Brand Culture

Jonathan Schroeder, Miriam Salzer Morling, Jonathan Schroeder, Miriam Salzer Morling

• Publisher: Routledge
• Year: 2006
• ISBN:
  9781134252312
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

This fascinating book shows that neither managers nor consumers completely control branding processes – cultural codes constrain how brands work to produce meaning. Placing brands firmly within the context of culture, it investigates these complex foundations. Topics covered include:

• the role of consumption
• brand management
• corporate branding
• branding ethics
• the role of advertising.

This excellent text includes case studies of iconic international brands such as LEGO, Nokia and Ryanair, and analysis by leading researchers including John M.T. Balmer, Stephen Brown, Mary Jo Hatch, Jean-Noël Kapferer, Majken Schultz, and Richard Elliott. An outstanding collection, it will be a useful resource for all students and scholars interested in brands, consumers and the broader cultural landscape that surrounds them.

Part I Corporate perspectives on brand culture

Chapter 1
A cultural perspective on corporate branding
The case of LEGO Group

Majken Schultz and Mary Jo Hatch

We argue that moving away from product to corporate branding means moving from a communication/marketing driven activity towards adapting a brand-based strategy for managing the organization. Corporate branding implies that the whole organization serves as the foundation for brand positioning and entails that the organization is able to make specific choices, design organizational processes and execute activities in ways that are distinct to the organization compared with competitors and mainstream trends. As opposed to product branding, corporate branding highlights the important role employees play in brand practice, making how employees engage with and enact the values and vision of the brand more profound and strategically important to corporate brands (see also Aaker 2004; Ind 2001; Schultz and de Chernatony 2002; Olins 2003). Accordingly, the values, beliefs and aesthetic sensitivity held by organizational members become key elements in differentiation strategies, as the company itself moves centre stage in the branding effort. Issues like credibility and relevance of the brand to external stakeholders rest heavily on the shoulders of employees, whose cultural behaviour supports—or damages—the company’s claims to brand uniqueness and attraction. In short, employees are crucial for the ability of the company to practise what it preaches. That is why we see more and more companies engaged in making the brand understandable, relevant and engaging to their employees through a host of different internal activities, such as internal marketing, employee communication campaigns, brand programmes, company intranet websites, corporate merchandise, staged events—often conceived in terms of ‘Living the Brand’ or ‘Being the Brand’ (Aaker 2004; Ind 2001; Schultz and de Chernatony 2002).

Based in our conceptual framing of corporate branding, we focus on the role of employees and thus organizational culture in constituting a corporate brand. In our opinion, organizational culture has been the most underestimated element in corporate branding, and yet represents the most important difference from product branding. This is because culture manifests itself in the ways employees interpret and emotionally engage with the brand and its stakeholders. In this chapter, we offer an illustration of how a cultural perspective can be applied in the managerial effort to shift from product branding to corporate branding. We argue that the corporate brand implementation process moves through different stages, each creating a distinct paradoxical challenge for brand management and each posing different opportunities and limitations for involvement of employees in the corporate brand. We illustrate our conceptual framework with a description of the branding process taking place in LEGO Group, the Danish producer of play materials. This chapter is based on extensive experience working with LEGO, which we also discuss in articles from Harvard Business Review (Hatch and Schulz 2001) and California Management Review (Schultz and Hatch 2003).

A FRAMEWORK FOR CORPORATE BRANDING

In previous articles we have emphasized that successful corporate branding resides in the alignment of strategic vision, organizational culture and stakeholder images (Hatch and Schultz 2001, 2003; Schultz and Hatch 2003). These were defined as:

1 Strategic vision—the central idea behind the company that embodies and expresses top management’s aspiration for what the company will achieve in the future.

2 Organizational culture—the internal values, beliefs and basic assumptions that embody the heritage of the company and manifests in the ways employees feel about the company they are working for.

3 Stakeholder images—views of the organization developed by its external stakeholders; the outside world’s overall impression of the company including the views of customers, shareholders, the media, the general public, and so on (Hatch and Schultz 2001).

Together these key elements of corporate branding underpin the Corporate Brand Toolkit (Hatch and Schultz 2001, 2003). To enhance or maintain corporate brand alignment, we have argued that companies must pay attention to all three elements of corporate branding simultaneously. It is important to remember that corporate branding is not only about differentiation in the marketplace; it is also about belonging.

