Explain the importance of establishing credibility for business communications

Business Communication

Developing Leaders for a Networked World

Peter W. Cardon www.mhhe.com

ISBN 978-0-07-340319-9 MHID 0-07-340319-9

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Cardon

Imagine yourself at the center of the communication process …

How do you establish credibility with your communication?

How do you convey your message effectively to influence others?

How do you set yourself apart with your communication skills to reach professional goals?

Develop into a leader for a networked world as Peter Cardon puts you at the center of business communication through his:

Unique focus on credibility woven throughout the textbook chapters

Practitioner and business case-based approach

Forward-looking vision built on tradition

@petercardon

To learn more and to stay up-to-date in the Business Communication field visit www.cardonbcom.com

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J O H N S O N , O L I V I A 9 1 1 0

Introduction to Business Communication Chapter 1 Establishing Credibility

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After studying this chapter, you should be able to do the following:

LO1.1 Explain the importance of establishing credibility for business communications.

LO1.2 Describe how competence, caring, and character affect your credibility as a communicator.

LO1.3 Define and explain business ethics, corporate values, and personal values.

LO1.4 Explain the FAIR approach to ethical business communications.

Learning Objectives

Establishing Credibility

C H

A P

T ER

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Chapter Case: A Culture of Trust at eBay

Who’s Involved

Meg Whitman former CEO (1998–2008)

John Donahoe CEO of eBay (2008–present)

Pierre Omidyar founder and chairman of eBay (1995–present)

The Situation

Perhaps no company better exemplifies the importance of trust or credibility in business relationships than eBay. eBay’s online auction and shopping website is built on the notion that buyers and purchas- ers can trust one another to accurately represent the quality and nature of products and ship them in a safe and timely manner—a business model based on the notion of trusting a complete stranger. In recent years, eBay has begun to post seller ratings, which are measures of seller credibility in terms of accuracy of item descriptions, honesty of communications, reliability in shipping time, and fairness of shipping and handling charges.

Why Does T his Matter?

In most business situations, others make judgments about what you say, write, and do based on your credibility. Credibility is your reputation for being trustworthy— trustworthy to perform your work with excellence; to care about those you work with and for; to live by high ethical, corporate, and personal values; and to deliver on your promises. In short, your credibility is the degree to which others believe or trust in you. In this book, we often use the terms trust and credibility interchangeably.

Business communications occur in the context of working relationships, all of which depend on trust. 1 Credibility has always been important to business relationships, yet its importance has grown in recent years with an increasingly interdependent, knowledge-based workplace. 2 As one of the foremost thinkers on trust in the work- place, Stephen M. R. Covey made this observation:

Contrary to what most people believe, trust is not some soft, illusive quality that you either have or you don’t; rather, trust is a pragmatic, tangible, actionable asset that you can create—much faster than you probably think possible. . . . It is the key leadership competency of the new global economy. 3

The importance of credibility as a basis for effective communication is universal. As Victor K. Fung, chairman of the Li and Fung Group centered in Hong Kong, China, stated, “A good leader is probably no different in any culture in the sense that a good leader must have credibility. That is something one establishes . . . based on the way one handles [oneself] . . . and by [an] established track record.” 4 Fung’s comments illus- trate an important point that we will explore in detail: Credibility emerges from several sources, including abilities and achievements as well as interpersonal skills and traits.

In this chapter, we discuss the ways that business executives and the business community establish trust. Then, we focus on three components of credibility: compe- tence, caring, and character. 5 First, however, we discuss the culture of trust at eBay. Throughout the chapter, we will return to the culture of trust at eBay with examples and comments from business executives. 6

? LO1.1 Explain the

importance of establishing credibility for business communications.

Hear Pete Cardon explain why this

matters.

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Do you operate from a position of trust or credibility? That is one of the first things you should consider as you communicate. In the business world, you often start from a deficit of trust. As a result, one of your first goals should be to gain trust or credibility from colleagues, clients, customers, and other contacts. 7

Given the major business scandals over the past decade (i.e., Enron, Adelphia Com- munications, WorldCom), trust in businesses and business executives has dropped to all-time lows. In a recent Gallup poll, just 12 percent of respondents considered busi- ness executives honest and ethical. For other business-related professions, trust ratings were also low: bankers, 19 percent; advertising practitioners, 11 percent; insurance salespeople, 10 percent; stockbrokers, 9 percent; and car salespeople, 6 percent. 8 As depicted in Figure 1.1 , the trust extended by the general public to business executives is far lower than the trust extended to members of other selected professions. 9 The public also increasingly views companies with less trust. Approximately 85 percent of senior executives surveyed believe that public trust in business has gone down. Approximately 62 percent of survey respondents across 20 countries said their trust in corporations had gone down following the economic crises of 2008 and 2009. 10

