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Elif Karaosmanoglu
Researcher, Marketing Department, The Middlesex University Business School, London
Douglas Paterson
(Formerly) Warwick Business School, University of Warwick
The purpose of this paper is to provide an overview of the corporate identity concept. This
investigation initially provides a brief review of the literature and clari®cation of the various
components of the corporate identity concept. Then, through a series of in-depth interviews
with 32 individuals from twenty dierent organisations in dierent industries, it aims to develop
an understanding of the bene®ts organisations believe can be derived from a strong identity. The
study shows that many practitioners and academics believe that a virtuous corporate identity is
pivotal to their success. Many interviewees stated that the bene®ts of a strong and positive
corporate identity could boost employee motivation, increase the ability of the organisation to
recruit and retain high quality employees, provide a strong base for organisational culture in the
event of mergers and acquisitions, increase transparency of business practices, bring com-
petitive advantage, help to develop better relationships with other businesses and aid
investment into the company. The study recommends that businesses should try to develop
systematic methods of measuring and managing their corporate identity.
Introduction
Interest in corporate identity has increased in both academic and business
circles in recent years. Corporate identity is now widely recognised as an
eective strategic instrument and a means to achieve competitive advantage
(Gray and Smeltzer, 1985; Schmidt, 1995). It can be used to gain competitive
advantage as customers identify with all aspects of a business, including its
social, cultural and ethical policies and not just with the company's products
and services. Furthermore, when making purchase and investment decisions
and evaluating employment opportunities, all stakeholders are increasingly
concerned with corporate reputation, which is based on the stakeholders'
elaboration of corporate identity over time.
Review of literature
Corporate identity: the concept
In some studies of identity, corporate identity has been ascribed to the design
elements of organisations (e.g. Jenkins, 1991; Pilditch, 1970; Selame and
Selame, 1975). These studies have focused on the evolution of a company's
1
The terms corporate identity, corporate brand, corporate reputation as well as corporate
image are being used interchangeably. However, the discussion and delineation of the borders
of these terms are not within the scope of this paper. For de®nitions of these terms the readers
could refer to Balmer (2001), Dutton and Dukerich (1991), Gioia, Schultz and Corley (2000),
Melewar (2003), Stern, et al. (2001), Whetten and Mackey (2002).
2
Melewar (2003) has termed these elements as the Corporate Identity Taxonomy in his article.
Corporate culture
The organisation's core values, behaviour and beliefs are re¯ected in its
corporate culture (Albert and Whetten, 1985). Corporate culture and corpo-
rate identity are closely related and intertwined with each other (Hatch and
Schultz, 1997). Hence, Ambler and Barrow (1996) state that corporate culture
is associated with the values that support the organisational strategy or
corporate identity (Abratt, 1989). There are a number of dierent views as
to what constitutes corporate culture and unsurprisingly, no concrete de®ni-
tion of the concept exists.
Furthermore, there is a contentious debate concerning the extent to which
corporate culture can be created by organisational leaders, as opposed to being
something far less controllable emerging from social interaction (Smircich,
1983). However, many commentators (e.g. Abratt, 1989; Balmer, 1998;
Balmer and Soenen, 1999) agree that the following elements are contained
within corporate culture: corporate philosophy, corporate values, corporate
principles, corporate guidelines, corporate history, founder of the company,
country-of-origin and subculture.
Corporate philosophy is associated with the core values and assumptions of
a company created by senior management. Corporate values are concerned
with the moral principles and beliefs that guide the company's culture (Gray
and Balmer, 1997). 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; Ind, 1992). Furthermore, the
corporate mission guides the strategic management of the business and is an
important source of dierentiation from other organisations.
Corporate principles are fundamental in the formation of corporate actions
such as targets, values and the mission of an organisation. Corporate guide-
lines are vital in explaining the signi®cance of corporate principles to all levels
of the hierarchy within the organisation. Corporate history has an impact on
corporate identity as organisational culture develops and evolves over long
periods of time and is shaped by the events that take place (Ind, 1992). Many
authors also state that the founder of the company plays a crucial role in
driving and shaping organisational culture (e.g. van Riel and Balmer, 1997).
