Exploring the relationship between strategic management and firm identity

12. 4. 2018

There is a symbiotic relationship between firm identity and strategic management. The relationship is in two forms which are mutually influential and mutually reliant.

The longitudinal timeframe displayed by the mutuallyinfluential relationship displays a verycasual or mutual relationship between company identity and management strategy. The change of an organization can materially affect transformation by preventing, shaping or facilitating initiatives that are set for the improvement of organizational performance. The mutually reliant relationship between the strategic management and firm identity is non-longitudinal, and the relationship exhibited does not have a casual effect. The two phenomena relate to each other in terms of inference, rationalization, andattribution. The relationships of the two phenomena cannot be marked as the same, and are dyad. The mutually influential relationship between firm strategy and identity reveals the aspect of interdependence and symbiotic link. 

The mutual relationship between company identity and strategic management reveals that the nature of a company strategy depends on the state of corporate identity. The company image also determines how decisions are being made, in an effort to ensure that customer trust is maintained (Harfield, 2011). Organizational strategy checks on the company identity and also serves as a reinforcement. The shape of the companyis shapedby the corporate identity- during the formation of any strategy, the firm identity must be considered. For instance, the ownership of the companycan be vested on the investors and borrowers. The image of an organization, as defined by the society defines the way the management formulates policies and implement them. For instance, the Barclays Bank PLC’s corporate strategy on the improvement of finance generation depends on how customers have reviewed the company in terms of levels of service and the range of products offered. Lending strategies such as setting interest rates and the maximum loan limit aredetermined by the willingness of the customers to borrow at the ratesor to come for other financial services at the proposed or existing rates (Barclays Bank PLC, 2018).

Corporate identity and company strategy act as checks for each other. In most instances, senior managers explicitly and implicitly refer to the societal views about a firm, before any corporate decisions are made (Elms, 2010). Consultations are made to the stakeholders, especially those involved in the actual transaction of stock. The direct stakeholders give information regarding the nature of the marketand through the decisions, the management can formulate or implement policies that are corresponding to the prevailing market conditions. In 2016, Barclays Bank PLC realized that the germane for a good company image is maintaining the ethosof familiarity and being fair to the clients. The company codes of conduct were made strict to conserve and improve the public image of the company, throughthe use of customer relations seminars and notices. The sales promotion activities were done in accordancewithsocietalstandards, to protect the company’s corporate identity. 

Organization image can also be viewed as a constraint to the planning processsince before any strategy is adopted, the management must consider the effects of the policy to the public (Freeman, 2014). The legal, operational and philosophical aspects of the society are considered, before the implementation of any policy. The de facto and de jure aspects of corporate strategic management and relations with the society are well defined within Barclays Bankand have therefore led to the good public image and the good economic performance of the firm. 

The merging of expectations of the firm and the society fills the gap that exists between corporate strategy, societal identity, andstrategy (Wei, 2011). The responses from senior management of Barclays Bank indicates the disparities that existed before a mutual understanding was established regarding the harmonization of corporate policies, to consider the views of customers and other stakeholders in policy formulation. By adjusting the mentalstates, the senior managers established a symbiotic relationship between company strategy and organizational identity. The management also realized the need to ensure that the strategies of the society and the company are mutually dependent. Kantur (2011) arguesthat the cognitive reconciliation involves the change in the mindset of the individual managers and that if the reconciliation is not done at the right time, then the conceptualization of the bilateral relationship between firm identity and the corporate strategy might be elusive. Author indicates that the change in management belief occurs when the attitude and beliefs of the management team are changed, but not the behavior. The significance of the firm’sidentity plays a major role in the determination of the competitive advantage of a company, and the acquisition of customer loyalty. 

The concept of strategic management and its relation to other disciplines is prominent in the modern research works, due to its nature of being complex and very dynamic. Several strategic management theories have been formulated to explain its components and the relations with other fields of study, and it has been established that the efficiency of planning determines the survival of form in the currentcompetitive market. On the other hand, another factor that determined the success of a company is a firmidentity, which is the general outlook of a company to its stakeholders. Organizational identity is determined by the efficiency in strategic management, hence the two can be termed as mutually existing. Any alteration in the management system of a companydirectly affectsthe image. Strategic management aims at making profits for an organization, by utilizing all the available opportunities. The identity of a firm is also important for customer loyalty and trust. Therefore, it can be concluded that strategic management and firm identity have a mutual relationship and the success of a company in a competitive environment fully depends on the efficiency of strategic management. 

Author: David Johnson, student LIGS University


Balcan, C. (2012). Characteristics of strategic management in innovation in the field of Hotel management.Iasi: Universityy of Iasi.

Barclays Bank PLC. (2018). Annual report 2017.Edinburgh: Barclays Bank PLC.Elms, H. (2010). New drections in strategic management and business ethis.Sydney: Kogod School of Business

Freeman, E. (2014). A stakeholder approach to strategic management.Virginia: University of Virginia.

Harfield, T. (2011). Strategic management and Michael Porter.Cambridge: harvard University.

Kantur, D. (2011). The theory of cognitive dissonance: A marketing and management perspecive.Istanbul: Istanbul Kemerburgaz University.

Wei, H. (2011). A grounded theory of the corporate identity and corporte strategy dynamic.Coventry: University of Warwick.

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