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Managing the Changes in Corporate Branding and Communication: Closing and Re-
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Corporate Reputation Review Volume 6 Number 4

Managing the Changes in Corporate


Branding and Communication: Closing and
Re-opening the Corporate Umbrella*
Don E. Schultz
Northwestern University, USA

Philip J. Kitchen
Hull University Business School, UK

ABSTRACT bution of the paper is the ‘umbrella’ concept.


While the controversy continues over whether Undoubtedly, changes in the business and gen-
an organization should focus on corporate or eral social environment necessitate integration at
product branding, this paper explains why cor- both marketing and corporate communication
porate branding is the most likely scenario for levels. The umbrella metaphor is useful in con-
most multi-national organizations in the 21st ceptualizing the foundation and integration of
century. It is argued here that a strong, consis- corporate communication. Before the conclusion
tent and cohesive corporate brand and communi- of the paper, the authors offer their recommen-
cation program is needed to maintain and dations on how managers, consultants and aca-
increase cash flows and increase shareholder demics could use the metaphor to clarify the role
value. Further, it is explained why this of corporate communication within an organiza-
approach is not only relevant, but is likely to tion.
be mandatory in the emerging networked and
interactive marketplace. The authors use a new INTRODUCTION
physical metaphor, the ‘corporate umbrella’, to CEOs and CFOs under fire — roller-
explain and illustrate how corporate branding coaster share prices — loss of investor con-
and communication programs are relevant and fidence — sacking of senior executives —
appropriate for all organizations. First, the revolving boardroom doors — failure to
umbrella concept is described. Then, the paper tell or sell convincing explanations of
illustrates why many traditional corporate events to customers, employees, analysts
umbrella communication approaches and activ- and/or investors — poor handling of crises
ities have been worn and torn by the winds of and issues management, for example,
environmental change, thus making them irrele- recent fiascos associated with Ford, Fire-
vant and useless. This is followed by a descrip- stone, Proctor & Gamble, Enron, World-
tion and discussion of the new type of corporate com, and Arthur Andersen — are all clear
umbrella that must be developed for firms to illustrations of the current failure of many
successfully compete in the 21st century market- corporate initiatives and the growing need
place. The paper is based on concepts developed for clear, concise, understandable corporate
and presented in a book published by Palgrave- plans and strategies. As important, how-
Macmillan, Basingstoke, England in August ever, is the need for those plans and pro- Corporate Reputation Review,
2001: ‘Raising the Corporate Umbrella’ and grams to be communicated clearly and Vol. 6, No. 4, 2004, pp. 347–366
# Henry Stewart Publications,
used here, with permission. The major contri- effectively by CEO, board level personnel, 1363–3589

Page 347
Managing the Changes in Corporate Branding and Communication

corporate communications directors and driven sales, marketing and communication


other managers to the various corporate approaches, becomes not only ineffective
stakeholders. As van Riel (1997) has so but inefficient as well. Thus, the authors
clearly pointed out, there has never been a believe, the integration of all forms of cor-
greater need for effective and enlightened porate communication both inside and out-
communication with and by corporate and side the organization is required to
institutional stakeholders. properly harness the emerging, dynamic,
For all organizations everywhere, these global marketing and communication sys-
factors form part and parcel of the fiercely tems that will comprise the 21st century
enhanced competitive landscape of the marketplace (Schultz and Kitchen, 1999).
global marketplace (Bartlett and Ghoshal, Through the use of the corporate
1998) of today and tomorrow. Yet, there is umbrella metaphor, this paper identifies
substantial and growing evidence (Deetz, eight forms of traditional corporate com-
1995) that organizations and managers are munication that, although still widely prac-
not communicating effectively and, indeed, ticed around the world, are rapidly sinking
may well be mis-communicating with the into the sedimentary strata of economic
very people and firms who hold the key to and social history. The paper then presents
their corporate future. Nowhere is this a list of eight new, dynamic, integrated
more in evidence than in the investment forms of corporate and brand communica-
community. Investors want to understand tion that, in the authors’ view, will drive
future value. Organizations report historic firms of the future.
value. The move to Stern Stewart’s EVA, Given the development of global sys-
the Balanced Scorecard (Bennett and Stern, tems in finance, transportation, logistics,
1999) and PricewaterhouseCoopers drive communication, and now marketing and
to ‘Value-Based Accounting’ (Read, 2001) branding, it is argued that the corporate
are illustrative of the trend away from the entity is now more important than the
mis-communication iceberg that has char- products and services it produces or vends
acterized the 20th century to the new dri- (Mitchell et al., 1997). This perspective
vers of corporate communication in the implies the firm and its outputs are often
21st century. tremendously influenced by the perceptions
Over the past ten years, research has of the various stakeholders and stakeholder
shown that the greatest hindrance to effec- groups (Schultz et al., 2000), not just by
tive corporate communication programs is the output of the plants and service centers
the lack of established and implemented it controls. Increasingly, it is argued here,
internal communication processes and sys- the value the corporate entity creates is for
tems (Kitchen and Schultz, 1999; Schultz its stakeholders and owners, not just for its
and Kitchen, 2000). The lack of process customers and consumers. Those stake-
thinking and systems planning has become holders can include shareholders, employ-
an even more glaring weakness when the ees, owners, business and alliance partners,
market, marketplace, customers and consu- and a host of other, internally involved
mers become not just integrated and net- participants. Yet, most organizational com-
worked, but interactive as well. Thus, the munication has traditionally focused on the
corporate tradition of condoning indepen- consumer, customer or end-user or on the
dent marketing and communication pro- financial markets, often ignoring the values
grams as siloed and separate units or that are created for others. Thus, this paper
elements inside the organization, com- argues that corporate communication and
monly with their own product or activity- corporate branding must become key skill