Similarly there is often a country-of-origin eect whereby characteristics of
national identity are a strong in¯uence on company culture (Balmer, 1998).
Finally, the issue of subcultures must be dealt with. The unitary perspective
assumes that culture is monolithic and a re¯ection of the founder's beliefs
(Peters and Waterman, 1982) and in consequence organisational members
share a sense of loyalty and commitment to the organisation (Dutton et al.,
1994; Whetten and Godfrey, 1998). However, this view is a little misleading.
Hence, many commentators have embraced a dierentiation perspective,
viewing the organisation as an amalgamation of subcultures (Melewar, 2003).
Corporate behaviour
Dutton and Dukerich (1991) and Dutton et al. (1994) highlight that organ-
isational identity is driven by the degree of cohesion between the organisation
and the employees, i.e. the level of their commitment and enthusiasm towards
running and sustaining the organisation's long term development. There are a
number of elements associated with behaviour including corporate behaviour
(Balmer, 1997), employee behaviour (Kennedy, 1977; Dowling, 1986; Kir-
iakidou and Millward, 2000) and management behaviour (van Riel, 1995).
Corporate behaviour stems from corporate actions in their entirety, both
those that are planned and congruent with corporate culture and those that
occur spontaneously.
A clear distinction can be made between corporate behaviour and employee
behaviour. Corporate behaviour is associated with senior management's task
of instigating the clear communication of the corporate vision and strategy.
Whilst employee behaviour is associated with the process by which employees
relate to the organisation (Dutton and Dukerich, 1991; Dutton et al., 1994).
Finally, senior management, through their actions and statements, exert a
substantial in¯uence over management behaviour.
Corporate structure
Corporate structure consists of organisational structure and branding
structure and is a fundamental component of corporate identity. Organ-
isations engage in branding strategies in order to positively dierentiate
themselves from competitors (Aaker, 1996; Balmer, 1995, 2001; Ind, 1996).
Three varieties of corporate identity structures have been put forward by
Olins (1989).
Firstly, 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. Secondly, there is the endorsed
structure, in which corporate identity is associated with the name of the
subsidiaries. Finally, the branded structure is one where products are
dierentiated through dierent brand names. The organisational structure
is associated with the degree of centralisation and decentralisation, in terms of
both geography and across products (Ind, 1992).
Industry identity
This refers to fundamental industry features such as competitiveness, size and
rates of change, which in¯uence the corporate identity of a company. The
industry identity can have a profound eect on a company's ability to project
its individual corporate identity. The corporate strategy of certain organ-
isations will be strongly in¯uenced by the industry that they compete in
(Melewar and Wooldridge, 2001; Peteraf and Shanley, 1997). For example,
during the 1970s the public took a fairly negative view of the oil industry, and
hence of the individual companies in the sector, like Chevron in the USA
(Winters, 1986, 1988).
It appears that these companies have experienced some diculty in
changing their identities, owing to criticism of their environmental prac-
tices. This criticism comes from sources of uncontrollable communication
such as environmental groups, and they aect not only individual ®rms but
Corporate strategy
Corporate strategy is the blueprint of the ®rms' fundamental objectives and
strategies for competing in their given market. It determines what the
company produces, the level of pro®t made and stakeholder perceptions
about the company. As corporate strategy lies within the personality of the
organisation and corporate identity is an expression of this personality
(Abratt, 1989), corporate strategy is thus a component of corporate identity
(Gray and Balmer, 1998; Gray and Smeltzer, 1985; Ind, 1992; Kiriakidou and
Millward 2000).
Simoes (2001) conducted research into the relationship between business
level strategy and corporate identity management. She found that companies
which focus on brand consistency tend to use corporate identity management
to dierentiate themselves from other organisations. Indeed, corporate
identity is seen as a basis for dierentiation and positioning (e.g. Abratt,
1989, Gray and Smeltzer, 1987, Riel and Balmer, 1997). Additionally, Simoes
(2001) found that cost-oriented ®rms focus on visual aspects of corporate
identity management, simply because they prioritise lower-cost advantage,
rather than investing more on dierentiation. These ®ndings show that
companies with dierent strategy orientations have dierent levels of corpo-
rate identity management.
