Corporate Identity Essay Sample
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Introduction of TOPIC
Purpose – This paper investigates what organisations perceive as the essential components of corporate identity concept and their contents. It proposes an operational deﬁnition of corporate identity on the basis of the practitioners’ views. Design/methodology/approach – The information was gathered through 32 in-depth interviews with managers from different organisations (mainly multinational companies) and an analysis of corporate literature and web sites. The initial analysis is based on a multidisciplinary categorisation developed by the ﬁrst author, which facilitated the systematic analysis of a wide range of components (e.g. corporate communication, corporate design, corporate culture etc.) associated with corporate identity. Findings – The study shows that there is a considerable divergence in opinions concerning the fundamental components of corporate identity among practitioners. Most interviewees heavily associated identity with the areas of corporate design, communication, behaviour and strategy whereas there was no unanimous agreement as to whether or not corporate culture was a product or determinant of corporate identity. Research limitations/implications – Developing sub-items and their measures for each dimension presented in the proposed deﬁnition and examining the possible relationships between them might be the further step.
Also additional empirical research which considers consequences of corporate identity management in relation to company performance indicators could enhance overall understanding of the concept. Practical implications – Senior company management can use the categorisation discussed in this paper as a starting point for development of corporate identity management strategies. Originality/value – Recategorisation of Melewar’s corporate identity dimensions, which help deﬁne corporate identity concept in measurable terms. Keywords Corporate identity, Corporate strategy, Organizational identity, Corporate image Paper type Research paper
European Journal of Marketing Vol. 40 No. 7/8, 2006 pp. 846-869 q Emerald Group Publishing Limited 0309-0566 DOI 10.1108/03090560610670025
Introduction For a variety of reasons, both academic and business interests in corporate identity have increased signiﬁcantly in recent years. Organisations have realised that a strong identity can help them align with the marketplace, attract investment, motivate employees and serve as a means to differentiate their products and services. Thus, many organisations are striving to develop a distinct and recognisable identity. Certain characteristics of an efﬁcacious corporate identity include a reputation for high quality
goods and services, a robust ﬁnancial performance, a harmonious workplace environment, and a reputation for social and environmental responsibility (Einwiller and Will, 2002). Identity is now widely recognised as an effective strategic instrument and a means to achieve competitive advantage (Schmidt, 1995) and being researched by more academics and practitioners. However, the lack of a clear deﬁnition (Balmer and Greyser, 2003) makes the research in corporate identity management area a formidable task (Melewar and Jenkins, 2002), especially, in relation to determining the parameters of the research concept in guiding scholarly investigations (Balmer and Greyser, 2003; Cornelissen and Elving, 2003). This lack of clarity in the academic world is also reﬂected in the business world. Many executives confessed to having little knowledge of how to manage, control or even explicitly deﬁne the concept (Melewar et al., 2003).
In academic research, since corporate identity has been associated with different levels of organisational phenomena and practices i.e. the road from visual expressions to all expressions of the organisation (Cornelissen and Elving, 2003), developing better measures to examine it as well as its components remain of considerable importance. Therefore there is a need for an in-depth analysis to decipher the essence of the corporate identity construct and its derivatives (Cornelissen and Elving, 2003). However, the main aim of this paper is rather to develop a better understanding of corporate identity through examining the experiences and perceptions of managers. We review evaluations of the deﬁnitions of the corporate identity concept and elucidate the components of corporate identity based on the literature, and investigate empirically how corporate identity management is practiced in comparison to its theoretically deﬁned components. By examining the managers’ views, we demonstrate how each component’s content has been explained and perceived in practice.
The central issue this paper assumes is that this approach will enable us to operationalise the concept and its components by examining it in an “ecologically valid environment” (Smith et al., 1998, p. 64) rather than at a theoretical level, since any theoretical or conceptual argument needs to be tested in actual application (Allen and Janiszewski, 1989). Furthermore, from the perspectives of managers interviewed, it examines the importance of each component in the overall corporate identity management. The study uses both in-depth interviews and secondary sources of information from academic and corporate literature and tries to classify the essential components of corporate identity. As a result of this attempt, it provides an operational deﬁnition of corporate identity, which may aid further empirical research.
Corporate identity: the concept A review of the literature over the past 20 years reveals that both academics and practitioners are placing increased importance on the issue of corporate identity. The various deﬁnitions of corporate identity were reviewed for the purpose of this study, largely based on research by a number of commentators (Balmer and Soenen, 1999; Ind, 1992; Melewar and Jenkins, 2002; Olins, 1990a, b). Corporate identity could be interpreted as a strategic manifestation of corporate-level vision and mission, underpinned by the strategies which a corporation employs in its operations or production (Melewar and Wooldridge, 2001). A strong emphasis is placed on ethical and cultural values, as well as
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organisational history and philosophy (Ind, 1992). The literature reviewed almost unanimously makes a profound link between corporate image and corporate identity, stating that image is the collective perception that the stakeholders have of corporate identity. Balmer’s research (1998) is useful in outlining some of the generally accepted features of corporate identity deﬁnitions. First, corporate identity is a multidisciplinary ﬁeld. Second, it is a term used to identify the essence of what the ﬁrm is and thus incorporates many unique characteristics of the ﬁrm such as history, philosophy, culture, communication and the industry the ﬁrm operates in. Third, it is inseparable from the corporate personality of the organisation. Furthermore, Balmer and Soenen (1999) also provide some useful judgments. They highlight that although there is no consensus on what elements make up the corporate identity mix, it is widely agreed that a multidisciplinary approach to the study of corporate identity is necessary (See also Bick et al., 2003).
