1. A holistic and integrated vision of brands would
allow stakeholders to coordinate these two functions
and create as many synergies as possible, taking
advantage of these two spheres. Nowadays brands
may generate economic value as long as they create
social value: the bottom line improves if people’s
lives improve. Such is the premise argued by the
book titled Brand Society, authored by Martin
Kornberger, Professor at the Copenhagen Business
School (Denmark).
Despite being used a lot, brands have not been
sufficiently studied. This means that brands are used
to obtain immediate economic returns rather than to
transform the society and people’s lives that in turn
would lead to economic results. Kornberger believes
that now is the time to change the situation and
try to establish close and well-coordinated relations
between producers and consumers.
Brands represent a new form of organising production
and managing consumption. These two areas have
been separated since the beginning of the Industrial
Revolution. However, the convergence that is taking
place today heralds a new era that may be named
the Second Renaissance, whose key features are the
following:
1. Brands are the reference point in a system of
hyper communications: the value chain turns
into the value network with multiple actors.
2. Brands represent the fundamental
values of life: freedom, happiness, love,
desire or the feeling of membership.
3. Brands recognise the authority of their creators,
i.e. consumers and other stakeholders.
On the one hand, brands are transcending their
habitual domain (organisation) and stretch the
borders of influence. On the other hand, this may
become possible only if they cut across the entire
society (its political, ethical and social aesthetic
dimensions) and turn into a link connecting the two
areas mentioned earlier.
A Combination of Magic and Logic
Brands should conform to a formula that is easy
to proclaim but difficult to implement: a mix of
We have witnessed how the phenomenon of brands transformed the economy
and people’s way of life all around the world. Brands constitute part of both
the economic dimension (as a business tool) and the social dimension (as a
sociological phenomenon). They are part of these dimensions and have the
power to change them.
Strategy Documents
I44/2013
Why are Brands Able to
Transform Organisations and
People’s Way of Life?
Brand
Insights
This document was prepared by Corporate Excellence – Centre for Reputation Leadership and contains references to the book Brand
Society by Martin Kornberger, Professor at the Copenhagen Business School (Denmark), published by Cambridge in 2010.

2. Insights 2
Why are Brands
Able to Transform
Organisations and
People’s Way of Life?
¨Brands should
conform to a
formula that is
easy to proclaim
but difficult
to implement:
combine logical
elements (the
functionality)
and magic
elements (the
content)”
logical and magic elements, where logic stands for
functionality and the benefits of using brands, and
magic is manifested in their content, the fact that
they turn into symbols that express human desire for
something important. For example, Lexus represents
human desire of luxury (realisation) and at the same
time a good and elegant car; 3M is associated with
innovation (progress) and at the same time a good
adhesive tape; Nike is associated with achievement
(success) and good sports footwear; and Disney is
associated with entertainment (imagination) and good
animated movies.
Brands provide solutions for improving our lives
and at the same time leave impressions in our lives:
brands shape humans in the same way as humans
create brands. Ways of life associated with brands
turn into archetypes of human behaviour, tastes,
beliefs, preferences and life styles.
Logic and magic are two sides of the same coin:
they need and support each other. Magic leads
to personal interpretation of some social symbols,
while logic enables rational use of global resources.
The Nature of Organisations is Changing
The monopoly of businesses for instituting
organisation and production is giving way to
creativity of communities and social networks. That’s
why the new environment and the new reality of
brands are changing the nature of organisations.
Boundaries between the internal and external are
disappearing, enabling greater interaction between
stakeholders. Organisational culture is changing
towards lower fragmentation and fewer internal
divisions. Management is no longer governed by
the ideas of authority and control, and includes
more elements of autonomy and cooperation.
Thus, traditional job division gives way to
hybrid and mixed profiles. Finally, identity is no
longer a cognitive and rational process – it is the
combination of experience and emotions.
Another trend is that new brands maximise their
level of connection with the environment, fleeing
the closed vision focused on internal processes
and events. Thus, brands challenge the traditional
identity of companies, their capacity to innovate
and their organisational culture by putting them
in touch with new realities and needs – something
typical for a society that from pure consumption
developed features of production and turned into
the society of consumers-producers that it is now.
Brands Drive the Development
of Capitalism
Another point argued by Brand Society is that
brands are an important element for understanding
the changes in the society, economy and capitalism.
Brands drive management through identity, values
and life style and act as a link between business and
culture that has been missing up until now.
Capitalism used to be cold, rational and mechanical.
Brands, on the contrary, encourage companies to
be more approachable, emotional and organic, thus
overcoming traditional separation between business
and society and operating as a bridge between the
two worlds, changing the rules of the game and
introducing new rules that replace the old ones.
This change affects not only corporate and business
brands, but also other brand types – i.e. regional and
institutional brands, and respectively other types of
organisations: city councils, governments, associations,
political parties, trade unions and, to a lesser extent,
NGOs. Brands create the scene and act as a guide used
by people to plan their lives.
Graph 1: Some suspicions and differences (maybe in degree, not in kind)
Source: Martin Kornberger, 2011
Low Interactivity Increasing Interactivity
Boundaries Flexible yet relatively stable Dissolving of internal / external
and emergence of shared
platforms?
Organizational culture Fragmentation around internal
fault lines
Increased fragmentation
resulting from interaction with
communities / tribes?
Control and power Management as authority Who owns the brand?
Organizational design Division of labour to minimize
transaction coasts
Organizing networks, hybrids and
ecologies?
Organizational identity Identity as relational cognitive
process
Experiential identities and
aestheticization of processes of
organizing?

