Insights

When it Comes to Corporate Reputation…Location, Location, Location
Article

When it Comes to Corporate Reputation…Location, Location, Location

What traits lead to a strong corporate reputation? Is it thought leadership? A diverse product line? Innovation? Corporate social responsibility efforts? While many are divided on specifics, most would likely agree that reputation is built on a smattering of all of these, along with a few others as well. The one characteristic that might not be as expected, however, is location.

The good news is that overall, views about the reputations of multi-national corporations (MNCs) are relatively stable—meaning they haven’t changed much over the past year. When we look at perceptions on a country-by-country level, however, we see that where you live really frames your perceptions of MNCs.

In reviewing the findings from a 2014 study conducted in 16 countries about corporate reputation, we see that people who are highly engaged and active when it comes to business issues—“Opinion Elites”—have notably different perspectives about the reputations of multi-national companies depending on where they live.

While 39% of global Opinion Elites believe multi-national companies have good reputations, only 26% of Opinion Elites in the U.S. say global companies have good reputations, down nine points between 2013 and 2014. Comparatively, Canadian Opinion Elites’ ratings of global companies have increased nine points over the same time period, to 39%. Global companies look the best to Opinion Elites in emerging markets, with Brazil and India remaining strong and stable in their overall views. Although Opinion Elites in China and Mexico feel MNCs have lost some ground over the past year, their perceptions remain more positive than their peers in developed markets.

Where a company is headquartered is another element that contributes to its reputation. When we focus a lens on companies and where they’re based, Opinion Elites feel most favorably toward companies headquartered in their own country. Out of the other HQ locations measured, U.S. companies are viewed the most positively. In fact, 51% of global Opinion Elites feel favorable about American-based multi-national companies, followed by companies in Japan (46%) and France (40%). Which countries seem to engender the least confidence as a HQ location? About two in 10 Opinion Elites say they would feel less favorable toward a company if its headquarters were based in China, Saudi Arabia and India (24%, 22% and 19%, respectively).

Looking more closely at the U.S. as a HQ location, opinions vary depending on where people live. Opinion Elites in the U.S. (79%), Mexico (75%), India (74%) and Brazil (70%) have the most positive views of American companies. Comparatively, Opinion Elites from Russia and Germany are the most skeptical of U.S.-headquartered companies, with only 24% and 26% favorability, respectively.

Age also plays a role in how Opinion Elites relate to companies based on where they’re headquartered. Only 59% of global Opinion Elites who are 18-34 say they’d feel more strongly about a company if it were based in their home country, compared with 70% among those over the age of 55. Younger Opinion Elites are more receptive toward companies headquartered in various international locations—including the U.S., China, Brazil, India and Saudi Arabia—than their older peers are.

There’s little doubt that myriad factors inspire whether one chooses to engage with a company, one of which is corporate reputation. It’s an increasingly recognized business asset that companies should grow, tout and protect. These findings show that a host of things can affect the reputation of a global company—things both in its control and not (country-specific biases toward large companies overall, how HQ location shades perceptions). Implications for reputation managers around the world are significant, with a clear directive to nuance reputation management activities to account for the varied view across country and age.

Methodology

The insights in this article were derived from Nielsen’s 2014 Global Reputation Study with Opinion Elites, the second annual installment of the study. The research consisted of a 25-minute, online survey conducted between Sept. 24 and Oct. 16, 2014, with 4,982 interviews across 16 markets. All Opinion Elites met the following criteria: aged 18+, follow national business issues closely, highly informed about those issues and regularly participate in influential behaviors. Results were weighted to be representative of key Opinion Elite population demographics present within each country sampled.