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The news of the world and the ethics of business

July 10, 2011

The News of the World saga in the UK is an amazing tale of the tolerance of a public for questionable business ethics. While the polls suggest the public trust business and the media less- they are still unlikely to take action-unless something extreme happens. People are still buying gas at BP and cars from Toyota- despite their PR
disasters.

The NOW story wasn’t new, it was first reported a couple of years back, but only thanks to diligent and determined reporting by a Nick Davies , a Guardian journalist.

It appears the public might be able to tolerate questionable ethics for a while and it wasn’t the public that brought the News of the World to its knees, it was its advertisers, who could no longer risk the potential public backlash from their continued advertising presence.

The key trigger for the News of the World’s demise were the details which emerged about the newspaper hacking into voice mails of a murdered child and into the families of soldiers killed on active duty.

Maybe celebrity voice mail hacking had been fair game in the eyes of the UK public, when this news broke, the paper had clearly stepped too far out of line.

Business has slowly won back trust after the scandals of 2008- Edelman’s Trust Barometer shows business swinging wildly- from 54% in 2008- falling to 36% in 2009, up to 54% in 2010 and falling back again this year to 46%.

Maybe it’s the lack of punishment for the bankers who caused the mess; with only Madoff going to jail so far. It suggests some financial sectors might still be treading rather dangerously. No one is taking to the streets quite yet,the public seems to be looking at banking and bankers with a skeptical and cautious eye. In fact, Edelman’s data shows trust in banking has declined from 71% in 2008 to 25% in 2011.

One big area for concern for business has been privacy and with the number of data breeches occurring, it’s clear business isn’t quite there when it comes to protecting its customer data. However, perhaps the sheer number of incidents has insulated business from real damage, with people now assuming that breeches are a likely occurrence and that there’s little that can be done. You don’t hear any real outcry or boycotting- 90% of Sony’s users are back after its serious data breech.

Overall, if the News of the World saga tells us anything about business and ethics, it’s that the public is prepared to tolerate a lot, but start over-stepping the line in certain areas- they can run your brand out of business.

While this is a somewhat simplistic analysis given the social media age we are now in, but while brands are more “open” these days and attacks and criticisms are more likely- trends show us that these tend to die down after a while.

However, it would be foolish for a brand to be complacent- this new era of openness and transparency means that it might not take a top-class journalist to make it happen- the insider Whistleblower, the growth of Wikileaks like organizations and the proliferation of bloggers, make it easier than ever to find the massive ethical misdemeanor that triggers defection and irreparable brand damage.

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