On the 26th of September, in association with the Mail & Guardian, Plus 94 Research released the results of the 2014 Top Companies Reputation Index (TCRI). An Executive Summary of the report, including a list of all of the winners, is available on our website. Below are the answers to some frequently asked questions about the study:
What is corporate reputation?
A company’s corporate reputation is the sum of all of the views and beliefs held about the company, based on its history, its current trends and its future prospects; in comparison to close competitors. It is a combination of the multitude of perceptions that stakeholders hold and how these make them feel about a particular organisation. Corporate reputation is a relative assessment which is, by definition, constantly in a state of flux. However, Plus 94’s reputation model allows for an objective and scientific measurement of corporate reputation.
Why is a good corporate reputation important for your business?
Reputation is an indication of the synchronicity between a company and the community that it aims to serve and as such, it is of vital importance that organisations invest in building a positive reputation for themselves. South African consumers are sharp and well informed and, more often than not, make purchasing decisions based on a company’s reputation. It is important to build and maintain a healthy corporate reputation as customers warm up to the prospect of dealing with such businesses and are even lenient towards them when they face market and business challenges. It is also critical for corporate affairs managers, boards and CEOs to have a clearer image of public expectations of their role in society from a commercial, social and environmental point of view.
Why the TCRI?
The Top Companies Reputation Index (TCRI) recognises the diversity of interests and parties that impact on a business and accordingly sums up how an entity is perceived. If applied correctly, the TCRI is an important corporate development tool which can be used to entrench market performance while ensuring that the businesses serve sustainable communities within a thriving environmental setting. The M&G 2014 TCRI gives Top Businesses in South Africa an opportunity to not only visualise but also to understand their intangible and non-traditional assets, which are often a reliable proxy for performance on the more tangible assets that more often than not occupy the bulk of management time.
What is a Top Company?
The TCRI survey is Top Companies based, which means that it rates the Top 50 companies according to highest advertising spend. The TCRI then also covers their direct competitors and other key consumer sectors, resulting in a total of 163 companies rated in 2014. Furthermore, unique to the TCRI as a corporate reputation measure, the results are split into industries. This is essential as some industries do tend to attract lower levels of rating than others, based on specific connotations that they may evoke.
Mining companies are not included in the study because they are not part of the Top 50 advertisers. Our experience also shows that, as a part result of this, most consumers are not familiar with what mining companies do, and hence are less likely to answer questions accurately.
What about the sample?
Ratings may differ from survey to survey depending on sample size and geographic coverage of the sample. The TCRI 2014 methodology covered a sample of 3042 respondents in all 9 provinces. Interviews were conducted in the respondent’s home language and demographically weighted to be representative of provinces, age groups, race and gender. Prior to doing the rating, respondents were asked to indicate familiarity with the different businesses in the study presented in rotated random order per industry sector panel. Only businesses that respondents were familiar with were made available for rating purposes. Every respondent rated an average of 5 companies, resulting in a total of 15234 ratings overall.
How was reputation measured?
There are several reputation measures in the market, and the results will most likely differ if the dimensions used are not the same. The TCRI methodology uses a list of 9 dimensions and 31 attribute statements. Based on our assessment of the reputation environment, other studies do use fewer dimensions.
The advantage of having a more exhaustive list of attributes is that a company stands a better chance of being assessed on all of its attributes. An example is Woolworths, which came first in one other reputation measure with a score of approximately 74. While it did not come first in the TCRI overall measure for various reasons, including the fact that it is not a Top 50 Advertising Spend Company, its reputation score as per the TCRI was however much better at 79.69.
A further example is the TCRI Overall Winner – Coca Cola – with a score of 85.68. The key drivers of Coca Cola’s positive reputation fall under the measurable dimensions “Recognition” and “Governance” – attributes that may not have been under consideration in other studies where Coca Cola is not represented.