How the reputation of a country can either help or hinder the internationalisation of a company s reputation

Transcription

1 Insights Strategy Documents I26/2012 Reputation How the of a country can either help of a company s There are two key factors that contribute to the of a company when it decides to make the leap into other markets - the of the country in which that firm is based and the social context. These are the two primary considerations affecting the way public opinion and stakeholders in those countries make their evaluations. The of a company or of the major companies and brands from a country ends up having a decisive influence on the of that country in general. This is a return journey - a two-way mechanism that can, depending on how it is managed, become either a virtuous cycle or a vicious cycle from which it is difficult to emerge. For this reason, some companies attempt to hide their in their country of origin. The parts have an influence over the whole, yet the whole also the parts. A simple metaphor can be made concerning the relation between the of a product, of a commercial brand, and a company s corporate. The better the of its products, the higher will be the of a company. Conversely, the better a firm s, the more highly reputed will be its products, in a sort of transfer of meanings - and also of value and trust. The of companies and countries as communicating vessels The halo effect is a clear sign that the protective covering of one extends over another. According to Eunkyung Lee, a researcher at Sungkyunkwan University in Seoul, South Korea, one acts as a source of information and evaluation This document has been prepared by Corporate Excellence Centre for Reputation Leadership. It has cited, from among other sources, speeches by Michele Tesoro-Tess, general manager of the Reputation Institute in Italy, Eunkyung Lee, researcher at Sungkyunkwan University in Seoul (South Korea), Mary Lambkin, professor at University College in Dublin (Ireland) and Cristina Palanca, head of Research and Brand at Santander, delivered at the 16 th Global Conference Going Global in the Reputation Economy, organised by the Reputation Institute in Milan from 30 May to 1 June, 2012.

2 How the A company s that of its home country, while that country s also that of the company. The parts have an influence over the whole, yet the whole also the parts that is applied to the origin of the other. The influence of an evaluation of a person, product, company or country has an effect over a wider group, especially when information is lacking. When confronted with a lack of knowledge about a product - of any brand - a consumer travelling abroad will make the primordial choice of brands that he or she is familiar with - often international brands that are also present in the native country and which that person habitually uses. A product or service s country of origin plays a significant role in its strength or weakness. Made in the USA or Made in China have radically different things to say about the product we have before us and about the manufacturing company. These phrases call on our feelings, but also relate to our differing prior experiences. They anticipate the experience that we may have from that moment. There is a proven and well-demonstrated tendency in consumers who, without any further thought, form a more favourable buying attitude or use of products that belong to a certain company or country. This is especially significant with certain product categories, or even with entire economic sectors. Recovering a national The state of an economy - the situation of its public finances or of its main economic indicators - affects a country s. It contributes greatly to improving or worsening the evaluation of that nation in terms of trust, outlook and the possibilities of recovery - should that economy find itself in a difficult situation. Ireland is a paradigmatic case, due to the current crisis ravaging different European countries. Graph 1: Global Media Coverage of Irlanda (Posisive vs Negative) Total Number of Articles According to Mary Lambkin, professor at University College in Dublin, the so-called Celtic tiger has, in a short period of time, gone from the being best country to live in (according to a variety of indicators in 2005), even surpassing its eternal rival the United Kingdom in per capita GDP, to being one of the nations hardest hit by the real estate and financial crisis. Too often, hubris and excessive displays of pride can anticipate a precipitous drop in, along with the activation of a latent risk in past activities. Yet it is also possible to quickly emerge from such a crisis if the following seven rules in which transparency and communication play an important role are followed: 1. Identify and dismiss those who are responsible for the crisis 2. Appoint a new leader who is accessible to the media 3. Rapidly provide detailed information about the scandal 4. Issue a quick and sincere apology to everyone 5. Make plans and signs of recovery visible 6. Improve the governance structure and mechanisms. 7. Commit the organisation to high standards of citizenship. According to Lambkin, if these measures are taken and implemented satisfactorily, it is possible to recover the main product rotation indicators in less than a year, levels of investment in the period of a year, and levels of in three years - given that most crises follow a very similar pattern. In the case of Ireland, negative information about the country has for the most part decreased since Negative Economy Negative General Negative Tourism Positive Economy Positive General Positive Tourism Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Source: Mary Lambkin, 16th Intenational Conference on Corporate Reputation Brand, identity and competitiveness, Insights 2

