Introduction
Trust is important in any business. Trustworthiness in a company contributes to its competitive capabilities, as it allows the organisation to have more opportunities in the medium-term. Appearances of trustworthiness and actual trust may be the same. However, they are very different. The first one is only a potential that the business expresses. It does not absolve the business of any loss that would occur if there is an actual breach of trust. The second one is an actuality, which ensures that there is never a breach of trust, and no losses are suffered due to a loss of trust.
Trust increases referrals to business and repeat business, leading to a loyal customer base (Sinha, 2010). Other than customers, other business partners rely on trust to form long-term relationships. A good, trustworthy business can obtain financial assistance from its financial partners, even when it is unable to meet its short-term debt commitments. Similarly, a business can use trust as the basis for seeking agreements with the employees, as the internal stakeholders, and the suppliers, as the external stakeholders, to allow it to make some changes in its operations so that it can pass through difficult times.
Public trust is the most important factor in public organisations, as well as not-for-profit organisations. Public trust determines the legitimacy of the organisation’s funding. Ethics and accountability are important factors in building trust in all kinds of organisations. Building trust requires transparency and adequate communication with all the internal and external stakeholders of the company. Structures to maintain a trustworthy business can be formal, like a code of ethics, or informal, like traditions, values, organisational culture, and work principles (Greiling, 2007).
The BBC Case Study
The BBC is a publicly funded organisation that experienced a trust crisis in 2007 due to editorial misjudgements. The incidences happened to pre-recorded programs that caused misinformation about competitions and features that fooled the public into thinking there was public participation in the programs.
The root causes leading to the loss of trust
The root cause of the problem was the lack of policies governing the ethics of particular acts done by the staff in charge of the programs. Program editors also allowed the need to broadcast programs on time to override their need to be accountable and truthful in their approach in delivering services to the public. There was a need to compete within the industry and to highlight the BBC as an organisation that was responsive and innovative in broadcasting. Unfortunately, there was no mechanism for ensuring that the goals were met. As such, the employees responsible opted to do things without following the due process, as required in their profession. They made the matter worse by liaising with their immediate superiors to hide the irregularity, with the excuse of saving the particular programs from obsolesce.
How effective do you consider the taken mitigation actions?
In the BBC case, mitigation actions included communication with all the workers through bulletins and meetings to reassert the core BBC values. The communication also included a policy of no tolerance to deception. The organisation suspended phone-related and interactive competition and embraced mandatory training on editorial ethics. This training involved all the staff involved in content production. These measures were effective in ensuring that workers had the necessary knowledge and skills to inform their decisions about deception. However, knowledge was not enough to deter workers from preferring to use deception. Workers had the likelihood of finding incentives to cheat the system that was going to inform the management of the company about the deception.
There was a need to address the root origin of the problems to eradicate them. One way that the BBC did this was by subjecting all publicity materials to formal editorial compliance. This ensured than non-editorial employees did not have room to allow other non-ethical incentives to influence the performance of their work. They were restricted to providing the right work that met the trust policy of the organisation. If they failed to do so, then the editors would have an obligation to point out the mistakes and seek remedies.
One challenge of relying on additional authority to safeguard trust issues is that it can prompt junior officers to collude with the higher authorities and continue with the harmful behaviour in their duties. The original editorial misjudgements happened because the higher authorities were unable to perform their duties well. Therefore, relying on the competency of the higher authorities alone was not enough. There was a need to reduce the incentives for the employees to be deceptive. One of the ways to do so would be by addressing the performance thresholds put in different positions in the organisation (Greiling, 2007). Ensuring that enough resources were allocated to the employees and considerable time allowed to perform a given duty was another way. Reducing job pressures would also allow the employees to follow the due process and maintain the right values and philosophy of the organisation as they performed their duties (Greiling, 2007).
What would happen if the company did not publicly address the issues and make changes?
Failing to address the issue publicly would result in an on-going mistrust from the public stakeholders. Continuing mistrust would lead to the loss of legitimacy of the organisation and cripple its ability to perform its duties well. Such an eventuality would cause it to shut down because of failing to do its public duty as a publicly-funded organisation. Also, a new organisation with adequate control measures would be set up as a replacement for the BBC.
