External Image, Internal Identity - SAGE Publications Inc | · external perception programs are...

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External Image,Internal Identity

C rafting the strategy that shapes the imageand identity of the organization is probably

the most important responsibility of corporatecommunication staff. Image helps the organiza-tion to differentiate itself from others, and iden-tity enables the organization to integrate itselffrom within. Strong identity evolves into ideol-ogy that helps pull organizational memberstoward the vision of the organization. Andstrong image helps companies manage the adap-tation and retention processes. When the imageand identity are in agreement, the organizationas a whole is externally adaptive and internallycohesive. When image and identity are not man-aged properly, constituents are confused, and thecredibility of the organization tends to diminish.The linkage between identity and image can bestrengthened via intense integration, coordina-tion, and monitoring activities across differentareas of corporate communication functions(e.g., investor relations, media relations, employeerelations, government relations) and based ondifferent communication approaches (e.g., finan-cial, marketing), as shown in Figure 3.1. Althoughthe functions of corporate communication areonly briefly described in the following sections,

they are discussed at length in chapters 5–8.Chapters 9–11 provide a thorough review of thefour communication approaches and relatedtheories and topics.

The value of the Competing Values Frameworkfor Corporate Communication (CVFCC) is inproviding a broader and integrative interpretationof corporate communication environments byaddressing diverse stakeholders such as reporters,marketers, competitors, customers, investors,regulators, employees, and managers. Shaping andsustaining the image of the organization is a challenge that requires a broad, strategic view oforganizational environments. Kiriakidou andMillward (2000), for example, discuss the impor-tance for an organization to have a strategic fit,which entails auditing the organization’s desiredidentity (management’s vision and mission) andthe actual identity (what the organization is andhow it frames the mindsets and behaviors of itsmembers) to reveal the potential gaps between thetwo. Doing so, in turn, shapes the reputation ofthe organization. Image is the mental map thatconstituencies have about the organization.Effective image management requires corporatecommunication managers to act as if they are

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paranoid managers—constantly scanning theexternal environment and sorting through themultiple images that are formed perceptually bydiverse stakeholders. The goal is to address possi-ble weaknesses and vulnerabilities and guardagainst suboptimization. In addition to buildingpositive image and reputation for an organization,sustaining and managing an organization’s iden-tity is important in helping corporate identityadapt to a constantly changing environment.

When image aligns with identity, an organi-zation is widely accepted by the public; it is rec-ognized implicitly and explicitly, and, in effect, isinstitutionalized. Retention by the environmentis then facilitated through branding and legit-imization. Leading companies in different indus-tries successfully manage the institutionalizationprocess through strong identity programs andcredible image. Verizon, for example, began asignificant brand name campaign in the spring

of 2002, describing the company as “helpingcustomers make progress every day.” Its brandname was associated with a positive, upliftingmessage, centered on accumulation of eventsthat might otherwise be overlooked, rather thangroundbreaking or historic events. IBM’s exper-iment with the World Jam and the creation of“gravity centers” with information brokers act-ing as communication conduits or communica-tion links is an example of a company that is inthe midst of updating its identity. IBM has avery strong corporate communications depart-ment and seems to be doing very well. As of2002, it was listed as the number two companyin the Holmes Report.

Another successful example is the Japanesedepartment store Sogo, which established astrong corporate identity in order to integrate itsemployees effectively through rituals and cere-monies. For instance, employees need to call out

28 PART B: STRATEGIC CORPORATE COMMUNICATION

Goals/StrategiesSystems/Processes

Marketing CommunicationReputation/Branding

Products/MarketsIndividuals/Groups

FinancialCommunication

Image

ManagementCommunication

Identity

Performance Credibility/AccountabilityOrganizational Communication

CorporateCommunication

Figure 3.1 Competing Values Framework for Corporate Communication: Approaches and Focus

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the company’s slogan and sing the company’ssong together in the morning before they beginwork. They also bow 90 degrees to welcometheir customers. Because of distinctive charac-teristics such as these, Sogo presents the publicimage of employee solidity and a reputation ofputting customers above everything else. Thesecharacteristics are embedded within Sogo’s cor-porate identity; thus, corporate identity is sign-ificant in constructing the company’s externalimage and affecting its reputation. As much evi-dence has revealed, a reputable organization hasa competitive advantage and, therefore, sustain-ing and managing corporate identity seems tobe an inevitable and valuable part of organiza-tional strategic planning.

Integrated CorporateCommunication

As Figure 3.1 illustrates, marketing and manage-ment communication is the dominant commu-nication link between the brand image and theidentity fabric of the organization. Financial andorganizational communication, on the otherhand, is the dominant communication linkbetween organizational goals, strategies, andoperators who are expected to embrace the mis-sion and vision of the organization. Marketingand financial communication addresses the out-side view of the corporation, with much atten-tion given to managing external stakeholders(e.g., customers, investors). Management andorganizational communication, on the other hand,responds to the need to link key interfaces (e.g.,systems, structures, processes) and operatorsinternally and align the corporate sociotechnicalsystem. This integrated view of corporate com-munication is also consistent with Markwick andFill’s (1997) analytical framework for managingcorporate identity and aligning resources withorganizational goals and strategies.

Viewing internal and external communicationas connected functions shifts the focus of cor-porate communication to answering questions

about how an organization can communicateconsistently to its many audiences in a way thatrepresents a coherent sense of self. That sense ofself is needed to maintain credibility and reputa-tion inside and outside of the organizationthrough strong organizational identity and posi-tive external image. Corporate identity is proje-cted to stakeholders using a variety of cues andrepresents how the organization would like to beperceived. Through delivering a planned messageto target audiences, an organization’s particularobjective is more likely to be achieved. One suchplanned message would be the corporate identityprogram, which consists of two parts: the organi-zation’s visual identity, including the design andgraphic associated with an organization’s symbolof self-expression, and the corporate mind andbehavior, such as organizational values andactions that are embedded in organizationalculture (for more on this topic, see chapter 11).Before embarking on a plan, managers shouldtake into consideration both the organization’soriginal identity and its current identity. Asshown in chapter 13, this process could start withaudits that measure the current cultural profile ofthe organization and compare it with a desiredcultural profile. Understanding an organization’spast allows managers to identify strengths andweaknesses in the current identity and improveweaknesses in the corporate identity program(Van Riel & Balmer, 1997).

Sustaining and ManagingIdentity Programs

There are four important elements that shouldbe considered in sustaining and managing aneffective corporate identity program:

1. SUSTAINING AND MANAGING AN ORGANIZATION’S

MIND IDENTITY AND BEHAVIOR IDENTITY THROUGH

INCREASING INTERACTION WITH AN ORGANIZATION’S

STAKEHOLDERS. An organization’s mind identity is the set of values and philosophies that arebelieved by everybody in the corporation. The

Chapter 3: External Image, Internal Identity 29


behavior identity is the actions that an organiza-tion takes in order to distinguish itself fromothers. In the corporate identity program, bothmind identity and behavior identity are signifi-cant enough to be recognized. In an attempt toconsummate both, there must be increasinginteraction with the organization’s stakeholdersto create and nurture a sense of positive corpo-rate identity. To allow communication with anorganization’s stakeholders, both internal andexternal perception programs are needed. Thetarget audience of an internal communicationprogram is the company’s employees. One of themost important messages to deliver in the inter-nal program is to create and define the com-pany’s values and beliefs to the employees whowill thus have a clearer sense of what it means to be a member/employee of the organization(Goodman, 1998). Examples of this kind ofinternal perception program include employeeorientation and two-way communication bet-ween manger and employees. From these com-munication programs, employees will establishconfidence and trust in the company, whicheventually results in increasing the company’scompetitiveness through employees’ better jobperformance. Moreover, interacting with employ-ees through internal communication programsenables a manager to determine an organiza-tion’s negative identity. As Markwick and Fill(1997) suggest, employees’ view of corporateidentity can be seen as a barometer of cus-tomers’ opinions and as a catalyst for change andimplementation. External communication alsois significant in shaping public perception aboutan organization; it is usually associated withpublic relations and generates media attention.Examples of external communication programsinclude corporate-sponsored literacy and out-reach programs, which promote the image ofgood citizenship.

2. SUSTAINING AND MANAGING AN ORGANIZATION’S

VISUAL IDENTITY. According to Goodman (1998),corporate image is part of the overall makeup ofcorporate identity and goes hand in hand with

the organization’s graphic design. Logos, letter-head, and house style are examples of visualidentification of an organization. Because of itsrole in communicating about the organizationto its stakeholders, symbolism has been assigneda great deal of importance (Van Riel & Balmer,1997). For example, a company’s logo is expectedto present the basic tenets of corporate identityas well as its meanings to the stakeholders. Alogo’s design is based on the company’s lettername, captures stakeholders’ attention in thecompany, and reinforces positive reaction viathe visual stimulus (Goodman, 1998). Hence,the shape, use, and color of the logo are allimportant elements to be considered in an orga-nization’s identity program.

