2004 Edelman Asia Pacific Stakeholder Study:
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2004 Edelman Asia Pacific Stakeholder Study: The Only Way to Have a Friend is to Be One Ralph Waldo Emerson. Admired/ Successful Corporation. Meeting Stakeholder Needs & Expectations. Driving Corporate Reputation. Driving Business Outcomes. Corporate Reputation Management.

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2004 Edelman Asia Pacific Stakeholder Study:

The Only Way to Have a Friend is to Be One

Ralph Waldo Emerson


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Admired/ Successful Corporation

Meeting Stakeholder Needs & Expectations

Driving Corporate Reputation

Driving Business Outcomes

Corporate Reputation Management

Delivering Quality Products & Services


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Major Forces are Impacting Business

Globalization

Deregulation &

Privatization

Erosion of Trust

in Corporations

Rise of Consumerism

Advances in Science

and Technology

Tech and Media

Convergence

Dispersion and

Immediacy of Media

Social Responsibility


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Imperative to switch focus:

Resulting Shift

Managing relationships as drivers of corporate reputation and resulting business outcomes

Managing perceptions as drivers of corporate reputation


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Business success requires mastery of the ‘Relationship Imperative’-- a philosophy that underscores the critical role of open, interactive, and information-richrelationships between a corporation and its stakeholders.

So, What Does this Mean for Business?

Driving Business Outcomes


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Implications for Driving Business Outcomes

Aligning your agenda to your stakeholders’ agendas

  • Mutuality

  • Commitment

  • Satisfaction

  • Trust



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Research Objectives -- To examine and understand:

The current environment for corporations

The drivers of stakeholder opinions

The role of social factors in relationships

Edelman’s Asia Pacific Stakeholder Research

  • Research Premise: Relationships with key stakeholder groups are critical to driving business outcomes


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Six stakeholder groups:

Senior business executives

Government officials

Media

NGOs/Trade Associations

Up-scale consumers

Employees*

Nine markets:

Australia (2)

China (3)

Hong Kong

India (2)

Japan*

Korea

Malaysia

Singapore

Taiwan

Edelman’s Asia Pacific Stakeholder Research

  • Year two of annual research

  • Conducted by Wirthlin Worldwide

  • Forty-minute, in-depth face to face interviews with 540 stakeholders in 13 Asia-Pacific cities

* Added to 2004 research



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Similar to 2003, 3-in-4 stakeholder respondents believe that things are 'pretty much on the right track’

The most often cited reasons for this optimism are:

Follow strategies, plan for the future, and good management

A good economy, high GDP, and better lifestyles

Profitability of corporations

Stable political/legal system/good government policy

Significantly more respondents in 2004, compared to 2003, cited this indicator

In thinking about the way corporations do business, are things going in the right direction or are they off track?

An Optimistic View of Markets & the Direction of Corporations


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The Other Perspective…

  • 1-in-4 feel things are 'off track‘

    • Japan and Korea account for much of this perspective

  • The most often cited reasons for this are:

    • Corporations over emphasize profit making

    • Corporations are short-sighted

    • Bad government policy/lack of corporate governance

    • Lack customer focus

    • Unethical/fraudulent behavior

Average Response

Japan

Korea

Right Direction

75%

45%

58%

Off Track

25%

55%

42%

Significantly more respondents in 2004 cited these reasons, compared to 2003


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Reasons for why feel things have ‘gotten off track’

Gov’t

Media

Consumers

NGOs

Sn. Execs.

Employees

Emphasis too much on profit

21%

21%

22%

38%

35%

26%

Short-sighted

5%

13%

28%

14%

30%

9%

Bad gov’t policy/Lack corp. governance

21%

17%

10%

10%

20%

13%

Worth Noting


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Air of confidence for corporations in pursuing relationships and pursuing agendas

Stakeholders predisposed to cooperate with corporations

What this Means for Managing Stakeholder Relationships

  • However, macroeconomics and government policy -- not corporate behavior -- driving perceptions of business environment


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Drivers of Corporate Image and pursuing agendas


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Key Findings: and pursuing agendas

Tangible business indicators still most critical

Significant increase in importance of:

Customer relationships

Corporate Social Responsibility (CSR)

Stakeholders’ Opinions Of Corporations In Asia Pacific


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When thinking about corporations in your market, what do you usually notice first that makes them stand out from the rest?

