Detailed Review of Ethical Identity Of IBs Essay Example

Detailed Review of Ethical Identity Of IBs Essay Example Detailed Review of Ethical Identity Of IBs Essay Detailed Review of Ethical Identity Of IBs Essay Identity, according to the Oxford Dictionary, is (1) absolute sameness; oneness; equality of two expressions for all values of the literal quantities, equation expressing this; (2) condition or fact that person or thing is itself and not something else; individuality, personality (The Oxford Dictionary 1984). In terms of corporate identity, the consistent visual symbols of the corporation fit the first linguistic definition, while the distinct attributes of the corporation (Balmer 1998, Bernstein 1984) or the reality and uniqueness of the organization (Gray and Balmer 2001 p. 1) fit the second definition. Hence, corporate identity can be the same and yet different (Bernstein 2003). Reviews of the literature on corporate identity indicate a plethora of definitions for the term, ranging from the tangible to intangible, and from the tactical to strategic (see Allessandri 2001, Melewar and Jenkins 2002 for a compilation of the various definitions). However, there is some agreement among researchers that the term is related to answering the questions what are we? And who are we? (Balmer and Greyser 2003) or what the firm is (Hawn, 1998, Portugal and Halloran 1986), hence referring to the distinct attributes of the organisation. Birkigt and Stadler (1986, as cited in Balmer 2001) suggest four elements of corporate identity: personality, behaviour, communication and symbolism, while van Rekom (1997) identifies three elements: essence features of the firm, features that set it apart from others and continuity of the features over time. According to Balmer and Soenen (1999) corporate identity encompasses three elements: the mind (the expressed organisational ethos, vision, strategy and product performance), the soul (distinctive corporate values of the firm) and the voice (the various ways of communicating to key stakeholder groups). In short, corporate identity is the bonding of strategy, structure, communication and culture, embracing both tangible (e. g. name, logo and colour) and intangible (e. g. firms behaviour and reputation) elements that make it distinctive (Balmer 2001, p. 280). Balmer and Soenen (1999) further operationalised four distinctive features of corporate identity using the mnemonic ACID, each letter representing a distinct identity type: actual, communicated, ideal and desired. Actual identity encompasses the business strategy, values and philosophy, corporate culture and structure (Gray and Balmer 1998) while communicated identity is closely linked to image and reputation, which in turn leads to the realisation of desired (what corporate management wants it to be) and ideal identities (what stakeholders see as optimal). Since their exists an explicit covenant or a promise (Johansson and Hirano 1999, Mitchell 1999) between an organisation and its key stakeholders, corporate identity must be managed so as to ensure alignment between the various identities suggested by Balmer and Soenen (1999). This entails communicating and behaving in a manner that leaves a pleasant impression with key stakeholders (Cornellisson and Elving 2003). One of the avenues through which information about corporate identity (e. g. its ideology, management philosophy, products, commitments to society, etc. ) is communicated is the corporate annual report. Hence, managing information disclosure in corporate annual reports in a consistent and pleasing manner will produce a positive corporate image an over time will produce a positive corporate reputation (Allesandri 2001). In other words, through proper communication management, companies can build their reputation, which may lead to competitive advantage (see the operational model for managing corporate identity by Gray and Balmer 1998) and will pay off in both operational and financial ways (Dowling 2001), as well as ensure business survival (Balmer and Stotvig 1997, van Riel and Balmer 1997). Islamic banks are representative of a new wave of corporations whose social goals are at least (if not more) as important as making profit. Based on the definition by Gray and Balmer (2001), such corporations fit what they described as having ethical identity. They studied two such corporations. Migros and Patagonia to find commonalities that exist between them. Berrone et al. (2005) assessed the impact of corporate ethical identity on the firms financial performance and their results indicate that revealed ethics (aspects of communication of the ethical identity) have informational worth and enhance shareholder value, while applied ethics (all actions and policies considered as ethical and beyond communication of ethical values) have a positive impact through the improvement of stakeholder satisfaction. Since commonalities already exist between Islamic banks, as they are based on the Islamic ethical business framework drawn from the Shariah (Islamic law, often referred to as ethics in action), it would be interesting to assess whether an ethical identity gap exists and its implications on corporate branding and corporate image and reputation. Hence, in this article, we attempt to assess the degree of variation of communicated ethical identity (as disclosed in the corporate annual report) against a benchmark of ideal ethical identity (checklist constructed based on Islamic precepts) for the Islamic banking sector where trust is vital. Specifically, we measure the degree of ethical identity of seven Islamic banks in the Arabian Gulf region based on their corporate annual reports for the years 2002-2004 inclusive, using what we term an Ethical Identity Index (EII). The reason for confining our scope to Islamic banks in the Arabian Gulf region is because these countries share a similar socio-economic structure, which as such enables us to control for macro and cultural effects and make comparison and interpretations more meaningful. We chose corporate annual reports rather than other media of communication in assessing communicated ethical identity because they offer a snapshot of managements mindset in a particular period (Neimark 1992), have greater potential to influence due to widespread distribution (Adams and Harte 1998), are more accessible for research purposes and are used by a number of stakeholders as the sole source of certain corporate information (Deegan and Rankin 1997). The results of our survey, analysis and discussion constitute a further contribution to corporate identity, corporate communication, corporate social responsibility and Islamic banking literature. The article proceeds as follows. The next section presents a literature review on various aspects of Islamic banking and discusses what constitutes the ideal ethical identity based on the Islamic precepts. The third section describes the research method. The fourth section presents our results and discussion, followed by the conclusions, implications and avenues for further research in the final section.