Apart from the radical consequences, the failure to address the issues publicly would also create room for the guilty staff to continue with the practice, as they failed to see the significance of the matter in the overall welfare and mandate execution of the BBC. This failure would ensure that the BBC would not handle all the loopholes, even with the interventions to prevent a repeat of the same problem. The BBC needed adequate scrutiny to manage all the loopholes and regain trust. Internal stakeholders had a stake in keeping things going on as they were, as long as they fulfilled their immediate needs.
In the case of the BBC, the immediate need was the ability to fulfil work duties without going through tasking processes that were required by the organisation’s policy on truth. The organisation opened up its internal programs and operations to scrutiny due to public involvement created by the public attention to the issues. This prevented employees from continuing with their wrongdoing.
Do you believe that the company reputation can be rebuilt, or will they suffer the consequences also in the years to come?
The BBC can be rebuilt. Although its intervention did not create a robust solution to the problem, there is still room for improvement. The organisation now has a better chance to detect similar violations should they occur in the future. Although workers would be inclined to maintain operational ability, the management was adamant that protecting the reputation of the organisation and gaining a high value of integrity was more important. Thus, the management set the pace for the workers to consider what was most important to the organisation and to exhibit the best behaviour and make the best decisions concerning the integrity of their jobs (Dietz & Gillespie, 2012).
If any other scandals that taint the trustworthiness of the BBC appear, they will probably be the remnants of the present scandal, which are unlikely to have additional inherent causes. Going forward, the increased monitoring and training of the editorial staff will ensure that the BBC can sustain its policy of non-deception and avoid the consequences in the coming years. Interim reports at the BBC will be effective in presenting the most challenged areas to the stakeholders. This will raise debate on the issue and provide solutions for additional reforms that would further move the organisation towards being more reputable. As long as there is persistent scrutiny of its operations, the BBC will remain on a good path and should not suffer the consequences of loss of trust. Nevertheless, as highlighted earlier in this review, corruption in the system can undermine its integrity. Future interventions on monitoring and reform must be public so that they do not succumb to internal manipulations by the employees at any level of the organisation.
Toyota Case Study
Toyota faced a loss of trust challenges when one of its cars caused an accident and killed the occupants because it was faulty. The company sold faulty products and jeopardized its reputation of being a reliable and safety-conscious company. Even after the incident, it took considerably longer for local responses to the crisis to start. This highlighted quality assurance problems at Toyota. The evidence further tarnished the image of the company. As a remedy, Toyota recalled the affected cars, but it did not handle the exercise well. This created more safety-related panic and additional mistrust from the consumers (Dietz & Gillespie, 2012).
The root causes leading to the loss of trust
Failure to monitor the manufacturing and marketing processes to ensure that they aligned with the values communicated by the company was the main source of the lost trust. However, these failures occurred in the background, but they manifested in the form of faulty cars that had failed to pass adequate tests. They also manifested as Toyota’s lack of innovation in the process of testing safety and additional safety features in its vehicles, in line with changes in technology and the progress in the automotive industry.
The company had allowed its aggressive growth strategy to stand in the way of its need to maintain diligence in the manufacturing process. It also went against its principle of constant improvement and elimination of waste by allowing the high demand for growth to supersede quality assurance operations within the company. Consumers were appalled by the high number of affected cars. They saw it as evidence of a system-wide failure, which would mean there could be other problems with Toyota that were waiting for an accident to occur to be discovered.
How effective do you consider the taken mitigation actions?
Public communication done by the head of the company was effective in assuring consumers that there would be adequate attention given to the problem. However, the events that followed the communication showed that the company lacked an adequate internal mechanism to address the problem in a way that would quickly restore its public reputation. Toyota chose to reverse the basics of the Toyota Way. The effectiveness of this intervention would depend on the direction of change, and the features of change embraced. The original Toyota Way was effective, only that it needed adequate safeguards to prevent a repeat of the loss of accountability incidence caused by a focus on growth.
The new system of testing in the manufacturing process would include a combination of five accident-avoidance technologies. This was a case where Toyota was finding advancing its methods and operations to adhere to industry best practices as appropriate. It was a good way of advancing the company’s capability. However, if the interventions by Toyota to embrace industry best practices on safety were only isolated interventions, then the company may still face the same problem in the future. The company should have put the adoption of industry benchmarks and best practices as part of the revision of its Toyota Way (Dietz & Gillespie, 2012).
The creation of a 50-strong global quality task force was welcome. Still, like many task forces, there was a gap between policy formulation, investigation reports, and the actual amendments of practice on the manufacturing plants. Thus, the mitigation was good, but not very effective. It would have been better to combine the mitigation with a mechanism for ensuring that interventions by the experts, the task force, regulators, and other stakeholders quickly found their way into the manufacturing process and operation as safety improvements (Dietz & Gillespie, 2012).