This opinion is supported by Melewar and Jenkins (2002) who state that the term “corporate identity” evolved from undertakings in the area of marketing, primarily in areas such as corporate visual identity systems, which are used to represent the organisational values and mission to the outside world. However, the evolution of the corporate identity concept meant that the term became associated with a wide range of functions including business strategy, philosophy of key executives, corporate culture, behaviour and corporate design which are both interdependent and unique to each organisation (Van Riel, 1997). Melewar and Jenkins (2002) state that, whilst there is no distinctive difference between the views of practitioners and academics, there are differences in the approaches the two groups viewed the fundamental components of the mix. The approach taken by practitioners is generally more process-orientated (Balmer, 1998) and is thus generally concerned with more tangible elements of identity with a strong emphasis on those areas that have a higher propensity for manipulation.
Balmer and Soenen (1999) highlight that this can result in practitioners concentrating on visual aspects of identity and overlooking other areas. Academics generally take an approach that is more orientated towards structure, and tend to address a greater number of the mix components. Research methodology A review of the corporate identity literature was conducted along with a review of related topics such as corporate strategy, strategic planning, marketing strategies and organisational behaviour.
The literature review revealed that although there are several studies on corporate identity, there is still a need for a more elaborate operational deﬁnition of the concept. Through analysing the views of both practitioners and academics a functional deﬁnition of the term was developed by the authors. The initial analysis is based on the categorisation developed by Melewar (1993) as this provides a multidisciplinary approach and facilitates the systematic analysis of a wide range of components associated with corporate identity. The seven main dimensions put forward in Melewar’s categorisation are; corporate communication, corporate design, corporate culture, behaviour, corporate structure, industry identity and corporate strategy. Figure 1 depicts the initial categorisation.
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Figure 1. The original corporate identity categorisation
The research aimed to ascertain what respondents believed were the core components of corporate identity and the relationship between these components. The method of research was a case study approach, which comprised 32 in-depth interviews mainly with directors and senior managers but also with some lower level employees in 20 companies. The study was oriented towards providing an operational deﬁnition, and so the interviews aimed to examine a wide range of experiences and perspectives. The companies included in the study came from a broad spectrum of industries including two multinational banks, two multinational accountancy ﬁrms, two multinational oil companies, two multinational engineering companies, two multinational IT companies, four multinational conglomerates, two internet insurance companies, two toy companies and two marketing consultancies.
Of the 32 individuals interviewed, ten held positions in the ﬁeld of marketing, four held human resources positions, 14 were senior general managers or directors and four were on graduate training schemes. In certain organisations we interviewed more than one individual. A broad spectrum of academic research on the topic of corporate identity was also conducted for the purpose of this investigation. Secondary sources of information were also used such as company literature, information from their respective websites and relevant press releases about each company. A broad cross-section of companies was chosen because part of the investigation aimed to analyse why particular ﬁrms might perceive certain components as more important than others. For example, whether the choice of components and identity were related to the size of the ﬁrm, the industry in which it operates or any other ﬁrm-speciﬁc inﬂuence.
The sample thus reﬂects a diverse set of organisations, functional areas, and positions. The interviews did not follow any particular structure. Unfolding the corporate identity concept Corporate communication A number of academics have stressed the links between corporate communication and corporate identity (Cornelissen and Harris, 2001; Van Riel, 1995; Varey and Lewis, 2000). Corporate communication is a term that encompasses all the ways in which the organisation communicates with its various stakeholders.
Thus, all of the messages emanating from an organisation, everything that it produces and all of the activities it is involved in will act to shape stakeholders’ perceptions. Corporate communication can be both controlled and uncontrolled in nature. Communication intentionally instigated by management with the aim of improving stakeholder relationships is classiﬁed as controlled corporate communication. Conversely, uncontrolled communication takes place when organisations inﬂuence stakeholders’ perceptions unintentionally.
Controlled corporate communication. A distinction can be made between three main types of corporate communication, categorised as management, marketing and organisational communication. Grunig (1993) argues that the particular “mix” of these subdivisions of communication is integral to the concept of corporate communication. Marketing communication is generally associated with the 4Ps of product, price, place and promotion and is aimed at supporting the sales of an organisation’s products or services.
These include, advertising, public relation activities and direct marketing. Organisational communication is conceptualised by Van Riel (1995) as all forms of communication with stakeholders with whom an organisation has an interdependent relationship. Investor relations and labour relations are part of organisational communication. Marketing and organisational communication both act as the principal link between image and strategic management (Hatch and Schultz, 1997). Management communication applies to attempts to “communicate the vision and mission of the company in order to establish a favourable image and ultimately a good reputation amongst its internal and external stakeholders” (Olins, 1989). Examples include, house journal and magazines for employees and annual and environmental reports for external audiences.
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Importance of controlled corporate communication There was a strong consensus amongst the interviewees that controlled corporate communication was an important component of the overall corporate identity concept. An interviewee from the engineering company reﬂected this sentiment when asked about the importance of corporate communication to overall identity: It really must be. We must now be more accountable with respect to our activities and this means that efﬁcient mechanisms must be implemented to communicate with the wide variety of groups who have an interest in our company.
An interviewee from one oil company stated that the inter-relationships of corporate communication and identity meant that the two concepts were inseparable: Corporate communication is not just what the company says but how it is viewed in the outside world, so it is to a large extent what your identity is based upon. Everything . . . (company name) does, communicates something, from our environmental stance to our shareholder statements and our identity is based on how all these forms of communication are received by our staff, customers and investors.
Management communication is perceived by many academics and practitioners as being the most important of these three forms of communication, as it involves the expression of organisational goals directly to internal stakeholders (Kennedy, 1997; Kiriakidou and Millward, 2000). Most of the interviewees concurred with this view, for example, an interviewee from a trading (conglomerate) company stated: The most important thing in a company is that everyone is aiming for the same thing, therefore, the corporate management has to put forward its goals, its mission and try to sell these to its employees. Once managers do this then the other corporate problems become far easier to solve.
