Interactive Network Branding: Creating corporate identity and reputation through interpersonal interaction

2.1 The current state of corporate brand research

Corporate branding can be described as a multidisciplinary field of study (Balmer, 1995) that has consequently proved its usefulness for both academia and practice (Biraghi and Gambetti, 2015). However, since its appearance, the multidisciplinary roots of the concept have also caused considerable conceptual confusion. Three major shifts in the concept of corporate branding can be identified (for full description see Biraghi and Gambetti, 2015). The first shift relates to branding strategy moving its focus from products to an organizational perspective (e.g. Balmer, 2001), and in the second shift moving its focus from marketing to corporate strategy (e.g. Urde, 2003; Abratt and Kleyn, 2012). Finally, the third shift offers a stakeholder-centric perspective highlighting a relational view where the corporate brand emerges in ongoing dialogue between the company and its stakeholders; from this perspective, branding as an activity is no longer considered to be communication managed by a single company (Biraghi and Gambetti, 2015). This final shift concurs with the suggestion of Melewar et al. (2012) to move away from the traditional static perspective on corporate brands, and to adopt a dynamic, processual view.

In this paper, we contribute to the third shift, where corporate branding is defined as “a relational and social process that relies on the constructionist role of communication based on a collaborative sensemaking process between the company and its stakeholders” (Biraghi and Gambetti, 2015, p. 264; see also Cornelissen et al., 2012). This relational process (Hatch and Schultz, 2003) reflects partners’ expectations, needs, and plans (Biraghi and Gambetti, 2015), as well as the company’s brand promise (Balmer and Greyser, 2003; Balmer and Gray, 2003). In line with this view, we adopt a social constructionist approach to branding, which presents “corporate brands as vehicles of meaning that emerge from social interaction between the company and its environment” (Melewar et al., 2012, p. 601; see also Leitch and Richardson, 2003). Given that branding occurs in interactions between the company and its stakeholders, and that corporate brands are ultimately formed in the minds of individual people, we assume that they are exposed to constant refinement and change. This implies that corporate brands are not defined solely by a single firm and then communicated to different partners and stakeholders, but instead, they are created through a process of interaction.

Corporate identity and corporate reputation are selected as the key concepts denoting corporate branding process. Brown et al. (2006) define corporate identity and reputation as individual level perceptions, while corporate image functions better at the organizational level of analysis. Corporate identity and reputation also lend themselves to be studied through and interaction perspective as continually changing and changed properties, while image has a static and cognitive connotation, representing a state that cannot be actively changed. We, thus, see the identity and reputation associated with companies as important “means of meaning creation” (Abimbola and Vallaster, 2007, p. 342). As essential components of corporate brands, corporate identity and reputation emerge in interaction, mutually reinforcing each other, and denoting a direct connection between the internal and external stakeholders of the company (de Chernatony and Harris, 2000).

Corporate identity is defined as an inside view on the company, denoting how employees internally perceive their company and how they aim to present it to the outside world (Hatch and Schultz, 1997; Gioia and Thomas, 1996; Simões et al., 2005). In other words, the corporate identity is built primarily through internal interactions, involving employees at different hierarchy levels. However, specifically in small companies, identity is closely connected with previous experiences and the beliefs of the founder, who acts as the key responsible person of a company (Rode and Vallaster, 2005; Sandbacka et al., 2013). The founder’s experiences and perspective on the world strongly shape the firm’s identity.

Corporate reputation, in contrast, is defined as an overall perception of a company, created externally by stakeholders, and potential and current business partners (Abratt and Kleyn, 2012), i.e. by individuals but also by groups, or even networks (Balmer, 2001). It represents mental associations (Brown et al., 2010; Dacin and Brown, 2002; Gioia et al., 2000), or perceptions built over time (Gotsi and Wilson, 2001). As an overall perception of a company reputation reconciles the multiple individual perceptions of an organization, but reputation can also be seen to emerge within different interest groups, since “social interaction provides a basis for shared impressions, beliefs, and attitudes” that motivates group action (Bromley, 2002, p. 36). In a business network context, La Rocca and Snehota (2016) argue that corporate associations are even business relationship specific. In this study, we adhere to the reconciled group view, since it captures best the original meaning of reputation as a continuously generated and changing in interaction amongst external actors, and thereby differs clearly from other relationship specific perceptions, such as attraction, trust, or perceived fairness.

