowledge process outsourcing. The potential impact of outsourcing can be seen across various business activities and processes. Information Technology outsourcing involves issues such as programming, applications development, and coding. This is mainly geared towards enhancing the ability of organizations to access IT resources that may be difficult to exploit in-house. Outsourcing also involves the performance of a particular business processes and functions such as finance and accounting, back-office operations, processing, and administration, as well as contract functions. This is known as business process outsourcing with organizations seeking service providers to undertake their non-core processes to enhance efficiency.

Knowledge process outsourcing (KPO) involves offshoring of domestic business functions to lower cost foreign providers. It helps companies to gain competitive advantages by virtue of the type of activities and processes outsourced. Unlike BPO and ITO, KPO involves high end or knowledge-driven processes. These processes require specialized domain expertise such as financial management, risk assessment, insurance underwriting, clinical trials, legal services, or R&D. KPO is unlike BPO and ITO because it does not involve simple rule-based process expertise and leveraging economies of scale. It focuses on accessing the global talent pool in order to carry out processes that require specialized analytical and technical skills, as well as decision-making and judgment. KPO adds value by providing high quality expertise and superior productivity (Baldia, 2012).

IT outsourcing in different industries and organizations is undertaken because of the strategic advantages it offers to them. The central driver of IT outsourcing is cost reduction. It allows companies to access high quality services and processes without spending money in installing computing resources. The outsourcing companies provide services at relatively lower costs compared to what the company may access in-house. It also provides an opportunity to select the lowest cost provider to enhance profitability. IT outsourcing is also used because it allows access to superior skills and expertise. The outsourcing company has access to high quality work force to perform the different tasks effectively. The presence of superior skills from the service provider allows high service quality thus enabling the outsourcing company to deliver the same to its customers.

IT Outsourcing
IT Outsourcing

IT outsourcing is a significant aspect in relation to strategy and focus. It allows an organization to select the best-suited service provider to ensure that its services are in line with the needs. Outsourcing allows changes in capacity in line with organizational needs without incurring heavy costs. As a result, it enhances flexibility for the outsourcing company. It plays a strategic role in enhancing the capacity of the outsourcing company to meet its expanding needs for computing (Aalders, 2012).

Importance of IT Outsourcing In the Financial Sector

The financial services sector is one of the largest investors in Information Technology. The financial services sector requires significant computing resources in order to perform their activities efficiently and cooperation across geographical locations. The industry has increased utilization of IT resources in response to the financial crisis that affected the global economy (Bartels & Pass, 2000). Increasing market volatility has also made is essential for financial institutions to have effective IT systems for enhanced efficiency. Increasing competition, shrinking demand, globalization, and regulation require banks and other financial institutions to engage in system upgrades and integration. This activity is especially significant for banks involved in mergers and acquisitions because of the need to integrate the operations of the merging institutions. This has highlighted the need for financial institutions to evaluate their operating models, and make significant changes in processes as well as IT. This has prompted many banks to incorporate IT outsourcing as a way of enhancing their operational efficiency (Hirschhein & Lacity, 2000).

Financial and banking institutions dominate the global ITO industry. The banking and financial services institutions ITO market is worth US$ 100 billion and is dominant in the industry. Improving profitability and customer experience are the most critical objectives influencing IT investment for the banking industry currently. Some of the key themes in relation to IT outsourcing in the industry involve cloud computing, analytics, and social media. These technologies have a significant role to play in enhancing the operation of financial institutions.

The development of informationalization of Chinese commercial banks

The Chinese banking industry has grown significantly with the increasing demand for financial services. This has also increased demand for IT services in the sector enhancing growth of the banking industry IT solution market. The market is expected to grow at an annual compounded rate of 21.7% from 2013 to 2017 (Kearney, 2004). The market will be 9.6% higher than China’s banking industry IT market. The year 2012 was a milestone for the development of the banking sector with the launch of the five-year plan for development and reform of the financial industry. Measures for managing commercial bank capital resulted in the introduction of new capital regulations for the industry (IDC, 2013).

The interest rate market also developed significantly in 2012 because of the bidirectional expansion of floating ranges for loan and deposit interest rates. Financial reforms were a significant aspect in political debate, in 2012 laying the foundation for the development of the banking industry. It experienced significant development in 2012 with business and IT functions being highly integrated. The significance of technology in the industry became more apparent and stepped into a new phase of internationalization.

Indigenous innovation policy and widespread government investment have helped in enhancing technological advancement, in China. In spite of these advancements, China’s computer network and technology still lags behind compared to the advanced economies. Chinese financial institutions have been falling short of international competitors because of low financial innovativeness. This has reduced the ability of such banks to develop into world standard players.

The current situation in the banking industry in China is that the different institutions have realized the significance of technology. They have embarked on strategies for enhancing the utilization of technology in order to increase competitive advantage. The government has also started encouraging collaboration with international players to enhance their global footprint. Initially, financial institutions in China, especially the most sensitive banks, were used to doing everything internally (Daianu, 2005). The “opening up” policy of 1978 enabled Chinese companies to learn from foreign nations and interact in the global market (Hawkins & Mihaljek, 2006). They did not open up to working with foreigners because of their conservative mindset. This mindset is changing, and they are making efforts to enhance performance through the establishment of strong alliances. One such alliance is the collaboration between the Bank of America and China Construction Bank. The two banks sought to get in to collaboration to provide innovative credit card services in China. This collaboration was meant to leverage the financial strength of CCB with BoA’s leading credit card expertise (Bank of America, 2007). This collaboration provided the bank with the capacity to develop solutions that will enable it retain market share while meeting the growing market demand.