Methodology
This article is an exploratory study, which aims to gain from practice new
insights into the corporate identity concept and its management. The
espoused values of those leading the organisations, as expressed through
corporate identity and their actual impact in practice are the main focus of the
study. Thus, the investigation aims to compare the rhetoric surrounding
corporate identity with the reality of its practice. In particular, it seeks:
To determine the extent to which organisations follow a systematic
approach in constructing their corporate identity.
To determine the implementation of corporate identity by organisations
in diverse sectors and of different sizes.
To evaluate the benefits of corporate identity as perceived by the managers
interviewed.
Since the identity ®eld is a relatively new area of interest and its de®nition
and linkage to related concepts remain vague (Melewar and Wooldridge,
2001), the researchers adopted a qualitative methodology as an initial step
(Bryman, 2001), which helps to clarify concepts and to show new directions
for further investigation (Churchill, 1991). It relies on in-depth interviews to
increase the possibility of obtaining rich data from the views of interviewees
(Bryman, 2001). Like many exploratory studies, the companies were chosen
Field interviews
The goal of the investigation was to ascertain individuals' perceptions and
experiences of corporate identity. In consequence, the study was qualitative,
based upon extensive interviews with 32 individuals from twenty companies
and concerning the implementation of corporate identity within their respect-
ive organisations. The study was orientated towards theory construction (i.e.
elicitation of constructs and propositions) and so the interviews aimed to
examine a wide range of experiences and perspectives.
The companies were from a broad spectrum of industries including two
multinational banks, two multinational accountancy ®rms, 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 ®eld of marketing, four held
human resources positions and fourteen were senior managers or directors
and four were on graduate training schemes. Multiple individuals were
interviewed in certain organisations.
company operating under the Anglo-Saxon norms has led to many situ-
ations of con¯ict and misunderstanding.
A former senior director from the engineering company stated: `The merger
changed many aspects concerning the way in which we did business. We had
previously operated under a system in which there had been a strong ethos on
loyalty and teamwork, which was dramatically undermined once the new
management was brought in. This meant that successful working relation-
ships that had been in place for years were massively disrupted.'
The new values espoused once the merger had taken place were incongruent
with values that had been evolved over many years at the engineering
company. This highlights that corporate identity may not always be helpful
in bringing about integration between two companies in the event of a merger.
This was probably because of apparent massive dierences between each
corporate culture.
In conclusion, the establishment of a clear and consistent corporate identity
in the event of a merger can be seen as a way of aiding integration and reducing
confusion amongst the new workforce. Similarly, it can signify to other
stakeholders such as investors and customers the strategy of the new company
and any changes in strategy that are to take place.
environmental and ethical policies so that consumers can see that we are an
organisation operating with integrity and solid principles.'
This company has intensively marketed their `green policy' over the last
decade. This is partly a result of the bad publicity the company had received as
a consequence of some of its activities in Third World countries and its
environmental record. Furthermore, it is now easier for NGOs like Green-
peace to publicise poor environmental practices by use of new technologies,
such as the internet.
The development of a positive corporate identity has therefore clearly
provided them with a tool to counteract negative consumer perceptions. This
corporate identity has been cultivated via extensive marketing and discussion
with environmental groups as to how they can conduct their operations with
minimal damage to the environment. The company has become proactive in
trying to achieve the `triple bottom line' as opposed to simply pro®t
maximisation. The term `triple bottom line' is used to capture the whole set
of values, issues and processes that companies must address in order to
minimise any harm resulting from their activities and to create economic,
social and environmental value. This quest for the triple bottom line has
become engraved in this company's corporate identity.
The manager of a marketing consultancy stated that: `Our company is
recognised in the industry as one that develops and provides customised
marketing solutions to the exact speci®cation of our customers; this is our
source of competitive advantage. This recognition has been achieved through
the results we have delivered. Our corporate identity has contributed to these
results as it has instilled an ethos of service quality in all our employees, which
is what our company culture is really all about.'
