Ipsos Corporate Reputation

Global Vs Local

Local relevance is climbing the corporate agenda for global businesses and reputation management has a vital role to play in getting the global versus local balance right.

Globalisation and the growth of the digital economy make it increasingly important for businesses to understand cultural norms, customer expectations and regulatory views across every market.
Conversely, as the media, political pressure groups, and investors have become global, local incidents can now quickly escalate into global reputation crises.
Reputation Council members are clear that the balance between local market needs and global strategy requires experimentation and analysis, as well as evidence-based trust.

In 1983 Theodore Levitt published his classic treatise ‘The Globalisation of Markets’ in Harvard Business Review. His central contention was that advances in communications and technology were leading to a more homogenous world, indeed, a world where uniformity in consumer tastes would increase and global brands would flourish by delivering the same proposition and experience – regardless of location.

Reality seemed to support Levitt’s contention as companies such as McDonalds, Levi’s, Toyota and Panasonic exported standardised products (and marketing campaigns) around the world. The concept of the ‘global consumer’ was in the ascendancy and businesses aligned their organisational structures accordingly. Decision-making became centralised with the focus on global business units rather than individual countries.

Perhaps not surprisingly, the same principles permeated global reputation management: The idea that an organisation and what it stands for should be consistently expressed regardless of the location and cultural context. Ideas such as vision, purpose and core values were seen as essential truths that underpinned the corporate reason for being. They needed little in the way of adaptation to local needs or sensitivities and were at their best when unadulterated.

This doctrine held true for a number of years but became increasingly questioned with the emergence of fast-growing economies such as China and India, which spawned increasingly powerful local competitors. Consumers no longer needed to default to global brands as local companies were producing products and services that were catching up in quality and brand appeal. It became apparent that local relevance was climbing the corporate agenda for global businesses and that reputation management had a vital role to play in getting the global versus local balance right.

It’s in this context that we decided to ask our Reputation Council members from around the world to share their thinking with us in this area. Our findings fell under a number of clear themes: authenticity; measurement; autonomy; and digital and social media.

Authenticity

In an environment of increased scrutiny of global corporates in domestic markets, corporate communicators report the growing importance of translating global strategy into authentic localised outputs.

To do this effectively, corporate communicators must have a deep and evidence-based understanding of both the role of localism in driving reputation in the domestic market and local stakeholders’ expectations of the corporate entity, and then be empowered to turn broad global strategies into effective domestic communication plans, backed up by meaningful practical demonstrations of the entity’s commitment to the local market.

In addressing this challenge, many Council members referred to one of the bedrocks of good reputation management: authenticity. It emerged that if an organisation has done the groundwork in developing and embedding a strong corporate brand strategy internally, it will be well positioned to apply a specific market or stakeholder lens to this strategy to develop and tailor external communications that are authentic. That is, they’re true to the master strategy and relevant to specific markets or stakeholder groups, and will not put the business in a position where it is communicating in one market or with one stakeholder group in a way that compromises it with another.

"The stakeholders in each market whose views make up your reputation are shaped by their cultural, historical, political and market differences. There is a culture in every country that is different, no matter what global strategy you’re trying to deploy."
"Stakeholders don’t expect you to be a global brand, they expect you to be a local brand. When they interact with us, they interact in the local context."
"We have to operate with sufficient consistency so that we bring the same value set and value proposition wherever we operate around the world. We have to do this whilst also knowing that different audiences care about different things and therefore expect different things from you. We must appreciate this balance, else we risk not being authentic."
of Council members working in multinational companies analyse perceptions of their sector or business across different countries.
Measurement

As barriers to global business continue to diminish and the world becomes smaller, many businesses find themselves in new markets and new regions, managing different cultural norms, customer expectations and regulations. It’s normal in these situations to wonder why a company’s reputation varies by market, much as a reputation may vary by stakeholder audience. The majority of Council members we spoke with recognise this complex environment and understand that it’s nearly impossible to have a consistent, unified reputation across markets.

"It’s impossible. A general theme could come through, but it’s different at the local level. You can create a general belief about an organisation, but not a unified reputation across markets."

Within this context, most global communicators and marketers aim to develop a consistent global positioning strategy and framework that has the flexibility to be tailored to local markets, and also strive to demonstrate a long-term commitment to the local markets where they operate.