When discussing identity and reputation, as perceptual elements of corporate brands, the crucial role of individual actors cannot be ignored. Much of the previous literature has highlighted the importance of individuals, especially employees, for corporate branding processes (e.g. de Chernatony, 2001; Hatch and Schultz, 2003; Balmer and Gray, 2003). Through interpersonal interactions, these firm representatives can either “make or break a corporate brand” (Ind, 1998, p. 324). Since brands are created in the minds of people who represent their companies, they are thereby becoming perceptions of business actors. The perceptions of corporate brands are founded on products and services, the company environment, staff behavior, and communication (Olins, 2000). In elaborating the concept of INB, we concentrate on the role of individuals, including employees but also managers, founders, and any individual representatives of companies and organizations.

In corporate branding literature, identity and reputation are seen to affect one another (Cornelissen et al., 2012). Internal identity can be influenced by perceptions of external actors, i.e. reputation (de Chernatony and Harris, 2000; Dutton et al., 1994; Gioia et al., 2000), and as Törmälä and Gyrd-Jones (2017, p. 76) found in their empirical study of B2B new ventures, “brand identity develops over time through a reciprocal sensemaking and dynamic interactions between company and the key external stakeholders.” Finally, if managed properly, a created identity can lead toward perceived attractiveness and recognition of the firm, and can influence its competitive position in the market (de Chernatony, 2001).

2.2 The IMP group studies on brand issues

Branding has not been a favored theme among IMP researchers. To demonstrate how branding and business network thinking have been combined in research, we first conducted a short analysis of the research available at the IMP website (IMP Group, 2017) where 2,872 conference papers presented in IMP conferences over the period of 2000-2017 can be found. The results showed only 43 papers with the concept of “brand” in their title (1.5 percent), and 54 papers with “brand” in the abstract (1.9 percent). When searching for the word “corporate brand,” only seven papers could be found (published later in journals). The studies focused on co-branding strategies used by companies to increase their value in B2B markets (Bengtsson and Servais, 2005), the role corporate brand image plays in attracting or identifying potential business partners (Blombäck and Axelsson, 2007), and the participation of network actors in the branding activities of SMEs (Mäläskä et al., 2011). Vallaster and Lindgreen (2011) advocate a dynamic, actor-level perspective. Drawing on strategy-as-practice research, they observed the formation of corporate brand strategies through personal interactions and ongoing dynamic processes. In another study, identity creation was examined as an evolutionary process among different actors of a business network (Lemmetyinen and Go, 2010). In addition, researchers have provided some instructive reviews on B2B branding research (see, e.g. Keränen et al., 2012; Leek and Christodoulides, 2011).

Delving a little deeper into IMP studies, we then examined a broader range of studies drawing on the business network approach. It can be concluded that IMP scholars have both examined corporate brand-related issues and dealt with concepts that can be interpreted as implying the idea of a corporate brand. However, they have rarely used the original brand concepts or interpreted them in a similar manner as branding scholars. The brand-related concepts and expressions that have been used are, for instance, “attractiveness of a business partner” in Anderson et al. (1994), corresponding to the corporate reputation as defined by Abratt and Kleyn (2012), and an impression that other exchange partners have of the focal firm. At the same time, the paper written by Anderson et al. (1994, p. 4) introduces and elaborates on “strategic network identity” describing it as: “the overall perception of its [company’s] own attractiveness (or repulsiveness) as an exchange partner to other firms within its network context.” This definition combines the concepts of identity and reputation. However, although the study proposes measures for capturing network identity, the major part of the measures correspond to the definition of reputation, such as, “Due to our supplier relations, our firm is regarded as one of the most attractive suppliers to our present and potential customers” (Anderson et al., 1994, p. 12).