One example that illustrates the importanceof logo design is Samsung’s 1993 identity pro-gram. The objective of the program, according to Samsung’s (1995–2007) official Web site, was to“strengthen competitiveness by bringing the atti-tudes and behavior of all employees in line withSamsung’s desired perception by the public” (¶ 1).Samsung redesigned its logo in an attempt tochange its image of second- or third-rate prod-ucts to become a world leader in its businessareas. The new logo was crafted in English tosymbolize its global presence throughout theworld. It incorporated an elliptical shape to con-vey a message of innovation and change. The let-ters “S” and “G” both partially break out of theoval, showing Samsung’s desire to be one withthe world and to serve the society as a whole.Moreover, Samsung chose blue as the color of itslogo to suggest the organization’s reliability andstability, and at the same time to exude a feelingof warmth and intimacy with its stakeholders.The design of the new logo has been successful incommunicating and reinforcing the company’scorporate identity with stakeholders. Beforeimplementing its identity program, Samsunggave the impression that its products only sold in discount stores and Wal-Mart. To change thisnegative brand image, the company’s redesignedlogo created a nonverbal message to reinforce thecompany’s qualities of reliability and innovation.



As a result of its corporate identity program,Samsung has become one of the world’s leadingcorporations in the electronics industry, espe-cially in mobile phones.

3. UNIFYING THE COMPANY’S MIND, BEHAVIORAL, AND

VISUAL EXPRESSION THROUGH A CONSISTENT AND HIGH-QUALITY APPLICATION OF PROGRAM STANDARDS. Themind, behavioral, and visual expressions of anorganization must be designed and applied con-sistently across the functions of corporate com-munication. Visual expression includes the useof similar symbols, consistent typography, andstandardized colors (Alessandri, 2001). A posi-tive corporate identity and image can be devel-oped and perpetuated via internal programs and those directed at the public. Applications ofvisual identity include different means of com-munication such as print advertising, letterhead,brochures, stationery, checks, and businessforms (Goodman, 1998).

Consistency and standardization are keys inthe unifying application of corporate identity; acorporation’s identity should be consistent andconsecutive. For example, the contents or tech-niques of advertisements, such as those used by Disneyland, may be boundlessly variable, butthe main idea and character should be consis-tently conveyed. Although different advertise-ments are presented every year, the main ideathat Disneyland communicates to its audience isits “happy family,” and the character it uses isalways Mickey Mouse. Because of the repeatedapplication of the same expression, Disneyland’scorporate identity is recognized throughout theworld. From this example, we can see that con-sistent and standardized application is essentialin creating and unifying an organization’s cor-porate identity.

Boyd (2003) provides an example of the impor-tance of keeping a message consistent acrossdiverse constituencies. He demonstrates how theuse of a metaphor can be a method for buildingidentity and image with multiple stakeholders.Metaphors let messages for different audiencesreinforce a single identity of the organization

and the issue at hand; they unify internal andexternal stakeholders. The case Boyd discussesinvolved a merger between two companies and a hostile takeover attempt by a third party. Thecompanies involved needed to gain the supportof various stakeholder groups, and Boyd’s studyfocused on the media campaigns the companiesused to gain support. The two merging compa-nies used a war metaphor throughout the wholecampaign. They tried to show that the thirdcompany was launching a war against them by attempting a hostile takeover, and they kepttheir messages consistent. They used the mediato send their messages through advertisements,articles, and commercials. They addressed how ahostile takeover would impact all stakeholders,not just shareholders.

According to Boyd (2003), the use of the war metaphor damaged the takeover company’simage. The company was portrayed as aggressive,irrational, forceful, and savage, and the two merg-ing companies were seen as victims in need ofsupport from the stakeholders. The third com-pany sent out a number of different messages, butnone were consistent, which may be why it failedto achieve the hostile takeover. Boyd’s exampleshows how a consistent message can get all stake-holders to identify with the organization and itsgoals. It also shows the importance of targetingboth internal and external stakeholders.

4. AUDITING THE IDENTITY PROGRAM AND REVIEWING

THE CORPORATE IDENTITY CONTINUOUSLY. Assessmentmust be made during and after implementationof the corporate identity program. To audit theeffectiveness of the actions taken by manage-ment, it is necessary to look at the program’sobjectives and evaluate whether the expectedoutcomes have been reached and properly com-municated (see chapter 13). Even though theidentity program may be successful at themoment, the designed corporate identity mightnot fit the organization forever. Because the cor-poration and its environment are both perpetu-ally changing, corporate identity needs to bereviewed for possible updates.



Primary Functions ofCorporate Communication

The overall value of the CVFCC is that it providesa fuller view of corporate communication inwhich a dynamic interplay of complementaryand often competing orientations takes place.The framework supports the notion of commu-nication systems that are both independent andinterdependent. It offers an integrated view inwhich the relative value of each perspective is notmitigated by the value of the other perspectives.The CVFCC affords an excellent opportunity todescribe these perspectives while weighing thetradeoffs among the perspectives to enrich theanalysis. The framework is therefore a representa-tion of four perspectives on communication thatare highly interdependent. As Figure 3.2 illustrates,these perspectives are also aligned with the fourprimary functions of corporate communication.

The framework is particularly useful in help-ing communication researchers and practitioners

form a better understanding of the scope andrange of communication activities that affect the organization both internally and externally.Moreover, it promotes the development of com-munication responses that consider the objectivesand consequences of employing different mes-sages when addressing different audiences. Thesefunctions and their subareas must be balancedand managed strategically. Thus, the CVFCCintegrates communication perspectives, mes-sages, and skills across the different areas. Theseareas are outlined below and treated thoroughlyin chapters 5–11:

1. Marketing communication concentrateson media relations, corporate advertising,issue management, public relations, com-munity relations, customer relations, andreputation management.

2. Financial communication covers investorrelations, image management, legal com-munication, executive communication,


RunScale

Media Relations

InnovateBuild

InvestorRelations

EmployeeRelations

Government Relations


Figure 3.2 Competing Values Framework for Corporate Communication: Functions


strategy communication, external affairs,performance management, and crisismanagement.

3. Organizational communication focuseson government relations, field communi-cation, administrative communication,codification and integration, and compli-ance communication.

4. Management communication centers onemployee relations, culture and changecommunication, site communication,human resource management, and socialidentity communication.

Media Relations

Media relations (MR) is characterized by out-ward communication serving to advance the cor-poration’s goals. One of the main concerns of theMR function is keeping up with current trends inthe market. The organization must stay current in order to determine which opportunities areworth pursuing and which are not. In addition, aconcern for this section of the CVFCC is to deter-mine how customers will be won over. Essentially,the MR function engages in corporate advertis-ing, a form of advertising different than productadvertising because it involves promotion of theentire organization. Corporate advertising is anextremely important factor in retaining cus-tomers. As Goodman (1998) asserts, getting themedia to provide press for your corporation isalmost universally the goal of any MR plan. Themain question to ask in this sector is “To whatextent is the communication insightful, mindstretching, and visionary?”

The purpose of MR is to build a positive rep-utation and encourage branding of the organiza-tion’s name in the marketplace. The corporationintends to portray the characteristic of innova-tion to its constituents, hopefully strengtheningits image as perceived by external stakeholders. Acurrent environmental issue that exemplifies therelevance of corporate communication in this

area is the acceleration of product life cycles.This trend is particularly evident in fluid marketssuch as consumer electronics, in which compa-nies with high visibility and a strong reputationhave a competitive advantage because theirbrand name adds value to their products byreducing uncertainty in the minds of customers,retailers, and distributors (Balmer & Gray, 2000).This example drives home the significance ofcorporate communication by showing whateffective corporate advertising can accomplish.

Attracting new customers and retaining cur-rent ones are two essential goals pursued by cor-porate advertisers to help support the financialgoals of the organization. It is therefore in theorganization’s interest to direct corporate mes-sages through various media, such as television,newspapers, magazines, radio broadcasting, andthe Internet. Essentially, the organization wantsto get as much press as it can. Examples of out-lets used to deliver messages in the MR subenvi-ronment include press releases, interviews with reporters, and distribution of corporatebrochures. Much of the work of MR staff is doneby boundary-spanning personnel who act as abuffer between the organization and the envi-ronment, screening out things not relevant tothe corporation. Boundary spanners, such asmarket sensors or customer relations staff, relayto the organization information about currenttrends and changes in the environment.Boundary spanners also develop strong andsustained working relationships with reporters,contacting them in a timely manner with newsand updated information.

Employee Relations

Employee relations (ER) focuses primarily oninternal communication and identification issues.Identity is understood as the visual manifesta-tion of a company’s reality as seen in corporateactions, symbols, sagas, and jargon. However,image can be understood as a product of iden-tity. Therefore, even though the ER function



may not deal directly with managing externalcommunication, it is nonetheless a factor indetermining image. Essentially, corporate com-munication in this environment is aimed atintegrating the organization from within, usinga broad range of communication activities andproducts that are receiver centered. According tothe CVFCC, the main question to ask in thisquadrant is “Is the communication discerningand perceptive of the receivers’ needs?”

