Relationship To The Company Commerce Essay

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Apart from the effort that I put in this assignment, the success on completing this assignment depends largely on encouragement and guidelines of many others. I take this opportunity to express my gratitude to the great people who have been giving me a tremendous support to complete this assignment.

First of all I would like to thank my teacher. I don't know how to say thanks for his tremendous support and help. I felt motivated and encouraged when he gave me guidelines.

Finally I would like to thank my family and friends who gave me ideas and contributed to this assignment, I am grateful for everyone who supported me to do this assignment.


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Relationship to the company

The reason behind choosing Ceylon Tobacco Company as the selected company for this assignment is that I work as a Trade Marketing Executive in Ceylon Tobacco Company which helped me to gather accurate and up-to-date information about the company.


Word count

Task 01 - 3,850 words (Excluding heading and in text references)

Task 02 - 2,213 words (Excluding topics and in text referencing)

Total - 6,063 words

Executive Summary

Corporate reputation is involved with the match between identity that the organisation tries to create among its stakeholders and image that stakeholders perceive about the organisation. Many internal and external factors lead to building Image and Identity of the organisation so therefore identifying and managing those factors in a controllable manner is called managing corporate reputation. Nowadays more and more companies are focusing on managing corporate reputation by measuring it on a regular basis because corporate reputation has been identified as one of the key drivers of competitiveness. With the increasing focus towards corporate reputation, organisations use various corporate reputation measurement tools known as standardised and customised tools which have been developed by authors and institutes.

Therefore in order to build CTC's corporate reputation among its stakeholders several measurement models were selected which has been identified as appropriate for the organisation such as communication audit, identity audit and media comments to measure the current reputation of CTC. With the results of the audit it has been identified that there is a mismatch between identity and image where Social corporate responsibility of CTC has not been communicated properly to its stakeholder due to several strategic issues such as lack of awareness about the importance of corporate reputation among employees, transparency regarding company activities, stakeholders of CTC having negative perception about the company and ineffective communication strategy.

So in order to rectify the strategic issue three recommendations were suggested such as enhancing the effectiveness of corporate communication process, enhancing CTC employee's awareness levels on the importance of corporate reputation while setting up policies and finally monitoring & evaluation of new corporate communication process on its stakeholders and enhancing the relationship levels. Along with the above recommendations financial and political implementation implications and how to rectify them has been discussed. These recommendations will improve the corporate reputation of CTC among its stakeholders and as a result competitiveness of the organisation may improve.

Task 1 - Managing Corporate Reputation

Concept of corporate reputation

Corporate Reputation has become an important topic in the corporate world due to the value that it creates in each and every organization for its survival.

Figure : Corporate Reputation Mix

Source: adapted from Davies et al. (ibid p.76)

According to Davies (2003) corporate reputation or corporate brand of an organization is directly linked with its identity that it has created among its internal stakeholders and image of how the external stakeholders perceive about the organization. Whereas according to the Fombrun (1996) corporate reputation is an aggregate perception of outsiders about the salient characteristics of firms. They reflect the general esteem in which a firm is held by its multiple stakeholders. On the other hand Brady et al (2006) has a very different perception regarding corporate reputation to Davies whereas he had said that for an organization brands are more controllable than reputation because a reputation is created by stakeholders and attributed to an organization. By contrast a brand is manufactured by an organization to sell to one stakeholder group, consumers.

Corporate reputation management has lot of positive consequences to the organization and one of the most important consequences is that it drives competitiveness of the organization whereas according to Dowling (1994) corporate reputation has been defined as an intangible asset which could also act as a competitive advantage by creating hype among shareholders and, media to make decisions in the organizations favour and becoming the first choice in the consumers and employees mind. On the other hand according to the Fombrun (1996) Reputation not only accrues to better performing companies but also enables their performance. Stronger bottom line performance comes about because better regarded companies achieve 'First Choice' status with investors, customers, and employees. Therefore measuring corporate reputation is very important for an organization as several vital factors for the survival for the organization is directly linked to the corporate reputation.

Measuring corporate reputation

Measuring corporate reputation can be described as a meaningful way of evaluating the current strength of the current corporate reputation in order to gain an insight regarding where corporate reputation of the organization stand with regard to its rivals and industry players. Similarly according to Fombrun (1996) firms seeking to build its reputation should, assess the current state of the company's reputation and that of its rivals, analyse the desired future state of the company's reputation, and finally articulate the projections that can move it from one configuration to the other.

Do companies emphasis on measuring corporate reputation?

