Corporate identity is “the identity attributed to an organization by its more powerful managerial group”; organizational identity represents “shared interpretive schemes” that other groups such as members, stakeholders, users, or the general public collectively construct to provide meaning to their experience (Rodrigues and Child, 2007; 887).
Changes in corporate identity can be stimulated by external pressures as interpreted by corporate managers (Chreim, 2005). Divergences between the corporate identity and the desirable organizational identity as perceived by external parties such as citizens or governments lead to “identity dissonances” (Chreim, 2002). When this phenomenon arises, managerial responses search to restore consistency.
The ability of top managers to construct and sustain a corporate identity discourse depends on two main factors: mobilisation and legitimacy.
Mobilisation is a concept applied to “the development of collective consciousness and the energizing of action in social and political movements” (Newton, 1999).Firm mobilisation capabilities help sustain managerial identity. The counter-mobilisation capabilities of other interest groups that are opposed to a particular identity compromise it (Rodrigues and Child, 2008: 892).
Legitimacy is a sociological term that denotes “a condition of positive valuation and acceptance enjoyed by persons in positions of power, and by the organizations through which that power is exercised” (Rodriguez and Child, 2008: 893). Habermas introduced the concept of ‘legitimacy crises’ to define “situations in which individuals or organizations in power are unable to meet social expectations” (1975).
Corporate identity is used as a claim for legitimacy for the organization. The identity gains legitimacy when it is embedded in a discourse that relates sympathetically to the wider context. Thus “conscious and explicit attempts on behalf of the organization to justify what it is and what it stands for are aimed at securing legitimacy for the ideas behind a corporate identity and the actions associated with it” (Rodriguez and Child, 2008: 893).