FOUR CARDINAL MANIFESTATIONS OF CORPORATE IDENTITY: GENERIC PHENOMENON

GENERIC PHENOMENON

The corporate identity of business organizations belonging to the same industry is predominantly governed by strong and homogeneous organizational characteristics described in literature (see Balmer and Stotvig, 1997; Morison, 1997; Wilkinson and Balmer; 1996; Olins, 1978; Balmer and Wilkinson, 1991; Bernstein, 1984; Dowling, 1994) as generic corporate identity. Much of the significations indicating such common characteristics were made manifest in a number of ways. First, this occurred through mimetic isomorphism, second via coercive isomorphism and third via homogeneous organizational intelligence and behaviour. Generic identity has also manifested through the pursuit of common corporate social responsibility activities, through the physical construction of similar corporate architecture and also through globalization.

Mimetic Isomorphism and the Emergence of Generic Corporate Identity: Dimaggio and Powell (1983) argued that when organizational technologies are poorly understood, strategic goals are ambiguous and increasingly the business environment creates symbolic uncertainty, it is highly likely that organizations model themselves after other organizations perceived to be more successful, superior and legitimate. Dimaggio and Powell (1983) described this act as mimetic isomorphism or organizational imitative behaviour. This theory is grounded on the assumption that having observed the achievements of successful organizations, aspiring business organizations are likely to take a cue and follow the behaviour of the proceeding or successful organization regardless of whether such business practices are compatible to theirs. It is a rational response to competition in the marketplace because it economizes on search costs to reduce the uncertainty that an organization is facing (Cyert and March, 1963). Organizational imitative behaviour occurs when organizations are not convinced of the possibility of achieving set targets or when they are challenged by the difficulties of recognizing the cause effects of adopting specific strategies. Lieberman and Asaba (2006) argue that in such conditions of doubt, uncertainty and ambiguity, organizations are more likely to be receptive to information and implicit in the actions of others. Organizations imitate one another through the introduction of products into the marketplace and even in the processes involved in the introduction of such new products. Organizational imitation concurs in management systems, organizational forms, market entry and even in the timing of investment to forestall falling behind competitors, or because the activities of major market actors convey useful and strategic information which can be exploited with ease. Although the modelled organization may be unaware of emerging imitation, nevertheless, it serves as a useful and convenient source of practices that borrowing firms use. As Dimaggio and Powell observed, organizational imitative behaviour frequently occurs unintentionally and indirectly through employee transfer or turnover or explicitly through the use of similar business model processes by consulting organizations – the resultant effect of which, homogenization or generic identity occurs throughout the industry. It is wrong and short sighted to limit the emergence of generic identity through mimetic isomorphism in organizations to business processes of product introduction, market entry, timing of investment and nature of management systems. Time and again, it occurred in the use and adoption of house styles. Carls (1989) argued that in the anticipation of creating huge awareness many organizations copy and imitate the house styles created by successful industry leaders regardless of whether or not these identities are appropriate for them; leading to the emergence of unified, common, homogeneous, monolithic (see Morrison, 1997) industry wide identity, which Olins (1978) described as generic. See for example the imitative behaviour of the information technology industry. By the 1970s, IBM had established itself as the most successful organization and a force with which to reckon. The dominance of IBM in this industry (over this) period was severe, to such an extent that all organizations within this industry copied and imitated it. In the bid to achieve recognition and profit quickly from the instant recognition, which the use of IBM look-alike identity might bring, many organizations within the information technology industry developed house styles, logos, showrooms, information materials, corporate advertisements that imitated IBM. The impact of IBM’s visual style on competition obliterated all consideration for other options. Thus the nearer to IBM a firm looks, the more like a real computer company firms will perceive themselves. Thus, for example, years after IBM adopted the ‘think’ payoff campaign, which appeared in its offices and plants and replicated in various languages, as its marketing mantra, the defunct ICL equally mounted a ‘think ICL’ corporate advertising campaign (Olins, 1989).