According to Fombrun and Van Reil (1997, p5) although corporate reputations are seldom ubiquitous, they remain relatively understudied. In part, it is surely because reputations are seldom noticed until they are threatened. A good example of this could be Shell Company rejuvenating its corporate reputation after being accused for maritime sinking of drilling plant. On the other hand nowadays due to budget and resource constraints majority of the companies measure corporate reputation as a practice but at a lower scale not covering all the aspect of the corporate reputation, also some companies use customize measuring tools to measure corporate reputation mainly due to not having a standardized measuring tool which will not be useful for comparisons. Therefore one of the most common barrier that organizations face in measuring corporate reputation is that there is no standardized global corporate reputation measurement tool that can be used to measure and compare with rivals, industries etc. Another barrier could be the lack of management knowledge about the importance of corporate reputation which will reduce the organizations focus towards corporate reputation management. As measuring corporate reputation is a complex and difficult approach which involves audits, researches etc, and large scale organization may manage to this with their existing resources but however small scale organizations may find it disturbing to allocate resources as they will be more focused on their profit objectives and survival.

Concept of measuring corporate reputation

Concept of measuring corporate reputation has been argued by different authors in terms of its positive as well as negative consequences to the organization when practically doing it in the real world. Fombrun (1996) has stated that "Actively measuring and managing reputation although a costly activity that requires sufficient investment of time, energy, money and commitment is nothing less than enlightened self-interest". Many authors have commented for measuring corporate reputation as it involves with number of beneficial consequences such as It has been linked to intention to purchase a service (Yoon et al.,1993); the attitude of buyers to salespersons and products in the organization buying situation (Brown, 1995); perceived product quality and to deterring competitor entry when a tough stance is adopted (Weigelt and Camerer, 1988); contributing to performance differences between firms (Rao, 1994); attracting investors, lower cost of capital and enhancing the competitive ability of firms (Fombrun and Shanley, 1990); and, to enabling strong organization identification by employees and "inter-organizational cooperation or citizenship behaviour" (Dutton et al.,1994).

But however Stephen Lloyd (2007) argues that organizations should not measure its reputation because reputation is a natural element that drives by the way an organization act according its values and norms, hence there is no requirement in wasting organizations resources in measuring it and manipulating according to the way the organization requires. On the other hand Annarita (2000) states that "If reputation is not adequately defined it cannot be managed" because corporate reputation has been defined many authors based on different facets, hence when there is no particular definition to an element there can be a question mark in measuring it.

Approaches to Corporate reputation measurement

Corporate reputation measurement is topic that many authors, institutes and researches have actively participated in identifying a standardized approach, therefore as a result several models have developed however standardized approach has not been developed yet due to corporate reputation is an element that is being linked to many internal and external components of an organisation.

In general following three key models can be taken into consideration;

Corporate Reputation

General Indicators

Identity Audit

Commercial indicators

Figure ; Corporate Reputation Measurement Tools

Source: adapted from Managing Corporate Reputation Student Hand Book

General indicators are indicators that will give a general indication about how the company is performing in terms of its financials and comments from external parties. Identity audit refers to the evaluation of Identity mix. On the other hand commercial indicators are indicators that are developed by organizations or institutes to measure corporate reputation while customizing according to the organizations specifications. Further information about these models will be discussed in the next chapter

In conclusion it can be said that corporate reputation is one of the most important factors that organizations should focus in such dynamic environment that is challenging day by day. Also it is important to know that corporate reputation is directly linked with aspects such as competitiveness which needs to be driven proactively for survival therefore actively measuring it could be beneficial in the long run although it could be difficult and complex to measure on a periodic basis as it involved with usage of lot resources.

Methods of Measuring Corporate Reputation

Corporate reputation is measurable asset for organizations but should be measured in a systematic and meaningful manner in order to get a clear picture of where it stands (Fombrun, 2003).A variety of applied measurement tools has been created that purport to measure corporate reputations. Most have been found wanting in one way or another (Bromley, 2002; Fombrun et al, 2000). In this chapter tools that have been recommended under three key models will be critically evaluated based on criteria in order to identify the most suitable tools for corporate reputation measurement.

General Indicators

General Indicators involves with indicators that are not specifically developed to measure reputation, however these indicators have the power to evaluate reputation in financial terms and comments from external parties which could give quantitative as well as qualitative results.

Table : General Indicators

These quantitative indicators measure corporate reputation based on the performance of the organization ignoring the fact that stakeholders play a key role in breaking or building a corporate reputation so therefore media comments can be useful to measure the stakeholders perception about the organization and how media comment will impact on stakeholders perception changes. A good review in the literary section of a Sunday newspaper can make or break a new novel. The mention of a particular wine on a cookery programme on the television can see sales rocket the following day (Davies et al, op cit, P. 33). Another disadvantage of quantitative indicators are that such indicators like return on relationship, corporate reputation valuation and brand equity will be complex and difficult to measure as there are no specific guidelines on what aspects to be taken into account. Finally it can be said that out of all the indicators media comment will be very useful to measure corporate reputation effectively. However media comment alone will not be useful to gain a broad picture about the corporate reputation of the organization.

