Reputation matters

As a consumer, business professional or regulator, we make judgments every day about companies. They are all influenced by the assumptions we make about whether the companies are “good” or “bad”.

Reputation is the common denominator that helps us to make judgments about issues in fields in which we are not experts. When you have a hard choice to make, you ask advice from peers and insiders. When you read or hear something, you file it away to help make future judgments. You share this insight without much prodding with anyone that asks.

What do they think and what does it mean?
The Top Companies Reputation Index is designed to help companies and their stakeholders understand what people think about them and how it will impact their business. It is designed to help consumers to get a clear, objective view of the companies from which they buy products and services. It also helps regulators to understand the companies that fall under their aegis.

This is the third year the survey has been done: it was first published in 2001 and again in 2011. The intention now is to run it annually to provide an authoritative benchmark of companies with a good reputation and the reasons they have it.

More than a brand or numbers study
This research is intended to be complementary to the various brand perception studies done, such as the Top Brands Awards or the Top 500 Awards, which respectively look at the softer side (brand and product perception) and the harder side (financials and other specific metrics).

“Our particular focus on specific reputational dimensions and the way in which the study is designed make it different from any others conducted in South Africa,’ said Sifiso Falala, chief executive of Plus94 and the project’s research head.
 
The research looks at how people view the companies they buy from, do business with or invest in and how their reputation influences buying and other business decisions, including regulation.

When stakeholder confidence in a business is low, the public scrutiny of the business increases.

For the first time, the research also looks at whether individuals share their opinions of companies on social media channels such as Facebook, Twitter and popular messaging systems (a key distinction between online or text-based messaging systems and their offline counterpart is that the former can be easily forwarded, copied and shared).

People make decisions because of beliefs
“It is important to note that the reputation measure is considerably different to simple awareness and brand studies,” said Falala.

“This study is about the reputation of a business – the intangible equity of the corporate entity. This is important.  Research by Standard and Poor’s and others have shown that companies with a strong reputation are best disposed to maintain their market value in tumultuous economic conditions. The United States government bailed out certain businesses after the 2008 economic meltdown because they were considered ‘too big to fail’.  Aspects of this related not only to size, but also the reputation of these businesses.”

For a company, a good reputation is not just a nice thing to have. Sometimes, it is the only thing that stands between success and becoming a footnote in business history.

South Africa’s winners and losers

Overall score
1    Coca-Cola SA
2    MTN
3    SAB Miller
4    Pick n Pay
5    Unilever SA
6    Standard Bank
7    Vodacom
8    Absa
9    Old Mutual
10    KFC

Spontaneous association with a good reputation
Pick n Pay    26%
Woolworths    17%
Edcon    12%
Vodacom    11%
Coca-Cola South Africa    11%

Spontaneous association with a bad reputation
Shoprite Holdings    19%
Edcon    7%
Pep Stores    7%
Eskom    5%
Cell C        4%

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