The task of corporate communication in theER function is to strengthen the organization’sreputation and credibility in the eyes of theinternal stakeholders by emphasizing the valuesof the organization, its strong culture, and itscongruent communication systems. The key tostaying competitive in today’s volatile markets is the ability to attract and retain a skilled andmotivated workforce. Attracting and retaininghigh-caliber personnel play a prominent roleboth formally and informally in communicatingthe organization’s identity to the outside world(Balmer & Gray, 2000).

The predominant form of communicationused by ER staff is interpersonal and relationalin nature. In targeting employees, corporatecommunication ER staff must take into accountthe diversity and complexity of the corporation’sworkforce. Different types of people respond todifferent kinds of messages. Therefore, from a CVFCC perspective, having knowledge ofemployee needs is extremely important. In addi-tion, the current trend of telecommuting andoutsourcing makes reaching employees withcorporate communication messages an evenmore complex task. Management must now fig-ure out how to measure things like productivityfrom employees who are telecommuters orworking in outsourced companies. Corporatecommunication in this segment must alsoaddress the concerns of union members, if rele-vant, and their respective unions, as necessary.

A variety of message types are exchanged inthe ER quadrant of the CVFCC, and a greatnumber of techniques are used for the actualdelivery. These techniques range from individual

meetings to company-wide seminars. Seminarsand retreats are a good way to build a solidreputation and positive corporate identitybecause they bring together many employees inone place, thus making it easier to deliver a con-sistent message across the board. Other examplesof message delivery methods include print andelectronic newsletters, local area networks,intranet, and various mail lists. The moreemployees identify with their organization, themore likely they are to show a supportive attitudetoward it, accept its premises, and make deci-sions that are consistent with organizationalobjectives (Stuart, 2002).


Government relations (GR) is characterized byinternal organizational communication aimed atachieving compliance through regulative systemsand processes. The goal is to increase account-ability through accurate information about the organization while adhering to certain systemand governmental standards. Activities in thisenvironment are aimed at communicating thecompany’s position on particular issues, strength-ening organizational credibility, and fostering apositive organizational identity. An effective cor-porate strategy cannot be realized if credibility istarnished. Communication in the GR function ismore centralized and internally oriented than inthe other functions, but nonetheless has implica-tions for corporate image. One current environ-mental issue that exemplifies the importance of corporate communication in this sector isderegulation. Many organizations have a blurredpublic image as a result of deregulation in theirparticular industry (Balmer & Gray, 2000).Corporate communication addresses this issueby modifying the public personas of thesecompanies; it provides a rationale for what infor-mation should be communicated about the cor-poration and why. By regulating the company’sprocesses and adhering to ethical standards, thecorporate communication department helps to



portray the company as a good corporate citizen.By communicating social responsibility inter-nally, the corporation can project accountabilityand a positive image to its stakeholders.

Corporate communication in this functionalso addresses the issue of society’s growingdemand for high levels of corporate responsive-ness and ethical standards. Corporate communi-cation staff works with regulators to make surerelevant information is processed and suppliedto the people who need it. To maintain ethicalstandards and establish accountability, it is nec-essary to have a workforce that internalizes theimportance of complying with ethical standards.

Investor Relations

Investor relations (IR) sets out to provide presentand potential investors with an accurate por-trayal of a company’s performance and prospects.The communication that occurs in this functionis financial in nature, aimed at promoting thecredibility of the organization. IR is also con-cerned with achieving organizational goals andeconomic reasoning, or publication of the meth-ods for getting returns on investments. IR is animportant corporate communication functionbecause it projects the organization’s financialstrengths and creates a corporate message thatlegitimizes the existence of the corporation.Another issue that exemplifies the importance ofcorporate communication in IR is dealing withmergers, acquisitions, and divestitures. Suchmoves might result in a gap between a company’simage and its true identity, especially whenassimilation processes (as in merged companies)go astray. IR staff must therefore be familiar withsociocultural dynamics as well as how to influ-ence the level of congruence between the differ-ent parts of the organization.

Developing trusting relationships with securityanalysts and the financial community is impor-tant for effective delivery of key corporate mes-sages. The target audience for IR personnel islargely made up of stakeholders such as venture

capitalists and financial media reporters withinfluence over the financial success of the organi-zation. Messages can be addressed to the businesspress and various analysts in the investment com-munity. Some companies, however, may find itbeneficial to bypass analysts and go directly toinstitutional fund managers at financial firmssuch as banks, insurance companies, and majorinvestment organizations with specific messages.The types of messages and the means for deliver-ing them may include direct mail aimed atanalysts or highlighting the organization in thefinancial media through advertising and promo-tional campaigns. Specifically, IR may handle theproduction of financial publications, annualreports, and other such documents required bythe Securities and Exchange Commission, stockexchanges, and shareholders. The aim of corpo-rate communication in the IR function is toenhance business results and stock market evalua-tions. The person responsible for corporate com-munication in IR may be the communicationexecutive, the financial director, the company’spress secretary, or a mix of all three (Dolphin,2003). It is also important to note that many com-panies create autonomous departments to handleIR, and some even hire outside consultants.

The Communication Process

Communication involves the exchange of pur-poseful messages between senders and receivers.Directors of corporate communication, unitmanagers, and staff specialists from variouscorporate communication departments such asMR, IR, GR, and ER create messages that targetspecific audiences or receivers. Receivers areinternal and external target audiences that mayinclude reporters, investors, analysts, regulators,and employees. When receivers require sendersto provide more information or to clarify someaspects of the message (e.g., when MR stafffends off criticisms from investigative reportersabout alleged advertising mishaps), they also actas senders. Thus, an overlap in communication



roles between senders and receivers occurs in anexchange system that provides both sides withopportunities to record, inform, reinforce, orchallenge the intent of the message.

The communication process is contextual, cir-cular, and dynamic. Contextual factors includethe interests, motives, and values of the commu-nicators. Feedback loops and simultaneousexchanges between multiple players (e.g., MRpersonnel and reporters) make the communica-tion process both dynamic and circular. Theexchange of communication through positive ornegative feedback allows both sides to adjust the communication, make necessary corrections,and align their expectations. Often referred to asthe S-R (sender-receiver or stimulus-response)process, Figure 3.3 illustrates the nonlinearity ofthe communication process.

A typical process is often filtered through“noises” or barriers that need to be dealt with orovercome before a meaningful outcome can beobtained. Examples of barriers that might hin-der the achievement of acceptable outcomesinclude hidden motives, gaps in expectations,incompatible values, cultural differences, mis-trust, or lack of credibility. Other barriers

include language and the use of complexmetaphors, intended or unintended ambiguity,misinterpretations, and misunderstandings. Thechallenge for the communicators is to conductthe communication constructively and persua-sively until a mutual understanding is reached.Effective flow of communication occurs whensenders and receivers are engaged in a meaning-ful exchange of feedback that considers the objec-tives of both sides. When encoding (senders’expressions of thoughts) and decoding (receivers’interpretation of messages) are in sync, the com-munication process is effective.

Although chapters 11 and 12 include illustra-tions of different message orientations anddiverse communication roles, it is important toremember that the communicator’s focus is onattainable outcomes and target audiences. Forexample, the target audience for IR includesanalysts and stockholders, and that of ERincludes employees and trade associations. Thekey is to compose the appropriate message byfiguring out what the objectives of the commu-nication are, who the audience is, and how (e.g.,verbal, visual) and when the message should bedelivered. The selection of suitable channels


Channel Selection

Context

Message

Response

AudienceBarriersCommunicator

Figure 3.3 The Communication Process


is also important. A concerned regulator willrequire the GR staff specialist, for example, tocompose a formal written report that accuratelyaddresses the facts and details of a particularcompliance procedure. ER staff, on the otherhand, may choose to supplement a newsletterwith an informal presentation that is interactiveand entertaining. In selecting the right channelof communication, the goal is to reduce thenoise, increase trust and credibility in theengagement, and ultimately gain the attention ofthe audience.

The main challenge is to recognize the needto gain the trust and mutual respect of the par-ties involved in the communication. As you readthis book, you will learn more about the impor-tance of this process. Communicators on bothsides of the spectrum develop trusting relation-ships when they move toward convergence andwhen messages are composed clearly and coher-ently. As you will see in chapters 5–8, the chal-lenge for corporate communicators is to balancethe competing tension that is often generatedbetween the functions of corporate communica-tion and their divergent audiences.

Summary

Chapter 3 sets the stage for linking the primaryfunctions of corporate communication bothinternally (identity) and externally (reputation).

Viewing internal and external communicationas connected functions shifts the focus of corpo-rate communication to answering questions ofhow an organization can communicate consis-tently to its many audiences in a way that repre-sents a coherent sense of self. That sense of selfis needed to maintain credibility and reputationinside and outside of the organization throughstrong organizational identity and positive exter-nal image.

