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May 19, 2009

Consumer Products Companies Have the Best Reputation Among US Respondents to Survey
    by Robert Kropp

Annual study by the Reputation Institute ranks Johnson & Johnson first in corporate reputation, while companies in financial industries suffer the sharpest declines. -- In its fourth annual Reputation Pulse Study of the 153 largest US companies, the Reputation Institute (RI) surveyed over 7,000 US consumers and obtained more than 24,000 ratings by which it measured the corporate reputations of the largest US companies engaged in commercial activities.

The results of the study were subsequently published on the web site of Forbes Magazine.

RI employed seven reputational dimensions in its study. It assessed corporate reputation by rating the quality of a company's products and services, whether a company sells innovative services or is innovative in the way it does business, the quality of the workplace and treatment of employees, whether it behaves ethically and is transparent in its disclosures, whether it supports good causes and protects the environment, the effectiveness of its management, and its financial performance.

The RI study found that consumer products companies have the best reputation among US consumers. In the current study, conducted in the aftermath of the economic crisis, RI found that companies in the financial industries suffered the most significant decreases in corporate reputation. The report also found that the energy and telecommunications sectors continue to struggle with reputational issues.

Of the 153 companies studied, Johnson & Johnson displaced Google as the top-ranked US company, with a global pulse score of 83.58. Johnson & Johnson finished in the top ten in six of the seven dimensions of reputation. Rounding out the top five of companies in the US were Kraft Foods, UPS, General Mills, and FedEx, each of which scored above 80. Google dropped to eighth in the rankings, with a score of 78.80.

The largest gains in corporate reputation were earned by Dow Chemical and Wal-Mart. Both companies improved by more than 12 points over their rankings in 2008. In 2009, insurance giant AIG lost 27.52 points, the largest drop of any company ranked. Goldman Sachs lost 17 points, while Morgan Stanley dropped by 13 points.

The RI report found that over 65% of respondents would recommend one of the top 10 companies to others, while 30% would not recommend any of the bottom ten companies.

RI recommended that in order for companies to improve their reputations, they should engage with such stakeholder as customers, investors, and employees, in order to develop a framework for ongoing reputation management.

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