Identity, Image, and Reputation

Finding and maintaining an appropriate identity, image, and reputation is crucial for every company. But how are these concepts defined, how companies distinguish themselves from others, and how can image be managed? These are the questions I will deal with in this posting.

What are Identity and Image?
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, uniforms, and all other tangible pieces of evidence created by the organization and communicated to a variety of constituencies (definition found in the textbook).
Image is the reflection of an organization’s identity; it is how the organization is perceived by constituencies. Since constituencies can differ, there can be several images for one company. Organizations should be aware of their image. In order to evaluate the own image, organizations should conduct qualitative and quantitative research with constituents.

Differentiating Organizations through Identity and Image
In today’s competitive environment products and services frequently have similar or even identical features. So identity and image can be the only distinctive feature consumers can use to make purchasing decisions. Often differences in identity and image might be the decisive point for costumers to select a certain company’s product and not that of a competitor.

Shaping Identity
In order to build an appropriate corporate identity, organizations have to consider three major points.
First of all, a company should communicate an inspirational corporate vision, which contains core values, philosophies, standards, and goals. A successful vision provides orientation for all constituencies and influences the way they perceive an organization. Communicating the vision in terms of a narrative or a story can support the perceived coherence of a vision.
Additionally organizations should carefully choose names and logos, because names and logos function as identification tags. They can be used to quickly identify and evaluate an organization. Therefore, successful branding strategies can add great value to a company. On the other hand, poor branding can have significant negative impacts on a company’s value. Changing a brand name can either enhance a company’s identity, or it can confuse consumers and thus, damage the company’s identity.
Although branding is important, organizations should be aware of the fact that branding alone can never successfully shape a company’s identity. It should be embedded into a coherent overall identity management.
That is the third point corporation should consider, in order to create a positive corporate identity: A company should present itself consistently across all its identity elements.

Identity Management in Action
A method that has been successfully used by many organizations to manage the identity process consists of 6 steps.
In step 1 the company has to conduct an identity audit, which helps to assess the current reality. Then, the company’s senior management should set identity objectives that explain how each constituency should react to specific identity proposals. Step 3 is called: Develop design and names. Companies should be careful when choosing a design or name in order to avoid the possibility of trademark and name infringement. Therefore, companies should use the support of a consultant. After having conducted step 3, it is time to develop a prototype of a company’s name and design. In step 5 this new identity should be launched and communicated. When doing this, it is necessary to emphasize the strategic importance of the changed name and design. The last step is to implement the program and to create a consistent identity. Identity consistency can be reached by developing identity standards. The whole communication process of implementation can take several years.

In the Eye of the Beholder
Even before customers interact with a specific company they have a certain image of that company. This image can change after the customer interacts with the organization. The goal is to have that image better than before, not worse. Because one bad experience can destroy the relationship with a customer, each and every interaction is important.

Building a Solid Reputation
Managers can build a solid reputation by aligning an organization’s image and identity. In order to achieve this goal, managers should shape a unique identity and project a coherent and consistent set of images to the public (according to Charles Fombrun, New York University professor emeritus).
It is important to understand the difference between reputation and image and reputation and identity. Here is the explanation of Paul A. Argenti’s book Corporate Communications: “Reputation differs from image because it is built up over time and is not simply a perception at a given point in time. It differs from identity because it is a product of both internal and external constituencies, whereas identity is constructed by internal constituencies (the company itself).”

Class Discussion (02/21/2008)
In class, we talked about our understanding of the word “image” in a business context. We came to the conclusion that an image is a personal perception of a company. Since perceptions are subjective, an individual’s image of a company might be different from another individual’s image of the same company.
Professor Szul showed us the logos of different car companies and asked us to write down the first 5 adjectives that crossed our minds when we saw the logo. This method revealed our personal images of that company. It was interesting to see what the class thought about the different companies.
We also introduced the definitions of identity and reputation and discussed the difference between identity, image, and reputation (see explanations above). It is important for a company to align its identity and image, and to build a solid reputation in order to assure that the public perception of the company is positive.

Examples/Personal Experiences
I experienced an example of identity management in Germany. The company “KarstadtQuelle”, which major business was retailing, went into trouble because its sales went down due to a bad reputation. In the 1970’s and 1980’s Karstadt was known as quality retailer, but this reputation worsened during the 1990’s. In 2005, the bad development forced KarstadtQuelle to file for bankruptcy. KarstadtQuelle developed a plan that had the objective to organize the recovery of its business activities. One measure was to improve its image. KarstadtQuelle changed its corporation name to Arcandor (see: http://www.arcandor.com/en/konzern/konzern.asp). The change of the corporation name showed that a new period had begun that should be more successful than the past period. Also, the corporation wanted to emphasize that it consisted of more businesses than just the retail business. Simultaneously, Arcandor strived to improve their stores that were subject to critiques. The whole campaign was a success. Today, Arcandor is a profitable company.
An example for a business that needs a good identity, image, and reputation management is banking. The business of banks is based upon their reliability. Because banks deal with the money of other persons, they are in a very delicate business. Banks need to assure that they have a solid reputation in order gain the deposits of their customers. Individuals will not give their money to organizations they do not trust. Thus, a bad reputation can seriously hurt the business of banks. This makes banks a good example of companies that need a thorough reputation image.
In Germany, banks played a major role in the Great Depression from 1929-1933. At the beginning of the crisis, the public got to know that the German banking system was not refunded appropriately. The public became nervous and lost their faith in the banking system as a whole. Because so many people wanted to withdraw their deposits and savings, there were long lines in front of bank buildings were the result. Although the message of the improper refunding referred to the banking system as a whole, each and every bank went into trouble due to the loss in the banking system’s reputation. This example shows how sensitive the public is to the banking business. Furthermore, it shows another important point: The trust of the public is the most important asset a bank or the banking system possesses.

Links:
http://www.joelonsoftware.com/items/2006/08/10.html

http://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Identity.html

http://www.morrisseyco.com/insight/pdfs/MVRv6_1.pdf