The Dynamics of Organizational Identity Construction and Deconstruction

Autoria: Suzana Braga Rodrigues, John Child

Abstract: This paper concerns the cycles of identity construction and deconstruction. Based on a case
study of 27 years history of a Brazilian telecommunications company it argues that an organization
identity endures if it is collectively reiterated in practices and routines, if it is embedded in the
organization culture. By investigating the socio-political aspects that drives changes towards the
different types of identities that becomes salient throughout the organization history, this paper provides
insights into the dynamics that link identity at the organizational and group level of analysis.

In their seminal article, Albert and Whetten (1985) characterized an organizations identity as its central,
distinctive and enduring features. The concept continues to attract considerable attention and its
relevance is widely recognized (e.g. Academy of Management Review 2000, Whetten and Godfrey
1998). Yet, according to one of its leading scholars, the study of organizational identity is in a state of
confusion and this minimizes its prospects of yielding a systematic body of knowledge (Whetten 2002).

A number of outstanding issues remain to be resolved. One is whether the characterization of an

organizations identity as enduring can be sustained, given that organizations evolve and in many cases
periodically undergo major change. Radical organizational change or transformation implies a
corresponding change in identity, and suggests the need to know how organizational identities are
constructed, maintained and de-constructed through time. It appears that organizational transformation
may be held back if the management of a transition from one identity to another is neglected (Pfeffer
and Sutton 1999). If organizational identities are subject to change, the further question arises as how
this happens and which actors play a part in the process. While Albert and Whetten (1985), the fact that
an organization is itself an actor in society raises the possibility that the legitimacy of its identity may
also be subject to external arbiters.

These issues remain under explored and they provide the agenda for this paper. It analyses the identity
of a major Brazilian telecommunications company during its lifespan from 1973 to 2000. This
companys identity shifted dramatically during its evolution, and was subject to several phases of
construction and de-construction. Analysis of this case contributes in three principal ways to our
understanding of a complex subjecti. First, by providing insights into the constitution of organizational
identities and the process whereby they change. Second, by investigating the socio-political dynamics
that drive such change. Third, by explicating the relational dimensions within those dynamics that link
identity at the organizational and group levels of analysis.

The evidence to be presented in this paper indicates that the shift from one identity to another involves a
cyclical process of construction and deconstruction in which two analytical components are salient. One
component addresses the extent to which an organization identity is acceptable to constituent groups
and its domain. This concerns the legitimacy of the organization and its identity, allowing that such
legitimacy is likely to be limited because of the pluralism of an organizations social constituency
(Ashforth and Gibbs 1990). The fact that organizations themselves can be defined by conflicting and
evolving values can be equally problematic for the legitimacy they possess among their members
(Elsbach 2000). The other analytical component recognizes that a shift in organizational identity
depends on the extent to which a coalition of constituent groups is able to articulate and to mobilise
political support for an alternative identity. In order to understand whether an organization identity
endures or not, it is therefore necessary to take into account how social groups related to the
organization inform and contribute to its role as a social actor . An organizational identity is more likely

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to endure when it is collectively shared (Larrain 2000). When it is collectively shared, an identity is re-
iterated through discourses and practices that justify its underlying values and principles.

Both these analytical components involve a distinction between the identity of the organization and
identities in the organization (Whetton 2002). Whetten argues that identity of the organization has
become confused with identities in an organization, and that this stems from a failure to recognize that
the organization is a social actor in its own right and not just an aggregate of social collectives (groups).
We suggest, however, that there is much to be gained from the integration of these two perspectives. An
analytical focus on the interdependencies between the organization as a social actor and its social
constituents can help to clarify both the dynamics of organizational identity change and the relationship
between them. The organization as a social actor has an identity that can be characterised in terms of
ideals, stated missions and symbols. Reference to its constituent social groups draws attention to how
actors within the organization and its domain contribute to constructing and deconstructing that identity.

Following a brief description of the case and the research methodology employed, we present a
descriptive analysis of the phases of identity construction and deconstruction for the company. This
analysis provides the material for the subsequent discussion that addresses the theoretical issues already
outlined, namely the process of organizational identity change, the social dynamics behind it, and the
relation between identity at the organizational and group levels of analysis. In particular, we discuss the
role of social coalitions in organizational identity dynamics, the relationship between organizational
identity and social identities, and the cyclical process of identity change.

The case study

This paper is based on the study of the 27 years life of Telemig, a Brazilian telecommunications
company. Although it had antecedents as part of a Canadian group founded twenty years earlier,
Telemig was incorporated in 1973 by the Brazilian military government through an amalgamation of
some 100 different companies within the state of Minas Gerais. When a civilian government replaced
the military regime in 1985, Telemig remained a state-owned corporation. However, during the
following ten years the company was unable to secure adequate development funding and in 1995 the
decision was formally announced to privatise the company, and indeed the whole sector. Privatization
duly took place in 1998. Subsequently, Telemig was incorporated into a wider group of 16 companies,
losing its name in 2000 and becoming reduced to a regional sales office.

