Reputation management Corporate reputation versus corporate branding: the realist debate

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1 Reputation management Corporate reputation versus corporate branding: the realist debate The author is at the Cranfield School of Management, UK. Keywords Corporate identity, Corporate communications, Brand image, Corporate image Abstract Studies in the fields of marketing and corporate identity are at a crossroads. Changes in the structure of organisations and their operating environments have led to the emergence of the concept of corporate branding and possibly even the development of a new domain of management science. This paper traces the development of brand thinking from both a marketing (customer market) perspective and a multi-disciplinary (organisation) perspective. Argues that the current transitional period is, in fact, caused by a congruence of thinking in these two fields and that much of the current debate has stemmed from their alternative starting points; a ``top down'' organisational perspective versus a ``bottom up'' customer market perspective. Adopts a realist perspective to build a conceptual framework that combines elements of both approaches and describes the application of this framework and a new marketing model to an initial pilot study. Electronic access The current issue and full text archive of this journal is available at A recent empirical study by Fombrun and Rindova (1998) with leading US/UK companies found that those companies with a more positive reputation appeared to project their core mission and identity in a more systematic and consistent fashion than companies with lower reputational rankings. Further, these companies try to impart significantly more information, not only about their products, but also about a range of issues relating to their operations, identity and history. It is interesting to note how the concept of corporate image actually started from a customer market perspective. The development of greater insights into the nature of organisational branding through corporate personality and corporate identity in response to environmental changes clearly mirrors the development of brand marketing. A further parallel is found in the emergence of corporate branding as a key concept in the literature (Balmer and Soenen, 1997; King, 1991; Ind, 1997; Hatch et al., 1998). This congruence of academic thinking is highlighted in Figure 1. The major difference between these two perspectives is one of starting point. The marketing perspective is based upon the primacy of customer value and the view that the brand is a strategic resource that can be used as an architecture to guide the business processes that generate brand value (Macrae, 1999; Urde, 1999). The organisational perspective, in contrast, views branding as an organisational tool that must be managed to create alignment between the internal culture and external image of the organisation (Hatch and Schultz, 1997), arguing that this must begin with the organisation's vision. The crux of this debate is therefore the legitimacy of two different starting points: a ``bottom-up'' customer market focus versus a ``topdown'' organisation focus. The resolution of this issue will have a profound influence on the future agenda for brand management. The new agenda for brand management Volume 5. Number pp. 42±48 # MCB University Press. ISSN The preceding literature review points to a growing recognition of the corporate brand as a valuable asset. However, whilst there is some consensus on the perceived benefits of

2 Figure 1 Congruence of academic thinking managing the corporate brand, there is uncertainty over what this entails for organisations (Lane Keller, 1999; Ind, 1998; Balmer, 1998). In setting out a new agenda, corporate brand managers face two key tasks. The need to create breadth or brand consistency across all stakeholders, and the need to create depth or brand continuity throughout the organisation. The corporate brand must be viewed as both an organising proposition that helps to shape an organisation's values and culture (Mitchell, 1999) and as a strategic tool of management which can guide the organisational processes that generate and support value creation (Urde, 1999). But to establish consistency and continuity for the brand requires new frameworks capable of managing the broader set of variables associated with an organisation, as opposed to a product, and greater understanding of the mechanisms involved. The pivotal role of communication The importance of communication in the branding process is supported both conceptually (Birkigt and Stader, 1987; Gray and Balmer, 1997) and empirically. Recent empirical work by Fombrun and Rindova (1998) on the reputation management strategies of leading US/UK companies led the authors to conclude: In sum these analyses indicate that communication benefits may result not only from the amount and frequency of communications but from the variety of issues about itself that a firm reveals through its 43 communications. Communications that make a firm transparent enable shareholders to appreciate the firm's operations better, and so facilitate ascribing it a better reputation. This suggests that communication can play a pivotal role in corporate brand management. It does, however, raise three further challenges. First, the need for a clear typology of communications. Second, a more robust approach to segmenting stakeholder audiences. And third, identification of the interfaces with each of these audiences. Establishing a communication typology Van Riel (1995) views communication as a valuable management tool and distinguishes three types of communication by organisations: management, marketing and organisational. In his model, corporate communications must be co-ordinated across the organisation to develop ``common starting points'' (CSPs). Segmenting stakeholder audiences Davidson (1999) defines brand stakeholders as those who have either an economic interest (employees, shareholders, suppliers, partners) or an economic impact (customers, opinion formers, regulators, legislators). This typology broadly concurs with the ``six markets'' model proposed by Christopher et al. (1991). The thinking behind these definitions has been developed to produce a conceptual stakeholder audience typology in Figure 2. Identifying the interfaces Abratt (1989) defines the identity/image interface as the crucial point of contact