In most contemporary corporations, mediarelations (MR), employee relations (ER), gov-ernment relations (GR), and investor relations(IR) are interrelated and form the whole of thecorporate communication system. Internally, ERand GR ensure that the company’s sociotechni-cal system functions well; externally, IR and MRpresent the company to the market. IR and MRare dedicated to creating a good reputation andenhancing the corporate image in the eyes ofthe public, whereas ER and GR concentrate oncorporate identity, ethics, socialization processes,compliance systems, and social responsibilityinitiatives. It is important for each of these func-tions to establish clear objectives and work col-laboratively to achieve consistency across diversecorporate communication goals and messages.Strategically, the functions of corporate com-munication are both independent and interde-pendent, operating as a matrix structure, asillustrated in Figure 3.4. The matrix exemplifiesthe role of corporate communication as an


Departments (Decentralized operatives)

HumanResources Finance Marketing Legal

Media Relations

Investor Relations

Employee Relations


Functions ofCorporate

Communication(Centralizedstructure)

Figure 3.4 Corporate Communication as a Matrix


all-inclusive department with cross-functionallines. The circles represent corporate communi-cation functions that draw on functional depart-ments for resources.

This network of highly interconnected opera-tives requires close proximity to the strategic apexof the organization. Pushing corporate commu-nication to the top is necessary for developingcoherent corporate messages and communicating

these messages to diverse organizational stake-holders. Therefore, corporate communicationshould be appreciated and treated as an integralpart of the top management function. A closerelationship between communication directorsand upper management aids in developing strate-gies to deal with issues management and to main-tain a logical and clear decision-making process(Cornelissen, 2004).


1. The different functions of corporate communication reflect the need to respond to multiple orga-nizational constituencies. Give examples of such constituencies and discuss the importance of cre-ating a consistent image across these constituencies.

2. Discuss the usefulness of the CVFCC in addressing interconnectivity across internal and externalcommunication systems and functions.

Review Questions

CASE STUDY

Starbucks Coffee Company

Starbucks, generally considered the most famous specialty coffee shop chain in the world today has over6,000 stores in more than 30 countries, with three more stores opening every day (Fortune, 2003). Manyanalysts have credited Starbucks with having turned coffee from a commodity into an experience to savor.Starbucks’ objective has always been to emerge as one of the most recognized and respected brands inthe world. Since it made its IPO (initial public offering) in 1992, Starbucks had been growing at a rate of20 per cent per annum and generating profits at a rate of 30 per cent per annum. Starbucks has alwaysfelt that the key to its growth and its business success lies in a rounded corporate identity, a better under-standing of customers and a store experience that would generate a pull effect through word of mouth.Howard Schultz, Starbucks’ founder and chairman, had early on in the company’s history envisioned aretail experience that revolved around high-quality coffee, personalized, knowledgeable services andsociability. So, Starbucks put in place various measures to make this experience appealing to millions ofpeople and to create a unique identity for Starbucks’ products and stores.

Schultz felt that the equity of the Starbucks brand depended less on advertising and promotion andmore on personal communications and word of mouth. As Schultz put it: “If we want to exceed the trustof our customers, then we first have to build trust with our people. A brand has to start with the [inter-nal] culture and naturally extend to our customers. . . . Our brand is based on the experience that we con-trol in our stores. When a company can create a relevant, emotional and intimate experience, it buildstrust with the customer . . . we have benefited by the fact that our stores are reliable, safe and consistentwhere customers can take a break” (Business Week Online, August 6, 2001). Schultz regarded the baris-tas, the coffee makers in the stores, as his brand ambassadors.

Starbucks looked upon each of its stores as a billboard for the company and as a contributor to build-ing the company’s brand and reputation. Each detail was scrutinized to enhance the mood and ambienceof the store, to make sure everything signaled “best of class” and that it reflected the personality of thecommunity and the neighborhood. The company went to great lengths to make sure the store fixtures,the merchandise displays, the colors, the artwork, the banners, the music and the aromas all blended to



create a consistent, inviting, stimulating environment that evoked the romance of coffee, and signaled thecompany’s passion for coffee.

By the late 1990s, consumers associated the Starbucks brand with coffee, accessible elegance, com-munity, individual expression and a “place away from home.” And in 2001, brand management consul-tancy Interbrand named Starbucks as one of the 75 true global brands of the twenty-first century.Starbucks’ identity and positioning as “a socially responsible purveyor of the highest quality coffee [thatis] offered in a unique retail environment” has thus led to a respected and strong reputation with cus-tomers, industry analysts, communities and other stakeholder groups.

Starbucks has always been concerned about its image and reputation, and rightly so. One of the pos-sible ways of growing for Starbucks was to distribute its coffee through supermarkets, airlines (e.g., UnitedAirlines) or fast food chains such as McDonald’s and Burger King. But such alliances and alternate distri-bution chains carry significant risks for the brand and its reputation. Starbucks has built its distinctive rep-utation around a unique retail experience in company-owned stores. And customers could perceive thebrand differently when, for instance, they encountered it in a grocery store aisle—an environment andchannel that Starbucks did not control.

Case Questions

1. Consider the risks for Starbucks in forming product alliances with other companies or adding alter-native distribution chains. What rules of thumb can you suggest, particularly from the viewpointof Starbucks’s corporate identity and the strong reputation that the company enjoys?

2. Reflect on the corporate identity of Starbucks in the coffee shop market. To what extent do youfeel that this identity is unique, authentic, and competitive in this marketplace?

3. “If we want to exceed the trust of our customers, then we first have to build trust with ourpeople. . . . [A] brand has to start with the [internal] culture and naturally extend to our customers”(Howard Schultz, Starbucks founder and chairman, quoted in Stanley, 2001, ¶ 2). Use the CVFCCto evaluate the significance of Schultz’s assertion. Which functions of corporate communicationplay a role in brand management? Clue: Consider the relationship between internal and externalcommunication.

SOURCE: From Cornelissen, J., Corporate Communication Theory and Practice, pp. 80-81. Copyright © 2004,London: Sage Publications, Ltd.


41

4

Identity, Reputation,and the Functions ofCorporate Communication:A Strategic View

Corporate communication is an integral partof the strategic management process in

which organizational mission and goals arecommunicated explicitly to various stakeholders,including employees. When key organizationalleaders define what the company is about, they areforced to clarify and find common agreement onwhat the organization’s values are and what dif-ferentiates it from other organizations. The endresult provides focus and direction for all organi-zational members. Yamauchi (2001) argues thatcorporate philosophy is encapsulated in anorganization’s vision. Formulating a philosophy ofwhat management hopes the company will oneday become is a requirement for organizationalsuccess. Corporate philosophy (or mission)energizes employees; it builds common groundbetween the company and its employees. It helpsunify a company by producing a co-creation ofvalues so that workers can achieve organizationalgoals and maintain strong internal and external

relationships. Internalizing a corporate missionalso helps employees develop a sense of identifica-tion. Communication helps to create an imagethat conveys the company’s vision or mission andreflects the interests of the organization. Employeeswant to feel that they are making a unique contri-bution to the goals of the organization; this can beachieved through integration and identificationprograms in which employees assimilate organi-zational core values and align their interpretationsof how the organization sustains its operationswith the overall strategy and vision.

Corporate communication is valued for itsstrategic input into decision making and theoverall corporate strategy, not just for its opera-tional excellence in managing communicationresources and programs that are already deployedwithin the organization (Cornelissen, 2004).The following questions provide a starting point for developing communication strategy(Clampitt, DeKoch, & Cashman, 2000):


• With whom will executives communicate?• How will employees and executives

communicate?• When will employees and executives

communicate?• Where will employees and executive

communicate?• Why should executives communicate?

So what is strategic corporate communication?It is the central, integrated, externally orientedframework of how the organization intends to obtain its stated objectives (Hambrick &Fredrickson, 2001). Thus, strategy serves as thebasis for organizing, implementing, and evaluat-ing communication activities within and outsidethe organization. Effective communication strat-egy links the mission and goals of the organizationwith its markets (“What business will we be in?”);clarifies the means to achieve the stated objectives(“How will we get there?”); and identifies theunique characteristics (e.g., corporate identity,reliability of service, reputation) and core compe-tencies of the organization that help differentiate

it from its competitors (“How will we win overcustomers?”) and the sequence of activities, tim-ing, or staging (e.g., pursuit of early wins, buildingcredibility) to achieve growth (“What are ourmoves, and how will we obtain our returns?”).Strategies are altered based on changes in the envi-ronment, competitors’ responses, and new choicesand initiatives made by top executives (Hambrick& Fredrickson, 2001). Creating appropriate mes-sages and choosing the right communicationchannels to deliver them can help companies aligntheir goals with the interests of key stakeholders(see Figure 4.1).

The integrated approach to strategic corporatecommunication allows for a number of benefits,including greater consolidation of communica-tion disciplines, increased coordination from acorporate perspective, more input into executivedecision-making processes, and adoption of amore consistent form of message compositionand channels (Cornelissen, 2004). Above all, itleads to the rise of the centrally located corporatecommunication figurehead. Taken together, thismodel and its benefits suggest the centrality of


Reputation

Credibility

Channels

Values Symbols

• Differentiation• Economic• Reasoning• Staging• Means• Markets

OrganizationalIdentity

CorporateStrategy


Stakeholders

Delivering theCorporate Message

Corporate Image

Figure 4.1 Linking Strategy and Communication


corporate communication and the importance ofusing stakeholder analysis to advance the strategicgoals of the organization.

