Bailouts, bonuses and bad business behavior all combined to erode the overall reputation of corporate America to its worst standing in ten years, according to the Harris Interactive RQ survey, which polls more than 25,000 American consumers to first identify the 60 most visible companies and then to rank them based on their reputation in six different categories: emotional appeal, products and services, social responsibility, vision and leadership, workplace environment, and financial performance.
Technology remains the highest rated industry, but its reputation declined along with six other industries, with the automotive industry reporting the greatest decrease ever. The financial services industry now shares the lowest industry ranking with the tobacco industry, with just 11 percent of the public giving positive ratings to these two industries. The pharmaceutical industry was the only industry to register a significant positive change from 2007.
Despite a dramatic decline in corporate America’s image among consumers, Johnson & Johnson, Google, Sony, Coca-Cola, Kraft, and—returning to the list of Most Visible Companies—amazon.com, all received RQ scores that categorize their reputations as “excellent.” (An RQ score of 80 and above is considered “excellent.”)
“While the overall reputation of corporate America has never been worse in the eyes of the general public, greater understanding of and credit for working diligently to build and maintain a good reputation has never been stronger,” says Robert Fronk, senior vice president and senior consultant on reputation strategy at Harris Interactive. “The RQ study also validates that both corporate behavior and corporate communication play a major role in how a company is perceived.”
Johnson & Johnson claimed the top spot for the 8th time in the study’s 10-year history by placing in the top five in five out of the six reputation dimensions. Sony had one of the biggest improvements in rank, climbing from 16th place in 2007 to 3rd place in this year’s ranking. The only company with greater improvement in its actual RQ score was Wal-Mart, whose score increased by almost 5 points.
“The companies that achieved RQ scores that characterize their reputations as either good or excellent have a decidedly value or comfort basis in their businesses”, says Fronk. “While the reputations of many of these companies have been relatively stable over time, there is no doubt that in the current economic environment, these two characteristics only serve to reinforce a positive reputation.
AIG, in its first appearance on the list, recorded one of the lowest scores in the study’s history, with Enron’s 2005 score being the last at this low level. The three Detroit automakers recorded the three largest reputation declines this year, with General Motors suffering one of the biggest one year drops in the survey’s history, placing them 58th on the list of 60 companies rated. This contrasts with Toyota’s number 10 ranking.
Along with the overall plunge in the perceptions of the financial services industry as a whole, seven individual financial services firms—AIG, Washington Mutual, Citigroup, Merrill Lynch, Wachovia, JP Morgan Chase, and America Express—which were not on the list in 2007 joined the list of Most Visible Companies in 2008 alongside repeat companies Wells Fargo and Bank of America Corporation. All had scores reflective of companies with very poor reputations.
“Our study indicates just how hard it will be for many financial services firms to regain the trust of both the public at large and their customers,” says Fronk. “These firms hold nearly all of the bottom spots on the lists of companies whose products are least likely to be purchased or recommended. And unfortunately, these companies have extremely high familiarity and recall of corporate communications, but are not seen as being sincere, transparent, accurate, or consistent in their communications, all of which have a very high correlation with positive reputation.”
The top 10 companies on this year’s list in order of ranking include: 1) Johnson & Johnson; 2) Google 3) Sony Corporation; 4) The Coca-Cola Company; 5) Kraft Foods; 6) amazon.com.; 7) Microsoft Corporation; 8) General Mills; 9) 3M Company; 10) Toyota Motor Corporation.
In the various categories covered by the survey, the leaders were:
· Social Responsibility: Whole Foods, Johnson & Johnson, Coca-Cola, Walt Disney, Microsoft
· Emotional Appeal: Johnson & Johnson, Kraft, amazon.com, Sony, General Mills
· Financial Performance: Johnson& Johnson, Berkshire Hathaway, Coca-Cola, Microsoft, Google
· Products & Services: Sony, Johnson & Johnson, 3M Company Google, Kraft
· Vision & Leadership: Berkshire Hathaway, Google, Microsoft, Coca-Cola, amazon.com
· Workplace Environment: Google, Johnson & Johnson, Sony, Microsoft, Kraft
Among the survey’s other findings:
· Nearly all (98 percent) believe it is important that corporations do evolve to more sustainable business practices;
· More than two-thirds (68 percent) believe American corporations are lagging behind companies in other countries;
· Only 16 percent of Americans believe that they will make these changes on their own; and,
· Most Americans (90 percent) say they give some consideration to sustainable business practices when purchasing a company’s products and services.
“There is a serious struggle right now for American consumers as they weigh ‘value’ in a product or service and ‘values’ in what they want and expect from companies,” says Fronk.