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Schultz and Kitchen

areas for the organization of the future and each of whom can impact markedly on
those efforts must be focused not just exter- both short-term and long-term market
nally, but internally as well. share, profit performance and shareholder
To illustrate the approach, how the con- value.
cept for this paper developed will be The corporation has thus become a
explained. brand that also needs to be ‘marketed’, or,
put another way, communicated, for in the
GENESIS OF THE CORPORATE authors’ view, all marketing is communica-
UMBRELLA tion and all communication is essentially
In the early 1990s, a leading guru of man- marketing. But, today, marketing the cor-
agement thought — Professor Charles poration means much more than a few
Handy, then of the London Business advertisements in the Wall Street Journal,
School — published a book entitled: The donating a few dollars to public radio and
Empty Raincoat (Handy, 1995). The title some corporate chest-thumping on the
related to a sculpture Professor Handy had Sunday morning ‘public affairs’ television
seen in an open-air sculpture garden in shows.
Minneapolis during a trip to the USA. Of Instead of this historic view of corporate
the three shapes created by sculptress, communication and branding, it is sug-
Judith Shea, the dominant one was a gested here that, because of the emerging,
bronze raincoat, standing upright, but with interactive and networked marketplace,
no-one inside it. For Handy, the empty there must be a new ‘raising of the corpo-
raincoat served as a paradox for the appar- rate umbrella’. By that is meant senior
ent emptiness of much that was occurring executives, led by the CEO, senior man-
in the name of technological, industrial and agement, and the board, need to present
post-industrial ‘progress’ at that time. the organization in such a way that it not
The authors have adapted Handy’s cor- only protects and nurtures all the indivi-
porate paradox in a somewhat different dual brands and customer relationships
manner. The empty raincoat, here, seems within its portfolio, but confirms to all sta-
to personify the apparent ‘emptiness’ of so keholders that the organization itself stands
many of today’s corporate entities. Empti- for something other than an anonymous,
ness in the sense that the firm appears as a faceless, profit-taking corporate entity.
cold, distant, unfeeling monolith, often This is represented diagrammatically in
unrelated to either its customers and consu- Figure 1.
mers or to its employees, associates and A market-oriented organization and its
other stakeholders. This seems a strange total meaning, ie its ‘corporate umbrella’,
paradox in a marketplace where interactiv- cannot be hoisted by empty corporate pla-
ity, dialog and personalization are becom- titudes or traditional corporate branding
ing more the rule than the exception. and communication programs. Instead, it
Thus, the authors argue that in today’s can only be communicated and made rele-
world, executives and managers at all vant when its management, employees,
levels, from the CEO downwards, must business partners, associates, channels and
reach out and communicate not only with affiliates understand and practice a totally
customers and consumers — from whom they integrated corporate marketing, communi-
expect to generate sales, income flows and cation and branding approach that puts
profits — but also with various related and reality and realism inside the firm and
involved employees, channels, affiliates, gives it form and substance on which to
associates, publics and other stakeholders, build and operate. By using that platform,

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Managing the Changes in Corporate Branding and Communication

Figure 1: ‘Raising the corporate umbrella’

Corporate Brand

Customers Employees Partners Competitors


Channels Shareholders

SBU SBU SBU SBU SBU SBU

B B B B B B B B B B B B

B B B B B B B B B B B B

SBU = Strategic business unit


B = Business unit

the company can then announce and illus- driven corporate communication
trate its values, vision, mission and com- programs and activities act like the ribs
mitment internally and externally to the of an umbrella in that the various
various stakeholders and those who have, communication activities of the firm
might have or might want a relationship of support the overall organizational
some sort with the firm. In short, the aim communication systems. Lose or
of this paper is to suggest how corporate mismanage one of the communication
management can put flesh on the bones of ‘ribs’ such as crisis management, corpo-
the corporation and raise the corporate rate advertising, or environmental
umbrella in such a way that: issues, and the whole communication
coverage of the organization becomes
1 it acts as a force-field metaphor — unstable in the stormy winds of change.
nurturing, protecting, and providing The ‘ribs’ refer not just to potential and
the resource-fertile environment to actual communication activities de-
grow the total entity, including the ployed by the firm, but also relate to
individual brands and stakeholder rela- the underlying managerial assumptions
tionships, treating them as valuable and and practices concerning the nature of
potentially irreplaceable assets. the marketplace, the stakeholders they
face and how such stakeholders can and
and should be addressed to build relation-
ships by means of corporate communi-
2 it acts as a metaphor in terms of the cation.
way it can be operationalized at the
corporate level. In other words, under- Given this scenario, this text will now turn
standing that fully integrated, process- to the need for a different view of corpo-

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Schultz and Kitchen

rate communication and branding. This TWO CORPORATE UMBRELLAS?


will be followed by a discussion on the Earlier, this paper referred to the premise,
various traditional forms and modes of cor- developed by Charles Handy, that the pre-
porate communication. The authors sug- sent day corporation could be likened to an
gest that, while these approaches still exist, empty raincoat, with nothing underneath
they are increasingly less viable. It is in terms of values, responsibilities, trust or
assumed that the context of globalization, relationships. While there are doubtless
wherein multi-national firms jockey for many organizations seeking corporate gain
the mind, heart, and market, will already at whatever the cost, in the authors’ experi-
be well understood by the readers. ence, there are many others that feature a
solid combination of enlightened manage-
ment, interested and dedicated workers,
THE NEED FOR CORPORATE useful and honest channel members, and
BRANDING supportive shareholders who are interested
It has been argued elsewhere that a multi- in building for the future, not just maxi-
national or global firm’s personality, repu- mizing immediate corporate returns. The
tation and image will become the biggest challenge, of course, is separating those
single factor in consumer choice between who ‘proclaim’ and those that actually
its products and services and those selected ‘perform’. That has a lot to do with com-
from competitors (Eales, 1990; Melewar munication, in the realms of both the cor-
and Saunders, 1998, 2000). The authors poration and the stakeholder.
agree with this premise. But, personality From the view of the CEO and his/her
and image do not just impact on consumer corporate communication director, it is
choice and behavior. They also influence a much easier to provide useful and valuable
variety of publics or stakeholders, whose strategic direction and tactical execution in
views and behaviors can markedly impact communication programs to the latter than
overall corporate performance. the former. The challenge is sorting the
Simultaneously, corporate personality two. Organizations do change — some-
and image can exert a positive or negative times for the worse, but often for the
influence on consumers, governments, better. Thus, one of the key tasks of any
employees, communities, and even share- corporate communication manager is to be
holders. There is likely to be nothing in able to anticipate when such changes are
these statements with which any corporate occurring and either try to increase positive
communication director would disagree. change or perception, or to mitigate the
The authors’ view, however, is that there impact and effect of negative issues and
may well be two types of corporate crises. In this way, corporate communica-
umbrella. The first is the historic tion and those who control it, become in
umbrella, used so successfully during the effect the conscience of the corporation,
rapid growth years of the 1990s, now reflecting what is useful and valuable to be
broken and exposed to all the storms of communicated and trying to control or
change. The second inferring a new era of limit those forms of communication that
global, interactive, networked dialog are either false or may have the potential
between all parties — unfurled, unbroken to deceive or mislead. Consider the impact
and capable of providing a protective nur- that a strong, relevant, unbiased corporate
turing device for all the strategic business communication program could have had
units and brands within its scope, is now in reducing some of the corporate greed of
emerging. the past decade.

