Keys to effective corporate branding

April 16, 2015

Based on an interview with Kenneth De Roeck and François Maon and their article “Taking Up the Challenge of Corporate Branding: An Integrative Framework” co-authored with Christophe Lejeune (European Management Review, vol. 10, 2013)

Business success depends on customer support, but it also requires the support of employees, suppliers, and government and non-government organizations. A study by IÉSEG researchers shows how to go about creating an effective corporate branding strategy that strengthens organizational relationships with both internal and external stakeholders.

Kenneth De RoeckAssistant professor Kenneth De Roeck joined IÉSEG in 2013. He previously taught strategic marketing at the Louvain School of Management (Belgium), where he also earned his PhD in management and economic sciences. His research focuses on CSR, organizational behavior, and corporate branding and identity management.

MAON François-37Associate professor François Maon joined IÉSEG in 2009 after holding teaching and research positions at Louvain School of Management (Belgium), where he also earned a PhD in management sciences. In addition to corporate branding and identity management, his research focuses on CSR and stakeholder engagement and influence practices.

Research methodology
Kenneth De Roeck, François Maon, and ESTA School of Business and Engineering’s Christophe Lejeune draw on extensive conceptual and theoretical work to propose an integrated framework for corporate branding. They illustrate their proposals with a case study of furniture retailer IKEA (130,000 employees in 287 stores in 38 countries). Case study data came from promotional materials, press articles, and corporate websites as well as interviews with 5 IKEA managers, 5 employees, 6 customers, and 5 representatives of NGOs in contact with IKEA.

Corporate branding enables companies to build competitive advantage and improve business performance by fostering identification and support among customers, employees, suppliers, NGOs, etc. Such support translates into employees who are willing to go the extra mile, suppliers that offer privileged access to resources, and even greater legitimacy with governments. Up until now, the traditional corporate branding model has consisted of three pillars: organizational reputation, strategic vision, and culture.

Kenneth De Roeck and François Maon consider these concepts too abstract to be useful in managerial practice, which is why they have introduced more tangible concepts that connect the pillars of the traditional framework. Their additional concepts can help managers to reap the benefits of their corporate branding strategy more effectively and ensure greater consistency between internal and external corporate messages.

How to connect strategic vision with organizational reputation and identity
To create a link between top management’s vision for their firm and the company’s reputation and identity, De Roeck and Maon highlight the need to promote consistent “intended images”. Such images represent the company in the way that company leaders want it to be seen, and actions that communicate these images should reach both external stakeholders and company employees. For example, IKEA (the company used to illustrate all of the concepts that they present) would like to be seen in the same way — nice design, good value — by all stakeholders and on all types of markets.

The firm promotes this unified image by presenting catalogs, websites, and stores that are virtually identical worldwide. Such consistency with regard to both internal and external stakeholders is a key component of corporate branding effectiveness. Indeed, IKEA is willing to adapt business policies to ensure a consistent intended image that coherently promotes the strategic vision. In other words, if, for example, a survey showed that IKEA was seen as a luxury brand on the Chinese market, the company might lower prices to send the opposite message and strengthen its intended image as an affordable brand.

Find out what stakeholders think
In order for a company to determine appropriate “intended images,” they must understand how the organization is perceived. Market and employee surveys, customer and supplier interviews, and meetings with government authorities and NGOs are all concrete means to acquire such insight. The researchers refer to the resulting stakeholder view as the company’s “construed image,” and it is the second component for building the connection between a company’s reputation, vision, and culture.

De Roeck comments: “IKEA is very good at finding out what market stakeholders think of it and of constructing a coherent image among customers and suppliers. However, the company sometimes has difficulties with non-market stakeholders like NGOs, local communities, and governments. This group is more complex and naturally more critical.”

In fact, when De Roeck and Maon interviewed NGOs for the study, they discovered negative perceptions of the firm. “In the 1990s, IKEA was criticized for environmentally irresponsible practices,” Maon explains. “The discrepancy between the company discourse and their actions was perceived as hypocritical. It caused a scandal and resulted in reputational damages on several markets. That’s why this is an important issue.”
The researchers add that external criticism generally makes its way into a firm and can cause further damage by eroding employee pride and engagement. Still, companies can learn from such negative experiences. “IKEA now takes a more proactive approach to non-market stakeholder relationships,” he notes.

The central role of organizational identification
The third connecting factor is employee identification with the organization. The idea is that effective branding starts in-house, with company members viewing the company in the way management desires (internal intended image). There are many actions companies can take to foster organizational identification and turn employees into genuine brand ambassadors. Specific, representative language and storytelling are effective actions.

At IKEA, employees are called “family” members, and stories about the company’s founder circulate and are passed on from generation to generation of company members. Especially remarkable is IKEA’s use of HR policies and practices to generate organizational identification. Firstly, when it comes to hiring, IKEA strives only to hire people whose values correspond to those of the company; CVs and technical skills are far less significant than personal attitudes and values. Secondly, the company extends this idea to their promotional policy, only promoting people who have firmly identified with the firm and whose personal values have proven coherent with the organizational outlook.

De Roeck explains that organizational identity is linked to company culture but easier to act on. “Identity is more tangible than culture and easier to change. It refers to the distinctive, enduring attributes of a company and offers a concrete means to connect vision and culture. You can act upon identity, because it implies mental associations, whereas culture is a long term development that is difficult to change.”

De Roeck and Maon stress that their detailed framework for corporate branding can be used as a practical aid. “Our study pinpoints critical factors and significant connections. Companies should pay close attention to internal and external stakeholder relationships and interaction.” Corporate branding is worthy of investment, because it creates competitive advantage through stakeholder support and loyalty.

Applications in the work place
The study shows how HR can contribute to effective corporate branding.

  • HR can make a point of hiring people whose personal values correspond to organizational values to gain brand ambassadors as they fill jobs.
  • Using value coherency as a key criterion for promotion is a way to ensure that managers represent the desired company image.
  • Because consistency and coherency are critical to the effectiveness of the corporate brand, companies should focus on coordinating corporate branding initiatives. Instead of external messages generated by PR and marketing, and internal messages from HR or managers, a dedicated team might be created to deal with corporate branding creation and communication to all stakeholders.