Based on our continuing research on corporate branding and organizational identity, we add identity as the conceptual anchor for the simultaneous differentiation and belonging, as identity articulates who the organization is and what it stands for compared with others (Hatch and Schultz 2002; Albert and Whetten 1985; Gioia et al. 2000). Contrary to strategic vision, which embodies future aspirations for the company (Collins and Porras 1994), identity is comprised of claims about who the company is as an organization, which many companies explicitly express when they espouse organizational values or core beliefs (Whetten and Mackey 2002; Olins 2000, 2003; Balmer and Greyser 2003). In practice, however, there may be little difference between vision and identity, as identity claims sometimes express desired future identity rather than describe actual organizational behaviour, just as vision, mission and values rhetorics in companies are often intertwined. Comparing image and identity, identity is a privileged claim of self among organizational members, whereas images reside among multiple (other) stakeholders engaged in different interpretations of the company who together produce a multiplicity of images that feed into the continuous development—or fragmentation—of the brand (e.g. Dutton and Dukerich 1991; Gioia et al. 2000). Particularly in the case of well-established and well-known brands, such as the LEGO brand, the brand image is important in the marketplace, but also as an influence on the commitment and loyalty of employees (Dutton et al. 1994).

Organizational culture, in contrast, emerges from the taken-for-granted assumptions and tacit webs of meaning that lie behind everyday employee behaviour. Cultural assumptions and meanings are manifested in numerous cultural forms, such as rites and rituals, symbols, espoused values, myths, stories, etc. (Martin 1992, 2002; Hatch 1993; Schein 1992). In that regard, organizational culture serves as a contextual reference and conceptual backdrop for the collective reflections of ‘who we are’ as an organization. The notion of culture also includes espoused values, which may be similar to identity claims to the extent that these values focus on the official definition of an organizational self rather than being, for example, more general codes of conduct for organizational behaviour. Adding identity as the fourth element of corporate branding completes the Corporate Branding Toolkit (see Table 1.1):

Table 1.1 The cycles of corporate branding

4 Identity—organizational claims about who we are as an organization, which serve as the foundation for defining what the corporate brand stands for compared with others and are often stated as core values, central ideas or core beliefs.

We claim that organizations whose managers attend to the dynamics of vision, culture and image—centring on identity—will outperform those whose managers either ignore these issues or do not understand the interrelations between them.

JOURNEY TOWARDS CORPORATE BRANDING: LESSONS FROM LEGO

This section of the chapter provides examples of some cultural dimensions of the managerial and organizational challenges that faced the top managers of LEGO Group when they moved to corporate branding in their strategy formulation process. Using the Corporate Branding Toolkit as the analytical framework, the LEGO Group case shows how their branding effort expanded from its initial marketing focus into a company-wide reorganization that involved several change management programmes and an ongoing initiative to create a global brand based in the LEGO Group company culture and unique heritage.

The LEGO Group corporate brand was created in 1932 when Ole Kirk Christiansen, a carpenter from rural Denmark, created a company for the manufacture of wooden toys. For decades it acted as a strong umbrella brand, guiding the company through extensive international growth as well as numerous product innovations. The LEGO brand has obtained an iconic status (Holt 2003) and has been among the world’s most admired brands among families with children, along with Disney, Kellogg’s and Coke according to Young and Rubicam’s Brand Asset Evaluator. However, in the late 1980s, and particularly in the mid-1990s, brand extensions into software, lifestyle products, new licences, parks and television fragmented the LEGO brand. Combined with fluctuating financial performance and an ever more competitive and rapidly changing marketplace, brand fragmentation presented top management with the dual challenges of maintaining a focus on the substance and distinction of LEGO Group heritage, while allowing for continuous innovation and expansion into new businesses. At the same time, top management had the overall challenge of changing the severe financial fluctuation with sustainable profitable growth. In response, LEGO top managers decided to reintegrate the company via a corporate brand strategy that was tied into the deep roots of LEGO’s cultural heritage and unique global stature as a brand in children’s development.

