May 2 (Bloomberg) -- Google Inc. led Harris Interactive’s annual poll of corporate reputations and Johnson & Johnson kept its No. 2 ranking after a year of product recalls.
The two companies beat Warren Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc., which fell from first place to fourth in the annual survey even as its score rose. While the public’s view of top banks improved, the financial industry still placed ahead of only tobacco companies.
Google, owner of the world’s most popular search engine, rose to first on the strength of its financial performance and public admiration for its workers, said Robert Fronk, leader of New York-based Harris’s reputation-management practice. The poll found corporate reputations rebounding as the economy improves and the scandals of the financial crisis recede.
“There’s still 44 percent who say that the reputation of corporate America is still falling, but that’s down dramatically,” Fronk said in a telephone interview. “We are seeing a more positive story beginning to develop.”
Rounding out this year’s top five companies were St. Paul, Minnesota-based 3M Co. in third place and, in fifth place, Apple Inc., the Cupertino, California-based maker of the iPhone and the world’s largest technology company by market value.
The online survey of 30,000 people ranked the reputations of the 60 most visible companies. American International Group Inc., the New York-based insurer rescued in a $182.3 billion U.S. bailout, took last place. Toyota Motor Corp., the automaker beset by recalls and reports of unintended acceleration in 2009 and 2010, dropped the most, from No. 20 to No. 43.
The survey was conducted Dec. 30 to Feb. 22, before Berkshire Hathaway executive David Sokol’s March resignation amid revelations that he had bought shares of Lubrizol Corp., a Buffett takeover target based in Wickliffe, Ohio. The poll also came before last month’s criticism of Google and Apple that their smart phones recorded data about users’ locations.
While scores improved for all 17 industries in the survey, 77 percent of the public still rated corporate images “not good” or “terrible.”
Google’s high regard was unusual for the 12-year-old survey, because the Mountain View, California-based company didn’t earn especially high scores for trust, admiration and respect -- what Harris calls “emotional appeal.” Instead, the company scored top marks for financial dominance and its workplace environment.
Google is known for employee perks including play rooms, a gourmet cafeteria and on-site massages, and it’s respected for hiring smart employees and treating them well, Fronk said.
Reputation and Sales
Respondents told pollsters they were more likely to buy products or services from top-rated companies, and high-scorers have tended to have less volatile stocks over the past decade.
“We have always believed that if we focus on making the best products for our users all else will follow,” said Gary Briggs, Google’s vice president for consumer marketing, in an e-mail. “We’re honored to be recognized in this ranking and we will continue to put our users first.”
Harris measured reputations based on 20 attributes in six areas: social responsibility, emotional appeal, products and services, workplace environment, financial performance and vision and leadership.
Johnson & Johnson’s resilience stemmed partly from decades of “baby equity” acquired from popular, family-oriented products such as baby powder, Band-Aids and children’s shampoo, Fronk said. Consumers have long associated the New Brunswick, New Jersey-based company with quality and ethical standards, he said. J&J also was helped by media reports that didn’t identify it as the source of recalled Tylenol and other brands, or named only its subsidiary, McNeill Consumer Healthcare, he said.
J&J, the world’s second-largest maker of health-products pulled more than 40 brands of children’s medicine and other items last year and shut a manufacturing plant over quality violations. In May 2010, U.S. Representative Eldophus Towns, a New York Democrat, said company documents showed J&J orchestrated a “phantom recall” of defective Motrin without notifying regulators.
While J&J scored high marks for trust and ethics, only 11 percent of respondents said they would definitely buy its stock, down from 26 percent last year. The number who said they would definitely recommend the stock took a similar slide.
The question for J&J is whether it follows the path of Toyota, the world’s largest automaker, Fronk said. Toyota’s standing was relatively unchanged in the previous poll after recalling millions of cars because of sudden-acceleration reports. This year, the Toyota City, Japan-based company had the biggest decline in the poll.
Toyota’s Lesson for J&J
In survey interviews, the message for J&J “came through crystal clear and that is, ‘we’re watching how you handle all the recalls and we’re looking to see if you do what we expect you to do,’” Fronk said.
Where J&J has made “mistakes,” it has strived to correct them, Chief Executive Officer William C. Weldon told shareholders at the company’s annual meeting April 28. J&J is spending $100 million to upgrade the factory that made most of its recalled medicines and adopted new quality-control standards across the corporation, he said.
“I want to encourage you to keep your faith in this great company and the people in it” who are “directly engaged in restoring confidence and earning back our trust and reputation,” Weldon said.
Technology companies rated highest, with 75 percent of people saying they had a positive view of the industry. Twenty-two percent had a positive view of the financial-services industry, up from 16 percent last year.
Banks accounted for four of the bottom nine ranked companies: JPMorgan Chase & Co. at No. 52; Bank of America Corp. at 55; Citigroup Inc. at 57; and Goldman Sachs Group Inc. at 58. JPMorgan, Citigroup and Goldman Sachs are based in New York. Bank of America is based in Charlotte, North Carolina.
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