LESSON - 3: CORPORATE IMAGE

B A (JMC) (3-YDC), SEMESTER SYSTEM

SEMESTER –IV

SEC III: PUBLIC RELATIONS AND EVENT MANAGEMENT

Unit -1: PUBLIC RELATIONS

LESSON - 3: CORPORATE IMAGE

Objectives:

Explain the concept of Organisation / Corporation

Learn what is a Corporate identity & Corporate culture

Know about Corporate personality & Corporate reputation

Understand the importance of Corporate image

Describe the role of public relations in promoting Corporate Image

Introduction:

Corporate Image is the image of a Corporate organisation in the eyes of the Society. It is the impression of that organisation in the minds of the people. It is the manner in which a corporation, firm or business enterprise or an industrial establishment presents itself to the public. Corporate image is the total public perception of an organisation as expressed by the internal and the external public. Such image depends on the organization's objectives, goals, vision, mission, policies, products, services, financial performance, corporate philosophy, corporate philanthropy, corporate charity, corporate social responsibility, corporate citizenship, corporate governance, corporate culture, corporate reputation, corporate conscience and its behavior towards employees and the community. All these things put together constitute Corporate face. The better the service, the greater the image. A good image of an organisation indicates its effective functioning and better performance.

In this lesson we learn specifically about Corporate identity, Corporate culture, Corporate personality, Corporate reputation, Corporate social responsibility in order to understand Corporate image and the role of Corporate public relations in promoting all these aspects. Corporate Public Relations is also called as Corporate Communications.

Corporation / Organisation – Concept, Meaning & Definition

The word “corporation” derives from ‘corpus’, the Latin word which means body, or a ‘body of people’. In American English the word “corporation” is most often used to describe large business houses. In British English and in the Commonwealth countries, the term ‘company’ is more widely used to describe the same sort of entity while the word “corporation” encompasses all the incorporated entities.

A Corporation is a legal entity that is separate and distinct from its owners. Under the law, Corporations possess many of the same rights and responsibilities as Individuals. Corporation is a legal personality. It can sue and can be sued in the courts of law.

There are various types of corporate entities. They are Private limited company, Public Company, Sole proprietorship, one-person company, partnership company, limited liability partnership etc. A Corporation is always a company, but not all Companies are corporations.

Dictionary meaning of corporation is “a large company or a group of companies authorised to act as a single entity and recognised as such in law.”

Corporation is deemed as a citizen. It is called corporate citizenship. It is an idea which has both practical and ethical dimensions. It suggests a two-way relationship between corporations and society which are oriented towards meeting the community needs. As in the case of an individual citizen, the corporate citizen who has emerged from a corporation has similar legal and moral responsibilities towards the needs of the Society. Thus the corporates are also required to discharge corporate social responsibility.

A Corporation is an organisation, usually a group of people or a company, authorised by the State to act as a single entity and recognized as such in law for certain purposes.  

According to Keith Davis, “Organisation may be defined as a group of individuals, small or large, that is cooperating under the direction of executive leadership in accomplishment of certain common objectives.”

Organization is just a hyponym of corporation. The difference between corporation and organisation is that corporation is a group of individuals, created by law or under authority of law, having a continuous existence independent of the existences of its members, and powers and liabilities distinct from those of its members while organization is the quality of being organized.

Corporate Identity

Corporate identity may be described as the distinctive insignia or logo of a Corporation, easily recognized and remembered by the public. It encompasses an organization’s core values, standards and its goals. Corporate identity has a historical background. In the early period, kings would lead their armies and identify themselves by means of an emblem or a flag. They later became the corporate identities of modern organisations. The Indian national emblem, which is an adaptation from the Saranath 4 Lion Capitol of Emperor Ashoka as the identifying symbol of the Govt of India. The wheel of law, i.e. Dharma Chakra appears at the center of the abacus with a bull on the right and a horse on the left and outlines of other wheels on extreme right and left. The word ‘Satyameva Jayate’ from Mundaka Upanishad meaning ‘truth alone triumphs’ are inscribed below the abacus in Devanagari script.  This is the national emblem of our country and our nation is identified by this emblem all over the world.  This is also used in all the correspondence of Govt of India right from the official diary to the official gazette. When you see this emblem, you think of India as a nation. This principle also applies to corporate India.  People sometimes remember a particular organisation by its corporate identity.  For example, when we see two hands protecting a lamp flame we think of Life Insurance Corporation. Similarly, the inverted ‘red triangle’ has become an identifying symbol of family planning. Think of brand logos of major Corporates like Apple, Google, Microsoft, IBM, Amazon, Facebook, Coco cola, Pepsi, Nestle, ITC, Samsung, Ford, Toyota, Mercedes Benz, Honda, Tata, Mahindra, Maruti, McDonald for example. The moment we see these logos we recall the owner of the brand. Thus brand identity which is the representation of a brand gives Corporate identity to reflect the overall image of a company.