Problem Definition

It is critical for administrators and other decisions makers to understand the benefits of IT outsourcing for their organizations. They also require comprehensive information on the risks and potential pitfalls that their businesses can encounter while implementing IT outsourcing. There are many areas that require consideration including the model to be implemented as well as the best way to ensure the security of critical information.

Significance of the study

Most of the available literature on IT outsourcing has focused on advanced economies. China and other emerging economies have been assessed as the destinations for outsourced work from the West. There is limited research on the outsourcing drivers and issues for domestic organizations in China. This study will provide critical information on how banks and the financial services sector can benefit from outsourcing IT (Deloitte Research, 2003). It will also shed light on the considerations made by the administrators and other decisions makers before outsourcing their IT functions. This will play a critical role in aiding companies that provide outsourced IT services to know how to attract commercial banks as clients. It will guide them on the aspects that they have to consider. This will enhance their competitiveness and attract high-value clients such as financial institutions or commercial banks.

The study is also essential in providing a clear understanding of the political economy and the business atmosphere surrounding the financial services sector. The industry is highly dependent on the government, and there are key political factors that require consideration in strategic decisions (King, 2005). The current study will highlight the political factors that have to be considered by decision makers in the financial services sector. This will aid in understanding the considerations that organizations have to remember in order to benefit from outsourcing in the financial services sector.

Purpose of Study

The background information on the banking industry and developments in relation to IT outsourcing show that significant thought is put into such decisions. The managers have to assess critical information regarding their operations as well as the market in order to benefit from outsourcing. It is clear that financial institutions will benefit from outsourcing y ensuring that they implement key strategies effectively. This highlights the purpose of the current study, which seeks to investigate the impact of different factors that influence decisions towards outsourcing strategies applied in commercial banks, in China.

Research Objectives

The research aims and objectives of the study focus on the decision-making aspects considered by managers in commercial banks when adopting IT outsourcing. The objectives of the study are:

  1. To determine the potential risks for Chinese commercial banks that want to engage in IT outsourcing activities
  2. To assess the key factors that Chinese commercial banks consider in their IT outsourcing strategies
  3. To investigate the strategic model that is most appropriate for outsourcing decision-making in commercial banks
  4. To assess the criticality of outsourcing to financial institutions
  5. Assess whether management attitude towards outsourcing influences their perception on the criticality of the strategy

Research Questions

The research objectives of this study will be accomplished by developing effective research questions to be tackled during the study. These questions will focus on the key areas that are significant to decision-makers in the financial services sector. The research questions to be addressed in the study are:

  1. What are the potential risks for Chinese commercial banks that want to engage in IT outsourcing activities?
  2. What are the key factors that Chinese commercial banks consider in their IT outsourcing strategies?
  3. Which strategic model is most appropriate for outsourcing decision-making in commercial banks?
  4. How critical do financial institutions consider outsourcing to be?
  5. Does management attitude towards outsourcing influence their perception on the criticality of the strategy?

Theoretical Framework

The hypothesis considered for this study is that commercial banks have to consider several key aspects before engaging in IT outsourcing. They have to take a core competency focus and ensure regulatory conformity in their operations. These are the two top factors considered by commercial banks when implementing outsourcing strategies. It is critical to consider that commercial banks also worry about the security of their critical information because of the privacy of customers. As a result, the decision makers in commercial banks have to consider the quality of work, as well as the security offered by the service providers. In outsourcing IT functions, in commercial banks, they focus on different factors that may influence the decision. Commercial banks have priorities such as security, quality of work, strategic aspects that they follow in selecting the model and the service provider. This study follows the model of perceived risks and benefits to assess whether they have a significant influence on the decision by managers. It utilizes a model adopted from (Gewald & Dibbern, 2009) to assess the influence of perceived roadblocks, risks, benefits and criticality in adoption of IT outsourcing for commercial banks. The study utilizes the model suggested from Gewald & Dibber (2009), but modifies it to ensure that the constructs of perceived risk and benefits suit the context of the Chinese financial services sector.

Literature Review

This chapter highlights the available literature on the use of IT outsourcing in different industries. Its focus is to show the areas that have been highlighted in previous studies. It will also emphasize strengths as well as weaknesses of the data or available information in order to show gaps.

Outsourcing in Emerging Economies

Outsourcing decisions on different organizations are based on different factors such as labor cost. The cost of labor and services provision is the main reason why many organizations outsource their non-core activities. This is because it provides them an opportunity to access high quality services at competitive prices. This occurs because most of the destinations for outsourcing services are low cost emerging economies that have an abundance of skills. They offer IT and other services at significantly low costs compared to other countries. This has played a critical role in making emerging economies significant destinations for outsourced work. The governments in these countries such as China and India have taken the initiative by encouraging their citizens to establish outsourcing companies (Yeats, 2001). Benefits such as tax breaks act as an incentive for the development of these institutions.