Coercive Isomorphism and the Emergence of Generic Corporate Identity; Coercive isomorphism, Dimmaggio and Powell (1983) argues, is the consequence of formal and informal unified pressures of forces and persuasion exerted by regulatory institutions on other organizations to conform and comply with a specific set of rules upon which they are dependent and by cultural expectations in the society within which organizations function. The existence of a common system of rules, policies and common legal framework in which organizations comply affects many aspects of organizational behaviours, processes and structure. Hence, in the course of compliance, industry operators begin to exhibit similar traits in behaviour and a dominant industry-wide (generic) identity emerges. Similarly in the business environment, when unified regulatory policies are initiated by regulators, most organizations in the market will adopt overall, unified compliance programmes emphasizing the pursuit of common policies, common procedures, and common work rules. These programmes often feature common methodologies, structures and templates for meeting current and anticipated compliance requirements (Gable 2005) resulting in the development of common, similar, uniform, regular, standardised, identical product/services, pricing strategy, distribution and organizational intentions. Importantly, these common organizational characteristics, or what He and Balmer (2005) described as a unique type of identity incorporating characteristics attributable mainly to a specific industry – generic identity, will emerge. The banking industry gives a good example of how compliance with regulatory policies has led to the development of generic corporate identities.

Prior to the period of economic liberalization, banks in western capitalist economies acted mainly as clearing institutions. Their role was to obtain deposits from private customers and lend first to businesses in commerce, industry and agriculture with the personal customers coming second. The British banking industry prior to the period of deregulation provides a good example of this role. Under the regulatory dispensation, lending and deposit rates were determined by the Bank of England, thus acting as a huge constraint against innovation within this industry. The pursuit of this policy, led banks to exhibit common innate conservative banking practices (Nevin and Davies, 1970) which in effect made the banks look similar. British banks gave free advice and offered unrewarded assistance to successive governments in the administration of exchange controls (MacCrae and Cairncross, 1985). Price and product competition together with competition for customer deposits, in this industry, were considered unacceptable (Olins, 1989; Balmer and Wilkinson,

1996) thus giving the banking industry a universal non-competitive corporate identity. Most British banks in developed economies equally exhibited similar corporate identity traits given regulatory policies that forced and drove the expansion of banking services governments in developing countries. British Banks were equally encouraged to lend money to foreign governments in developing economies with the aim of recycling surpluses built up by OPEC countries (Balmer and Wilkinson, 1996). These factors and others led British banks towards the development of a generic identity.

The emergence of homogeneous corporate identity is not limited to banks in Britain. The banking industry in Nigeria equally had a fair share of the display of generic identity traits due to its submissiveness and compliance to its apex regulatory institution. The first major form of regulation witnessed in the Nigerian banking industry began with the enactment of the 1952 banking ordinance. The ordinance gave the Central Bank of Nigeria, which although was not created until seven years afterwards, the power to limit the establishment of banks to federal and state governments to forestall the collapse of banks and enhance a stable financial system. The limitation of bank ownership to federal and state authorities together with existing imperialist banks, all of which had less thirst for profiteering, made competition for customer deposit non aggressive, thus giving this industry a non-competitive corporate identity across the board. The Central Bank of Nigeria instituted various monetary policies that enhanced the institutionalization of aggregate ceilings on the expansion of banks’ credit, while sector credit guidelines and interest rate controls were used to influence the direction and cost of credit. These monetary policies were further strengthened with the promulgation of the 1969 banking decree, which empowered the Central Bank of Nigeria to set the structure of bank interest rates, specifically minimum deposit rates and minimum and maximum lending rates, with priority sectors (e.g. agriculture, commerce, industry etc.) subject to preferential lending rates (Brownbridge, 2005). The direction of bank credit was influenced through annual guidelines issued by the Central bank stipulating the minimum and maximum percentage shares of a bank’s total loans to be allocated to particular sectors and to indigenous businesses. Additional guidelines prescribed minimum levels for lending to small scale enterprises and loans extended in rural areas. Consequently, the credit priority given by Nigeria banks in support of productive sectors of the economy led to the creation of a ‘‘support for industry’’ and ‘‘comprehensive banking’’ image throughout the banking industry, which Wilkinson and Balmer (1996) called a “generic identity.” In 1977, a rural banking programme was initiated under which the banks were provided with targets to establish specified numbers of branches in the rural areas over the following decade. The objectives were to attract cash held in the rural areas into the banking system so as to increase the effectiveness of monetary policy, extend rural credit facilities and spread the banking habit (Adegbite, 1994). The outcome of this was the development of growth, expansion and emergence of a homogeneous (national) coverage identity throughout the banking industry.

