The Global RepTrak ™ 2007 Measuring The Reputations of the World’s Largest Companies Reputation Institute has been studying the dynamics of Reputation for more than 10 years. Research shows that a well-regarded company is more likely to be liked, trusted, and respected. Reputation Institute created the RepTrak™ Model to provide companies with a standardized framework for benchmarking their corporate reputations internationally and to enable identification of the factors that drive reputations. The RepTrak™ Model The RepTrak™ Pulse measures the good feeling, trust, and respect/admiration that consumers feel towards a company. The RepTrak™ Pulse therefore provides an overall assessment of the health of a company’s reputation. In turn, research shows that a reputation is built on 7 pillars from which a company can create a strategic platform for communicating with its stakeholders on the most relevant key performance indicators. The RepTrak™ Model therefore consists of 7 dimensions that were found from qualitative and quantitative research to best explain the reputation of a company internationally. In the Global RepTrak™ 2007, Reputation Institute measured, not only perceptions of companies on the core Pulse attributes—the beating heart of the model—but also asked respondents to rate the companies on the 7 key dimensions. The Global RepTrak™ 2007 Measures Corporate Reputations Worldwide The RepTrak™ Pulse 2007 is the second annual study of the reputations of the World's Largest Companies. The study was developed by Reputation Institute to provide executives with a high-level overview of their company’s reputation with consumers. Over 60,000 online interviews with consumers in 29 countries on six continents were conducted in January and February 2007. More than 175,000 ratings were used to create reliable measures of the ‘corporate reputation’ of more than 1,000 companies. Companies Rated The Global RepTrak™ 2007 measures the reputations of the largest corporate organizations in each country based on their ‘total revenues’. Rated companies had to have significant consumer presence and be minimally familiar to the general public . All companies are measured in their home country only. Survey Methodology The Global RepTrak™ 2007 was conducted online in all countries, except South Africa. The RepTrak™ Pulse is calculated by sampling an average of 100 local respondents who are familiar with the company. Questionnaire The Global RepTrak™ 2007 questionnaire is a 10 minute long online survey that invites respondents to describe their perceptions of companies. Analyses All RepTrak™ Pulse scores are standardized on both the country and global level. Through further statistical analysis, Reputation Institute connects RepTrak™ Dimension scores with RepTrak™ Pulse scores, as well as with various supportive behaviors, in order to identify the drivers and implications of corporate reputation. The findings enable companies to understand and take advantage of the dynamics of reputation among the general public.
RepTrak™ 200: The World’s Most Respected Companies --The Top 50 The RepTrak™ 200 consists of the 200 companies with the world’s best corporate reputations. Topping the list is Denmark’s favorite toy company LEGO with a RepTrak™ Pulse of 85.01. Sweden’s giant retailer IKEA claims 2 nd place with a Pulse of 84.05 followed by the company that claimed the top spot in 2006 Italy’s famed food products company Barilla. Regionally, the RepTrak™ 200 is dominated by Europe (97 companies). North America comes in 2 nd with 44 companies, followed by Asia Pacific (41 companies), and South America (16 companies). The 2 remaining companies are from South Africa (Pick ‘n Pay and First National Bank). The top tier consists of 26 companies with excellent Pulse scores above 80. The top tier is dominated by 17 European companies. Japan is represented by 4 companies (Toyota, Canon, Honda, and Matsushita), and the U.S. has 2 companies in the top tier (Kraft Foods, and UPS). These companies all enjoy high levels of admiration, trust, and respect in their home countries as well as positive word of mouth from consumers. The 2 nd tier of top-rated companies consists of 144 companies with Pulse scores in the 70’s. The group is led by Philips from the Netherlands (79.82), and includes such well-regarded companies as FedEx (79.39), Novo Nordisk (79.09), BMW (78.89), Johnson & Johnson (78.80), L’Oréal (78.44), and Nokia (77.76). These companies all enjoy strong reputations and are trusted and admired by the public in their home countries. The 3 rd tier of the RepTrak™ 200 consists of 30 companies that all have Pulse scores above the global mean of 64.2. These companies enjoy better than average levels of trust, admiration, and good feeling from local consumers. Excellent/Top Tier above 80 Strong/Robust 70 – 79 Average/Moderate 60 – 69 Weak/Vulnerable 40 – 59 Poor/Lowest Tier below 40 All Pulse scores are standardized on both the country and global level. For further explanation see the RepTrak™ Methodology section. All RepTrak TM Pulse scores that differ by more than +/-0.5 are significantly different at the 95% confidence level
