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21 Nov, 2005

U.S. CEO’s Assess Cost Of Anti-Americanism

The link between the US government’s geopolitical/economic policies and its impact on US business has taken a step forward with last week’s release of a detailed survey which sounded out the views and opinions of US corporate leaders on rising anti-American sentiment worldwide


New York, November 18, 2005 – The link between the US government’s geopolitical/economic policies and its impact on US business has taken a step forward with last week’s release of a detailed survey which sounded out the views and opinions of US corporate leaders on rising anti-American sentiment worldwide.

Roger Dow, President and CEO of the Travel Industry Association of America, was one of the 34 senior corporate executives and 14 “Thought Leaders” interviewed for the survey, the first of its kind. Boeing and United Airlines were two companies with direct involvement in the travel & tourism industry whose CEOs were also interviewed, along with icons like McDonald’s, Starbucks, Motorola, General Motors and HBO Inc, among others.

Noted John Zogby, President/CEO, of Zogby International, the research and consultancy firm commissioned by Business for Diplomatic Action (BDA) to conduct the qualitative survey, “Upon examining the responses of 48 U.S.-based corporate leaders and top thought leaders on the potential impact of anti-Americanism on U.S. companies, the consensus average is somewhere between a score of 3 and 4 on a scale of 1 to 5 (with 1 representing ‘no threat at all’ and 5 representing ‘extreme threat’.”

He added, “Given that the global landscape will continue to change with the rise of China, India and other countries, the U.S. needs all the friends it can get. One simply can’t underestimate what our country stands to lose in terms of economic power if American companies find it difficult to trade overseas. There are clear signs that American hegemony is faltering.”

Mark Morris, founding Board Member and head of BDA’s research efforts said the study shows conclusively that the rise in anti-American sentiment abroad is a concern for many U.S. corporate leaders though, “almost none of the executives who participated in the study had a clear sense of how to respond or just how the private sector should engage in helping to shore up America’s standing in the world. He added that “BDA plans to change that by identifying specific projects and programs that lend themselves to business-led initiatives designed to address the several root causes of anti-American sentiment.”

The findings of the report have massive implications for the travel & tourism industry which, along with Hollywood and the US fast-food chains, contains some of the most visible US icons globally. Many of these icons are the first to come under attack by terrorists or anti-globalisation movements protesting US government policies.

By recognising the rise of anti-American sentiment as a matter of concern and bringing it out into the public domain, the report has paved the way for it to be openly debated in travel & tourism industry forums, rather than swept under the carpet, as the industry has been prone to do. The findings also tally with those of another survey carried out by the Pacific Asia Travel Association which indicated a strong desire by many industry personalities to have the issues brought out into the open and debated, rather than swept under the carpet.

They also carry implications for Australian and British companies whose governments are also pursuing foreign policies aligned with those of the US.

BDA President Keith Reinhard, who is also chairman of DDB Worldwide Communications, noting the private sector’s impressive response to Hurricane Katrina, said that “Given the vast reach, the creativity and the world-renowned operating efficiency of U.S. corporations, they are uniquely qualified to take on a public diplomacy mission. It’s also in the long term self interest of U.S. business leaders to do so,” he said, citing other recent research that shows a global cooling toward American brands.

Reinhard thanked those who participated in the study saying, “We are most appreciative of the time and thought lent by busy executives to Phase I of our research and we look forward to engaging them further in our effort.” He said that Phase II of BDA’s research will be fielded early next year and will probably involve consumers in key foreign markets.

Download the full report: www.businessfordiplomaticaction.org/learn/articles/zogbygloballistening05.doc



Key Insights

The most surprising finding of this listening research, conducted among 34 senior corporate executives and 14 thought leaders here in the U.S., was the lack of consensus on the part of the business leaders confronting this issue. A few CEOs saw anti-Americanism as a threat to growth; many were unsure of the threat, and some have ignored the issue completely. BDA found this variance striking, as CEOs are often in concert with one another when it comes to their views on current business challenges and emerging threats. Instead, we found a wide range of views and uncertainty among CEOs about the impact of anti-Americanism to their businesses. Thought leaders, however, were virtually unanimous in their deep concern regarding the long-term threat that anti-American sentiment poses to brands and business.

The one area of commonality among CEOs and thought leaders was agreement on the pervasive nature of anti-American sentiment. While many felt it may not be affecting businesses, they did concur that it is a detriment to our nation and Americans themselves.

BDA has concluded that while it may not be essential to get business leaders to acknowledge the threat of anti-Americanism to their brands, encouraging them to address the issue on behalf of its threat to the American people is critical. The U.S. private sector represents the most credible and appropriate messengers for America. Business is uniquely positioned to engage and address the rise in anti-American sentiment because business touches the lives of more people around the world than the U.S. government ever could, and has the resources and expertise to build new and in some cases stronger bridges of trust between America and the world.

