Friday, June 6, 2008

The World's Most Reputable Companies


If there was a clear link between savvy business and popularity, Toyota would be this spring's prom queen.

In the latest study from the Reputation Institute, a private, New York City-based research and consulting firm, the Japanese automaker is ranked No. 1 on a list of the 600 largest companies in the world for having the best reputation. Toyota (nyse: TM - news - people ) was ranked No. 6 last year and in 2006.

There's a notable newcomer in the second spot, one that may not come as a shock. Introducing Google (nasdaq: GOOG - news - people ).

The Mountain View, Calif.-based media company may be a runner-up on the global list, but it is ranked No. 1 on a list of 150 of the largest U.S. companies, followed by Johnson & Johnson (nyse: JNJ - news - people ) and Kraft Foods (nyse: KFT - news - people ). Globally, IKEA of Sweden and Italy's Ferrero rank third and fourth, respectively.

Johnson & Johnson CEO William Weldon said his consumer products company's success hinges on courageous leadership. The Reputation Institute ranks J&J as the fifth most reputable company in the world, a significant jump from its rank of 35 last year.

"I expect leaders to grow their businesses and, at the same time, to make us proud of the ways they grow," he said. "This is the character of true leadership."

Ken Powell, CEO of General Mills (nyse: GIS - news - people ), which was ranked fourth in the U.S. and 11th globally, said, "We continue to build trust in our brands by paying attention to other consumer priorities such as product innovation, health and wellness benefits, and the sustainability of our manufacturing processes. Holding ourselves to the highest standard on ethics and integrity is part of building that trust.”

Showing the biggest reputation boosts from last year are PKN Orlen (energy) of Poland, Sasol (nyse: SSL - news - people ) (raw materials) of South Africa, and the State Bank of India. Nokia (nyse: NOK - news - people ) and Samsung showed the greatest decline in reputation, as ranked by the Reputation Institute.

Reputation Institute co-founder Charles Fombrun said PKN Orlen's positive media coverage and its attempt at expansion have bolstered the company's public image as it emerges as central Europe's largest oil company. The same success applies to the Bank of India with its rapid growth, despite consumers' general distrust of banking worldwide.

In 2006, the Reputation Institute launched its inaugural list of the world's most respected companies. For this year's study, the institute surveyed more than 60,000 respondents during February and March. More than 150,000 separate company ratings were obtained to measure more than 1,000 companies in 27 countries. Respondents voted only on domestic companies.

A standardized measurement system is used to rate the overall health of 600 of the world's largest companies, based on annual revenue and a gross domestic product-weighted system.

Had the list of companies been culled based solely on highest annual revenue, the U.S. would've been over-represented. There are 150 U.S. companies on the list. It also includes 40 companies from Japan, 35 each from China and the U.K., 30 each from France and Germany, and 20 from Russia.

Each company's overall Global Pulse score is based on what the Reputation Institute calls the seven dimensions of reputation: products and services, innovation, workplace, citizenship, governance, leadership and performance. The most influential dimensions are products and services and citizenship.

Top-tier companies and industries received a score higher than 80 in the study. The global mean, or average score, was 64.2. According to the study, the general public tends to rate makers of consumer products, computers and electronics well above the global mean. The results indicate relative appreciation for those customer sectors and suggest a favorable operating environment for companies in these sectors.

The Global 600 are separated into 24 industries. Based on reputation, consumer products (72.75) ranked the highest on national and international scales. The energy industry (51.45) had the worst reputation in the U.S., while telecommunications companies (56.18) had the worst reputation among consumers worldwide.

Original here

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