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Corporate america’s trust chasm

October 27, 2010

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In a world where it’s hard to know who to trust, a chasm has emerged where Americans appear to lack trust in the critical institutions that they’ve depended on for decades, government and big business.

The erosion of trust in government has been long-term, but has accelerated rapidly in recent years. Attitudes to big business have traditionally been cyclical and tend to rise with a thriving economy because everyone can see the gains that big business brings.

However, Americans find themselves at something of a crossroads with neither big business or government proving themselves to be at all trustworthy. It’s the reason for the current political climate where there are a group who want to change the status-quo and others who’ve disengaged themsleves from political discourse because they don’t believe the system can be changed.

According to Bruce Nussbaum in a blog post for Harvard Business Review, corporate America has broken its social contract with the American public and he gives six reasons for the breakdown.

1. Outsourcing- Instead of investing at home- companies outsourced abroad

2. Trust- American businesses don’t look like responsible adults

3. Greed- CEO pay that’s out of control

4. Corruption- Lobbying allows business to control politics

5. Democracy-Freedom of speech allows unions and business to control the front end of politics

6. Ingratitude- No thanks from corporate America to the tax payers for bailing them out

While there’s clearly an opportunity for companies to do something about this, most Americans probably believe that there’s little they can do about this and it’s just the way business is run and interacts with the political system. They might feel bad about it, but unless is directly impacts them, there not going to boycott corporate America. However, while they might not boycott, the above conditions make it almost impossible for the American public to truly believe what corporate America is telling them; they won’t believe the ads and they won’t believe the PR hype. They will use their own personal and the advice of those closest to them to work through the BS.

In such a toxic environment, communication is hard. Companies that want to avoid the cynicism need to prove and state their case to show there’s more than BS to their stories. This means demonstration and action are even more important.

The issues that Nussbaum raises are the tip of the iceberg, things could change dramatically if consumers start to understand that their personal safety and the safety and health of family members is being compromised by companies exploiting loopholes in regulation or cutting corners to save money. It’s likely the current lack of trust makes companies much more vulnerable to these attacks, having no goodwill and their disposal to offset a potential attack.

What’s certain is that we are now entering a period where corporations are going to be judged on what they do, rather than what they say. There’s clearly a massive chasm to be filled and remains to be seen if anyone in corporate America is ready to step up.

Posted by Ed Cotton

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