Corporate Culture

We often hear about corporate culture as against government culture. The beliefs and behavior that determine how a company’s employees and management interact and handle outside business transactions is called corporate culture. Often, corporate culture is implied, not expressly defined but develops organically over a period of time from the cumulative traits of the people, the company hires. A company’s culture is reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, treatment of clients, client satisfaction and every other aspect of operations. It also implies its shared values, ideals and basic code of conduct among its employees. The basic pattern of shared assumptions, values and beliefs considered to be the correct way of thinking about and acting on problems and opportunities of the organisation is also called corporate culture.  Every organisation has a dominant culture which can be defined by them as intensive, fun, creative etc. There can be counter cultures or sub cultures within the organisation which can support or oppose the dominant culture. They could in fact act as forces of surveillance or as a source of new emerging values. For example, Google is a company that is well known for its employee-friendly corporate culture. 

Corporate culture can elevate companies above their competitors and support long-lasting success. Such a culture can:

• Provide for a positive workplace environment
• Create an engaged, enthusiastic and motivated workforce
• Attract high-value employees
• Drive and improve performance quality and productivity
• Result in favorable business results
• Underpin a company's longevity
• Strengthen returns on investment
• Provide a competitive advantage
• Clarify for employees the goals of their positions & departments
• Contribute to the diversification of the workforce

Corporate Personality     

Every organisation has its personality based on its organisational culture. It is almost synonymous with corporate culture as the culture of the organisation determines whether the personality sported by the corporation is young or old, dynamic or static. Organisations that cultivate an exclusive and distanced approach also train or recruit employees who will fit into this image. The type of leadership that develops also depends on the type of the organisation and its structure. A management that believes in hierarchy does not encourage equal or horizontal structures while an organisation that believes in horizontal but not totally vertical, encourages the leadership that can lead others through firm yet on an equal basis. This is seen as an organisation li9ke Google which is an IT company has youth as a majority of its employees. Therefore corporate personality is of youthful has less formal way of communicating, flexi hours of working and a casual workplace culture.

On the other hand, Corporate personality is the creation of law. And as per the law, a corporation is an artificial person created by the personification of a group of individuals. The theory of corporate personality mainly states that a company has a legal identity different from its member. Like individual, a corporate can sue and can be sued in case of disputes.

Corporate Reputation

What is reputation? The dictionary meaning of reputation is “the overall quality or character as seen or judged by people in general, the beliefs or opinions that are generally held about someone or something”. Reputation is the sum total of the corporation’s daily actions, and it will determine whether recruits will join, consumers will buy and journalists and legislators will give it the benefit of doubt. Corporate reputation emerges based on one’s experience of an organisation or its products.

Edelman Public Relations, a public relations agency, defines the management of corporate reputation as the “orchestration of discrete public relations initiatives designed to promote or to protect the most important brand you own your corporate reputation”. This reputation will be good or bad, strong or weak depending on the quality of strategic planning. Reputation is defined as “the collective representation of an organization’s past performance that describes the firm’s ability to deliver valued outcomes to multiple stakeholders. Expressed in plain terms, “Reputation is the track record of an organisation in the public’s mind” (Wilcox, Len and Cameron 2005). Reputation unlike corporate image is owned by the public. It is not formed by slogans. A good reputation is created or destroyed by everything an organisation does, from the way it treats employees, to the way it handles conflicts with outside constituents.

The management’s commitment to achieving its stated goals, and the skill and energy with which all component programmes are implemented and communicated contribute to the creation of reputation. Corporate reputation or image is based on how the company conducts or is perceived as conducting its business. The attributed values such as authenticity, honesty, responsibility and integrity evoked from the person’s corporate image constitute corporate reputation. Reputation like image is based on all impressions gained by the public, but there is a difference. Unlike image, reputation is formed from personal experience. Image is based on beliefs developed from a distance without the benefit of contact. Reputation of a corporation, according to a few scholars, is based on three key factors: (i) economic performance of an organisation; (ii) social responsibility (iii) the ability to deliver valuable outcomes to stakeholders.