It is also apparent that communication directed at the external stakeholder management communication plays a fundamental role in developing the desired corporate image and in creating a strong competitive advantage (Kiriakidou and Millward, 2000). In general, most of the companies believed that marketing and organisational communication were also highly signiﬁcant forms of corporate communication. However, many of the interviewees explicitly stated that they felt the sub-divisions of marketing, organisational and management communication were a little artiﬁcial and impractical as the inter-linkages often made it impossible to distinguish between these different types of communication. Uncontrolled corporate communication. Cornelissen (2000) argues that the linear models of corporate identity (For models see Stuart, 1999b) overlook the fact that corporate identity perceived by publics, i.e. corporate image, is a total product of controlled and non-controlled messages. Balmer (1995, p. 35) states that “. . . everything the organisation does will in some way communicate the organisation’s identity”, which implies that unplanned communication has a considerable role in corporate identity management (Stuart, 1999b).
Importance of uncontrolled corporate communication The majority of interviewees also perceived the matter of uncontrolled communication as being highly important to corporate identity. The dearth of academic literature on the subject is thus all the more surprising and there is a clear need for more research in this area. An interviewee from an accountancy ﬁrm expressed the concern that his organisation had about uncontrolled corporate communication: . . . all of the players in our industry are now under such close scrutiny from the media that we must operate at the highest standards, because bad publicity really has a more detrimental impact on our business than ever before.
Another method of inﬂuencing uncontrolled corporate communication that was perceived to be highly effective by more than one interviewee was to ensure that employees were highly motivated and to develop an internal culture of integrity and honesty. This makes sense as uncontrolled communication often takes place when employees interact with external stakeholders (Moingeon and Ramanantsoa, 1997). One interviewee from a marketing consultancy stressed this link between a virtuous company culture and positive uncontrolled communication about the company: . . . values of probity and integrity will always be of the utmost importance and are the key to success in most companies and if you are running a company with these values you will develop a positive image which is reﬂected to the outside world.
A dynamic inter-relationship between culture and communication must be acknowledged. Corporate cultures will generally be communicated to stakeholders in some form, particularly through employee behaviour and therefore one method of reducing the occurrence of negative uncontrolled communication is by gaining employee commitment of core corporate values. Every respondent believed that corporate communication was a fundamental inﬂuence on the corporate identity at his or her company. However, many interviewees did state that communication could only be effective if it was supported by performance achievements and that corporate rhetoric must be congruent with the reality of its operations and behaviour. Corporate design (visual identity) Corporate design is a term used to describe the vast number of visual cues that are associated with a speciﬁc organisation. Corporate visual identity system (CVIS) is composed of ﬁve main elements: the organisation’s name, slogan, logotype/symbol, color and typography (Dowling, 1994; Melewar and Saunders, 1998; Topalian, 1984).
Visual identity can be conveyed in other ways, for example, through the companies’ products and vehicles and the location as well as the architecture of its buildings. The interior ofﬁce design, for example, may symbolise many aspects of the corporate culture. Dowling (1994) also highlights other applications of CVIS including advertising, clothing, packaging and promotion and give-aways. Furthermore, Olins (1990a, b) highlights the importance of the organisational environment in expressing the corporate identity. Baker and Balmer (1997) state that visual identity has two fundamental purposes, ﬁrstly, it represents the organisation’s values and philosophy, and secondly, it supports corporate communication. The organisation’s visual identity can inﬂuence many of the stakeholders including employees and investors as well as consumers.
It is the most frequently discussed aspect of corporate identity and in consequence, one of the most commonly used methods to indicate a transition in identity by organisations is a name change, often along with alterations to the corporate image. Importance of corporate design Both the literature and the interviews supported the assertion that many organisations use design as a means of expressing the strengths and qualities of the ﬁrm (Melewar and Saunders, 1999). One interviewee from an insurance company reﬂected the general consensus that design was a crucial element of corporate identity: It [corporate design] gives our employees a sense what is expected of them and gives our customers, who are largely other businesses, a sense of what the company is about, professionalism and a high level of service.
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Although there was considerable agreement that corporate design was an important part of the overall corporate identity concept some sub-components of design were considered more important. Numerous interviewees believed that the slogan was an important aspect of design stating that slogans can have a powerful effect on stakeholders’ perceptions of the organisation and can be useful in reminding employees of the corporate mission. The interviewee from an IT company emphasised that: When you set up a new company you must make it clear what the new policies and catch phrases are going to be and these can have a strong impact on the overall company identity.
Again, the relationship between design and culture is apparent, as corporate slogan and mission are often cited as key components of culture as well as design. There was also a strong consensus, particularly amongst the interviewees from large multinationals, that architecture and location are an important aspect of corporate visual identity. An interviewee from an oil company suggested that a particular change in location and ofﬁce layout had had a profound effect on the internal culture of the ﬁrm: When . . . [company name] brought everyone into the new centre at Waterloo (London) there was an impact on the culture and this came with a new ofﬁce layout, probably symbolising a change to some extent in the way things were to be done.
To summarise, the majority of interviewees believed that design was an important aspect of corporate identity. However, they felt that some of the sub-elements of design were more important. The slogan, architecture and ofﬁce layout, were of particular importance whilst there was some scepticism surrounding the beneﬁts of changing the company name. Another important element that might be considered is the design of the company’s web site. Web sites are becoming an ever more popular medium that stakeholders use to gather information about the company and thus are important in shaping perceptions of corporate identity. Corporate culture There is a plethora of different views as to what constitutes corporate culture. Some argue that it is strongly associated with rituals, for example, one interviewee explicitly stated that culture: “. . . is the way we do things around here”.