Methodology
This research on which this case study is based was longitudinal both in scope and method. It employed
the multiple methods and sources listed in Table 1. This approach permitted an investigation over time
into both the identity of this organization and the role of its social constituents. As Table 1 indicates, this
study drew from a combination of sources many of which provided rich narratives: biographies,
interviews, documents and newspapers. These narratives will be used to clarify the substantive character
of identities as well as their interpretation in the light of events at the time. Certain sources, like the
biographies of the companys founders and other sector leaders, are particularly illustrative of a given
period of the organizations history. Information on the sector and the national telecoms holding
company (Telebras) provided insights into the companys context.

The study was carried out in three stages. The first phase of fieldwork conducted between 1986 and
1990, was based on biographies, interviews and documents. It provided insights into the processes of
identity construction and deconstruction between 1973 and 1990. A second phase of fieldwork was
conducted between 1997 and 20001, and this provided information on developments during the 1990s.
The third stage of research was completed in 2001 and concentrated on the analysis of Telebras and
1

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Telemig documents (including annual reports) from 1973 to 2000, internal documents on Telebras
policies and practices, and the Telemig trade union newspaper.
Table 1 in here

Identity construction and deconstruction in Telemig

Construction of the military bureaucracy identity (1973-78)

In 1964 the military took over power in Brazil and held it until 1985. The so-called triple alliance that
dominated the country during these years the military, the techno-bureaucrats and the multinational
interests - provided the intellectual framework that regulated the interaction between business
organizations, the market and institutions (Dreifuss 1981). This network espoused the ideology of an
interventionist and nationalist state that should encourage the establishment of an independent economy
based on the development of an endogenous technological capacity. State companies were considered
the main instrument of government policies; they were viewed as the vehicle of economic growth.

The biographies of the leaders of the sector indicate the presence of a cohesive network or dominant
coalition comprising military officers and civilian engineers who occupied positions in the bureaucracy
and in the companies themselves. Within Telemig, the two most powerful groups were military officers
who held the top policy-making management positions, and engineers in the development department
were responsible for policy implementation. Members of the dominant coalition came from the same
educational background, and shared views about the importance of the sector, its structure, operational
priorities, the ethos of the companies and how they should be managed.

Interviews with other founders suggest that the sector was viewed as the cause and as the consequence
of economic growth and social progress. It was seen a means to generate wealth and circulating
information. As one said, together with information technology, telecoms provided the basis for the
knowledge society and therefore for economic development. At the same time, telecommunications
was seen as part of the daily life of people, as an essential technology that could improve living
conditions. As a former Telemig director put it: A telephone is also a companion at homeit
constitutes the nervous system of an urban life.

This period clearly illustrates the construction of a strong and distinctive organizational identity, driven
by a coalition of key actors who also share an identity of their own. Their background was similar. They
regarded themselves as pioneering professionals for whom nationalism and patriotism were important
values. They were doing something new that was not based on written norms of conduct; they had to
learn by doing and then teach others. They described themselves as innovative, bold, and at the same
time as disciplined and hard working. Their idea was that the telecoms companies should be managed
like private enterprises within the framework of the state and its ideals of promoting long term
economic growth and social good for the community. They perceived telecommunications in Brazil as a
rare example of the private ethos applied to state enterprises. This group was able to embed its ideals
into companies like Telemig because its network crossed levels in the system. Military officers held a
number of important positions within Telemig. Military, engineering and bureaucratic personnel
maintained close relations across system levels and some crossed between key positions within Telemig
and the relevant state and federal bureaucracies. They also took other measures that contributed towards
the organizational identity of the telecoms companies. For example, they organized seminars throughout
the country in which they expressed their views on the mission for those companies.

Telemig at this time had a mission rather than a defined strategy. This mission was imbued in wider
national plan to help the military rescue the country from underdevelopment and from the communists.
Each company was supposed to carry through this mission within its own territory. Telecommunications

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was seen as serving various social and economic objectives: it was expected to promote integration of
villages and remote communities to urban centres, to contribute to economic development and also to
protect the borders of the country against intruders. Telemigs mission embraced these objectives in
addition to making a profit.

During this period, Telemig could pursue this hybrid mission because it was very insulated from the
outside world. It was protected from competitive pressures because telecommunications was part of a
state monopoly. It was protected from the influence of politicians because the military suppressed
political rights and expression. Some directors boasted the fact that they never had received a politician
in the company. Telemig was not exposed to pressure from consumers either. They were considered
only as users of a facility that the company was proud to provide as a privilege. Management was also
protected from pressures from employees by an authoritarian culture, based on rigid rules and power
distancing. The company union was quiescent and management controlled the appointment of its head.
The military emphasized a career ladder based on professional qualifications and loyalty to the
organization in terms of length of service. Nevertheless, this authoritarianism was perceived by many
of those interviewed as akin to the traditional paternalism of the family. They tended to liken the
company at this time to a father or mother figure, or a large family. The combination of a clear
organizational identity based on serving the community with a culture that emphasised discipline and
structure seems to have supported this familial image.