3 Figure 2 Stakeholder audience typology management. They still, however, need a model that captures both the top down and bottom up elements identified in the literature. The UOVP model ± from product brand value to corporate brand value between the organisation and its various stakeholders. This viewpoint is developed by Rindova's (1997) model of the image and reputation formation process which defines projected images as the collective output of communications from the organisation to its stakeholders. A number of conceptual studies (Stuart 1995; Balmer, 1998) suggest that this interface should be studied as it is the ``moment of truth'' for the organisation if it wishes to align the image held by the individual stakeholder with the image projected by the organisation. These three building blocks can be combined into a single model that defines the communications mix and can be used to map the key communications interfaces with each stakeholder audience (see Figure 3.) These building blocks give us the beginning of a framework for corporate brand Figure 3 Modelling the communications mix, stakeholder typology and communications interface concepts The changing nature of brand management requires new models which both embrace the increasing complexity of organisational structure and environment but also provide a framework for establishing brand consistency and brand continuity. The unique organisation value proposition (UOVP) proposed by Knox and Maklan (1998) provides a mechanism for achieving both brand consistency and continuity by reinterpreting brand and customer value across the entire organisation. It does this by integrating the company's core business processes into a visible set of credentials that add value holistically through the entire operations of the organisation, with the brand envisaged as a cable which binds and directs these core processes. The brand consists of four ``higher marketing mix variables'': (1) reputation; (2) product and service performance; (3) product brand and customer portfolio; and (4) networks (Figure 4). Knox and Maklan state that the mix of these four components creates the organisational or corporate brand and the means by which this brand is differentiated from its competitors. It is this author's assertion that the UOVP model provides a superior framework for Figure 4 Positioning and branding the organisation 44

4 corporate brand management as it not only offers a clear starting point (customer value), but also combines ``top-down'' elements into its mix of variables. Further, it offers a clear framework by which brand consistency can be achieved, and a mechanism for achieving brand continuity, through its identification of links with the organisation's core business processes. In brand consistency terms, the UOVP model finds conceptual support from Dowling (1993) and Duncan and Moriarty (1997). Further support for the brand continuity aspects of the model are provided by Macrae (1999,) who asserts that brand architecture should be viewed strategically and organisationally as a company's channels to its value-building promise. Building a conceptual framework for corporate brand management Macrae (1999) stated that one of the biggest inhibitors to developments in this field is not connecting up the wealth of branding knowledge that now exists in academic and practitioner fields. In response to this view, the author has taken a realist perspective in the spirit of Bhasker (1997) and Zinkhan and Hirschheim (1992) to construct a conceptual framework for corporate brand management communications that blends ``top down'' and ``bottom up'' approaches, as shown in Figure 5. An initial case study An initial pilot study was carried out in 1998 using this framework and it is informative to outline briefly the process adopted and consider some of the main findings. Firm X is a medium-to-large sized international law firm with its head office in London. The firm has shown considerable growth in the last 20 years and has established a strong reputation in certain key practice areas. The firm was seen as suitable for conducting a pilot study as it gave access to senior individuals at board and partner level. Further, the firm was undergoing a period of profound change and had identified issues surrounding its branding. The managing partner had recently unveiled a new strategy for growth that set out a vision of a global law firm with a reputation for consistent, high quality service. Following initial meetings with the PR manager, head of business development and managing partner, the first stage involved a focus group with 15 senior partners. As preparation for this session, an initial stage of analysis was conducted on archival research held by the firm on its clients' attitudes to the service provided. These data were used as input at the focus group to discuss the key drivers of customer value. The session discussed the current and desired competitive positioning of the firm and identified the key drivers of customer value, utilising a customer value monitor (Knox, 1999) to assess current capabilities in respect of these value drivers (Figure 6). This bottom up approach was adopted as a first Figure 5 Conceptual framework for corporate brand management 45