This has made emerging nations key beneficiaries of outsourcing because of their availability of cheap labor, high skill levels, and an appropriate environment for attracting FDI. Most of the clients for outsourced services are in advanced economies such as Germany, the UK, and US. Labor cost arbitrage due to the differential is the main aspect influencing outsourcing from these economies. The factors that influence the outsourcing of IT and other knowledge-based services also differ significantly from manufacturing. Different industries have varied factors and roadblocks that may influence their uptake of outsourcing activities. The factors influencing outsourcing among companies in the same country or region also vary considerably compared to offshoring across regions. This means organizations in emerging economies have to be effectively apprised with information on the quality of services provided as well as other factors that influence their decisions (Fowler & Jeffs, 1998; Ketler K. & Walstrom, 1993).

Benefits of IT Outsourcing

The main reason why organizations engage in IT outsourcing is that they can derive significant benefits that increase their competitiveness and productivity. Arguments on core competencies, comparative advantage, and transaction cost economics indicate that outsourcing has a cost aspect (Lacity et al, 2009). Managers who are motivated by expectations to generate benefits such as cost reduction, flexibility, and high productivity often see it as a rational decision. Outsourcing provides a significant opportunity to control costs by enhancing flexibility. This is because they can purchase IT capacity as required by their operations. Outsourcing companies have economies of scale and scope because they specialize on particular services or areas (Janko & Koch, 2005). This enables them to provide services at significantly lower costs compared to the cost incurred by their clients in doing the same in-house.

Outsourcing provides an opportunity for organizations to improve on their productivity by focusing on core competencies. They get access to a pool of highly qualified technical skills and knowledge for augmenting organizational gaps. The management of a company that outsources its non-core activities gets access to skills that enable the organization to enhance the productivity of its resources. This provides an opportunity for enhancing competitive advantage for the organization. This is because the organization combines in-house skills with those of the outsourcing vendor (Casale, 2001). Outsourcing provides significant benefits to the overall business performance through process improvisation and customer satisfaction.

The different studies on the benefits of outsourcing indicate that it is meant to provide tactical, strategic, and business benefits. One of the main benefits is flexibility because it enables the transformation of fixed to variable costs. This presents benefits that enable organizations to focus their activities to the benefit of customers and creation of value (Fisher et al, 2008; Yang & Huang, 2000). Some of the tactical and strategic benefits of outsourcing include efficient management of organizational knowledge. Improvisation of IT, business processes, and innovation provides benefits for organizations that enable them to meet customer demands effectively.

Risks of IT Outsourcing

Outsourcing is a highly lucrative business process because of the benefits it confers to them. It is critical to consider that the high payoff associated with outsourcing also involves risks that may hinder success. The growing trend of outsourcing involves a growing practice in terms of scope and nature. This situation presents a risk that client organizations face because of their reliance on the vendors for services. The client firm may become over reliant on the vendor of outsourcing for IT or other business needs. This over reliance is negative because it leads to the client organization failing to get the benefits of outsourcing (Duhamel, 2003;). This risk is exacerbated by the inability or unwillingness to provide the level of quality required. This leads to the client organization failing to get the benefits of outsourcing because of quality inconsistency (Marin & Verdie, 2003).

Another risk of increasing IT outsourcing is that the client firm may lose core competencies in the field. Organizations outsourcing processes or IT expose themselves to the risk of losing essential internal competencies, cross-functional skills, or innovation capacity. The client organization may also lose control over the processes or the vendor thus reducing its ability to meet customer needs. Engagement in an outsourcing contract also develops problems associated with adverse selection and agency theory. Adverse selection, failure by the vendor or low quality services can increase the complexity of business management. This may defeat the rationale of outsourcing because it makes business difficult for the client. A study by Rouse and Corbitt (2003) showed that management of vendor relationships is one of the main risks associated with outsourcing. Poor management of these relationships can result in reduced realization of the expected benefits and may damage the client organization.

Banking and financial services institutions have an additional set of challenges associated with the regulatory environment (Jinnan & Hualiang, 2010; Puga & Trefler, 2002; McLaren, 2002). They have to consider the legal obligation for services and information as well as reputational risks for issues such as lost data or poor service quality. Confidentiality and data integrity issues may arise with IT outsourcing in commercial banks (Gewald & Franke, 2005). These risks may result in many financial institutions shying away from outsourcing their IT because they represent very heavy potential losses. These risks span the wave of outsourcing from ITO to BPO and KPO, but the degree of impact from each factor differs based on the type of outsourcing and the organization.

Theoretical Models Applied In Prior Research

Prior research on the factors influencing outsourcing decisions in different organizations have focused on management attitude towards outsourcing. The perceived risk theory (Peter & Micheel, (1976) has played a critical role in determining such studies. Other decision theories that have been used in assessing decision making regarding IT outsourcing include resources theories and innovation diffusion theories. Cost-risk analysis and Delphi model expert opinion have been applied in prior studies on the decision-making process involving outsourcing activities. Four theoretical constructs based on perceptions have been applied to conceptualize different factors that influence outsourcing decisions. The Jain and Natarajan (2011) study used four theoretical constructs of perceived benefits, perceived roadblocks, perceived risk, and perceived criticality.

