Compliance is one of those trendy terms that is used more and more frequently in the economy. It seems to be able to mean almost everything. The basic idea is simple and goes without saying: Companies must comply with existing laws and at the same time assume their social responsibility. But what does compliance mean beyond that?
In terms of corporate governance and marketing, speech plays an important role in corporate identity. The term corporate identity tends to imply a vague mixture of a company’s self-image and their external impact. But what does corporate identity really mean? In this guide, we will show you what a corporate identity consists of, and how you can use the different aspects of it in your own company.
- Corporate identity: an important building block in corporate management
- What is corporate identity? Here are 5 important aspects
- Corporate identity: example of a misunderstanding
Corporate identity, often abbreviated as “CI”, is both a corporate governance strategy and a communication concept. However, the two terms cover slightly different ideas. Corporate identity is the self-image of a company, and includes all strategic measures that contribute to this desired image.
Corporate identity: an important building block in corporate management
A corporate identity (CI) is not just something that a company conjures up. A corporate identity requires planning, should include the whole company, and will require both time and financial effort. At the same time, the corporate identity should express the company’s self-image through the guidelines and values that run through all areas of the business. The more complex and far-reaching the corporate structures are, the most precisely you have to analysze and organisze them in order to convey a consistent image internally and externally. CI guidelines for large companies can be several hundred pages long.
Corporate identity is more intended as a conceptual construct than anything else. The components that create this identity are determined by inner values and external factors. The CI of a company is a complex system of different building blocks that influence each other and work internally (within the company) and externally (outside the company).
These are the usual goals of a good corporate strategy:
|Inside the company||Outside the company|
|Staff cooperation: Better cooperation through consistent, transparent processes||Profiling the market: A distinctive CI is inherently different from other competitors|
|Staff motiavation: Better performance through community feeling and loyalty||Enhance the corporate image: Ensuring customers have positive emotions and attitudes towards the company: Ensuring customers have positive emotions and attitudes towards the company|
|Clear goals: Different departments see their contributions to the company as one and work towards them||Familiar brand and structure: Having the brand’s image widely recogniszed, increasing customer loyalty|
|Good internal communication: Arrangements between the individual departments improve the impact of work done and save on costs||Corporate Image and actions are compatible: The company and employee’s actions correspond to the established image of the company|
Companies strive to present a uniform, transparent image of themselves and their brand, both externally and in its corporate structures. When employees and subcontractors see this company image, what its values and goals are, it makes working for a company easier. In addition, a consistent self-image strengthens the loyalty of the workforce, who can recognisze their role in a well-networked structure. Employees who feel valued and understand relationships within the company tend to cooperate better with other departments and have an improved overall performance.
Externally, the CI determines what directions marketing campaigns should take, as well as what the targets should be and how to conduct market research. The self-image of a company has a significant impact on the measures it takes to present itself to customers and the public. On the other hand, thoughtless, contradictory measures can convey a flawed corporate identity.
Of course, corporate identity is subject to change. External circumstances such as social change and internal factors, like new product developments or restructuring can result in aspects of corporate identity needing to be rethought. However, it is advisable to be careful when making significant changes, as sudden differences in behavior may unsettle your customer base. If your brand appeals to your customers’ identity, a fundamental change may feel like a betrayal to them. However, altering your CI is something inevitable to accompany necessary changes. This is clearly visible in a field such as politics, where parties change their image often.
The other side of corporate identity is corporate image. This refers to the external perception of the company, which both influences and is influenced by the corporate identity. If the company has a strong identity, it stands out from the competition and enjoys a certain image that establishes its reputation in the public domain. A corporate identity should be visible in all aspects of the company over time. Established companies with a good reputation do not do themselves any favors when they throw an existing corporate identity overboard. A sudden change in direction is likely to cause customers to turn on the company and even make negative public comments about it.
corporate Image, in contrast to corporate identity, is just the external image of a company. External factors like media coverage, customer reviews, or rumors play a major role in its development. The goal of corporate identity strategies is so positively influence corporate image, since the corporate image can determine the success of the entire company.
What is corporate identity? Here are 5 important aspects
Depending on the design, corporate identity as a corporate management strategy consists of 5 to 7 areas and sub-areas. To develop a coherent strategy, you should analysze each area to determine how it affects your corporate identity. Clearly understood basic values are the basis for a comprehensive concept. A company motto also sums up these values succinctly. Develop an effective strategy by getting feedback from all departments and making the process transparent. The literature recommends evaluating the success of a strategy according to these four factors:
A company motto should be short and meaningful, so it is important to choose it wisely. For example: for years, Google’s company motto was “Don’t be evil”. This motto is in some ways a great principle that conveys social corporate responsibility, however, much of the message consists of denial (“do not”) of a state: you are running the business well by just remaining passive and not doing anything “bad”. In 2016, Alphabet, the new umbrella company that owns Google, introduced a new motto: “do the right thing”. This statement is similar in structure, but now calls for positive action instead. This conveys more dynamism and requires employees to take responsibility for their own actions.