Corporate communication that is linked tostrategy has particular characteristics that differfrom past conceptions of PR. First, currentresearch emphasizes that corporate communica-tion must be connected to top management dueto the importance of bringing an outside per-spective to executive decision making. CEOs whohire investor relations executives as merelyperipheral staff members do so at their own peril.

Second, effective corporate communicationoften employs a two-way symmetrical model of exchange with stakeholders (see chapter 12).The one-way model is often adopted becausemany PR professionals come from the field ofjournalism and are trained in the public infor-mation model of generating unidirectionalmessages (Gordon & Kelly, 1999). The two-waymodel, on the other hand, seeks feedback fromstakeholders toward the goal of mutual under-standing (Plowman et al., 1995).

Third, strategic planning seems to be synony-mous with proactive planning and the initiationof communications. In 1991 the New Zealandgovernment implemented a radical restructuringof its social services, including the privatization ofits state-owned public hospitals, which wereconverted into 23 Crown Health Enterprises(CHE), and the creation of an internal marketwith purchasers (four regional health authorities)separated from providers. Interviews with chiefexecutives of CHEs suggested that provider unitswere seeking a wider role than originally envi-sioned, with an interest in the health care needs oftheir populations and the initiation of somepurchasing on their behalf. The purchasers, on theother hand, saw a much more limited role for theCHEs, subjecting them to attacks from politicians,medical organizations, community groups, andmedia (Barnett & Malcolm, 1997; Comrie, 1997).

In her study of two similar CHEs over a 3-month period, Comrie (1997) found thatproactive press relations were more likely toyield positive news stories (75% of the time)than were reactive activities or mere responses

to media requests for comment. Of the twoprovider units, MidCentral and Health Waikato,described by Comrie, MidCentral was moreproactive in issuing media releases, initiatingphone calls to reporters, holding conferences,and attending pubic meetings. During the 3months, MidCentral received more newspapercoverage overall than Health Waikato, and 65%of news stories about MidCentral were the resultof proactive activities. Health Waikato hadnearly 25% fewer of its stories result from pro-active strategies. Generally, the more input thatprovider units (CHEs) had in a story, the morelikely it was to be neutral (presenting both sidesof an issue) or positive. Strategically developingand maintaining favorable relationships withthe press can impact positive coverage andincrease the likelihood that the press will presentan organization’s side of the story. Establishingthis relationship in advance of crises gives com-panies more control in protecting their image.

Gotsi and Wilson (2001b) noted the impor-tant role employees have in influencing corporatereputation. Organizational actions and outcomesoften lead to conflicting reputations, such asdoing well in the marketplace but not having agood workplace climate and satisfied employees.Employees deal directly with the organization’sexternal stakeholders and can be influenced bytheir feedback. Conversely, employees are able to influence stakeholders by projecting certainimages to them. For instance, employees canaffect an organization’s reputation negatively ifthe internal messages and values they perceive are not consistent with the values and messagesdirected toward outside constituents. On theother hand, if the corporation’s values and mes-sages are consistent, employees can be the bestresource for advocating the company’s reputa-tion. Moreover, if an organization adopts a proac-tive strategy with the media and consumers, itsreputation is more likely to be positive. However,if the media and consumers must seek outinformation regarding the corporate actions andoutputs independently, the likelihood that theorganization will be portrayed negatively in thenews media is relatively high.

Chapter 4: Identity, Reputation, and Functions 43


Effective marketing communication, PRstrategies, and media relations help shape a corporation’s identity and affect its reputation.Maintaining a good reputation allows companiesto differentiate in a saturated market. Excesscapacity and cutthroat competition often forcecompanies to emphasize branding and servicereliability in which corporate reputation signifi-cantly influences customer loyalty and retention(Caudron, 1997). In addition, knowing where thecompany stands on public issues and identifyingthe factors influencing its current reputation are important corporate communication goals.When an organization maintains a proactive andaccountable communication strategy with variousmedia outlets, corporate reputation and credibil-ity tend to increase. Corporate reputation is theresult of communication strategies, activities, andproducts that intersect with the fields of market-ing and management communication. Reputa-tion is both the cause and effect of a dynamicrelationship between organizational members andexternal stakeholders (e.g., customers) in whicheither one has the ability to influence the other. Acorporation’s social performance and image arekey factors in influencing reputation and attrac-tiveness (Turban & Greening, 1997). As Figure 4.2

shows, shaping public attitudes toward an organi-zation can help increase trust and enhance organi-zational credibility. In turn, the public image of anorganization affects the viability of the organi-zation over time. As Goodman (2001) suggests,integrity and credibility are the pillars of strategiccommunication.

The government also has a role in shaping thereputation of organizations; it enacts regulationsand laws to which corporations must adhere.Socially responsible organizations that choose togo above and beyond the guidelines specified byregulatory requirements usually enjoy a betterreputation. Moreover, organizations that provideshareholders with updated financial informationthat is open and honest enjoy a better perceptionof organizational credibility. A system ofaccountability allows investors to be confident inthe organization, which improves its reputation.Likewise, investors will likely flee organizationsthat hide financial deficits and lack measures ofaccountability. The loss of credibility might alsohinder new prospects and produce an unfavor-able reputation among future investors.Arguably, the boundaries that separate internaland external communication are ambiguous andtherefore must be managed interdependently


Media Stakeholders Reputation

Credibility

Trust

Public Image

Figure 4.2 Media and Corporate Reputation



(Cheney & Christensen, 2001; Corley Cochran, &Comstock, 2001). Organizations need to main-tain credibility both inside and outside the orga-nization. Since employees are important internalstakeholders, management needs to focus atten-tion on the firm’s identity or image as it ispresented to the employees. At the same time,management must communicate a good publicperception as well. Many internal stakeholdersare influenced by the messages delivered by or fil-tered through the external environment (Corleyet al., 2001). Thus, in the early stages of strategicplanning, the dynamic relationship betweeninternal and external communication programsshould be taken into consideration.

GE: Managing Image and Corporate Identity

Organizations and their environments arechanging continuously, so organizations needto reexamine their corporate identity overtime. For example, General Electric (GE) his-torically dealt with only one area of business,but as the company changed over time, itevolved into one of the largest diversifiedmultinational companies in the world. Accor-ding to Fortune,“GE makes 65-cent light bulbs,400,000-pound locomotives, and billion dollarpower plants. It manages more credit cardsthan American Express and owns morecommercial aircraft than American Airlines”(Kjellerup, n.d., ¶ 1). In such a situation, it isnecessary for GE to simultaneously sustainand manage its “original” and “new” corporateidentity to avoid any confusion about the com-pany’s messages both internally and externally.

Keeping a consistent image across differentconstituencies is a nearly impossible task. Howdo you bridge the gap between extreme stake-holders’ views or competing demands withoutconfusing stakeholders or tarnishing the credi-bility of the organization? GE’s internal restruc-turing during 2002–2003 significantly reduced

the number of people employed in its PowerSystems division in Schenectady, New York,demoralizing the local community that oncemaintained strong ties with the company. AndGE’s image was tarnished by its intense fightagainst dredging and the blitz of ads it placed inprint and electronic media opposing theEnvironmental Protection Agency ruling onthat topic. These corporate ads backfired whenthe local community and the media highlightedGE’s inconsistent communications and lack ofaccountability by using the company’s newmotto, “We bring good things to life,” sarca-stically. Establishing an accurate corporateidentity helps people understand who a com-pany is, what it does, and what value it adds tothe community. For this reason, GE, one of theworld’s business leaders, changed its identityin the 1980s based on its true facts and its devel-opment needs. This case application providesa pertinent example of how important it is todefine a strong positive corporate identity togrow the company. In the early 1980s, GeneralElectric Company was already positioned as thenumber one or number two diversified multi-national business in the United States. However,its logo, which included the company’s name,gave people the impression of “electrical busi-ness” only. In 1985, management reexaminedthe corporate identity and decided to reshape itto reflect the company’s true identity.

Richard Costello, the manager of CorporateMarketing Communications, who was incharge of reshaping the company’s identity,assigned the case to corporate identity con-sultant Landor. To address the reality of thecorporation, Landor recommended that in itsexternal and internal communication, thecompany no longer call itself General Electric,but simply GE, and the highest level of compe-tency was added to the business name to makeit concise and lean. Using such concise com-petency terms as GE Aerospace and GEPlastics, the company hoped to build awarenessof its diversity. A similar logic was applied


internally to simplify functional titles, whichsupported the company in becoming lessbureaucratic. Also, Landor’s research showedthat perceptions of GE were high in terms ofreliability but fell short in terms of dynamismand innovation. So the new identity systemmaintained the image of reliability andimproved perception of its innovation anddynamism. Figure 4.3 shows the evolution ofGE’s identity. This change broadened theawareness of GE’s diversity, so that peoplewould have a more accurate perception of thecompany. It maintained GE’s image of reliabil-ity and improved perception of its innovationand dynamism. The new identity also unifiedthe company’s visual and verbal expressionthrough a consistent and high-quality applica-tion of the contemporary program standards.