First Impressions of Corporations

Significantly more respondents cited ‘Good service’ in 2004

Significantly less respondents cited ‘Management/leadership’ in 2004

26%

25%

19%

14%

13%

12%

12%

11%

10%

10%

5%

2%

2004

2003

Profitable

Good service

Staff quality/attitude

Brand/product quality

Corporate Image/lack of scandal

Management/leadership


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Employee benefits usually notice first that makes them stand out from the rest?

Active promotion/Ads

Corp Culture

Customer focus

Global vs. local corporation

Corporation size

Efficiency/operations

Corporate citizenship

Innovative

First Impressions of Corporations

Additional factors of importance

9%

8%

7%

7%

7%

6%

6%

6%

5%

2004


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Mean Score* usually notice first that makes them stand out from the rest?

Mean Score*

Quality product/service

How it deals with customers

Management team

How would you prioritize different aspects of a corporation’s corporate image when seeking information about that corporation?

Underscoring the Point

‘Customer Relations’ and ‘CSR’ more important in 2004

2004

2003

Financial performance

Attention to CSR

How it deals with employees

* The mean score represents the average allocation of poker chips (out of 10) that a respondent would spendfor information on each of the six areas.


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Why A Focus on These Factors? usually notice first that makes them stand out from the rest?


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Corporate Social Responsibility usually notice first that makes them stand out from the rest?

Upscale consumers and employees are significantly more likely to discount this information

NGOs/Trade Associations are significantly more likely to value this information

Dealing with Customers

NGOs/Trade Associations are significantly more likely to discount this information

Employees are significantly more likely to value this information

Worth Noting…


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Where Does CSR Fit? usually notice first that makes them stand out from the rest?


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A Responsible Corporation in Asia Pacific usually notice first that makes them stand out from the rest?

Key Findings:

  • Tangible business factors are still considered the most essential to a ‘good and responsible’ corporation

  • Intangibles/social factors receiving higher priority – and in some areas – have rivaled tangible business factors

    • Building relationships with stakeholders and operating in an open and transparent fashion is now more important than providing profits for owners/shareholders

    • Providing good training and staff development is now more important than making products that impress others


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How important is it for a good and responsible corporation to have each of the following characteristics?

A Responsible Corporation in Asia Pacific

Most essential* characteristics:

Characteristics of a Responsible Corporation in Asia Pacific

78%

Offers top quality products/services

Stands behind its products/services when something goes wrong

72%

* A ranking of eight or higher on a 10-point scale with 10 being absolutely essential.


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A Responsible Corporation in Asia Pacific to have each of the following characteristics?

2003

2004

65%

Listens to customer attitudes and opinions on satisfaction

65%

Significantly less respondents ranked this as essential in 2004

56%

55%

Provides senior leadership that can be trusted

52%

Works hard at building relationships with core stakeholders

--

Operates in an open and transparent fashion

51%

50%

Provides profits for its owners/shareholders

58%

49%

Significantly less respondents ranked this as essential in 2004

Provides good training and development for staff

54%

49%

Makes products that really impress other people

44%

58%

41%

Communicates frequently and openly with employees

42%

Significantly more respondents ranked this as essential in 2004

Educates customers about the impact of its products/services on society

36%

37%

Concerned about/active in doing something about community welfare

29%

36%

= Tangible business factors

* A ranking of eight or higher on a 10-point scale with 10 being absolutely essential.


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Why are Tangible Business Indicators So Important? to have each of the following characteristics?


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Why are Intangible/Social Factors Important? to have each of the following characteristics?


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CSR to have each of the following characteristics? =

meeting the expectations of your stakeholders

CSR =

meeting the expectations of your stakeholdersandmeeting the needs of your community

A Note on CSRAn Evolving Definition in Asia Pacific

2003

2004


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What Does This Mean? to have each of the following characteristics?

Key to CSR activities in Asia Pacific:

Understand the difference between corporate altruism and CSR

CSR must focus on your core competencies and increasingly your communities’ welfare


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How Do Corporations Perform Against These Criteria? to have each of the following characteristics?

