Saturday, June 30, 2007

Corporate Identity, Image and Reputation

"Reputation problems grow like weeds in a garden," Davis Young wrote in his book Building Your Company's Good Name. "Direct and indirect costs escalate geometrically."

Corporate Identity

A company’s identity is the visual manifestation of the company’s reality as conveyed through the organization’s name, logo, motto, products, services, buildings, stationery, uniform and all other tangible pieces of evidence created by the organization and communicated to a variety of constituencies”.

Corporate identity can be broken down into four component parts:

•Corporate Strategy - Strategy is the overall plan that determines the company's product/market scope and the policies and the programs it chooses to compete in its chosen markets.
•Corporate Culture - Corporate culture is the shared values and beliefs that the organization's members hold in common, as they relate to each other, their jobs, and the organization.
•Organizational design - Organizational design refers to the fundamental choices top managers make in developing the pattern of organizational relationships.
•Operations - It is the aggregate of all the activities the firm engages itself, to affect its strategy.

All the components become a part of the reality of the corporation and can influence its identity in a wide variety of ways.However, consistency should be maintained across all the identity elements from logos and mottos to employee behavior. Thus corporate identity is the reality of the corporation—the unique, individual personality of the company that differentiates it from other companies.

Corporate Image

“Corporate image describes the manner in which outsiders perceive a company, its activities, and its products or services. It is the organization as seen from the viewpoint of its constituencies”.

•In a competitive business climate, many businesses actively work to create and communicate a positive image to their customers, shareholders, the financial community, and the public.
•A corporate image should be consistent with the positioning of the company's product, product line, or brand. Any inconsistency in the overall corporate image and the positions of individual product offerings will be confusing to the constituencies.

Experience – If I as a customer prefer vegetarian food and choose KFC restaurant that has the image of serving the best chicken, which is noticed in its name, the company’s image and ads will not convince me in making my choice.


•Corporations should realize that its image in the eyes of the various constituencies is important for the company. The image that various constituencies have of the company will influence their willingness to either provide or withhold support. Thus, if customers develop a negative perception of a company or its products, its sales and profits assuredly will decline.
•A company’s image with its employees is particularly important because of the vital role they play with the company’s other constituencies

Building a solid reputation

•Reputation differs from image because it is built up over time and is not simply a perception at a given point of time.
For example, TATA Group of Industries

•Reputation differs from identity because it is a product of both internal constituencies, whereas internal constituencies construct identity. Reputation is based on the perception of all the constituencies.
•Importance of reputation is evident from several prominent surveys and rankings that seek to identify the worst and best players in the game. For example, Fortune’s “Most Admired” list; Business Week and Interbrand’s “Best Global Brands” ranking, etc.
•Reputation can help companies to weather crises more effectively.
For example, Coco - Cola’s contamination cases in India in 2004 that came and went without damaging the firm in the long term.

Corporation’s Social Responsibility

•Companies today need to consider social responsibility and corporate philanthropy when thinking about its own reputation.
•Corporations need to act as “good corporate citizens”.

For example, GE’s support for environment protection moment through its "ecoimagination" project.
Coors Beers in the US is a charter member of “Two Percent Club”, a group of companies that pledge to give two percent of pre-tax profits back to the community.
http://www.coors.com/part_community_funding.asp

•Thus to enhance its reputation company’s should conduct programs for the welfare of the social communities.

Coca-Cola an “eKo” friendly company. http://www.coca-colaindia.com/eko/default.asp