Corporate Reputation Study Shows Impact of Current Events
The seventh annual Reputation Quotient study shows that the overall reputation of American corporations, which was already weak, slipped further in 2005. This year, 71 percent of respondents rated American businesses'' reputation as "not good" or "terrible," compared with 68 percent in 2004. So, despite corporate-governance reforms such as Sarbanes Oxley and a growing commitment to ethics and social responsibility, companies haven''t redeemed themselves with the public.
The Reputation Quotient study, which offers an established approach for measuring corporate reputation, was conducted in two parts. Between March and June, 6,977 respondents were asked to name the two companies with the best reputations and the two with the worst. The 60 companies named most often were then rated by 19,564 people in a separate survey between Aug. 30 and Sept. 26. Harris Interactive in association with the Reputation Institute, developed the tool to help understand the foundation of a corporations'' reputation, as well as the perceptions that are most closely associated with consumers'' behavior when it comes to purchasing a company''s products and stock.
RQ research evaluates stakeholder perceptions across 20 attributes that are grouped into the six dimensions of reputation:
Products & Services
Vision & Leadership
Interestingly, many respondents to the survey did not give corporations much credit for their respective philanthropic ventures over the past year, which included response to the devastating tsunami as well as hurricanes Katrina and Rita. In fact, many respondents called on companies to give more and make their good deeds more visible to the public. Procter & Gamble Co. was one of the companies that respondents criticized for not doing enough to demonstrate social responsibility. Partly as a result, P&G dropped from fourth on the list in 2004 to 13th in 2005.
The question of whether or not to publicize social activism is up for debate, of course. We typically encourage clients to announce their good deeds but to understand that their largesse should primarily help achieve organizational objectives other than visibility. If they are publicly recognized, that''s great, but the desire for credit should never be a driver.
Not surprisingly, current events played a role in how some corporations were ranked. For instance, the three oil companies in the survey -- Exxon Mobil Corp., Chevron Corp., and Royal Dutch Shell PLC -- were ranked among the bottom 15 at least partly due to the spike in the price of gas at the pump. Meanwhile, Halliburton finds itself among a rogue''s gallery, narrowly placing higher than Adelphia, MCI (WorldCom) and Enron. On the flip side, all the glowing praise of Google certainly contributed to its incredible debut at number three.
Here is the complete listing:
1 78.75 Microsoft Corporation Home Depot The Procter & Gamble Company The Walt Disney Company Dell Computer Corporation Honda Motor Pepsico Costco IBM Corporation General Electric Company Starbucks Corporation McDonald''s SBC Communications ChevronTexaco Corporation Altria Group Sprint Corporation 54 55 56 Enron
Johnson & Johnson
The Coca-Cola Company
United Parcel Service (UPS)
The Boeing Company
E.I. D uPont De Nemours (DuPont)
J.C. Penney Company
Ford Motor Company
General Motors Corporation
Bank of America Corporation
Sears Holdings Corporation (Parent of Kmart/Sears, Roebuck, and Co.)
Merck & Co., Inc
Time Warner Inc.
Martha Stewart Living Omnimedia
Tyco International, Ltd.
United Airlines/ UAL Corporation*
Adelphia Communications Corporation
MCI (formerly Worldcom)
The Procter & Gamble Company
The Walt Disney Company
Dell Computer Corporation
General Electric Company