Corporate Image

A company's corporate image is the public's perception of it's brand. A corporation shapes it's image by communicating its identity through marketing and advertising. However, what really sculpts the corporate image is a company's financial or innovative performance along with it's products and services. In today's world ethical business practices, business values, customer service and employee engagement play a very important role in establishing corporate image.

Elements of Corporate Image[1]
Corporate Image was once advertising jargon but is today a common phrase referring to a company's reputation. The "image" is what the public is supposed to see when the corporation is mentioned. The ordinary man and woman on the street usually have a wry view of public relations, advertising, hype, hoopla, and therefore also of corporate image — and this often for good reasons. But a good corporate image is a genuine asset; it translates into dollars at the counter and higher stock valuation. The concept is usually associated with large corporations, but small businesses also have a corporate image even if neither their owners nor customers think of it that way. In the absence of active efforts, corporate image "simply happens": it is how a company is perceived. Management, however, may actively attempt to shape the image by communications, brand selection and promotion, use of symbols, and by publicizing its actions. Corporations trying to shape their image are analogous to individuals who will dress appropriately, cultivate courteous manners, and choose their words carefully in order to come across competent, likeable, and reliable. In the personal as in the corporate case, the image should match reality. When it does not, the consequence will be the opposite of the one intended.

A corporate image is, of course, the sum total of impressions left on the company's many publics. In many instances a brief, casual act by an employee can either lift or damage the corporate image in the eyes of a single customer or caller on the phone. But the overall image is a composite of many thousands of impressions and facts. The major elements are:
1) the core business and financial performance of the company,
2) the reputation and performance of its brands ("brand equity"),
3) its reputation for innovation or technological prowess, usually based on concrete events,
4) its policies toward its salaried employees and workers,
5) its external relations with customers, stockholders, and the community, and
6) the perceived trends in the markets in which it operates as seen by the public. Sometimes a charismatic leader becomes so widely known that he or she adds a personal luster to the company.

Importance of Corporate Image[2]
The corporate image of a company plays an important role in the success of the company. Customers’ actions are largely influenced by the corporate image of a company. It is difficult to build a strong and positive image of the company in such a cut-throat competitive environment, and once the image is ruined, it is near impossible to gain it back. A positive corporate image is important because it:

  • Increases the loyalty of customers and strengthens the relationship with them: In present times, people have many options when they decide to buy one product. In a highly competitive environment, companies use various strategies to gain the loyalty of their customers and attract new customers. A positive corporate image can help attain customers and helps in gaining their loyalty. For example, nowadays, companies participate in social activities such as helping poor, providing education to underprivileged children, or activities associated with environmental causes. Contribution in such activities creates a positive image of the company in the eyes of people.
  • Enhances the performance of products: The performance of products produced by a company is largely impacted by its image in marketing. People have become aware more than ever, and they also have options to reject the products of one company and choose the products of another company. A company with a positive image can easily sell its products with investing less in advertising. For example, people have blind trust in the quality of the Phones and other technological devices produced by the Apple company because Apple, since its inception has managed to sustain a positive corporate image and always presented itself as a leader in the smartphones’ market.
  • Influences the actions of the employees of a company: Employees of a company represent the company in the market, and their actions play an important role in building or ruining the image of a company. However, it is not wrong to say that the corporate image of a company also influences the actions of its employees. If employees are associated with a company with a strong and positive corporate image, then they will feel liable to act accordingly so that they will not harm the image of the company.
  • Strengthens the business image of the company: People are skeptical when it comes to the investment of their money. Their investment decisions largely influenced by the corporate image of the company. A bad corporate image will not only harm the sales, but it will also repel investors.

How to Improve Corporate Image[3]