When the corporate identity of GEchanged, so did the corporate image. Becausecorporate image reflects the totality of stake-holders’ perceptions, it must be managedresponsibly. Chairman and CEO Jack Welchestablished the Identity Advisory Council tohelp Landor set up interviews with variousstakeholders and provide the visual materialsfor the audit program. In addition, GE held aseminar with 40 to 50 of its major suppliersand got them to begin working with the systemto help keep the program on track. In so doing,GE created an organizational identity that

incorporated both internally held values andexternal expressions of these values. Landordelivered to GE’s division heads a two-volumemanual documenting all the standards thatwere now linked to the new identity. Supportedby a communications manager who had par-ticipated in the development of the programthrough the Advisory Council, each businessbegan implementing the standards of the newcorporate identity system. After the AdvisoryCouncil had communicated the guidelinesinternally, it took on the challenge of imple-menting the program with external suppliers.To make the corporate identity program workwell in the real market, they made sure that itdid not get out of line from a financial perspec-tive and got people to feel comfortable withand take ownership of it. Landor continued towork with GE on identity system maintenance,monitoring the implementation of the identitysystem and maintaining it over time.

When GE changed its logo to reflect the newidentity, it wanted to sustain its corporate rep-utation. Reputation is the reflection of an orga-nization’s public image; it is a reflection of thehistorical, accumulated effects of previouslyobserved identity cues and organizationalexperiences. The new identity system retainedthe GE monogram, a 100-year-old symbol thatreflects consistency and reliability, and com-municated GE’s emphasis on dynamism and


• Reliability• Innovation• Dynamism

• Diversified• Lean• Concise

GE

• Old-fashioned• Electric• Bureaucratic• Broad

General Electric

Figure 4.3 Transforming GE’s Identity


innovation. Goodman (1998) states that a logobuilds corporate image by giving a nonverbalmessage that reinforces the company image inthe mind of the viewer. GE spent tremendousenergy delivering a logo that represents its newidentity while preserving its image. The newGE monogram not only maintained the com-pany’s corporate tradition and spirit, but pro-moted its innovative and dynamic corporateenvironment. The newly designed identityprogram was a huge success; it helped improvethe company’s awareness and external image.As a result, GE’s revenues grew from $25 billionin 1980 to $134 billion in 2003.

Target: Managing Corporate Reputation

The Target Corporation is an example of acompany that has differentiated itself from thecompetition by promoting a unique image andpositive reputation. “Expect more of every-thing: More great design, more choices, moreconvenience, more service and more clothes,housewares and designer-created items thatyou’ll never find anywhere else. And pay less. It’sas simple as that” (Target.com, 2007, ¶ 1)—thisis Target’s promise to its customers as dissemi-nated in the Philosophy and Values section ofthe company Web site. Target’s slogan of“Expect more. Pay Less.” projects the corporateimage of an upscale discount retailer. Althoughthe terms upscale and discount may seem para-doxical, through its innovative and creativemarketing strategies, Target has successfullyintegrated these competing values into its cor-porate image. Through its innovative marketingand branding strategies and its favorable corpo-rate reputation, Target has differentiated itselffrom its competition. None of Target’s key com-petitors, Wal-Mart, Kmart, or Kohl’s, enjoys theimage of an upscale, trendy, and chic retailer.The niche that Target has carved out for itself isas a classy, low-cost alternative to superstores,especially for customers who would not shop at

Wal-Mart. The average Target shopper has afamily income over $50,000 a year compared to$30,000 for the average Wal-Mart shopper (OnTarget, 2004).

So how has Target managed to project itselfas being classier and trendier than its competi-tors? One particularly innovative strategy wasto hire high-profile fashion designers such asMichael Graves, Cynthia Rowley, and IsaacMizrahi to design low-cost product lines to besold exclusively in Target stores. Currently,these designers can be seen in Target’s televi-sion ads describing their innovative take onhigh fashion. These television spots serve adual function of promoting Target’s trendynew products and promoting Target itself as atrendy place to shop. Indeed, the majority ofTarget ads serve as brand builders. Since the1990s, Target has used “a sort of ‘pop art’ adver-tising that mixes music, imagery and color”(T. Howard, 2001, ¶ 1). According to Schlosser(2004), “Target settled on a marketing stylethat more closely resembled Andy Warhol–inspired pop art than the drab price-focusedads of its competitors” (¶ 11). Target’s advertis-ing projects the “Expect More” component ofthe company’s slogan, and weekly newspaperflyers deliver the “Pay Less” promise. TargetAdvertising Director Nancy Carruth affirmsthis: “Pay less is always our Sunday insert. OnTV it is really brand awareness we are showing.And we’re showing it’s a hip, fun and entertain-ing place to shop” (T. Howard, 2001, ¶ 8).J. P. Morgan senior analyst Shari Eberts agrees,stating that “advertising is a really importantpart of what helps differentiate Target fromWal-Mart. It is more of a fun, fashionableimage that helps drive people into the stores.Target is much more about developing thebrand and the image” (T. Howard, 2001, ¶ 12).It is important to note that Target attempts tolive up to its advertised image of being a trendystore; for example, many Target stores featurea Starbucks as opposed to the generic hotdogand popcorn stands often located at its com-petitors’ locations.



Target’s innovative, image-building app-roach earned it Advertising Age’s Marketer ofthe Year honors for 2000. Advertising Agepraised Target not only for its finely honedpopulous marketing but also for its widelyrecognized red-and-white bull’s-eye logo as aneffective advertising icon in a class with thoseof McDonald’s arches and Nike’s swoosh.Target has used a variety of innovative tech-niques to flood the public with its logo, one ofwhich occurred in February 2004 when“thirty-five clones of Target’s mascot, a whitebull terrier named Bullseye, invaded New YorkCity’s celebrity-filled Fashion Week”(Schlosser,2004, ¶ 20). Publicity stunts such as this havehelped Target create buzz about the upscaleretailer while actually spending less on adver-tising than its competitors. In 2003 alone, Searsspent $627 million, Wal-Mart $467 million,and Target $442 million on U.S. television,print, and Internet ads. Whose logo stands out?

Target seeks to differentiate itself not onlythrough its image as a trendy and innovativeorganization but also through a strong rep-utation as a charitable and philanthropiccorporation. Target’s corporate responsibilitystatement begins with words from Chairmanand CEO Bob Ulrich:

Being committed to the social, economic andenvironmental health of the communities we serveis a key part of Target’s heritage, a cornerstoneof Target’s strategy and vital to our long-termsuccess. . . . Today, Target continues to work hardto enhance the communities we serve. We areactively engaged in programs that benefit familiesand young children through our donations of morethan $3 million each week; we endeavor to designstores that complement and protect the environ-ment in which we operate, even as we continue togrow; and we strive to adhere to the principles ofintegrity and strong corporate governance thathave guided our business conduct and perfor-mance for decades (Target.com, 2006b, ¶ 1–2).

Indeed, Forbes ranked Target as the mostcharitable organization in 2004. Target donated

2.1% of its 2003 earning compared to 1.3%for Nationwide, Forbes’ second most chari-table organization (Moyer, 2005). Along withdonating a large portion of its cash earnings,Target is engaged in several national partner-ships with philanthropic organizations such asthe American Red Cross, the Breast CancerResearch Foundation, and the Family LiteracyFoundation. Recently, in partnership with theTiger Woods Foundation, Target began theStart Something Program, designed to teachchildren leadership skills and achieve theirdreams. On March 20, 2006, Target brokerecords when it donated $15.6 million toschools across the country as part of its TakeCharge of Education program.

Clearly, Target is a charitable and humani-tarian organization. But it should be pointedout that Target also makes an effort to ensurethat the public knows this information. Thecompany’s Web site lists all of its charitableactivities in great detail and provides pressreleases detailing its latest donations andpartnerships with humanitarian organizations.Furthermore, Target is likely enjoying theenormous amount of negative press beingdirected at its rival, Wal-Mart. Wal-Mart’s pub-lic image issues, coupled with Target’s strongpresentation of its image as a charitable, good-neighbor organization, allow Target to furtherdifferentiate itself from its competitors.However, no corporation is invincible, andTarget is no exception. During the 2004 holi-day season, Target made the decision to banSalvation Army collectors from operating out-side of its stores, because the company has ano-solicitation policy, and it stated that it couldno longer make an exception for the SalvationArmy because of a dramatic increase in solici-tation requests (E. B. Smith, 2004). Target facedcriticism for this decision, and some specu-lated that the company “might have decided itcould take a harder line with the SalvationArmy because its shoppers tend to be moreaffluent than the impoverished families theSalvation Army serves, and more affluent than



customers at competing retailers that kept thekettles in place” (E. B. Smith, 2004, p. 5b).

The organization’s upscale and trendyimage could have been transformed into one ofarrogance and snobbishness; however, Targetseems to have dealt with this issue both cre-atively and effectively. During the 2006 holidayseason, in the wake of Hurricane Katrina,Target and the Salvation Army formed a part-nership to provide relief to the victims. Visitorsto Target’s online store could purchase a varietyof items for hurricane victims that would bedelivered by the Salvation Army. Major GeorgeHood, the national community relations anddevelopment secretary for the Salvation Army,stated that “this is an important partnershipwith Target to help the people of these areasbegin to rebuild their lives. With their assis-tance, we are enabling thousands of Gulf Coastfamilies and people all across the country tobegin that process” (Target.com, 2006a, ¶ 4).

