Defining Identity and its Related Concepts

Over the last 25 years, there has been a growing interest in the corporate identity concept, mainly due to the changes in technology, market dynamics, consumer values and consumer behaviour. Corporate identity emerged as a design concept and started to attract managerial interest as a design issue in the 1970s. This led to corporate identity being regarded as a strategic tool and a source for competitive advantage (Downey, 1987; Bickerton, 1999).

Companies that have not thought seriously about their corporate identity may suffer from a disconnection with their stakeholders. There is a great deal of evidence to show that organizations have become more interested in the benefits that management of the corporate identity might bring (Riel, 1995) and the impact that a strong corporate brand might have on stakeholder loyalty (Balmer, 1995).

As pointed out by several authors, (Belt & Paolillo, 1982; Gray & Smeltzer, 1985; Milgrom

& Roberts, 1986; Downey, 1987; Lippincott & Margulies, 1988; Olins, 1990; Melewar, 2003), there are several advantages of corporate identity:

• It can act as a central force that motivates employees. By better understanding the purpose, direction and speciality of their organization, the staff will show greater pride and support for it.

• Corporate identity can help companies to recruit high-calibre executives.

• A company’s stakeholders become aware of the organization’s business capabilities, management strengths, competitive distinction and product and service diversity by the reflection of its identity.

• Consumers can be informed about product quality and this in turn will provide support for a company’s products and brands.

• Corporate identity enables the formation of a strong corporate brand that brings on stakeholder loyalty (Balmer, 1995; Markwick & Fill, 1997).

• The financial community can better comprehend a company, which in turn attracts investors.

The multidisciplinary nature of the corporate identity field has led to various definitions of corporate identity proposed by the academic literature. Building on Albert and Whetten's conceptualization, some authors define corporate identity as “the organization's presentation of itself to its various stakeholders and the means by which it distinguishes itself from all other organizations” (Markwick & Fill, 1997); that is, “it is what the company communicates about itself, and it represents how the company wants to be perceived” (Zinkhan et al. 2001). The corporate identity concept suggests that each company has its own personality, uniqueness, and individuality (Bernstein, 1984).

Corporate identity is the articulation of what the organization is, what it does, and how it does it, and is linked to the way in which an organization does business and the strategies it

adopts. The definition given by Abratt & Shee (1989) puts even more body to the concept:

“The corporate identity is the «personality» and «soul» of the corporation”.

A conceptualization of identity is provided by Albert & Whetten (1985). These two authors indicate that a statement of organizational identity provides an answer to the question "Who are we as an organization?" Identity becomes investigated with more thoroughness, referring to what is of centrality, distinctiveness, and temporal continuity for an organization (Albert & Whetten, 1985).

All organizations have a corporate identity (Abratt & Shee, 1989; Bernstein, 1984; Olins, 1990). The difference between organizations is represented by the fact that some organizations actively seek to manage their identities while others take less care, confuse their audiences, under perform in their markets and unconsciously contribute to the formation of negative reputations (Fill, 1995).

In the literature on corporate identity, concepts such as corporate image and corporate reputation are frequently used. The distinction between corporate identity and corporate image is necessary to be made: corporate identity refers to how an organization perceives itself and wants to be seen by its stakeholders, and corporate image is dealing with the actual perception of the organization by external stakeholders. The ideal situation is when the corporate image is identical to the corporate identity (Hatch & Schultz, 1997; Stuart, 1999).

Margulies (1977, p. 66) makes as well a distinction between the two concepts: corporate identity is “the sum of all the ways a company chooses to identify itself to all its publics - the community, customers, employees, the press, present and potential stockholders, security analysts, and investment bankers” - and image, is “the perception of the company by these publics.”

Although there is a clear distinction between these concepts, Abratt & Shee (1989) talks about the obvious relationship between: corporate image, corporate identity and corporate personality concept. Every company has a personality, which is defined as “the total sum of

the characteristics of the organization”. These characteristics serve to distinguish one organization from another. This personality is projected by means of conscious cues which constitute an identity. The overall impression formed by these cues in the minds of audiences constitutes an image. Corporate personality refers to the values held by personnel within the organization. It is defined as the collective, commonly shared understanding of the organization’s distinctive values and characteristics (Baker & Balmer, 1997; Cornelissen & Harris, 1999). Encompassing corporate philosophy, mission, vision, strategy and principles, corporate personality constitutes a main subset of corporate identity.

Having defined the concept of corporate identity, it is necessary to make a distinction between its aspects. In his review of the literature, Riel (1995) found that, like organizational studies, the corporate identity literature does not produce a single definition of corporate identity. The literature does, however, make a distinction between the visual and strategic aspects of corporate identity (Balmer, 1997).

The strategic approach to corporate identity is concerned with how the vision, values, mission, and philosophy of a company are linked to image and reputation (Riel, 1995). On the other hand, the visual school concentrates in symbolic manifestations of the business and is concerned with creating outward manifestations of identity, such as graphic design, logos, package design, building design, and other symbols of the organization (Balmer, 1995, Olins, 1989). The common trait characteristic is that both schools focus on influencing the stakeholder’s image of the organization. The related discipline of corporate communications, most often found in the public relations functions of an organization, is concerned with issues management. It, like the strategic and visual approaches, seeks to manage corporate image and reputation.

However, a corporation’s actions are inseparable: “how it behaves”, “what it says”, “how it treats people” and “what it makes and sells” are all parts of a single whole. Everything within the company has an effect on everything else and everyone has an effect on everyone else (Olins, 1978). This means that corporate identity “is built up from the

physical, operational and human characteristics of an organization, which are closely interrelated” (Topalian, 1984).

Corporate identity and corporate image are intangible assets which bring more value to the company. The value of corporate identity and/or corporate image is its ability to enhance business performance directly or indirectly (Riel, 1995). This is because it becomes a potential source of differentiation and competitive advantage (Gray & Smeltzer 1987; Olins 1991; Riel & Balmer 1997).