Identity Audit

Organizations identity should focus on attribute or attributes of a firm that involves with purpose of the existence of the firm, its mission and vision (Albert and Whettem, 1985). According to (Barney, 2001) if organization wants its organizational identity to be a source of competitive advantage, not only must and organizations identity be valuable, but it must be rare and costly to imitate.

Table : Identity Measurement Indicators

AC2ID tool evaluates the different identities of the organization to check whether all identities are in line with each other. This tool can be successfully applicable in a situation where consumers and employees leaving the organization due to their confusion in identities. According to (Balmer& Geyser, 2003) Advantages of using AC2ID is that it gives brief understanding about the gaps in identities so that corrective actions are taken. Another advantage could be that when using these tools viewpoints of many stakeholders will be taken into account so the result getting bias will reduce. Information collection and analysing will be high time and budget consuming as several stakeholders needs to be reached to increase the effectiveness of the project (Graham, 2005).

Symbols audit is a concept where the current symbols of the organization is evaluated based on to what extent consumer recognize the brand, consumer association with the brand, consumer perception about how resources are utilized to show the desired identity. This tool can successfully be adopted for the organizations which emphasis more on physical evidence of the organization due to a ban in corporate communication. Several advantages of symbols audit has been highlighted by (Bromley, 2002) such as the audit will provide a detailed insight regarding the effectiveness of the current symbols used. Another advantage that has been highlighted is that this audit will be easy to conduct and also will be interesting for respondents as it is involved with symbols. But however it will be difficult to get into a conclusion about what changes need to be done as each respondent may give different view point in changing symbols because stakeholders different past experiences with symbols may influence them generate ideas regarding changing them (Fombrun, 1996) .

Commercial Indicators

Commercial Indicators are indicators that have been developed by research institutes, publications, authors etc for organization that seeks to measure its reputation. Commercial tools can be categorized into two segments namely standardised tools and customised tools.

Table : Commercial Indicators

Standardized tools are the tools that are conducted by publications on an annual basis which is published on their magazines or newspapers, for example LMD most respected, America's most admired etc. one of the advantage of these tools are their criteria's standard so organizations will be able to compare the results with rivals. But however many authors have criticized standardized tools due to factors such as these publications conduct their survey only in largest companies in the industry. And also the survey is conducted among the internal stakeholders where the other stakeholders are ignored (Brown and Perry, 1994; Fryxell and Wang, 1994).

On the other hand customized tools are tools that are conducted by specialized firms as a survey when a client company gives them a briefing about what areas of corporate reputations should be looked into. One of the advantages of these tools is that these tools can be customized according to the requirement so organizations will be able to conduct the survey only on the area which they think could be a problem to their reputation. But however, although these tools can be customized, it has been difficult to compare their results with rivals, since the scales vary in the Number and content of items as well as sampling frames and organisations may find it difficult to conduct survey on a periodic basis as these tools are highly expensive (Fombrun, 2007).

In conclusion it can be said that each corporate reputation measurement model has important tools that can be taken into consideration when conducting a comprehensive and productive measurement of corporate reputation. Therefore it has been decided to take media comments from general indicators and two key tools (AC2ID and Communications) from identity audit to prepare a comprehensive mini survey and focus group discussion for CTC that will cover broad range of corporate reputation attributes and will be helpful to provide valuable results so that gaps in corporate reputation can be identified and minimized.

Review of CTC's Corporate Reputation

This chapter takes into account the justification of the selected measurement tools to diagnose CTC's current reputational status and methodology used to gain insights from stakeholders about their current perception about CTC. Also this chapter includes a critical analysis of the key findings from methodology to identify opportunities for improvement.

Corporate Reputation

Corporate Image

Corporate Identity

Corporate Communication

Corporate Behaviour

Visual Presentation


Corporate Mission

Figure : Corporate Reputation Grid

Source: adopted from Managing Corporate Reputation Student Hand Book

Above diagram clearly shows what aspects lead to corporate reputation, therefore it can be seen that corporate identity and Image plays a major role in managing the reputation of an organization. Corporate communication also plays a bigger role in communicating the right identity to respective stakeholders. Therefore it has been decided to focus on corporate image, identity and communication as those a key essential elements for managing corporate reputation.

Justification of selected measurement tools

Figure : Audit Conceptualisation


When measuring the corporate reputation of CTC using the above mentioned tools it is imperative to gain different stakeholder insights in order to measure corporate reputation effectively and efficiently without letting it become a bias study. Therefore several methodologies have taken into account such as a mini questionnaire and focus group discussion for the primary audit.