"It’s critical to understand reputation by market and have an umbrella narrative globally but understand that different markets, different cohorts and different subgroups are going to require pushes and pulls that are nuanced in the messaging. That will always be the case. Unless you have that diversified approach, you’re likely to fail at a global approach. The more global we get, the more local we get."

Additionally, this localisation of messaging and communications within the broader global context requires strong teams and partners on the ground.

"You need respect for regional and country communicators. They know the local market better than anyone else. Companies should be listening from the bottom up, not the top down."

Nearly all the Council members interviewed indicate that they evaluate their company’s reputation globally to provide the insight necessary to tailor their strategies and understand how to prioritise messaging and communications to local markets and various stakeholders. In many instances, this reputation measurement informs everything these companies do – programme prioritisation, partnerships, key messaging, stakeholder prioritisation, resource allocation, etc.

"It helps you to invest where it’s needed, but also get ahead of pushback. Research is a guiding tool for resource allocation and to measure the success of programmes."

Reputation measurement plays a critical role in the long-term strategy for local markets, and in the words of one of our Council members:

"You can’t improve what you don’t measure."
Autonomy

Our research suggests that tailoring corporate communication to local markets has become more important in recent years. Council respondents point out that it is vital to find a balance between local market needs and corporate-level strategy. The alignment builds on continuous exchange and relationships of trust.

The paradox is that the media, political pressure groups and investors have become global, but it is precisely this global perspective that has made local reputation problems more urgent. Today, a local reputation issue has the potential to grow into a global reputation crisis. On the flipside, communication tools on hand today have also made it easier to tailor global strategies to local particularities.

Mixing global and local communication strategies brings different points of view to the table. The way businesses talk to clients or organise a campaign and the images they use to build a corporate brand differ greatly between Saudi Arabia, China and Sweden. What matters depends on local cultural values, including religion. It is this broader context that needs to be considered when building communication strategies. Blending local and global communication can be a source of refreshing innovation.

Council members agree that the balance between global communication objectives and local needs has got to be right. Companies experimented with a spectrum ranging from totally autonomous local to totally centralised global communication strategies. There is no one-size-fits-all solution.

Whilst global narratives set the broad framework of a strategy, alignment with local needs is important. Both ought to be interlocked. Continuous exchange with local communication experts is necessary to achieve this. Local communicators should have a degree of autonomy, because they are the ones with robust knowledge of their local communication landscape. This autonomy presupposes trust in the vernacular expertise of communication teams on the ground.

"There are also questions of internal governance: What is the relationship between the holding company and its local market branches? How much autonomy do you grant local communicators? How far can this be, or should this be, controlled centrally?"
"On the corporate level, we must understand that it is very well possible for a local reputation issue to grow into an existential global reputation crisis. A system must be in place that allows communicators to allocate resources and to react with precision on the ground."
Digital and social media

For global businesses, digital and social media have dramatically increased public scrutiny of local operations. What may once have been considered local incidents can now quickly escalate into global reputation crises. At the same time, connecting with local consumers and stakeholders increasingly requires tailored engagement at a local level.

The challenge for global businesses is therefore a simple, if paradoxical, one: to build a reputation that is globally consistent and at the same time locally relevant.

"The growth in digital media in the last 20 years does mean that being able to segregate reputation by geography is not really tenable."

In last year’s Reputation Council report, we discussed how equity flows between corporate and product brands, offering both opportunities and threats to corporate communicators. The same principle applies to reputational equity flow between regions. And this flow has been accelerated by the growth of digital media, which has collapsed the barriers to information flowing between regions. In this environment, inconsistency of positioning or behaviour between regions becomes a threat to global businesses.

Reputation Council members stress the importance, therefore, of establishing a principle or framework that anchors corporate behaviour and messaging globally. This is the role of the corporate brand. As described in Ipsos’s white paper, ‘Brand Purpose: What’s the point of you?’, part of the purpose of brand positioning is to act as the “guardrails for communication.”

Final thoughts

It’s clear that the world has indeed changed since Theodore Levitt mused on the role of the global brand over 35 years ago. Global marketing and communications are no longer homogenous; we now live in a world where brands and reputations are seen through the prism of local market needs and expectations.

Council members clearly recognise this change and are working with CEOs and other members of the senior leadership team to implement communication and business strategies that achieve the right balance between globally consistent and locally relevant messaging.

