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Global Trust in Indian MNCs is down

31st October 2013


Trust in Indian companies has suffered a sharp decline since 2011, according to the 2013 Emerging Markets Supplement to the Edelman Trust Barometer. The study has revealed that global trust is now at around 33 per cent in mid-2013, compared to 42 per cent in 2011.

It was also found that 83 per cent of Indian respondents had trust in India-based multinational corporations, whereas developed markets outside of India was only at 29 per cent.

The study showed that businesses head quartered in emerging markets – Brazil, Russia, India and China – are generally less trusted than their counterparts in developed countries. With Brazil being the most trusted and India following second.

India has 48 per cent trust from the other emerging markets, however with the developed markets trust in India MNCs only at 29 per cent there is a hurdle to overcome.

“Many in developed markets do not trust BRIC market governments and this greatly impacts trust in any organisation closely tied to them,” said David Brain, president and CEO, Edelman Asia Pacific, Middle East & Africa. “Businesses closely linked with their national governments must be radically transparent about their organisations’ history, values, structure and decision-making processes.”

Robert Holdheim, CEO, Edelman South Asia, Middle East & Africa, said: “While Indian companies enjoy high trust levels (83 per cent) in India, low brand awareness of Indian companies and low recall value of Indian CEOs have contributed to a significant trust deficit in developed markets. Our analysis also reveals that the actions that drive trust in emerging economies are different from those in developed economies. This often leads to the huge gaps between perceived performances of companies as against the expectations on certain indicators.”

There are several consequences to low trust levels in Indian companies. Only four in ten developed market respondents said they would accept investment in their countries from companies based in BRIC countries. Only 38 per cent of the respondents in developed markets said they would trust an Indian MNC to buy a company in their country, in comparison to 60 per cent in emerging markets. The survey also indicates that developed market trust in an India-based company buying a stake in a company in their country or making a major investment in their country is also low at around 40%. Germany and France are the developed markets that have the least trust in companies headquartered in India.

A key insight that emerges from the survey is that Indian corporations must execute more effectively on key trust drivers. Developed markets perceive quality products and services and integrity to be key trust building attributes for India-based MNCs. Protection of customer data, respect of employee rights, quality control, responsible supply chain and protection of intellectual property are actions that can help address the challenge of low trust levels in developed markets.

Making overall recommendations for Indian MNCs, Holdheim added: “Indian companies should focus on brand building and transparent communications in developed markets. By making proactive and transparent use of earned, owned and digital communication channels, Indian MNCs have an opportunity to enhance trust levels among key stakeholders.”


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