Importance of establishing credibility in business communications

Discuss The Formula For Credibility And Write About The Key Aspects Of Competence, Caring, And Character

1.1.Discuss the Formula for Credibility and write about the key aspects of Competence, Caring, and Character

.2Explain the FAIR approach to evaluating ethical business communications

3Why is emotional intelligence so important in logical business tasks? What are the four domains of emotional intelligence? Describe three related communication competencies for each domain.

4.Think about a recent movie or TV episode you watched. Select a scene that involves interesting nonverbal communication - ideally, one that might occur in the workplace. Based on this scene, do the following; A. Summarize the scene in approximately one paragraph. B. Analyze the nonverbal communication. Explain how various body parts sent signals, including the eyes, mouth, shoulders, arms, and hands C. Describe how you can mimic or avoid three aspects of this nonverbal behavior in the workplace and why you would do so.

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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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

o n

e

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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?

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6 Part one Introduction to Business Communication

Most of these perceptions about business leaders as untrustworthy are not nec- essarily fair. Daniel Janssen, former chairman of the board of directors of Solvay (a Belgian chemicals company operating in more than 50 countries), explained the dilemma:

Executives of large companies today are generally perceived as efficient and competent, but also self-interested and ungenerous. However, I think that people who form this opinion are underestimating something of which they lack knowledge. Many executives, in top management and also at other levels, are incredibly generous and not at all self-interested. They do their job and they do it with respect for the common interest. But it is true that capitalism is too often marked by its dark and greedy side. 16

You will often find yourself needing to establish credibility in this post-trust era. As a future manager and executive, you can control your reputation as a credible communicator by focusing on three well-established factors: competence, caring, and character.

The Role of Competence in Establishing Credibility

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

Competence refers to the knowledge and skills needed to accomplish business tasks, approach business problems, and get a job done. Most people will judge your compe- tence based on your track record of success and achievement.

In her memoir, Meg Whitman explains how as a young professional she gained cred- ibility and displayed competence within her organization: “I just focused on delivering results,” she said. “You have to excel at the tasks you’re given and you have to add value to every single project, every conversation where someone seeks your input.” 17

People develop competence in many ways: through study, observation, and, most important, practice and real-world business experiences. Your entire business program is likely centered on developing competence in a certain business discipline and/or in- dustry. You may already have significant business experience. If you’re a novice, seek- ing internships and jobs related to your discipline will help you develop competence.

How you communicate directly affects the perceptions others have of your compe- tence. Throughout this book, you will find an emphasis on two traits associated with competence: a focus on action and an emphasis on results.

A focus on action implies that you seize business opportunities. Meg Whitman em- phasized this action-oriented approach to work: “The way I usually put it is, the price of inaction is far greater than the cost of making a mistake. You do not have to be per- fect to be an effective leader, but you cannot be timid.” 18 She also described the eBay emphasis on results:

I don’t believe that all a company needs to do is declare that it has values and then say, “Trust us, we know what’s best.” To be a success, you must identify a goal with a measurable outcome, and you must hit that goal—every day, every month, every year. Trying is important. But trying is not the same as achieving success. . . . [Some] people expect to advance in their careers regardless of results and are surprised when it doesn’t happen. They feel entitled. Their attitude is: “Because I’m here, because I’m me, you owe me.” 19

In summary, you demonstrate competence by taking an active role in your business and by getting results. How you communicate your plan of action and the results of those actions will determine how others perceive your competence and your credibility.

The Role of Caring in Establishing Credibility Your colleagues, clients, and even your customers will trust you far more if they know you care about them. As Mahatma Gandhi once stated, “The moment there is suspi- cion about a person’s motives, everything he does becomes tainted.” This statement

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ESTABLISHING CREDIBILITY Chapter one 7

applies in nearly all business circumstances: Once an individual is perceived as un- concerned about the interests of others or disinterested in causes above and beyond him- or herself, others distrust such a person. In the business world, caring implies understanding the interests of others, cultivating a sense of community, and demon- strating accountability.

Understanding the Interests of Others Meg Whitman saw that the culture at eBay was committed to the best interests of buyers and sellers:

Connecting with people’s hopes and dreams is a dynamic I perceived in the eBay community. Both buyers and sellers so often loved eBay because it connected them to their aspirations—perhaps the desire of amassing a great collection, or the dream of financial stability from successfully building an online business. 20

Your ability to gain credibility strongly depends on your ability to show that you care for the needs of others. Furthermore, your ability to show you care puts you in a rare position as a business leader. After all, less than half (42 percent) of employees believe their managers care about them. Even worse, less than one-third (29 percent) of employees believe their managers care about whether they develop skills. 21

Effective communicators gain trust by connecting with others—that is, seeking to understand others’ needs, wants, opinions, feelings, and aspirations. Virtually every as- pect of communication you will focus on in this book relies on this other-orientation.