  • Identify your company's purpose: If you truly want to build a loyal following for your brand and, in turn, strengthen your reputation, your company's core message should focus on your purpose - not how you make your product or what your product is. This notion, that people buy the "why" behind your organization - not the "what" or "how" — isn't just some idealistic trend catching fire in the business world today, though. It's actually rooted in human biology. The most primal part of the brain is called the limbic system, and it controls all decision making. It also happens to control all our emotions and feelings. So, resonating with your audience will also appeal to the part of the brain that's responsible for action. In other words, if you can evoke emotion, you can drive behavior. Conveying a clear and convincing purpose through all your brand's actions will forge the emotional connection required to persuade an audience to support you. And the more people who support you, the stronger your reputation will become.
  • Make sure you can walk the walk: Sometimes, brands that want to reap the rewards of being a mission-driven company don't actually adhere to the values they claim they're so passionate about. But even though being a quasi-mission-driven company can attract new customers, once they uncover your hypocrisy, it's almost impossible to retain them. A Yale psychology study suggests that highlighting your morality is essentially a short-cut to high status. But if people realize you don't actually possess the traits that shot you up the social ladder, they'll lose trust in you and respond harshly to your deception. Before you start boasting about your company's dedication to putting the customer first, make sure your actions are actually aligned with these values, or that you have a plan in place to do so.
  • Own your mistakes: Even the smartest brands make mistakes. But what separates the great companies from the good ones is their ability to admit that their wrong and change course in light of new information. Unfortunately, a lot of companies won't admit their mistakes or change their minds, even if it's the right choice, because they have too much pride or don't want to seem weak. However, admitting you're wrong actually requires a lot more strength than sticking to something that hurts your customers just because you've invested a lot of time or effort into an initiative. By owning your mistake and correcting it - instead of blaming the issue on external factors - your customers will understand the rationale behind your decision and appreciate your honesty and humbleness. Just like Contently, making a mistake that hurts you customers can spark harsh backlash and even start a trending Twitter hashtag that undermines your brand's integrity. But, ultimately, you can still earn back your customers' trust and support if you put your pride aside and own and correct your mistakes.
  • Offer the best customer service possible: For many customers, one of the first interactions they'll have with your brand is through a customer service representative — so customer service plays an undeniably critical role in corporate image. Customer service representatives can demonstrate your company values in both their actions and words. For instance, consider Glossier's customer service department (known as the gTEAM), who are responsible for responding to customer messages on social media and creating personalized experiences for each customer who reaches out. This type of authentic, customer-first attitude is a small example of a bigger Glossier core value: "Devoted to the Customer". Ultimately, each interaction your customer has with your company has the power to form their entire perception of your brand — and those customers will share both positive and negative feedback with friends. For this reason, customer service is a vital component to consider when improving corporate image.
  • Make sure your website and social media presence reflect your current corporate image: Corporate images change over time. Just consider HubSpot's Culture Code, which has been updated over 25 times since it was first created — while the values have stayed the same, the messaging has required adjustments to reflect HubSpot's most up-to-date corporate image. As your organization grows, as consumer preferences and industries change, and as you learn more about what makes your customers happy, your priorities or vision might shift slightly. To reflect the most relevant, accurate version of your corporate image, then, it's critical you maintain a strong social media and website presence. Oftentimes, social media is the first opportunity people have to discover your brand — and they'll likely make a snap judgment of your entire image as a result of a few images or videos at the top of your feed. So make them count. Similarly, your website is your digital storefront. In much the same way you might repaint your house every few years and add fresh flowers to the pots outside, you'll want to update your website regularly for freshness. Take a look at your website and consider whether it truly reflects your current corporate image. If not, consider whether a complete redesign is necessary, or whether a few small tweaks could do the job.

Theory of Corporate Image[4]
In the process of managing corporate image, the fundamental variables are: corporate identity, corporate communication, corporate image, and feedback. Corporate identity is the reality of the corporation — the unique, individual personality of the company that differentiates it from other companies. Corporate communication is the aggregate of sources, messages, and media by which the corporation conveys its uniqueness or brand to its various audiences. Corporate image is in the eye of the beholder — the impression of the overall corporation held by its several audiences. The objective in managing corporate image is to communicate the company's identity to those audiences or constituencies that are important to the firm, in such a way that they develop and maintain a favorable view of the company. This process involves fashioning a positive identity, communicating this identity to significant audiences, and obtaining feedback from the audiences to be sure that the message is interpreted positively. An unsatisfactory image can be improved by modifying corporate communication, re-shaping the corporate identity, or both.