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Managing the Changes in Corporate Branding and Communication

The future role of corporate communi- merger or acquisition, a crisis, an environ-


cation will thus change dramatically in the mental question, a misunderstanding with
21st century organization. Where formerly shareholders or just run of the mill corpo-
corporate communication was viewed as rate marketing and sales communication
the group, organizational resource, or with customers and prospects, corporate
sometimes even the person who ‘fixed branding and corporate communication are
things with the media when the coverage areas every organization must master or
was negative’; or was responsible for ‘spin- else they are likely to master the corpora-
ning some ‘‘corporate gold’’ out of noth- tion.
ing’; or was viewed simply as a ‘PR
bunny’, whose primary task was to orga- THE CLOSING CORPORATE
nize the corporate parties and create some COMMUNICATION UMBRELLA
type of ‘buzz’ about the organization; Given the preceding scenario, what are the
today, the authors view corporate commu- key corporate communication factors orga-
nication and the corporate brand as senior nizations need to review, reconsider and
management’s lynchpin with the various change? To what extent are the elements
publics. That means the method and used by corporate communicators outdated
manner for developing communication in light of current environmental circum-
strategies and giving corporate focus and stances? What current corporate communi-
direction to all the ways in which the orga- cation skills are no longer as valuable and
nization can and will touch and influence useful as they once were? In short, what
its myriad stakeholders around the world. current communication approaches need to
Let there be no doubt, communication is be re-thought and re-considered by the
and will be critical to every organization in forward-looking communication director?
the 21st century marketplace. In fact, it While the authors list the areas, concepts
may well be the most important thing the and management rules that are likely to
organization can do, even more critical to disappear below, it is also recognized that
marketplace success than the products or they have often served the corporation
services the firm has developed and is cur- well in the past. Thus, they may be hard to
rently marketing. It is believed that the abandon. But, it is clear that their days are
perceptions, beliefs and feelings of the var- limited. The authors identify each of these
ious stakeholders have a major impact on corporate beliefs, assumptions or ‘corporate
the current and on-going success of the communication managing rules’ with a
company. It is further suggested here that few brief statements which it is believed
corporate communication and branding that every CEO and corporate communi-
will drive the corporate organization of the cation director will quickly recognize as
21st century. The reason: if the organiza- historic ‘inherent truths’. Those managers
tion cannot build internal and external should be able to quickly and easily relate
value through its brand, and then, commu- them to the warp and woof of current-day
nicate its vision, mission, and values, some corporate communication development
other organization, entity, stakeholder, or and management.
irate public entity with an axe to grind and In the areas below, it is argued that these
with the communication capabilities can ribs or sections of the corporate umbrella
and will. That will have a major impact on are closing or being furled, not necessarily
the top, bottom and middle lines of the by choice, but by the changing environ-
balance sheet. mental circumstances in which corpora-
So, whether the corporate situation is a tions compete and communicate. These

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Schultz and Kitchen

Figure 2: ‘Closing the eight-section umbrella’

Traditional
Corporate Communication

Everything
National
National Product Optional
Optional
is
Is orientation
Orientation focus
Focus comms
Comms
outbound
Outbound

Separatist Tangible
Tangible Corporate Product
Product
approaches
Approaches assets
Assets monolith
Monolith branding
Branding

concepts and approaches have had their day these ‘corporate messages’ were developed
and while they, like a used umbrella, will to inform, educate, persuade or influence
continue to provide some coverage of cor- the various audiences and stakeholders
porate value, they are getting tacky and identified by the firm, particularly those
torn. Like a weakened umbrella in a raging that management felt needed ‘to be com-
storm, the concepts and approaches are municated with’.
sure to be ‘turned inside out’ through the Communication and messages were
strong winds of 21st century change. directed toward those external audiences
Figure 2 illustrates what the authors and success was measured by the successful
believe is the rapidly closing umbrella of tra- distribution of those developed messages.
ditional corporate communication assump- The common assumption was that ‘the
tions and approaches. As shown, there are more messages delivered the better’. Thus,
eight major assumptions or driving forces there was great focus on communication
that have directed or guided corporate message ‘tonnage’ in the belief that the
communication management for at least company with the greatest investment gen-
the past 40 years. The authors call them the erally dominated the communication spec-
‘historic ribs’ of the corporate umbrella. trum.
Internal communication programs, if
Everything is Outbound they were used at all, were generally devel-
For the most part, traditional corporate oped by the human resources (HR) group.
communication programs have reflected They consisted primarily of keeping
the views, needs and wants of the corpora- employees and other interested groups
tion. These were the ‘things, ideas, con- ‘informed’ about what ‘their company’
cepts or beliefs’ the firm wanted to was doing and how it would impact and
‘deliver’ to the ‘audiences’ which the orga- affect their lives, their jobs and their
nization had selected. For the most part, future.