The first identity crisis (1978-1985): deconstruction of the military identity

Various factors contributed to the deconstruction of the military identity and these have been described
in detail elsewhere (Rodrigues and Child 2001). A major factor was the loss of legitimacy by the
military regime. The alliance that had supported the regime at the macro and micro institutional level,
between the military, techno-bureaucrats and multinational interests began to dismantle. The regime
also lost political support among the population at large. In addition, a new political actor began to grow
in importance both at the macro and the micro level: the unions. The national telecommunications union
became very strong through building a network at the political level, notably with the Workers Party,
and integrating this network down to the company unions.

Reflecting these developments, from the late 1970s the power of the military in state companies began
to wane. There were several contributory factors. By this time it was becoming clear that the economic
model of development based on state intervention had failed to deliver the expected results. The state
companies were in general highly indebted and no longer capable of driving economic development.
There were demands for a review of the economic model and as well as for institutional reform.
Multinational companies also indirectly challenged the nationalistic element in Telemigs identity
through the pressures they exerted to open up the telecommunications market. The unions began to
agitate for better wages, fair working conditions, and participation in management. As the coalition
between the military, the bureaucrats in the central government and the engineers in companies began to
weaken, the alliance between unions and the Workers Party consolidated. This new network began to
pressure for changes at the level of companies. Union activism grew throughout the country with the
support of a Brazilian society now more openly showing its opposition to the military regime. The
companys first strike for many years in 1979 was a considerable shock to management. The union also
articulated its criticism through powerful metaphors in its newspaper, founded in the same year
(Rodrigues and Collinson, 1995).

Telemig became a company in search for a new identity. Its employees began openly to reject the
identification with the military management. The trade union increasingly challenged the high power
distance between managers and subordinates as well the authoritarian style of the military and their
allies. The former alliance that tied the military to engineers also began to come apart, both within

4
Telemig and in the sector as a whole. Interviews with employees in general and the examination of the
union newspaper reveal that the coalition within Telemig against the military management was initially
centred on union activists and then spread later to other organizational levels. The union made it clear
from the outset that it was distancing itself from the military identity. It is, however, also evident from
these interviews and documents that the union itself did not have a comprehensive proposition about the
direction the company should take. Whereas the military had had a very clear idea about the mission
and identity of Telemig, the union did not. Nevertheless, through its newspaper and activism, the union
began to challenge the militarys exclusive rights to define the identity of Telemig.

These circumstances deprived Telemigs identity as a military bureaucracy of its legitimacy. It was
impossible for the company to realize the mission that lent substance to that identity. The weakening of
the alliance between military officers and engineers, and managements problems in meeting new
demands from employees, also reduced the collective acceptance of the organizations identity.
Deprived of its liberating mission and army discipline, Telemig witnessed a deconstruction of its
previous identity as a military bureaucracy.

The political bureaucracy (1985-1993): a confused and contested identity

In 1985 the country returned to a democratic regime. Civilians took control of Brazilian state companies,
in particular politicians or aspiring politicians. Telemig remained a state enterprise linked to the national
holding company, and there was no consideration of its eventual privatization. Although it introduced some
new services during this period, it lacked the initiative and the freedom enjoyed by private companies to
innovate. The new republican government did not view the telecommunications as a priority. The funds for
expansion of the sector diminished substantially, though Telemig managed to expand through creating
some autonomy for itself, as noted below. This was a period of strategic paralysis for Telemig and its
sector, though dynamic in terms of political interference and employee and union activism. The new group
that took office in the company reflected political alliances supporting the federal government and the
coalition holding power in the State of Minas Gerais. The appointment of the new CEO resulted from
negotiations among the Minister of Telecommunications, the Governor of the state of Minas Gerais, and
politicians whose favour the central government wished to court.

When civilians took control of Telemig, they planned to introduce a completely new management style,
with a view to changing the organization's internal and external image. Stimulated by wider social changes
that had brought in a more democratic regime and state, and by a highly active union demanding better
working conditions and employee participation, managers tried to create an alternative corporate identity.
The new identity was intended to be more liberal and democratic. Accordingly, management decentralised
decision-making and encouraged wider employee involvement through the managerial council. Following
the earlier debacle, it was able to enhance the companys autonomy as strategic decision making had to be
discussed at the managerial council. Managers also retained from the past what they thought would be
useful to their purposes: they created integration rituals; they revived the happy-family metaphor and
created a new one, the open door policy. Their intention was to create a meaningful basis on which
employees could identify with Telemig by portraying a positive image of a democratic, caring and
considerate organization. (Rodrigues and Collinson 1995).

Although management had ideas about the style and the corporate culture they wished to develop, they
did not have a proposition for Telemigs identity in terms of objectives and strategies, one that was able
to integrate the mission with processes and routines, as in the days of the military. As one manager put
it: During the military period, efforts focused on a master doctrine. The company had clear
guidelines. Authority, responsibilities, rules and organizational processes were clearly set out and
integrated. At that time, the companys directors had a professional technical career, and they could be

5
promoted from Telemig up to the holding and the ministry. Today, the directors calculate how many
extra votes they will win with a given project, and they move from here to become deputies.