3 How the An excellent is achieved through excellence in business multiplied by an effecctive use of good communication and divided into the social context the end of 2010, when compared to the poor performance of 2008 and The country s position as an attractive place to invest has recovered precisely from that year - to the same extent that Ireland has improved its current account balance, along with the number of tourists it attracts. The indicator that is still awaiting improvement is precisely that which is related to the country s, which will move in direct correlation to an improvement in confidence within that nation. The fact is that recovery in national needs more time than that of business, mostly because it is affected by other factors such as the political or environmental situation. This has been noted by Michele Tesoro-Tess, managing director of the Reputation Institute in Italy, as well as the aforementioned Lee, who points out that social responsibility demands are higher for countries and their governments. The of cities and countries In the same way that a country s affects and is affected by its companies, among other factors, cities also directly interact with their countries. Meanwhile, the of its major cities also greatly determines a nation s ability to attract tourists, business, investment and talent. In fact, according to Tesoro-Tess, citing data from the Reputation Institute s City RepTrack Pulse study, a five-point increase in a city s correlates with a 7.2% jump in the willingness of travellers to discover that city. Moreover, familiarity with a city and its story has a direct prior impact on its. Graph 2: Familiarity has positive impact on Accordingly, while the key factors for a country s are an advanced economy, efficient administration and an attractive environment, for a city these three are the main dimensions for its own. The correlation and interrelation between the two is that strong. In both cases, the number of ambassadors and recommendation-givers - as well as detractors or destructive opinion-givers - determines whether a country or city achieves high levels of admiration, esteem, positive feeling and trust. Santander, a good example to follow According to the model put forth by professor Cees B.M. van Riel, an excellent is achieved through excellence in business multiplied by brand excellence as a differentiating factor. This is then combined with making effective use of good communication and divided into a key element for internationalising the social context. This includes the different regulations of each country, demands for transparency, cultural differences and the mechanisms of supervision and control. For Santander, according to Cristina Palanca, Head of Research and Brand, the sector s requirements in the social and institutional environment have greatly influenced the needs of the Spanish bank to adapt and improve in its process in Europe and Latin America. In the area of excellence in business, a key factor has been a focus on the customer and on brand excellence. A unique brand model throughout the world, adopted in 2004 although subject to How much i know the place Reputation of the place Source: Michele Tess, 16th Intenational Conference on Corporate Reputation Brand, identity and competitiveness, Insights 3

4 How the local adjustments, has been the prevailing trend throughout the process. This success is also due to a deeply rooted internal cultural model that revolves around a commitment to talent, employees and universities, together with communications supported by the firm s sponsoring of the Formula 1. Santander s good is thus supported both inside and outside Spanish borders. It rests on the firm s clear and solid business model, on permanent dialogue with stakeholders, and on its focus on the brand as a strategic priority. This brand functions as an umbrella that serves to consolidate the group s identity wherever it operates. Finally, that good rests on the strong commitment of the company s most senior executives to the entire process. Conclusion: as a previously established packaging Reputation plays a decisive role in our attitudes, behaviours and decisions, and as such, in the way we perceive a country. A country s precedes and that of its companies. On the other hand, the of a nation s companies and cities -together with their institutions and leaders in all areas of social activity- that of the country itself. To the extent that these institutions can manage this group of s in a harmonised and intelligent way, they will be able to enjoy the maximum mutual benefits. They can do this by coordinating a al architecture that fosters the interests of companies and their home countries -when they interact with and confront international markets. Insights 4

5 Leading by 2012 Corporate Excellence Centre for Reputation Leadership Business foundation created by large companies to professionalize the management of intangible assets and contribute to the development of strong brands, with good and able to compete in the global market. Its mission is to be the driver which leads and consolidates the professional management of as a strategic resource that guides and creates value for companies throughout the world. Legal Notice This document is property of the Corporate Excellence Centre for Reputation Leadership and has as its objective to share business knowledge about Brand, Reputation, Communication and Public Affairs Management. Corporate Excellence Centre for Reputation Leadership is the owner of all the intellectual property rights of the images, texts, designs and any other content or elements of this product and has the necessary permission for its use, and therefore, its copy, distribution, public release or transformation is prohibited, without express authorization from the owner.