Corporate Identity

Corporate identity can be defined as the identity of an organization that is constructed through the media to differentiate a company’s position in the eyes of important stakeholder groups. Corporate identity is the organizational equivalent of personal identity, or who and what a person is. Translated to the organization, the search for identity starts with who, what, and why—in business referred to by Simon Sinek as the golden circle, the reason for the existence of organizations. Because image and reputation have increasingly been seen as important for organizations, the quest for corporate identity has also become important.

The corporate identity construct became important in corporate communication at the very end of the 20th century and has been central in scientific debates on corporate communication ever since. One reason for this is the shift from product branding to corporate branding, in which companies attempt to distinguish themselves based on the company culture and values. The ongoing emphasis on corporate social responsibility of organizations and positioning organizations as part of society stems from thinking and theorizing about corporate identity. Without language and communication, an organization would not exist.

This entry covers the types of corporate identity, the benefits of corporate identity, and the connection of corporate identity to corporate reputation management and to corporate culture, structure, and strategy.

Types of Corporate Identity

Corporate identity scholar John Balmer’s AC3ID model consists of questions that are fundamental for organizations in finding a unique position in a competitive market and finding desirable answers that can and will create extra value. Although these questions help, finding the right answers might be difficult. In practice, there are big gaps in how organizations are seen and what they really are, and between what organizations ought to be, what they wish to be, and what they really are. The search for these answers is of eminent importance.

In the AC3ID model, the actual identity comprises the current attributes held by the organization, what the organization really is, whereas the communicated identity (what the organization is saying, online or in print, to its investors and customers, etc.) is a different angle and is not always the same as the actual identity. Conceived identity refers to the perceptions held of the organization by internal and external stakeholder groups and networks, whereas covenanted identity refers to the covenant (promises) that relates to the corporate brand. The ideal identity reflects what the organization considers its optimum, whereas the desired identity is what the organization wishes to be.

Besides the AC3ID model, Balmer presents a star as the 6Cs (character, communication, constituencies, covenant, conceptualizations, and culture), as equal parts of the corporate marketing mix or the corporate communication mix. Balmer identifies the points of the star as character (what we indubitably are), communication (what we say we are), constituency (whom we seek), covenant (what is promised and expected), conceptualizations (what we are seen to be), and culture (what we feel we are).

The answers to these identity questions are not straight true or false ones. The answers possess the strategic choices of management or ideally the organization as a whole as a positioning inquiry, or the way the organization positions itself among its competitors and in the marketplace. Gaps found between current and ideal states form the basis of changes and developments to make organizations successful. These inquiries include questions of what quality the organization wants to offer to its stakeholders, whether it is telling the truth, and whether it wants to be trusted. In our interactive and networked world, trust in organizations is at risk. An incident or crisis can explode within a short period and spread globally, as seen in the case of the 2010 oil spill from the Deepwater Horizon drilling rig in the Gulf of Mexico, which was leased by BP, and Volkswagen’s use of a software algorithm to cheat on vehicle emissions tests, which was discovered in 2015. BP had claimed to do everything possible to prevent harm to the environment, a claim that was still prominent on its website even four months after the start of the Gulf of Mexico incident. Volkswagen (n.d.) had published in its 2014 sustainability report that it has a “preventive compliance approach and foster[s] a corporate culture that stops potential breaches before they occur.” These two incidents clearly show the distinction between what an organization communicates about its identity and what the actual identity is.

Within corporate communication, scholars see organizational identification as the employee’s understanding of the organization, and corporate identity as the external representation of who or what the organization is. How the organization tells its story internally and externally in our connected digital world is an extension of corporate identity.

There are three main ways of thinking about corporate identity: (1) as an expression of organizational personality, (2) as an organizational reality of characteristics, and (3) as appearance, the sum of all organizational expressions. The first two are existential views on identity; they suggest that there is an inner self or a soul expressed in manifestations of identity. According to these views, a company behaves on the basis of its character, its culture, and its identity.

The third approach, identity as appearance, is a rhetorical alternative, where identity is designed, not discovered. In this approach, identity emerges in the conversations of organizations with their stakeholders, the polyphony of different stories to different stakeholders. These voices need to be integrated; that is one of the reasons why fields such as corporate communication and integrated marketing communications emerged. There is a need for orchestration of the voices of the organization to make the organization appear honest, reliable, responsible, and credible, since its stories are connected and come from the same grand narrative. Stories construct identity, as in organization studies where the narrative is used as a metaphor for organizational identity and autobiography as a metaphor for organizational self-representation. In this view, the collective identity of an organization is described as a continuous process of narration where both the narrator and the audience are involved in formulating, editing, applauding, and refuting various elements of the ever-produced narrative. Identity in this view is produced in the past, present, and future interactions between stakeholders through the telling and retelling of stories. The narrative understanding of corporate identity suggests that identity is fragmented. A company has different identities, as it has subcultures. There is a strong belief in integrating these stories.

The narrative approach to corporate identity offers a valuable insight on complex thinking about corporate identity. Especially in large, global operating companies, with many employees, the idea of one ideal identity is not realistic. The polyphony of voices and the different cultures the organization is operating in make narrative expression in many stories more realistic and allow constituents to navigate the many stories about the organization. Through these stories, stakeholders can learn about the people behind the organization and the story of its development, and this understanding can help in building the organization’s reputation.

