Many consumers have little confidence in the ethics of big business leaders. How will this affect their loyalty to the companies?
Loyalty could be said to be an "ethical" path to take. Loyalty is often driven by what is perceived as being "right". Many people equate being loyal to "doing the right thing". How many times have you heard someone say "Oh, I wouldn't want to change my supplier. That just wouldn't be right. It wouldn't be fair." But that argument applies both ways. As soon as they suspect the supplier of being unethical, greedy or anti-social, that brake on defection vanishes like a puff of smoke. The Enron debacle has focused attention on the ethics of big businesses and what consumers actually feel about companies and those who run them. The conclusions drawn are quite illuminating, and not very encouraging.
An image problem
Now, a timely new Business Week/Harris poll reveals that only one in three Americans feel that large companies have ethical business practices and just over one in four believe that they are straightforward and honest in their dealings with consumers and employees. Clearly, those being surveyed - consumers - are not really in a position to know the true state of affairs within big companies. But the important thing is that it's the impression that counts. If consumers feel that a company is unethical, they won't need actual proof to justify defecting. This "image" problem is one that will have to be addressed quickly and effectively. General Electric Co. Chief Executive, Jeffrey R. Immelt, told Business Week: "Credibility and trust is everything [in business]. And because of the recession, because of Enron, that trust has evaporated."
The poll revealed that 16% of Americans have "a great deal of confidence" in the people running major companies (up from 15% in 1999) but those who have "hardly any" confidence in business leaders doubled from 13% in 1999 to 24% now. And company watchdogs fared even worse: 28% had "hardly any confidence" in government agencies, 29% felt that way about accountants and a thumping 47% had hardly any confidence in lawyers.
No doubt, we will see new rules and restrictions in the near future. But will those be enough? What is really needed is a restoration of public confidence in the integrity and honesty of those at the top.
For the full poll results, go to the February 4 issue of BusinessWeek online, at www.businessweek.com