An analysis of Target reveals that it seems tounderstand the importance of having both astrong image and a strong reputation. Target’sreputation as a charitable, caring organizationhas allowed the company to stay relatively offthe radar of groups that have strongly criti-cized many of its competitors. Target has suc-cessfully taken a unique approach to discountretailing and marketed itself in a way that setsit apart in the marketplace.

McDonald’s: Promoting the New Image

McDonald’s is the leading global foodserviceretailer with more than 30,000 local restaurantsserving nearly 50 million people in more than 119countries each day. [It] is one of the world’s mostwell-known and valuable brands and holds a lead-ing share in the globally branded quick servicerestaurant segment of the informal eating-outmarket in virtually every country in which it doesbusiness. (McDonald’s, 2005–2006, ¶ 1–2)

McDonald’s is now in a position to onceagain rule the market of fast food, but some

years ago it faced serious problems. Without aconsistent marketing strategy—rather, leav-ing the creation of its image to the localrestaurant owners—it had become notoriousfor lacking focus, being out of touch with theculture, stifling ideas in bureaucracy, and cre-ating a subpar work environment (Arndorfer,2005). The company fought the bad sales fig-ures and stock prices with a new marketingcampaign whose trademarked slogan is “I’mlovin’ it.” However, the campaign is more thansimply a series of new, continuously producedcommercials. McDonald’s itself calls it, in apress release, a “brand campaign.” Accordingto a press release (McDonald’s, 2003), the newcampaign—designed by the German adver-tising agency Heye & Partner—is unique inthe history of McDonald’s because it is notonly the first marketing endeavor entirelyinvented and produced outside the UnitedStates but also the first campaign that unitesall restaurants under a single brand message.

The expectations connected with the newcampaign, as well as the goals that the com-pany hopes to achieve, are high. According toLarry Light, McDonald’s executive vice presi-dent and global chief marketing officer, “it’s anew way of thinking about and expressing ourworldwide brand appeal to the consumer. . . .We will communicate a consistent brand mes-sage while at the same time capturing thespirit, music and flavor of each local country”(Ragan’s PR Intelligence Report, 2003, TheExecution, ¶ 2, 6). According to Light,McDonald’s “I’m lovin’ it” campaign is a keyingredient in the company’s new marketingapproach, intended to invigorate, revitalize,and energize the McDonald’s brand world-wide. Called Rolling Energy, this approachinvolves McDonald’s first-ever integratedglobal 2-year marketing calendar that willprovide consistency in messaging and com-munication to customers and employees. TheRolling Energy program features a varietyof integrated marketing activities, includingpromotions, media planning, new products,



merchandising, and internal marketing. Thiscampaign serves the function of sustainingand managing the organization’s visual iden-tity because it promotes not only the productsbut also the image and the organization itself.The campaign consists of putting the slogan“I’m lovin’ it” on the company’s products andinitially releasing five television commercialsthat depict young people in everyday situationsenjoying McDonald’s food. The campaignalso used Justin Timberlake as a prominentrepresentative of the new message, portrayingthe characteristics of innovation in the formof a modern and trendy star.

In the spring of 2004, McDonald’s faced a major crisis when it was indirectly blamed forthe obesity of thousands of Americans (andfast-food consumers worldwide) when themovie Super Size Me was released. The docu-mentary shows creator Morgan Spurlock—who ate only McDonald’s food for 30 days—consuming more than 5,000 calories each daywithout exercising. The consequences for hishealth were disastrous, and the movie resultedin a great deal of bad publicity for McDonald’s.The company’s response was to start a new ini-tiative, called “Go Active,” which was aimed athighlighting McDonald’s intent to promote amore balanced, active lifestyle. McDonald’ssigned successful athletes such as tennis playersVenus and Serena Williams to promote its GoActive program. The company also adjusted itsmenu by eliminating the “super-size” optionaltogether, and it introduced more salads andlow-fat chicken sandwiches as alternatives to itsexpansive hamburger selection. In addition,McDonald’s gave away “stepometers” in thehopes of motivating people to track their dailyfitness activity, and even proactively started acampaign that sought to make the nutritionfacts about the food available at a standardMcDonald’s restaurant more readily attainable(in conjunction with the 2006 Winter OlympicGames, the company launched a NutritionInformation Initiative to provide nutritionfacts directly on the food packaging). Another

step toward creating a better image concerninghealth risks was to sponsor major sportingevents, including the Olympic Games (through2012) and soccer events such as the EuropeanChampionship (EURO 2004) and the 2006World. McDonald’s also developed sponsor-ships for sporting events at many (predomi-nantly American) schools.

In connection with the promotion of ahealthy lifestyle (and consequently, corporateimage) the “I’m lovin’ it” strategy was elasticenough to allow regional adjustments (bothnationally and internationally) while stillpresenting an underlying, unified message tostakeholders. For example, some restaurants inGermany went so far as to change the dom-inant colors from the traditional red andyellow to green, white, and gray to give a morehealthy and stylish impression. Together witha series of commercials launched in 2005—which starred internationally recognizedsupermodel Heidi Klum as a spokesperson—McDonald’s acknowledged the strong trend inGermany toward fitness food and a healthylifestyle, and used it in the campaign.

A good and open relationship with thepress, especially following the Super Size Mecrisis, made it possible for McDonald’s to get anumber of articles and stories published,which showed that its food does not necessar-ily lead to obesity and other health problemsand can actually help individuals lead a health-ier lifestyle and possibly even lose weight.Several groups attempted to repeat the experi-ment demonstrated in the movie, but had dif-ferent experiences and results. The newlycreated image differentiated McDonald’s fromits direct competitors, Wendy’s and BurgerKing, and thus enabled McDonald’s to get abigger market share and become even morerecognizable as a brand. The combination ofthe efforts taken resulted not only in an imagethat is arguably stronger now than it was beforethe crisis, but also, together with the “I’m lovin’it” campaign, in the rise of sales figures—from6.4% in 2003 to 9.6% in 2004, after a decline in



the previous years (MacArthur, 2006). Provingthat the ad campaign was a successful strategyfor image improvement, McDonald’s experi-enced a significant decrease in its employeeturnover rate (Arndorfer, 2005). Plans for tele-vision commercials to portray the pride felt byMcDonald’s employees (a visual manifestationof internal identity) are already in the works.

Further promoting corporate reputation isthe fact McDonald’s has been active in thecommunity for years. Since 1974, the RonaldMcDonald House program has providedhomes away from home for families of criti-cally ill children (coincidentally, it is also theprimary recipient of Southwest Airlines’ char-itable donations). Additionally, McDonald’sengages in several regional community pro-grams and actions, including neighborhoodbeautification initiatives, education and youthdevelopment programs, and local/regionalsporting events. The company is especiallyinterested in charities that benefit childrenand stresses the McDonald’s World Children’sDay, which is celebrated in its restaurants allover the world. The company prides itself onraising money for children and ultimatelyaims to create broader awareness of children’sissues. In addition, McDonald’s stresses thecompany’s commitment to environmentalprotection, and its homepage lists a numberof awards that the company has received fromnumerous environmental protection groups.Particular emphasis is placed on the responsi-ble treatment of natural resources such aswater and energy, as well as the proper meansof waste disposal. The company has alsoresearched reusable material for packagingbecause excessive waste of the paper used inits product packaging has been a constantpoint of criticism over the years.

Not only does McDonald’s engage in vari-ous charities, but it also provides emergencysupport in the event of catastrophes such asHurricane Katrina and the tsunami in South-east Asia. Often, the money raised amongemployees or in restaurants is donated to

children, as was the case with the tsunamirelief (the organization donated $500,000).And when Hurricane Katrina hit NewOrleans in 2005, McDonald’s donations pro-vided not only money for the reconstructionof destroyed areas but also free food atrestaurants in the vicinity of destroyed neigh-borhoods and refugee camps. This kind ofengagement connects the organization withthe community by creating or invoking theimage of the good neighbor.

Effective CommunicationStrategies

The many forms of media relations and forma-tive research activities typically used to designeffective marketing communication strategyaimed at enhancing corporate communicationcan be grouped into the acronym SMART(Bruning & Ledingham, 2000):

1. Scan—Identify and segment targetgroups; audit the existing perceptions ofkey public members.

2. Map—Develop a strategic plan thatintegrates the mission and goals of theorganization and the interests of its keystakeholders.

3. Act—Conduct a pilot study and take thesteps necessary to adjust the plan to matchthe values and needs of key public members.

4. Roll out—Implement the revised strategicplan with the larger population.

5. Track—Monitor the effects of organiza-tional activities on public perceptions,and use the information gathered toreassess organizational initiatives anddirect and control the implementation ofa marketing communication strategy.

