Rebranding a disgraced organization: A case study of the Icelandic banks Elvar Ólafsson Department of Business Administration Master Thesis in Management Research Spring 2010 LUND UNIVERSITY Abstract Title: Rebranding a disgraced organization: a case study of the Icelandic banks University: Lund University - Sweden Course: Masters Thesis in Business Administration, Programme in Management Research, 30 University Credit Points (30 ECTS). Seminar date: 2010-06-03 Author: Elvar Ólafsson Supervisor: Sverre Spoelstra Keywords: Rebranding, Disgraced Organizations, Corporate Social Responsiveness, Corporate Visual Identity, Customers perception of Image & Reputation Purpose: The purpose of this thesis is to gain understanding of rebranding of a disgraceful organization. It will be a modest attempt gain insight into customer’s perception of a changed identity and how it affects the organization’s image and reputation. Methodology: The present study is qualitative research using semi-structured open ended interviews with empirical data that is approached through interpretative approach. Theoretical perspectives: Relevant theory on rebranding, corporate social responsiveness and corporate visual identity; altogether framed by the focus on the perception of change in the eyes of the customer. Empirical foundation: This paper is based on a case study of the three major banks in Iceland. The empirical material constitutes 14 semi-structured open ended interviews with customers. Additionally, bankruptcy reports, newspaper articles and the banks web sites are analyzed. Summary Findings: The banks rebranding efforts have had little affect on their customers as the general public has lost all trust in the governance of the financial system. My main argument is that although branding and rebranding theories state how and what you should do to be successful, there are situations as in my case that leave the disgraced organization’s rebranding strategies with little power to win back the loyalty of their customers. 1 Acknowledgement There are various people that I want to express my gratitude for their support, advice and engagement. This thesis would look different without their participation. I would like to express my gratitude to all those who gave me the possibility to complete this thesis. I am grateful to my supervisor Sverre Spoelstra of Lund University whose help, stimulating suggestions and encouragement helped the framing of this thesis. Furthermore, I would like to give thanks to all of the interviewees for their co- operation and for all the information they provided me with. I dedicate this thesis to my friends and family for their never-ending support and understanding. Elvar Ólafsson Lund, 2010 2 Table of Contents Abstract ...................................................................................................................... 1 Acknowledgement ...................................................................................................... 2 1 Introduction .......................................................................................................... 5 1.1 Background ................................................................................................... 5 1.2 Research question ....................................................................................... 10 1.3 Purpose ....................................................................................................... 11 1.4 Method ........................................................................................................ 11 1.5 Relevance ................................................................................................... 11 1.6 Limitations ................................................................................................... 12 1.7 Thesis Structure .......................................................................................... 12 2 Methodology ...................................................................................................... 14 2.1 Case study .................................................................................................. 14 2.2 Method ........................................................................................................ 15 2.3 A Reflexive Approach .................................................................................. 15 2.4 Data for building the case studies................................................................ 16 2.5 Interview Setup ............................................................................................ 17 2.6 Validity, Reliability and Objectivity ............................................................... 19 3 Frame of reference ............................................................................................ 21 3.1 Branding ...................................................................................................... 22 3.2 Corporate Social Responsibility (CSR) and Corporate Social Responsiveness (CSR2) ....................................................................................... 24 3.3 Rebranding .................................................................................................. 28 3.4 Corporate Visual Identity (CVI) .................................................................... 29 3.4.1 A new name and slogan ....................................................................... 31 3.4.2 Logo – design and colour ...................................................................... 33 3.5 Corporate rebranding pitfalls ....................................................................... 35 3.6 Image, reputation and Loyalty ..................................................................... 37 3.7 Conclusion ................................................................................................... 41 4 Presenting the Icelandic banks .......................................................................... 42 4.1 Kaupthing / Arion banki ............................................................................... 42 4.1.1 Kaupthings’ pre-bankruptcy transactions .............................................. 43 4.1.2 Older research on Kaupthing ................................................................ 46 3 4.1.3 Rebranding Kaupthing as Arion ............................................................ 47 4.1.4 Arion’s financial solutions ...................................................................... 49 4.2 Glitnir / Islandsbanki .................................................................................... 50 4.2.1 Glitnir’s pre-bankruptcy transactions ..................................................... 50 4.2.2 Older research on Islandsbanki ............................................................ 52 4.2.3 Rebranding Glitnir / Islandsbanki .......................................................... 52 4.2.4 Financial solutions ................................................................................ 54 4.3 Landsbankinn .............................................................................................. 54 4.3.1 Landsbankinn’s pre-bankruptcy transactions ........................................ 55 4.3.2 Older research Landsbankinn ............................................................... 57 4.3.3 Rebranding Landsbankinn / NBI ........................................................... 58 4.3.4 Landsbankinn’s financial solutions ........................................................ 59 4.4 Conclusion ................................................................................................... 60 5 Analysis ............................................................................................................. 61 5.1 Branding and rebranding efforts .................................................................. 61 5.2 The interviewee’s pre-bankruptcy reflections .............................................. 64 5.3 Post bankruptcy reflections ......................................................................... 65 5.4 The rebranding effect .................................................................................. 66 5.4.1 New name ............................................................................................. 67 5.4.2 New logos ............................................................................................. 68 5.4.3 New values: .......................................................................................... 69 5.4.4 The Financial solutions ......................................................................... 70 5.5 If you had to start all over ............................................................................ 71 5.6 Conclusion ................................................................................................... 73 6 My contribution and further discussion .............................................................. 76 References ............................................................................................................... 79 Appendix 1 - Interview topic guide ............................................................................ 87 Table of Figures Figure 1: Bankruptcy comparison ............................................................................... 7 Figure 2: Arion’s former and current logos................................................................ 48 Figure 3: Islandsbanki’s former and current logos ...................................................