Another article from the network literature elaborates on “corporate associations” (La Rocca and Snehota, 2016) and their development in business networks, by focusing on the mutually perceived identities of firms. This goes hand in hand with “identities in networks” presented by Huemer et al. (2009), or “network identity” (Öberg et al., 2011; Olkkonen, 2001), and “organizational identities” (Huemer, 2012), all of which involve mixed aspects of identity and reputation, where identity is mentioned, but typically described as reputation. Additionally, some papers use expression such as “being recognized and accepted” (La Rocca and Perna, 2014), “having a strong brand name” (Öberg, 2012), and “boosting retailer brands” (Mouzas and Ford, 2006), without a direct connection or reference to branding literature on reputation. Obviously, such misalignment is due to different paradigmatic views and the resulting unwillingness to refer to the concepts of another school of thought.

To summarize, corporate branding literature posits a distinction between identity being an internal and reputation being an external perception of the focal company. The IMP School, in contrast, has not made a clear boundary between the company and its external environment. Research has focused on interaction and relationships between business firms, following the inherent logic of network studies (e.g. Håkansson and Snehota, 1995; Håkansson et al., 2009; see also Brass et al., 2004). Therefore, while focusing on the external context of business actors, IMP scholars have used branding concepts in a mixed manner. Motivated by the conceptual ambiguities and the scarcity of corporate branding research in business network studies, we deliberately use branding literature and integrate the idea of corporate branding into the theorizing of business networks. This is done in the next section.

3.1 The importance of interpersonal interactions

The concept of an INB implies a perceptual approach to business networks at the level of individuals. These individuals and groups of individuals, start, develop, maintain, and conclude business relationships with other companies (e.g. Håkansson and Snehota, 1995). As Guercini et al. (2014, p. 929) highlight: “The interaction behavior of individuals who represent two businesses when they meet is an important facet of business relationships.” Business relationships are, therefore, essential for mutual development and learning, they create a meaning for each company in a business network, and they are a necessary part of business accomplishments. Especially in the context of SMEs, individuals are often role models that strongly influence the creation of corporate identity and reputation (Abimbola and Vallaster, 2007). In other words, corporate identity is usually a replication of the founder’s personality (Olins, 1978), while reputation is a result of the founder’s interactions with the company’s business partners (Fombrun and Rindova, 2000).

INB follows the reasoning that in order for business activities to be carried out and resources utilized and developed, companies need individuals (Axelsson, 2010; Guercini et al., 2014; Halinen and Salmi, 2001; Medlin and Törnroos, 2008). Moreover, as pointed out by Håkansson and Snehota (1995, p. 192): “It is individuals who endow business networks with life […] who bring into the relationships their intentions and interpretations upon which they act.” In order for a company to develop its corporate brand in business markets, human representatives should be responsible for managing brand relationships (Gupta et al., 2010). With this in mind, the actors in INB are human actors, i.e. employees of companies, such as sales personnel, or marketing people, whose main task is to communicate with individuals from other companies. In addition to these actors, the directors of companies and managers on various levels play an important role, especially for the development of business relationships. These individuals represent their companies, act on their behalf, interact with other representatives, use the resources, and perform business activities. In other words, they create the basis of interpersonal interactions in business networks.

This standpoint is crucial for understanding identity and reputation as perceptual concepts. Individuals can be understood as boundary spanners in networks, who enact and influence corporate identity and reputation creation through their interactions with other actors (Abimbola and Vallaster, 2007). However, when analyzing the creation of these brand perceptions, it is important to distinguish between the following three types on interpersonal interactions:

1. Internal interactions – denote interactions between individuals who are part of the focal company. Interactions, thus, occur inside the company and involve individuals from different positions and functions, or hierarchy levels. This perspective of interpersonal interactions contributes to corporate identity development, which is at its core an internal process (Rode and Vallaster, 2005; Simões et al., 2005; Gioia et al., 2000).

2. External interactions – correspond to interactions between individuals who are not part of the focal company. These representatives of other companies and organizations are either directly or indirectly connected to the focal company. The process of interaction consist of word-of-mouth, referrals, references, and different perceptions created in the minds of individuals that have a direct bearing on the focal firm’s reputation (Brown et al., 2010; Dacin and Brown, 2002; Gioia et al., 2000). These interactions contribute to the creation of reputation in business networks, referring to processes that are external to the focal company.

