Woolworths has overtaken mobile operator, Vodacom as the company with the strongest reputation in South Africa.
This is according to the Reputation Institute’s (RI) National RepTrak Pulse survey for 2014, which ranks the largest listed companies by revenue and familiarity.
The survey, now in its ninth year, tracks companies which are engaged in commercial activities, have a reasonable amount of familiarity with the general public, and are not wholly-owned subsidiaries of other companies.
Last year’s top firm Vodacom fared particularly poorly in 2014, losing as many as 9.35 points to sixth position on the table – one position below rival operator, MTN.
Woolworths’ reputation strengthened marginally, from 73.98 to 74.31 points.
According to the RI, the clothing, home and food retailer led the field on all reputation dimensions: leadership, citizenship, governance, workplace, innovation, products/services, and performance.
Reputation Institute’s Partner for Africa, Dr Dominik Heil said: “The 2014 survey shows that Woolworths is in a league of its own. Its success comes in an environment in which South African corporate companies are suffering a bloodbath in their reputations.”
“Woolworths has managed to break out of this logic because it has a sound stakeholder management strategy. It demonstrates that engaging with stakeholders is not a loss exercise. If you create value for all your stakeholders – and not just for your shareholders – and manage that well, the benefit ‘pie’ for everyone will grow.”
Trevor Ndlazi, Reputation Institute’s country manager for South Africa, said that the biggest driver of reputation in South Africa in 2014 is products and services at 15.2%, with citizenship only slightly behind at 15.0%.
“Product and services, citizenship, financial performance and innovation explain almost 60% of reputation, while workplace, governance and leadership made up just under 40% of what drives reputation this year,” he said.
Ndlazi said that the drop in Vodacom’s reputation – from a strong/robust score of 74.17 in 2013 to an average/moderate rating of 64.83 in 2014 is massive and is largely attributable to its dispute with Icasa over mobile termination rates.
The financial services sector also fared poorly. Even though Standard Bank jumped from seventh to second position on the table, its 2014 score of 68.77 points was only marginally better than the 2013 score of 68.5.
First National Bank dropped 9.08 points from last year. FNB is a wholly-owned subsidiary of First Rand but is included in the survey as it is a major player in the financial services sector.
Nedbank and ABSA dropped 4.18 and 4.39 points respectively.
The survey is conducted annually in January and February among 1,462 unique respondents, from whom 3,860 rates were obtained. Respondents’ distribution was balanced to the country population on age and gender.
To be included in the survey, companies had to meet the following criteria:
- All companies were among Financial Mail’s 2013 Top Companies listed on the Johannesburg Stock Exchange (JSE) based on total revenues; and
- All companies were at least somewhat familiar to the economically active segment of the general public.