Tarred by the Same Brush: How Should American Companies React to the Declining Reputation of the US?
Among global publics, the US has never been the most popular country, at least in terms of the way people view the impact it has on the world. We know this because of the long-term tracking survey GlobeScan has conducted with the BBC World Service since 2005. In our latest global country poll for the BBC World Service, the US showed the most substantial decline in ratings out of all the countries polled this year.
In 2012, the US was at least in positive territory, with slightly more people believing that the US had a positive influence on the world than a negative influence. Those were heady days indeed. In 2017, the US is unfortunately back to being significantly underwater on this metric with a net rating of -23. In other words, across the 10 countries that we have tracked for this question since 2005, an average of 30 percent of people believe that the US has a positive influence and 53 percent believe that it has a negative influence. This brings views of US world influence back down to levels where they were at the end of George W. Bush’s second term in office. This is a pretty bad situation and knowing that North Korea is viewed less positively is of little solace.
Exactly how much the new Trump administration is driving this negative view is not known (negative perceptions were on the increase 2013 and 2014), but other research backs the assumption that Mr. Trump has contributed to these latest unfavorable findings.
Should American Companies Be Concerned?
The answer is yes. In an interesting analysis looking at historical export volumes against research measuring country reputations, the authors conclude that a county’s reputation has a marked effect on its exports. Specifically, a decline in a country’s reputation has a negative effect on its exports.
This is a sobering thought for US businesses in a world where the country’s reputation is declining. This decline is also seen in other polls such as the latest Pew Research Center survey, where a global median of just 22 percent has confidence in Trump to do the right thing when it comes to international affairs.
Moreover, there are already a number of studies showing a potential “Trump effect” on US businesses. In China, the United States’ third largest trading partner, consumer sentiment toward US brands is deteriorating. Also, figures show that international tourism to the US is declining, which could have a significant impact on the US retail market.
What Can American Companies Do?
Many American companies have already distanced themselves from the Trump administration on a number of issues including climate change and immigration. However, while these have been important actions, companies are unlikely to be able to distance themselves from every internationally unpopular comment or decision that Trump or his administration makes.
A more strategic approach for companies is to ensure that they are clearly and authentically communicating their core purpose and values to consumers. GlobeScan research conducted in 2016 revealed that globally, almost two-thirds of consumers try to support companies and brands that have a purpose of making a positive difference in society, and that having a corporate purpose is an important positive driver of trust in companies. Furthermore, when asked to name a company demonstrating a strong purpose in this way, consumers in many countries, including some of the US’s most important trading partners, mentioned American companies such as Microsoft, Apple, Google and Coca-Cola.
In addition, it is important for companies to localize their social, economic and environmental responsibility efforts to their main markets and countries of operation. In particular, as the chart below from our most recent Radar research shows, consumers have high expectations of companies on such things as fair wages, environmental responsibility and providing goods and services that make a positive impact. Being able to demonstrate that it is meeting these expectations at a local level is important for building trust and maintaining a company’s local license to operate.
Have a Positive Impact
Ultimately, while global consumers are trending toward the belief that the US has a negative influence on the world under the Trump Administration, American companies can seek to insulate themselves from this association by demonstrating a positive impact in the markets in which they operate. Consumers believe that large companies have such responsibilities regardless of national origin, and if a company authentically demonstrates that these responsibilities are baked into its DNA, it will not matter where that DNA originated.