In response to growing employee dissatisfaction with the company, fuelled by the way wages were
being devalued by high inflation, and also by the lack of legitimacy of the new management, Telemigs
union adopted an adversarial policy. Workers took over the plant many times and initiated various
stoppages. The union took advantage of the climate of low trust in the new management to make
various public demands for changes in working conditions, in superior-subordinate relationships and for
the introduction of social benefits.

Loyalties were divided between the old style of management based on engineering, bureaucracy and
meritocracy and those who belonged to the group of those recently empowered. The union viewed itself
separate from engineers and managers. The military had left behind a distinct organizational culture
based on professionalism and probity. These ideals, together with authoritarian relationships and an
emphasis on rational decision-making, were still deeply embedded in the behaviour of Telemig's
managers and leaders. Thus, in the second half of the 1980s the organization was characterized by
contradiction and ambivalence. The organization had lost its previous identity and sense of purpose.
Management tried in vain to create to develop the consensus that could support a new identity.

The construction of a market-oriented identity (1993-1998)

By the beginning of the 1990s it became apparent that the model of development based on state
intervention did not meet economic and social expectations. The Cardoso government that took office in
1993 began to express its preference for a neo-liberal framework. At the same time technological
changes were dissolving previous boundaries between industry segments by creating hybrid services
such as video conferencing, multi media and data transmission.

The Cardoso government put forward a neo-liberal message that idealized the virtues of the market as
opposed to the deficiencies, including corruption and bad management, of the state. Neo-liberal
ideology carries clear conceptions about institutions, organizations, individuals and their role in society.
Individuals must be permitted to pursue their self-interest more freely and efficiently, and organizations
must have attributes such as rationality, and flexibility in order to achieve competitiveness through
innovation and leanness. Those failing to adopt such attributes are condemned to fail (Carrier 1997).

The first step in applying this programme was to improve the performance of the companies and
upgrade their competencies. The second step was to introduce new regulations that fostered
competition. In order to implement these changes the government constructed a political network that
supported neo liberalism. The minister of telecommunications was an advocate of the free market and
he appointed politicians or career professionals to implement his plans within the companies. Under
Cardosos government, Telemig had two types of CEOs: those who had built their careers within the
company, and politicians. Both had to be supporters of the neo liberal framework and privatization. The
role of these CEOs was to turn around the company so as to make it attractive to private investors in the
near future. They were expected to lay down the ground for the construction of a new identity for
Telemig: to change it from a political bureaucracy to a market organization.

In 1995 the government formally announced its intention to privatise the telecoms sector and Telemig
began a major transformation. It abandoned projects deriving from political pressures and began to
invest in innovative projects that added value. It diversified its portfolio of services and focused heavily
on large customers. Management had already started to invest in quality control programmes, re-
engineering and training. It now separated engineering and operations from the business areas. It
created business units and a marketing department. Accordingly, the message was circulated that the

6
company should move to become a service company rather than an engineering company. The company
invested in innovation, productivity and in early retirement programmes. Two concepts were prominent
in its training programmes. The first was that managers should now be considered as collaborators,
implying that they should be prepared for moves from their current positions at any time. The second
concept was that of employability. This implied that managers should learn new skills in order to justify
their employment and also to be able to find employment anywhere in the market. This idea was that
managers, not just companies, must be competitive. At this time 107 employees left the company in an
early retirement programme.

Shareholder value: the end of an identity

Telemig was privatised in 1998. It was acquired by a state bank, a manufacturer of telecoms equipment
(which later sold its shares to an investment house), an investment fund and a pension fund. Following
privatization, Telemig has gone through a series of transformations. It changed from a company
identified with the state of Minas Gerais to becoming a member of a group of sixteen companies located
in various parts of the country that had been acquired by the same collection of financial investors. Its
name changed to Telemar in 2000, the groups head office moved to Rio de Janeiro, and a new group
CEO was appointed from the private sector. This CEO was expected to build a new corporate identity
for the various state companies acquired by the group; one compatible with a shareholder value
philosophy. The former Telemig now had owners who were very clear about what they wanted from its
members. The most frequent question asked became how each could contribute to shareholder value.

Under private ownership Telemig, now Telemar Minas, has been progressively denuded of functions.
While a state company, it had been a complete business unit with a full range of management functions,
including finance, human resources, marketing, operations and R&D. After privatization it lost its R&D
and most of HRM functions. The financial and operations functions have also been cut back, and the
company is gradually being transformed into a regional sales office.

