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Frame or Get Framed:
The Critical Role of Issue Framing in Nonmarket Management

EXECUTIVE SUMMARY

 

Introduction

How an issue is framed shapes the nonmarket (political, social, cultural) context that surrounds it. Framing the same issue in a different way can inspire a completely different public response. The Economist recently argued that “our response to questions very much depends on how the issue is framed: we think surcharges on credit cards are unfair, but believe a discount for paying in cash is reasonable.”

Issue frames are not random; they are the product of strategic behavior by firms, government agencies, NGOs, and similar actors. Coal producers emphasize the benefits of energy independence, automobile manufacturers highlight the advantages of clean diesel, and Hollywood decries movie piracy. These are all examples of framing, deployed consciously to manage nonmarket perception of important issues.

Framing in Action

In 2005, DP (Dubai Ports) World, a leading global port operator owned by the Dubai government, was looking to expand its operations through the acquisition of P&O, a London-based rival with assets in 16 countries including the United States. To move forward with the acquisition of P&O’s U.S. assets, DP World required the approval of the Committee on Foreign Direct Investment in the United States (CFIUS), a multi-departmental group responsible for assessing the national security implications of foreign direct investment. DP World was well-positioned to obtain CFIUS approval: its interests were aligned with those of the critical political actors, and their support seemed guaranteed.

However, the situation changed dramatically in a matter of weeks. Unbeknownst to DP World, a Florida company, Eller & Co, hired lobbyists to circulate a memo on Capitol Hill criticizing the proposed deal and raising security concerns related to DP World’s roots in the UAE. Eller & Co had a commercial grievance with P&O, and was vindicated when NY Senator Charles Schumer publicly denounced the proposed deal: “Foreign control of our ports, which are vital to homeland security, is a risky proposition.” Schumer’s statement brought the issue into the media spotlight and set off a public firestorm. Within days, a House panel voted near-unanimously to oppose the acquisition, and the Senate drafted legislation to block it. Less than three weeks after Schumer’s intervention, DP World capitulated and the deal was off.

What went wrong? The details of the acquisition had not changed, but Senator Schumer had reframed the issue. His rhetoric and that of his allies changed the question from “Does DP World’s management of U.S. ports pose a security risk?” to the much more emotionally charged “Should a country associated with terrorism control our ports?” The act of reframing transformed the nonmarket environment.

Nonmarket Strategy

Consciously developing effective frames can help firms avoid many of the problems faced by DP World. Framing isn’t the same as persuasion. Persuasion is about changing beliefs through argumentation, while framing is about shaping or changing the weight assigned to different beliefs by emphasizing some considerations over others. Frames filter what we see, but they themselves can be hard to recognize. As such, the study of framing is relevant to the growing body of research on political – or nonmarket – capabilities, defined as “knowledge and skills that enable firms to manage the public policy process.”

There are multiple pathways through which firms can shape the nonmarket environment to their advantage.

First, appeal to key audiences and be consistent. Research shows that frames are most effective when they are tailored to appeal to an intended target audience. Firms should identify which critical actors are already engaged in an issue and which new actors might be brought in to help shape an issue to their advantage.

Second, frame early. Firms frequently compete with other actors to establish a dominant frame in the minds of key stakeholders. Once frames are established, they usually stick. It’s prudent to be a first-mover when creating a new frame.

Third, maintain empirical credibility. In order to be effective, frames must be consistent with events and evidence. Firms should avoid frames that they cannot back up with their actions in the past, present, or future.

Lastly, select frames to increase your nonmarket influence. Firms will benefit the most when they proactively identify which of the nonmarket dimensions - actors, interests, arenas, information, or assets - are the most important to target and address. As an example, actors involved in an issue may be largely fixed, and attempts at framing that bring in new actors may thus be futile.

Implications

While there is no guarantee of success in framing, to neglect its importance is to allow nonmarket stakeholders or competitors to dictate the conversation surrounding an issue. Frames play an important role in political and social debates by helping stakeholders make sense of and attach meaning to complex issues. Besides gaining strategic advantages, firms can use framing to contribute to the quality of public discourse surrounding an issue. As with most powerful assets, framing can be abused. It is critical not only to maintain credibility, but to address frames originating elsewhere that have been deployed to sabotage or misinform. Managers who are more aware of the power of frames and who engage more effectively in strategic issue framing stand to benefit greatly.