Essays on Trust in Managers Case Study

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The paper "Trust in Managers" is a great example of a Management Case Study. In today’ s world, trust plays a major part in companies. Trust acts as the building block in an organization which enhances their success (Andersen, 2005). When an organization lacks trust, it leads to skepticism among the customers, investors, and stakeholders. This was evidenced after the financial crisis of 2007-8 where the corporation’ s trust dropped to less than half of the population. It becomes hard for an organization to become an effective and working relationship among the employees and stakeholders is destroyed due to a lack of trust (Cristina & Bijlsma-Frankema, 2007). Trust acts as a foundation for having effective communication and motivation (Searle & Dietz, 2012).

Trust and organization performance are directly linked. High performing organizations have trust among all stakeholders. An organization with a high level of trust leads to consumer confidence in using their products. Once an organization trust is lost, they suffer losses as seen in the case of Toyota and Siemens. Organizations with a high level of trust are known through their ability, benevolence, and integrity (Swift, 2001).

A customer is willing to take a risk on a trustworthy organization. This leads to an organization making more sales of their products and services. The level of trust in an organization determines its effectiveness in carrying out its processes (Brien, 1998). Control and coordination in an organization is based on trust (Swift, 2001). Trust is associated with employees' and customers' satisfaction. When an organization destroys its trust, it takes a year to rebuild it. The case study analysis critically analyses the cases of Toyota and Siemens in relation to loss of trust and rebuilding it. Siemens Siemens is a German engineering firm with a presence in several countries globally.

The multinational corporation was involved in a scandal where employees were found to have siphoned off a lot of cash through unethical acts such as phony consultants, contracts, and false bills with an aim of paying massive bills and win contracts. The management was accused of condoning the irresponsibility that was exhibited in the firm. Siemens faced the loss of trust from the shareholders and the public. The organization’ s employees were humiliated and its trustworthiness and integrity were put into question (Dietz & Gillespie, 2012). Siemens's approach to the scandal was highly praised by many experts.

The first response to the scandal was not appropriate as the management downplayed it. The company termed the scandal as an affair of a few million Euros, but within a month it was estimated at 420m Euros. Senior executives distanced themselves from the scandal leading to blame games. The initial response to the scandal was incompetent though the management was able to restore a firm reputation after several months (Dietz & Gillespie, 2012). The diagnosis phase involved four international investigations as well as own internal inquiry.

The firm involved a rigorous approach to the investigation which showed the pressing urgency of the reforms. The employees who volunteered themselves were given amnesty, CEO and chairman resigned. The scandal had been contributed by systematic elements such as aggressive growth strategy, decentralized matrix-like structure, and poor checks and balances system. Siemens had a corporate culture that allowed bribes to be tolerated (Dietz & Gillespie, 2012).

References

Andersen, A. J. (2005). Trust in managers: a study of why Swedish subordinates trust their managers, Business Ethics – A European Review, Vol.14, no.4, p. 392-404.

Brien, A. (1998). Trust and distrust in organizations Professional Ethics and The Culture of Trust. Journal of Business Ethics, Vol. 17, no.4, p. 391-409.

Cristina, C. A. & Bijlsma-Frankema, K. (2007). Trust and Control Interrelations. Group & Organization Management, Vol.32, no.4, p.392-406.

Dietz, G. & Gillespie, N. (2012). The Recovery of Trust: Case studies of organisational failures and trust repair, Institute of Business Ethics, Occasional Paper 5.

Searle, R. H., & Dietz, G. (2012). Editorial: Trust and HRM: Current insights and future directions. Human Resource Management Journal, Vol.22, no.4, p. 333-342.

Swift, T. (2001). Trust, reputation and corporate accountability to stakeholders. Business Ethics: a European Review, Vol.10, no.1, p.16-26.

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