Further dialogue with this manager revealed that this company culture had
been `instilled' through a variety of means such as training days, recognition
systems and communication from the top of the hierarchy. These appear to
have been successful in developing the aspired company culture and in
consequence have contributed to providing a competitive advantage via
corporate identity.
Thus, one of the primary reasons why companies are placing so much
importance on the issue of corporate identity is because identity can play an
important role in cementing consumer loyalty and the strength of brands and
this will obviously have a bene®cial impact on sales.
This company appears to have developed strong links with the organ-
isations that it does business with. Again these relationships have been actively
encouraged by senior management, who have used elements of corporate
identity (such as communication with employees) to stress the importance of
building partnerships in business. Similarly, an interviewee from the oil
company stated that: `The size of our organisation means that healthy links
with other businesses are a necessity. A lot of time and eort goes into our
business to business operations and extensive marketing in this area also takes
place.'
Thus, at this company marketing is aimed at other organisations in order to
promote the corporate image. Business-to-business links are clearly import-
ant to the company and therefore (company name) must try to ensure that
they are perceived positively by other businesses.
Conclusion
The study shows that there is considerable divergence in opinions concerning
the fundamental components of corporate identity. At one end of the
spectrum, some interviewees perceived it largely as being a marketing tool
and associated it with the external conception of the ®rm, developed through
advertising and public relations. Conversely, others saw it as a more inclusive
term, which includes virtually every aspect of the ®rm from strategy to culture
and argued that it was the very essence of the company.
In summary, the investigation found that all respondents believed that
corporate design, behaviour, communication and strategy were components
of identity. There was no unanimous agreement concerning the inclusion of
corporate culture and corporate structure. Some respondents felt that both
were integral to identity whilst others argued that they were aliated to
identity but not components. There was no clear distinction between the views
of employees at dierent levels of the hierarchy, although there was a general
perception amongst some that a gap existed between the rhetoric and practice
of some elements of corporate identity systems.
Despite the lack of consensus on `what' corporate identity is, there was
considerable agreement about the bene®ts of a strong, positive corporate
identity. All interviewees stated that these include the areas of employee
motivation, recruitment and retention, maintaining consistency during
mergers and acquisitions, consumer attractiveness via transparent and ethical
business practices and improvement in supplier and investor relationships
and competitive advantage.
It has also been mentioned that in order to have positive results in these
areas corporate identity should be managed by thorough implementation of
plans established for each component (See Figure 2).
meant that most employees genuinely felt that the organisation `belongs to the
people who work at it.' Many spoke of how signi®cant events such as the recent
accountancy scandals had aected corporate identity.
The food and domestic products conglomerate also appeared to adopt a
thorough approach to the management of identity but the interviewee stated
that it placed far more importance on marketing itself to the consumer than any
other stakeholder group. Similarly, the trading conglomerate heavily invests
in managing its corporate identity; however, it is primarily concerned with
its identity in the eyes of investors, rather than the other stakeholder groups.
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T.C. Melewar received a PhD in International Corporate Visual Identity. Formerly a lecturer at
MARA Institute of Technology, Malaysia and Senior Lecturer at De Montfort University,
Leicester, Dr. Melewar has links with a number of companies including Corus, Sony and
Safeway. Current research interests include corporate identity, marketing communications
and international marketing strategy. In addition to all these roles, Dr. Melewar is Visiting
Professor in International Marketing at Groupe ESC Grenoble, France.
Elif Karaosmanoglu is a research fellow at the Middlesex University Business School and
doctoral researcher at the Warwick Business School. She received a BSc in Management
Engineering from Istanbul Technical University and an MBA from the Marmara University
Institute of Social Sciences. She has published widely, following leading conferences' proceed-
ings: recently she published her research in conjunction with the European Marketing Academy
Conference and with the International Conference on Corporate Identity, Reputation and
Competitiveness. With Dr. T.C. Melewar she has also co-authored a chapter in Communicating
with Customers: Trends and Development, edited by Cleopatra Veloutsou.
Douglas Paterson was a former Master's student, supervised by Dr. Melewar, studying at
Warwick Business School.