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
• Financial Performance
• Workplace Environment
• Social Responsibility
• Vision & Leadership
• Emotional Appeal

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	Johnson & Johnson	80.56
2	The Coca-Cola Company	79.69
3	Google	79.52
4	United Parcel Service (UPS)	79.37
5	3M Company	78.78
6	Sony Corporation	78.75
7	Microsoft Corporation	78.11
8	General Mills	78.03
9	FedEx Corporation	77.79
10	Intel Corporation	77.27
11	Toyota Motor Corporation	77.27
12	Home Depot	76.50
13	The Procter & Gamble Company	75.91
14	The Walt Disney Company	75.88
15	Dell Computer Corporation	75.73
16	Honda Motor Co.	75.60
17	Pepsico	75.26
18	Costco	74.03
19	IBM Corporation	73.42
20	General Electric Company	73.39
21	Southwest Airlines	73.20
22	The Boeing Company	73.10
23	Starbucks Corporation	72.93
24	Nike	72.11
25	Target Corporation	71.83
26	E.I. D uPont De Nemours (DuPont)	71.56
27	Apple Computer	70.59
28	Unilever	70.28
29	Wal-Mart Stores	69.99
30	Best Buy Co.	69.74
31	Hewlett-Packard/Compaq	69.44
32	Pfizer	69.10
33	J.C. Penney Company	68.81
34	Verizon Communications	67.01
35	McDonald''s	66.83
36	SBC Communications	66.67
37	Ford Motor Company	66.14
38	General Motors Corporation	66.07
39	Bank of America Corporation	66.00
40	Allstate Corporation	65.82
41	Sears Holdings Corporation (Parent of Kmart/Sears, Roebuck, and Co.)	65.26
42	Gateway	65.17
43	Citigroup Incorporated	65.00
44	DaimlerChrysler	64.47
45	Merck & Co., Inc	64.07
46	Time Warner Inc.	63.85
47	ChevronTexaco Corporation	62.46
48	AT&T Corporation	62.37
49	Comcast Corporation	62.08
50	Altria Group	61.62
51	Sprint Corporation	61.01
52	Martha Stewart Living Omnimedia	60.99
53	ExxonMobil Corporation	59.57
54	Royal Dutch/Shell*	59.45
55	Tyco International, Ltd.	58.39
56	United Airlines/ UAL Corporation*	53.09
57	Halliburton Company	52.22
58	Adelphia Communications Corporation	49.75
59	MCI (formerly Worldcom)	46.80
60	Enron	30.05