However, given the rise of connected and savvy stakeholders, it is imperative that such strategies are built on the pillars of:

  • Authenticity – behaviour is aligned to communications
  • Autonomy – power is devolved wherever possible
  • Digital and social media – understanding their role in breaking down barriers
  • Measurement – objective assessment of progress

Methodology: 154 interviews conducted with Reputation Council members between 25th June and 12th November 2018.

Read more from the Reputation Council...

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Amid the uncertainty of the pandemic, the S of ESG is coming under greater scrutiny

Actions on E, S and G in tandem remain essential to corporate reputation

As ESG has surged up the consumer agenda, new Ipsos data shows that improving society is identified as the top priority for multinationals among consumers across the globe – perhaps not surprising given the social implications of the pandemic. While fundamental issues such as safe working conditions are seen as most important here, each company should carefully consider how to adapt its operations to improve sustainable business practice. Companies should continue to pursue actions on all three pillars of ESG though. Not just because E and G remain critical in the public’s eyes, but also as it – as we should all know now – makes good business sense to do so.

Companies’ role in creating shared value

Companies are increasingly assessed on the extent to which they bring ‘net benefits’ to society. Especially among the financial community and the media there is a focus on ESG: companies’ performance on Environmental, Social and Governance (ESG) issues that come with doing business. Not just because you ultimately shoot yourself in the foot if you run out of the natural resources you need, treat your staff unfairly, or become wound up in corruption scandals. No, also because doing the right thing has BECOME a source of value creation. Not least, this is because we – ‘the public’, consumers and employees – pay more attention to what companies do or stand for than we did a decade ago – be that their efforts to increase staff diversity & inclusion, meeting net zero goals, or paying their fair share of taxes.

In March 2021 Ipsos asked consumers across 28 markets to rank ESG priorities for multinationals. While all three aspects, ‘E’, ‘S’ and ‘G’, were seen as important, improving society (S) came out as the top priority, with 41% of the votes globally. Protecting the environment (E) followed at 31%, almost on equal footing with practicing good governance (G, 28%).

In 22 out of the 28 countries surveyed, improving society received the most picks as the top priority, with a majority of the vote share in Spain (54%), Poland (52%), Japan (52%) and Korea (50%).

These findings are not surprising in the context of COVID-19. Health & safety precautions in the workplace, as well as a desire for job security amid economic uncertainty, have, for many, become necessary concerns.

How should companies engage with the ‘S’?

Given the increased focus on the role of companies to contribute socially, where should they focus their efforts on the ‘S’ pillar of ESG?

Looking at which societal issues people want multinationals to address, our survey shows that improving working conditions and worker health & safety come top. This is true across all regions, from Europe to APAC, to Middle East-Africa, to LATAM through to North America. Potentially contributing here are new COVID-related concerns about ventilation, social distancing, face masks at work etc., on top of existing issues.   

Despite ample attention across (social) media for issues around gender equality and diversity, these topics came out lower down the list. Again, this holds true when looking in detail at the answers from people across different parts of the world. 

It’s impossible to give a blank slate answer to how companies can best create shared value on ‘S’. The priorities in the eyes of consumers listed above, give an idea. But what that means for each individual business is something that needs careful consideration. That’s why it’s so important for companies to engage with their stakeholders on these issues. Employees who feel their employer looks after them, will be more willing to go the extra mile: a ‘give’ for the ‘get’. Local communities who see that companies take their interests at heart, will be more open to dialogue and working together to create mutual benefits. Etcetera.

Ipsos advises businesses on how they should address ESG challenges and helps them to define, manage and communicate their priorities. A relevant example to multinationals is our advice on how to frame “benefits” of ESG strategies to consumers. As people aren’t driven by sustainability claims alone to take action (as they often feel they are doing enough already), it is most effective to couple these to an extra incentive personal to them. So instead of saying: “switch to renewable energy to reduce your carbon footprint” position this as “switch to renewable energy will save you money AND help you reduce your footprint”.

Finally, what’s left to say is that, as I have said before, investments in ESG issues should be financially responsible and prudent in their own right, giving shareholders a return on investment. Ultimately, genuine progress on ESG will help to protect companies’ social licence to operate and bolster their reputation.

For more information please contact:

Marloes Klop
Research Director, Corporate Reputation

Marloes.Klop@ipsos.com

Technical details about the survey

These are the results of a 28-market online survey conducted by Ipsos on its Global Advisor platform. Ipsos interviewed a total of 14,000 adults aged 18-74 in the United States, Canada, Malaysia, South Africa and Turkey, and 16-74 in 23 other markets. The survey was fielded between 19 February and 5 March 2021.