3. Boundary spanning interactions – refer to interactions between company representatives and external actors, i.e. to interactions that occur at the borderline between a company and its network environment. Typically, sales people and buying representatives act in such boundary spanning roles for their companies. As Geiger and Finch (2009, p. 616) highlight: “Sales personnel develop and act on and within a complex pattern of relationships with other companies as well as with their colleagues in their own organization, making exchanges and forming identities within and across these companies as well as within and across markets.” In these interactions, the internal identity formation and external reputation creation collide and affect each other (see, e.g. de Chernatony and Harris, 2000; Dutton et al., 1994; Cornelissen et al., 2012). The identity of a company can be strengthened or challenged through business interaction and the reputation can, respectively, be grounded more firmly on the experienced performance of the company (e.g. Abimbola and Vallaster, 2007; Ojasalo et al., 2008). The core of INB process is found at this interface, i.e. in business relationships and in interactions with other companies. Figure 1 illustrates these three types of personal interactions that are relevant for the INB process.

By choosing the INB perspective on branding and networking, individuals become the key drivers of action (e.g. Axelsson, 2010). This is especially relevant for SMEs, in which the representative often bears the whole burden of the company (Abimbola and Vallaster, 2007). In these cases, one individual is responsible for most of the business actions and interactions, and, therefore, his/her social network connections are crucial for the firm existence and positioning, as well as for the development of corporate identity and reputation. Ultimately, it is often not clear what “individual” refers to, and where the line can be drawn between the organizational and individual level (see La Rocca, 2013). For instance: “[…] the individual not only acts on behalf of the organization in the usual agency sense, but it also acts more subtly, ‘as an organization’ […] as a result, individual behavior is more ‘macro’ than we usually recognize” (Chatman et al., 1986, p. 211). The INB concept suggests that an actor embodies individual and organizational levels nested within each other and enmeshed in a way that one cannot exist without the other.

3.2 Toward a process model of INB

Based on the preceding conceptual elaboration and the input from corporate branding and business network literature, we propose a processual model of INB (see Figure 2).

The model illustrates the ongoing process of INB that occurs in business network settings where a company interacts with its business partners and creates a corporate brand. Corporate branding occurs as an integral part of business networking through two key processes: identity creation and reputation creation. Identity and reputation are created through the perceptions of the individuals who act on behalf of their companies and interact with each other. Identity is formed in internal interactions within a company (Rode and Vallaster, 2005; Simões et al., 2005; Gioia et al., 2000), and refers to how employees (including managers and potential founder members) internally perceive their company and how they aim to present it to the outside world. At the same time, in external interactions, people outside the focal company are communicating with each other, thereby creating a reputation for the company (Abratt and Kleyn, 2012; Brown et al., 2010; Gioia et al., 2000). Reputation refers to an overall perception of a company, created externally in a business network by potential and current business partners. The creation of identity evolves around the following questions: “How do we perceive our company?” and “How do we want to be perceived?”, while reputation creation relates to the questions of “How do others perceive us?” and “How do they evaluate our action?” (cf. Brown et al., 2006). All this indicates the interrelatedness of business networking and branding as processes, and demonstrates that ultimately, identity and reputation creation are inseparable parts of networking. This, however, does not mean that INB is always positive. Instead, interpersonal interactions can also weaken, or even destroy the identity and reputation of a company, implying its positive and negative effects on corporate branding.

The social constructivist view on corporate branding is the cornerstone of the model (Biraghi and Gambetti, 2015; Cornelissen et al., 2012). Branding is seen as a social and relational process that emerges in different interpersonal interfaces. As representatives of their companies, business people interact and communicate with each other and thereby create perceptions of their corporate identity and reputation (Koporcic and Törnroos, 2015; Koporcic, 2017). These perceptions are importantly influenced by experienced company performance (e.g. Abimbola and Vallaster, 2007; Ojasalo et al., 2008). In the model, these interpersonal interactions are divided into three types: internal, external, and boundary spanning.