Secondary audit involves with gathering media comments regarding CTC, company internal records and conducting a SWOT analysis in terms of the reputation. More information about methodologies and implementation and limitation of study can be found on appendix 7

Key findings of the audit

The audit resulted in identifying key issues with regard to the corporate reputation of CTC. Findings of the audit have been included in the measurement tools to get an understanding about the current situation of the corporate reputation.

AC2ID tool

Figure : Identity Audit Findings

The concept of identity refers to how an organization expresses and differentiate itself in relation to its stakeholders (Van Reil and Balmer, 1997). According to CTC identity audit it can be seen that CTC has many actual identities that could be communicated in order to satisfy the stakeholders expectations but however through its communication channels CTC is continuously trying to communicate financial strength, product quality and employer brand (refer Appendix 6 point 4) which could satisfy the expectations of shareholders, consumer and employees, however it is imperative to note that there are several other stakeholders such as government authorities, pressure groups, distributors and farmers who has a higher interest and power on the organization whose expectations should also be catered through communication (refer Appendix 4).

Finally according to identity audit it can be said that CTC is currently facing a mismatch in their actual, ideal and communicated identities which has impacted on its corporate reputation where different stakeholders has developed different conceived identities about the organization which is clearly shown in the below gap analysis.

Current Image

One of the best place to work for in Sri Lanka, Unethical & Irresponsible Organization, Consumer Centric, contributor to government revenue

Desired Identity

A financially healthy corporate responsible organisation with environmental friendly working environment and consumer centric culture

Gap Analysis

Corporate Social Responsibility



Figure ; Gap Analysis

Communications Audit

Table : Communication Audit Findings

According to the communication audit it can be seen that CTC corporate communication strategy is not at a satisfactory level with regards to fulfilling expectations of its key stakeholders (Refer Appendix 6 point 6) because CTC being an organization that operates in a highly controversial industry which is perceived as an unethical industry, communication plays a major role in building corporate reputation, However when looking at the above table and audit findings it can be seen that CTC is involved in lot of activities to fulfil its stakeholders requirements, however due to lack of awareness among its stakeholders regarding the CSR initiatives stakeholder perceive organisation as an unethical organisation (Refer Appendix 6 point 7). On the other when it comes to the expressiveness of CTC in terms of its identity communication many stakeholders have suggested that CTC is lacking in terms of transparency and responsibility (Refer Appendix 6 point 5) which also points out that CTC is weak in its communication as it doesn't fulfil the information requirements of its stakeholders.

Media comments


Awards & Recognition


Employer Brand

ProductCTC is a famous company among the Sri Lankan media channels due to its presence in the controversial industry with many legal barriers and negative perceptions. According to Appendix 3 it can be seen that CTC is well known company who's positive and negative articles are getting published more often in different media channels. Following analysis shows the weight of positive and negative media comments on the organisation.

Being able to remain at the 4th place in business today top 20 companies

Being among the top 5 employer brands in Sri Lanka.

Overall share of voice


(Negative comments overweigh Positives)

Strong financial strength and performance is reviewed by Colombo Stock Exchange.


Employees wining the HR awards and SLIM Awards.


Profits and revenue growth.



Income of Cigarette selling goes to England

Public health concern due to smoking

Danger of passive smoking

CTC got caught giving bribes to government authorities


Financial Impact of smoking to the government

Brand launch run into protest

Smoking - a potential health hazard

Irresponsible marketing


Becoming a part Killing culture

Youth smoking prevention


Figure : Media Comment Map

Strategic Issues

According to the audit findings it has been identified that CTC's image and Identity is not in line with each other which had impacted on its reputation.

Figure ; Corporate Reputation of CTC

An analysis has been done to identify the root causes of the gap so that corrective actions can be taken accordingly; root causes are as follows;

Lack of awareness about the importance of corporate reputation among employees.

One of the issues for mismatch in image and identity has been identified as lack of awareness about the importance of corporate reputation among employees where employees of CTC has stated in the focus group session that corporate reputation is not an influential factor for survival and competitiveness.

Figure : Influential Factors for Survival and competitiveness

Source: Focus Group Findings

Lack of transparency regarding company activities

Another issue that was identified through the audit is that majority of the stakeholders are not having adequate awareness on company activities. Also according to the audit finding majority of stakeholders have commented that CTC does not involve in CSR initiatives, whereas in reality CTC is the highest contributing companies towards CSR Initiatives Island wide. Following chart clearly shows that many stakeholders have rated a lower score to Transparency of the company.

Figure : Expressiveness of CTC

Source: Questionnaire Findings

Ineffective communication strategy

According to the communication audit it can be identified that there is a loophole in CTC communication strategy where it only satisfy internal stakeholders such as shareholders, employees, distributors etc through its communication methods where as they have ignored the expectations of external stakeholders.