Research Methodology

This section of the paper highlights the strategy applied in addressing the research questions by collecting and analyzing data. The research methodology shows the participants of the study as well as the data collection and analysis plans. The study is designed qualitatively because it relies on the development of a new decision-making model addressing influential factors. The qualitative study relies on in-depth interviews that seek to understand the factors influencing management decisions in commercial banks regarding IT outsourcing.


The participants for the study are Chief Information Officers (CIO) from major banks in China. The focus on CIOs is because they are involved in decisions regarding IT, which makes them appropriate for this survey. The study focuses on major banks in China because they have considerable IT operations and they would benefit the most from outsourcing. This strategy aids in assessment of the political economy in China in order to develop decision models that fit into the environment.

Data Collection Plan

The data will be collected using open-ended interviews that will be conducted on CIOs in major Chinese banks. The interviews will be conducted face to face in order to provide opportunities for getting additional information. The respondents will be selected using convenience sampling and will rely on getting qualitative data from a small sample of CIOs. The respondents selected will be given an opportunity to expound on the questions asked in order to provide qualitative information on decision-making regarding IT outsourcing.

Data Analysis Plan

The data collected from the interviews will be coded in order to prepare it for analysis. This will make it possible to assess the responses and analyze them according to the model selected. The responses will be coded to show the categorizations of perceived risk and benefits from the respondents.

Anticipated Findings

Anticipated findings from the study will be beneficial to medium-sized commercial banks in China. They can use the results of the research to evaluate their situation before making outsourcing decisions. This will aid them in developing a strategy to avoid undesirable consequences and costs. Development of a decision model for assessing outsourcing strategies will help banks to gain a competitive advantage over their competitors.

IT outsourcing vendors can also benefit from the findings of the study. Knowing what the customers need is a fundamental requirement for any business. IT outsourcing vendors will gain information how to attract the proper market segment and develop efficient products. This is especially beneficial for foreign vendors because they will gain an understanding of local preferences and risk endurance. The government and regulators can also benefit from the findings of this research by gaining insight on the deficiency of regulations implemented.

Limitations of the study include the use of a considerably small sample. This may reduce the reliability of the data and its generalizability in the population. Another limitation is that institutional information is unreliable. For instance, data from the banking industry indicates that Chinese Banks are performing brilliantly, but the market doubts the accuracy of these figures because of the institutional ineffectiveness of poor information and regulation (The economist, 2011).


This study will focus on the decision-making processes and models considered by bank managers in developing IT outsourcing strategies. This is based on the increasing use of IT outsourcing in the banking and financial services industry in order to meet customer demands. The research objectives of this study are to determine and assess the potential risks for Chinese commercial banks that want to engage in IT outsourcing activities. It also seeks to assess the key factors that Chinese commercial banks consider in their IT outsourcing strategies. It also focuses on the strategic model, as well as the criticality of outsourcing to financial institutions and management attitudes. The study utilizes two constructs to assess decision-making models on IT outsourcing in commercial banks, in China. The constructs proposed for the study are perceived benefits and perceived risks of IT outsourcing. The study is accomplished using a qualitative study design that utilizes face-to-face interviews to collect data. The data will be coded and assessed using the two constructs of perceived risk and benefit in order to develop a new model.


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Public Relations Dissertation

Public Relations

In society, in all platforms of work and life, the application of public relation as a job as well as a term is considerably significant. Similarly, the importance of public relations as a vital form of communication cannot be neglected. The core purpose of public relation is to generate concrete public image through a communication model. Thus, the whole country obtains a positive image as a tourist destination and this aspect of public relation is the most beneficial for the tourism industry.

The period of economic recession turns the attention of various countries towards the promotion of travel and tourism industry. A new marketing approached was devised to attract more and more tourists for a specific destination. Obviously, tourists travel to a familiar tourist destination, in this regard; the modern perspective of tourism marketing plays a vital role. Nonetheless, the application of marketing tactics, techniques, and knowledge fortify the foundation for portraying an attractive picture of a specific tourist destination, which helps to motivate tourists and develop comparative advantages.

Marketing mix is an inseparable part of promotion, which facilitates marketing for the growth of the destination. Likewise, in the promotional mix, public relation underpins the several weak spot of the tourism business. Clearly, public relation is an arresting and consistent approach depicting the product and pulls the attention of guests towards a specific destination through a gaining and competent method.

However, despite understanding the impressive importance of public relation, no mandatory attention has been put forth, at national and international level, by the present and past researchers. Moreover, in tourism about public relation very brief material is available, which is comprised of very few articles and manuals. In addition, no authentic textbook or scientific publication has been written regarding the importance of public relation in tourism. Nevertheless, more emphasis has been given to marketing in tourism; thus, public relation has been treated as a segment of promotion and marketing.

The public relation theorists and the marketing theorists have a contradiction between them regarding the status of public relation as a branch of marketing or as an individual separate subject. The public relation theorists think that owing to the public relation’s large scope it should be treated as separate subject. The American public relation researchers have given this classification of marketing tools.

The current paper has been organized in the following manners:

  • Introduction
  • Basic theoretical postulates about marketing of a tourist destination and its relation with the communication of the market
  • Public relations
  • The utilization of media in public relation for travel and tourism exposure
  • Conclusion

Public Relations Definitions

BIPR (The British Institute of Public Relations) describes public relations as maintaining common consideration between an organization and its publics through purposeful organized and continue endeavor for establishment is public relations. According to the definition, public relation is not a random activity instead; it is designed and structured on considerations of an organization and its publics. Thus, public relation is comprised of outcomes, analysis, expectations, considerations, attention and research.

