Corporate Reputation in Decline, but Top Companies Buck Trend

Some 71 percent of U.S. consumers rate corporate America’s reputation as poor, but consumers still will buy, recommend and invest in the most visible companies that focus on building their corporate reputations, according to the ninth annual Harris Interactive Reputation Quotient (RQ) survey, MarketingCharts reports.

See charts of consumers’ perception of corporate America, 2006-2007.

The RQ surveys thousands of American consumers to identify the 60 most visible companies and rank them based on their reputation in six categories: Emotional Appeal, Products & Services, Social Responsibility, Vision & Leadership, Workplace Environment, and Financial Performance.

The reputation of seven out of 11 industries declined from the previous year, and that of 16 of the companies with the worst marks fell even further, according to this year’s RQ.

Company Rankings

The top 10 companies on this year’s RQ list (see top 45):

1. Google
2. Johnson & Johnson
3. Intel Corporation
4. General Mills
5. Kraft Foods
6. Berkshire-Hathaway, Inc.
7. 3M Company
8. The Coca-Cola Company
9. Honda Motor Co.
10. Microsoft Corporation

Among companies, Google ranked No. 1, beating out last year’s RQ reputation leader, Microsoft, as well as Johnson & Johnson, which had been the top-ranked company until last year.

Google, even among the top 60 four years ago, topped the list by scoring in either first or second place on reputation drivers of financial performance, vision/leadership, social responsibility and workplace environment: see the top 6 leaders in each category.

“For Americans to hold a company in high regard today, clearly more than just profits are needed - companies need to focus on overall corporate social responsibility and how their employees are treated in order to build trust with today’s consumers,” said Robert Fronk, SVP, Senior Consultant, Reputation Strategy at Harris Interactive. “Google received a top-ranking for social responsibility primarily due to their workplace environment, demonstrating that corporate responsibility, in the minds of consumers, starts with your own employees first.”

Industry Rankings

Certain industry sector reputations - including airlines, consumer products, insurance/financial services, pharmaceutical and retail - have plummeted since 2006. (See table showing change in ratings, 2006-2007, for each industry.)

With mergers, bankruptcies, and media attention around canceled flights frustrating consumers, the airline industry had the largest drop in rankings from 2006: Only 26 percent of Americans give positive RQ scores to airlines.

In contrast, the technology sector fared much better, with Google, Intel, and Microsoft in the top 10. Among companies, Hewlett-Packard/Compaq was the biggest gainer; Intel, Apple and Google also showed significant positive rating changes from 2006 to 2007.

Additional Findings

• Companies taking an active role managing their reputations are seeing positive results, whereas those that are not continue to see their reputation decline. Of those companies that scored in the Top 30, 19 (63 percent) improved their scores year-over-year, while 11 (37 percent) had scores that declined. However, of the companies that scored in the Bottom 30, just 14 (47 percent) improved their scores year-over-year while 16 (53 percent) declined even further.
• Despite a drop in the consumer-products sector overall, many consumer packaged goods companies scored well, with General Mills, Kraft Foods and Coca-Cola ranking in the Top 10. Males tend to give higher scores to technology companies; women give top marks to consumer packaged goods companies.
• Of the 52 companies measured in 2007 and 2006, 15 experienced noticeable changes in their reputations - nine went up and six declined.
• In addition to significant shifts for technology companies, other big gainers in 2007 included Berkshire Hathaway, BP and Verizon Communications. Berkshire Hathaway benefited from its strong financial performance as well as the halo effect of Warren Buffet’s $37 billion donation to charity the previous year.

About the survey: The RQ surveys 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 the six reputational categories. The first phase included 7,105 people and identified the most “visible” reputations took place in July and August 2007. The second phase included 20,477 online interviews and was conducted from February 7 to March 3, 2008.