In contrast, others such as Peter and Waterman (1982) argue that employees are central to culture and what is important is the “shared values” of participants, although the evidence for this perspective has been strongly questioned. There is a range of views concerning the relationship between corporate culture and corporate identity. Culture epitomises the consensus within a company about how activities should be accomplished and is conceived as a result of a group’s shared experience and learning with respect to matters of external adaptation and internal integration (Schein, 1985).
In contrast, identity pertains to who we are as an organisation. Moingeon (1999) states that the use of the identity concept is a result of ﬁeld researchers’ perceptions of the “inadequacy of the culture concept to go past the descriptive level in organisational analysis”. Downey (1986) believes that corporate culture is the consequence of corporate identity and argues that culture is the “what” of a company and identity is the “why”. Importance of corporate culture and its sub-components There was unanimous agreement amongst the interviewees that the corporate culture at their organisation was fundamental to its commercial success. Most of the interviewees were able to deﬁne the characteristics of their speciﬁc corporate culture, for example, the interviewee from a trading (conglomerate) company stated that the culture represented: Probity, teamwork and integrity.
There was considerable debate amongst the interviewees over the relationship between corporate culture and corporate identity. A signiﬁcant number of interviewees perceived the two concepts as being fairly separate and distinct entities. For example, an interviewee from the engineering company stated that: I think corporate culture is something that builds up over years and years, it has nothing to do with the corporate identity of the company which is projected to the public.
This view seems to perceive corporate identity as being an image developed by the organisation for marketing purposes to outside stakeholders and not intrinsically linked to internal aspects of the ﬁrm, and thus perceives corporate culture as being an entirely separate entity from corporate identity. A respondent from a toy company stated that his company would try to project a different corporate identity depending on the groups they intended to appeal to and was thus more malleable in contrast to culture, which existed purely in the minds of employees: Corporate culture is what really goes on in our companies. It is the true reality of how employees feel about working for us. Corporate identity is more to do with how we want to be seen by various groups.
However, many interviewees suggested that corporate culture and corporate identity were inseparably connected. For example, one respondent from an oil company claimed: . . . corporate culture and corporate identity are certainly connected and it is actually very difﬁcult to dissect the two. Corporate culture drives the development of the identity of the organisation but also is generated by it.
Out of all of the components of corporate identity, the issue of corporate culture threw up the widest range of opinions. Some of the interviewees regarded culture as being exactly the same thing as identity, others felt that culture was simply a component of identity and some even expressed the opinion that culture transcended and was a far broader concept than identity itself. All of the interviewees felt that a strong culture was fundamental to the success of their organisations and the relationship between corporate culture and identity is clearly one that would beneﬁt from further academic and business research. In order to allow a systematic and objective evaluation of the concept of corporate culture, its various sub-components will be analysed. Although there is no universally accepted deﬁnition of corporate culture, the literature review suggested that the following are important elements of culture; philosophy, mission, values, principles, guidelines, history, national culture, the founder of the company and subculture (Ambler and Barrow, 1996; Czarniawska and Wolff, 1998; Schmidt, 1995).
Importance of mission Corporate philosophy is associated with the fundamental values and assumptions of a company created by senior management. Corporate values according to Van Riel and Balmer (1997), are concerned with the beliefs within the organisation and include language, rituals and ideologies that guide the company’s culture and form the corporate identity. All of the companies (except for the smallest, a toy manufacturer) had a clear set of explicit statements pertaining to corporate philosophies and goals. Most of the interviewees stated that these were in place to clarify organisational ethics and objectives to a wide variety of stakeholder groups. The corporate mission pertains to the reason for the existence of the company and is thus seen by many as the most important element of corporate philosophy (Abratt, 1989). The interviewee from a trading (conglomerate) company maintained the need for a mission statement: . . . at the end of the day if you don’t have a mission, if you don’t have goals, then you’re ﬁnished.
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Corporate principles are an important inﬂuence on essential corporate actions such as targets, values and the mission of an organisation. Corporate guidelines are vital in explaining the signiﬁcance of corporate principles to all levels of the hierarchy within the organisation. Many interviewees stated that corporate philosophy, values, principles and guidelines are emb
edded in the mission statement of the company. Importance of corporate history There is a clear link
Moingeon and Ramanantsoa (1997) state that while history is instrumental in deﬁning the corporate identity, identity in itself is instrumental in guiding history by its contribution to the development of cultural norms manifested in perceptions and actions of members, thus a dynamic linkage is evident between these two elements. Most of the interviewees were of the opinion that corporate history was a signiﬁcant constituent of the corporate identity concept. One interviewee from an IT company stated that corporate history could have a lasting impact on reputation: . . . if you’ve got a reputation that’s historic; it’s often very difﬁcult to change that reputation . . .
This is evidence of the fact that stakeholders’ perceptions of organisations are formed over long periods of time, so the history of organisational activities such as behaviour, communication and strategy is the key to the foundations of identity. Thus, the majority of respondents believed history to be an important element to both culture and identity. Moreover, history is also strongly related to the next sub-component, the founder of the company. Importance of the founder of the company In general, every interviewee believed that the founder of the company had at some stage been an important inﬂuence on corporate culture.
Some were more adamant than others about the perpetuation of that inﬂuence as time went on but the fact that every single interviewee knew a bit about the founder of their organisation suggests that the founder usually plays some role in the development of corporate culture. One interviewee from an engineering company, when asked if he felt that the founder of the company had a signiﬁcant impact on corporate identity reﬂected this view: . . . the founders had a big inﬂuence on the company because they brought different national cultures to the organisation, as I’ve said this Anglo-Dutch inﬂuence is very important to this day. Also their business strategies are still important particularly regarding growth and risk.
