Literature Review Corporate Identity What is corporate identity? The task of defining corporate identity is challenging. Different views and definitions were introduced to the concept. The first time the “corporate identity” term was used was in 1957 by Lippincott and Margulies (Cornelissen & Elving, 2003). It was constrained by the visual representation of the organization by which means it identify itself.
The understanding of the concept has expanded later to include all the characteristics that gives the organization its specificity, stability, and coherence (Larcon and Reitter 1979; Reitter and Ramananrsoa 1985 in (Moingeon & Ramanantsoa, 1997)) which includes culture, strategy, and core competency (Cornelissen & Elving, 2003), this supports Balmer & Gray (1999) argument that corporate identity can be a source of competitive advantage.
Although the concept has expanded to include more than the visual representation, visual cues still are assigned a great value in terms of communicating the corporate values and ethos rather than being a means of increasing the corporate visibility (Balmer, 1998). Balmer argues that the visual identity can play an important role in communicating strategic change and thus can be powerful. Albert and Whetten’s (1985) in (Cornelissen & Elving, 2003) have defined identity as the organization character that is central, enduring, and distinct.
Tsai (2008) adds to the previous definition that corporate identity is also of collective nature (Tsai, 2008). Olins (1989) discuss that all outputs of an organization contributes to the construction of its identity (van Rekom, 1997). Olins (1995) has defined corporate identity as “the explicit management of all the ways in which the organization presents itself through experiences and perceptions to all its audiences”.
Therefore, corporate identity is not concerned only with customers; rather it handles perceptions and identification of corporation to all stakeholders and is spanning beyond the visual design of the logos and letters of the organization to include its collective behaviour as an organization. Balmer and van Riel (1997) stated that corporate identity is rooted in the behaviour of its members which supports the argument that corporate identity is of a collective nature. Van Rekom (1997) defines identity as “the set of meanings by which an object llows itself to be known and through which it allows people to describe, remember and relate to it”. He conclude that identity reside in the corporate side but adds to the formation of a corporate image in the stakeholders side. Melewar and Wooldridge (2001) identified corporate identity as a strategic manifestation of corporate-level vision and mission, underpinned by the strategies which a corporation employs in its operations or production. In the previous definition it is presumed that corporate identity is aligned with the corporate vision which is the ideal case to leverage the benefits of corporate identity.
Van Riel (1997) defines corporate identity as the self presentation of an organization, rooted in the behaviour of individual organizational members, expressing the organization’s continuity, distinctiveness, and centrality. The challenge in defining the concept lies in its complexity and interdisciplinary nature as explained by Balmer and Soenen (1999). The International Corporate Identity Group (ICIG), therefore, came up with a statement of corporate identity, The Strathclyde Statement, to describe it. Please refer to Appendix B for the ICIG statement.
A commonality between all attempts to define corporate identity, as well as, The Strathclyde Statement, indicates its characteristics which are concluded to be: 1. Collective. 2. Central. 3. Enduring. 4. Identifying of corporate. 5. Manageable. 6. Manifested by corporate-level strategy (vision and mission). 7. Affecting corporate image and affected by corporate image. 8. Can be a source of competitive advantage. In spite all the variations in defining the concept, a clearer image of what corporate identity is emerges after studying its constructs and dimensions.
This will be explored in the next section. Corporate identity: The structure What meant by structure is the components that constitute the corporate identity. Regardless of the difference in categorizations, researchers have more in common when it comes to studying the construct of corporate identity than they had in its definition. Different views were offered of the construct of corporate identity. From a corporate communication paradigm, Birkigt & Stadler (1986) in (Balmer, 1998) have introduced corporate identity mix that focuses on the means by which corporate identity is communicated.
Their mix includes corporate personality, behaviour, communication, and symbolism. Birkigt & Stadler mix has been given a good deal of attention by many authors (van Riel, 1995; Balmer, 1998; van Rekom, 1997). Communication is considered an important factor in shaping corporate identity, where it is stated that messages are communicated through behaviour of organization members (Balmer & van Riel, 1997). In 1995, Schmidt’s mix was introduced; it adds external environmental factors and also includes corporate culture to the corporate identity mix.
