Corporate Branding

At a time when even those located at the bottom of the economic pyramid are considered targets of consumer marketing, branding aptly comes under intense moral scrutiny. Critics of branding like Naomi Klein question the right of corporations to invade our consciousness with endless images designed to make us like them or to trigger our desire to buy their products and services. But there is another moral question we might ask about the branding of corporations: Can corporate brands encourage their managers to conform to the ethical standards of the communities in which they operate?

Data from consulting houses that make it their business to value brand equity provide convincing evidence that well-managed brands can as much as double their firm's market capitalization. That value can be destroyed overnight, however, when the corporation's behavior meets with widespread disapproval (e.g., Enron, Parmalat). Even when perceived misbehavior is later exonerated, as it was in the cases of Arthur Anderson's involvement in the Enron scandal and Royal Dutch Shell's plan to sink an oil rig in the North Sea, damage to corporate brand equity can carry enormous and lasting costs. These cases provide reason to believe that, as companies invest in their corporate brands, they will become more vigilant with respect to behaviors that put brand value at risk. If this happens, desires for ethical control over corporations might give critics a motive not just to tolerate, but to encourage corporate branding.

Although showing a relationship between brand investment and cash flows or market capitalization has occupied much of the attention given to corporate brands by economists and practicing managers, more sophisticated reasoning is needed to develop branding as an academic field of study. Some of this ground has been covered with respect to defining what brands are and studying their symbolism, particularly in regard to product brands. Less has been accomplished by way [Page 284]of theorizing the branding of corporations and conducting empirical studies of this phenomenon, though some work focusing on the organizational side of corporate branding has appeared.

Brands, whether product or corporate, have always been associated with the symbols that carry their meaning. A symbol is any object, word, or action that stands for something else; thus, a brand is represented by not just one symbol (say a logo or a name), but a constellation of symbols. Brand meaning is produced by those who intellectually, emotionally, and aesthetically engage with brand-related objects, words, or deeds in ways that permit these symbols to represent ideas, feelings, or experiences and invite the people who respond to them to join in symbolic community. This way of understanding brands implies using interpretive epistemology to develop brand theory and guide empirical research. It also makes clear that the interpretive work of brand symbolism is distributed among the organization's stakeholders (including employees, customers, investors, suppliers, partners, regulatory agencies, special interests, the general public, and local communities), competitors, and the media.

Because brand value is created within the relationships an organization develops with its stakeholders, the equity it represents is dependent upon maintaining these relationships. From this perspective, brands are created by acts of interpretation that occur within the population of stakeholders who keep brands alive by producing and reproducing their social and cultural meanings. To the extent that its symbolism expresses or enhances the values of a brand's stakeholder constituency, economic value is created and sustained. When a brand loses equity, it is a sign that some or all of the meanings that sustain it have been damaged or lost.

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