Indeed, banks (under regulated regimes) demonstrated common features of “national coverage”, “comprehensive banking service” and “support for productive sectors of the economy”. The dominance of such a strong generic corporate identity systems in the banking and financial services industry during a regulated regime has already been demonstrated in theoretical literature. For instance Balmer and Wilkinson (1996) argued that ‘‘the generic identity of the banking industry over this period has been much stronger than any individual corporate identity which the banks have been able to establish. The banks were, in fact, regarded as embodying the British virtues of conservatism, reliability and security’’. In another study, Olins (1978) also confirmed the existence of strong generic corporate identity in the financial services sector stating thus: “There is certainly a collective Building Society culture, a collective Building Society way of behaving and doing things, but despite the individual Building Societies’ quite considerable efforts to differentiate themselves by advertising, the experience of dealing with them, their offices, their forms, the way in which their employees behave is so similar, that it is virtually impossible to tell one from the other.” A similar tune was chorused by He and Balmer (2005) that ‘‘a strong generic identity still existed within the building societies sector. In the context of the magnitude of change, and the considerable efforts to which individual societies have gone to create distinct corporate identities, this finding was unexpected.’’. Other authors such as Morison (1997), Howcroft and Lavis (1986); and Balmer (1987) have in their studies confirmed the dominance of generic corporate identity in the banking industry.

Homogeneous Intelligence, Behaviour and the Emergence of Generic Corporate Identity: There has been an attempt by business organizations to develop benign super intelligent and ‘know it all’ cultures. Most business organizations, particularly those belonging to the same industry have common knowledge and strategic information in relation to the best and most appropriate period to launch and withdraw products, forecast stock market responses to social political and economic issues, develop pre-occurrence and develop a greater an in depth understanding of customers needs. Quite often, organizations are faced with drastic environmental turbulence and dramatic changes in their business lives. In spite of this, however, they appear ambitious, unruffled, visionary and even display the sense of creating order even in the worst case of turbulence (Olins, 1978). Such knowledge and attitudes makes business organizations, particularly those with similar business inclinations, to exhibit common behavioural attitudes, traits and characteristics that lead to the emergence of a strong industry wide generic identity.

Corporate Social Responsibility and the Development of Generic Identity: According to Fukukawa and Moon (2004) Corporate Social Responsibility (CSR) refers to ‘‘activity by business that can be said to enhance society is removed from business for profit activity and is voluntary and thus not required by law or any other form of governmental coercion. It is, though, increasingly hard to isolate CSR from mainstream business and government regulation given the prominence of the ‘business case’ and government incentives through soft regulation. Nonetheless, CSR is still distinguished by its focus on responsiveness to and even anticipation of social agendas, and by increased attention to social performance’’. Until recently, corporate social responsibility would hardly have been considered as a business environmental factor worthy of inclusion in organizational strategy. Two things happened in the recent past that changed this viewpoint (Hussey, 1998). First is a greater understanding (by organizations) of the balance of nature and of the effect of human activity on this balance. Science and the growth of human population have for long been known to change ecological factors, what is now understood is that many of the changes bring penalties as well as benefits. The coin has two sides. The second factor is a change in social attitude in Europe and North America, which has created an increasing amount of awareness and concern for ecological issues. In the 1960s smoking was a norm and many non smokers who complained of fumes in offices were regarded as non conformists. Today, however, non smokers are in the majority and non smoking offices and even organizations, common. Smoking is now considered as an antisocial habit. There is now an ever-increasing weight of public opinion against things that threaten the ecological balance; much of this opinion manifesting itself in positive attitudes against pollution. This knowledge and attitude has been reinforced by major disasters: nuclear power in Russia; oil tankers breaking up in the USA and Europe; poisonous gas escaping from a chemical plant in India. These organizational induced disasters have unimaginable effects on the human natural habitat and severe implications for organizations as well. Consequently, the business activities of all organizations (without exception) have in the recent past become increasingly subject to the pressures of politics, economics, competition, demands of labour and remarkably the media of mass communication. Organizations, who might have otherwise preferred to be silent operators, are now compelled to pursue corporate social responsibility activities and make their voices heard in the right quarters especially among stakeholders (Salu, 1994). Put another way, corporate social responsibility has become an all-comers affair (Kelley and Kowalczyk, 2003) and has, in view of the recent scandals emerging from organizational activities, gained unprecedented prominence. In addition to the issues of pollution and ecology, unethical business practices which led to the failure of many highly respected business organizations can also be adduced to this rise in its prominence (Rossouw, 2005). Unimaginable scandals involving high profile organizations such as Enron and WorldCom rocked the business environment and contributed in no small measure to the rising use of CSR among business organizations (Leonard and McAdam, 2003). Cases of such unexpected scandal shook stakeholder confidence and created concern about business ethics and governance. Similarly, growth in the pursuit of corporate social responsibility activities has been largely due to heightening awareness of the health risks associated with tobacco products and the continued threat of nuclear war (Waring and Lewer, 2004). As Fung et al. (2001) argue, greater awareness about social responsibility in investments throttled by the rise in union pension funds in the US, Canada, Australia and the United Kingdom has also been a major contributor to the pursuit of corporate social responsibility. As a result, corporate social responsibility has become increasingly important and as such there is increasing public demand for greater transparency from multinational companies.

