Trust in business is improving from its nadir in 2009, but still remains dishearteningly low. Recent surveys report that only one in four members of the general public trusts business leaders to correct issues, and only one in five trusts them to tell the truth and make ethical and moral decisions. The 2014 Edelman Trust Barometer, a 27-country survey with more than 33,000 respondents, finds that overall trust declined across countries and sectors, with CEOs ranking second lowest at 43% and government officials the lowest at 36% as credible spokespeople to win public trust (Edelman Berland, 2014). This public distrust is manifest, for example, in record fines imposed by the U.S. Department of Justice of $16 billion on Bank of America to settle allegations that it knowingly sold toxic mortgages to investors. Other services and product companies also face record fines for mis-selling products (such as payment protection insurance), or for using contaminated ingredients in products (such as melamine-adulterated milk powder or horse meat in beef burgers) to generate marginally higher economic returns. Such high-profile corporate misconduct has called into question the integrity of business and its leaders. The Occupy Movement against social and economic inequality provides an example of a mass protest, but there have been other more targeted campaigns directed toward such issues as food labeling, poor labor practices, the living wage, executive pay among several others. This breakdown in trust not only undermines enduring connections with employees, customers, suppliers, and society in general, it also impedes the ability of business to engage in the risk-taking needed to innovate and contribute to social and economic development.
Business | Business Law, Public Responsibility, and Ethics | Strategic Management Policy
Strategy and Organisation
Academy of Management Journal
Academy of Management
HOLLENSBE, Elaine; WOOKEY, Charles; HICKEY, Loughlin; GEORGE, Gerard; and NICHOLS, Vincent.
Organizations with Purpose: From the Editors. (2014). Academy of Management Journal. 57, (5), 1227-1234. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/4624