Internal interaction occurs within a company between employees, and external interaction amongst outsiders that are either directly or indirectly connected to the focal company. The boundary spanning interaction at the borderline of the company and its environment forms the key domain of interaction for corporate brand creation. At this interface, personal interactions with outsiders challenge the internal view but also provide a channel to affect their perceptions, i.e. reputation, through actual company performance (Geiger and Finch, 2009).

Finally, perceptions of a corporate brand affect the position of the company in its business network (Koporcic and Törnroos, 2015; Koporcic, 2017). A strong corporate brand leads to better opportunities to achieve a desired position in a market (see Figure 2). In the IMP view, the network position has been seen as a structural outcome of networking processes, a sum of a company’s relationships with other actors (Johanson and Mattsson, 1992; Anderson et al., 1998; Abrahamsen et al., 2012). These relationships define the roles and obligations of a company vis-a-vis other companies, and to be changed strategic action would be necessary. INB brings a new approach to the concept. The network position created through INB process is not only a structural outcome of business relationships but is also an outcome of perceptual and intangible brand elements, i.e. corporate identities and reputations.

Network position is seen as changing and dynamic, i.e. an emerging outcome of branding and networking processes. However, besides being influenced by the corporate brand, a network position also has an effect on the corporate brand, i.e. reputation and identity (see the two-headed arrow in Figure 2). A strong and powerful position offers possibilities for further enhancement of a corporate brand, and depending on how such opportunities are used, can either create a more distinctive or an ill-defined identity, or improving or worsening the company’s reputation.

The model describes corporate branding as an emergent process. This does not mean, however, that a corporate brand cannot be influenced by the company. The concept of INB presumes that business interactions organically shape corporate brand identities and reputations, whether this is the company’s aim or not, but that a CB may also be the result of purposeful, engineered branding activities by the focal firm and its partners (e.g. co-branding strategies, Bengtsson and Servais, 2005).

5.1 Implications for research

Theoretically, the study contributes to the latest major shift in corporate branding literature that highlights the importance of a relational view where a corporate brand emerges in ongoing dialogue between the company and its stakeholders, and where branding is no longer considered as communication managed by a single company (Biraghi and Gambetti, 2015). As an alternative to the corporate communication view, the study offers an interaction approach to branding that together with a social constructionist perspective is used to create an understanding of how corporate brands emerge in interpersonal interaction. The study answers the research call of Melewar et al. (2012), by providing an understanding of corporate branding as a process, and thus complements the static view of corporate brands prevalent in CB literature.

Even more importantly, the study adds to the current IMP research by integrating the idea of corporate branding and the concepts of identity (Simões et al., 2005) and reputation (Abratt and Kleyn, 2012) into its realm. Here, we follow the path paved by Lemmetyinen and Go (2010) and Mäläskä et al. (2011) with the aim of bringing further clarity to the concept of corporate brand in business network research. The offered process model of INB describes, in specific, how corporate branding emerges as an outcome of interpersonal interactions in business network settings. The model further develops the concept of INB proposed by Koporcic and Törnroos (2015). Being perceptual and socially constructed, the concept of INB accentuates the role of individuals in corporate brand creation. As a result, three types of interpersonal interaction are identified: internal, external, and boundary spanning. By stressing the role of individuals, we participate in the recent discussion within the IMP School, where the concept of “actor” has been problematized (Håkansson et al., 2009; La Rocca, 2013). By presenting individuals as the key drivers of branding, the study creates a new understanding of the role of individuals in business interactions, answering to the calls by Axelsson (2010) and Guercini et al. (2014). Individuals represent both themselves and their organization at various interfaces and at the same time, implying that “actors” are more than just a single unit of analysis – a company or an individual. The model also complements the overly structural view of the concept of network position, attaching the intangible element of the corporate brand into it (cf. Johanson and Mattsson, 1992; Abrahamsen et al., 2012).