The following example in particular shows the obvious links between the founder and other components of corporate identity such as the company name (as the company founder’s name). The respondent from an accountancy ﬁrm stated that: He certainly did in . . . [company name], a chap called . . . [founder’s name] set the company up. The work ethic that he developed which was a very harsh one for the city in those days has been maintained despite the years that have passed.
Importance of country-of-origin Many academics maintain that a strong link exists between the national culture from which the company originated and its corporate identity (Foo and Lowe, 1999; Rowlinson and Procter, 1999; Varey and Lewis, 2000). For example, common associations are made such as “German efﬁciency” and “Japanese innovation”. In general, the interviewees believed that there was a country-of-origin (COO) effect present within their organisation. However, this had been diluted in many organisations, which had been operating overseas for a long period of time with a decentralised structure.
The COO effect also appeared weaker in organisations that had grown through international mergers. One interviewee from an engineering ﬁrm was probably most adamant about the importance of national culture on overall corporate identity: . . . when you talk about . . . [company name] you talk about a German company, which has grown over many years within Germany and many of the businesses and communities we developed strong links with were also German and this made our national identity a strong part of our overall identity.
Most respondents believed that the COO was a signiﬁcant inﬂuence on corporate culture. However, many were of the opinion that the inﬂuence of national culture was declining as a result of globalisation. This sentiment was strongly expressed by respondents from an oil company. Thus, these companies might now be described as a true multinational company that has transcended the COO effect as its operations take place in so many different countries and it has adapted its activities to local conditions in these countries. An interesting area of research might therefore be to analyse whether or not the increasing spate of mergers and acquisitions in many multinationals has meant that national characteristics are no longer as important to corporate identity as they have previously been.
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Importance of sub-cultures The unitary perspective assumes that culture is monolithic and reﬂections of the founder’s beliefs and in consequence organisational members share a sense of loyalty and commitment to the organisation (Schein, 1985). However, this view is a little misleading since there is no substantive reason why employees across the organisation would share consistent and stable values. Hence, many commentators have embraced a differentiation perspective, viewing the organisation as an amalgamation of sub-cultures (Balmer and Wilson, 1998; Deal and Kennedy, 1982; Meyerson, 1991). They go on to explain that because corporate culture is highly inter-meshed with historical and behavioural characteristics of the ﬁrm and its employees, and the fact that each employee will interpret history and management communication differently, the evolution of a unitary corporate culture is virtually impossible.
There was a wide range of opinions amongst the interviewees. Some respondents claimed that many sub-cultures could be identiﬁed in their organisation and that this could be problematic. Others stated that they had little inﬂuence and some even stated that they did not exist in any signiﬁcant capacity. One interviewee from a trading company argued that sub-cultures could have a detrimental impact on corporate identity: . . . a classic example of this, 10 years ago I sold a company that had just started off as 3 of us and ended with 90 people who were put in their own 5 sub-divisions to allow them to do their own thing, be more creative. And what happened was that they all got jealous of each other and I’ve seen this many times in other companies that I’ve worked with when in fact the internal brands can often become more destructive towards each other than the actual competitor brands.
Another interviewee from a marketing consultancy spoke of the negative impact that a clash of national cultures had had within his organisation: . . . particularly as a result of merging with an American company. Many of our UK employees ended up forming cliques and I suppose they did the same, it all really becomes a bit dysfunctional when you’re trying to work towards one goal as a team, but that’s what happened and there was a bit of animosity.
In summary, respondents felt that corporate culture was of fundamental importance to virtually every aspect of their ﬁrm’s operations. Factors which respondents felt strongly inﬂuenced corporate culture include; mission statements, history, country of origin, subculture and to a lesser extent the founder of the company. There was a wide range of opinions concerning the relationship between culture and identity ranging from the two terms being essentially the same thing to a view that the two were fairly distinct and separate entities.
Behaviour Behaviour is another fairly intangible aspect of corporate identity. However, an analysis is made easier by breaking it down into a number of elements that make up behaviour including, corporate, employee and management behaviour. Many commentators suggest that the actions of a corporation are a fundamental element of its identity (Albert and Whetten, 1985; Hatch and Schultz, 1997; Kiriakidou and Millward, 2000; Topalian, 1984). Importance of behaviour Corporate behaviour stems from corporate actions in their entirety, both those that are planned and congruent with corporate culture and those that occur spontaneously. The majority of the interviewees believe that corporate behaviour can have a very long-term effect on the overall corporate identity of organisations and it was fairly unanimously agreed that corporate behaviour could have a huge impact on corporate identity. This is unsurprising as what the organisation “does” is clearly linked to perceptions of what it “is”. Interviewees were also questioned about the importance of management behaviour.
Many academics suggest that management behaviour, i.e. the communication and actions emanating from top management, can have a signiﬁcant impact on corporate identity (Fritz et al., 1999; Hatch and Schultz, 1997) and the interviewees substantiated this view. Most interviewees believed that lower level employees saw senior management as role models and that management behaviour was fundamental in setting standards for employee behaviour, a view expressed by one of the banking directors: . . . one of our directors, decided to run the London Marathon, now all of the employees were impressed by this and it sent out a strong message to the outside world that a director from a bank was ﬁt and healthy enough to do this and many positive associations were then made.
Finally, respondents were asked how important employee behaviour was in inﬂuencing corporate identity. Most respondents stated that employee behaviour inﬂuences customers and other stakeholders and employees’ actions are perceived as a reﬂection of the corporate identity, thus employee behaviour is generally seen as a vital component of identity. Other interviewees corroborated this view, for example, an interviewee from an accountancy ﬁrm stated that the behaviour of individuals had a signiﬁcant impact on other employees: . . . all of us inﬂuence each other, we’re all driven to do well at the company and I think it is a force of motivation.