The sample consists of approximately 500 individuals in each of Argentina, Australia, Belgium, Brazil, Canada, China (mainland), Chile, Colombia, France, Germany, Great Britain, Hungary, India, Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Peru, Russia, Saudi Arabia, South Africa, South Korea, Spain, Sweden, Turkey, and the US.

The samples in Argentina, Australia, Belgium, Canada, France, Germany, Great Britain, Hungary, Italy, Japan, the Netherlands, Poland, South Korea, Spain, Sweden and the US can be taken as representative of their general adult population under the age of 75.

The samples in Brazil, Chile, mainland China, Colombia, India, Malaysia, Mexico, Peru, Russia, Saudi Arabia, South Africa, and Turkey are more urban, more educated, and/or more affluent than the general population. The survey results for these markets should be viewed as reflecting the views of the more “connected” segment of their population.

The data is weighted so that each country’s sample composition best reflects the demographic profile of the adult population according to the most recent census data.

Where results do not sum to 100 or the ‘difference’ appears to be +/-1 more/less than the actual, this may be due to rounding, multiple responses, or the exclusion of “don’t know” or not stated responses.

The precision of Ipsos online polls are calculated using a credibility interval with a poll of 500 accurate to +/- 4.8 percentage points. For more information on the Ipsos use of credibility intervals, please visit the Ipsos website.

The tech sector always bets that product quality will override privacy concerns

Probably the most common criticism levelled at the tech sector is the one about privacy – the sense that the tech sector, or government enabled by the tech sector, are collecting far more data on individuals than they should, and that the data is then being sold or used for unclear purposes. While the tech sector sticks closely to its cherished, and well-proven, ideology that positive user experience nearly always mitigates these concerns in practice, it is also true that the concerns of pro-privacy groups within society, and government, are getting louder and more prominent.

Stark evidence of this can be seen across two, relatively recent, product launches. Both of which have attracted major criticisms from privacy and digital rights campaigners, while at the same time being major commercial success stories.

Concerns around business and government use of personal information is high on a global scale

Let’s look at those concerns first – the 2020 Ipsos Global Trends survey[1] shows in stark detail the level of concern that exists around the world about what is being done by companies and governments using the personal data being collected from people when they go online.

A rise in private sector surveillance

So, bearing such concerns in mind, let’s examine the news coverage of Amazon’s Ring product line over the last few weeks. Ring is a video doorbell system, which seems innocuous, but with millions sold what you end up with is a potential surveillance network the size of which has never been seen before, and all in the hands of Amazon. And what has Amazon done with it? For one it initially entered into partnership with a large number of law enforcement agencies in the US that allowed them access to the videos it records without a warrant being required[2]. To quote from the Guardian, because of Ring “law enforcement are given a backdoor entry into private video recordings of people in residential and public space that would otherwise be protected under the fourth amendment”. While Amazon has recently extended its moratorium on sharing its facial recognition software with police, a ban it says that will stay in place until Congress creates the appropriate safeguards, it is puzzling why a similar approach to sharing data with law enforcement has not been adopted with Ring. Especially given the high-profile critique of the product by former Amazon software engineer Max Eliaser;

“The deployment of connected home security cameras that allow footage to be queried centrally are simply not compatible with a free society. The privacy issues are not fixable with regulation and there is no balance that can be struck. Ring should be shut down immediately and not brought back[3]

Now Amazon can certainly say that they are following the law as it exists and that the capabilities and requirements of the Ring product are all made available to the consumer at the point of sale. Amazon has acknowledged some of this controversy and has consequentially changed how police ask for video content, now requiring the police to ask for footage via the Ring Neighbors app, allowing local users to comment or assist as they judge best[4]. However, to a background of high consumer concern about how personal data is being used and with Ring cameras being described as “a threat to privacy at best and a danger to society and democracy at worst[5]”, critics may accuse Amazon of not thinking product features through a bit more carefully. That said, when they have a product that has shifted many millions of units in the US alone it is clear that, as ever, product utility quashes privacy concerns at point of purchase. A fact underlined by the 4.6 rating the Ring 3 has on Amazon.com, a rating based on 33,000+ reviews.