Building CTC's Corporate Reputation

This chapter involves with providing recommendations to rectify identified issues through reputational audit. Suitability, Acceptability and Feasibility of the recommendation is taken into consideration while special attention has been provided for financial and political implications in implementing the recommendations. Each recommendation will be equipped with an implementation plans so that each recommendation will be implemented effectively and efficiently. Finally how these recommendations will impact on the competitive position of the organisation will be critically evaluated.

Recommendations& Justification

Recommendation 1

Enhancing the effectiveness of corporate communication process to fulfil stakeholder expectations

Justification & Importance of recommendation

CTC's current corporate communication process has been identified as an ineffective process as it has created a gap between the perceived image and desired identity. Therefore enhancing the effectiveness of corporate communication process may minimise the gaps between image and identity leading to CTC becoming highly reputed company because CTC is currently involved in many CSR activities (Refer Appendix 5 point 1.9).For example Dialog Sri Lanka recently conducted a corporate communication revamp to minimise its gaps in image and identity, results of this activity made dialog one of the highly respected and reputed company in Sri Lanka

How it is done

Corporate communication process of CTC will be segmented into 3 categories such as management, marketing and organisational where each category stakeholders will be identified to select the most suitable way of communication while allocating a responsible person for each communication platform

Table : Corporate Communication Process


This process improvement will result in CTC utilizing every available communication platforms to communicate what is expected by its stakeholders.

Awareness and transparency levels regarding CTC may improve among its stakeholders.

CTC will be able to minimise its gap between image and identity.

Resource Assessment

Table : Recommendation 1 Resource Assessment

Implementation implications

Financial Implications

Adopting the additional communication methodologies may involve an additional cost of approximately Rs. 5 million per annum.

Recruiting addition human resources to manage the communication process may involve an additional cost.

Return on investment of the project will be indirect as it may improve the performance of the organisation.

Payback period of the project will take at least 1 year to show results but it will be long-term investment.

Political Implications

Communication department will not be able to focus on special projects until they are used to the new system so managers may use their political influence to gain focus for their project.

Frequent communication through internal communication methods may frustrate employees during busy times so they may use their political powers to stop it.

Recommendation 2

Enhancing CTC employee's awareness levels on the importance of corporate reputation and setting up policies according to the desired identity.

Justification & Importance of recommendation

Employee's actions and behaviours have larger contribution towards the reputation of an organisation. Therefore it is important that employees of CTC are aware about the importance of corporate reputation for the business so that management set up policies to change employee's thinking, actions and behaviours according to the desired corporate reputation of CTC. Therefore recruitment of a consultant to emphasise the importance of corporate reputation has become successful to change company's behaviour, actions and thinking according to its desired identity by setting up key policies. An external consultant has been chosen for this task is because an external consultant may have a wider knowledge and experience regarding the subject rather than an internal person.

How it is done

This will be done through recruitment of a consultant for a period of one week to conduct meetings to management in order to emphasise on the importance of corporate reputation management and its impact on the survival and competitiveness, and how the company should change its thinking, actions and behaviours according to its desired identity which will result in minimising an important weakness of lack of awareness towards corporate reputation (Refer appendix 5 point 2.3) and setting up key policies according to the desired reputation.


Awareness levels of employees regarding the importance of corporate reputation may improve.

Employees may change their actions, behaviour and thinking in line with the desires identity.

Resistant to change may reduce to a greater extent.

Organisation will be able to set up key policies for employees to build up its reputation.

Resource Assessment

Table : Recommendation 2 Resource Assessment

Implementation implications

Financial Implications

CTC will have to bear an additional investment of Rs.1million on consultant fee and venue arrangements which will not have a direct return on investment and low payback period.

Political Implications

Selecting the right consultant who is recognised as a role profile in among many employees of the organisation so that resistant to change will be reduced to a greater extent.

Acceptance of the importance of corporate reputation for CTC will be a question as employees could argue that CTC has been surviving in the industry for a long time without focusing on corporate reputation.

When practicing the policies senior employees may show lack of support and resistant to change to their traditional thinking, actions and behaviours according to the desired identity

Recommendation 3

Monitoring & evaluation of new corporate communication process on its stakeholders and enhancing the relationship levels.

Justification & Importance of the recommendation

In this recommendation new corporate communication process will be evaluated and monitored whether it fulfils each stakeholder expectations while building relationship levels and improving interaction levels. Fulfilling stakeholder expectations and improving interaction levels will lead to stakeholders having positive attitude towards the organisation's reputation.

