Corporate Image and Corporate Reputation: the other realities LECTURE 6 Corporate Image and Corporate Reputation: the other realities

Objectives To understand the importance of perception To understand the key elements of the corporate image and corporate reputation concepts “Model of the Moment”: the family of business related images (see page 176)

THE TIMES LECTURE at WORCESTER COLLEGE, OXFORD UNIVERSITY “After 2000 years of human progress it seems that the real nature of things remains as inaccessible as it was to Aristotle” LORD SAATCHI

IMAGE AND REPUTATION In business studies CORPORATE IMAGE has been the dominant focus until (in the mid 1990s) greater attention was accorded to the CORPORATE REPUTATION concept. The eminent English economist BOULDING is credited with being the founder of a distinct line of inquiry relating to business images.

BOULDING: PATERFIMILIAS OF CORPORATE IMAGE STUDIES Boulding’s Book “The Image” (1956) has been the most influential work on the area. He concluded that there was an a priori link between an individual’s image of an organization and that person’s behavior towards the organization. Boulding’s hypothesis captured the minds of scholars and practitioners of business in the 1950s.

CORPORATE IMAGE: a rich but problematic concept. The richness of the concept can be seen in the earlier note on Boulding. However, the concept is problematic owing to its’: multiple meanings negative associations, its difficulty (impossibility) to control, its multiplicity and the different image effect of different stakeholder groups.

Corporate Image: Schools of thought TRANSMITTER OF IMAGES (focus on the corporation itself) RECEIVER END IMAGES (image studies as seen from those who are subjected to/hold images) FOCUS OF IMAGE (image of the industry and or country) CONSTRUED IMAGES (beliefs about beliefs-my image of what YOUR image is of the corporation)

TRANSMITTED IMAGES Projected image: creation of a single image Visual image: images created by graphic design and logotype Desired Future image: the wish image (to be held of the organization at some future date)

RECEIVER END CATEGORIES Transient Image: a fleeting mental picture Corporate Reputation: judgements made about the organization over time Brand user image: the image of the corporate brand that most closely resembles the values of an individual Stereotype image: where shared beliefs are held across different stakeholder groups

FOCUS OF IMAGE CATEGORIES The brand image: perception of the brand in relation to others within the industry (market niche) The industry image: of a sector such as airlines

CONSTRUED IMAGE CATEGORIES Construed corporate image: relates to how employees see the organization as ENVISIONED BY another group (senior management) the same concept applies to the other image types previously mentioned

…… model of the moment FAMILY OF BUSINESS RELATED IMAGES Holding Company Subsidiaries/other corporate service and product brands THE CORPORATION’S IMAGE Industry image Country of origin image

…..model of the moment THE CORPORATION’S THE FAMILY OF BUSINESS RELATED IMAGES HOLDING COMPANY IMAGE(S) OTHER CORPORATE, SERVICE AND PRODUCT BRAND IMAGES THE CORPORATION’S IMAGE(S) INTERNAL ----------------- EXTERNAL INTERNAL ----------------- EXTERNAL INDUSTRY IMAGE(S) COUNTRY-OF-ORIGIN IMAGE(S)

CORPORATE REPUTATION EXPLAINED The principle difference between corporate image and corporate reputation is that reputations are formed over time. However, as with corporate image, reputations can be good, bad, unwanted, out of date etc

The benefits of a positive corporate reputation Can give distinctiveness and a competitive advantage can contribute to profits can act as a safeguard in times of adversity

Reputation as a control mechanism? Balmer argued that the organization’s reputation can act as a standard governing behavior i.e. “Would my actions be in line with the company’s good/bad etc reputation” Can be used by employees, those in recruitment etc He developed the DEAR principle to explain the above………………………...

THE DEAR PRINCIPLE D= DECISIONS E= EVALUATED A= AGAINST the R= REPUTATION

REPUTIONS ALSO APPLY TO.. The corporate brand part of an organization (business unit/subsidiary) what an organisation makes as well as how it behaves “I would buy their cars but I would not wish to work for them!”

Finally……….a word of caution Although a valuable resource (in many instances) a corporate reputation is NO GUARANTEE of business survival or of success. Consider Olivetti which had an enviable reputation as a leading manufacturer of typewriters but took insufficient account of technological developments in the field..Olivetti computers ?

SUMMARY: i The concepts of image and reputation are laden with different meanings. Perception is important because it effects our behavior (Boulding) Unlike images a reputation is formed over time In considering perceptions held of an organization consideration should also be given to the image/reputation of the industry, country of origin, corporate and product brands, as well as those of its subsidiaries.

SUMMARY: ii Images and Reputations can be good, bad, wanted, unwanted, deserved, undeserved etc. Reputations may act as an explicit/implicit control device (see the DEAR principle) Reputations, on their own, are no guarantee of success/future business survival.

He is quick, thinking in clear images; I am slow, thinking in broken images. He becomes dull, trusting to his clear images; I become sharp, mistrusting my broken images. Robert Graves