5 Figure 6 Customer value monitor ± Company X stage of analysis to create initial consensus among participants. The focus group did, however, identify a lack of consensus among the partners present as to the desired and actual components of the reputation element of the company's UOVP, specifically with regard to its commitments and values. As a follow-up to this session, a further stage of face-to-face, semistructured interviews were conducted with a sample of partners across all key departments within the firm. Following analysis of the data generated, the findings were modelled as an organisation brand monitor (Knox 1999), as shown in Figure 7. This identified the existing brand and mapped out the desired brand for the firm in the future. Figure 7 Organisation brand monitor ± Company X This process served to highlight the gap that existed between the current brand positioning and the positioning desired to meet the vision outlined in the managing partner's strategy for the firm. Two clear examples of this gap related to the reputation and performance elements of the UOVP model. Analysis of the interview transcripts, using conceptually ordered matrices, uncovered a divergence of views on whether to position the firm as a holistic, all-service organisation, or whether to promote its unrivalled expertise in specific niche areas. This inconsistency was supported by content analysis of existing marketing material which pointed to an inconsistent approach to describing and distinguishing the firm. A further inconsistency revealed by the data was in the approach to servicing clients in terms of day-to-day communication and administration. This led to an analysis of the main business processes in the company, and specifically to identify those processes which will require attention if behaviour is to be aligned with the new strategy. These are represented in the process monitor in Figure 8. Whilst the pilot study was instigated to test the intervention and data collection components of the author's research design, it does provide an opportunity to show the use of the conceptual framework and points to some clear implications for the future of corporate brand management. The initial findings supported the view of Hatch et al. (1998) that it is important to understand the context in which corporate branding operates. Analysis of the data Figure 8 Process monitor ± Company X 46

6 suggests that a fourth variable must be added to this process: competitive positioning. This creates a context diamond that allows the corporate brand manager to examine two continuums, an internal/external continuum and a temporal continuum (Figure 9). Understanding the interplay between these variables on both continuums will improve the effectiveness of corporate branding strategies. The adoption of a clear starting point (customer value) created a strong focus and point of consensus for senior management. This gave a clear rationale for the project and helped overcome any inherent cynicism among participants. Linking the ``top down'' elements of strategy and vision by using the UOVP model helped to provide a framework for the investigation and gave all participants a clear frame of reference. The model also helped to highlight the current inconsistencies that existed in individuals' interpretations of the corporate brand and the main elements that served to differentiate the firm. As a further implication, the investigation of the performance element of the brand helped to highlight areas where brand continuity could be improved across the firm by standardising procedures and instigating a policy of agreed best practice. Implications for management The preceding discussion suggests that management must adopt new processes for understanding and managing its corporate brand. Figure 9 Context diamond for corporate branding To be effective, these processes must combine elements from the fields of marketing and multidisciplinary organisation studies. A combination of both a ``bottom up'' (customer value) and ``top down'' (vision, strategy) approach to corporate brand management offers a framework for creating brand consistency and continuity throughout the organisation and across the organisation's diverse stakeholder audiences. To achieve brand continuity requires a clear understanding of the main components of the organisation brand and the commitment of senior management to ensure that these elements are both realised and supported by the business processes of the organisation. Summary This paper has traced the development of brand thinking from both a marketing (customer market) perspective and a multidisciplinary (organisation) perspective. The author has shown how much of the work in both fields has evolved along similar lines and that the two fields of enquiry are now converging to define the new discipline of corporate brand management. The author has also demonstrated how the adoption of a realist perspective can be utilised to build a conceptual framework that combines elements of both a ``top down'' and ``bottom up'' approach. In explaining this process and introducing the use of the framework in an initial pilot study, the author argues that the current transitional stage of debate is not the dawn of a new domain of management science. It is, instead, an extension of marketing to embrace an organisational perspective. (This article is based on a conference presentation given at the International Centre for Corporate Identity Studies (ICCIS) entitled ``Corporate identity: crossing the Rubicon'', held at the Department of Marketing, University of Strathclyde, June 1999.) 47 References Abratt (1989), ``A new approach to the corporate image management process'', Journal of Marketing Management, Vol. 5 No. 1, pp