How it is done

Separate corporate reputation team will be appointed where a team member from each department will be allocated to this function who will be working on CR project apart from conducting their core tasks and head of communication will be given the responsibility to head the team. CR team will be responsible to monitor satisfaction levels of stakeholders with the communications strategy while maintain a good relationship and interaction levels with specific departmental stakeholders and update them on what's happening in the company.





Human resource

Research and development

Project manager

Team member

Team member

Team member

Team member

Team member

Team member

Figure : CR Team


Relationship levels may improve to the optimum level with stakeholders so the impact on the business from stakeholder will be minimised.

Monitoring and evaluation of new corporate communication process can be implemented.

New ideas on how organisation can express itself to its stakeholder may come up.

Resource Assessment

Table : Recommendation 3 Resource Assessment

Implementation implications

Financial Implications

CTC will have to allocate a budget of Rs.0.5 million for consistent communications and engagements with stakeholders

Company may have to give a reward to the selected employees due to the additional workload that is carried by each team member.

Political Implications

When employees are pulled out from departments it will impact on work programmes of each department so departmental heads may resist releasing their employees for the project.

Even though employees are pulled into the project team employees will be de-motivated as an additional workload will be allocated to them in addition to their day to day work

capability gaps may arise as different employees from different department will carry different capabilities and skills


In conclusion it can be said that CTC's current corporate reputation is a question mark as there is a gap between the identity which the organisation is trying to create among its stakeholders and image that stakeholders perceive regarding the organisation. CTC will not be able to improve its corporate reputation among its stakeholders if they continue with the current identity and image. The audit that was conducted using Identity, communication and media comment measurement tools resulted in identification of four route causes for the mismatch between the image and identity for which three important recommendations have been suggested to improve the image so that image and identity will be in line with each other resulting in corporate reputation of CTC to improve. Implementation of the above recommendations will lead to have a direct impact on competitiveness in many ways such as getting higher share of wallet as many consumers are willing to invest more money on highly reputed and trustworthy organisation rather than low reputed company. Reputation could also act as signal of quality and an entry barrier to the competition. So when the competitiveness of the organisation improves it automatically improves the shareholder value as majority of the stakeholders are having credibility about the performance so positive word of mouth about the performance and reputation of CTC will increase the number of potential investors willing to invest on the company. When a company is having a strong competitive position and better access to capital it will be helpful for the company attract the right talent to the organisation as many potential employees may expose to positive word of mouth through communication methodologies which will result in trust being built among the potential employees. CSR initiatives and the above factors in mind CTC will be known as a corporate social responsible company due to its respectable activities.


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Internal Reports

CTC Annual Report (2010)

CTC Annual Report (2011)

CTC Social Report (2011)


Fonseka, S. D. CSR Manager, Ceylon Tobacco Company (Interview conducted on 18th September 2012)

Jayakody, S. Head of Trade, Ceylon Tobacco Company (Interview conducted on 18th September 2012)

Amarasekera, S. HR Director, Ceylon Tobacco Company (Interview conducted on 18th September 2012)

Task 2 - The relationship between corporate culture and corporate reputation

Selection of target journal

The selected target journal can be named as Corporate Reputation Review. One of reasons behind choosing this journal is due to the fact that this article is based how corporate culture could impact on corporate reputation. Another reasons behind choosing this article is that the target audience who reads this article are mainly businessman who are interested about the ways in which they could enhance their business reputation so therefore this article will be useful for the target audience. The articles that get published in this journal are more focused on corporate reputation management. Frequency of publication of this journal is monthly basis. The reach of this journal is high due to availability of the journal in more than 20 countries. The readership of the journal could be high due to high circulation in organisations.



This document has been materialized to create an understanding on the relationship between corporate culture and corporate reputation.


The relationship between corporate culture and corporate reputation was identified by evaluating the extent to which corporate culture impacts on corporate communications and its significance in influencing corporate reputation. In order to critically evaluate and justify on the topic previous studies, journal articles, company and industry examples will be taken into account.


The finding of the study reveals that there is a strong relationship between corporate culture and corporate reputation due to communication of current culture to the potential stakeholders through corporate communications. According to the evaluation of CTC culture and its impact of on corporate reputation due to corporate communication it has been identified that there are several cultural as well as communication issues, the identified cultural issues are as follows;

Lack of honesty at work

Lack of Freedom through responsibility

Lack of Open mindedness

The identified communication issues are as follows;

Autocratic decision making

Lack of trust, confidence and credibility in communication


This paper will enhance the understanding of the reader in terms of influencing power of corporate communication to communicate the current corporate culture of the organization and how will it impact of the overall corporate reputation of the organization. Also this paper will provide an evaluation on the current corporate culture and communications of CTC in order to identify potential gaps and to rectify them accordingly.