The most important areas of corporate identity are:
- Corporate design (CD)
- Corporate behavior (CB)
- Corporate culture
- Corporate communication (CC) + language (CL)
- Corporate philosophy (CP) + corporate soul (CS)
This section represents all the sensory elements a company uses to represent themselves. These should be uniform in order to increase recognition value. There should be a company logo, which should appear at the company entrance, on the website, in advertising, or letterheads, as well as a representative color that should be included on business card and brochure designs. A uniform concept saves time and money, since new designs have to undergo tedious processes. The architecture and interior design of company building and branches, the design of uniforms and internet presence, are also part of it. New buzzwords include corporate sound (like the well-known Windows sound) and corporate smells (coffee houses in Vienna scent the air with fresh coffee powder, for example).
Corporate design is very important in terms of company recognition. Global players usually have a simple, meaningful company logo. Ideally, a customer should immediately recognize your company when they see your logo. Read more about how to create a professional logo yourself in the Digital Guide.
It is important to take a close look at the behavior of your company. How does the company deal with groups of people who have a direct connection to the company? This includes employees and customers, as well as suppliers, subsidiaries, and shareholders. How does your company interact with the public? Employee leadership, monetary and non-monetary behavior, as well as the ability to criticisze are all also included.
The corporate culture is, to some extent, related to the company’s operating culture. Certain basic values, norms, and the legal order must be obeyed and respected by the company. In addition, there may be precise rules of conduct and values that are specific to the company. Depending on their scope and commitment, they can even influence social culture. Corporate culture also informs the corporate behavior (CB) and corporate communication (CC) of a company.
Corporate communication + corporate language
Companies use specific language to express their corporate culture. This language can be formal and structured, or informal in a company with flat hierarchies, for example. Communication deals with the way a company voices its concerns and values internally and externally. This includes communication between the individual departments and hierarchy levels in the company, as well as public relations and advertising campaigns.
Do you need help with communication on social media? Read more about how to get your company started on Instagram.
Corporate philosophy + corporate soul
When starting a business, you have a specific purpose. The values and norms that make up the core of the company aside from working towards a profit are what determine corporate philosophy. Compressing this value structure to very basic aspects gives you the corporate soul of a company, and expresses the ideal image that you want to represent. The corporate soul is thus a unifying element in all aspects of corporate identity. When the corporate soul of a company can be seen in all areas of corporate governance, you have achieved a balanced self-image.
Corporate identity: example of a misunderstanding
Reaction to negative PR is particularly important in this age of globally accessible, timely reporting and communication through social media. Are you going to delete critical comments and ignore customer’s opinion? Or are you willing to apologisze when appropriate, maybe in an amusing way, to smooth things over? The following is an example by the Dove brand from October 2017. A social media backlash occurred after the company used a racist advertisement, employing imagery that made many users feel sick – especially since this was not the first time a “gaffe” like this had happened:
According to Dove, the goal of the clip, which was shared heavily on Facebook in the US, is supposed to be a representation of their inclusive company policy. However, the order that the models appear in, combined with the image of the soap, allows for the interpretation that dark skin would be washed white with the product. The before-and-after pictures suggest that lightening the skin would be an improvement. The predecessors of Unilever (Dove’s parent company) broadcasted very similar advertisements at the end of the 19th century, when casual racism was still socially acceptable. The advertisements always claimed that white skin was preferable. The parallels in how the advertisements were depicted painfully reproduces these connotations in the 21st century. Twitter users pointed this out to Dove:
On the one hand, customers and the public accuse the company of gross moral misconduct, and on the other hand, a lack of sensitivity in dealing with a large part of their target audience. Additionally, the advertising image is completely contradictory to their current corporate identity, which sees itself as all-inclusive, and keen to promote self-confidence. Dove apologiszed by tweet in an attempt to mitigate the damage:
Companies aim to create a specific image with their corporate identity. In broadcasting that advertisement, Dove made a massive mistake in corporate communication. While the campaign should appeal to all woman, and indicate that the product is suitable for different skin types, many users interpreted their message differently. These people were aware of the topic and could clearly see the problematic nature of their imagery immediately. Other groups took longer to take notice.
However, Dove should have been aware of what their advertisement implied. Precise analyses and knowledge of their target group is key for a company’s presentation. Companies who reveal that they do not understand their customers’ beliefs, needs, and preferences quickly lose their employees trust and power of persuasion. As a result, an established brand with a loyal customer base has now damaged their image and their sales figures. However, by apologiszing, Dove has shown that they are not immune to or above criticism from their customers. If similar misunderstandings would have taken place and no apology had been issued from the company, serious damage to their image would have been unavoidable.
A corporate identity strategy involves all areas of a company. The goal is to have a positive self-image which then reflects well on other people. Having a well thought-out corporate identity sets you apart from competitors, conveys trustworthiness, and strengthens your right to exist in the market. You also motivate employees to perform better and save money. Make sure you adhere to this identity in all areas of your company to avoid making mistakes and alienating customers and employees.