Proposing INB as a relevant branding approach to SMEs, the study challenges the belief that only large corporations that have major budgets and dedicated branding departments can conduct branding activities in business markets. On the contrary, we argue that SMEs can afford branding activities, but these should be executed through individuals, especially in boundary spanning interactions. Supported by recent empirical research from SME context (e.g. Koporcic, 2017; Mäläskä et al., 2011; Rode and Vallaster, 2005; Sandbacka et al., 2013; Törmälä and Gyrd-Jones, 2017), we suggest that INB can be applied to SMEs, start-ups, and actively internationalizing companies who seek a position in new and typically foreign markets. As a business activity, INB denotes an emergent process, making the concept particularly relevant for companies that do not yet have an established or strong corporate brand in the market. By acknowledging both organically emerging and intentionally planned branding activities as part of INB, the study builds bridges between corporate branding and IMP as research paradigms, and draws the research closer to the reality experienced by managers in SMEs.

5.2 Implications for practitioners

The study offers some implications for practitioners. As key drivers of corporate branding in business networks, representatives of the company, whether managers, employees, or founders, should be aware of their impact on the emergence of corporate identity and reputation. When the firm is in its early stages especially, the personality and reputation of the founder is likely to be reflected in the identity and reputation of a company itself. In addition, practitioners need to understand that corporate branding is never static, but instead an unfolding and interactive process. Through personal interaction with others, every employee provides a face for the company and is responsible for the corporate brand. The three types of interactions form three important but different arenas for influencing corporate brand creation. With respect to identity creation, managers should pay particular attention to internal interaction. Only by clearly defining its identity, a firm (through its representatives) can create a strong corporate brand and achieve a desired network position. It is equally important to create a positive reputation for an SME in its business network. This occurs in external interactions that are mostly beyond the control of company employees. Boundary spanning interactions form the most important interface for corporate brand creation. Through these interactions, SMEs can affect the creation of their own and their partners’ corporate brands through direct interaction, providing evidence of good performance, and responding to the challenges that reputation creates, for instance, through effective reference marketing. Marketing, sales, and purchasing people with their connections to important others play key roles in providing access to strategic information and other resources necessary for corporate brand creation.

There is also a downside in INB, from the practitioners’ point of view. Being keenly connected to business networking as a process, INB can be difficult to manage. A managerially oriented branding scholar could rightfully ask: Can you define and plan branding and networking as separate activities and can you measure the success of INB? The answer is: yes, you can, but only if you take the interactive nature of brand creation into account and examine branding within the contextual constraints of the network and people operating on behalf of their companies. As in all branding activities, the resulting corporate identity or corporate reputation irrevocably unfold, even without any intentional efforts. But if the company purposefully strives to affect its identity or reputation, it may create some positive effects on it. It is, thus, important to note that INB is not only an outcome of an organically emerging process, but also of intentionally planned activities, but within the limits of the existing personal relationships and business networks.

5.3 Avenues for future research

Since the paper is conceptual, further research is needed to study the INB process empirically and in more depth. Questions such as how the different types of interpersonal interactions function in creating a corporate brand and what are the mechanisms and processes through which individuals affect identity and reputation creation, deserve attention from researchers. One option would be to use the critical incident technique to identify especially positive and especially negative incidents in order to learn how interpersonal interaction affects identity and reputation creation and also how individuals in boundary spanning interactions could try to enhance the positive circle or, respectively, to repair the potential damage done. Future research is also needed in order to answer the question of to what extent the INB process can be managed and how the engineered activities and emergent approach to branding can be used together to create strong corporate brands for SMEs. In addition, different engineered activities deserve more research attention, for instance, how identity and reputation creation can be enhanced by purposeful branding initiatives, such as co-branding (cf. Bengtsson and Servais, 2005), network-level branding (cf. Lemmetyinen and Go, 2010), social media campaigns, or the significant presence of the company founder or other key representative in the media.

We hope that proposing INB as a new approach to corporate branding in B2B markets will engender empirical research in the future and inspire scholars from different paradigms to “climb over the fence” to observe what is new and exciting in other domains and discourses and what this can offer to the development of branding knowledge in B2B and beyond.