A deficit of trust also exists within companies. Various surveys show that employees often do not trust their own business leaders. Just 51 percent of employees trust senior management, and only 36 percent of employees believe their company leaders act with honesty and integrity. Furthermore, approximately 76 percent of employees have seen

eBay started in 1995 when founder and computer programmer Pierre Omidyar’s personal auc- tion website sold its first item: a broken laser pointer for $14.83. Omidyar, a French-born American of Armenian-Iranian descent, is still chairman of eBay and now has a net worth of approximately $5.5 billion. Along with his wife, Pam, Omidyar also heads the Omidyar Network, a philanthropic investment firm “dedicated to harnessing the power of markets to create opportunity for people to improve their lives.” eBay grew rapidly in its first few years. By 1998, it had annual revenues of $4.7 million, half a million users, and 30 employees. Yet, its explosive growth really began when Omidyar asked Meg Whitman to take the CEO position. Whitman brought business credibility to the company. She had thrived in corporate leadership positions at Procter & Gamble, Bain & Company, The Walt Disney Company, and Hasbro, where she was in charge of global marketing for brands such as Playskool, Mr. Potato Head, and Teletubbies. When Whitman first met Omidyar, she did not expect to take the position. After all, eBay was a small, unestablished, and relatively high-risk company. But she admired Omidyar’s business model. As she explained in her memoir ( The Power of Many: Values for Success in Business and Life ), “Pierre carefully explained that he believed eBay was thriving because it was based on the idea that most people are basically good and that the users could be trusted to do the right thing most of the time. . . . Ultimately, eBay developed because millions of people bought into the idea that they could trust each other.”

Task 1 Establish credibility through

competence.

Task 3 Establish credibility through character.

Task 2 Establish credibility

through caring.

The Role of Trust in the Post-Trust Era

4 Part one Introduction to Business Communication

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ESTABLISHING CREDIBILITY Chapter one 5

illegal or unethical conduct in the past 12 months at their jobs. 11 As future business managers and leaders, you will often find yourself in charge of employees who are accustomed to not trusting those in leadership positions.

A strong predictor of cheating in the workplace is cheating in school. Sadly, re- cent research has found that cheating is so pervasive that some use the label a global cheating culture. Among high school students, 80 percent of high-performing students admit to having cheated, and 50 percent do not believe cheating is wrong. Other re- search about high school students found that more than 70 percent had engaged in serious cheating, and 50 percent had plagiarized assignments from the Internet. In a study of over 50,000 undergraduate students in the United States, more than 70 percent admitted to serious cheating. Nearly 80 percent stated that Internet plagiarism was not a serious offense. 12

Perhaps most concerning is that business students are among the worst offenders. When asked in anonymous surveys if they had cheated to get into graduate school, many students admitted to having done so: 43 percent of liberal arts students, 52 per- cent of education students, 63 percent of medical students, 63 percent of law students, and 75 percent of business students. Think about that! Three-quarters of graduate-level business students admitted to some form of cheating to get into their programs. In another study involving hypothetical ethical dilemmas, convicts in minimum-security prisons scored as high on unethical behavior as MBA students. 13 In yet another study of 6,226 undergraduate business students in 36 countries, American business students viewed cheating no differently than did students from countries considered high in corruption. 14

Michael Maslansky, a leading corporate communications expert, has labeled this the post-trust era. In the post-trust era, the public overwhelmingly views businesses as operating against the public’s best interests, and the majority of employees view their leaders and colleagues skeptically. Regarding the post-trust era, Maslansky said, “Just a few years ago, salespeople, corporate leaders, marketing departments, and communicators like me had it pretty easy. We looked at communication as a relatively linear process. . . . But trust disappeared, things changed.” 15

90 Nurses

Police officers

Clergy

Bankers

Business executives

High Trust

Low Trust

80

70

60

50

40

30

20

10

0 2000 2001 2002 2003 2004

Year

2005 2006 2007 2008 2009

FIGURE 1.1

How Will You Overcome Public Perceptions to Build Credibility? A Look at Trust in Professions over a Decade

Note: Based on annual Gallup Poll surveys (Gallup Polls, “Honesty/Ethics in Professions,” retrieved June 1, 2010, from www .gallup.com/poll/1654/honesty-ethics-professions.aspx). Percentages based on the number of respondents who responded “very high” or “high” to the following questions: Please tell me how you would rate the honesty and ethical standards of people in these different fields—very high, high, average, low, or very low?