Corporate Reputations, Branding and People Management To Sue and Christine for their help and encouragement throughout this project – Graeme To my husband, Christopher, and our children, Alexander and James – Susan Corporate Reputations, Branding and People Management: A Strategic Approach to HR Graeme Martin and Susan Hetrick AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEW YORK • OXFORD PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Butterworth-Heinemann is an imprint of Elsevier Butterworth-Heinemann is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA First edition 2006 Copyright © 2006, Graeme Martin and Susan Hetrick. Published by Elsevier Ltd. All rights reserved. The right of Graeme Martin and Susan Hetrick to be identified as the authors of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone (ϩ44) (0) 1865 843830; fax (ϩ44) (0) 1865 853333; email: permissions@elsevier.com. Alternatively you can submit your request online by visiting the Elsevier web site at http://elsevier.com/locate/permissions, and selecting Obtaining permission to use Elsevier material Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances in the medical sciences, in particular, independent verification of diagnoses and drug dosages should be made British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data Control Number: 2006925279 ISBN–13: 978-0-7506-6950-4 ISBN–10: 0-7506-6950-0 Typeset by Charon Tec Ltd, Chennai, India www.charontec.com Printed and bound in The Netherlands 06 07 08 09 10 10 9 8 7 6 5 4 3 2 1 For information on all Butterworth-Heinemann publications please visit our website at http://books.elsevier.com Contents Foreword vii Preface ix Acknowledgements xiii 1 The importance of the corporate agenda and its links with human resource management 1 2 Managing corporate brands and reputations 39 3 Organizational identity, action and image: the linchpin 81 4 The quality of individual employment relationships and individual employee behaviour 115 5 Four lenses on HR strategy and the employment relationship 161 6 New developments in HR strategy and the employment relationship 191 7 Corporate reputation and branding in global companies: the challenges for people management and HR 227 8 Corporate communications and the employment relationship 257 9 Corporate strategy, corporate leadership, corporate identity and CSR 295 10 The corporate agenda and the HR function: creating a fit-for-purpose future 337 Index 377 This page intentionally left blank Foreword In the fast-changing, increasingly global and competitive world of business, the ability of organizations to create and sustain strong corporate brands and reputations is one of the only ways to stay ahead. In most organizations, the main responsi- bility for reputation management and corporate branding rests with marketing, communications and public relations departments. Yet, as most of us working in the field know only too well, it is people who create reputations for excellence and memorable brands; it is also the actions of people that can destroy these vitally important intangible assets. Moreover, attracting, retaining and engaging talented people in indus- tries such as my own means we are increasingly reliant on high- quality reputations and brands. This is one of the reasons why we, as a leading global financial services company, continue to invest so much time, money and effort into building our cor- porate reputation, and in sustaining our position as an ‘employer of choice’. We know that engaged employees equals business success and profitability. This book is essential reading for CEOs, marketing and HR practitioners who are serious about making a valued contribu- tion to the success of their organization. This book outlines the future scope and contribution of human resources to business strategy. It is one of the first serious studies of the corporate landscape and is very well researched and practical. I hope you get as much out of this book as I have. Neil Roden Group HR Director, RBS This page intentionally left blank Preface This book is the first in a series designed to help senior practi- tioners in human resource management (HRM) develop their knowledge and skills in the strategic issues facing them and their organizations. Like others, we believe the term ‘strategic’ is often over-hyped; we limit its use in this context to mean ‘important’. And, in our view, there are few more important considerations for senior managers than creating and sustain- ing excellent reputations and brands for their organizations. For example, survey evidence produced by a major interna- tional consultancy firm, Hill & Knowlton, in 2006 showed that reputations and brands were among the top items on the agenda of CEOs, including those in China. Why this should be the case has been addressed by John Kay, a leading British economist, who opined: The distinction between the role of shareholders and employees was clear when shareholders had bought the plant and employees worked in it. But the principal assets of the modern company are knowledge, brands and reputation, which are in the heads and hands of employees (J. Kay, 2004, The Truth About Markets: Why Some Nations are Rich but Most Remain Poor. London: Penguin, p. 58) So organizations need to capitalize on reputations and brands to be different from others to create and sustain sustainable competitive advantage; at the same time, they also need to be seen as legitimate, especially in an environment in which they are increasingly distrusted by large sections of the community. Thus, in addition to corporate branding, many businesses are . project – Graeme To my husband, Christopher, and our children, Alexander and James – Susan Corporate Reputations, Branding and People Management: A Strategic. 16 1 6 New developments in HR strategy and the employment relationship 19 1 7 Corporate reputation and branding in global companies: the challenges for people