Questions Raised and Views Expressed

The research raised several interesting questions and revealed some best practice examples and lessons learned, all of which would benefit from further exploration and listening. Some of the insights gathered from the interviews include:

<> Some business leaders felt that being identified as an American company is not an advantage and, in fact, is best avoided. There were also those who saw themselves as global companies and believed that this provided them with insulation from any effect of anti-Americanism.

<> Almost all business leaders see the need for building social capital at the local level and many have put CSR programs in place. However, uncertainty was widespread when it came to publicizing their good works and cooperating with other firms or NGOs. Also, none of the CSR programs in place had been developed with anti-Americanism in mind.

<> While some of the CSR programs had been developed together with local input, many seemed to be the same program repeated in multiple geographies without accounting for differing needs from market to market.

<> Business leaders consistently underscore the importance of adapting to the various cultures and environments in which they operate and putting a local face on their businesses.

<> More and more leaders are seeing their American employees abroad as de facto ambassadors and are beginning to stress the importance of proper selection criteria and sensitivity training for these positions.

<> Some interviewees mentioned that young people, who constitute the population majority in many developing nations, should be a key demographic target for CSR efforts.

Going Forward

The overarching objective of the BDA Global Listening Research Project is to identify strategies and tactics that, if employed by businesses, can make a positive impact in helping stem the tide of anti-Americanism abroad. This Phase I of qualitative learning requires a quantitative phase of consumer research conducted around the world to provide additional context and specificity to our qualitative efforts. We need to capture the views of people on the street to understand how their views of America might affect their behavior.

Going forward, we plan to gather the ideas and insights of world consumers to uncover the kinds of prescriptive actions that the private sector can undertake to build better understanding and mutual respect between America and peoples of the world.



When Does a Problem for Others Become a Problem for Me?

Upon examining the responses of 48 U.S.-based corporate leaders and top thought leaders on the potential impact of anti-Americanism on U.S. companies, the consensus average is somewhere between a score of 3 and 4 on a scale of 1 to 5 (with 1 representing “no threat at all” and 5 representing “extreme threat”) on how serious a threat anti-American sentiment is to U.S. companies.

But the consensus score does not seem to capture the picture that emerges from these interviews. Indeed, to a great degree, a sort of a “not in my backyard” attitude dominates the views of many of those interviewed – i.e. “Sure, it can be a problem for others but it certainly is not one, nor do I believe it will be one for (my company).”

Several of those interviewed indicated that their company is safe because it is not seen as an American company – that it is a “global” or even “local” company because it tends to hire local people in whatever country it operates. For others, they feel the problem does not exist within their own company because their product is so superior that it transcends any identification with the U.S.

This could all be very true. But it flies in the face of recent articles that portray a radically opposite picture. In one article in the Financial Times (November 2004) headlined, “Giant U.S. Brand Names Suffer Sharp Sales Dip in France and Germany”, the author notes:

Many of the best-known U.S. brands are suffering a sales slump in “old Europe,” raising questions about whether anti-Americanism is adding to local difficulties caused by slow economic growth. Coca-Cola, McDonald’s, Marlboro, and General Motors have revealed problems in Germany or France that echo those already faced by Disney, Wal-Mart, and Gap.

While the article suggests other forces may be at play, it also notes that anti-Americanism may be a real factor.

A separate article in the Financial Times (November 2004), headlined “U.S. Icons Lose Their Cool in Europe,” reported significant and worsening losses for major American brands in Europe and further noted that “to company executives, the mishaps are nothing more than a series of unfortunate coincidences”:

Yet the scale of corporate America’s European misadventure cannot all be explained by coincidence and stagnation… One theory gaining ground is that the growing unpopularity of U.S. foreign policy – particularly after Iraqi prison abuses emerged in May (2004)—is finally catching up with those iconic brands most closely associated with the stars and stripes.

The article further opines that “warnings from the marketing industry suggest the risk stems not so much from overt boycotts, but from a loss of cachet among younger consumers.”

What is clear from our interviews is that the thought leaders are much more sanguine about the potential negative impact of anti-Americanism on American companies than the company leaders are themselves. In fact, among the latter, we get a sense that they feel immunized from any negative consequences for the following reasons:

<> Tendency to localize operations and personnel;

<> Several companies do not lead with their corporate name to make the company appear to be as local as possible;

<> They make significant efforts to behave like a local company through corporate citizenship initiatives;

<> They show respect for local traditions and culture.