It is composed of corporate culture, corporate behaviour, market condition and strategies, product and services, and communication & design. Melewar & Karaosmangolu (2006) suggest a “seven dimensions” construct for corporate identity that is very similar to Schmidt’s mix. These are corporate culture, corporate behaviour, and corporate communication, corporate structure, corporate strategy, corporate design, and industry identity. Balmer and Soenen (1999) have proposed a corporate identity mix that is composed of three of the human senses; these are soul, mind, and voice, see figure 1.
The mind is the vision and philosophy, strategy, products and services, corporate performance, brand architecture, and corporate ownership, the soul consists of values, cultures, employee affinity, and internal images, and the voice consists of the corporate uncontrolled communication, controlled communication, symbolism, personnel and corporate behaviour, and indirect (external/ third party) communication. Figure [ 1 ] [ 1 ] Corporate Identity Mix – Adopted from [ (Balmer & Soenen, 1999) ] Corporate culture
Corporate culture was devoted proper attention since the early stages in expanding the corporate identity concept beyond the visual identity (Baker & Balmer, 1997; Hatch & Schultz, 1997; Stuart, 1999; Dowling, 1986; Markwick & Fill, 1997; Stuart, 1999; Melewar & Karaosmangolu, 2006). “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 (Melewar & Karaosmangolu, 2006).
It is therefore, represented in the shared values and beliefs among corporate members and also includes corporate philosophy, mission, and subcultures (Melewar & Karaosmangolu, 2006). Baker & Balmer (1997) consider culture as the most important element in the corporate identity mix. However, in their explanation for corporate identity mix, Balmer & Soenen (1999) consider culture as a different concept from values but they place both of them in the Soul category in their organically inspired categorization.
All researchers in the topic state that corporate culture is an important factor in influencing corporate identity. Dowling (1986) puts corporate culture on the same ontological level as corporate identity and argues that culture, identity, and image are related components of a system that defines organizations, while Markwick & Fill (1997) consider corporate culture as part of corporate personality, which directly influence the corporate identity. Bernstein (1984) considers corporate personality as the total characteristics that generate corporate identity.
Abratt and Shee (1989) agree to the same opinion and consider these characteristics as the totality of behavioural and intellectual characteristics of the corporate. Melewar & Karaosmangolu (2006) found that culture is usually communicated to stakeholders through employees’ behaviour. Therefore, culture can be considered as a context in which employees’ behaviour is formulated (Stuart, 1999). Corporate Behaviour Many commentators suggest that the actions of a corporation are a fundamental element of its identity (Balmer & van Riel, 1997; Hatch & Schultz, 1997; Kiriakidou & Millward, 2000; Topalian, 1984; Olins, 1995).
While Balmer & Soenen (1998) consider behaviour as part of the voice in their categorization, Melewar & Jenkins (2002) gives more attention to the behaviour as described by “the body language”. Behaviour is one of the most important aspects in corporate identity since corporate identity is rooted in the behaviour of its members (Balmer & van Riel, 1997). This importance comes from the fact that behaviour can be an important media to communicate messages to different stakeholders (Melewar & Jenkins, 2002). Olins (1995) contends that everything that corporate does or say communicates.
Therefore, it is important to align employees’ behaviour totality or the corporate behaviour with the values, philosophies and communication to effectively contribute toward building the targeted identity. Van Rekom (1997) argues that actions that are deliberate are more important than spontaneous ones. Markwick & Fill (1997) argues that the visual cues can be misleading; they rely on other cues such as behaviour, communication, and values to understand corporate identity. It is important, then, to indicate that corporate behaviour has to be managed and aligned with the messages communicated by corporate to enforce its identity.
Management behaviour is an important aspect of behaviour since the former are more exposed to stakeholders. Hatch and Schultz (1997) argue that identity and image are influenced by the management behaviour. Melewar & Jenkins (2002) argue that management behaviour should be consistent with the values and vision of the organization not to create confusion or communicate faulty messages. Van Rekom (1997) emphasizes the importance of centrality in corporate identity and suggests that employees’ efforts and behaviour should collaborate towards confirming the organization goals and objectives.
