Re-building Trust in Organisation - Case Study Example

Re-building Trust in Organisation (A Case Study on BBC) Name of Student Lecturer Date Introduction Trust is considered as an important antecedent for cooperation and contributes to constructive and collaborative behaviour essential for long-term relationships between different parties. Trust is important for innovative relationships among employees within the organisations and with stakeholders, such as customers. It can be defined as the expectation of an actor of the other party’s goodwill, competence and behaviour (Blomqvist & Stahle, 2004). According to the authors both goodwill and competence levels are necessary for the development of trust in business context. It can also be defined as the readiness to put oneself at risk based on the actions of another individual (Interaction Associates, 2013, p.2). The trustee’s characteristics are presented as trustworthiness which consists of three elements of ability, benevolence, and integrity (Starnes, Truhon, & McCarthy, 2003). Generally, when there is greater trust and lower perception of risk in a relationship, risk taking is likely to take place in a trust relationship. Although the outcomes of risk taking may be excessively positive of negative, they will ultimately feed back to the trustee, thus increasing or reducing the level of trustworthiness in the trustee (Starnes et al., 2003). Based on the BBC Case Study, this paper explores the root causes of loss of trust in the company, the effectiveness of the mitigation actions taken, the possible consequences of failure to publicly address the issues of mistrust and make changes, and whether the company can re-build its reputation. Also, it discusses the importance of trust and provides necessary recommendations to the organisation. Background of Case study The British Broadcasting Corporation (BBC) is a publicly funded organisation. It experienced a crisis in 2007 following broadcasts of live or pre-recorded programmes that were misleading or deliberately deceiving the audience (Gillespie & Dietz, 2009). The Corporation ran programmes related to phone-in competitions, which despite giving the appearance of, did not allow, viewers to participate in the programmes. Examples of the incidents included lying to child viewers (Blue Peter, twice), and charity donors. As a result, BBC lost its reputation for honesty and broadcasting excellence. The Corporation’s long-term reputation experienced severe damage since in the same year, 59% of the public indicated to have lost trust in the Corporation (Gillespie & Dietz, 2009). Despite successfully resolving its trust failure, it was extremely difficult for the Corporation and its staff to deal with both the political and operational consequences. Blame game persisted in within the Corporation creating more tension which had undeniable implications for the level of trust repair in the organisation (Gillespie & Dietz, 2009). In the same year, while the Corporation was investigating the allegations of a faked broadcast of Saturday Kitchen that was reported in a newspaper, a viewer reported the same incident which involved the TV programme for children known as Blue Peter (Gillespie & Dietz, 2009). During the live show of the programme on 27th November 2006, a ‘technical problem’ occurred making it difficult for viewers to get through to the studio so to participate in a charity phone-in competition. When the programme was running of a live broadcast, it is reported that a junior employee requested a child in the studio at the moment to pretend to be the winner (Gillespie & Dietz, 2009). Besides the programme makers covering up what had occurred, the researcher who was responsible was also appreciated by the editor of the programme for making the broadcasting of the show successful. Later, the mother of the fake winner raised concern, which meant that Mark Thompson, the Director-General of the BBC and to respond (Gillespie & Dietz, 2009). What were the roots causes leading to the loss of trust? The main root causes of loss of trust in BBC was misleading or deceiving its audience and acting dishonestly towards the public. According to Kim, Dirks and Cooper (2009) individuals can behave in a ways that violate trust by neglecting to meet expectations. Trust can be violated even by people who have not been directly affected by the transgression. The Corporation made mistake to broadcast live of pre-recorded programmes that misled the audience. Given that, this is a public broadcaster, the audiences believed that whatever the Corporation broadcasted was reliable and could not in any way be deceptive. The BCC deceived its audience by purporting that the phone-in competition involved viewer participation, when actually no viewer was allowed to participate in the competition (Gillespie & Dietz, 2009). It can also be argued that use of features that gave the appearance of viewer participating in the programmes was misleading to the audience and the entire public. This was a great failure on the part of the BBC fraternity and it definitely resulted to loss of trust. It was a demonstration that the Corporation does not actually consider the issues of integrity and excellence to latter. This is why 59% of the public acknowledged that the Corporation’s trust had been affected because of such unexpected actions (Gillespie & Dietz, 2009). As if this was not enough, the BBC was again reported to have acted in the same way, but this incident had happed in 2006. Although, this had not been reported earlier immediately it happened, when it was eventually brought to the lime light by a viewer, it further damaged the Corporation’s reputation. In this incident, a junior employee in the BBC acted unethically by asking a child who had visited the studio to pretend being the winner in the competition (Gillespie & Dietz, 2009). It is unfortunate that the audience at the time believed in that the competition was fair because of the trust they had in the Corporation. The truth about the deceptive broadcasting was