Thursday, March 26, 2009

Telstra fails the public respect test

TELSTRA'S efforts to cast itself as a good corporate citizen appear to have failed. The telecommunications and media company has come near the bottom of the class for corporate behaviour on such hot topics as executive salaries and fair wages for staff.

Woolworths, on the other hand, came top of a Herald survey that explored consumer expectations of large Australian and Australian-domiciled international companies.

Taken during the fall-out over Pacific Brands and the huge payouts to executives at the failed insurance group AIG, the survey by a researcher, The Leading Edge, records what people believe companies should be doing to gain their respect and trust.

Most large corporates are failing to rein in excessive salaries of their executives but are recognised to be doing more about paying their staff fair wages, the survey of 1500 people shows.

Overall, companies are performing badly in three areas consumers regard as important - what companies are doing to limit their impact on the environment, whether they conduct their business in an open and transparent manner, and whether they impose limits on executive pay and bonuses.

However, all of the large companies included in the report (see below) were, to varying degrees, seen to be providing equal opportunities to staff, paying fair wages and treating their customers with respect.

Areas that are often the focus of corporate marketing campaigns, such as supporting charities, community projects and activity in developing nations, are not regarded as important by Australian consumers.

The study also highlights how much responsibility individuals assign to governments and business to get the country out of the current doldrums; a third of that falls to the Federal Government, a third to big business, and the remainder shared by state governments, local communities and, lastly, the individual.

The survey will make uncomfortable reading for Telstra. Of the 10 companies in the survey only international packaged goods giants Unilever and Procter & Gamble recorded lower scores. People said they were least likely to speak favourably about Telstra than any other company and, more worrying, almost a quarter said they were more likely to bad-mouth Telstra - nearly four times the number for Woolworths, Coles and Nestle.

Conversely, three quarters of the people surveyed said they were most likely to talk favourably about Woolworths than any other company. Woolworths, which registered the highest score in the key criteria, was also regarded as the most ethical company, twice that of its nearest competitor, St George.

Karen Phillips managing director of TLE Sydney, said the research shows Woolworths is more successful in bridging the gap between the corporate face it projects and the day-to-day experience of customers.

"From a corporate perspective Woolworths has done very well, largely because it's put a lot behind a very effective [marketing] campaign that gives a warm human face to the company.

"But I think as much as Telstra may have worked at it [corporate social responsibility], they have not really generated a level of connectivity at a human level with their recent campaign."

A Telstra spokesman acknowledged it had work to do. He said: "Telstra treats with great seriousness any feedback about the company's reputation."


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