This is also evidence of the link that exists between corporate culture and employee behaviour. If there is a culture of hard work present within an organisation this will positively translate itself into employee behaviour. Virtually all of the interviewees stated that recruitment, training and education were vital in order to develop this culture and emphasise this desired behaviour to employees. Consequently, the majority of interviewees believe behaviour is integral to identity. Behaviour was strongly associated with other components of identity such as culture and communication providing more evidence of the interdependency between the various components.
The importance interviewees felt behaviour had on overall corporate identity is unsurprising as ultimately what organisations “do” will play a big part in shaping perceptions of what they “are”. Corporate structure Corporate structure consists of organisational structure and branding structure and is cited by several authors as being a fundamental component of corporate identity (Chajet, 1989; Ind, 1992; Olins, 1986; Strong, 1990). Brand structure. Organisations engage in branding strategies in order to differentiate themselves from competitors. Strong brands are fundamental in establishing an identity in the marketplace, strengthening customer loyalty and for many companies are vital in counteracting the growing power of retailers (Douglas, 2001). Three varieties of corporate identity structures are put forward by Olins (1986). First, the monolithic structure is one where the organisation uses a consistent name and visual style and in consequence the corporate identity of the company is the brand to the consumer. British Airways, Shell and IBM all tend to follow this approach.
Second, there is the endorsed structure, in which corporate identity of the parent company is associated with the name of the subsidiaries. Finally, the branded structure is one where products are differentiated through different brand names. Examples are Unilever and Procter and Gamble. Importance of brand structure Two respondents emphasised the importance of the branded structure. The interviewees from a food and domestic products conglomerate stated that: Our corporate identity is not really in place to boost our image to consumers. It’s there for other groups such as investors or graduates. Our brands are what make us successful in the fast moving consumer goods market. No one really cares who is behind the brands unless the company gets a bad reputation.
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Similarly, the interviewee from the trading (conglomerate, tobacco) company stated that the brand identity was far more important to consumers than the overall corporate identity. He asserted the vast majority of consumers were unaware of the companies behind the brands in the cigarette industry and that brand identity was their sole source of competitive advantage. On the whole, the interviewees had a range of views concerning the relationship between brand structure and corporate identity. Some felt that brand structure in itself was not a component of identity and was more a consequence of it, in that the identity dictated the subsequent brand structure.
Others felt that the brand strategy was a component of identity as “what” the organisation produced had a considerable impact on what it “is” in the eyes of stakeholders. Organisational structure. The organisational structure is associated with the organisational hierarchy, lines of communication and reporting responsibilities. Of greatest importance is the degree of centralisation and decentralisation, in terms of both geography and across products (Cornelissen and Harris, 2001; Van Riel, 1995; Varey and Lewis, 2000). Organisational structure is inexorably related to brand structure. A corporate dominant structure (Laforet and Saunders, 1999) leads to monolithic identity and is more likely to be implemented by centralised companies due to the opportunities it allows for standardisation.
Companies with a high degree of centralisation are likely to deny autonomy to subsidiaries. Conversely, where there is a high degree of decentralisation, subsidiaries often develop very distinct identities. Olins (1986) argues that this allows managers far more autonomy and that brand-dominant structures are far more likely to emerge. This situation was found to be true in one of the conglomerates where the interviewee stated that brand identities were distinct from the overall corporate identity. Importance of organisational structure There were again mixed opinions as to whether or not organisational structure is a tangible component of corporate identity but the general consensus tended to be that it was a product of corporate identity rather than something that makes up the identity, as expressed by this interviewee: . . . I think the corporate structure is a tool; the corporate identity is set up and then the corporate structure is developed to deliver the aspirations which are clear in the corporate identity.
A respondent from a marketing consultancy believed that corporate structure has a strong impact on corporate culture. However, he felt that culture was a distinct entity from identity. He argued that identity was solely associated with external perception of the company. The responses naturally show that different organisations take different approaches to corporate identity concept and its relation to corporate structure (Stuart, 1999a). The companies with diversiﬁed structures, i.e. the conglomerate in this case, give more emphasis to its constituting parts and distinguish overall corporate identity than the brand identities, whereas the companies with professional structure, i.e. the marketing consultancy in this case, strongly mention the beneﬁts of corporate culture and take company identity as an external manifestation (for further discussion about the link between structure and identity see Stuart, 1999a). Many respondents claimed that structure was something that could easily be changed, whilst identity and culture were far more enduring ﬁrm-speciﬁc characteristics that evolved over time and were difﬁcult to change.
The impact of changes of structure on corporate identity was also inconclusive. Some respondents felt that permanent structural changes could have a far-reaching impact on culture, whilst others stated that these changes could be short term in nature and subsequently were only of ﬂeeting importance. Although it is not very clear from the responses whether corporate identity is a product of corporate structure or vice versa, it could be concluded that corporate structure has an interceding role in corporate identity management (Stuart, 1999a). Industry identity Industry identity pertains to characteristics such as competitiveness, size and rates of change, which inﬂuence the corporate identity of a company (Balmer, 1997). Companies operating in an industry with a clear and strong identity may adopt very similar strategies in areas of corporate identity management, and in consequence they commonly develop similar identities. The inﬂuence of industry identity is particularly signiﬁcant in certain industries in this study, in particular the banking and oil companies.
