Economic Crisis Impacts Business Image In Europe
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Economic Crisis Impacts Business Image In Europe

The economic crisis and banking excesses continue to significantly impact trust in business and CEOs.

Holmes Report

The economic crisis and banking excesses continue to significantly impact trust in business and CEOs, according to a new European Trust & Purpose survey from Burson-Marsteller. In addition, close to 70 percent of consumers say a strong corporate purpose is important to them and nearly 80 percent say they would rather pay more for products and services that are delivered and produced responsibly and fairly.

Trust in multinationals has decreased by 36 percent over the past two years and trust in CEOs has decreased by almost 50 percent during the same time. The survey also reveals that loss of trust is not limited to the business community: national governments across Europe have experienced a 51 percent decline in trust over the past 2 years, with the biggest losses felt in Portugal (-84 percent), Greece (-78 percent) and Spain (-77 percent).

The most trusted industry sectors are computer technology and online services, supermarkets, food and beverage, and automotive. The least trusted sectors are energy providers, social media and financial services.

Across Europe, consumers singled out the financial crisis and corporate behaviour as the events that had caused them to lose trust in companies in the last two years.

“It is not an exaggeration to say that the 2008 economic downturn has had a catastrophic impact on trust in corporations and the people who lead them. The financial crisis has transformed the way people view companies and corporate leadership”, says Jeremy Galbraith, CEO, Burson-Marsteller Europe, Middle East & Africa. “Trust is no longer something that corporations can take for granted—it has to be earned by nurturing a close relationship with consumers and other stakeholders and consistently proving a commitment to the things that matter to them.”

Trust in business also varies enormously and depends on a combination of factors. Overall, provenance and business size counts. People trust local companies the most, national companies a little less and international least of all. Similarly, people trust front-line staff to tell them the truth about a corporation, as opposed to its CEO, who is seen as motivated by personal profit.

The study also shows that over two thirds of people believe that having a strong corporate purpose is important and consumers would rather pay more for products and services that are delivered and produced responsible and fairly. Core values such as honesty and trustworthiness, good value and treatment of employees are viewed as the key reputation builders.

“The challenge for companies and those who communicate on their behalf is that a majority of consumers views them as dishonest and believes that most communications from companies are lies,” says Galbraith. “Consumers trust local businesses that they know and direct communications. And the results are consistent across Europe. This shows the fundamental need to re-build corporate reputations and change the way companies communicate.

“Having a corporate purpose integrated into your business strategy and ensuring it is communicated, and understood, internally and externally is an important part of this.”
Other findings:
• Many industry groups are more trusted than traditional thought leaders. Trust in computer technology (71 percent), supermarkets (64 percent) and automotive (55 percent) is higher than in media (38 percent), central government (24 percent), religious leaders (24 percent) and politicians (13 percent); religious leaders and politicians are even less trusted than the financial services sector (28 percent).
• Europeans are cynical about the motivations of business and CEOs: 60 percent believe they are less trustworthy than the average employee and nearly half believe their motivation is personal profit. Trust in CEOs over the past 2 years has decreased the most in Spain (68 percent), Portugal (64 percent) and Sweden (59 percent).
• 66 percent are less likely to trust companies that are foreign-owned. Europeans trust companies from Australia (56 percent), Japan (55 percent) and America (48 percent) more than BRICs (China 18 percent, India 14 percent, Brazil 14 percent, Russia 12 percent).
• Honesty and trustworthiness (40 percent), good value (39 percent) and treatment of employees (28 percent) are the key reputation builders, more so than what companies say about their support for the community (11 percent) and environment (19 percent).
• More than two thirds of people believe that a strong Corporate Purpose is important and almost 80 percent would rather pay more for products and services that are produced responsibly. People prefer realistic, down-to-earth messages over grandiose statements, the want hear about a company’s values from the front-line teams (80 percent), and most (72 percent) feel that companies have become more dishonest over time.
• Overall, trust in the European Parliament and European Commission has decreased less (-32 percent/-33 percent) than trust in national government (-51 percent).


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