What would happen if the company did not publicly address the issues and make changes?
Toyota’s failure to address the problems publicly would have created insurmountable press attention to the company, with calls for the authorities to take punitive measures against the company. Customers yet to be reached by the recall program would have panicked and sued the company for neglect of safety for any foreseeable issue that they would have with their Toyota cars. Addressing the issues publicly, ensured that Toyota was able to respond to the aftershocks of the crisis and came up with a possible intervention that responded to the most pertinent needs of the problem, as expressed by the stakeholders. Without publicly addressing the issues, the company would be lost on what to resolve first and what to schedule for later. It would lack the on-going feedback from the stakeholders, who are necessary for navigating a trust crisis.
The trustworthiness of the Toyota brand would plummet to unrecoverable levels. Moreover, it would be very difficult for the company’s leadership to maintain a market leadership position in the future. The intervention would not attain levels of responsiveness that it did. The centralised corporate structure in Toyota aided a top-down approach to the intervention, while the incident demanded decentralised intervention. Thus, the entire response was bungled, as the central company authority was trying to bypass its bureaucracies to fight the lost reputation. However, were it not for the public attention on the case. The resolve to deal with internal bureaucracies, create a separate global task force to analyse, and formulate future safety policies might have been impossible.
Do you believe that the company reputation can be rebuilt, or will they suffer the consequences also in the years to come?
Toyota’s reputation will be rebuilt. The company did well in coming up with new measures that affected its entire operations and management activities. It embraced industry benchmarks on safety and opened itself to public scrutiny. In the future, it will be possible to detect failures in its system, as the company revised its core manufacturing and business principles as outlined in the Toyota way. At the same time, it now has a task force to advise future company policies on safety and related issues, as a way of safeguarding its reputation. Based on these remarks, it is unlikely that Toyota will be a victim of the same trust loss crisis in the future.
Toyota is unlikely to allow too much growth to cripple its organisational systems and values again. Therefore, the company will retain a good balance between its quest to increase its competitive capabilities with growth strategies and its need to safeguard its current market share by keeping stakeholders satisfied through the maintenance of trustworthiness. Lastly, there will be more transparency in the pursuit of growth, as the internal processes of the company open up to central management, task force, and public regulatory scrutiny. This will aid the Toyota’s quest to sustain its values and core working principles in all its operations. Consequently, there will be no additional consequences suffered in the future regarding the same trust issues.
Summary of recommendations for The BBC and Toyota cases
Trust remains an on-going strategy in all organisations. Thus it should not be handled as a time-bound project. Therefore, the BBC needs first to address the motivating factors for deception by the employees before it relies on the interventions of training and oversight to solve the trust problem. It has to balance workloads, performance expectations of the employees, and reduce the instances of collusion between administrators, editorial staffs, and other employees, to avoid jeopardising the internal system established to maintain trustworthiness in its operations.
For Toyota, the interventions of the central management are good, because the created task force forms a bypass mechanism for defeating internal bureaucracy and ensuring that there are adequate responses to future challenges in the Toyota way. A review of the Toyota way is also a good initiative that the company should keep doing periodically. Also, it has to come up with another separate organ for injecting task force recommendations into normal operations. Alternatively, Toyota should expedite the process of linking task force reports with actual practice by giving the task force some central management mandates and powers, which will ensure that the company can respond very fast to future trust challenges.
In addition to relying on the executive leadership to drive reforms, the two organisations must also consider the practical implications of their solutions. This consideration will look at whether they add unnecessary processes that cause resistance and produce likely causes of neglect in the future. The organisations must recall the underlying causes of their respective problems and address them, in addition to responding to the most pertinent issues raised by the public (Bracey, 2014). Therefore, the two companies should embrace a proactive strategy to maintain trust.
References
Bracey, L. (2014). The importance of business reputation. Business in Focus. Web.
Dietz, G., & Gillespie, N. (2012). The recovery of trust: Case studies of organisational failures and trust repair. London, UK: Institute of Business Ethics.
Greiling, D. (2007). Trust and performance management in non-profit organizations. The Innovation Journal, 12(3). Web.
Sinha, A. (2010, December 1). Preparing for growth, time to rebuild trust and reputation. Forbes. Web.