To start just the plan is not sufficient a continued endeavor is mandatory. The purpose of plan must be achieved logically. However, when circumstances are not favorable such as poor economy, volatile politics and similar aspects the target becomes more difficult.

PRSA (The Public Relations Society of America) defines public relations, as the purpose of public relations is to develop and generate common motives among institutions and groups.

The book “Effective Public Relations” is measured the bible of public relations in America. It is written by Cutlip, Center and Broom (1985) describes public relations as, public relations is a function of management that maintains, recognizes and institutes common advantageous attachments between an organization and its publics, obviously, the success of an organization depends on publics. Conversely, most of the organizations never feel that their success depends on the common association with publics. If the organizations neglects the fact of importance of its publics they cannot grasp the real success in business.

In his book, Frank Jefkins (1993), a British author explains public relations, to obtain goals related to common concerns public relation provides planned communication between an organization and publics inwardly and outwardly. This definition depicts a two-way communication inward and outward between publics and organization underpin through common purposes.

Variation In Public Relations

Nowadays, the approach of public relation has transformed significantly and has various functions. International Public Relations Association, which was founded in London in 1950, these Public Relations are comprised of organized, resolute and continued working through maintaining and establishing common consideration between an organization and its surroundings and the surroundings of an organization is public (www.

Public Relations Dissertation
Public Relations Dissertation

In the language of tourism, the description and parameters of public relations and its meaning have been defined as “in tourism the perception of public relations points towards all the functions implemented a tourism offer, for generating, in the public a positive opinion regarding all the functions, services, targets of the work, and work. Thus, public relation is an organized, pre-planned and mindful function that can affect the public pertinently (Senečić and Vukonić, 1997).

Moreover, it is important to recognize public relations as a different form of communication while describing the concept of public relations.

Public relation has been often classified under marketing through marketing and marketing communications theorists (Kotler, Bowen and Makens, 2001); however, public relations theorists (Cutlip, Center and Broom, 2003) observe it as a different management category. In any circumstances, on marketing process the effect of public relations cannot be denied.

In addition, there is a wrong perception about public relation that it is always classified in the group of advertising, publicity and media relations.

According to Deuschi (2007) who defines public relations, it is a function of management, which utilizes mutual communication and works to facilitate the public with the purpose to affect the opinion of the public; moreover, its purpose is to obtain concern and recognition for the organization.

The Association Of Marketing And Public Relations

Conversely, marketing is considered as a function of management, which directs and organizes all the activities of business by engaging the evaluation of the requirements of the customers and, thus, transforming buying power into a concrete demand for a specific product. Thereby, make it possible for the consumer to have it, thence, accumulating profit and obtaining different goals of business (Weber and Boranić, 2000).

However, without public relations marketing process cannot be perceived. Both the functions are very arresting for the growth of business and only their inter-connectivity make it real excellent outcomes for business.

Mostly marketing, communication, and marketing approaches have various kinds of public relations. The only dissimilarity is the targeted public as public is communicated directly. Nonetheless, the target public can vary according to the activity.

Specifically, for the current paper the author has chosen an outline from the most common kinds of public relations regarding tourism. They have been devised and separated by Black (2003) into fundamental categories, and this is comprehensively encircling all the important detail related to the target public within tourism destination scenario. They have been mentioned below:

  • Internal public relations
  • Association with state administration and government
  • Domestic public relations and community associations
  • Consumer attachments and international public relations
  • Publicity and media relations

The Principles of Malvin Sharp

A deep understanding of public opinion is necessary for a public relations practitioner. The understanding helps him/her to comprehend the variation of public opinion, he/she can recognize opinion leaders who have formal and informal opinion and he/she can develop a relation with them through particular messages. For maintaining favorable public opinion, Melvin Sharp (2000) devised the following principles to guide organizations:

  1. Although technology is accountable for the segmentation of current society, yet it can be implemented to access publics.
  2. For both external and internal publics the management of an organization’s communication is mandatory to make sure precise and appropriate comment because transformation, adaptation and adjustment are necessary for durability.
  3. According to law and social rights all stakeholders have the right to have all the information regarding decisions, which can affect directly or indirectly them; thus, accurate information should be provided for the welfare of all.
  4. The opinions and attitudes of the public, in complete operational atmosphere, is the base of social and economic strength of an organization.

Critical Elements of Public Relations

Wilcox, Ault and Agee (1998) have recognized seven practical and critical elements of public relations. These are very helpful in monitoring public opinion in public relations:

  • Advisory committees: The committee is inclusive of prominent citizens to offer advice regarding policies, public relations programming and concepts.
  • Staff meetings: To impart knowledge and experience through sharing the obtained knowledge of informal research through staff meetings is a good practice.
  • Sampling/polling: For the organization and its policies a deliberate and organized research regarding the attitudes and interests of public is polling.
  • Telephone calls and letters: After tracking the patterns that might be helpful for essential changes in company policies this genuine source emerges.
  • Media reports: These can be obtained after monitoring the media for editorials, OP-Ed pages, and letters to the editor and through news stories.
  • Field reports: Sales people, customers and various patrons submit complements, suggestions, questions and complaints, which can be achieved through field reports.
  • Personal contact: Friends, company employees, customers, opinion leaders, consultants, and business associates are the people that can be accessed easily through a phone call or by obtaining an appointment.