Telemig has therefore lost both the symbolic and material components that defined its identity as a
company. The change of name was of considerable symbolic importance. Telemig stood for Tele Minas
Gerais, whereas Telemar means Tele sea. Though the new name could make sense for other
companies in coastal areas and for the new corporate HQ in Rio de Janeiro, it was seen as inappropriate
to an inland region. The change of name seemed yet more perverse given the well-established Telemig
brand, which had identified one of the best performing and most respected telecoms companies in the
whole country. Moreover, much of the culture that previously defined Telemig has also gone, like the
idea of the large family, paternalism and life employment.Materially, the organization now has only a
circumscribed and subordinate position vis--vis its holding company. Telemig had previously enjoyed
some autonomy and scope for tasking a lead within the wider state system. It was considered elitist,
being known for having the best engineers and thinkers in the sector. This capability was reflected in the
fact that after privatization many of its executives were assigned to different regions of the country in
order to upgrade standards in other companies within the new group. Telemig lost its autonomy with
most important decisions now being taken by the parent in Rio de Janeiro, including use of its
surpluses. It has even had to give up its central office building in Belo Horizonte.

Discussion
The role of coalitions in organizational identity construction and deconstruction
Telemig experienced several phases of organizational identity construction and deconstruction during its
lifetime from 1973 to 2000. The first phase began in 1973 when the company was formed by
government fiat, amalgamating about 100 existing companies. Leaders of the telecommunications
sector joined with the military government in defining a new identity for the organization. This identity
was maintained successfully during the early years by a tightly-knit dominant coalition that spanned

7
macro and micro levels. The coalition consisted of technocrats in the telecommunications ministry,
military officers appointed to senior management positions in Telemig, and company engineers. The
social identities of these three groups had sufficient compatibility and cohesion to enable them to join
together to articulate and maintain a credible identity for the company. Telemigs identity was
disseminated and socially legitimated by this coalition and through wider institutional arrangements
such as the telecommunications institutes.

The subsequent period, 1978 to 1985, witnessed the progressive deconstruction of Telemigs previous
organizational identity. Its external sponsor, the military regime was losing political legitimacy. The
companys dominant coalition was increasingly being challenged, and its conviction and cohesion was
eroding. Bolstered by growing popular discontent and industrial unrest in Brazilian society, a new
coalition of unions and the Workers Party gained in power and cohesion. It attacked the legitimacy of
the dominant coalition, and backed this with industrial action.

The deconstruction of Telemigs organizational identity was not, however, immediately followed by the
construction of a new identity that was either clear or legitimate. Instead, a period of confused and
hollow identity ensued in the years up to the announcements from 1993 onwards of plans for the
companys eventual privatisation. During this period, the company retained the form of a public
bureaucracy but lacked its concomitant substance as a professional public service provider. One reason
for the failure to construct an effective organizational identity at this time was that the counter-coalition
to the pre-1985 regime was characterized by opposition to the previous organizational identity rather
than by the advocacy of any clear alternative on the part of a new rising dominant coalition. The role
that the trade union might have played was diffused through a programme of co-opting employees as
allies through provisions for greater participation within the company.

The construction of a new organizational identity for Telemig in the 1990s was triggered by the
ascendancy of governments with neo-liberal ideologies and their alliance with appointees to the
companys top management. These appointees were seen as competent and, in several cases, had been
associated with earlier attempts to introduce reforms and improved practices. The company was
therefore now in the hands of managers who both espoused a neo-liberal ideology and possessed the
competence to lead a corporate transformation in preparation for privatization. The new organizational
identity they framed with the endorsement of government was that of a public bureaucracy being
prepared for privatization through developing its capability to respond to market criteria the market
bureaucracy.

Privatization, once enacted, led to a further stage in the evolution of Telemigs organizational identity.
It was now subsumed into a larger group that pursued added value for the benefit of a network of
private owners rather than the state or provincial community. Market awareness remained important,
but the companys main raison detre was now to secure a high return on the investment made by
specific owners who came from outside the sector. Telemigs previous identification with the wider
community of Minas Gerais was formally severed when it lost its separate legal identity and status.
There is today a strong dominant coalition of owning groups fostering the emergence of the new
shareholder identity, but it is not universally accepted as legitimate by all groups within the company
particularly those who perceive themselves closely associated with Minas Gerais.

Coalitions, networks and identity

The coalitions that played a significant role in the evolution of Telemigs identities were effective when
they aligned the identities and interests of different groups within social networks that straddled the
boundaries of the company. Relevant groups inside Telemig included top managers, engineers,
technicians, workers and officers of the company union. Those outside the company included members

8
of the military and subsequent civilian governments, other politicians, ministry bureaucrats, and officers
of the national telecommunications union and, in recent years, major shareholding groups.

The role of networks in identity formation and maintenance has been largely neglected by the literature
on organization identity. The Telemig case offers five insights into the role played by networks in the
construction and deconstruction of organizational identities. First, it indicates that a network is an
important conduit of social and cultural information. The networks associated with Telemig served as
transmission belts of new ideas (Mische 2003). They were important locations for the creation and
maintenance of identity and culture.

