Corporate Identity as a Strategic Management Tool - Term Paper Example

Corporate Identity as a Strategic Management Tool Introduction A brand is defined as a term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of other sellers.’ This definition, according to the American Marketing Association, or AMA, is basically about companies being able to hold their own market against their competitors. It is about having the capability to make their consumers choose their products and/or services as opposed to the other brands in the market. Brands are able to capture the experience and perceptions of a certain customer, all of which can be influenced by the brand itself, and over which they also have no control of (Lake, 2009).However, brands mean so much more than just advertising and marketing. It not only embraces visual elements, but for a brand to be familiar with its audience, it should always be involved in complex marketing science and cognitive behaviour analysis. This means that brands need to tap into their customers’ minds and should be able to capture their customers’ attention. Furthermore, a strong brand can only remain so if it is constantly managed well in the context of a business design built around its customers and profitability (Birdsall and Johnston, 2008). According to Aaker & Joachimsthaler (2000), the concept of corporate branding in marketing is not just branding the product and marketing it to the general public. In fact, it goes beyond that. The concept of branding is one that takes into consideration the company’s values. Balmer (2001) also mentions that corporate brands should not be mistaken to have the same meaning as product brands. The main difference is that corporate brands have a higher strategic focus, and they also have different internal and external goals for success. Furthermore, the employees themselves, in addition to a company’s management team, all have a part to play in making sure that the values being exhibited by the company does not only take place within the organization, but the same values must also be exhibited outside the organization. Knox (2004) states that the perception that consumers have with regards to a certain brand heavily depends on the reputation of the company to the general public. On an equal note, the image that a company may give off the public may also be the result of the perceptions of the consumers themselves (Chun & Davies, 2006). Reputation, Identity and Image It must be noted that there is a main difference between reputation, identity and image. According to Whetten & Bromley (2002), the identity of a company is that which refers to what the organization focuses on, what it strives for and what people remember the most about it. It is something that makes an organization unique, and it is what makes the organization stand out amongst its other competitors. It is something that comes from the stakeholders of the organization since they are the ones that are directly involved with what the organization is about, or stands for. On the other hand, the image that a company possesses may purely depend on how an individual perceives the company to be. Thus, oftentimes, even when a company does not wish to give off a negative image to the public, such instances do happen, even unintentionally. Finally, the reputation of a company is the kind of message that it relays to its consumers. It also consists of the kind of expectations that is expected of the company, and how well it delivers its promises. Thus, when a consumer evaluates an organization’s performance and compares it with their own expectations, the company’s reputation is at stake. According to Dowling, 2001), the reputation of a company is seen through a company’s visions and missions, its strategic intent and also its core competencies. When a company has a solid reputation, a competitive advantage is created and this is what influences several factors, that ultimately affect the company’s profitability. These are the purchase decisions of the consumer, the commitment of the employees, the decisions of the investors and the coverage of the media. If companies are not able to build a solid reputation, than it could be expected that the company would not be transparent to the public. This is because transparency is connected to a higher market value, and when a company is faced with challenges, one of the most important things to worry about would be their transparency to the public. The greater the transparency, the higher the market value (Fombrun van Riel, 2004). Alvesson & Willmott (2002), have constructed a model of identity regulation which aims to determine the processes through which organizations are able to acquire their own control from the construction of particular selves. Identity regulation basically stems from an employing organization, by way of the ‘discursive mechanisms’ which encourage employees to create their own self-images, which are in turn, aligned with the objectives of the management team. The formation of a person’s identity begins during the early stages of a child’s life, especially through ‘parental identification.’ It is during the teen years when the individuals are particularly concerned about who they are and what they should be like. The formation of the identity process is one that includes an interaction between both the external (social) and the internal (biological and physiological) factors. Both these factors have a direct effect on the person’s sense of identity. Without identity, a person does not have a sense of meaning, since it is what guides an individual with his/her source of actions, and it is also influenced by cultural attributes that give it further meaning (Castells, 1997). In the workplace, it is important for leaders to define a certain type of reality for all the members of the organization. It is also the leaders’ responsibility to make sure that this reality is easily accepted by the entire organization. In order for an organization to become successful, it is important that all its members are encouraged to have a shared spirit and they should also establish an identity through explicit, concrete, particular and self-conscious activities (Van Maanen, 1976). All the members of the organization can develop a certain sense of identity through the help of symbols that separate the organization from its environment and through the acquiring the identity out of interacting with other individuals within and outside the organization itself (Salzer, 1994). The Concept of Social Identity According to Wendt (1999), the social identity of an organization refers to the