In recent decades the world has become a global village. People wear the same clothes, drink the same sodas, watch the same movies or have the same phones. Multinational companies are partly responsible for this equalisation process.
Though differences among cultures have decreased significantly, reputation perceptions of global companies vary from country to country and market to market. So, how do multinational corporations uphold a strong reputation across the markets where they operate?
A main issue for global corporations is usually the difference between the reputation in domestic and foreign markets as shown by the Reputation Institute’s Global 2012 Rep Trak™ 100 [PDF]. According to the study, 64% of the companies analysed have a stronger reputation in their home country market compared to globally. More recently, the 2015 Global Rep Trak™ 100 showed that a company’s reputation can be up to 20% weaker in foreign markets.
Exporting a strong reputation is clearly a tremendous challenge, but it is crucial for global corporations. A positive reputation drives growth to any business, contributing to revenue generation, attracting the best talent and protecting the company in case of a crisis.
There are several rankings related to reputation that implement different methodologies and evaluate a multiple range of criteria. This makes it hard for companies to identify the most relevant drivers of reputation. However recognising reputation drivers that are often repeated in the rankings and the most popular attributes in respective markets is crucial to addressing reputation perceptions globally.
By examining various reputation studies it is possible to identify drivers that contribute best to the achievement of a positive reputation.
Comparison of reputation attributes' among reputation scales using the reputation drivers proposed by the Reputation Institute
As shown in the table above, most of the rankings monitor the same attributes even if they use different words or definitions to describe them. Based on the common reputation drivers it is essential to think about what companies can actually do to improve their reputation in foreign markets. How can multinational corporations enhance their reputation globally?
10 recommendations for multinational corporations to improve their reputation in foreign markets
1. Connect with universal values
Each culture and each market is different and has its own characteristics. But there are widespread universal values that translate beyond countries borders. Multinational corporations need to find that universal bond – those values that can be applied across geographies, in order to connect with people from all over the world. If a company successfully builds this bond it will become something bigger than itself; creating an emotional attachment with stakeholders worldwide.
2. Apply glocal strategies
Multinational corporations have a challenge in becoming locally relevant. That’s why they need to understand local stakeholders well and customise universal values to these markets. The only way of achieving this understanding is through dialogue with key stakeholders: a company won’t become part of the local fabric if it doesn’t listen to consumers, employees and shareholders. In addition, local subsidiaries need to have a certain independence to implement their own reputation strategies. Communication professionals from the subsidiaries, who are responsible for managing the day-to-day tactics, know better their market and stakeholders.
3. Ensure brand consistency
Once universal values have been set up and adapted to local markets, multinational corporations must abide by these principles. Companies have to be sensitive to local realities, but without forgetting its intrinsic identity. It is essential for companies to keep its unique corporate character, the same one, all around the world. The best way of achieving brand consistency is to establish a global reputation strategy at a corporate level, where subsidiaries are also involved, and set up mechanisms to ensure brand and reputation consistency globally.
4. Base plans on research
Communication professionals face the challenge that reputation is an intangible asset. That is why research is extremely important to prove the ROI (return on investment). It is impossible for reputation professionals to manage something that can’t be measured or evaluated. Moreover, extensive research helps multinational corporations have a deeper understanding of markets where they operate and contributes to take better decisions based on an analysis.
5. Leverage corporate sponsorships
A large number of companies have put in place corporate sponsorship activities. Sponsoring sports or events can produce a reputational lift for multinational corporations, allowing companies connect with stakeholders in a much more pleasant and relaxed environment. They also contribute corporations associate themselves with local events that are relevant to local stakeholders.
6. Benefit from local influencers
Using local brand ambassadors is another effective tactic in reputation management strategies. It is important that the brand ambassador reflects the values of the company. If relevant in a particular market, brand ambassadors will become local influencers, connecting their image to the company’s image and making local stakeholders identifying themselves with these ambassadors.
7. Don’t forget employees
If multinational corporations don’t perceive employees worldwide as brand ambassadors they are missing an essential reputation asset. Having employees aligned with the company’s values, will provide an important reputational lift. Everybody at the company needs to realise and understand that everything they do have an impact on corporate reputation.
8. Solve the brand unification processes vs. keeping local brands dilemma
Companies present different brand architectures, ranging from house of brands to corporations that unify all their local brands into a single one. There is not a global rule than can be applied to every single case. Corporations must use their common sense to figure out the best potential solutions always keeping several aspects in mind.
On one hand, local brands usually possess a significant value. Is it worthwhile for the corporation to lose these valuable assets in an M&A? That’s the reason a brand such as Spanish broadband and telecommunications provider Telefónica decided to keep local brands. On the other hand, a global brand provides strength and consistency to corporate reputations. Can a company take advantage of having a global unique brand? Santander has one single brand worldwide. This provides the bank greater visibility, making the Santander brand more popular.
The industry is an important element to consider before taking a decision in this respect. Consumers might prefer local energy for telecommunications providers because they are part of their daily lives. But the might prefer to have the strength of a global bank to keep their savings, providing greater confidence among its customers.
9. Contribute to local communities
Multinational corporations must get involved with local communities from the markets where they operate. Local stakeholders need to know that companies truly care about them; that is not just something they do because is the ‘right thing’. Contributing to development of communities will help companies being perceived as local corporations among their stakeholders. Otherwise, local publics could see corporations as invaders that only seek to produce profits. Community engagement activities must be aligned, one more time, with the company’s values.
10. Encourage dialogue with stakeholders
Communicating with and informing stakeholders about the company’s activities are essential tasks in reputation management strategies. Listening to stakeholders is also crucial, especially since they now share their opinions through social media channels. This is also related to a participatory corporate culture; which usually leads to a two-way communication model based on dialogue between corporations and stakeholders. If a corporation has true conversations with its stakeholders, it will be easier to meet their expectations. Meeting stakeholders’ expectations will provide a positive boost to organisations’ corporate reputation.
Remember the people
Even if the world is becoming more and more global, companies can’t forget that there are people behind that globalisation; it is these people they should be interacting with. Corporations must find connections with what people care about worldwide. For example, what are the most relevant values for these persons? Therefore empathy is key to managing reputation anywhere in the world.
In addition, people need to feel as if companies truly care about them and about the way their lives can be improved with a product or service. Beyond economic interests, corporations should become that ‘friend that sticks by their side’.
The 10 recommendations above capture both concepts; as a result, if multinational corporations apply them, they will have a stronger reputation globally.
You can find Ignacio @ignaciobalez on Twitter to continue the conversation.