Importance of industry identity Virtually all of the respondents claimed that the corporate identity of their organisations was strongly inﬂuenced by the industry that they compete in. The evidence from an oil company is a good example of this. It appears that the company has had difﬁculty in changing its identity due to the criticisms of its environmental practices. Thus, a link between sources of uncontrollable communication and the effect of industry identity is also clear. For example, criticism from environmental groups has not only affected individual ﬁrms but also the entire industry. It appears that control over their corporate identity was made more difﬁcult because many stakeholders do not differentiate between companies and may associate the oil industry with pollution and exploitation. A respondent from the oil company reﬂected this view: . . . in previous years the oil companies were dominated by technical concerns on the exploration side and upstream business. But now it’s more downstream, marketing to consumers.
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Hence, this particular oil company has begun to invest heavily in trying to improve the perception that various stakeholders have of them. In consequence, perceptions of the industry as a whole are improving, particularly because other oil companies are also engaging in similar activities such as third party ethical and environmental audits. The link between uncontrollable communication and its effect on industry identity was again highlighted when speaking to an employee from an accountancy ﬁrm: Yes, I mean we’re all aware of the events in our industry and it would be ridiculous to argue that our senior partners haven’t tried to adapt our identity so that our reputation of integrity and best-practice is maintained, even though we haven’t actually been implicated in any of the scandals.
The interviewee was referring to the accountancy scandals that have recently taken place in America and it seems that these events have had a signiﬁcant impact on all of the companies in the accountancy industry, even those not associated with them. It seems that media and public attention can have a massive impact on stakeholders’ perceptions of the entire industry, which in turn shapes their perceptions of individual ﬁrms within that industry. In general, the respondents from the accountancy companies, oil companies and banks felt that the industry identity had the most salient impact on their overall corporate identity.
Those working in companies that conduct the majority of their business with other businesses rather than selling directly to consumers appeared to believe that industry identity had less inﬂuence on corporate identity. Corporate strategy Corporate strategy is the blueprint of the ﬁrm’s fundamental objectives and strategies for competing in their given market. It thus determines what the company produces, the level of proﬁt made and stakeholder perceptions about the company. Many commentators suggest that a strong link exists between corporate strategy and corporate identity. Gray and Balmer (1998) see the major components of corporate identity as being: “the company’s strategy, philosophy, culture and organisational design”. Differentiation strategy.
Differentiation strategy is an aspect of overall corporate strategy pertaining to the speciﬁc strengths of a company and how it chooses to compete by using these. Many writers agree that this is strongly linked with corporate identity as Simpson (1988) states differentiation takes advantage of a ﬁrm’s strengths that are important constituents of its basic identity. Positioning strategy. Positioning strategy is associated with the identity that a company strives for. Companies position themselves in order to be distinguished from competitors and they do this through an analysis of their inherent strengths and weaknesses.
Importance of corporate strategy Corporate strategy is often instrumental in attempts to change corporate identity, a fact that was substantiated by many interviewees. Another point claimed by many interviewees was that corporate strategy could have a massive impact on identity, particularly when it resulted in the restructuring of the workforce. A respondent from the IT ﬁrm stated that: Yes, it is having a very big impact. We had to focus, we had to restructure, we had to downsize, in order to meet the strategic objectives and that had a big impact on the identity of the company and there was a big impact particularly the internal employees start to wonder what their future is and what the future of the company is.
An interviewee from the toy company spoke of how corporate identity provides direction and purpose for his company and is therefore intrinsically linked to strategy: Yes, the identity is useful in providing a sense of direction for employees and the strategy provides the plan as to where the company is going, so really, neither can be complete without the other.
Thus, strategy can be considered as a subset of corporate identity in this situation because it provides the means by which identity is perpetuated throughout the company. There was almost unanimous agreement concerning the importance of the relationship of strategy with identity and further work in this area is necessary. One such area maybe to determine the impact of strategic change on corporate identity, which is becoming increasingly
common in the form of downsizing and outsourcing. Summary and conclusion Every respondent had a unique perception of corporate identity and the majority of the respondents claimed that corporate identity was an increasingly important phenomenon. There was a considerable range of opinions amongst the interviewees pertaining to the importance of the various components of the concept. To a large extent this can be explained by the multidisciplinary nature of the term (Bick et al., 2003).
However, those working in the same company generally agreed on the fundamental characteristics of the corporate identity of their ﬁrm. In general, most interviewees heavily associated identity with the areas of corporate design, communication, behaviour and strategy. However, there was no unanimous agreement as to whether or not corporate culture was a product or determinant of corporate identity. The responses about controlled corporate communication reﬂect that marketing, management and organisational communication are intertwined and it is hard to set strict borders between them. However, managers’ ability to create an internal understanding of the mission and vision of their organisation as well as its communication strategy is considered as the main step in order to have effective external communication. The role of uncontrolled communication was stressed too. Most of the respondents agreed that a better reﬂection of internal integrity of a company via its employees will have a positive impact on its perception, hence will create favourable word-of-mouth.
Another point also stressed was the management of media relations. The majority of the managers have mentioned that corporate design supports the communication of a company’s identity both internally and externally. However, more emphasis is given to slogan as well as architecture and location by the respondents. They have asserted that these three aspects help a company create a sense of attachment for its employees and shape what consumers associate with it. The respondents’ approaches to the link between corporate culture and corporate identity are twofold. Some interviewees believed that corporate culture and corporate identity are in fact inseparable, whilst others felt that corporate culture is distinct from identity. However, the interviewees mentioned that corporate history, which preserves company norms and practices over years; the founder of the organisation, who initially sets the business philosophy of a company; country-of-origin, which links national culture characteristics to a business’s working principles and practices; and sub-cultures, like different departments with different needs and desires as well as different nationalities having stake in a company, have a considerable impact on corporate culture.
Therefore, it could be concluded that even if some respondents excluded corporate culture from the components of corporate identity, an indirect relationship between them is implicitly assumed in their responses. The behavioural aspect of an organisation has been mostly associated with how managers disseminate information to employees about their organisational goals and practices. It is believed by many respondents that their organisations will have a better image and gain more recognition if their employees are able to represent the organisation’s values to external audiences. Additionally, they mentioned that their organisations’ reactions towards certain issues such as environmental problems will convey cues about their company’s identity.