Today’s business organizations are not just victims of the ever changing business environment but also the creators of the very circumstances that made corporate social responsibility imperative. Issues such as adverse social and environmental consequences of oil caused by pollution of natural habitat, allegations of complicity in human rights abuses perpetrated by state or private security forces, failure to use revenues from oil to provide lasting benefits in public health or education for the development of host communities and criticisms of BP’s handling of security in Colombia, the sinking of the Exxon Valdez on the Blight Reef of Prince William, among others, have all contributed significantly. Notably, the lessons learnt from these incidents have made many organizations to think twice about the practice of corporate social responsibility and many organizations who would normally never have bothered about corporate social responsibility now have clear policies on issues relating to environmental management, health and safety, human rights, ethics and transparency. While it is assumed that celebrated corporate failures and the abuse of organizational power contributed significantly to the rise in prominence of corporate social responsibility, it cannot be denied, however, that the phenomenal growth in social power and its influence in enforcing organizations to take full responsibility for the obstruction of balance of the natural environment in which we all reside contributed significantly to the rise in the use of corporate social responsibility. The public and stakeholders alike have become increasingly vigilant and critical of physical environmental problems caused by many organizations. The use of CSR has grown so much that organizations are now becoming accountable not just to investors but also to stakeholders. Increasingly, many organizations are adopting CSR to assure value based corporate governance and promote ethical business practices to regain and peddle consumer confidence. Thus, nearly every organization worth its name in today’s marketplace is involved in one good cause or another and gets involved in good causes for several reasons. While some do it to get rewards in sales and nurture stakeholder loyalty, others pursue it to build the reputation of their product and corporate brand (Whitaker, 1999). The use of corporate social responsibility is often supported by heavy media coverage either through corporate advertisements, guided editorials or news mention. Consequently, the communication of similar social responsibility events to stakeholders (by different organizations) creates the impression that organizations are similar in the minds of stakeholders.

