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 109 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."
Amazon has since retrofitted its fulfillment centers with air conditioning but 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.
[Editor's note: Updated the article to properly reflect Amazon's total fulfillment centers worldwide.]
Keith Noonan has no position in any stocks mentioned. Rich Duprey has no position in any stocks mentioned. Tamara Rutter owns shares of Amazon.com and Netflix. The Motley Fool recommends Amazon.com, Bank of America, McDonald's, and Netflix. The Motley Fool owns shares of Amazon.com, Bank of America, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.