3. Insights 3
Why are Brands
Able to Transform
Organisations and
People’s Way of Life?
“Brands drive
management
through
identity, values
and life style
and transform
society,
economy
and even
capitalism”
Conclusion: Psychology, Sociology
and Economy Converge
The intersection of these three disciplines gives birth to
a new kind of brand that brings together lifestyle, social
values and economic value creation, because today
brands transform the way people live and consume as
well as the way companies produce goods.
Brands create a new kind of business culture that
is more open and encourages real and virtual
communities to interact, thus implementing new ideas
and using brands as intermediaries in this process.
Therefore, the key to innovation is convergence
of ideas and passion for creating new realities.
Innovation develops around brands, meaning
that innovations management is performed
through brand management and vice versa, and
that innovation and brand express life styles,
fundamental values and ways of life. Brands can
be viewed as fait accompli or accomplished facts,
they are widely used without being properly studied.
Thus more research is needed in the area in order
to enable brands accomplish their mission: combine
the social and economic dimensions in order to
create value.
The Unstoppable Rise of Design
When we think about such brands as Apple, possibly
what first springs to mind is design.Apple above all
is about design, including the design of innovations.
Its design is friendly, easy, simple and practical. And
among other things, brands should be associated with
design. Design should power all their facets. Now it
is not only about designing a brand, but also about
incorporatingdesignintothebrandasthefundamental
part in the context of the new conceptual era driven
by the Internet.
Other brands follow suit, such as Ikea (which is pure
design in itself), Google (in terms of its simplicity),
C&A, Samsung, Starbucks or Sephora. And this
design may manifest itself in graphics, product
design, processes, layout, service, user experience or
interaction.
Design has turned into the key ingredient of any great
experience that a brand may offer to stakeholders.
New businesses focus specifically on design, placing it
in the centre of their brand strategy in order to achieve
innovation and differentiation. As brands expert
Marty Neumeier puts it, brands should express beauty
and be beautiful.
Expectations of stakeholders, and customers in
particular, have grown in what concerns design. This
is probably explained by the fact that the experience of
Internet navigation and browsing numerous web pages
leads users to increase their demand for simplicity
and easy access. We understand when a website is
poorly designed and associate our disappointment and
frustration directly with the brand.
Graphic 2: Emotional benefits of a designful company
Source: The Designful Company by Marty Neumeier.
Traditional company Designful company The result
Puts a premium on the ability to
empathize with people outside the
company, which creates a feeling of
connnectedness
Excitement and satisfaction
Respect comes from merit more than
position, imparts self-esteem
A can-do feeling replaces a can’t do
feeling
A feeling of shared success
The feeling we get from caring about
beauty is hope for the future
Focus on customers
About vision and
creativity
Jobs are project oriented
Risk is part of the
innovation process
Workers collaborate
Beauty is built in
Focus on costs
About command and
control
Jobs are role oriented
Risk taking is discouraged
Workers are siloed
Beauty is tacked on
instead of: shift to:

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