Destination Marketing and Public Relations

In destination marketing and in promotion of tourism, the author of this paper has researched extensively and has discovered that public relation is a noticeable segment for promotion of tourism, which influences directly all the functions of travel and tourism. Moreover, community tourism organizations and national tourism organizations during organizations of marketing management of destination can take advantage of public relation for making an effective strategy.

Conclusively, the importance of public relation is undeniable, in this regard; the following hypotheses have been tested:

  1. The application of public relation is not in the right direction
  2. Public relation has a separate identity and is different from advertising
  3. For promotion of a tourist destination regarding destination marketing it is very helpful

The clarification of the concept is necessary prior to describe the demand of public relations within the parameters of tourist destination marketing. Marketing of traditional product is considerably dissimilar from marketing in tourism. In the features of supply and demand, this vital variation is hidden. Tourism is a type of service according to Mill and Morrison (1985), “What is sold is a non-material experience, and not material goods, which may be tested before use“(Cited Moutinho, 2005).

For the application of marketing in tourism, two methods are implemented. (1) For utilizing and establishing marketing as a foundation of business guiding principle for individual companies are accumulating advantages/profits through tourism market; (2) in utilizing and establishing as supporting force to business strategy, which is at the scale of an individual unit provides a fundamental approach regarding placements of organization through tourism (Senečić and Vukonić, 1997).

Stakeholders and Public Relations

According to the association with the organization, not many efforts have been made to recognize stakeholders, specifically, in public relations literature. Nonetheless, some segmentations of stakeholders are very simple such as internal and external publics. The best efforts to recognize all stakeholders through the public relations literature were made by Grunig and Hunt (1984) in their linkage model. To recognize relationship’s of stakeholders with an organization this model has four linkages normative linkages, diffused linkages, functional linkages, and enabling linkages.

The relationship between public relations, stakeholders theory and stakeholders management provide guidance in recognizing publics and important stakeholders. However, it is critical to know how much attention should be given to each stakeholder or how much they deserve.

Moreover, usually, public and stakeholders’ terms are implied as they are same but this is a vague concept. In the public relations and different literature of mass media public is recognized according to their association with the message while stakeholders are recognizes in business literature in line with their association to an organization (Winn, 2001).

The most popular definition of stakeholders is Freeman’s definition who states that if a person or groups of persons is affected by any action of an organization or they can affect the performance of an organization are called stakeholders (Freeman, 1984).

Media, Tourism and Public Relations

According to the freedictionary mass media represents the ways of communication that can easily access to great number of people quickly. The mass media means may be radio, magazines, newspapers television etc. To observe behavior, perceptions, beliefs and values of people sociologists study mass media. For instance, mass media impart knowledge about social evils and dangers such as young people learn how and with whom to have sexual relations because it may be dangerous due to the fear of AIDS. Mass media has immense power; it can turn loyalty of people against and in favor of political leaders. Several movements in the history are the contribution of mass media (chegg).

Inventors and modern technologies have made the media of current age inseparable part of human lives. The significance of media is undeniable and the impact of media on human lives is long lasting.

Television is the most common source of media. It is an important part of every household. Children of current age cannot live without watching cartoons and their favorite programs. They watch television without tiring for hours. These impressions of television screens become their friends and dreams. When they grow up and start going to schools their eyes catch the images of magazines and popular newspapers. Some of the images remain commit to their memories for years and some efface very soon.

The topic of media is very interesting and one can read it and define it for hours. There are several hot topics that attract the audience, obviously, everybody has a different taste and interest; therefore, people choose specific newspapers and magazines for their study. The dissimilar interests of people are politics, showbiz, sports and many more. The subject of media is very intricate and it has perceptible distinctions according to country, culture and politics.

Tourism is fragmented and intricate industry; it has several dimensions, which perform their roles in hotel chains, tour operators and air carriers. Therefore, smaller organizations at regional and local standards and national organizations have to solve their issues regarding planning, promotion and research at the national standards (Moutinho, 2005).

Certainly, the tourist destination marketing as an activity of business and philosophy of modern business attach the destination product to the market and, which occurs at two occasions: at the level of the organizer’s offer and at the destination altitude. In the present paper, the stress will be given on the destination altitude as the activities of marketing are, usually performed, at a lower level, by tourism organizations and by national tourism organizations.

In the marketing process, the most significant aspects are communication with the market. Kesic (2003) there are two fundamental approaches of communication:

  1. Mass communication
  2. Mutual communication

Mass communication is related to the media just as a liaison within the process of communication and it is generally points towards mass communication. According to Meler (1999), the promotional activities can be segregated into classified large groups.

  1. Fundamental promotional activities such as publicity, public relations, personal selling, sales promotions, and advertising.
  2. Derivative promotional activities such as “word of mouth” advertising, customer services, packaging, and designing.

The most liable bodies are community tourism organizations when at the destination level the communication/promotional mix and its function is considered. However, when the promotional activities are related to other countries, it would becomes the liability of the regional organizations and national tourism organizations along with local organizations because they are familiarized the domestic market and community.