No doubt this has brought success and even respect for individual companies over the years, but it begs some serious questions: Are these companies as “immunized” as they told us they are? Can they really pretend to be non-American in the final analysis? Can this work for a long period of time? Is there an element of denial or even arrogance? Are we in a new era of anti-Americanism where all of the old rules no longer apply? Is the real question not how we see ourselves but how others see us? And is it really in our nation’s interests to have major U.S.-based companies denying they are even American in the first place?

A recent article in Business to Business Magazine reports that some U.S. branding experts feel that business-to-business brands are “largely immune to opinion about American foreign policy,” while others assert that it can have a long-term detrimental effect on American companies.” Where there have been boycotts of American consumer products, the article notes, there has been no “catastrophic or irreparable damage” and that such actions tend to be “noisy and short-lived”.

But according to principals of Landor Associates, a branding consulting firm, they have seen research indicating that the U.S. itself has declined in terms of brand standing over the last few years.

With the global landscape changing with the rise of China, India, and other countries expected to continue in the foreseeable future… the U.S. needs all the friends it can get. ‘One can’t underestimate what America stands to lose in terms of economic power if they find it difficult to trade overseas’… There are signs that American hegemony is faltering. ‘The fact that Airbus has overtaken Boeing happened in part because… some people would rather deal with a French company than an American company.’

In short, a threat exists for American companies abroad in general and there are plenty of corporate leaders who do in fact see it. The threat is not only in the Middle East or the Arab and Muslim Worlds. Both corporate and expert interviewees pointed to serious problems in Europe, Latin America, and Asia as well as throughout the Middle East and Southeast Asia. U.S. business must engage in understanding and responding to rising anti-American sentiment as it is the only sector positioned to make any lasting impact at this time. To ignore these concerns would prove detrimental to our future economic and national security.



(Roger Dow, Former VP, Marriot & Current President & CEO, Travel Industry Association of America)

<> “I feel that the ranking for anti-American sentiment is a ‘4’ if unchecked.”

<> “In the year 2000, the U.S. experienced the highest number of international tourists – 51 million; After Sept. 11, 2001 this figure dropped to 42 million in 2002. In 2004, international tourism picked up to 44 million. For 2005, we are projecting 45 million international visitors – still well below the point reached in 2000. U.S. share of global travelers crossing boarders has dropped from 7.4% in 2000 to 5.8% in 2004 — while the ‘global travel pie has increased in size, our slice has gotten 22% smaller…’

The four factors that are most responsible for this are:

1) World became regional after Sept. 11, 2001. Fear and uncertainty of whether or not people could get home, lead them not to travel to and from the U.S.

2) We have become ‘Fortress America.’ All of the visa restrictions, pain and hassle associated with highly increased security – some visitors stating that they were treated as more like criminals than welcomed guests. With the international media blowing up these issues – ‘perception is leading to reality.’

3) U.S. Image is a problem. People are reconsidering whether or not they want to spend their money here. It is now 30% cheaper to be in the U.S. – we are ‘on-sale’ and not crowded.’

<> “Attitude is important – “Welcome to America,” “Can we help you” are

messages that need to be established.”

<> “These (Corporate Social Responsibility) initiatives should be taken not only because ‘it is the right thing to do,’ but it is the ‘imperative thing to do.’”

<> “Reversing our declining image is not only about ads – our future vitality is key and we need to involve locally based operations outside the U.S. in the planning process for CSR initiatives, not just talk to ourselves.”

<> “If only 1/16 of 1% of Defense spending were allocated to public diplomacy, we’d have $300 million to attack this problem that threatens the U.S.’s future viability. Corporations should work with government (Karen Hughes new role) to create exchange programs: media, opinion leaders, students, travelers, etc. A proactive program could negate the need for a billion dollars spent on Defense, while having a positive impact on the economy.”


“I don’t view anti-Americanism as being a problem…Business seems to transcend any political disagreements that arouse anti-American sentiment.” — Unidentified Corp Leader

“If they are given choices, they may not choose ‘American,’ although in the end they are looking for the best product at the cheapest price. Overall the threat of anti-American sentiment is not great (but it is far greater in the Middle East).” — Unidentified Corp Leader

“I do not see the effect of anti-American sentiment on U.S. businesses abroad as being long-term. I see it as more episodic and I believe that everything is market driven and therefore the best products and services will eventually win out. As a former history major: ‘this too shall pass.’” — Unidentified Corp Leader

“People feel Americans are arrogant, although I think that maybe rather than arrogance we are perceived that way because we are always in a hurry to get things done and can come across as steamrollers. We need to understand the cultures that we do business in and listen better. CSR initiatives should be part of your fundamental business model and be tailored to that individual country’s needs through the local communities.” — Judith McHale, CEO, Discovery Communications