Modern Architecture and the Development of Generic Identity: Architectural designs of corporate buildings and their locations have made significant contributions to the development of very strong generic corporate identities in today’s market place. The location of businesses plays a significant role in corporate identity. Locations not only give the address of business organizations but also provide an architectural context (Capowski, 1993). For centuries, interior, exterior and locational aspects of corporate architectural designs have not just been used to express organizational style but have also been used to convey strong statements about organizational personality, unique competencies, values, distinct organizational cultures and strategic intentions. Many business organizations have recognized that good architectural design is good business and that though silent, they convey strong corporate identities. All business organizations with good architectural design profit from the positive first impression of a great design. These designs present organizations in good light and have been found to be very crucial when establishing good corporate image (Plunkard, 2004). Since the British Victorian era many business organizations have recognized the strategic importance of projecting strong corporate identities using unique architectural designs on buildings. The identity projected through architectural designs becomes an image in the minds of potential customers and it is recognized as a strategic means of creating a positive, lasting impression on stakeholders. Architectural designs give customers a lasting impression that can contribute to a long, rewarding relationship with its customers. In addition, architecture adds to the vibrancy of business organizations. Between the 18th and 19th century, business organizations began to recognize that great internal and external architecture served the purpose of the most effective billboard to generate the desired positive attention and interest (Plunkard, 2004). Many business organizations have since this period been conveying strong and wealthy business identity through the imposition of massive architectural edifices on the high streets of major towns and cities (Olins, 1989) to generate larger customer bases, attract young, talented entrepreneurs as well as poach experienced staff from competitors (Melewar and Bains, 2002). During this period and up until now, business organizations are known to emulate themselves by constructing huge and gigantic edifices on high streets in high brow areas paving the way for development of common homogeneous corporate identities. The need to develop such huge architectural designs (historically) has been hinged on the shared desire to communicate a wealthy corporate identity. It has been driven by the need to reflect the image of wealth and business success by imposing huge magnificent modern buildings to attract businesses and customers (Olins, 1989). During this period, several banks namely Midland Bank (now the Hongkong & Shanghai Bank of China-HSBC), Lloyds Bank (now Lloyds TSB), Manchester and Salford (now Royal Bank of Scotland) and many other financial institutions designed and constructed massive state-of-the-art edifices to communicate and convey powerful statements in relation to financial success to high net worth customers (see the pictures below). This triggered a ripple effect in the financial industry and other banks joined the architecture design race not just in any location but on high streets. Eventually, the clamour for the presentation of corporate identity through the construction and reconstruction of massive architectural edifices in high brow areas caused an accelerating growth in interior design. In the course of re-inventing their businesses many major British financial institutions redesigned their internal architecture ‘to look strong and rich’. As Olins (1989) puts it, virtually every branch of every bank was designed to look rich, opulent, strong, respectable and conservative to attract high net worth individuals and businesses. The drawback, however, was that by developing such a common industry wide image, banks were equally constructing an industry-wide mono-identity system, tantamount to generic identity. Since the 18th and 19th century, however, the financial industry witnessed drastic and turbulent changes and, in the last 50 years, particularly in its services and business coverage. Banks now offer mortgages and insurance services to customers. Banks applied technology, changing society to a cashless one by providing automated cash vending machines at strategic locations round the country to serve the customer anytime, any day, anywhere. Many banks, e.g. HSBC Lloyds TSB, Barclays, went global by offering online financial services to customers across the world (Griffioen, 2000). The technological revolution also included the emergence of post-modern architectural designs. Many banks made huge investments into the construction of contemporary post-modern high-rise buildings to convey and signal desired messages to stakeholders. For instance, Hong Kong and Shanghai Banking Corporation (HSBC), one of the world’s largest banking and financial services organizations, commissioned a high-rise building in 1986 to make a statement of strength, power and confidence in the global financial market. In 1970, Lloyds TSB constructed a controversial high-rise building. With its exterior bedecked with pipes and ducts, looking more like the headquarters of an engineering or oil producing organization, it challenged existing high-rise buildings belonging to other financial operators (Olins, 1989). The construction and commissioning of these buildings created architectural design imagery which in some way contributed to the development of a strong industry wide homogenous corporate identity. In spite of this revolution witnessed in the banking industry, however, its formal grand architectural style, which is no longer appropriate for the nature of today’s business, remains on hold (Melewar and Bains, 2002). Many British banks, particularly the traditional ones, still operate from their imposing monstrous architectural designs, which Olins (1989) called giant transistor radios. Such common imagery has also contributed to the development of a homogeneous or generic identity system in the financial industry.

Multinational Trade and the Development of Generic Identity: Before the Second World War, very few organizations operated truly on the international scale. Only a few, like the major oil production organizations, the big US auto manufacturers and others like Unilever, ran what can be called truly multinational organizations in today’s context. Most business organizations just before the war operated mostly within their geographical regions and the majority of the lesser developed regions of the world were divided among world super powers. The United States controlled Latin America and the Philippines. England administered commonwealth countries (i.e. Nigeria, Ghana, India etc). France had control over the Francophone countries. Equally, Belgium and Italy maintained control over their well defined regions, German business organizations dominated many of the central European markets and Japanese organizations attempted vigorously to expand beyond their borders (Olins, 1978). These protected markets allowed manufacturing organizations to retain their national idiosyncrasies. By the time many treaties were signed (by many countries) to reduce trade barriers and allow easier entry into foreign markets, German and Japanese business organizations were far ahead of others in the act of understanding the nature of foreign markets – and their knowledge about these markets was used in competing fiercely with other new entrants into these markets and marketing assumed a major role in organizations and in the marketplace. Within a short period of global trade liberalization, many organizations originating from Europe and particularly the United Kingdom moved briskly to begin operations at desired locations all over the world. To achieve strategic sales intentions in foreign markets, therefore, English and French business organizations had to behave less like the English or the French. This was a common strategy adopted by many multinational organizations operating in foreign markets and these organizations began to look like one another. According to Olins (1978) ‘‘For the sake of ubiquity all multinational organizations, whatever their national origins, look more and more like each other’’. He stated further ‘‘in some industries, particularly those with international affiliations, this development has gone much further than in others. The aircraft industry, for example, which is American dominated, speaks American. Even such staunch nationalists as the French find it difficult to resist this pattern, simply because American influence throughout the industry is so strong”. Olins (1978) argued further that as globalization continues to penetrate into the fabric of international business and people all over the world develop similar tastes in consumption, multinational business organizations will develop common patterns of satisfying these tastes paving the way for the development of homogenised identities across various industries.