Trust is like a living organism. It is grown, requires maintenance and can be destroyed. If our trust in an organization is ever damaged it causes us to lose confidence in the ability and reliability of the organization to perform tasks or produce work either on time or of good quality. Trust must be earned. We do not give organizations our trust without seeing some benefit first.

The public trusts that businesses will produce safe goods and services to a certain quality standard. We also have expectations in how the company will act and behave. Organizations must show interest in the wellbeing of the community and environment. Consumers will only purchase goods if they believe the organization has their interests at heart. For example, a food product meets government regulations and is safe to eat.

To loose public trust means that the company did something to break the trust in the company’s product or in their behavior. What was once expected to be safe and reliable is no longer the case. The company may have cut corners to cut costs at the cost of quality.

Trust in an organization matters because it affects all stakeholders. Organizations stakeholders include investors, the community, customers and employees. Investors who believe in the company will invest more. If the local community’s council believes in the company, they will make it easier for the organization to do business. Customers will buy more if they believe in the organization’s products or services. Employees who believe in the organization will work smarter, harder, and generate new ideas.

If trust is damaged the organization must not think of only investors, all stakeholders must be considered. In a bad situation such as a scandal, it causes stakeholders to question the organization. An organization can lose employees as they may become embarrassed to work for company. This leads to higher employee turnover and more training costs. Leadership must be proactive to prevent violations of ethics. This involves having a clear vision, the promotion of ethics policies and showing that ethics are valued in the organization. The organization can promote leadership training courses and ethics workshops. Leadership should promote transparency, good governance and an ethical organizational culture. Leadership needs a clear understanding of moral expectations.

A trustworthy organization promotes good culture through policies, procedures, values, and equality. Leadership must model the behavior they wish their employees to be by showing a good example and supporting their employees. Leadership has the responsibility to cultivate good ethics, create meaning and give purpose. Leadership must uphold ethical standards, promote corporate responsibility, and prevent groupthink.