RepTrak™ 200: The World’s Most Respected Companies --Companies 51-200 Excellent/Top Tier above 80 Strong/Robust 70 – 79 Average/Moderate 60 – 69 Weak/Vulnerable 40 – 59 Poor/Lowest Tier below 40 All Pulse scores are standardized on both the country and global level. For further explanation see the RepTrak™ Methodology section. All RepTrak TM Pulse scores that differ by more than +/-0.5 are significantly different at the 95% confidence level
Changes in the Top 50 from 2006 to 2007 The top 3 companies defend their position –21 new companies join the top 50 Stability in the top 3 : Lego, IKEA, and Barilla successfully defended their top ratings from 2006. Reputation Gains: Russian companies made the greatest gains in reputation, with average improvements of over 10 Pulse points between 2006 and 2007. The largest change was Sberbank whose reputation catapulted the company into the top tier of the RepTrak™ 200 and into the top 10. Gazprom, Magnitogorsk Iron & Steel and Lukoil also enjoyed huge gains, reflecting the growing public optimism about Russia’s corporate sector. Strong gains were also recorded by Spain’s retailers Mercadona and El Corte Ingles which both made impressive gains in 2007, with Mercadona joining the global top 10 list of companies most highly rated by local consumers in their home countries. Brazil’s Petrobras, Vale do Rio Doce (CVRD), and Grupo Pao de Acucar made strong gains with the public that moved them in the global rankings. Denmark’s Rockwool also made impressive gains to join the 50. The most impressive movers from the U.S. were UPS and FedEx, with gains of over 87 and 69 positions to join the top 50. Reputation Loss: Germany’s Lufthansa suffered the greatest decline in reputation, dropping 5 Pulse points from its lofty #3 position to a #36 ranking. Excellent/Top Tier above 80 Strong/Robust 70 – 79 Average/Moderate 60 – 69 Weak/Vulnerable 40 – 59 Poor/Lowest Tier below 40 All Pulse scores are standardized on both the country and global level. For further explanation see the RepTrak™ Methodology section. All RepTrak TM Pulse scores that differ by more than +/-0.5 are significantly different at the 95% confidence level
Global Industry Reputations Companies in Consumer Products and Industrial Products are the Most Trusted; Telecom & Utilities Struggle Some industries are seen as more trustworthy, others as more risky; some are seen as profiteers, others are seen as more giving. All companies therefore operate in an industry context – and either suffer or benefit from the positive or negative halo around the industry. Top-Rated Industries : Companies involved in Consumer Products, Industrial Products, Beverage, and in the Electrical & Electronics sectors have built strong reputation platforms, from which they appear to be earning public trust. Industries with Weak Reputations : In contrast, companies operating in Telecommunications, Utilities, Construction/Engineering, Information & Media, and Transport & Logistics face an industry-wide predicament in that consumers do not trust, like, or respect companies. A negative context makes it challenging for individual companies to create favorable regard. The Financial Services is a case in point. The different segments in the industry (banking, insurance, and financial) are not highly regarded by consumers internationally which creates huge challenges for companies operating in the sector. All Pulse scores are standardized on both the country and global level. For further explanation see the RepTrak™ Methodology section. RepTrak™ Pulse scores that are more than +/- 0.5 apart are significantly different at the 95% level. Note: Industry classification is based on the 2-digit U.S. Standard Industrial Classification (SIC) codes. For reporting and ranking purposes in this report, only industries with a minimum of ten companies were examined. Excellent/Top Tier above 80 Strong/Robust 70 – 79 Average/Moderate 60 – 69 Weak/Vulnerable 40 – 59 Poor/Lowest Tier below 40
Global Leaders on the Seven Pulse Dimension Scores Quality Products/Services Innovative Company Well-Managed Good Corporate Citizen Appealing Place to Work Strong Leadership Good Financial Performance Pulse Dimensions Companies build their reputations on different platforms. The key for every company is to be relevant to its own stakeholders in what is said and done. A total of 18 companies earned a top 5 position on the 7 Pulse dimensions. Although no single company tops on all Pulse dimensions, Sweden’s IKEA makes it to the top 5 on 5 of the 7 dimensions, thereby demonstrating that the company’s reputations sits on a solid multi-dimensional foundation. Spain’s El Corte Ingles is top-rated on 4 of the Pulse dimensions. In contrast, some companies are praised from local consumers on only one or two of the Pulse dimensions. Finland’s Nokia, for instance, is only praised for its Innovation, India’s Infosys only for its Leadership, thereby suggesting to both companies some likely vulnerabilities in their reputation with consumers.