In practice, the tourism workers implement all type of the communication or promotional mix. Nevertheless, most of the researchers and authors suggest that the utilization of public relations, promotions, personal selling and advertising are the fundamental of promotional mix and they are enough for the purpose.

When an organization utilizes editorial, stories, interviews and different kinds of writing material to promote a specific service or product to inform the public; it implements publicity. Through media coverage a product or service is highlighted. Definitely, this is the most vital and cost curtailing method to attract public.

The implication of publicity in travel and tourism is very common. It guides and motivates travelers and provokes them to choose one travel destination over another travel destination. Moreover, it is not just like paid advertisement instead it is an unpaid proposal. The characteristics of publicity are to provide information regarding a specific product or service. An effective publicity leads the customer to bookings and enquires.

The word media has countless meanings. It covers a variety of niches such as radio, television, internet, newspapers, magazines etc. Apart from common media after the arrival of Web 2, which is known as social media that is also an effective media for publicity? However, to select right media for the product promotion requires research and understanding of the market. It is the first important step to promote any product among customers. The organization or related staff has to identify the most popular media for the promotion of their product.

After the launching of the product publicity thorough any medium, the organization has to view the advertisement and judge its audience reaction regarding the product. This approach helps to recognize any flaw in the ad because mistakes can be made. Moreover, the organization recognizes the uniqueness or commonness of their product and it also identifies whether the selected medium can reach to the targeted audience or not.

During a survey regarding the assessment of the impact of social and other medium of publicity that are being implemented in the practices of public relations it was revealed that each year the medium are increasing. For some businesses, Facebook is considered the most significant social media in all public relations and communication endeavors apart from video sharing sites such as podcasts, electronic forums, blogs, YouTube, search engine marketing and Twitter. For organizing and managing an organization’s social media communication and blogs, public relations or communication is consistently the most important function of an organization.

In this regard, marketing is considered second, obviously. In addition, according to the practitioners of social media and other types of medium of publicity are incessantly improving their precision in truth telling, honesty, trust and credibility. Furthermore, the practitioners have observed that the new media serving effectively as a regulator regarding traditional news media and is influencing organizational and corporate culture clearness, which is enhancing a ethical and translucent culture. In addition, the people of public relations are spending more time in social media and blogging in an average workday. They are spending almost 35% of their working time in social media activities.

Social Media

 Some people still define the social media and other medium of communication similarly, though they are transforming into new approach. For any person social media is a method to include changes or improvement, assessment and commentary, via online provide and get real-time feedback, and publish digital creative content (Mark Dykeman, 2008). According to Joe Marchese (2007), there is a visible difference between traditional media per se television, radio, magazines, newspapers and social media. Although social media is not the media itself, yet it provides surrounding of conversation, consumption, distribution and discovery of the media. However, both the media have the capability to access to small as well as large audience. Nonetheless, a significant difference is cost difference of both the media, the traditional medium’s production cost is higher than the social media production cost. The social media only requires access to computer and the art of selecting and communicating with the audience.

According to the Pew Research Center (2005, 2008 & 2012), in 2008, for the first time in history people started to read news through online sources instead of traditional mass media. The American tendency of viewing information online exhibits that the trend is transforming; however, it is not surprising, for instance, now Americans subscribe newspapers only on Sunday and all other days of the week they read online.

In 1995, only 10% adult Americans were utilizing the web service; however, in 2009, 80% Americans are taking advantage of internet (Pew, 2005, 2008, 2012). In addition, the University of Southern California and its Center for the Digital Future state that the figures of Americans who are using internet are 82% (2010).According to the search results of Pew 57% of Americans have laptops and 88% have cell phones. Nevertheless, income, education, and age are the provoking factors for the utilization of internet. Moreover, in the mentioned demographic classification, recently, great increase of utilization of internet has been observed. For instance, Americans over the age of 65 almost half of them are utilizing internet 86% of them are very active and have contacts through email and 34% of them have social networks interactions. Furthermore, the younger generation is more active regarding the implementation of new technologies as compare to the older generation. The new generation use internet for specific purposes such as downloading movies, songs and books (Pew, 2005, 2008, 2012).

The most significant advantage in the internet promotion is its easy measurement because websites record the data of visitors’ quantity, their staying duration and can calculate the clicking rates. This specific feature helps the companies to assess the efficiency of the advertising campaign and what further improvement can be done for enhancement (Arkantos, 2007).

Another advantage of online promotion and marketing is its limitless boundaries; obviously, the geography cannot affect its strength and the organization can reach every customer globally. Moreover, the cost of local publicity would be greater than global publicity (UNWTO, 2005 p. 54). Thus, even local companies can reach global customers.

However, Akantos (2007) considers that online marketing has some disadvantages. Though small companies have advantage in promotion of their products through online, yet with low budget, they cannot imagine to invest in huge expensive online advertising campaigns, for instance, they cannot invest in cost per click campaign.

Moreover, the remoteness between consumers and companies makes things suspicious and worse. It is difficult to believe a product or a service, specifically, which has virtual existence. Thus, first to find reliable consumers and companies is necessary. Arkantos (2007) also considers geographical distance between seller and buyer a problem for business. Furthermore, due to countless offers and limitless information the consumer becomes reluctant in making decisions because he/she becomes confuse (UNWTO, 2005 p. 54).

