When it & #BANNER1 & # comes to building corporate reputations, nothing is as effective as a company's efforts in the area of corporate social responsibility (CSR), according to the latest Nielsen Corporate Image Monitor (CIM) 2007 from Nielsen India, designed to measure people's perceptions of the image and reputation of India's leading companies.
As the CIM reveals, IT giant Infosys, Tata Steel and Tata Motors from the philanthropic Tata Group, Reliance Industries and India's reputable private bank, ICICI Bank, rank at the top of Nielsen India's Corporate Social Responsibility Index.
Indian companies have become more aware of their role in CSR initiatives in the last few years. Environmental consciousness in the form of maintenance of parks and roads, primary education and training are the top three investment areas. However, the study reveals that these initiatives fall short of stakeholder expectations and their vision for real social responsibility. Aside from primary education, stakeholders expect corporations to do more in the areas of health development, rural welfare and poverty eradication.
"There appear to be gaps between what Indian companies currently spend in support of CSR, compared to their stakeholders' expectations," says Palal Bhattacharjee, associate director, client solutions, The Nielsen Company, India. Bhattacharjee adds that it is important for corporations to take stakeholder CSR priorities seriously, bearing in mind the triple bottom line of People, Planet and Profit. This will not only help in the overall betterment of the country, but will also help corporations gain valuable mind space in the stakeholder community.
The CIM found that overall, the impression of the top 20 companies, among the people surveyed, had improved significantly in 2007. The average Net Image Goodwill of the top 20 companies saw a sharp improvement from 29 per cent in 2006 to 41 per cent in 2007.
Companies that showed a sharp improvement were Tata Steel, Tata Motors and Bharti Airtel. ICICI Bank was the sole entrant from the banking sector. Not one of the FMCG giants featured in the top 10 list.
Among the various attributes rated by the stakeholders, quality of products and services, using the latest technology to introduce products and services, reliability of products and services, continuous value add, and enhancement of products and services came out on top. Additionally, the 'company's clear longterm vision' and 'consistently making profit' were also voiced as critical factors that determined its image.
Meanwhile, a company that contributes to government revenue, is involved in community welfare and achieves its targets in an honest manner also ranked highly on the goodwill scale with the public. Companies attracting the best talent, having good scope for career development, and possessing an international perspective of management were rated highly, too.
According to Bhattacharjee, corporations must communicate their CSR initiatives to promote a positive image about the company in people's minds. News items in various media, word of mouth and company reports are the three major sources of information for various social and environmental issues. "Corporations should use regular media and company websites to promote welfare initiatives," continues Bhattacharjee.
As the CIM revealed, respondents were optimistic about the future of all the 20 companies studied, with most expecting high or stable future growth for almost all of them. The sense of optimism appears to be most buoyant for IT companies, Infosys Technologies, Wipro and Tata Consultancy Services, which took three of the top five places in terms of 'Opinion about the Future'.
The Nielsen Corporate Image Monitor is an annual syndicated study conducted by The Nielsen Company. The study covered seven cities and interviewed 1,120 respondents in 2007. CIM measures the perception of the stakeholders about the corporate image and reputation of the leading companies in India.
The top 20 companies studied in 2007 were Bajaj Auto, Larsen & Toubro, Bharti Airtel, Maruti Udyog, HDFC, NTPC, HDFC Bank, Reliance Communications, Hindalco Industries, Reliance Industries, Hindustan Unilever, Sterlite Industries (India), ICICI Bank, Tata Consultancy Services, IDBI, Tata Motors, Infosys Technologies, Tata Steel, ITC and Wipro.