Communication and design The purpose of creating a favourable corporate identity is to project a positive image to stakeholders and consequently a good reputation for the organization. Corporate identity has to be communicated in order to be able to take this advantage. Therefore, all communication media’s have to be aligned and coordinated in order to create a consistent corporate identity. Van Riel (1995) considers succession in communicating corporate identity as a factor to measure the effectiveness of corporate communication. Controlled Communication
Ind (1992) describes corporate communications as the “process which translates corporate identity into image”. Where Ind include uncontrolled communication in his definition, van Riel (1995) distinguishes between controlled and uncontrolled communication in his definition of corporate communication as “an instrument of management by means of which all consciously used forms of internal and external communications are harmonized as effectively and efficiently as possible, so as to create a favourable basis for relationships upon which the company is dependent”.
Controlled communication can be classified to include management communication, marketing communication, and organizational communication; which are controlled type of communication (van Riel, 1995). Management communication is vital in communicating the corporate objectives and goals to employees (Melewar & Jenkins, 2002). It is defined as an attempt 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).
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. Marketing communication include, advertising, public relation activities and direct marketing. Van Riel (1995) puts organizational communication as the one with stakeholders that has an interdependent relationship with the organization; this includes internal and external stakeholders. Uncontrolled Communication Cornelissen (2000) contends that perceived corporate identity is formed by controlled and uncontrolled communication.
Olins (1995) and Balmer (1995) agree on that everything the organization does or say communicates. Uncontrolled communication usually occurs by organization’s members dealing with external stakeholders (Moingeon & Ramanantsoa, 1997). It can be concluded that uncontrolled communication mainly occurs through behaviour; therefore, behaviour of corporate members should be aligned with corporate philosophies, values and strategies as mentioned earlier. Melewar & Karaosmangolu (2006) suggest that the corporate members’ commitment to the corporate values and goals will reduce the negative uncontrolled communication.
A dynamic interrelationship between culture and communication (controlled and uncontrolled) can be concluded from the earlier argument. Corporate culture is usually communicated through employees’ behaviour (uncontrolled communication) (Melewar & Karaosmangolu, 2006). Corporate Design Corporate design is consisted of the organisation’s name, slogan, logotype and symbol, colour and typography (Melewar & Saunders, 1998). Bernstein (1986) and Dowling (1986) consider the messages communicated through the symbol have more value than the symbol itself.
Therefore, it is the communication done by the symbol that makes the visual identity important to corporate identity. Melewar and Saunders (1998) attest on the importance of visual identity of corporation in influencing purchase decisions by consumers due to the rapid change in technology. The visual manifestation of corporate identity can communicate the corporate values and support the other forms of communication (Baker & Balmer, 1997). Melewar & Karaosmangolu (2006) also found that the slogan has powerful effect on stakeholders’ perceptions of the organizations.
Structure Corporate structure is fundamental component of corporate identity (Olins, 1986; Melewar & Karaosmangolu, 2006). Brand structure Organizations develop branding strategies in order to distinguish itself from competitors (Melewar & Karaosmangolu, 2006). Olins (1986) have introduced three different brand structures: 1. Monolithic structure: in this structure, the corporate uses consistent design and name. 2. Endorsed structure: where the names and designs of the subsidiaries are associated with the parent corporate. 3.
Branded structure: indicates that the design and name of the parent company is less exposed to customers and different products have separate brands. Organisational Structure Organizational structure refers to the hierarchy in the organization, lines of reporting and communication. The degree autonomy of the managers is determined by the degree of centralization within the organization’s structure. The more decentralize the structure is, the more autonomy managers have, (Melewar & Karaosmangolu, 2006) which may lead to the emergence of new brand structure (Olins, 1986). Strategy
All literature reviewed has made a link between corporate identity and strategy. There are different views on the relationship between corporate identity and strategy. The first view indicates that strategy provides a context to encapsulate corporate identity (Markwick & Fill, 1997; Stuart, 1999). The second view argues that as corporate identity encapsulates corporate values and mission and vision, it makes a reference point for the corporate strategy (Balmer & Greyser, 2009). He (2006) suggests a dynamic interrelationship between corporate identity and strategy which can be bidirectional.
He (2006) suggests that corporate identity and strategy should have a big enough gap to allow change and enough alignment to maintain consistency. Melewar & Karaosmangolu (2006) have highlighted two strategy types that are: Differentiation Strategy Differentiation strategy is the aspect of the corporate strategy that focus on the corporate strength and competitive advantage which is linked to the basic identity of the corporate (Melewar & Karaosmangolu, 2006). Positioning strategy Positioning strategy which is, according to Melewar & Karaosmangolu (2006), linked to the desired identity for the corporate.