revealed when the fake winner’s child complained of what had happened. This was such a shameful experience to the BBC, especially that it had been known as an institution of high integrity and broadcasting ability. Definitely, there is no way the Corporation could preserve its public image through such unprofessional behaviours; it eventually lost trust. How effective do you consider the taken mitigation actions? The BCC took various actions to alleviate the mistrust which I consider was the right approach to the problem. In respond to the crisis, both the Blue Peter’s presenters and Editor issued public apologies indicating their regret over what happened (Gillespie & Dietz, 2009). This was done within a week of the crisis even before the public became aware of the whole situation. Although, this could appear to be problematic, it was an indication that the mistake was not intended by BCC and announcing the mess prior to confirmation sends a message to the public that it was actually an error of judgment and not a deliberate deceit as portrayed to the public. Also, public apologies came from Director-General himself and other senior managers (Gillespie & Dietz, 2009), and this, I belief made the apology stronger. They even acknowledged the magnitude of problem on the trust of viewers and this was the best way to do it. Therefore, BBC did not sit back and watch the problem spread out of proportion, but acted soberly to the situation by making its position clear about the promoting the needs of its customers. The issue on conducting internal investigation was well thought of and would help clean the name of the Corporation. Although, some staff would not take the excise positively, it is likely that internal investigation would reveal more evidence of unethical behaviour; it would help the Corporation solve the problem once and forever. Internal investigations showed the commitment of the BBC to handle the problem and not avoiding or postponing the problem. In addition, it would help increased the understanding of the root causes of the problem, which would enable the Corporation to develop effective and appropriate solutions to the problem and prevent the problem from happening again in future. Generally, the initiatives by the BBC would help put its house in position. It is good the Corporation acknowledged the incident and displayed its regret, and went ahead to demonstrate the wish to understand what occurred so to identify the best remedial actions. This was a confirmation of the Corporation’s integrity, benevolence and integrity in the broadcasting industry. What would have happened if the company did not publicly address the issues and make changes? The fact that BBC took the initiative to publicly address the problems and made appropriate changes was an indication that it was sorry about what happened and was ready to change and re-build its reputation (Hodgins & Liebeskind, 2003). However, if it failed to take such a bold step, it would face various consequences. The first thing that would happen is that BBC would completely loss its reputation for honesty and broadcasting excellence beyond repair, which it had celebrated for a very long time. Initially, before the crises occurred in 2006 and 2007 in the Corporation, the audience had absolute trust in its operations and enjoyed the relationship. However, now that the problem occurred, it was inevitable for the BBC to apologize to the public and its audience about the issue to avoid more damage on its reputation (Gillespie & Dietz, 2009). For example, when polls were taken after the crisis and public apology by the BCC, three-quarters of the respondents indicated that they still trust the Corporation, “trust the BBC to sort out the current situation and do the right thing in the future” (Gillespie & Dietz, 2009, p.29). This means that addressing the issues publicly was essential to re-building company’s trust, which would otherwise not be possible. Failure to publicly address the issue and make changes would also imply that the BBC does not care about the public and its audience. It would also indicate that the Corporation is not committed to delivering on its promises of honest and excellent broadcasting. This would in turn affect the confidence of stakeholders in the Corporation. It is possible that the stakeholders would loss their dignity and as a result they would want to not want to be associated with the Corporation. In addition, the political and operational repercussions would persist which would further spoil the reputation of the Corporation. Eventually, the BBC would loss its audience to competitors leading to reduction profitability. People would not want to watch TV broadcasts that they are not sure whether or not the information is accurate and reliable. Generally, the BBC would severely loss it competitive advantage in the broadcasting industry. Do you believe that the company’s reputation can be re-build, or will they suffer the consequences also in the years to come? In-deed, the BBC can re-build its reputation and it already indicated through the way is handled the crisis. One important thing the Corporation did that would help re-build its reputation faster was to demonstrate to the public and its audience that despite the problem occurring, it was committed to ensuring that it does not happen in future, by apologising publicly (Gillespie & Dietz, 2009). The demonstration of trust alone sends a powerful message to the public and that Corporation is ready to take a new direction and would not expose its audience to such shameful experiences again. This is the beginning of re-building the reputation of the Corporation because it is about winning the public confidence after the crisis. By acknowledging the existence of the problem was a confirmation to the public by the Corporation that it was actually an error of judgment that made the problem to occur, and that it was not intended. In fact, the approach the Corporation took in handling the problem seemed to work in its favor. When the crisis was