In this increasingly connected world, a company's reputation and
brand image is often as important as the products and services it
provides. It is in this spirit that we will look at three companies with
worse reputations than
Wal-Mart (
NYSE: WMT ) today. Below, three Motley Fool contributors explain why
Comcast (
NASDAQ: CMCSA ) ,
Monsanto (
NYSE: MON ) , and
Amazon (
NASDAQ: AMZN ) are getting a bad rap these days.
Keith Noonan (Comcast):
Comcast is no stranger to controversy. The cable and Internet provider
currently stands as the reigning champion of Consumerist's
Worst Company in America
tournament, and it has left a trail of moldy breadcrumbs documenting
its journey to become one of the most hated companies in the country.
Hidden fees, rising rates, and customer service that, in some cases,
might be generously described as
"difficult"
are all likely contributors to Comcast's sagging reputation. Yet, a
lack of comparable alternatives for customers might also be souring
perceptions.
While Wal-Mart receives criticism for its employment practices, and
McDonald's
is frequently dinged for paying low wages and promoting unhealthy
diets, consumers can typically choose not to do business at either of
those oft-criticized establishments with relative ease. Conversely, many
cable and Internet subscribers are all but forced to deal with Comcast
because of what effectively amounts to territorial monopolies.
According to the American Consumer Satisfaction Index, Americans hate
cable and Internet service providers more than companies in any other
industries. The ACSI also lists
Time Warner Cable as
the only the company to perform worse than Comcast in terms of customer
satisfaction, but if the proposed $45 billion merger of the two
companies is approved by the FCC, that distinction might soon be
irrelevant. As disputes with content providers like
Netflix continue
to play out amid a broader field of Net neutrality issues, and
subscription costs continue to increase, Comcast will likely secure a
spot among America's most reviled corporate entities for years to come.
Rich Duprey (Monsanto): Any list of companies with reputations that make used-car salesmen and Congress look good -- let alone
Wal-Mart (
NYSE: WMT ) -- invariably includes global seed giant
Monsanto (
NYSE: MON )
. The biotech is routinely vilified because of its work with
genetically modified organisms and the impact that has on the food
chain.
Earlier this summer, The Harris Poll proved the point after publishing the
reputation quotients of the 60 most visible companies, and listed Monsanto as the third most-hated company (only
Bank of America (
NYSE: BAC ) and
BP (
NYSE: BP ) were viewed in a worse light).
Certainly Monsanto is a polarizing company. On one hand, its
technology makes seeds resistant to insects, disease, and drought, thus
creating more opportunities to grow food to feed the world, but on the
other, its seed is unnatural and extends the biotech's control over the
food supply.
Farmers who once saved Monsanto's seed from their best plants year to
year to grow better crops in the future are now forbidden from doing so
because Monsanto owns right to these life forms. Many people have an
ethical problem with that, along with the potential for
future ecological disasters arising from the over-application of herbicides and pesticides that is creating superweeds and superbugs.
Regardless of whether Monsanto is a force for good or evil, others
feel food manufacturers that use crops whose very DNA has been altered
ought to carry a label stating so.
GMO labeling is increasingly a hot-button voter referendum issue, and Monsanto is often the focal point of the debate.
At least the biotech seems to be listening. Some of the most
important discovery-phase projects in its R&D pipeline are
developing molecules that share common traits with the food we eat.
Creating foods closer to what happens with hybridization rather than
what would be abhorrent in nature could see Monsanto gain greater public
acceptance. But those developments are a long way off. In the meantime,
we'll continue to find Monsanto a leading contender on lists of
companies we love to hate.
Tamara Walsh (Amazon):
The world's largest e-commerce retailer may have a spotless reputation
when it comes to customer service. However, the company's lightning-fast
delivery and competitive pricing mask Amazon's dark underbelly of
horrifying labor practices.
Amazon now operates close to 100 fulfillment centers worldwide, and
the company is heavily investing in new warehouses to make shipping
faster and more convenient for its customers. However, the harsh labor
conditions in these distributions centers have made Amazon the center of
much controversy.
The U.S. Labor Department opened a probe into the e-tailer last year
amid numerous worker deaths at its warehouses, including one in which an
employee was crushed to death. Nonetheless, workplace accidents aren't
the only reason Amazon's reputation now rivals Wal-Mart's in respect to
poor labor policy.
Sweltering conditions and exhaustive security checks have Amazon on
the defensive lately. Last month, the Supreme Court ruled in Amazon's
favor, saying the e-tailer does not need to pay factory workers for the
time they spend in security screening. However, the company's reputation
for work conditions in its distribution centers continues to weigh on
Amazon's reputation.
In his book "Why Smarter Machines are Making Dumber Humans," Simon Head writes:
The series revealed the lengths Amazon was prepared to go to keep
costs down and output high and yielded a singular image of Amazon's
ruthlessness -- ambulances stationed on hot days at the Amazon center to
take employees suffering from heat stroke to the hospital. Despite the
summer weather, there was no air-conditioning in the depot, and Amazon
refused to let fresh air circulate by opening loading doors at either
end of the depot -- for fear of theft."
Stories like these won't keep everyone from shopping on Amazon.com.
However, over time, they can certainly do lasting damage to a company's
brand image.
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