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Managing the Changes in Corporate Branding and Communication

Table 1: Separatist Versus Integrated Approaches

Separatist approach focus Integrated approach focus

Outbound one-way communication Integrated communication processes and management


Functional communication skills Interactivity
Communication specialists and specialization Connectivity
Emphasis on budgetary control Customer relationships
Turf wars Efficient customer response
Differential evaluation Just-in-time and EDI systems
Fiscal year battles Evaluation of customer behavior

Separatist Approaches two countries might share common bor-


Communication programs were developed ders, the national focus result was the same.
and implemented by ‘communication spe- Thus, communication programs were con-
cialists’, ie people or groups that had devel- strained and limited to the specific geo-
oped particular functional communication graphic areas in which the firm, its
expertise. Advertising people managed the divisions or business units were located.
advertising programs. Public relations Communication seldom crossed borders
people ran the public relations programs. and, if it did, it was developed and exe-
Employee communication people devel- cuted by ‘international specialists’, often
oped the employee communication pro- from the ‘headquarters’, who knew com-
grams. Each was budgeted separately. Each munication systems but often knew little
was developed separately. Each was evalu- about the cultures and countries to whom
ated separately. There was no need for or for whom the customers and consumers
functional specialists to talk to each other with which they were ‘communicating’
for they were conducting functional pro- existed.
grams about which the other functional
managers knew or cared little. As a result Tangible Assets
of this functional focus, there was always From the boardroom to the delivery dock,
the internal battle among the specialists for the focus was on the balance sheet. That
turf, position, power and money, with the balance sheet focused on tangible assets and
winner claiming victory each fiscal year at the use of those tangible assets to produce
budget time (see Table 1). sales and profits. Thus, measures of the use
of tangible assets such as outputs, plant
National Orientation capacity, share of market, distribution effi-
With limited exceptions, the multinationals ciency and the like were the key financial
being the primary examples, organizations measures for the organization. The corpo-
focused on their own national market. rate communication director took cues
Even among multinationals, the approach from the senior management and the board
was often the same, ie build a specific focus in terms of what was important, which
on the national market by adapting and was how well resources were being used
localizing the global program. Since each and how efficiently the organization was
country often operated separately and inde- operating. Therefore, the communication
pendently in terms of products, services, focus was generally on how well the firm
production, distribution etc, even though was employing the tangible assets the firm

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Schultz and Kitchen

controlled. The balance sheet was king. result, product brands dominated the mar-
What the members of the financial markets ketplace. Most marketing firms believed a
wanted to hear was uppermost in everyo- ‘house of product brands’ structure was the
ne’s mind. Customers and brands were nice logical choice of not just the marketer but
to have, particularly for fast-moving con- also the marketplace. Thus, because product
sumer goods (FMCG) organizations. But, brands dominated, at least in North Amer-
they had little to do with service firms, ica, corporate communication became the
business-to-business and other types of backwater of the communication industry.
organizations. The reason? Success was Little activity, little funding, little value,
measured by the distribution and the and little attention, except when there was
volume of goods and services the organiza- a corporate crisis such as the well-known
tion produced, not by the customers it ‘problems’ of Tylenol, Union Carbide,
served. Corporate communication, there- Exxon, Perrier, Coca-Cola, and most
fore, was about products, plants and effi- recently Ford, Firestone and Monsanto
ciency. The corporate message was about (http://www.epa.gov/oilspill/exxon.htm).
sales increases and competitors routed from Then, all of the focus was on the organiza-
the field and the value of the organization. tion, its needs, concerns and issues. In crises,
So, one might consider the communication some organizations responded well and
programs self-serving, except for the senior others poorly. The primary point, how-
management and the communication ever, is that for the most part, product
director, to whom they were ‘informative’ brands and product communication have
and ‘useful’. dominated organizational interest and
financial support rather than the corporate
Focus on Product, Not Company brand and corporate communication.
Along with the focus on tangible assets as
the organization’s primary positioning The Corporate Monolith
tool, came the belief that it was competi- Traditionally, most organizations have
tive differentiation that was the key to cor- attempted to be monolithic and monopolis-
porate success. Thus, organizations focused tic. That is, with some exceptions, the orga-
on product differentiation with the goal of nization wanted to own everything so it
developing some type of ‘unique selling could control everything. Thus, few firms
proposition’ (USP) (Schultz, 1993). In focused on affiliations, alliances or even joint
other words, communication focused on ventures unless and except when required to
product positioning, product benefits and do so by government decree. The corpora-
product brands as the most important com- tion was seen as a single, stand-alone unit
munication values the organization had to where, although it might have a number of
deliver. When the corporate brand was divisions or business units, the goal was cor-
considered, it was thought of only as some- porate integration. That integration ranged
thing in which the financial community from the totally integrated automobile
had an interest, or perhaps as something manufacturing organizations of pre-Second
that lent some financial value to the pro- World War, to the integrated oil companies
duct brands. that had a brief flourish in the 1960s and
Until recently, that primarily North 1970s to the high-tech and dot.com ventures
American view prevailed. Few saw the of the 1990s. Every organization tried to
value of the corporate brand, particularly own everything and thus benefit from their
those at ‘product-branded’ firms such as ability to create revenue all along the so-
General Motors or Emerson Electric. As a called ‘value chain’. There was, therefore,

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Managing the Changes in Corporate Branding and Communication

little interest in bringing separate organiza- Further, communication was treated as


tions together, developing alliances, trying an organizational expense (Schultz and
to find ways to cooperatively build markets Walters, 1997). Thus, communication was
or even to build corporate brands. seldom viewed as an investment by either
In the corporate monolith, communica- the management, the board or even the
tion was the last place most senior man- employees and stakeholders. Communica-
agers believed value could be built on a tion and branding were expenses, pure and
cooperative basis. ‘We are who we are!’ simple. Thus, when the time came to cut
‘They are who they are!’ ‘We’re competi- expenses, the corporate communication
tors and we’re out to take their markets’, program was typically at the top of the list.
‘capture their customers’, ‘establish beach- In many cases, the corporate branding and
heads in their areas of strength’ and so on. communication allocation was often held
The focus was on corporate gain, not cor- as a ‘bottom-line reserve’ that could be
porate cooperation and the various forms accessed whenever the rest of the corpora-
of corporate communication reflected that tion was not operating up to expectations.
view. Corporate communication programs Thus, there was little commitment to any
tended to be related almost entirely to ‘tell- form of communication, particularly at the
ing the corporate story to the financial corporate level. Great plans were laid but
market’ in the hope that would impact or seldom executed.
influence share prices or influence competi-
tors in some way. Brands and Branding
Emanating primarily from North America
Communication as an Option and from FMCG companies, each and
Corporate branding and corporate com- every product was branded and thus each
munication in any form have traditionally and every product attempted to become a
been seen as a corporate option. That is, brand. The individual brand concept,
management, at their sole and total discre- developed and perfected by Procter &
tion, could either fund or not fund brand- Gamble in the 1930s through the 1950s
ing and communication programs. That (Schultz and Kitchen, 1999), was focused
was certainly true at the corporate level. on building entirely separate product
Since measurement or evaluation of any brands with separate organizations, activ-
communication programs was few and far ities, budgets and so on. That concept
between, most senior corporate managers reached its peak in the era of mass market-
and boards could not notice any difference ing and mass media from the 1960s
in the firm’s performance as a result of through the 1980s.
their communication investment decisions. Brand managers flourished. Each brand
If they invested in corporate communica- had a place in the market and each brand
tion, things stayed about the same. If they place was communicated separately and
did not invest in corporate communication, independently. The same company could
things were ‘samer’. Thus, corporate com- therefore bring four to six or more deter-
munication could be funded this year and gent brands to market, each with its own
not the next, or funded next year but formulae and ‘special ingredients’, packa-
ignored the following year etc. Corporate ging and distribution system, and of
branding and corporate communication course, with its own advertising and mar-
were like spigots, turned on when some keting communication program.
need was felt; turned off when no issues In this ‘product brand’ arena, the corpo-
needed to be addressed. rate organization was a detail, a non-entity.