Corporate reputation, corporate communication and corporate culture

What is corporate culture

Corporate culture can be defined as a collection of traditions, values, policies, beliefs and attitudes that constitute a pervasive context for everything we do and think in an organisation (Mullins, 1999) on the other hand according to Schein (1985) 'corporate culture is the way we do things round here'.

Environmental ForcesCorporate culture is one of the internal factors that influence corporate reputation of an organisation therefore corporate culture and corporate reputation has a direct link between them. Following framework developed by Nelson &Kanso clearly shows the link between corporate reputation and corporate culture

Corporate Culture

Corporate Identity

Corporate Strategy

Corporate Personality

Corporate Reputation

Corporate Image

Identity Image Interface


Leadership vision

Products / Services

Organisation Structure

Corporate Identity Structure


Management Employees



Corporate philosophy

Core Value

Corporate Mission

Figure ; Internal Influences of Corporate Reputation

Source:- Nelson & Kanso (op cit, p 145)

According to the above framework it can be seen that corporate culture plays a major role in building the identity of the organisation according to the image that their shareholders would like to see. On the other hand corporate communication plays a supporting role in communicating the identity to its stakeholders which will create a positive image among the stakeholders which will ultimately result in building corporate reputation among its stakeholders. For example MAS Sri Lanka successfully utilized many corporate communication methodologies such word of mouth, Business articles, websites etc to promote their existing women empowered culture to build a reputation among potential employees to attract them towards MAS. On the other hand recently Sony Company felt victim to a major security breach on its play station network which leaked the confidential personal details of millions of consumers which has resulted the company in a major reputational disaster mainly due to employees of Sony acting against company values and policies of consumer privacy.

Figure ; Link between corporate culture, communication and reputation

Therefore according to the above diagram corporate culture of an organisation can act both positively as well as negatively towards the corporate reputation of an organisation so managing corporate culture and communicating it using effective corporate communication methods is very important for an organisation to build its reputation among stakeholders.

Corporate Culture @ CTC

Corporate Culture at CTC will be analysed and evaluated using cultural 'iceberg' as follows;

Table ; corporate culture evaluation

Cultural elements

Declared elements

practised by CTC (Yes/No)






CTC has gained lot of reputation by being a friendly and trustworthy and punctual organisation

Honesty and Integrity is lacking at CTC as no recognition or rewards are allocated for employees with high integrity and honesty





Hard working





Environmental friendly working environment


In terms of the artefacts, CTC has provided with the best facilities to give their employees an attractive and better working environment

High dependency on technology may lead to danger if there is a system failure

High technological atmosphere


Corporate social Responsible


Friday casual wear



First name culture


First name culture clearly emphasises the equality among the employees.

CTC is known for having the best structured business processors due to its multinational experience.

Employee motivation has improved with the rewarding scheme.

The use of first name culture may reflect no respect for elders and seniors. High dependency on business processors may lead to low speed to market and reaction levels.

Hard working and committed employees may get de-motivated due to mistakes in scheme.

Structured business processors and procedures


Pay for performance


Values & Beliefs

Freedom Through Responsibility


Strength through diversity has been practised at CTC when multi religious and multinational employees sharing their experiences to work towards common goal. Enterprising spirits are practised at the maximum level with lot of innovations and ideas coming up to improve performance.

Employee's freedom to do work the way they want is not practised at CTC as superiors are asked to micro manage their subordinates. Open mindedness is not practised at CTC as some innovative ideas of employees are rejected due to traditional thinking by employees

Strength through Diversity


Open Mindedness


Enterprising Spirit



Survival of the fittest


When it comes to assumptions it is assumed to be a organisation with lot of team spirit and employees at CTC assumes that it's a place where only fit people survive and seniors at CTC are given special attention and respect by junior employees which improves the image of the organisation

Innovations at CTC is just an assumption because in reality innovations are banned by the traditional thinkers

Team work


Respect for seniors




According to the above table it can be seen that CTC is living the most of its declared cultural elements but however there are several cultural elements that CTC is currently not practising which could result in higher impact on CTC's corporate reputation.

Corporate Communication @ CTC

How CTC's corporate culture is being build (Internal Communication)

Gibb (19610 Suggested that the communication climate of an organisation may be open (supporting collaborative working and the multi directional flow of information) or closed (discouraging it).

CTC is currently using closed communication climate where information is used for competition and political advantage (criticism, Judging, Scoring points). Also there is a tendency towards secrecy, insincerity and manipulation of information. Employees have a little willingness to discuss or question the status quo, or to volunteer new ideas because of the risk judgment or reprisals. In this climate inputs from lower level employees are not taken into consideration so therefore communication, learning, and creativity are inhibited.

Current communication climate will further be evaluated and analysed using five dimensions of an ideal communication climate recommended by Redding (1972),

Table ; Elements of Ideal communication climate


Practised by CTC




In terms of supportiveness CTC is having a very high rating because communication department is highly supportive with any type of information requirements and they update the employees of what's happening in the company regularly.