reported, 59% of the public indicated that the Corporation had damaged its reputation (Gillespie & Dietz, 2009). However, through the initiative of the Corporation of ensuring that the situation is under control and that re-build their reputation, when the polls were run, it was revealed that most people who knew about the crisis expressed confidence in the Corporation and were optimistic that it had the opportunity to improve in the future (Gillespie & Dietz, 2009). This shows that the BBC can really re-build it reputation for integrity and ability. The Corporation also put in place reforming interventions which are meant to rebuild its reputation, and I am confident they will work. For example, it suspended all the competitions that were phone-related and interactive, introduced compulsory training of editorial ethics for all staff, and revised the supplier and employment contacts to make ethical obligations clear among others (Gillespie & Dietz, 2009). All these initiatives showed that the Corporation was willing and ready and reform as an institution so to re-build its reputation. The BBC has good intentions and the spirit of serving the public in the best way possible, which it demonstrated through the actions it took after it was befall by the crisis. Importance of trust Trusting people makes them be true to you and treating them greatly makes them show their greatness to you, as well (Waldo, 1944 cited in Starnes et al., 2003). This is the power of trust in contemporary business organisations. Companies with high level of trust are likely to produce products and services of high quality at low cost since they can both recruit and retain employees who are highly motivated. In this case, employees would enjoy their work, be careful when performing their jobs, make appropriate personal decisions, bring in new ideas, take risks embrace organisation’s goals and objectives, as well as show organisational citizenship behavior (Starnes et al., 2003). This allows leaders in the organisation to perform other complex tasks. In addition, trust promotes the reputation of the company and for this reason it will attract different investors who are interested in doing business with the organisation (Dirks & Ferrin, 2001). The importance of trust in companies is also evidenced in the perspective of organisational justice. Organisational justice comprise of three aspects: distributive justice, procedural justice, and interactional justice (Starnes et al., 2003). Distributive justice occurs when people perceive fairness of organisational outcomes, procedural justice occurs when there is perceived fairness in the processes of making decision, while interactional justice occurs when there is perceived fairness in the treatment of employees and interpersonal interactions in the organisation (Starnes et al., 2003). Therefore, trust in companies helps promote employee morale and commitment to the organisation. Also, company trust is essential in enhancing customer satisfaction. Customers will maintain their relationship with the company they trust by becoming loyal to the company. This is beneficial to the company because it is likely to realize increase in sales and profitability (Hacker & Willard, 2002). Recommendations The problem of mistrust that occurred in the BBC was a serious threat to its reputation for honesty and broadcasting excellence. The problem happened due to internal failure of the Corporation, something that would have been avoided in the first place. The reforming interventions initiated by the Corporation are encouraged if it wants to re-build its reputation. In addition, the following recommendations will help the BBC take a new direction and prevent the crisis from happening in future. When developing interim reports meant to uncover the level of problems in the Corporation, it should be careful not to place blame on staff indiscriminately and inaccurately. The BBC should be fair when attributing blame (Gillespie & Dietz, 2009). The reforming interventions should be free from major confusion of process and task guidelines, otherwise staff may perceive them to be an overreaction (Gillespie & Dietz, 2009). This requires the senior leaders at the Corporation to communicate clearly the reform intentions to all staff in the company. The Corporation should focus of re-building trust both internally and externally because the crisis affected both ends. Externally, it should maintain the standards on audience interactivity so to strengthen its relationship with the public (Nakayachi & Watabe, 2005). The BBC should ensure the crisis does not occur as promised to the public so to maintain the reputation after re-building it. Making the same mistake again will make the audience loss trust in the Corporation completely (Nakayachi & Watabe, 2005). References Blomqvist, K., & Ståhle, P. (2004). Trust in technology partnerships. Trust in knowledge management and systems in organizations, 173-99. Dirks, K. T., & Ferrin, D. L. (2001). The role of trust in organizational settings. Organization science, 12(4), 450-467. Gillespie, N., & Dietz, G. (2009). Trust repair after an organisation-level failure. Academy of Management Review, 34: 127–145. Hacker, S.K., & Willard, M.L. (2002). The Trust Imperative: Performance Improvement through Productive Relationships, ASQ Quality Press. Hodgins, H. S., & Liebeskind, E. (2003). Apology versus defense: Antecedents and consequences. Journal of Experimental Social Psychology, 39: 297-316. Interaction Associates, (2013). Building Trust 2013: Workforce Trends Defining High Performance. Kim, PH, Dirks, KT, & Cooper,CD (2009). The repair of trust: A dynamic bi-lateral perspective and multi level conceptualization. Academy of Management Review, 34, 401–422. Nakayachi, K., & Watabe, M. (2005). Restoring trustworthiness after adverse events: The signaling effects of voluntary 'Hostage Posting' on trust. Organizational Behavior and Human Decision Processes, 97: 1-17. Starnes, B.J., Truhon, S.A., & McCarthy, V. (2003). A primer on organizational behavior. Read More