Led by nosediving perceptions of US auto and financial companies, the images of US corporations have plunged to their worst levels in 10 years, with 88% of Americans rating the reputation of collective corporate America as “not good” or “terrible,” according to the Harris Interactive’s 2008 Reputation Quotient (RQ) survey.
The study, which identifies the 60 Most Visible Companies in America and assigns them scores based on their reputation in six different categories, found that Technology remains the highest rated industry, although its reputation declined along with six other industries:
The Automotive industry reported the largest decrease ever, while the Financial Services industry now shares the lowest industry ranking with the Tobacco industry, the study found. Just 11% of the public gives positive ratings to these two industries.
The Pharmaceutical industry is the only industry to register a significant positive change from the last survey, in 2007, Harris said.
Cream Rises to the Top
Despite this free-fall in corporate America’s image, Johnson & Johnson (NYSE:JNJ), Google (NASDAQ:GOOG), Sony (NYSE:SNE), Coca-Cola (NYSE:KO), Kraft (KFT), and - returning to the list of most visible companies - Amazon.com (NASDAQ:AMZN), all received RQ scores that categorize their reputations as “excellent.” Harris noted that an RQ score of 80 and above is considered excellent.
The Top 60 Most Visible Companies and their reputation scores:
Johnson & Johnson claimed the top spot for the eigth time in the study’s 10-year history by placing in the top 5, 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 (NYSE:WMT), whose score increased by nearly 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,” said Robert Fronk, SVP and senior consultant at Harris Interactive. “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.”
Bottom of the Barrel
Insurance giant AIG, in its first appearance on the list, recorded one of the lowest scores in the study’s history, Harris said, noting that Enron’s 2005 score was the last company to dive to the same depths.
Not surprisingly, the top-three US automakers recorded the three largest reputation declines this year, with General Motors (NYSE:GM) suffering one of the biggest one-year drops in the survey’s history. GM placed #58 on the list of 60 companies rated. This contrasts with Toyota’s (NYSE:TM) #10 ranking, the highest for an auto company.
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 (NYSE:C), Merrill Lynch, Wachovia, JP Morgan Chase (NYSE:JPM), and America Express (NYSE:AXP) - which were not on the list in 2007 - joined the list of 2008’s Most Visible Companies. They joined repeaters Wells Fargo and Bank of America Corporation. All had scores reflective of companies with very poor reputations, according to the study.
“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,” said 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 study found that three-fourths of Americans believe that the economic crisis has worsened their overall view of the reputation of companies:
- 77% feel that the country’s economic condition will stay the same or get worse in the next 6-12 months.
- Amazon.com, Wal-Mart, and Berkshire Hathaway (NYSE:BRK.A) receive the highest positive ratings in regard to the economic crisis effect on perceptions of reputation and likelihood to purchase.
Six Key Areas
The six areas that the RQ survey focuses on that influence reputation and consumer behavior include the following, which are listed with the companies that scored highest in these categories:
- 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
Additional demographic findings:
- Johnson & Johnson ranks# 1 among females, those ages 40+, those with a high-school education or less and those with a household income of $35K to less than $75K.
- Google (#2 overall) ranks #1 among males, those ages 18-39, those with a college degree or higher, and those with a household income of less than $35K or more than $75K.
- Apple (#14 overall) ranks #2 among respondents with those with a graduate or higher degree.
- Disney (#13 overall) ranks #4 among those ages 40-54 and #5 among people with a household income of less than $35K.
- Whole Foods (#18 overall), ranks #2 among those ages 40-54.
- Berkshire Hathaway (#11 overall), ranks #5 among males, #5 among those with a college degree, and #3 among those with a household income more than $75K.
The study also reveals that the majority of Americans believe that corporations are not adequately evolving to more sustainable business practices and will require regulation to do so:
- Nearly all (98%) respondents believe it is important that corporations do evolve to more sustainable business practices.
- More than two-thirds (68%) believe American corporations are lagging behind companies in other countries.
- Only 16% of Americans believe that they will make these changes on their own.
- Most Americans (90%) give some consideration to sustainable business practices when purchasing a company’s products and and services.
About the study: The RQ, now in its 10th consecutive year, surveys more than 25,000 American consumers in a two-step process, through online and telephone interviews, to first identify the 60 most visible companies and then to rank these companies based on their reputation in six different categories: Emotional Appeal, Products & Services, Social Responsibility, Vision & Leadership, Workplace Environment, and Financial Performance. The “nominations phase” of the 2008 RQ survey was conducted from September to October 2008, the “ratings phase” was conducted from December 31, 2008 to February 2, 2009.