In 2001, top management created an internal task force with the purpose of crafting a concrete strategy for shifting to corporate branding. The task force included 12 organizational members from different functions and different parts of the world. Its brief was to define key challenges facing the LEGO brand and provide the outline for a future identity for the brand. Midway through their process, the task force expanded the scope of analysis, when it became apparent that the fragmented character of the LEGO brand was partly due to the organizational processes involved in managing the brand. It was at this point that Hatch and Schultz’s Corporate Branding Toolkit (see Table 1.1) was introduced as an addition to the more classic branding models (e.g. Aaker and Joachimsthaler 2000) and produced a second round of analysis that identified organizational challenges to the LEGO brand related to vision, culture and image.

Introducing the Corporate Branding Toolkit focused LEGO’s corporate branding effort, not only on strategic alignment, but also on alignment between consumers’ and employees’ understanding of the brand. Keeping in mind that the end goal of the brand strategy was a strong and coherent global position for the LEGO brand in the eyes of all stakeholders, the Toolkit model reinforced the need to attend to existing organizational cultures and images held by stakeholders and compare them with the aspired redefinition of the identity for the LEGO Group corporate brand. In retrospect, we see that the managerial and organizational process of aligning vision, culture and image behind the LEGO brand identity developed through successive approximations to the ideal presented by the Toolkit. Below we first describe the main activities that comprised these successive approximations as four cycles through the corporate branding process (summarized in Table 1.1). Table 1.2 summarizes the processes that are related in particular to a cultural perspective on corporate branding.

Cycle 1 Stating who we are

The first cycle focused on the high fragmentation of brand expressions across different product lines, sub-brands and businesses. We characterize the changes within this cycle as decentralized in the sense that stating a credible vision for the corporate brand identity required the managers to combine multiple insights derived from assessing the strengths and weaknesses of the company’s cultural heritage with data describing global consumer images of the brand. For instance, using insights from different methodologies (e.g. Millward Brown’s Brand Tracking, Young and Rubicam’s Brand Asset Evaluator), market research showed that: (1) few consumers were able to distinguish between LEGO’s sub-brands, and (2) although LEGO was highly regarded for its devotion to development and earning (particularly by mothers), it lacked ‘coolness and street cred[ibility]’ among children. Also, the taskforce conducted thorough comparisons with the core values of competitors, mapping the distinctiveness of the LEGO brand identity in the global marketplace in order to see how the unique heritage of the LEGO culture could be better used to create a sustainable differentiation and in this way better leverage the uniqueness of the organizational culture in a future global brand culture among all stakeholders.

However, although LEGO had a long heritage as a value-driven company, it had lost track of its numerous value expressions during a long period of brand fragmentation and increasingly overlapping value propositions. The corporate branding process therefore began with a return to LEGO core values as the foundation for redefining the brand identity. As the most important part of this process, the task force engaged in a series of workshops, conversations with the family owner (the founder’s grandson) and archival studies of LEGO Group’s previous value statements in order to gain a deeper understanding of the LEGO organization culture—both as it has unfolded over time, but also as it has generated new subcultures within new business areas by attracting people with different competencies and mindsets to LEGO Group. These people were recruited for example in LEGO Software in computer games and in LEGO Direct dealing with e-business and online development. For these people, the attraction of the LEGO brand image had served as a significant draw to the company and created expectations of playfulness and youthfulness, which were not always found in the organizational culture (Karmark 2002). In order to obtain a deeper understanding of why previous attempts to redirect the LEGO brand had been incomplete and not fully executed, the task force conducted a series of interviews with employees involved in the creation and execution of such attempts. These interviews revealed that one of the cultural challenges of LEGO Group was to link espoused values or identity claims to business processes and to leverage the emotional commitment among employees to the LEGO values in their everyday application of those values across different business areas and subcultures.

Table 1.2 The cultural dimensions of the shift to corporate branding

Based on these insights about organizational culture and stakeholder images, the task force reformulated the traditional LEGO values for the aspired brand identity giving them a contemporary feel and making the generic values based in the cultural heritage more distinctive to LEGO Group and potentially more relevant for the brand execution. Figure 1.1 shows how this sharpening of the brand identity was visualized in this cycle of the corporate branding process.

Along with the redefinition of the brand identity values, LEGO Group reshaped and redefined its brand architecture based on the play experiences that consumers obtain by engaging in LEGO play (e.g. the functional, emotional and self-expressive benefits, i.e...