Poll reveals mixed feelings about MNCs

A number of events in 2008 put the public's eye - and sometimes ire - on multinational companies (MNCs) in China.

They included the grassroots boycott of Carrefour during the Beijing Olympic Games Torch Relay; praise and questions alike about May 12 earthquake donations, Coca Cola's acquisition of Chinese juice giant Huiyuan and the tainted milk scandal generated sometimes heated discussion and reflection about the role multinational industries play in China.

At the end of last year, Ipsos, a leading global market research institution, collaborated with the Chinese business magazine Global Entrepreneur for an online poll about multinationals conducted Nov 7-12, covering 1,000 respondents of ages 20-50 from 10 cities, such as Beijing, Shanghai, Guangzhou, Dalian and Wuhan. They were asked about the corporate social responsibility (CSR) performance of multinationals.

CSR image

"Multinationals are leading players in the global economy," said Cheng Yating, a senior researcher of Ipsos China and a co-author of the poll report. "As the focus on natural resources, ecological environment, labor rights and business ethics worldwide intensifies, it means that these are social responsibilities that any successful multinational must uphold."

In China, CSR is not only about charitable donations, but also more about the responsibility demonstrated toward consumers by protecting local communities and the environment, added Jia Yanli of Ipsos China, another co-author of the report.

As the shift of world economic power leans increasingly toward China, multinationals are increasingly focused on the CSR of their Chinese partners. A major reason for the frequent occurrence of "sweat shop" scandals in recent years is that the low purchase price of multinationals force local companies to ensure profits by the only means available - taking advantage of workers.

In recent years, most multinationals have released annual corporate social responsibility reports. But Ipsos' survey indicated that the public has mixed feelings over the reasons behind their fulfillment of these responsibilities.

According to the survey, 60 percent of the netizens said that investment and the fulfillment of CSR is in line with the operating philosophy of these companies and is a benefit to Chinese society.

But nearly 40 percent of the surveyed stated that multinationals' fulfillment of CSR is just a mandatory action they take in order to save face.

A third of the respondents thought that CSR is a means for the multinationals to evade taxes or other charges.

"Environmental protection" has become a catchword in the management of multinationals. It is also a major component of CSR in China. Despite a laundry list of reasons pushing the active input into environmental protection - motives such as politics, economy and reduction of operating risks - the impact is still positive.

Ipsos' survey showed that respondents believe that multinationals have varied strength in environmental protection efforts. But more than 10 percent of the respondents thought that the most outstanding "green" companies are Johnson and Johnson (15 percent); P&G, Nokia and Coca Cola followed with results of 13 percent, 12 percent and 10 percent respectively.

Case study

Among the big events in 2008, 41 percent of the survey participants abhorred most of the acts and remarks attributed to Carrefour representatives during the European leg of the Torch Relay.

Although Coca Cola's acquisition of Huiyuan generated social debate beyond the sphere of commerce, it became a widely debated problem over whether a national brand should be protected or sold off to a larger international name. Ipsos' opinion poll showed that less than 5 percent of the public was opposed to the acquisition.

It also indicated that the general public is sensitive when multinationals are implicated into state politics and national sovereignty. Still, most held an enlightened attitude toward corporate behavior.

Concerning the donations that came in after the earthquake hit Wenchuan on May 12, 2008, the public view of multinational companies saw dramatic change.

Immediately after the natural disaster, Chinese herb tea maker Wanglaoji donated 100 million yuan during donation parties that were sponsored by government ministries and CCTV.

Its generosity won public praise and contributed to its sales and brand influence. But in contrast, positive public opinion did not completely find its way to multinationals either for donation amounts or speedy responses.

For a brief time, the image of multinationals as misers gained momentum.

People had a very simple yardstick: those that donated the most the fastest were "responsible" companies.

But when Ipsos started its survey half a year later, most of the public gave a more reasoned response with 60 percent commenting positively on the multinational companies' charitable responses. They thought that multinationals represented their support for China in appropriate ways.

They also understood that the slower response was due to the complicated mechanisms within these companies.

However, the tainted milk powder scandal was so widespread that it led to a creditability crisis affecting the whole industry. The public eye did not see multinationals in the center of the mess but it did not avoid them altogether.

Although the products of some multinationals were also posted on the list of tainted and unsafe to consume, their dairy products, after repeated tests, were the products that went back to the supermarket shelves earliest.

In the wake of this, 30 percent of respondents said they had "more trust" in multinationals, and would try their best to purchase from them.

(China Daily 01/19/2009 page8)