  • Corporate identity — the reality and uniqueness of the organization — may be broken down into four component parts: corporate strategy, corporate culture, organizational design, and operations. Strategy is the overall plan that determines the company's product/market scope and the policies and programs it chooses to compete in its chosen markets. Corporate culture is the shared values and beliefs that the organization's members hold in common as they relate to each other, their jobs, and the organization. It defines what the firm's personnel believe is important and unimportant, and explains to a large degree why the organization behaves the way it does. Organizational design refers to the fundamental choices top managers make in developing the pattern of organizational relationships. It encompasses issues such as whether basic tasks should be organized by function or product division, the company's overall configuration, the degree of decentralization, the number of staff personnel, the design of jobs, and the internal systems and procedures. Operations, the fourth and final component of corporate identity, is the aggregate of activities the firm engages in to effect its strategy. These activities become part of the reality of the corporation and can influence its identity in a wide variety of ways.
  • Corporate image is the reputation of the firm with the various audiences that are important to it. These groups that have a stake in the company are known as stakeholders. Stakeholders are affected by the actions of the company and, in turn, their actions can affect the company. Consequently, its image in the eyes of its stakeholders is important to the company. The principal stakeholders with which most large corporations must be concerned are: customers, distributors and retailers, financial institutions and analysts, shareholders, government regulatory agencies, social action organizations, the general public, and employees. The image that stakeholders have of the company will influence their willingness to either provide or withhold support. Thus, if customers develop a negative perception of a company or its products, its sales and profits assuredly will decline. Government regulatory agencies, another important set of stakeholders, are required by law to monitor and regulate firms for specific, publicly defined purposes. Nevertheless, these agencies have considerable discretion in how they interpret and apply the law. Where they have a positive perception of the firm, they are likely to be much less censorious. Obviously, each of the various stakeholder groups is likely to have a somewhat different perception of the corporation because each is concerned primarily with a different facet of its operation. Thus, consumers are principally interested in the price, quality, and reliability of the company's products and services. Financial institutions are concerned with financial structure and performance. Employees are mainly concerned with wages, working conditions, and personnel policies. Logically, then, a company should tailor its communication to each stakeholder group individually to address the special concerns of that group. However, maintaining a consistent image among the several stakeholder groups is also vital. Although it is prudent to stress different facets of the firm's identity to its various publics, the firm should avoid projecting an inconsistent image, because the concerns and memberships of different stakeholder groups often overlap. For instance, the financial community and the shareholders would have many of the same financial and strategic concerns about the company. In fact, many shareholders rely heavily on the advice of experts from financial institutions. Similarly, both employees and the general public have an interest in the overall prestige of the firm and the reputation of its products. A social action group's criticism, whether economically effective or not, is bound to influence some customers and affect the company's public reputation. A regulatory agency such as OSHA would focus narrowly on the firm's safety record and policies, but the company's employees and their labor unions also have a stake in these matters.
  • Corporate communication provides the link between corporate identity and corporate image. It should be defined in the broadest possible sense, because companies communicate identities in many different ways. Communication can include almost anything the company does, from the way telephones are answered to the involvement of company employees in community affairs. Some of the principal sources of corporate communication include company and product names and logos, formal statements (mission statements, credos, codes of ethics, annual reports, advertising copy, and company slogans), and behavior during important events. These events encompass scheduled events such as open houses and anniversary sales as well as unscheduled events such as lawsuits or negative press coverage.
  • Feedback is essential to the management of corporate image. Business owners and managers need accurate information on how they and their company are perceived if they are to make sound decisions. Ideally, feedback should be continuous. As a practical matter, continuous feedback can be elicited from salespeople, clients, employees, and other local business owners. Based on such input, modifications may be made in the company's communication methods or, if warranted, a formal study of the corporate image may be initiated. In addition to systematically utilizing internal sources, it is prudent to undertake a serious review of the business's reputation (both internally and externally) on a regular basis.

Procedures to Protect Corporate Image and Proof that they Work[5]
Once you craft your corporate image, you need to protect it. The more successful you are, the more jealous competitors, angry customers, and those with an agenda will attack you. You have to be prepared with the following three sets of procedures.

  • Rumor Procedure. If what others say is not true, you should employ the following three steps of the rumor procedure
    • Don’t publicize the rumor,
    • Promote the opposite of what the rumor says without mentioning the rumor, and
    • Provide undeniable and verifiable proof to support
  • Fact Procedure. If you did something wrong, you should employ the following fact procedure
    • Admit and apologize,
    • Limit the scope (or put the mistake in perspective), and
    • Propose a solution so the mistake is unlikely to reoccur.
  • Turn negatives into positives. On a transactional basis, misunderstandings and other negative situations will occur between you, your company, and your target audience. You need to do what you can to turn these into positives to
    • neutralize the negative before it turns into a conflagration that does serious damage to your image and
    • develop a closer relationship with the person (or people) that feel “wronged” by your company.

The numerous studies on Corporate Image point to the same result. Companies that create a good image and protect it using the procedures outlined above achieve higher levels of success. The results of three pioneering studies are summarized below.

  • Marriott Study. In their book, Turned On, Roger Dow and Susan Cook describe the Marriott research done to identify which guests intended to stay at the Marriott again. They divided guest stays into 3 groups (A, B, C). Group A = Nothing bad happened during their stay; Group B= Something bad happened, but Marriott fixed the problem; Group C = Something bad happened, but Marriott did not fix the problem. The percentage of these three groups that intended to return to the Marriott were as follows: Group A = 89%; Group B = 94%; Group C = 69%. Notice the largest group that returned was the B group where the negative was turned into a positive.
  • TARP Studies. John Goodman did pioneering customer service research through TARP, the company he founded in 1971. He showed that, while customer service is typically a cost center in most companies, it could be turned into a powerful marketing force to drive sales, repeat business and greater profits. His research showed that roughly 4% of customers (1 out of 26) that were “wronged” by a company complain. The other 96% (25 out of 26) stop buying and tell 9 to 10 others within a week about their poor treatment. This means that a negative word of mouth pyramid averaging 250 is created. If the company is able to satisfactorily solve the problems of the 4% that complain (turn the negative into a positive), they will tell 6 to 7 others within a week that the company solved their problem.
  • Opinion Research Studies. Opinion Research did studies that showed that when choosing between similar products, 87% of customers choose the product from the company with the better reputation. Another study showed that companies that develop a good reputation by taking good care of their customers are 25 to 85% more profitable!

See Also


  1. The Six Elements of Corporate Image Inc.
  2. Importance of Corporate Image Marketing91
  3. How to Improve Corporate Image Caroline Forsey
  4. Theory of Corporate Image Reference to Business
  5. Procedures to Protect Corporate Image and Proof that they Work HuffPost