Corporate identity management Several models were introduced by academics to manage corporate identity. In the following sections, some of these models are described and analysed. Kennedy (1977) Kennedy’s model has focused on the creation of a positive corporate image (See Figure 2). She has realised the ability to influence corporate image through behavioural projections of the company. Kennedy has realised that based on the reality behaviour, or as per her wording “policies operating within the company”, an enduring and robust positive image can be obtained.
In this model, Kennedy has acknowledged the importance of the effect of employees perception of the corporate on their behaviour and consequently on the projection of the corporate image to other stakeholders. In other parts of her article she declares the importance of employees in the process of company image formation. Also, there was no mentioning of visual identity of the corporate, as we know it is part of the corporate identity mix. Although her model hasn’t handled corporate identity in its new shape, her model was a starting point for several further models.
Kennedy’s model main contribution was her awareness of the ability to influence corporate image based on corporate reality and behaviour. Figure [ 1 ] [ 2 ] Kennedy model for managing corporate image – Adopted from Stuart (1999) Dowling (1986) As seen in Figure 3, Dowling has elaborated on the role of communication in forming image of the corporate. Dowling considered that interpersonal communication represents the images of the firm held by these groups, and that mass media communication represents the company’s perception of itself.
His argument is in contrast with the later literature reviewed which distinguishes between corporate identity, which communication is part of, and the corporate image that can be influenced by communication. Van Riel (1995) suggests that corporate communication should be consistent with corporate strategy, corporate identity, and corporate image. Figure [ 1 ] [ 3 ] Dowling model for managing corporate image – Adopted from Stuart (1999) In the conception of corporate culture, Dowling has dealt with culture as a determinant where he placed it at the same level with identity (Hatch & Schultz, 1997).
However, Hatch and Schultz didn’t share the same opinion with Dowling where they have considered culture as a context of identity rather than being a determinant. Also Dowling’s model were criticised for his underestimation of the role of management communication in influencing employees’ behaviour and internal images. Abratt (1989) Abratt’s model has introduced the concept of corporate personality. He argued that from the corporate personality, corporate philosophies can be developed, where the latter include values and culture of the corporate.
The strategy was also included in the corporate personality in the model as showed in Figure 4. However, Abratt has defined corporate identity as “an assembly of visual clues-physical and behavioural by which an audience can recognise a company and distinguish it from others and which can be used to represent or symbolise the company” (Abratt & Shee, 1989). It can be realised that Abratt regarded corporate identity as a communication process. Figure [ 1 ] [ 4 ] Abratt’s model for corporate identity management – Adopted from Stuart (1999) The main addition of this model is that it ntroduced the identity-image interface which was used by many authors later on like Stuart (1998, 1999) and Hatch & Schultz (1997). Markwick and Fill’s (1997) This model was inspired by Abratt (1989). The authors have made a distinction in strategy between the content and the process. As they agree with Abratt that the process of formulating corporate strategy is influenced by the corporate culture, which is included in corporate personality, they argue that the content of strategy may vary and is not determined by the culture all the time.
Therefore, they have added strategic management as a factor influencing corporate identity and corporate personality. Figure [ 1 ] [ 5 ] Markwick & Fill model for corporate identity management – Adopted from Markwick & Fill (1997) Markwick & Fill (1997) attest on the role of uncontrolled communication through employees’ behaviour. They argue that the consistency in images held by employees about the corporate can be projected as a positive cue to stakeholders.
It is, then, suggested that corporate identity management is helpful to associate employees with these positive internal images (Markwick & Fill, 1997). In this model Markwick & Fill have used the corporate communication mix by van Riel (1995) to indicate relations between the components in the model. Stuart’s (1999) This model excludes organizational culture from the corporate personality to be placed as a context in which corporate identity is formulated. This model highlights all aspects of communication as the previous one.
Stuart’s model is the most comprehensive one of all it indicates the role the products and services of the corporate in shaping its identity, introduces the effects of corporate structure on the corporate identity, and include the effects of corporate identity structure introduced by Olins (1986). This model will be discussed and used as the baseline for our assessment of the Balanced Scorecards as a tool to manage corporate identities. Figure [ 1 ] [ 6 ] Stuart’s model for corporate identity management – Adopted from Stuart (1999)