Second, in addition to facilitating the sharing of ideas, networks connecting internal and external parties
into an effective coalition were also instruments for mobilizing the initiative and power to take action
(Granovetter 1992). Groups that are interconnected by a common ideology share ideas about how
power and economic relations should be articulated in society. These ideas can be conveyed and
diffused by groups and people strategically situated at a given point of the network. Usually these are
people located in power and knowledge circuits (Clegg 1989) and are able to establish connections
between different social levels, such as between those in government and in organizations. They
persuade individuals and groups within the network that the ideology can express and align their
interests. In Telemigs case, a dominant identity was formed around ideas shared by groups and
individuals across different levels in and outside the organization.

The third observation is that Telemig demonstrated the importance of network connections to significant
bodies in the wider society and internationally. When it was a state-owned company, government agents
and politicians constituted a natural external constituency whose support had to be mobilized in order to
change or maintain organizational identity. Non-governmental groups outside the company, such as
banks, multinational telecoms corporations and consultants, played an important role in shaping its
changing identity in the periods leading up to and following privatization. Thus recognition of the role
played by network connections draws attention to the multi-layered nature of organizational identity
formation.

Fourth, the power of a network to create an organizational identity derives from the closeness of its ties
and its cohesion. We have used the term coalition to describe a network members that are closely tied,
not only by shared values but, also by common political interests. The network that created the military
bureaucracy identity for Telemig in the 1970s was clearly a dominant coalition in this sense. The groups
that supported the military regime and the military technocracy - the military, the techno-bureaucrats,
and the engineers constructed a strong collective identity for the company. This was based on a shared
conception about how the strategy of companies could contribute to Brazils development. Key
company appointees also held political positions in the central government, while the engineers and
techno-bureaucrats shared a similar educational background. Their social ties were strong. The network
of the Telemig founders was well articulated across different levels. It was capable of tying the
dominant ideology at the macro level to concepts, plans, and cultures at the micro level. Military officers
and engineers also controlled a network of power positions that they shared in rotation. Military officers
usually occupied important posts in state companies while the technocrats were invited to occupy relevant
posts in public administration (Dreifuss 1981). This created a favourable context for the institutionalisation
of technocracy as a powerful organizational ideology and for the construction of supporting myths. It
encouraged cultural isomorphism (Meyer and Rowan 1991) across all the telecoms companies and thus
gave them a degree of shared identity.

Last but not least, the fact that people belong to different networks suggests that while an organization
identity can be formed through the activities of a particular coalition, that identity will not necessarily

9
appeal to, or secure legitimacy from, among all groups. Since organizational identity is a collective
concept (Giddens 1990, Larrain 2000, Mische 2003), its central and distinctive characteristics require
confirmation by the organizations diverse constituencies in order to be enduring. They are likely to
secure this confirmation if they provide positive signals for the interests that anchor individual and
group identities both within the organization and in its relevant domain. The ability of network
coalitions to construct an organizational identity is enhanced by the credibility they enjoy in terms of
the vision they are able to articulate, the plans they propose, and the quality of management and
technology (practice) they offer to the company.

Identity: the organization as a social actor and social actors in the organization
The Telemig case draws attention to the reflexive and interactive nature of the relationship between
organizational identity and social identities. It shows that it is possible to achieve a collective identity,
one that integrates the identity of actors and that of an organization. When people see themselves
committed to an organization as members, then this sense of belonging becomes part of the definition
of oneself (Larrain 2000). In these circumstances, the identities in and the identity of an organization
become mutually supportive. A collective identity can become strengthened through re-iteration in
discourses and practices. Though Telemig in its early days was described as authoritarian and afflicted
by a disease called engineerism, these criticisms were at the time overshadowed by the sense of
collective purpose that its mission projected and by a culture that likened the company to a large family.
A collective identity can be enduring if reinforced by a congruent corporate culture. Among its
ceremonies, Telemig commemorated long-term employee service, especially the 25 th anniversary, and
maintained other rituals involving employees and their families.

A collective identity also serves to separate and differentiate groups from one another on the basis of
their alliance to the dominant coalition and identification with the values and principles they defend.
Discourses and practices, like rituals, can be used to publicly present those groups that are viewed as
included in the dominant coalition and those who are excluded. Thus identity also serves to justify the
continuity of certain groups in positions of power or prominence. For example during the military
period, the engineers had a special place in the organization; they had the best positions and salaries.
The expansion department had the best offices in the company and its members - the engineers - were
viewed as heroes. They were seen as the main contributors to the outstanding performance that the
company exhibited in those days.

Cycles of identity construction and deconstruction

The adoption of a longitudinal perspective has permitted us to capture not only the relational, but also
the chronological and political dimensions of organizational identity. From this perspective
organisational identity involves a trajectory of different identities that are respectively more or less
congruent with the cognitive aspects as well as with the interests of given categories of social actors.
Thus changes in organization identity reflect re-alignments of groups within the organization and at the
supra-organizational level. Given the public prominence of Telemig, the support of actors occupying
powerful positions in its wider domain provided a necessary, though not sole, condition for the
legitimacy of a given organizational identity. When viewed from a long-term perspective, Telemigs
organizational identity suggests a cyclical process of construction and deconstruction in which political
preferences can be as important as cognitive and affective choices. In this process, identity separates
and distinguishes groups not only in cognitive terms but also ideologically; it provides justification for
the rise and fall of coalitions from organizational power.