defining characteristics that make up the missions of the organization within a social setting. At this level, the identity of the corporation is one that makes up the group’s existence and it is also that which creates time and space for all its members. However, social identity must not be confused with corporate identity. While social identity refers to the different elements that can be considered to be fixed entities, otherwise known as ‘units of analysis,’ that have certain characteristics. On the other hand, corporate identity does not focus on fixed entities with characteristics. This assumption is rejected and this is done by endogenizing the corporate identities of the units just described (Abbott, 1992). As compared to social identities, corporate identities are configurations rather than just properties of other wise given actors. In this context, they are able to go through ‘entity processes’ with regards to both their existence and extent (Bowie, 2002; Gilpin, 1981). Changing Identity One of the most crucial questions that has to be asked is with regards to whether identity can be changed at all. According to Whetten (1985), there are a number of important stages within an organizational process wherein changes in identity are most likely to take place. For instance, when a person in power or authority makes the decision to leave the organization, or during the occurrence of retrenchment. Hatch & Schultz (2002) feel that there is a link between both identity and image when it comes to changing identity. Whether the image of an organization maybe external or internal, it can influence and alter organizational identity whether this is desirable or not. Organizational identity is also considered to be something that mutates over time and adapts, depending on the current environment. It is also something that can be managed in such a way so that it can reach the goals of the organization (Alvesson & Wilmott, 2002). According to Selvon (1996), many organizations imitate another organization’s identity. There have also been reports and research findings that both identity and identity change are perceived to be different by both employees and managers. Members of management teams tend to perceived identity at a strategic level, employees consider their identity to include both values and culture, therefore making it even harder to change (Corley & Gioia, 1983). One of the ways in which managers can manage corporate identity would be to influence or encourage their employees to be open to new changes that may take place within and outside of the organization. However, there have also been findings that organizational identity from a strategic perspective is less internalized at the managerial level than at the employee level. Thus, companies should constantly rely on knowledge resources in the company. There have been suggestions that in order to study organizational identity, there is a need to study it over time and there is also a need to utilize organizational history as a main source of information and analysis (Corley & Gioia, 2003). In order to manage corporate identity, there is a need for open communication to take place between the managers and the employees of an organization. This is because most employees feel that communication between managers and themselves simply contribute to a lack of corporate identity. In this context, it can be concluded that one of the most, or rather, the most important factors to bring about corporate identity and how to effectively manage it would be to make sure that sufficient communication is achieved (Riantoputra, 2010). Conclusion Companies find themselves constantly struggling to be recognized. A variety of factors make it increasingly difficult for companies to do this, not only for their customers but also for their investors, partners and employees. However, once a brand becomes successful as reinforced through corporate identity, it can make all the difference in ensuring that the brand can withstand the pressures of the economic cycle, and the varying tastes of the market. References Aaker, D.A. and Joachimsthaler, E. (2000) The brand relationship spectrum: The Key to the brand architecture challenge, California Management Review 42(4): 8–23. Alvesson, M. and Willmott, H. (2002) Identity regulation as organizational control: Producing the appropriate individual, Journal of Management Studies, 39(5): 619–44. Balmer, J.M.T. (2001) Corporate identity, corporate branding and corporate marketing: Seeing through the fog, European Journal of Marketing 35(3/4): pp. 248–291. Birdsall, C. And Johnston, N. (2008) Achieving brand-driven business success, Design Management Review, ABI/INFORM Global, p. 67. Bowie, D. (2002) Hospitality marketing : an introduction, pp. 142-144. Castells, M. (1997), The Information Age: Economy, society and culture, Vol. II: The Power of Identity (Oxford: Blackwell). Chun, R. and Davies, G. (2006) The Influence of corporate character on customers and employees: Exploring similarities and differences, Journal of the Academy of Marketing Science 34(2): pp. 138–46. Corley, K.G. and D. Gioia (2003) Organizational identity fragmentation during a Spin-off: Hierarchical Differences in Perceptions of Identity Change. Paper presented at the European Academy of Management Third Annual Conference, Milan, 3–5 April. Cullen, J. (2005) Corporate identity and reputation intelligence: Emerging opportunities for information professionals, Business Information Review, p. 101. Dowling, G. (2001). Creating corporate reputations: Identity, image, and performance. Oxford, UK: Oxford University Press. Fombrun, C. J., & van Riel, C. B. M. (2004). Fame & fortune: How successful companies build winning reputations. Upper Saddle River, NJ: Prentice Hall. Gilpin, Robert (1981) War and Change in World Politics. Cambridge: Cambridge University Press. Hatch, M.J. and M. Schultz (2002) The Dynamics of Organizational Identity, Human Relations, 55(8), 989– 1019. Knox, S. (2004) Positioning and branding your organisation, Journal of Product and Brand Management 13(2/3): pp. 105–15. Lake, L. (2009) What is branding and how important is it to your marketing strategy? Retrieved on February 19 2010 from http://marketing.about.com/cs/brandmktg/a/whatisbranding.htm Riantoputra, C.D. (2010) Know thyself: examining factors that influence the activation of organizational identity concepts in top managers’ minds, Group and Organization Management. Whetten, D. A.,&Mackey, A. (2002). Identity congruence and its implications for the study of organizational reputation. Business & Society, 41, pp. 393-414. Read More