Analysis of the corporate reputation of the company

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Analysis of the corporate reputation of the company

  1. 1. A) Analysis of the corporate reputation of the company Based on analysis of Fame and Fortune: How Successful Companies Build Winning Reputations (2001), there was very interesting fact. As you can on the next figure (figure 1), there are 10 the best and the worst companies, which were nominated by public. Some result, especially companies with the worst reputation, were not surprise, This was the case of Bridgestone/Firestone and Ford, because of the accidental deaths caused by exploding Firestone tires on Ford Explorers. ExxonMobil hasn’t benefited from any positive transfer from Exxon’s merger with Mobil, a company that has long enjoyed more positive regard from the public. None of these companies attracted positive nominations.1 Figure 1 Companies with the best and worst communication Wal-Mart those days was on the third rank as the company with the best reputation. It was quite achievement. The fact was that Wal-Mart took the third position on positive counts is that big surprise, given in consideration massive media and activist criticism about the company’s damaging effects on small local stores, which were forced out of business when Wal-Mart store opens in a community. Clearly the public thought very favorably of what WalMart had achieved from providing high-quality products at affordable prices, efficiently and effectively back in those days.2 1 http://www.eurib.org/fileadmin/user_upload/Documenten/PDF/Reputatiemanagement_ENGELS/t__Reputation_Quotient_model__EN_.pdf 2 http://www.eurib.org/en/knowledge-resource-centre/online-resource-centre/positioning.html
  2. 2. Present days After 13 later, Wal-Mart is in absolute different position, as we can see on the next figure (figure 2). Or true to be told, what we cannot see there, and that is Walmart. Figure 2 The companies with the best reputation in 2013 3 In the year 2013, Wal-Mart doesn’t belong between the top 7, doesn’t belong between top 15, not even between top 50 companies. In the year of 2013, Wal-Mart does not belong between the top 100 companies based on the Reputation Quotient model by Charles Fombrun, Naomi Gardberg and Joy Sever.4 It is truly remarkable (in negative expression), how Wal-Mart had stopped to care about reputation and concentrated just on profit, which is enormous, over 460 billions of dollars. However Wal-Mart has been criticized by numerous groups and individuals for breaking all kind of human rights for the last years. Mostly labor unions, but also community groups, grassroots organizations, religious organizations, environmental groups and Wal-Marts´ customers. They have protested against Wal-Mart, the company's policies and business practices, including charges of racial and gender discrimination. Other areas of criticism include the corporation's foreign product sourcing, treatment of product suppliers, 3 2013 - Global RepTrak™ 100 The World’s Most Reputable Companies 4 http://www.eurib.org/fileadmin/user_upload/Documenten/PDF/Reputatiemanagement_ENGELS/t__Reputation_Quotient_model__EN_.pdf
  3. 3. environmental practices, lacking CSR and transparency. That did lead to very week position of Wal-Marts´ reputation and trust in the eyes of the public and us. Based on all information mentioned above, we have analyzed and evaluated Wal-Marts´ reputation quotient based on 6 key dimensions, such as: Emotional Appeal: You simply like, admire, or trust the company. Products and Services: You think the company sells products or services that are high quality, innovative, reliable, or a good value for the money. Financial Performance: You’ve been happy with the company’s profitability, believe it has strong future prospects, and isn’t too risky to invest in. Vision and Leadership: You feel the company has a clear vision for the future and strong leadership. Workplace Environment: You believe the company is well-managed, has topnotch employees, and would be great to work for. Social Responsibility: You think the company is a good citizen—it supports good causes, doesn’t damage the environment, and does right by local communities. The results of the research and evaluation of Wal-Marts´ reputation according by research team is shown in the next table (table 1). Table 1 Reputation quotient of Wal-Mart (1 does not describe very well 7 describes very well) -> Your rating 1-7 1. Emotional Appeal: You simply like, admire, or trust the company. 4 2. Products and Services: You think the company sells products or services that are high quality, innovative, reliable, or a good value for the money. Financial Performance: You’ve been happy with the company’s profitability, believe it has strong future prospects, and isn’t too risky to invest in. Vision and Leadership: You feel the company has a clear vision for the future and strong leadership. Workplace Environment: You believe the company is well-managed, has topnotch employees, and would be great to work for. Social Responsibility: You think the company is a good citizen—it supports good causes, doesn’t damage the environment, and does right by local communities. 6 3. 4. 5. 6. 7 5 3 2 Emotional appeal Wal-Mart has been so many times criticized for its behaviour, that honour-ability of this company absolutely suffered. People don’t see Wal-Mart as a respectable company, which is easy to like and trust. All Wal-Marts´ scandals have taken their part and now public simply don’t see Wal-Mart as company of honour.5 Products and services 5 http://www.fastcompany.com/47593/wal-mart-you-dont-know
  4. 4. This and next point are the only ones, where Wal-Mart is doing well. Companies policy of cheap prices and huge shopping centres is still successful and it brings company high mark on the reputation quotient. Financial performance The best part of Wal-Marts´ performance. Enormous $ 460 billion in revenue, more than 10 000 stores worldwide, 2.2 million of employees in 27 different countries, that’s Wal-Mart in year 2013. Almost $ 75 per share, promising markets growth especially in developing countries. There is no doubt, that financial performance of Wal-Mart is great, however reputation quotient is not only built financial performance of the company, and that is different story of Wal-Mart.6 Vision and leadership There are new strategies of Wal-Mart, such as ecommerce and new eshops, Wal-Mart for universities, and that’s why it is evaluated by research team of high mark. However Wal-Mart has been missing transparency, and that is why so difficult to fully understand potential development of Wal-Mart and see through the whole Wal-Mart. Also Wal-Mart has been missing strong leader, who would be a public face of Wal-Mart and who would represent Wal-Mart in the way to the brighter future. Workplace environment According to Walmart, the company offers educational opportunities, health care plans, retirement plans and quarterly bonuses based on store performance.7 However Wal-Mart has been recently so many times criticized about mistreating human rights, women discrimination, low wages, not adequate bonus etc. That is why Wal-Mart is seen as a not great place to work at even of denying any of it by Wal-Mart.8 Social responsibility By the research team, this the biggest issue of Walmart. It is not just because of lacking corporate relationship management, not adequate donation and help to non-profit organization, but also transparency through Wal-Mart practically doesn’t exist. But also because corporate social responsibility is set up without further details, and transparency is absolutely not known term for Wal-Mart. Media and newspaper pages covered by negative posts about Wal-Marts´ business practices and mistreating, which a company in such a position simply cannot have. All those reasons mentioned above effected Wal-Marts´ fall from ranking as the company the third best reputation in 2000 to not even be on list of the 100 the most reputable companies in 2013. If there is no change from the side of Wal-Mart, and with such a strong trend and pressure from public for sustainable companies, there is no guarantee, that in another ten years, Wal-Mart will still exist.9 6 http://corporate.walmart.com/?povid=P1171-C1093.2766-L5 7 http://corporate.walmart.com/our-story/working-at-walmart/ 8 http://gawker.com/wal-mart-is-scared-of-these-true-stories-from-its-own-e-743832841 9 Our own analyses based on data for Project 1

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