Dionisopoulos and Crable (1988), however,discuss a different strategy for influencing media



discourse. In the aftermath of the Three MileIsland nuclear accident, when a coolant pumpfailed and citizens had to be evacuated from the area around the plant, the danger of nuclearpower became salient for reporters and forCongress. This atmosphere led to inaccurateinformation and an increasingly fearful public.The nuclear power industry employed defini-tional hegemony to change the rhetoric sur-rounding nuclear power “establishing newframes of reference for interpreting ‘relevant’information and thus, influencing the discus-sion in ways designed to have a policy impact”(Dionisopoulos & Crable, p. 136). By changingwhat was being discussed in relation to the acci-dent, the industry was able to control the infor-mation and use it to lessen the crisis. First, theNuclear Regulatory Commission questioned thecredibility of the media and accused them ofproviding inaccurate or inflammatory informa-tion about the accident and the safety of nuclearpower. Next, the industry emphasized the guar-antee of future safety and refocused attention onthe importance of nuclear energy to the coun-try’s future fuel needs. When the industry’s cred-ibility and very existence were threatened, it wasable to change the reactive dialogue surroundingan accident and introduce proactive discourse to manage it. The industry strategically dis-armed existing media messages and replacedthem with more proactive communication.

A government organization can use the mediato its advantage as well, and perhaps none usedmedia relations strategy better than the FederalBureau of Investigation (FBI) when it washeaded by J. Edgar Hoover. Gibson (1997)describes how the FBI built its public persona byruthlessly cultivating media relationships.Hoover perpetuated the myth not only of him-self as a great leader and lawman and but also ofthe power of the agency through an intense pub-licity campaign spanning 50 years. One part ofthe campaign was establishing mutually benefi-cial relationships with the media; Hoover allowedcertain cooperative journalists to view case filesin exchange for writing positive stories. TheChicago Tribune and the FBI were so intertwined

that raids were often scheduled to coincide withthe newspaper’s deadlines. Perhaps even moreinsidious, Hoover was able to extend his influ-ence to other parts of government. FBI ghost-writers sometimes contributed to the content ofcongressional speeches. FBI book authorsWatters and Gillars (cited in Gibson, 1997)claimed that, although it was common for Congress to be supplied with speech materialfrom government agencies, only the FBI pro-vided material solely glorifying its leader.The FBI used a propaganda-style model, and its PR machine painstakingly planned and care-fully administered its messages to create andcontrol the hero image of the FBI and specifi-cally Hoover. Today, however, the media would be unwilling to participate in such an arrange-ment, and the public would likely question themotives behind this type of one-way asymmet-rical campaign.

External Communication

Gordon and Kelly (1999) found that hospitalsthat developed managerially oriented PRdepartments that use two-way symmetricalcommunication with external stakeholders weremore likely to enhance organizational reputa-tion than departments that use more traditionalmeans of communication, such as periodicalpress releases. External communication basedon promoting values rather than products helpsorganizations to improve their image andincrease their credibility.

Crooke (1996) supports the position that thefunction of corporate public relations and mediarelations should involve the promotion of corpo-rate image and external affairs rather thanmarketing products and services. Credibilityproblems arise when the press identifies the cor-porate spokesperson as someone fulfilling a mar-keting function for the company, a situation thatcommunications consultant William N. Currysays enhances the skepticism and cynicism thatjournalists have for corporate spokespersons.Furthermore, according to Curry (cited in



Crook, 1996), “you end up with a lack of credi-bility because the suspicion on the part of thepress is that companies misbehave to increasetheir profits and that, if you’re in the marketingdepartment, your job is to sell the product, notthe truth” (p. 9). Clearly, a corporate PR profes-sional who has been identified by the media as amarketing representative loses the credibilitythat is needed to advance the corporation’s reputation. Fortune’s America’s Most AdmiredCompanies is a prime example to support thispoint. The companies on this list have the bestreputations in America, but they also continue toplease their stockholders. For example, in 1998Microsoft was ranked second on the list afterhaving generated $11.3 billion in revenue in 1997and averaging a 29% return to stockholders(Stewart, 1998). Corporate PR professionalsmust be careful when trying to sell a product tothe media; they must maintain the credibilitynecessary to manage and improve the reputa-tion of the corporation. Companies with highvisibility and a strong reputation have a compet-itive advantage in fluid markets because theirrespected names add value to their productsby reducing uncertainty in the minds of theircustomers, retailers, and distributors (Balmer &Gray, 2000).

Creating a consistent image is a very challeng-ing goal that requires a strong culture and thebranding of an organization’s name througheffective corporate advertising on one hand and a strong identity program on the other.Starbucks initially built its brand with limitedadvertising and plenty of PR, sometimes throughstories published in national magazines butprimarily through field communications to

establish brand awareness backed up by thedevelopment of strong organizational identitybased on principles of corporate citizenship. Theconcept of negotiated accountability (Ospina,Diaz, & O’Sullivan, 2002) implies that corporatecommunication personnel are required to com-municate organizational information consis-tently to both external and internal audiences. Todo so effectively, corporate communication staffand executives must be familiar with and knowl-edgeable about aspects of internal and externalorganizational environments; they have to copewell with pressures coming from all four func-tions of corporate communication: marketing,financial, organizational, and management.

Summary

Chapter 4 discussed the need for a more holisticapproach to corporate communication by highlighting strategic communication issuesand concepts. Internal and external prioritiesinclude responsibility to investors, relations withthe media, company culture, and relationshipswith government and regulatory agencies—areas covered by the Competing Values Frame-work for Corporate Communication (CVFCC).Organizations must attend to the needs of theirstakeholder groups through strategic corporatecommunication in order to build image andidentity and maximize credibility. Communi-cation should co-create an image that conveys acompany’s vision or mission, reflects its inter-ests, and encourages employees to feel that theyare making a contribution and a real differencewithin the organization.


1. What is the value of strategic thinking and acting for corporate communicators?

2. Discuss and illustrate the relationship between image and reputation.

3. Evaluate the importance of the SMART principles for corporate communication. Illustrate your answerwith pertinent examples.

Review Questions



CASE STUDY

The Power of Symbols: Creating Corporate Identity at Agilent Technologies

In March 1999, technology icon Hewlett-Packard announced its intention to split into two separate com-panies. The Silicon Valley giant, citing the difficulty of growing its $47 billion revenue stream and the chal-lenges of competing with smaller and often more nimble competitors, announced a plan to separate itsoriginal instrument, test and measurement, and medical equipment product lines from the newercomputer and imaging businesses. The surprise announcement was generally well received by customers,stockholders, and Wall Street analysts. Many of the company’s 23,500 employees, however, were anxious.

A significant challenge to the leadership team chosen for the new company revolved around the cel-ebrated company culture known to employees as “the HP Way.” Long known as a pioneer in progressivemanagement philosophies, including management by objective, profit sharing, and flextime, Hewlett-Packard boasted an extremely loyal set of long-term employees. These employees had grown accustomedto consensus decision making and the often-bureaucratic infrastructure that sometimes hampered theorganization’s ability to compete in the fast-moving new economy. The leaders of the new company werefaced with the need to quickly and effectively communicate the vision of their new enterprise. What cher-ished elements of the old days would remain intact? What new values needed to be instilled?

In July 1999, just four months after the announcement of the split, the new company was named AgilentTechnologies. The name was derived from the notion of agility. The connection to Hewlett-Packard heritagewas made clear by the tagline, “Innovating the HP Way.” Further, a starburst logo, representative of a burstof insight, was unveiled. The leadership team at Agilent Technologies effectively used myriad symbols to com-municate core values, vision, and purpose. The new CEO, Ned Branholdt, told employees, stockholders, andcustomers that Agilent Technologies would emphasize three core values: speed, focus, and accountability.The company vision (save lives and help people communicate) and purpose (we make the tools for peoplewho make dreams real) were widely communicated. The company name, logo, and initial marketing cam-paign were meticulously crafted to communicate the new company’s identity. Internal and external commu-nications were consistent in tone and presented the same core values, vision, and purpose. At each majormilestone of the transition, employees participated in ceremonies laden with symbolic meaning. Gifts andstock option grants were given in an effort to motivate and energize employees. The popular Hewlett-Packard culture was not abandoned, as the Innovating the HP Way tagline illustrated, but the new core val-ues began to create a distinct identity for the new company taking shape.

The leaders at Agilent Technologies successfully completed the transition by defining the transformedcompany culture through the use of symbols. In a matter of months, the results were apparent. Organi-zational behavior began to change, aligning employees with the new company’s well-articulated idealsand values. The thoughtful management of organizational communication reaped a huge reward.Employees at Agilent Technologies rallied behind the new organization, embracing the new corporateidentity with the same enthusiasm they had exhibited for their former employer, Hewlett-Packard.

Case Questions

1. Describe this change in terms of strategic communication planning.

2. Why was it important that the employees leaving Hewlett-Packard for the new company have aclear sense of the vision and purpose of Agilent Technologies?

3. Think of an organization with which you have been affiliated that has done a very good job or avery poor job of communicating core values, vision, and purpose. How closely do you identify withthis organization? How important are core values, vision, and purpose in building a strong senseof organizational identity?

SOURCE: From Michael Z. Hackman and Ross Campbell, “The Power of Symbol.” In Shockley-Zalabak, P. S.(2006), Fundamentals of Organizational Communication: Knowledge, Sensitivity, Skills, Values. New York:Pearson/ Allyn & Bacon. Reprinted with permission.


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