CMA Final · Cost and Management Audit

Evaluation of Corporate Image: formula sheet

Full chapter guide

Key formulas

Identity, image and reputation: Identity = what the company projects; Image = what stakeholders perceive now; Reputation = cumulative judgement over time; Use this one-line contrast in any 'differentiate' question.
Image gap: Image gap = Desired (projected) identity − Perceived image; A conceptual gap, not a number. A wide gap means communication or conduct is failing.
Core components: Products/services + Management and governance + Financial performance + People + Social responsibility + Customer service + Communication; Use as a checklist when asked for factors or components.
Image gap: Image gap = Desired image − Actual image; A concept, not a numeric formula. Assess it separately for each stakeholder group.
Core objectives of evaluation: Measure → Compare → Diagnose → Recommend → Monitor; A memory chain for writing objectives in an answer.
Stakeholder link: Benefit of good image = Benefit to each stakeholder group; Structure benefit answers by customers, employees, investors, lenders, suppliers and society.
Satisfaction or image score (percentage): Image score % = (Total score obtained ÷ Maximum possible score) × 100; Maximum possible score = number of respondents × number of items × highest rating point.
Weighted image score: Weighted score = Σ (Weight of attribute × Average rating of attribute); Weights must add up to 100% (or 1). Use higher weights for attributes that matter more to stakeholders.
Net favourable share in media: Net favourability % = (Positive mentions − Negative mentions) ÷ Total mentions × 100; Neutral mentions stay in the total. This is a common media-analysis measure, not a prescribed ICMAI formula.
Gap against benchmark: Gap = Company score − Benchmark score; A negative gap shows an area to improve. Benchmark can be a competitor, industry average or past period.
Role in three words: Review → Report → Recommend; Use this as the skeleton for any theory answer on the auditor's role.
Image gap: Image gap = Desired image − Actual (perceived) image; A conceptual measure, not a statutory formula. The audit aims to find the causes of the gap and suggest ways to close it.
Cost-benefit test for a recommendation: Net benefit = Expected benefit − Cost of implementing the recommendation; Recommend an action only when net benefit is positive, or when a non-financial benefit clearly justifies it.

Quick revision

Corporate image is the overall impression stakeholders hold about a company.
Image is shaped by many stakeholder groups, so one view is never enough.
Evaluation compares the image the company wants with the image stakeholders actually hold.
Objectives include finding gaps, protecting reputation and supporting strategy and decisions.
Key factors include product and service quality, governance, ethics, financial performance, employee conduct and social responsibility.
Evaluation combines internal evidence with external stakeholder feedback.
Use both quantitative and qualitative methods, and state the limits of each.
Survey results depend on sample design and question quality, so mention them as limitations.
The management auditor reviews evidence independently and does not simply repeat management's view.
Report findings with causes and practical recommendations.
Link image outcomes to the functions that cause them, such as quality, service and compliance.
Write answers with headings and short points, and add an example.

Common mistakes

Treating corporate image and corporate identity as the same thing. Fix: Remember that identity is projected by the company and image is perceived by stakeholders.
Saying reputation and image are identical. Fix: State that image is the current impression and reputation is the lasting judgement built over time.
Treating corporate image as only advertising or logo Fix: State that image comes from actual conduct: quality, service, ethics and governance. Communication is only one part.
Listing benefits without naming stakeholders Fix: Tie each benefit to a group, such as lower borrowing cost for lenders or easier hiring for employees.
Listing factors without explaining their effect on image. Fix: Add one sentence for each factor: how it improves or harms image and for whom.
Treating external factors as controllable. Fix: Remember that management cannot control media or regulation. It can only prepare and respond to them.
Listing tools without saying what each measures or who it covers. Fix: For every tool add what it measures, which stakeholders it covers and one limitation.
Relying on customer surveys alone. Fix: Include employees, investors, suppliers, regulators and the community. State that different groups need different questions.
Treating image audit as an audit of the PR department only. Fix: Say that image is shaped by quality, service, ethics, HR and governance too, so the auditor reviews all these areas.
Writing that the auditor implements or decides the image strategy. Fix: State that the auditor reviews, reports and recommends. Management decides and implements.

Exam tips

Differentiation questions are easy marks. Give a short table-like contrast in bullet form: source, nature, time, control.
In case questions, tag every fact to a component and say whether it helps or hurts the image.
Always name the stakeholder group that forms the view. It shows application, not recall.
Close with the management auditor's role. Examiners look for the audit link.
For MCQs, watch the wording: 'perceived by stakeholders' points to image, 'projected by the company' points to identity.
Structure benefit answers by stakeholder. It scores better than a general list.
In MCQs, reject options that treat image as only advertising, or as a recorded balance sheet asset.
Always add the management audit link in descriptive answers, even in one line.