Moreover, not all the people have access to internet; likewise, some of them do not have even computers. Thereby, to reach them through internet is not possible. In addition, there are people who do not use internet, for instance, the population of France is 60 million, yet juts 29 million people utilize the facility of internet (Veille info Tourism, 2007). Kotler and Bliemel (2001 p. 1212) claim that not for all products and services the online marketing is feasible. There are numerous services and products, which may not be promoted or sold through web.

However, Solis, (2011 p. 21) does not agree with other researchers. According to him, any service or device, which gets the help of internet to take advantages of conversation, is social media. Similarly, Wright and Hinson (2012) in their annual studies have observed the utilization of social media. They reveal in their findings that for public relations social media has brought positive changes, the new transforming technology has provided the power to organized communication with inner and outer audiences and, thus, facilitates the professionals. Therefore, social media has become important for various organizations and for public relations its significance cannot be neglected.

The Role of Engagement in Public Relations and Social Media

The word engagement has various meanings; however, its relation with public relations is obvious. The public relations practitioners convey engagement as a contact with any organization or conversation that helps in developing associations. The core focus of Solis’s book is engagement he thinks that one way communication is less important than two-way communication or dialogue; moreover, he emphasis the engagement of organization otherwise he suggests the organization should wind up its business (Solis, 2011, p. 2). Li and Bernoff (2008) also mentioned in their research about engagement and its relation with “conversation” and “talk.” However, Paine who wrote a book about measurement could not mention engagement in detail. Nonetheless, she accepts its significance and she describes the term of management as a number of retweets, number of comments in a blog, and numbers of visits of a visitor on a specific site.

Solis describes the arresting position of engagement. With stakeholders, it is a two-way conversation where, simultaneously, listening and engagement work together through conversation by social media platforms and this process is the responsibility of all the stakeholders. Moreover, he decries completely the obsolete conception that only one department has the responsibility of organizing and looking after the social media. However, in his book, Solis only focused Facebook and Twitter while he completely unnoticed the podcasts, blogs and Flickr. The important parts of engagement are conversation between an organization and community (Solis, 2011).

He considers that without helpful exchange, collaboration, insight and substance conversation is useless because it does not offer mutual satisfaction (Solis, 2011, p. 23). Interestingly, this important aspect is usually infringed in social media. For the benefit of engagement beyond keeping in view common satisfaction or helpfulness of their stakeholders, organizations usually take in worthless posts on their social media. In the chapter of “Rules of Engagement” Solis (2011) describes the method for engagement. Moreover, to guide foster engagement he highlights the significance of developing policies.

Solis describes the arresting position of engagement. With stakeholders, it is a two-way conversation where, simultaneously, listening and engagement work together through conversation by social media platforms and this process is the responsibility of all the stakeholders. Moreover, he decries completely the obsolete conception that only one department has the responsibility of organizing and looking after the social media. However, in his book, Solis only focused Facebook and Twitter while he completely unnoticed the podcasts, blogs and Flickr. The important parts of engagement are conversation between an organization and community (Solis, 2011).

He considers that without helpful exchange, collaboration, insight and substance conversation is useless because it does not offer mutual satisfaction (Solis, 2011, p. 23). Interestingly, this important aspect is usually infringed in social media. For the benefit of engagement beyond keeping in view common satisfaction or helpfulness of their stakeholders, organizations usually take in worthless posts on their social media. In the chapter of “Rules of Engagement” Solis (2011) describes the method for engagement. Moreover, to guide foster engagement he highlights the significance of developing policies.

The meanings of public relations are diversifying and have various shades such as recruitment campaign, political communication, propaganda, publicity etc. The Association of American Railroads first implemented the term of public relations, in 1897 (Cameron, Wilcox, Reber and Shin 2008, p.66). Nonetheless, in the scenario of communication activities the term is older than 1897 (Cameron al., 2008, p. 63). However, Newsom, Turk and Kruckberg (2007, p. 25) state that in the United States, public relations began in 1600-1799.

According to Newsom et al. (2007, p.25), states that from the beginning of civilized history some of public relations’ functions have been experienced. The experience was felt through different form of mass media such as newspaper in the 19th century, through radio in the early 20th century, and through television in the 1950s and for public relations campaigns it improved the opportunities. Moreover, different approaches of communication were practiced before the arrival and growth of the media market and for the conductions of public relations campaigns, the early practitioners of public relations have implemented these.

The most influential methods to develop a brand is public relations. During 2012, for the amplification of regional marketing campaigns of Tourism Calgary public relations have been implemented powerfully.

In communicating of the refreshed brand, public relations activities are vital because they enhance awareness and finally improve the sales. To have people listen the specific message through the positive headlines is the most reliable and quickest approach. In creative campaign finishing the key to understand behaviors through public relations is important as it recognizes the actual drivers of behavioral transformation.


In the current study, the impact of public relations and media has been studied extensively. Moreover, the contrast of mass media and social medai has been conducted. The importance of public relations and media is undeniable for the development of travel and tourism. Organizations related to travel and tourism can take advantages of such studies, which guide them to identify correct medium for publicity.


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