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Schultz and Kitchen

In fact, the product brands worked to keep ing recognition that the corporate brand is
the corporate brand out of sight. The less important. Global firms such as Sony,
the connection between the various pro- Samsung, LG, Schneider and others have
duct brands, the better — at least insofar as shown that corporate brands can indeed
the consumer stakeholder group was con- have value and provide a differentiating
cerned. Thus, the less customers and consu- force in the marketplace among all levels
mers knew about the corporate parent, the of corporate stakeholders. Yet, the percep-
better. Thus, the corporate brand became tion persists, certainly in North America,
like the ‘empty raincoat’ that Handy epito- that corporate brands are nice to have, but
mized in his writings in the 1990s. P&G not really equal to the product brands.
was a shell, as was Unilever. Corporate That perception generally persists until the
meant nothing. The product brand meant organization attempts to build share in the
everything. Admittedly, communication of global arena. The result has been that in
the corporate entity and its performance many organizations corporate branding or
was important to other stakeholder groups corporate communication, when it was
(ie financial stakeholders, investors, capital used at all, was primarily in support of the
markets, influential business analysts, and product brands. It appears that practice still
so on), but not too important. continues today.
Along with this focus on product There may well be other organizational
brands, there grew up a whole mythology beliefs and operating principles that have
of how brands were built and maintained. had an impact on the development of cor-
The premise was that mass communica- porate communication programs over the
tion, primarily television, delivered to years. These are, however, the key ones.
mass audiences with a common message They have driven the manner in which
that was driven home to the ‘target companies and firms have communicated
market’ through huge investments in and have been instrumental in guiding the
media and promotion, was the way brands development of media systems and supplier
were built. Thus, the ‘brand-building organizations. Most of all, they appear to
model’ was developed. The problem was, have generated marketplace success. That
the model only worked for P&G, Unile- is, they worked because they were devel-
ver, Coca-Cola, Colgate-Palmolive, and a oped for a specific type of marketplace, a
few other package-goods firms. When the specific type of communication delivery
‘brand-building model’ was tried by other system and a specific type of corporate
corporate organizations, particularly those need.
that were selling services or whose values The problem today is that corporate
came from long-term relationships or need is changing and has been for the past
some type of business-to-business connec- decade. Much of that change has been
tion, the model failed, often miserably. driven by technology that has radically
Thus, senior management began to believe altered the communication landscape.
that the corporate brand had little value, Much of it has come from the develop-
could not be built with communication ment of new forms of corporate value sys-
and certainly could not be developed at tems and the attempt to include, not
any reasonable cost. Therefore, there was exclude, social priorities, concepts and ideas
no use in trying. much has come as a result of new knowl-
As a result, today there are corporate edge and learning. The newer and better
brands that are not managed at all, except approaches on the horizon are discussed in
by their stakeholders. Yet, there is a grow- the next section.

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Managing the Changes in Corporate Branding and Communication

OPENING THE NEW CORPORATE communication and branding in the years


UMBRELLA ahead (see Figure 3). These are not pro-
There is little question: communication is scriptive. Thus, each senior executive and
changing, and the changes are having and corporate communication director must
will continue to have a major impact on review and determine how they fit or
the way corporate communication pro- relate to his or her specific organization.
grams are designed, developed and deliv-
ered in the 21st century. Below are Dialog and Interactivity
outlined the changes that will be most There is little question that interactivity
important. A quick comparison shows they will continue to have a major impact on
are the counterpoints to the traditional the corporate organization (Molenaar,
approaches described above, but that is as it 1996). While the communication focus of
should be. The new sometimes replace the the past few years has been on the web and
old and sometimes the old adapt to a dif- development of internet sites, both of
ferent model. But, as a reminder, new which are commonly outbound systems,
wine should not be placed in old bottles. the major change in the future will focus
This paper has used the metaphor of the on ‘connectivity’. This means the hooking
corporate umbrella so far throughout. That together, sharing and building of increas-
concept is expanded here. The difference is ingly close relationships between the cor-
that the opening of a new corporate porate organization and its customers,
umbrella must be based on the activities, suppliers, alliance partners and such
concepts and approaches that are now through intranets, extranets and other elec-
increasingly visible, for they will only tronic systems.
grow and expand in the interactive and In many instances, these communication
networked 21st century. systems are evolving into on-going dialogs,
Here, the authors identify the eight most since they provide continuing give and
important changes that will drive corporate take between the various parties. Electronic