The Telemig experience points to the value not just of distinguishing between the identity of an
organization as a social actor and that of social groups comprising or associated with the organization
(Whetten 2002), but also of exploring the connections between them. The dynamic processes through

10
which the identity of Telemig was constructed and de-constructed cannot be appreciated without
reference to how participating groups viewed that identity as part of their own identity. Social actors are
important agents in the construction and in the deconstruction of an organization identity. They can
legitimate it when they identify with it, and when they publicly reiterate it in discourses and practices. It
is at this point that an identity can be associated with an organization culture; when one cross-fertilises
the other. This link can be broken when a negative association between the organization and
management emerges in employees minds and emotions. When an organizational identity is patronised
by a particular group and fails to attend to the needs of particular interests, it becomes vulnerable to
moral and political attack. It is a sign that a de-legitimating process is underway. The fragmentation of
an existing configuration of identity, culture and interests paves the way for the formation of another
coalition driven by aspirations to positions of power within the organization. The history of Telemig
demonstrates that when this new coalition is able to mobilise support by forming a network, and by
aligning interests across organizational levels, a new identity cycle is about to begin. There is clearly an
important political dynamic behind this process.

In contrast to the notion of an enduring organizational identity, the history of Telemig suggests the
alternative possibility of a cycle of identity construction and deconstruction. This cycle is portrayed
schematically in Figure 1. The cycle is framed in terms of two key dimensions that have emerged from
the case study. The first is the extent to which there is a leading group, or dominant coalition of
network members, that is effective in guiding the organization and articulating an identity for it.
Effectiveness is assumed to be a product of the coalescence of the coalition and the extent to which it
has accumulated sufficient social power and legitimacy to impact on the policy of an organization,
including the construction of its identity. The absence of an effective dominant coalition characterized
Telemig for much of the 1980s, which was a period when the organizations identity was severely
challenged and a period of relative confusion ensued. The second dimension is the extent to which an
identity has become collectively accepted by core groups within the organization and by significant
groups within its domain. When this acceptance is high, the central characteristics of an organizational
identity are clearly articulated to a broad constituency and it enjoys wide legitimacy.
Figure 1 in here
In the cycle we are proposing, the rise of a newly coalescing dominant coalition provides the driver for
a new organizational identity. The term coalition is appropriate because it is likely to take the
combined forces of more than one group to promote a new organizational identity successfully.
Because of Telemigs high economic and social profile, its identity-forming coalitions required support
from politically powerful external groups within an extended network in order to assume effective
dominance within the company. Other groups, most notably the companys trade union, that failed
either to coalesce with others or to gain significant external support, were ineffective in getting their
proposed agendas (and hence potential identities) for Telemig into practice.

The lower right-hand part of the cycle in Figure 1 represents a situation in which the identity of an
organization is coming under challenge from groups outside the dominant coalition, or even from critics
within that coalition. There may be a growing tension between the image (stated values and mission)
that projects the identity of the organization in society and the material factors that underwrite it. This
could be because the organization is not performing adequately to give credence to its identity. It could
also be due to the growing power of external and/or internal groups who do not subscribe to that
identity, or the practices it is being used to justify, and who therefore constitute an opposing network.
In one sense or another, there is a growing tension between how the identity of an organization is being
represented and what is perceived to be valid either in terms of reality or desirability. It is also likely
that there is a growing incongruence between the organizations identity and its extant culture. The
organizations identity therefore passes through a phase of increasing de-legitimation. This coincides
with the decreasing effectiveness of the organizations dominant coalition in terms of its operation as a

11
cohesive social network and its ability to articulate an agreed and convincing expression of the
organizations identity. For the social actors involved, this phase represents the beginnings of a
detachment from the existing organizational identity. Their narratives about identification with the
organization frequently betray ambiguity and contradiction.

When the lower left-hand part of the cycle is reached, the organization is experiencing an identity crisis.
It may well face an economic crisis as well. Its previous identity has become confused, discredited and
challenged. In other words it is widely perceived to be ready for deconstruction. At this point there
may be an absence of clear and strong leadership because the previous dominant coalition has not yet
been replaced or because the new power holders have not yet had an opportunity to coalesce around a
new identity. The governing coalition is weak and the organizations identity has lost centrality both for
its members and in the eyes of external groups. In this situation, many social actors experience a high
level of alienation from the organization. They may at this point publicly manifest their disaffection
from the previous identity but without demonstrating a clear idea of the future identity. Taking refuge in
an idealised past can be seen as a way out the current uncertainties.

As the cycle moves to the upper left of Figure 1, an effective leading coalition has coalesced, possibly
with the support of significant external groups. That is, a new network has formed around a shared
sense of what should constitute a reconstructed identity for the organization. This coalescence of power
and social identity (identity in) is now sufficient for the construction and promotion of a new
organizational identity to take place. The substance and symbols of this new identity are likely to be
communicated and discussed intensively within the organization, and special efforts may well be taken
to disseminate them externally through various forms of publicity and public relations.