A company has different types of stakeholders and the perception of the company differs from one group to another. These groups are linked to an organisation in different ways. For example, stakeholders include shareholders, employees, customers, government and regulatory agencies, financial analysts, media, dealers and suppliers. To create a corporate reputation, it is necessary that programmes are designed to suit the different audiences. Such programmes must be developed based on the corporate strategy of the organisation. It is in the time of crisis that a good reputation acts as a shield to save the company.

A poor reputation will affect the company adversely, while good reputation will pay in both operational and financial ways. A survey reveals that the better the corporate reputation, the higher the stock price. There is a strong correlation between higher corporate reputation and higher price earnings.

Some values are given as follows:

1.    It adds extra psychological values to the products and services

2.    It helps customers choose between products and services

3.    It increases employee job satisfaction

4.    It enhances advertising and sales force effectiveness

5.    It supports new product introduction

6.    It acts as a powerful signal to the competitors

7.    It helps raise capital in the equity market

Here are some of the effects of poor reputation:

1.    Share market analysts do not like the company and undervalue its share price

2.  Journalists pay particular attention to companies with poor reputation and even when these companies do something good, journalists may remind their audience that this company has a bad history.

3. Customers seem more concerned and price sensitive about products and services from less respected companies.

4.    Poor reputations lead to poor employee morale

Corporate Social Responsibility

The earliest forms of corporate charity and corporate philanthropy have come to be known as corporate social responsibility of the present day. In simple words CSR means “giving back to the society”. Jamshedji Tata, the pioneer of social responsibility said; “Wealth that comes from the people as far as possible must go back to the people” It is against the background of this philosophy, the concept of CSR began in India at Jamshedpur, Bihar where the TATAs have built a township for the workers of the Tata Iron & Steel Company.

Thus CSR is the process by which a corporation participates in the welfare of both internal and external community, enhancing its environment and wellbeing to the advantage of the organisation and the community concerned. It also aims at building relationships with all types of public and increasing the reputation of the company.

The importance of CSR has further increased because of the changing corporate world. Everything from family life to ways of working are changing. In consequence, every organisation has to confront a global economy; a technological revolution; an information revolution and proliferation of sources of information. The emergence of large companies with international business; mergers and acquisitions and signs of increasing environmental damages. These have had an impact on the ways of doing business. CSR activities also enhance the corporate image of an organisation.

Corporate Image

If the image is important for the individual, it is essential for the Organisation. Image should be treated as an asset and should be planned, analysed and managed along with other valuable assets.

What is Corporate image? It is defined as the impression of an organisation in the minds of the people. Such an impression of the public is based on their knowledge about the organisation and their experience with its products and services. An individual knows all about his/her own business and organisation, but an outsider knows very little about that particular organisation and its business. Unless the individual takes the initiative to tell the outsider about his/her business, people do not know about the company. It is in this context that public relations as an information and communication function enters the field. It is the primary task of public relations not only to speak about the organisation and its products and services but also create a favourable image in the minds of people. A corporation’s identity and image is reflected in dealing with the employees on the one hand and customers on the other hand.

In fact, a corporate image is the total public impression of an organisation as expressed by the internal and the external publics. Corporate image depends on the organisation’s mission, vision, policies, qualitative products and services, better financial performance and in particular its behaviour with both the employees and the community. The better the service, the greater the image. A good image of an organisation indicates its effective functioning and better performance.

Corporate Identity vs Image

The importance of both the corporate identity and the corporate image has increased in the wake of globalization, when all corporations are involved in global trade wars. In such a competitive marketing environment, corporations which have a better image alone will survive, while others will perish. Though these two terms ‘identity’ and ‘image’ are different, they are complementary to each other. In fact, corporate identity as the forerunner of public relations activity supports the corporate image. If the identity is the physical insignia of a corporation, image is the mental perception of a person about an organisation. One looks at identity while another thinks about the image of an organisation.