7 Balmer, J.M.T. (1998), ``Corporate identity and the advent of corporate marketing'', Journal of Marketing Management, Vol. 14, pp Balmer, J.M.T. and Soenen, G.B. (1997), ``Operationalising the concept of corporate identity'', University of Strathclyde working paper series, Glasgow. Bhasker, R. (1997), A Realist Theory of Science, Verso, London. Birkigt and Stader (1986), Corporate Identity, Grundagen, Funktionen Fallbeisprele, Verlage, Modern Industrie, Landsberganlech. Christopher, M., Payne, A. and Ballentine, D. (1991), Relationship Marketing, Butterworth-Heinemann, Oxford. Davidson, H. (1999), ``Broaden your brandwidth'', Marketing Business, March, pp Dowling, G. (1993), ``Developing your company image into a corporate asset'', Long Range Planning, Vol. 26 No. 2, pp Duncan, T. and Moriarty, S. (1997), Driving Brand Value, McGraw-Hill, New York, NY. Fombrun, C.J. and Rindova, V.P. (1998), ``Reputation management in Global 1000 firms; a benchmarking study'', Corporate Reputation Review, Vol. 1 No. 3, pp Gray, E.R. and Balmer, J.M.T. (1997), ``Corporate identity: a vital component of strategy'', University of Strathclyde, Department of Marketing working paper, December, Glasgow. Hatch, M.J. and Schultz, M. (1997), ``Relations between organisational culture, identity and image'', European Journal of Marketing, Vol. 31 No. 5-6, pp Hatch, M.J., Schultz, M., Williamson, J., Fox, R. and Vinogradoff, P. (1998), ``The enigma of organisational differentiation in a hyper-competitive world: balancing organisational culture, vision and image'', paper delivered at the Second International Conference on Corporate Reputation, Identity and Competitiveness, Amsterdam. Ind, N. (1997), The Corporate Brand, Macmillan, Oxford. Ind, N, (1998), ``The company and the product: the relevance of corporate associations'', Corporate Reputation Review, Vol. 2 No. 1, pp King (1991), ``Brand building in the 1990s'', Journal of Marketing Management, Vol. 7, pp Knox, S.D. (1999), ``Positioning and branding the organisation'', in McDonald, M., Christopher, M., Knox, S. and Payne, A. (Eds), The Value-Driven CEO: Building a Company for Customers, Financial Times Management, London. Knox, S. and Maklan, S. (1998), Competing on Value. Bridging the Gap Between Brand and Customer Value, Financial Times Pitman Publishing, London. Lane Keller, K, (1999), ``Brand mantras: rationale, criteria and examples'', Journal of Marketing Management, Vol. 15, pp Macrae, C. (1999), ``Brand reality editorial'', Journal of Marketing Management, Vol. 15, pp Mitchell (1999), ``Out of the shadows'', Journal of Marketing Management, Vol. 15, pp Rindova, V.P. (1997), ``The image cascade and the formation of corporate reputations'', Corporate Reputation Review, Vol. 1 No. 2, pp Stuart, H. (1994), ``Exploring the corporate identity/ corporate image interface'', taken from a paper presented at Corporate Identity Symposium, University of Strathclyde, Glasgow. Urde, M. (1999), ``Brand orientation: a mindset for building brands into strategic resources'', Journal of Marketing Management, Vol. 15, pp Van Riel, C.B.M. (1995), Principles of Corporate Communication, Prentice-Hall, Englewood Cliffs, NJ. Zinkhan, G.M. and Hirschheim, R. (1992), ``Truth in marketing theory and research: an alternative perspective'', Journal of Marketing, April, Vol. 56, pp Further reading Balmer, J.M.T. (1997), ``Corporate identity: past, present and future'', University of Strathclyde, Glasgow, working paper series. Collins, J. and Porras, J. (1996), Built to Last ± Successful Habits of Visionary Companies, Century Hutchinson, London. Ind, N. (1998), ``An integrated approach to corporate branding'', Journal of Brand Management, Vol 5 No. 5, pp