Figure 3: Opening the eight-section umbrella

21st Century
Corporate Communication

Customer Leading
Interactivity Global
Global with
value
Value comms
Comms

Integrated Intangible Alliances & Corporate


approaches
Approaches affiliations
Affiliations brand
Brand

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Schultz and Kitchen

interchanges that provide updates on to share information on all strategic and


inventory, manufacturing scheduling, parts managerial issues. Both programs are
supplies, and the like are a prime example operating in all countries where BT has
of these interactive, dialog-based types of a current market presence, and in other
connections. Viewed from a traditional strategically important countries around
sender-to-receiver model, communication the world.1
in today’s corporation never really stops. It 2 Dow Chemical: Dow is a global science
is continuous and on-going. As a result, and technology based company that
today and tomorrow, communication is markets its products and services for
not something the organization ‘does’. It is, customers in 168 countries. It has
instead, something in which the organiza- annual sales in excess of US$18bn,
tion is involved. employs 40,000 people, has over 121
The result of these ‘continuing dialogs’ manufacturing sites in 32 countries, and
between corporate representatives and the supplies more than 3,500 products. In
firm’s suppliers, partners, customers and 1997, Dow went through a process of
other stakeholders will be an increasing radical restructuring and reorganization
reliance on communication interchange. to create and sustain customer dialogue
This will lead to a decline in traditional and interactivity. Today, its strategic
outbound, directed ‘communication’ in business units are focused on customers
which the corporation says its ‘piece’ or and solutions and Dow capabilities, not
delivers its ‘message’ and then sits back and on plants, products and geographies.
waits for a reaction. The impact of interac- One Dow team is assigned to each
tivity on the organization is now and will, customer, and that team is empowered
in the future, be incredible as it forces the to fill that customer’s global needs,
organization to begin ‘listening’ to com- solve its global problems, and service
munication from others, not just ‘talking’ all its requirements no matter the
through advertising, public relations, direct geography. Note that the ability to
marketing etc. Traditional, corporate-con- solve customer problems is based on
trolled outbound communication will not building the physical and technological
disappear, however, but it will certainly be base on which dialogue and interac-
replaced to a great extent by these new tivity can flourish.2
interactive systems. Two short but telling
examples will help. Integrated Approaches
There is little question, the functional
1 BT Relationship Programs: UK-based structure of most organizations is being
British Telecommunications designed challenged by the new communication
new programs to build and enhance approaches. Hand-offs, piece-work, hier-
relationships with existing and potential archical silos, command and control man-
customers around the world. A tech- agement and separated units are and must
nical program (the Global Information be replaced by ‘processes’ and ‘systems’.
Exchange) designed exclusively for Everything is being connected or inte-
technological specialist functions in grated into everything else, around the
organizations and included a newsletter, world. The ‘integration’ of the organiza-
seminars, and an interactive website tion must be one of the key management
(www.gie.com). For senior-level goals of the 21st century. Therefore, the
managers, a nontechnical program (the focus must be on ‘customer relationships’,
Global Executive program) is designed ‘just-in-time’, ‘efficient customer response’

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Managing the Changes in Corporate Branding and Communication

and ‘electronic data interchange’. Those Figure 4: A new planning model


concepts will drive how and in what form
organizations are structured and how they Plan Develop Implement
Plan Develop Implement
operate. Even the time-honored strategic
business unit (SBU) will be under attack,
as it will become increasingly difficult for
senior management to separate the activ- nication director then packages those
ities, resources and returns of one unit messages in some way and delivers them to
from another for managerial review and the relevant stakeholders. In this model, the
support. communication director was always
Certainly, this process approach will attempting to ‘tell’ or ‘sell’ the corporate
impact and affect communication. The view. Thus, the model was simple. (1)
need to integrate all the various forms of identify the topic, (2) develop the commu-
communication has been accepted by most nication and then, (3) implement or deliver
enlightened organizations. Only the most it to the target audience, in other words,
recalcitrant functional managers are still the people, firms or stakeholders the orga-
attempting to stem the tide. While some nization wanted to talk to, with or at.
functional specialists will undoubtedly be In this approach, there was no input
needed in the future because of the differ- from the stakeholder in terms of what
ences in the various forms and types of communication was wanted or needed or
delivery systems, such as advertising, they would like to hear. The organization
public relations and the like, there is little made all those decisions. Thus, the organi-
question the development of communica- zation ‘talked’ and stakeholders were sup-
tion processes and flow systems will con- posed to ‘listen’.
tinue to grow. Thus, the corporate In the new, interactive, networked mar-
communication director of the 21st century ketplace described, the most important
will become not just a ‘communicator’ but communication task is to create some type
a ‘process manager’ as well, with all the of dialog. Give and take between the firm
inherent management skills that type of and its employees, channel partners, affili-
activity will require (a comparison of ates, governments, customers and pro-
separatist versus integrated approaches is spects. In a dialog, there are reciprocal
shown in Table 1). needs and reciprocal requirements. To
The corporate communication director learn those needs, the communication
will also need to develop models of effec- director must learn to listen, not just
tive communication. Historically, organiza-
tions have been organized on a command Figure 5: The sense-adapt-response model
and control model, and the same model
has been adapted for corporate communi-
cation development. Typically, it is a Sense
Sense
‘plan-develop-implement’ approach (see
Figure 4).
Adapt
Adapt
Reversing the communication flow
The communication director either identi-
fies or is given the corporate direction and Respond
Respo nd
messages that management feels are impor-
tant to various stakeholders. The commu-

