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A technology bubble bursts. Senior executives are
led away in handcuffs. A leading accounting firm disintegrates.
Yet a small group of companies comes through it all with their
reputations intact, their chief executives admired by their peers.
General Electric, of the US, is once again the
world's most respected company, as it has been in every one of
the five years that the Financial Times/PwC World's Most Respected
Companies Survey has been published.
The more than 1,000 chief executives interviewed
around the world for this survey paid tribute to GE's consistent
performance, its ability to succeed in such a diverse range of
businesses and what one respondent called its "innovative,
creative, adaptable, aggressive, flexible" approach. Another
commended GE's "customer-oriented mindset, based on trust
and integrity" and the way in which the company remained
"committed to the basics".
Microsoft is in second place in this year's most
respected companies ranking, as it, too, has been for the past
five years. Although Microsoft has been criticised by consumer
groups and regulators for its dominance of the software industry,
this is what many rival chief executives most admire about the
company.
"The only world monopoly," was the way
one chief executive described Microsoft. "They changed the
way we do business," said another. "They have a highly
cohesive strategy. They are financially stable with a highly motivated
workforce," a third chief executive said.
IBM retains the third place it held last year. Coca-Cola moves
from fifth to fourth in this year's survey and Toyota from sixth
to fifth.
Indeed, all of the top 10 have been remarkably consistent
performers. All have appeared in our top 10 at some point in the
past five years. Sony, of Japan, in sixth place this year, was
fourth in 2001. General Motors, in seventh place, this year, was
11th last year and 10th the year before. Wal-Mart is the eighth
most respected company this year, which is where it was last time.
3M has moved from 14th to ninth place, the position it held in
2000. Dell, the world's 10th most respected company, moves up
sharply from 25th in 2001 but it, too, has been a top 10 company
before, winning seventh place in 1999.
What has happened to the remaining companies in
last year's top 10? Nokia, of Finland, the only European company
in last year's top 10, is at 29th place this year compared with
seventh last year, reflecting the uncertainties of the mobile
phone business. Intel is another company that has fallen down
the list, from ninth last year to 36th in 2002. Citigroup, in
10th place last year, has fallen, too, in the aftermath of questions
about Wall Street's behavior. But Citigroup has not fallen far
- to 15th place.
There is a small change at the top of our list of
the world's most respected business leaders. Bill Gates of Microsoft
is now the world's most highly regarded corporate chief, replacing
Jack Welch of GE, who held the top spot from 1998 until last year.
But Mr. Welch, who stepped down as GE's chief executive
last year, has not disappeared from view. In spite of his departure
from the helm of GE and a messy personal life, he is now the world's
second most highly respected business leader.
So it appears to take more than retirement to dent
the reputations of the most successful chief executives. Another
pensioner, Lou Gerstner, chief executive of IBM until March 2002,
is in third place. Michael Dell, head of the eponymous computer
manufacturer, is the fourth most respected business leader, up
from eighth last year. Warren Buffett, the investor who sat out
the technology boom, is in fifth place.
It is not only the top companies and chief executives
that have endured. So have the same few countries. Some countries
have one or two representatives. South Korea's Samsung is a new
entrant to the top 50, in 42nd place. But only four countries
have more than two representatives in the 50 most admired companies.
The US leads the way with 22 companies in the top
50, far ahead of any other country, but down from 26 companies
in the top 50 last year and 32 in 2000. Germany has the second
highest number of companies in the top 50 with nine, headed by
DaimlerChyrysler, BMW and Mercedes.
The UK has the third highest number of companies in the top 50,
with six corporate representatives, or eight if we include Anglo-Dutch
companies Unilever and Royal Dutch/ Shell. Unilever is in 12th
place, up from 47th in 2001.
The highest ranked purely British company would
have been regarded as a surprise entrant just a year ago: Marks
and Spencer, the retailer, was the 19th most respected company
in the world this year, after a three-year absence from our list
that reflected the fall in its reputation from which it has now
recovered.
The comments from the chief executives interviewed
indicated they admired M&S precisely because it had sunk so
far and re-emerged as a leading retailer. "They nearly hit
rock bottom, turned around and overcame a lot of problems in a
short time," said one.
Japan has three companies in the top 50: Toyota,
Sony and Nissan. Nissan is 50th on the list, but Toyota and Sony
are regular members of the top 10. What do the chief executives
admire about them? Toyota was described by one chief executive
as having "the best products and excellent service".
Another said of the company: "Brilliantly run. They know
what they are doing." Sony won praise for "constantly
supplying high value added products".
Nine of the 10 most respected business leaders are
either American or Japanese. The only exception is Carlos Ghosn,
the Brazilian-born executive nominated by Renault, a French company,to
run Nissan, a Japanese car manufacturer.
So much for continuity. Which companies and business
leaders have seen their reputations fall over the past year? Vivendi
Universal, in 33rd place last year, has now, beset with financial
troubles, dropped out of the top 50. So have several others, including
AOL Time Warner, Merck, Johnson &Johnson and Federal Express,
although the last two remain in the top 100.
There are some new names in the most respected leaders
list. A new entrant, in eighth place, is Alan Greenspan, chairman
of the US Federal Reserve. Hiroyuki Yoshino, of Honda, is another
new addition to the list, in ninth place.
Amongst those who appeared in last year's most respected
business leaders but have now dropped out of the top 30 are Steve
Case, of AOL, Michael Eisner (Disney) and Sir Christopher Gent
(Vodafone).
The dominant corporate issue of the past year has been corporate
ethics, which gives added interest to a new question we posed
to chief executives: which companies demonstrate most integrity?
GE tops this list, too, with Toyota in second place and Microsoft
in third.
Can a company reach the top of the world's most
respected companies ranking without being near the top of the
list of companies that demonstrate the greatest integrity? All
10 most respected companies make the list of the 50 seen as having
the greatest integrity. And seven of the most respected companies
GE, Microsoft, IBM, Coca-Cola, Toyota, GM and Wal-Mart are among
the top 10 companies seen by their peers as having the greatest
integrity another element of their enduring appeal.
©2002 TABIC. All rights reserved.
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