Corporate identity and corporate image are the two strong pillars of the public relations edifice through which the goal of public relations understanding of the public can be achieved. The terms ‘corporate identity’ and ‘corporate image’ are sometimes confused with each other and often considered one and the same. The corporate identity of ITC limited is printed on the cover page of a publication ‘Transforming lives and landscapes – rural development philosophy at work’. Here the organisation is communicating its identity as part of its rural development service. ITC’s target rural public actually view it after experiencing its rural development schemes, such as social and farm forestry, integrated watershed development, economic empowerment of women and web empowerment of farmers through e-choupal to transform them into powerful agents of social change. Today, ITC has a better image in the market. As such corporate identity is an identifiable visual symbol of the organisation where as corporate image is the perception of the person that exits in one’s mind. Both must run hand in hand and complement each other.

Corporate Public Relations

The term corporate public relations enhances all relationships that affect the corporation as a whole in reaching both the internal and the external publics. But the term corporation communications also is used as a substitute for corporate public relations. Corporate public relations deals with key publics of a corporation namely shareholders, employees, customers, distributors, suppliers, community neighbors, media and the Government.

The broad areas of corporate public relations programme vary depending on the fact-finding of the organisational issues and identified problems. The areas of corporate public relations were already discussed. However, the dimensions of corporate public relations cover the following things.

1.    Employee relations

2.    Shareholder relations

3.    Customer relations

4.    Dealers and Suppliers’ relations

5.    Community relations

6.    Financial relations

7.    Media relations

8.    Relations in crisis situations

PR in promoting Identity and Image

Public relations is an art of relationship management. It must promote both the corporate identity and the corporate image of an organisation.

Public relations can play a pivotal role in building the reputation of a company based on its vision, mission, goals and performance. The Chartered Institute of Public Relations, London defines it as “Public relations is about reputation, the result of what you do, what you say and what others say about you”. Public relations practice is the discipline concerned with the reputation of an organisation with the aim of earning understanding.

Integrated public relations communication combines the work of all departmental communication of an organisation in relation to teaching prospective publics on the one hand and promote public relations culture, within and outside the organisation to persuade and influence the segmented public towards organisational goals on the other. Corporate public relations programme either for internal publics or for external publics must be based on a strategic planning to reach all segments of public with good deeds. As part of integrated public relations communication, various media and tactics have to be used to achieve the following five communication objectives;

1.    Awareness of the company

2.    Customer needs and services

3.    Corporate image and reputation

4.    Stakeholders support

5.    Company’s performance and feedback

Summary                    

Corporate image is secured by Corporate Public Relations. It is because corporate public relations embraces all relationships that affect the corporation as a whole in reaching both the internal and external publics. The term corporate communications is also used as a substitute for corporate public relations. However, corporate communications include more than public relations in the sense that it talks of branding, image building as well as communication management which can also be called as integrated corporate public relations. The corporate mission, vision, strategy, identity and image together create reputation of the organisation that can be upheld with the help of public relations strategically. Corporate public relations also works for the company as a whole that it protects the already existing good will of the company while trying to gain additional good will through its activities. The importance of both the corporate identity and the corporate image has increased in the wake of globalization when all corporations are involved in global trade wars. In such a competitive marketing environment, corporations which have better image will alone survive, while others will perish.

Depending on the nature of the public relations manager, Public Relations can be proactive or reactive. However, an effective Public Relations demands pro-activeness in relation to the stakeholders. By noting feedback, it becomes possible to ensure that the image and reputation of the organisation does not suffer. As every organisation has an identity and reputation that has to be protected, it becomes the duty of the Public Relations personnel to safeguard the image under any circumstances. Corporate social responsibility has become another way of ensuring a good public image by the organisation by not alienating the community around it. In fact, by proactively giving back something to the community it serves; CSR has become one of the most popular offshoots of an organisation. A good corporate image is created and destroyed by everything an organisation does, from the way it treats employees to the way it handles conflicts with outside constituents.