From surveillance to tracking

Enough with Amazon, I hear the tech fans cry, that’s just one of the major brands. Well, let's turn to Apple and its brand-new gadget - the AirTag. A device sold as the means to find things you have lost, via a Bluetooth signal that alerts sympathetic devices that are web-enabled. Perfect for finding your luggage, your car, or, as has been pointed out by a wide range of news agencies, the person you are stalking.

Apple has attempted to build in safeguards to prevent “unwanted tracking” but the slew of media coverage over the last few weeks that point out how ineffective those safeguards are in practice probably shows how little thought the designers of this product put into thinking about the downsides of this product compared to the potential upsides. The warning sound that alerts the user to unwanted tracking is easily missed, and while people with an iPhone might be able to find unwanted AirTags those with Android phones cannot (right now).

While plenty of apps, charmingly called “stalkerware”, exist to help one person track another, and there are other products similar to AirTags where the manufacturers have put far less effort into stopping them from being used for nefarious purposes than Apple has. However, part of the surprise here is that, as The Washington Post articulates well “AirTags show how even Apple, a company known for emphasizing security and privacy, can struggle to understand all the risks involved in creating tech that puts everyday things online[6]. This disconnect between a company that is often praised for its firm stance on personal privacy and the potential misuse of this product is vast and easily fixed with little effort. As Wired suggests “Apple leadership needs to give abuse survivors and experts a central place in its development process, incorporating their feedback from the start. Otherwise, the company will continue to make products that endanger people more than they help[7]”.

Responding to this wave of criticism[8] Apple has announced some changes – reducing the amount of time before an AirTag starts beeping once it is away from its owner's iPhone and promising an Android application as well. Just like Amazon with Ring its good to see Apple responding to the issue, but it again raises the question of how a product like this got to market with these issues when Apple usually takes these issues so seriously. That said, just as with Amazon’s Ring it is highly likely that this product will sell incredibly well despite any privacy concerns due to its sheer usefulness. In fact one industry analyst in Forbes[9] confidently predicts its success, and possible billion dollar revenue for Apple, due to the vast number of devices the product can connect to and the popularity of the Find My app among Apple product users.

Consumers value privacy – as well as products that make their lives easier

Ultimately the tech sector knows its customers very, very well and knows that while there are people who may not buy these products because of privacy issues there are far more people who will ignore those concerns and buy them anyway. Negative media coverage of the like described above will have very little impact on the level of individual customers. That said, increased media focus on perceived privacy issues reinforces some of the negative reputational themes that affect the tech sector and the brands within it and are currently fuelling many of the debates that are ongoing around the world among legislators thinking of new regulation. Innovative new products that skirt the edge of what is appropriate, or legal, when it comes to privacy is one thing, as long as they are profitable, but fuelling the fires of regulation is another. The tech sector may want to ponder this.

Article links

[1] Markets: Argentina, Albania, Australia, Belgium, Brazil, Canada, China, Chile, Colombia, Denmark, France, Germany, Great Britain, India, Indonesia, Italy, Japan, Mexico, Peru, Poland, Russia, Romania, Serbia, Saudi Arabia, South Africa, South Korea, Spain, Sweden, Turkey, and the United States. 

Method The survey for the 2020 edition was carried out online using the Ipsos Online Panel, and face to-face interviewing in Albania, Montenegro and Serbia. The results are weighted to ensure that the sample’s composition reflects that of the adult population according to the most recent country census data. Total global data has not been weighted by population size, but are simply a country average.

Fieldwork dates June-July 2019

[2] https://www.theguardian.com/commentisfree/2021/may/18/amazon-ring-largest-civilian-surveillance-network-us

[3] https://amazonemployees4climatejustice.medium.com/amazon-employees-share-our-views-on-company-business-f5abcdea849

[4] https://www.cnet.com/home/security/rings-police-problem-didnt-go-away-it-just-got-more-transparent/

[5] https://thenextweb.com/news/amazon-engineer-ring-should-be-shut-down-immediately-and-not-brought-back

[6] https://www.washingtonpost.com/technology/2021/05/05/apple-airtags-stalking/

[7] https://www.wired.com/story/opinion-apples-air-tags-are-a-gift-to-stalkers/

[8] https://www.bbc.co.uk/news/technology-57351554

[9] https://www.forbes.com/sites/timbajarin/2021/04/20/airtags-are-apples-next-billion-dollar-business/?sh=4f60c605d187

For more information please contact:

Carl Phillips
Director & Global Stakeholder Research Lead, Corporate Reputation

Carl.Phillips@ipsos.com