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Schultz and Kitchen

master how to talk. The change is illu- which organizations must operate or risk
strated in the ‘sense-adapt-respond’ model the loss of global customers. In short, every
shown in Figure 5. organization will be attempting to achieve
As shown, communication is planned the ‘easy to do business with’ goal that is
based on ‘sensing’ the information or mate- demanded by customers and prospects.
rial the stakeholders need. Then, the orga- This attempt is needed by firms that are
nization must adapt to those needs in order perceived to be ‘local’, as they too will be
to be able to respond. Finally, the firm influenced by the marketing strategies and
must be able to deliver those wanted, tactics of larger businesses.
needed and desirable messages to the var- The impact of this global marketing, dis-
ious stakeholders across the broad spectrum tribution, pricing and servicing model is
of organizational communication. only now being felt by communication
This ‘sense-adapt-respond’ approach groups. The need for cross-cultural, cross-
requires new skills on the part of the com- border, and cross-language capabilities in
munication director. He or she must be all communication units is rapidly emer-
constantly listening to the various stake- ging. The requirements for instantaneous
holder groups and synthesizing that infor- communication around the world are con-
mation for senior management. Making tinuous. The capability of the firm to plan,
suggestions on how to adapt the organiza- develop and deliver communication pro-
tion to meet the spoken or unspoken needs grams becomes less important as the need
of the various groups and then responding for skills and abilities to sense customer and
through the most appropriate communica- consumer communication needs, adapt
tion channels and forms. Typically, these communication messages, and to respond
‘listening, adapting and responding’ skills to customers, markets, and stakeholders on
are new to the corporate communication a real-time basis becomes mandatory. This
function. But, new skills are needed for a sense-adapt-respond model will increas-
new marketplace and that is the challenge ingly be the key element for on-going cor-
of corporate communication in the 21st porate success (see Figure 5).
century. Thus, many of the communication pre-
paration and planning approaches that have
Global — Every Organization is Now historically been used must give way to
Global new, innovative, online, instantaneous
There is no choice. Today and tomorrow, research and data gathering methodologies
there is and will be no way to limit the that are just emerging. The old, established,
flow of information about products, ser- traditional communication systems must
vices and activities. Global, multinational give way to ones that not only span the
and international organizations that once globe, but, at the same time, allow the
operated on a restricted geographic basis, ie manager to drill down into local situations
on country-by-country management sys- as needed or required.
tems, have found their customers are driv-
ing them to a global view, and they are Intangible Values
helpless to stem the tide. Differential pri- As the value of the organization moves
cing or distribution schemes developed for more and more into the intangible areas of
unknowing customers in individual coun- intellectual property, brands, patents,
tries are no longer acceptable. One solu- know-how, people skills and the like, the
tion, one price, one distribution structure, focus of the firm must move inexorably
and one billing system are the formats on toward the management of intangible

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Managing the Changes in Corporate Branding and Communication

assets and away from the traditional focus those products and services may change,
on plants, factories, inventory, distribution the need for the organization to gain and
systems and the like. Thus, senior manage- maintain customers does not.
ment will need to be able to manage the The same is true of the financial commu-
new ‘corporate value’, much of which will nity. The value of the organization is not its
be bound up in the just emerging methods current share price. Rather, the value of the
and approaches to value creation and mea- organization is the confidence and accep-
surement from the accounting and financial tance of shareholders in the present man-
areas. agement’s capabilities for the longer term.
Chief among the new skills management It will not be the number of employees the
will be the capacity and capability to com- organization has, it will be their capability
municate the new, forward-looking, cor- to gain and maintain customers and their
porate relevance that is being created in the income flows that will count. Thus, the
form of shareholder value. Where once the focus of the communication programs must
‘balance sheet’ spoke for itself with hard, shift from that of products and services, and
verifiable, tangible assets as the value base, plants and corporate ‘stuff’ to customers
as the organization inexorably shifts to the and prospects, stakeholders, income flows
intangible, and more difficult to communi- and shareholder value. That is a radically
cate measures of future value, the commu- different approach to organizational com-
nication manager becomes one of the key munication, because it requires the commu-
elements in the new structure. The firm’s nication to be focused on explaining the
ability to explain, illustrate, teach and even value of external customers and stake-
persuade the financial community, associ- holders, not on how well internal managers
ates, affiliates, and even employees of these and products are managed.
new corporate values becomes one of the Today, obtaining corporate information
key elements in the corporation’s manage- by communication managers is relatively
ment toolkit. The corporate communica- easy. Most of the knowledge the commu-
tion manager will and must play a key role nication people will need is already inside
in all these tasks. the firm. The challenge of getting informa-
Communication, like the new corporate tion about the external stakeholders,
assets, is often believed to be ‘intangible’ whether they be customers, governments,
by current senior managers. Therefore, the environmentalists or communities, is much
capability of the 21st century corporate more difficult and requires an entirely new
communication director to put ‘substance’ skill set. But, that will be the task of the
inside this presently empty corporate rain- new corporate communication manager —
coat becomes a key contribution to the on- thus, new skills, new tools and new
going success of the organization. approaches. All will be critical in the man-
agement of 21st century corporate brand-
Customer Value ing and communication programs.
Most corporate managers now understand
the real sustainable competitive advantage Alliances and Affiliations
of their firm is the ability to gain, retain, Traditionally, senior managers have
grow and migrate customers and their focused on managing employees and per-
income flows over time. Products and ser- haps a limited number of distribution part-
vices are just the current means by which ners. In most cases, management had
the organization gains income and ulti- control or power over those individuals or
mately profits from customers. While groups. Therefore, the task was relatively

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Schultz and Kitchen

straightforward, that is, it was based on the lead element in the overall corporate
command and control. Employees could strategy. Thus, investments in and returns
be coerced or fired. Channels could be from communication will be some of the
restricted or their franchises canceled. But, top priorities of many firms. Indeed, the
in the new world of alliances, partnerships, corporate communication director will
joint-ventures and affiliations, the situations often be working and perhaps sometimes
are commonly ones of equal power, or at even guiding senior team managers.
least shared power between the firm and its As the management of customers and
partners. Thus, today’s managers must customer groups becomes the primary
become negotiators, referees, consensus focus of the firm, more than the operation
builders and even cheerleaders. That is cer- of plants and factories or the direction
tainly a new role for many of the ‘hard- of internal employees, communication
nosed’ managers of the past. It requires dif- becomes one of the key tools the corpora-
ferent skills, capabilities and even emotions. tion will employ. As before, the ability to
These are not areas where edicts, directives listen, learn and respond to customers and
or even ‘strong management recommenda- stakeholders becomes a critical skill set for
tions’ carry much weight. Thus, the corpo- the firm. Similarly, the ability of the orga-
rate communication director is likely to nization to create and maintain an ongoing
find many new challenges in guiding dialog with all stakeholders becomes the
senior management in these new, often primary way in which marketplace success
‘communication-based’ situations. will be identified and gauged.
From another view, internal and cross- Inherent in this is the need for the orga-
company or cross-SBU communication nization to develop new, different and
has not been something in which corporate more relevant methods of measuring the
communication directors have historically impact and effect of its communication
had much of a hand. That fell to other programs. As communication becomes an
internal people. Yet, in the 21st century organizational investment, and therefore is
arena, corporate communication directors managed like any other asset-producing
must play a key role in assisting senior activity, budgeting and measurement of
managers with the often delicate commu- returns become critical skills. In this sense,
nication tasks that can keep an alliance, the ability of the corporate communication
affiliation or other rather fragile relation- manager to identify, value and determine
ship, not just functioning, but thriving. investment levels and measure results
While this internal communication becomes just as important as the role strate-
initiative may be a new role for the corpo- gic planners and CFOs fill today. Indeed,
rate communication director, it is not a being able to measure and evaluate the
new one in every sense. It is simply that financial value of the corporate brand is
the communication skills will have to be one of the key skills corporate communica-
applied in a new arena and, in most cases, tion managers must master going forward.
on a much larger scale and at a more deli- There is no question, communication
cate stage. must become a key skill in the 21st century
organization. For the most part, it must
Leading with Communication lead rather than follow the strategic direc-
In many organizations, both large and tions and actions of the firm. In many
small, communication has often been an cases, this will be a totally new role for the
after-thought. In the emerging 21st century corporate communication director but one
arena, communication will commonly be that must be not only filled, but mastered.