FAQs

1.     What do you understand about corporation?

2.     What is meant by corporate reputation?

3.     What is corporate identity?

4.     What is corporate image?

5.     What is the role of Public Relations in promoting Corporate identity & image?

Model Answers

1. A Corporation is a legal entity that is separate and distinct from its owners. Under the law, corporations possess many of the same rights and responsibilities as individuals have. Corporations can enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes just as individuals. A corporation’s distinguishing characteristic is limited liability. Shareholders profit through dividends and stock appreciation but are not personally liable for the company’s debts. Almost all large businesses are corporations including Microsoft, Coca-Cola etc. A corporation is created when it is incorporated by a group of shareholders with a common goal who share ownership represented by their holding of stock shares.    
2. Corporate reputation refers to how a corporation is viewed by all of its stakeholders, including its employees, clients, shareholders and the general public. Corporate reputation is influenced by the company’s activities, goods and communications with stakeholders. Outside variables including media coverage and market coverage and market trends also influence it. A good company reputation can be one of a company’s most valuable assets because it can lead to more trust, customer loyalty and happy employees as well as financial performance and benefits like higher stock prices and more revenue. A bad reputation can lead to severe problems, such as less trust, customer churn and financial losses.

3.   Corporate identity is how a business presents itself to the outside world. Although internal culture and values are integral to shaping company identity, the corporate identity definition applies to a company’s visual assets and brand design. Any communication or information we see when we interact with a brand is part of its corporate identity. Although logo design sits under corporate identity, the term reaches far beyond this visual icon to encompass graphic design elements such as fonts, illustrations, colours, photography and animations. We see examples of corporate identity on everything from social media posts to billboard ads, staff uniforms to letterhead, product packaging to app profiles. The visual things become instantly recognizable and easily memorable.  

4.  Corporate image is the set of beliefs, attitudes and perceptions that the public have about a company or brand. That is to say, it is the way in which that public interprets the set of signals coming from the products, services and communications emitted by the brand. Corporate image is also referred to as brand image. It is the perception of a corporation held by the public, based on how it is portrayed through branding, public relations efforts, news media, stakeholders, employees, labour unions and consumer advocacy organisations.  To create a corporate image, corporations use both marketing resources and internal operations to construct a desired image in the minds of various stakeholders. In other words, corporate image is a mental picture of a corporation, held by its audience.

5. Public relations is very much essential to promote Corporate identity and image. Public relations practised in corporates is called corporate public relations or sometimes corporation communications. Corporate public relations is a planned and coordinated activity which works towards projecting the image of an organisation to the public as well as to its employees. A brand will be perceived as trust worthy, honest and credible if you have a solid PR plan. Public relations is the art of shaping the image of businesses, organisations or high profile individuals. Public relations can help improve a company’s image and identity by raising awareness about the company, its products and services. It also help shaping how the public perceives the company.

Multiple Choice Questions

1.      The word corporation is derived from the Latin word _______

a.       Company

b.      Corpus

c.       Corporal

d.      Cargo

2.      A corporation is always a company, but not all companies are corporations.

a.    False

b.    Partly false

c.    True

d.    Partly true

3.      Need for Corporate identity and corporate image has increased due to _____

            a.  Provincialization

b.    Privatization

c.    Liberalization

d.    Globalization

4.      If the image is important for an individual, it is ________ for an organisation.

a.       Essential

b.      Optional

c.       Desirable

d.      Unnecessary

5.      Corporate public relations ______ all relationships of the corporation

a.    Curtails

b.    Enhances

c.    Reduces

d.    Endorses

Keys to Multiple Choice Questions: 1. (b)  2. (c)  3. (d)  4. (a) 5. (b)

Glossary

Organisation: A group of people working together to achieve a common goal.

Corporation: A large company or group of companies authorised to act as a single entity and recognised in law.

Corporate identity: The physical insignia, by which a corporation is easily identified.

Corporate image: Impression of an organisation in the minds of the people.

Corporate reputation: The sum total of the corporation’s image in the society.

Corporate culture: The beliefs and behaviours that determine how company’s employees and management interact and handle outside business transactions.

Corporate social responsibility: It is an activity of the Companies to not just grow profits but to discharge environmental responsibility.

Brand: A product or service that has a unique and immediately recognisable identity that distinguishes itself from others in its industry.

Shareholder: A person, company or institution that owns at least one share of a company’s stock or mutual fund.

Stakeholder: A person, company or institution that owns one or more shares of a company.

Key Words:

Organisation, Corporation, Company, Corporate Identity, Corporate Culture, Corporate Reputation, Corporate Image, Corporate Personality, Corporate Social Responsibility, Corporate Communication, Corporate Public Relations

 Y. BABJI

Academic Counsellor, Public Relations (since 1989)

AP Open University/Dr BR Ambedkar Open University

Editor, Public Relations Voice