“Our overall objective is to leave the community better than we found it… Most policies are formulated overseas – tailored to the specific country, on a country-by-country basis. They don’t advertise the initiative because the goal is not to obtain publicity. We don’t want to send the message that we are doing this for publicity. We want to show that we care about the communities that we serve and we have a good reputation for doing so.” — Unidentified Corp Leader

“A company’s ‘personal stamp’ does not need to be on CSR projects conducted – initiatives do not need to be broadcasted. It is about personal pride in what you do.” — Unidentified Corp Leader

“We do indeed implement these types of programs with less a view of counteracting or preventing anti-Americanism than to simply be good corporate citizens. In fact, our approach is to ignore our U.S. roots completely when formulating such initiatives. It is irrelevant to our interests overseas. We believe in thoughtful and small-scale efforts in the cultural and educational realm that have a direct impact on the community.” — Andrew Bielanski, Senior Managing Director, Marketing and PR, Countrywide Financial Corporation

“We don’t want to be viewed as an American company abroad. We work hard to immerse ourselves in the local culture and habits in an effort to overshadow any foreign distinction.” — Unidentified Corp Leader

“There are a few key strategies to respond to growing anti-American sentiment – continue to encourage local indigenous leadership; put a foreign face on your company; and reach out to the local community.” — Unidentified Corp Leader

“Listen to the locals and give your local management a chance to be part of the solution as opposed to a firm’s headquarters in NY or Chicago taking over these initiatives.” — Unidentified Corp Leader

“We are a wildly successful global company and we make a point of having local production, management, and distribution – which in turn has made us immune from the effects of anti-American sentiment on our businesses abroad.” — Unidentified Corp Leader

“We actively encourage companies to work together on initiatives for the common good, to build synergy between organizations that have similar missions, to eliminate redundancy between alliances, and to find organizations that can fill in the gaps – in order to ensure breadth of coverage.” — Unidentified Corp Leader

“Our brand is viewed as authentic and original and although it is a known American brand, our independent research shows that we represent ‘what is great about America’…” –Unidentified Corp Leader

“Although a lot has been written about consumer behavior relative to anti-American sentiment – [we are] stronger today than ever. The iconic [American] brands should honor and respect their history – it is not necessarily a negative to be associated with America. It is understandable that the U.S. is constantly targeted, as ‘the tall tree in the forest gets more wind than the others.’” — Unidentified Corp Leader

Intel is seen as American and that is not a disadvantage – we are a brand leader and in a technology focused environment it is very good. The ideal scenario is to be a global company from a branding perspective.” — Hannes Schwaderer, International Managing Director, Intel Germany

“Businesses can have an effect on anti-American sentiment. American companies should not avoid the connection with being American. People around the world are buying into a lifestyle and ideology that is American and to try to disassociate would be damaging. U.S. companies should identify more with the local community. They should have a visible spokesperson in-country.” — Unidentified Thought Leader

“As the 800-pound gorilla, the U.S. will always get potshots – but it is how the U.S. reacts that can make a sizable difference. Whether the U.S. opts to take an arrogant stance or rather acts magnanimously can make all the difference. I believe that style is a key ingredient in international dealings – for not only in the world of politics but also in the business community. And while the U.S. has actual diplomats and ambassadors on the ground, I believe firmly that American business figures overseas constitute another important diplomatic contingency that can have a sizeable impact on countering anti-Americanism.” — Andrew Bielanski, Senior Managing Director, Marketing and PR, Countrywide Financial

“What can corporations do in general? They can remind the U.S. government – particularly the administration – why we must care about what other people think.” — Unidentified Thought Leader

“I also view our relationships with bodies such as Chambers of Commerce as vital and important in strengthening relations between companies and the foreign communities in which they do business. While membership within these organizations serves foremost to promote trade, partnerships, and business principles, they also can generate intangible goodwill as they are noticed by the local populations and governments. I am very involved with American Chamber organizations across the globe. I also see strong CSR efforts in local communities as being helpful. And while I think companies need to forge their own individual initiatives in addressing and combating anti-Americanism, I think companies can indeed get some benefits by their collective participation in organizations such as the Chamber of Commerce Center for Corporate Citizenship that serve the civic needs and aspirations of American businesses.” — Unidentified Corp Leader

“American companies need to behave like local companies when doing business overseas. Our building of schools and technology programs are two successful initiatives. It would be useful to work with other American companies on these and other projects.” — Unidentified Corp Leader


BDA is developing subsequent phases of research with help from a select group of senior advisors, researchers, academicians, NGOs and client corporations. For more information on our efforts please contact Cari Eggspuehler, Executive Director of BDA, at 415.732.3620 or cari.Eggspuehler@sf.ddb.com.

Keith Reinhard to give Keynote Address, Nevada Governor’s Conference on Tourism, December 14th, 2005, 10:00-11:00am. Wynn Las Vegas. For More Information: www.travelnevada.com


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