Participative decision making


As CTC is practising a closed communication climate decision are taken from the top management and cascaded down to low level staff so lower level employees view is not taken into account

Trust, Confidence and Credibility


Trust, confidence and credibility of the information is questionable as in some situations company hides the real situation from the internal stakeholders and show a completely different picture.



New innovative ideas are not welcome to CTC as it practises closed communication climate.

High performance goals


CTC sets high performance goals because CTC is a performance oriented organisation and performance is in the hearts of every employee.

The key learning's from the above table is that CTC is currently practising some elements of ideal communication climate which has shown great business results, However there are some areas such as participative decision making, openness and building credibility that CTC needs to focus and practise in order to make the communication climate an ideal one.

How CTC's corporate culture is being heard (External Communication)

CTC's culture is the most popular culture in the corporate world because of the fact that it uses several highly effective tools to communicate its culture to potential employees. Most influential and effective tool that they use is the positive word of mouth which has a greater level of influencing power over the potential employees. CTC practise this efficiently and effectively through taking care of its employees and fulfilling their needs so that when they go out to their communities they speak positive about the company's culture. Another tool could be publishing the awards and recognitions gained by the organisation on business magazines and newspapers so that corporate community is aware about the culture at CTC.

Identification of Root causes

With reference to the above evaluations of corporate communications and corporate culture several issue can be identified that could have an impact on the overall reputation of the organisation. The issues and the root causes are as follows;

Cultural issues

Lack of honesty at work - Lack of rewards and recognitions for honest and integrate employees.

Lack of Freedom through responsibility - Micro Managing subordinates

Lack of Open mindedness - Senior and management employees being traditional thinkers

Communication Issues

Autocratic decision making - Closed communication climate

Lack of trust, confidence and credibility in communication- Closed communication climates


Figure ; Conceptual Framework

Justification & Importance of recommendation

The reason behind recommending Open communication climate is because open communication climate is an open and honest climate. In this communication climate everyone's input is valued, regardless of role and status. Multi directional exchange of information and views can be seen in such communication climates. Therefore adopting open communication climate will enhance the trust and credibility of the information that is shared with its stakeholders and encourage the participative decision making concept.

Reduction in micro managing subordinates is recommended to enhance the practise of "Freedom through Responsibility" value because the employees of CTC are practising the above value, superiors should reduce the practising of micro management concept as it will reduce the freedom of the employees.

According to the evaluation it can be seen that currently CTC is having a traditional thinking where majority of the employees are still think from traditional point of view which has resulted in value of "Open Mindedness" not being practised by the company where there is no recognition new and innovative ideas. Therefore changing the thinking from traditional to innovative will result in higher recognition for innovations which will ultimately result in CTC becoming a company practising all the values they declare.

Currently Honesty and integrity is not practised at CTC mainly due to lack of rewards and recognition for honest employees, therefore it is recommended to allocate rewards and recognition for employees who have been honest to the company work so that company will be able to improve the behaviour of the corporate culture.

How the recommendations will be implemented

The conversion of communication climate from closed to open involves communication procedures change such as one way communication has to be converted to a two communication where every employee can participate in decision making. This could be effectively done with the help of a communication consultant who will help setting new communication processors and procedures to meet the requirements of open communication climate.

Reduction in micro managing subordinates can be done through conducting a meeting with management employees and communicating them about the impact of micromanagement on the value of "Freedom Through Responsibility" and employees motivation levels and requesting them to reduce it to the maximum level while getting their insights about the recommendation. This could be monitored by conducting a survey among the employees regarding the "Freedom through responsibility".

Changing the thinking of traditional employees is not an easy task as it involves with changing the way people work and think, therefore top management may have to conduct a meeting for all the employees and emphasise the importance of adapting innovative thinking with the increase in competition and the negatives that the company will have to face if the traditional thinking prevails. Finally company can request employees to get away from the traditional thinking and start building innovative point of view as it is required by the company

Allocating rewards and recognition for Honesty and integrity of the employees will be done by including honesty and integrity to employee's evaluation criteria and selecting the most honest employees of the year annually so that employees may focus on practising honesty and integrity as practise so the behaviour of the corporate culture may improve.


Honesty, trust and credibility of the information will improve due to the implementation open communication climate which will ultimately result in improvement in internal communication of CTC.

Employees may realise that they have freedom through responsibility at work so they will be motivated to go for an extra mile due to the low supervision.

Changing the thinking of employees from traditional to innovative will encourage employees to come up with new and innovative ideas because they know that it is going to be accepted by the organisation.

Allocating rewards and recognitions for honesty and integrity will result in employees in CTC trying to become hone