The evidence from the interviews shows that corporate structure has an impact on how brand structure of a company is determined and managed as well as how companies with different hierarchical structures approach the concept of corporate identity. For organisations with complex structures, corporate identity has a role in communication with shareholders, investors etc. but individual brand identities are the means of communication with consumers. Less sophisticated organisations emphasise the link between structure and culture more and imply an indirect relationship between corporate structure and identity.
The industry identity is also deemed as having an effect on how individual companies are viewed. Companies especially in high proﬁle sectors such as oil and accounting have to carefully manage their relationships with the intermediaries such as the media, NGOs etc. so that they can protect themselves from the potential bad publicity of the industry in which they transact. Lastly, the respondents have mentioned with high consensus that corporate strategy provides the processes to be followed about how to manage their organisations’ identities on a daily basis as well as in the long run. In other words, corporate strategy determines what a company’s identity is and is going to be.
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From the preceding analysis, the following deﬁnition and the revised dimensions of corporate identity are proposed: Corporate identity is the presentation of an organisation to every stakeholder. It is what makes an organisation unique and it incorporates the organisation’s communication, design, culture, behaviour, structure, industry identity and strategy. It is thus intrinsically related to both the corporate personality and image.
The responses reveal that the companies studied approach corporate identity concept more from a communications point of view encompassing both internal and external communication. Therefore, the deﬁnition above is generated within the borders of communication management theory, which also enables us to achieve our objective of providing an operational deﬁnition of corporate identity (Cornelissen and Elving, 2003). It dissects the three elements of corporate identity mix, i.e. symbolism, communication and behaviour (Van Riel, 1995), and incorporates the following aspects: culture, structure, industry identity and strategy. These last four elements should be considered from the communication perspective as well. For example, while operationalising industry identity, the impact of communicated industry identity on the perception of an organisation’s identity should be measured. We believe that this approach will aid further empirical research, since it provides measurable terms (Cornelissen and Elving, 2003).
Implications In this article, we have reviewed the literature to provide a theoretical background that structures our investigation about how corporate identity is perceived (see Figure 1) and which components are related to the concept in practice. Through the responses given by the managers of the companies studied we present a view of components of corporate identity in comparison to its theoretically deﬁned dimensions. Figure 2 depicts the revised components of corporate identity concept and the sub-items for each category, which are deemed as the most important aspects by the respondents.
It mainly differs from the categories mentioned in the Stuart’s (1999b) model in the areas of corporate structure, corporate strategy, corporate culture and corporate personality. In line with Bick et al. (2003) and Cornelissen and Harris (1999), the deﬁnition proposed suggests that corporate strategy is about how a company reacts in the market in terms of positioning and differentiation, whereas corporate personality is a reﬂection of strategy and culture through mission and core values of an organisation. Therefore, personality dimension is implicitly incorporated in mission, vision and values whereas Stuart’s model (1999b) mentions it as separate dimension.
Corporate culture is deemed as the context (Hatch and Schultz, 1997) by which history, founder of the organisation, country-of-origin and sub-cultures are manifested into mission, vision and values of a company, whereas Stuart (1999b) models it as the overarching context to all dimensions. It recognises the environmental forces as Stuart’s (1999b) model does. However, it highlights industry identity as the major aspect of environmental forces. The article posits an operational deﬁnition on the basis of the information gathered from the companies under investigation which may aid future research. First, developing sub-items and their measures for each dimension presented in the proposed deﬁnition and examining the possible relationships between them might be the further step.
Taking that step also helps to test the value of the deﬁnition proposed in this article. Second, while the dimensions of corporate identity and importance of its management has been the focus of this paper, additional empirical research which considers consequences of corporate identity management in relation to company performance indicators could enhance overall understanding of the concept (Cornelissen and Elving, 2003; Dacin and Brown, 2002). For managerial implications, this investigation suggests that there are considerable beneﬁts to be gained from developing a virtuous corporate identity including motivation of employees, improving customer loyalty and bringing investment into a company. From this exploratory study we have developed a more all-encompassing deﬁnition of corporate identity as well as formulated the revised corporate identity categorisation. We believe that this categorisation provides a useful starting point for senior company management to formulate the appropriate corporate identity strategy for their company.
Furthermore, this categorisation will enable companies to conduct research that aims to ﬁnd out which speciﬁc components of corporate identity stakeholders ﬁnd most important. Companies can then use this information to manage their corporate identity and project the desired identity to the different stakeholders. There are certain key issues that need to be addressed: . The sustainability of corporate identity in providing both competitive advantage and trust-based relationship with stakeholders. The majority of the respondents stated that their corporate identity had changed signiﬁcantly in the last 5-10 years. Management, in many cases with the help of external consultants, had initiated these changes and their short-term nature may result in stakeholders questioning whether or not their identities are genuine or just a form of hype. .
The existence of sub-cultures provides a useful reminder that organisations are made up of many heterogeneous social groups. Pratt and Foreman (2000) argue that the existence of these different groups is one reason why organisational identity is a strategic tool that requires serious consideration. Organisations can take on multiple identities for example depending on different departments such as marketing or ﬁnance or in the case of a conglomerate, the industry sector in which a subsidiary company operates (Balmer and Greyser, 2002). .
The evidence from the interviews shows that corporate identity is a more complex issue than being a straightforward phenomenon (Cornelissen and Elving, 2003). An effective corporate identity management requires considering all the dimensions mentioned in the proposed deﬁnition as well as the contingencies relevant to them, especially, when forming positioning strategies.
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