Corporate Identity and Corporate Reputation Management

Investing in corporate identity, image, and reputation delivers a strategic advantage for organizations. The distinctiveness helps stakeholders find or recognize the organization. The corporate identity provides the basis for the company being favored by stakeholders. When companies fail to send out consistent images, for instance, when they are unable to match their internal and external communication, it can threaten their existence. Thus, integrity is also a benefit as it is a reservoir of goodwill that will help organizations through a crisis.

In this view, corporate reputation management is seen as important for corporate communication. The presentation of the organization, through means such as logos, house style, stationary, uniforms, and tone of voice, contributes to its corporate identity, according to Annette van den Bosch, Menno de Jong, and Wim Elving. The main task of corporate visual identity is to present the company as one unique entity. As corporate identity has shifted from an instrumental field to a strategic field over the past few decades, the concept of visual identity has enriched thinking about corporate identity. Today, corporate identity is seen as the backbone of corporate communication, and much of the theory and practice of corporate communication has its basis in theories and thinking about corporate identity. The importance of corporate reputation and the numerous rankings of reputation and accountability relate to the manageable part of corporate communication, the corporate identity concept. An increased focus on corporate identity is reflected in organizations’ use of corporate marketing and corporate branding as means to position themselves, and the corresponding shift away from traditional product advertising and product marketing. Internal and employer branding can also reflect extensive thinking about corporate identity. An organization that is able to position itself as real and based on a set of trustworthy principles will most likely have this done through a clear corporate identity.

Connections to Culture, Structure, and Strategy

Various researchers have highlighted the relationship between corporate culture and corporate identity. Research has also shown a preoccupation with the construct of culture, variously labeled as corporate culture, corporate personality, and organizational identity, as an antecedent of corporate identity management. A strong organizational culture expressed through shared meanings and ideologies that are consensus based, homogeneous, monolithic, and/or organization-wide becomes represented to employees and other stakeholders and publics through the corporate identity mix. Culture and identity are related to the fundamental parts of the existence of organizations, labeled as the golden circle (why, how, and what). The same problems exist in quantifying corporate identity and corporate culture. The breakdown of a direct relationship includes the notion of a single monolithic corporate culture, which is precarious, as employees are subject to a complex set of identification processes (including identification with work and professional identification) resulting in differentiated subcultures. The role and figuring of cultural values and sensemaking in corporate identity management are mediated and moderated by codes of conduct and prescribed communication programs.

The relationship between the constructs of strategy, culture, and structure and dimensions of the corporate identity is modified by and subject to managerial interpretation of the organization and how it should be presented through the corporate identity mix. Managerial decisions and interpretations involve positioning choices and strategy. In a constitutive view, these meanings and sensemaking processes of the raison d’etre of organizations are being renegotiated and reconstructed.

The search for the ultimate answers to questions of corporate identity can offer distinct advantages in the long run. Organizations can benefit by not limiting the search for answers to the management team. Corporate culture and corporate identity are based on the whole company and include all parts of the organization, so ideally all these parts should be incorporated in the search for the answers. Although corporate identity has clear linkages with marketing, organizations that are able to include all parts of the organization in the search for corporate identity can shape all employees to serve as brand ambassadors. In that sense, Balmer’s desired identity with the CEO vision must be applied as the CEO or top management taking the lead in this process but including all employees.

Conclusion

The goal of corporate identity management is to acquire a favorable reputation and image. A company’s authenticity comes from presenting itself as it is and not from making claims of what it is based on management fashions. That is why the corporate story is important. What is the story, what does the brand stand for, and what is the organization’s code of conduct? As with the different stories about the company emanating from its different subcultures, communication can be true or false. It can represent the company in its true essence, but it also can exacerbate organizational wrongdoing, as it can present a wrong image of the organization. But in the long run, the real story, the true face of the organization will always come forward. The reputation damage from not telling the exact story, or not revealing the true identity of the organization, is life threatening for an organization. Stakeholders have a choice of whether or not to be stakeholders, and not being ethical in promises to stakeholders might cause them to decide to no longer be stakeholders, which can lead to the organization facing bankruptcy or going out of existence.

The different levels of corporate identity, from the fundamental to the relatively easily modified design and style aspects of identity, should be recognized and dealt with, as should the multiple narratives that make up a corporate identity. Managers dealing with these aspects of identity should acknowledge that corporate culture is not fluid, is very hard to change, and will take a long time to change. Although the fundamental and existential nature of corporate identity makes management of corporate identity difficult, management of corporate identity is important to an organization’s long-term survival and can create a favorable basis for business. Many corporate crises stem from a gap between what the organization claims that it is (communicated identity) and what the stakeholders see in reality. The notion of greenwashing, or communication activities where firms exaggerate their efforts on behalf of the environment, is only one example of organizations claiming to be more sustainable and concerned with corporate social responsibility than stakeholders perceive. Stakeholders know more about organizations than ever before, and organizations can suffer reputation damage when the communicated identities do not match with other forms of expressed identity. Consumers want organizations to be authentic and real; the ultimate goal of corporate identity management in its full appearance and broad scope is to align the organization with what it truly is.