Demographic Breakdown of Global RepTrak™ Respondents Profile of Respondents to Global RepTrak™ 2007 More than 60,000 respondents were interviewed during January and February of 2007 to create the Global RepTrak™ Pulse. A total of over 175,000 separate company ratings were obtained to measure more than 1,000 companies in 29 countries . Respondents had to be familiar with the company they were rating and were allowed to rate up to five companies. All interviews were conducted online with the exception of South Africa. In each country, the demographic breakdown of the sample was intended to reflect the demographics of the general population with internet access . The results are balanced on age and gender, but show the expected over-representation of mid to higher education levels in the global sample.
Market research shows that people are inclined to rate companies more or less favorably in different countries, or when they are asked questions directly or online. When asked in a personal interview, for example, it's known that people tend to give a company higher ratings than when they are asked by phone, or when they are asked to answer questions about the company online. This is a well-established source of 'systematic bias'. Another source of systematic bias comes from national culture—in some countries, people are universally more positive in their responses than in other countries. In statistical terms, it means that the entire distribution of scores in a 'positive' country is artificially 'shifted' because of this propensity for people in that country to give higher ratings to all companies, good or bad. The distribution of scores in that country may also be more 'spread out' than in another because people have more information and are able to make more subtle differences between companies.
To overcome these sources of systematic bias, Reputation Institute's policy is to adjust all RepTrak scores by standardizing them against the aggregate distribution of all scores obtained from the RI's Annual Global RepTrak Pulse. Standardization has the effect of lowering scores in countries that tend to over-rate companies, and has the effect of raising scores for companies in countries that tend to rate companies more negatively.
Two adjustments are made for every RepTrak™ Pulse
Reputation Institute uses its cumulative database of RepTrak Pulse scores about reputation scores internationally to carry out two adjustments:
1) Country Adjustment: All scores derived from surveys are standardized by subtracting the country mean and dividing by the standard deviation of all known scores previously obtained in that country. In statistical terms, this adjustment 'normalizes' the distribution of scores in the country to a mean of 0 and a standard deviation of 1, producing a 'z-score' for the company.
2) Global Adjustment: A global mean and standard deviation are calculated from all of the country-adjusted ratings. A global RepTrak Pulse score is scaled back by multiplying each company's z-score by the global standard deviation and adding back the global mean. The resulting number is the RepTrak Pulse or Dimension that is reported.
As additional global research comes in, Reputation Institute regularly updates the country and global distributions that are used to create our standardized RepTrak scores. All RepTrak results are therefore comparable across industries, countries, and over time.
Interpreting RepTrak™ Results The Global Distribution of Reputations The reputations of the largest companies in the world range from a low of 24.15 (AWB in Australia) to a high of 85.01 (Lego in Denmark). The global mean is 64.2 and the largest concentration of companies have a RepTrak™ Pulse between 60.0 and 70.0. As a result of our analyses, all RepTrak™ Pulse scores are standardized on both the country and global level. For further explanation see the RepTrak™ Methodology section. In interpreting results, note that all RepTrak™ Pulse scores that differ by more than +/-0.5 are significantly different at the 95% confidence level. Based on analyzing the global distribution of scores, Reputation Institute proposes the following benchmarks for benchmarking standardized corporate reputation results internationally: Global Mean = 64.2 Global Std. Dev = 26.57 Excellent/Top Tier above 80 Strong/Robust 70 – 79 Average/Moderate 60 – 69 Weak/Vulnerable 40 – 59 Poor/Lowest Tier below 40
Reputation Institute (RI) is a private advisory and research firm headquartered in New York with representation in more than 20 countries around the world. Founded in 1997, RI is a pioneer and global leader in the field of corporate reputation management, with a mission to help companies create value from reputation. RI connects a global network of practitioners and academics working towards this common mission through research, analysis, and consulting. In 2007, Reputation Institute’s Global RepTrak™ Pulse project surveyed more than 60,000 people in 29 countries, measuring consumer perceptions of over 1,000 companies in North America, Latin America, Europe, Asia, Australia, and Africa. RI works with corporate leaders who trust RI to use its cutting-edge knowledge, international network, and experienced advisors to help develop resilient reputing strategies.