The upper right-hand part of the cycle represents the results of the efforts put into identity construction.
The organization now has a clear, central and distinctive identity that is re-iterated by discourses and in
the culture. This has the backing of its controlling group or network, and it enjoys a sufficient level of
legitimacy outside the organization. These circumstances may prevail for a considerable length of time,
with the organizations identity becoming embedded in social consciousness and hence enduring. If and
when circumstances change in a way that begins to undermine the effectiveness of the dominant
coalition projecting the identity, or that create a gap between the identity and perceived reality, then the
process leading to identity deconstruction will get underway again.

Conclusion
In line with its aims, this paper adds to the theory of organizational identity in three major respects.
First, by pursuing a longitudinal perspective it has been able to detect the potentially cyclical nature of
identity. Organizational identities are liable to come and go with time. They are strong when they are
supported by an effective dominant coalition and embedded in the organizational culture. An
organizations culture can add tangibility to its identity through the routines it sponsors. In this way
organizational culture provides a bridge to members that helps secure their approval for organizational
identity. Equally, an organizational identity can be fragile and therefore of limited endurance when it
fails to create links with an existing organization culture or goes against principles and practices
cherished in the past (Gagliargdi 1986). An identity also tends to wane when its supporting coalition
disintegrates or fails to put forward a clear vision that employees feel is legitimate in terms of meeting
their needs and interests. The weakening of the dominant coalition creates a power vacuum that paves
the way for the formation of another coalition to take control. This new coalition is better able to
introduce and create a strong organizational identity the more its proposition is embedded in the
organization culture, the more it can fulfil its constituents interests and more this identity clearly
integrates the organizations mission, strategy and practices. A fragile identity can arise when the new

12
proposition is unclear, when it is merely grounded on opposition, or when the coalition sponsoring it is
weak.

A second theoretical contribution has been to clarify the way that its identity is not just an abstract
symbolic representation of what an organization stands for as a social actor. It also carries significant
ideological potential for the justification of the organizations leading groups and external principals.
This accounts for the role that power politics have played in the history of Telemigs identity
construction and deconstruction. An understanding of the dynamics of organizational identity therefore
requires a political perspective in addition to the emphases on cognition and affect that have grown out
of the origins of the identity concept.

The third contribution has been to clarify the way that the dynamics of organizational identity
construction and deconstruction involve processes that transcend levels of analysis. While the identity
of an organization is a holistic concept, it is impossible to account for it except by reference to the
various social groups that typically constitute an organization and its relevant external domain. It is
also significant to note that despite the holism of the concept, an organization identity is not necessarily
wholly collective. A collective identity has certain qualities. It is shared in the sense that members
define organizational features as being the ones they espouse. They re-iterate it through narratives and
behaviour that confirm its central characteristics. A hollow identity, by contrast, is one that is
proposed by the dominant coalition but is not shared. Some members demonstrate their detachment
from it, if not outright opposition. The case we have analysed indicates that over its life span, an
organization can assume different types of identity ranging in different degrees from collective to
hollow.

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Table 1. Research Methods and Sources in Three Phases of Investigation

Phase I: 1986-1990 Phase II: 1997-2000 Phase III: 2001

Telebras (holding company) Telebras (holding company)

Dossiers: Documents:
25 biographies of heroes and 144 documents on Telebras
leaders of the Brazilian policies and practices (1973-
telecoms sector 2000)
Interviews: 10 Anatel (regulatory authority)
5 senior executives documents
4 retired employees
Former office of the Secretary
for Telecommunications in
Brazil (1976-1990)

Telemig (focal company) Telemig (focal company) Telemig (focal company)

Interviews:
5 managing directors
60 managers and engineers at
division, department, and
section level
4 local union officials
Documents:
Analysis of 304 cartoons in trade
union newspaper ("The Goat")
(1979-1990)
Interviews:
4 managing directors
2 ex-presidents
45 managers at division and
section level
40 technicians (engineers,
supervisors, cable men,
telephonists)
8 retired employees
Questionnaires:
50 respondents: board
members, managers,
supervisors, employees
Documents:
Company reports (1973-2000)
Organizational charts (1983-
2000)
130 issues of trade union
newspapers ("The Goat",
"The Little Goat") and other
bulletins (1990-2000)

Others:
Management development
consultant to Telemig
Official of Fittel (National
Union for Telecoms)
Documents:
Analysis of 200 cartoons in
union newspapers ("The Goat"
and "The Little Goat")
(1990-2000)

14
 Figure 1. The Cycle of Organizational Identity Construction and Deconstruction

High

Dominant coalition The organization has

coalesced and promoting a clear, central and
a new identity for the collectively accepted
organization identity

Effectiveness failure to
of the secure legitimacy
for a new
organizational organizational
coalition identity

Organizational A disintegration of the

identity is ambiguous. dominant coalition leads to
Significant actors are growing challenge to the
alienated from it existing organization identity

Low High
Collective acceptance (legitimacy) of organizational identity

15
i