Nation's image reflects on corporate reputation
The Sichuan earthquake has killed tens of thousands of people and left millions homeless, but if there's a silver lining to be found in the crisis, it is that the nation's response to the quake has raised its reputation around the world.
Leslie Gaines-Ross, a New York-based 'reputation strategist' for the public relations firm Weber Shandwick, said the earthquake provided a classic example of how someone with a bad reputation - from a western point of view - changed their image overnight.
'The earthquake has really tempered people's perception of China, and it's much easier to identify with them now because of the positive reaction to the crisis,' Ms Gaines-Ross said. 'The way that the Chinese responded to this earthquake has made people realise that China knows what to do, and its leaders know what to do.'
And a country's reputation is becoming ever more important for how its companies will be received overseas. This was proven when its companies were splashed with black paint after some mainland factories churned out shoddy and dangerous consumer products.
France is another classic case, with the international supermarket chain Carrefour being targeted on the mainland after the Olympic torch received a lukewarm welcome in the streets of Paris. 'The whole idea of a country's reputation is growing in importance, and it is becoming very important in deciding perception and reputation of a company,' Ms Gaines-Ross said. 'The war on Iraq and the fallout after Katrina were sort of a one-two punch in terms of destroying the US reputation.'
After Hurricane Katrina devastated New Orleans and the United States government failed to answer the call for help, Wal-Mart Stores stepped in, donating US$20 million in cash along with 1,500 truckloads of free merchandise, food for 100,000 meals and the promise of a job for every one of its displaced workers. It also used its logistical efficiency to deliver basics such as water, fuel and toilet paper.
'Wal-Mart is a fabulous example of a company that repaired its reputation. They weren't listening to customers, to [non-government organisations] or employees, and their relationship with regulators and the media was bad. But they did a 360-degree turn in terms of listening and became a leader in sustainability,' Ms Gaines-Ross said.
Many mainland and Hong Kong companies opened their wallets to help the earthquake victims, but some did so with more fanfare. 'Contribute, but do it as quietly as possible. People will find out who did what,' Ms Gaines-Ross said.
Societe Generale was an example of a company that let a bad situation do more damage to its reputation than necessary, she said. The French bank in January said trader Jerome Kerviel conducted unauthorised trades which the bank said cost it more than US$7 billion in the biggest known trading scam to date.
Mr Kerviel is free on bail and insists managers knew about his trading activities. The bank was slow to take firm, clear action to turn the situation around. 'There was a real question of who was accountable, and they didn't address the situation clearly enough for the public,' Ms Gaines-Ross said.
Higher consumer spending power has given people the ability to choose their products based on quality and brand image, while the internet has become a powerful marketing tool used by and against companies. 'I don't think people outside China fully appreciate the large extent to which the social media [online discussion] has been embraced and adopted on the mainland, and the role this plays in a company's image there,' Ms Gaines-Ross said.
Actress Sharon Stone last month commented during the Cannes Film Festival that the Sichuan earthquake was 'bad karma' coming back at the Chinese for their treatment of Tibetans. A backlash in online chat groups helped turn the country against her.
'In terms of symbolism and communication, many of the companies in the US and Europe sort of seem to be hitting you on the head with their message, and in that respect they could learn a bit from the Chinese way of doing things,' Ms Gaines-Ross said.