  • Western multinationals (MNCs)

  • Asian MNCs

  • Healthcare/pharmaceutical corporations

  • Technology/telecommunications corporations


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to have each of the following characteristics?Living Up’ to Stakeholder Expectations

Key Findings:

  • All corporations fail to ‘live up to’ most important characteristics for a ‘good and responsible’ corporation

  • Western MNCs performed significantly better on most characteristics versus other corporations

  • Technology/telecommunications corporations generally outperformed Asian MNCs and pharmaceutical/healthcare corporations

  • Overall performance similar to 2003


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To what degree* do you believe these corporations live up to the characteristics?

Degree MNCs ‘Live Up To’ Characteristics

Expected

Western MNCs

Tech/Telecoms

Pharma/Healthcare

Asian corporations

* On a 10 point scale where 10 = completely live up to it and 1 = not at all.


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To what degree* do you believe Western MNCs live up to the characteristics?

Degree Western MNCs ‘Live Up To’ Characteristics

Expected

Western MNC performance

* On a 10 point scale where 10 = completely live up to it and 1 = not at all.


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Western MNCs performed significantly: characteristics?

Better in ‘provides senior leadership that can be trusted’

Worse in ‘provides profits for its owners/shareholders’

Worse in ‘makes products that really impress other people’

Significant Changes from 2003 to 2004

These two characteristics were also significantly less important to respondents in 2004 compared to 2003


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To what degree* do you believe Asian corporations live up to the characteristics?

Degree Asian MNCs ‘Live Up To’ Characteristics

Expected

Asian MNC Performance

* On a 10 point scale where 10 = completely live up to it and 1 = not at all.


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Asian MNCs performed significantly: the characteristics?

Better in ‘offers top quality products and services’

Better in ‘communicates frequently/openly with employees’

Significant Changes from 2003 to 2004


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To what degree* do you believe Pharma/HC corporations live up to the characteristics?

Degree Pharmaceutical/Healthcare Corporations ‘Live Up To’ Characteristics

Expected

Pharma/HC Performance

* On a 10 point scale where 10 = completely live up to it and 1 = not at all.


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Pharmaceutical/Healthcare corporations performed significantly:

Better in ‘offers top quality products and services’

Better in ‘listens to customer attitudes and opinions on satisfaction’

Better in ‘provides senior leadership that can be trusted’

Better in ‘communicates frequently/openly with employees’

Significant Changes from 2003 to 2004


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To what degree* do you believe Tech/Telecoms corporations live up to the characteristics?

Degree Technology Corporations ‘Live Up To’ Characteristics

Expected

Tech/Telecoms

corporations performance

* On a 10 point scale where 10 = completely live up to it and 1 = not at all.


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live up to the characteristics?Living Up’ to Stakeholder Expectations

Summary:

  • Corporations continue to fail to ‘live up to’ most important characteristics for a ‘good and responsible’ corporation

    • Some improvements seen between 2003 and 2004 performance, especially among pharmaceutical/healthcare corporations

  • Western MNCs continue to lead in performance levels

  • Corporations in Asia Pacific must close the gap between perceived performance and stakeholder expectations:

    • Offer quality products and services

    • Stand behind products and services

    • Listen to customer attitudes

    • Operate transparently


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1. live up to the characteristics?Start with a focus on relationship outcomes, not on driving a communications message. Relationships – their creation, enhancement and management – should be at the heart of business strategy and communications campaigns.

Key Learnings: Four Imperatives


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2. live up to the characteristics?Building relationships with key stakeholders means understanding their priorities and what factors they use when forming opinions about corporations.

Tangibles regarding corporate performance are the most important in driving relationships … but alone, they are not enough

Intangibles and more socially-driven topics such as ‘listening to customer attitudes’ and ‘commitment to community welfare’ are an increasingly part of the equation

Key Learnings: Four Imperatives


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3. live up to the characteristics?Expectations of responsible behaviors start with factors driven by a corporation’s core competencies.

Should be anchored by quality products and services and appropriate support of these should something go wrong

At a minimum, the needs of the community must be understood – actually addressing these needs will become increasingly more important to stakeholders in Asia Pacific

Key Learnings: Four Imperatives


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Customers set the tone. live up to the characteristics?If your customers are satisfied and think highly of you, other stakeholders will follow.

When seeking information about a corporation, stakeholders investigate how a corporation deals with customers as the second most important driver

Key Learnings: Four Imperatives


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