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Managing the Changes in Corporate Branding and Communication

Corporate Brand corporate communication director of the


The 21st century changes impacting the 21st century organization must develop.
corporate brand are enormous. As the firm
moves from a focus on product brands to MANAGERIAL RECOMMENDATIONS
highlight the corporate brand, major risks This paper has illustrated how many cor-
are incurred and major advantages gained. porate executives, or consultants who ser-
By operating under a corporate brand, the vice their needs, may be operating on the
firm risks total marketplace disaster should basis of outworn and outmoded communi-
things go wrong, as they did in the case of cation practices and assumptions, or put
Firestone (Bradsher, 2001). By the same another way using a corporate communication
token, the advantages of corporate identifi- umbrella where the ribs or supportive
cation, affiliation and value are increased. mechanisms are insufficient to protect the
There is little question that strong corpo- corporation from the vagaries of the cur-
rate brands such as Microsoft, FedEx and rent competitive environment. These out-
General Electric have done much to build moded assumptions and practices are
the global value of the organization. IBM, summarized in the earlier argument relat-
Pfizer, Starbucks and UPS do not have to ing to Figure 2 and the accompanying text.
explain what they do, all the relevant sta- Likewise, using the umbrella metaphor, the
keholders know. By the same token, a authors have directed management atten-
strong corporate brand such as Virgin, tion to the assumptions and required prac-
Kraft or Nestle allows those companies to tices associated with opening the corporate
move into new and exciting areas where umbrella in the 21st century.
the recognition of their name often paves Comparing the ‘ribs’ (ie management
the way for instant or near-instant success. practices and assumptions) of the two
Corporate brands have value, for they umbrellas reveals that managers must, as a
communicate a mass of virtues and benefits consequence of the prevailing competitive
to customers, consumers, shareholders, and general social environment, consider
stakeholders and other interested parties. the corporate umbrella (and its associated
But, managing a corporate brand is not an ribs) as a metaphor:
easy task. In too many cases, interested par-
ties try to crawl under the corporate brand — to facilitate transition from where they
umbrella to take advantage of its coverage are, and where the business is now, to
and reputation although they may not be where they and it need to be
deserving of the coverage the corporate — to facilitate recognition that communi-
umbrella provides. In other cases, business cation does not end with but is contin-
units or product managers refuse to take uous with customers and stakeholders
on the corporate cloak, believing that their — to work to overcome organizational
name, their recognition, their history and constraints whether they be organiza-
their future are greater by going it alone. tional, geographic, psychological, or
One of the key skills of the corporate com- behavioral
munication director of the 21st century — to see the need for corporate communi-
must be the capability and capacity to cation to be underpinned by research-
recognize what belongs under the corpo- rich stakeholder databases
rate umbrella and what does not. To — to recognize the clear need for a recog-
embrace those who deserve and to reject nizable interface between corporate and
those who do not. When all is said and marketing brand communication, and
done, that may be the most critical skill the — to undertake the required training in

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Schultz and Kitchen

the tools, technologies, and tactics asso- operating in the 21st century marketplace
ciated with the new corporate will play a key role in ‘filling the corporate
umbrella. This requires investment by raincoat’. Further, it is believed that corpo-
the firm and senior management in rate communication and corporate brand-
such training. ing will have much value by allowing the
organization to toss away the raincoat and
This paper has illustrated not one, but two, raise the corporate umbrella through effec-
corporate umbrellas. The umbrella meta- tive corporate communication programs,
phor in both its old unreformed state and developed and delivered both internally
its new renaissance state, together with the and externally. The opportunity exists, all
associated ribs, constitute ways of concep- the CEO and the corporate communica-
tualizing or theorizing information in the tion manager need do is seize the handle
domain of corporate communication. It is and open the umbrella — moving quickly
invited that colleagues in the domain of and effectively into the new world of 21st
corporate communication help test the century corporate branding and corporate
validity of the old and new umbrellas in communication.
the actual managerial thinking and prac-
tices in companies around the world. The ACKNOWLEDGMENTS
metaphor is ripe for further development. *The authors acknowledge the kind per-
Certainly, it is anticipated that the cate- mission of Palgrave-Macmillan Publishers,
gories or ribs described here can perhaps be Basingstoke, England to cite materials
presented more clearly, or there may be from their book Raising the Corporate
additional ribs, which have not been ade- Umbrella (2001), on which this paper is
quately identified or described. based.

CONCLUSION NOTES
The discussion now ends with these views 1 An extensive case on BT and its global relation-
of the closing of the historic corporate ship management program is found in Schultz,
umbrella and emergence of the new corpo- D.E. and Kitchen, P.J. (2000) ‘Communicating
Globally: An Integrated Marketing Approach’,
rate umbrella of the 21st century.
Macmillan Press, London, 217–226.
The authors believe there is value in the 2 An extensive case on Dow Chemical Co is found
present-day corporation. The corporation, in Schultz, D.E. and Kitchen, P.J. (2000) ‘Com-
in its multinational and global develop- municating Globally: An Integrated Marketing
mental phase, has been one of the most Approach’, Macmillan Press, London, 235–239.
important and impactful concepts in
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