Cultivating a Sense of Community The most effective business leaders in today’s corporate environment have generally risen to their positions because of their sense of community and teamwork. Meredith Ashby and Stephen Miles recently interviewed hundreds of prominent and accom- plished business leaders to answer questions such as What are the burning issues for corporate leaders today? and How do companies identify, attract, develop, and retain the best and brightest people in the workplace? Here is what they learned from these CEOs:

Most defined their main responsibility as chief executive to be that of inspiring, influencing, setting the direction for, facilitating, coaching, mentoring, and developing their employees. The word “control” was rarely used; instead, they spoke emphatically about the importance of a strong team orientation. Their role was to identify and empower a team, not command it. Indeed, many of them characteristically used the term “we” rather than “I” in discussing success within the organization. Instead of thinking in terms of individual accomplishment, most tended to think in terms of what their management teams had achieved. 22

Throughout this textbook, you will see techniques for communicating your “we” and “you” orientation rather than a “me” orientation. Speaking about “our needs” or “your needs” as opposed to “my needs” engenders trust and helps you come up with solutions that achieve mutual benefit.

Demonstrating Accountability A sense of accountability implies an obligation to meet the needs and wants of others. It also involves an enlarged vision of those affected by your business activi- ties. It takes a stakeholder view that includes all groups in society affected by your business.

In a commencement speech to business students at UCLA, Robert Eckert, CEO of Mattel, spoke about trust and, in particular, the sense of accountability that is needed among business executives and managers. He concluded his speech this way:

You are the future leaders of business. And when it comes to trust, your leadership style affects those you are leading. . . . As you go to work, your top responsibility should be to

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8 Part one Introduction to Business Communication

build trust. To perform every day at the highest standards. Not just for yourself, but for your team, for your supervisor, for the consumer, for the company’s shareholders, for the rest of us in business. . . . It’s day one of the next chapter of your life, and I’m putting my trust in each of you. 23

Thus, a sense of accountability involves a feeling of responsibility to stakeholders and a duty to other employees and customers. By placing a rationale for account- ability in your communications, you will generate substantial trust and goodwill from others.

Honesty Ethical behavior

Exchanges information willingly Shared objectives

Respectfulness toward others Expertise

Positive attitude Motivation

Consideration of others Ability to do the job well

Communication skills Intelligence Experience

Connectedness Works for a reputable company

0% 20% 40% 60% 80%

77% 68%

63% 53%

49% 42%

40% 39%

37% 36% 36%

29% 23%

17% 12%

FIGURE 1.2

What Determines Trust in Individuals in the Workplace? For Collaboration on Work- place Projects Source: From Economist Intel- ligence Unit, The Role of Trust in Business Collaboration. Copyright © The Economist Newspaper Limited, London. Based on a survey of 453 business executives around the world who were considered expert collaborators.

The Role of Character in Establishing Credibility

Character refers to a reputation for staying true to commitments made to stakeholders and adhering to high moral and ethical values. Character has always been important in business relationships, especially long-term, collaborative relationships. It is becom- ing even more important—especially for leaders—in an increasingly open, transpar- ent, connected, and interdependent workplace. David Pottruck, former president and co-CEO of the Charles Schwab Corporation, explained it this way:

The twenty-first-century leader is surely different from the leaders of the last two decades. The Internet has placed real power in the hands of people around the world. It has increased the possibilities for millions to do the work that enlivens them. There will be little loyalty to people or to organizations that are not worthy. No longer do pension plans and benefits create chains that hold people in one spot. To create loyalty in such an environment, the new leader will understand how to create a compelling culture, one that will allow people to contribute their best. He or she will then communicate meaning and trustworthiness in every word and action. Culture, character, and communication are the cornerstones of today’s new leadership. 24

Character is central in creating trust. Consider the recent research, depicted in Figure 1.2 . 25 Business executives were asked what the most important determinants of trust in workplace projects were. Overwhelmingly, character-based traits—that is, honesty, ethical behavior, and willingness to exchange information—ranked at the top.

In the following sections, we focus on four topics closely related to character: busi- ness ethics, corporate and personal values, open and honest communication, and fair- ness in business communication.

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ESTABLISHING CREDIBILITY Chapter one 9

Business Ethics Ethics are “rules of conduct or moral principles that guide individual or group behavior.” 26 Business ethics are the commonly accepted beliefs and principles in the business community for acceptable behavior. At a minimum, business ethics involve adhering to laws; safeguarding confidential or proprietary information; avoiding con- flicts of interest and misuse of company assets; and refraining from accepting or pro- viding inappropriate gifts, gratuities, and entertainment. 27

As far as corporate communications, the dominant business ethic in recent years is transparency. Transparency involves sharing all relevant information with stakehold- ers. As defined by Transparency International, transparency “is a principle that allows those affected by administrative decisions, business transactions or charitable work to know not only the basic facts and figures but also the mechanisms and processes. It is the duty of civil servants, managers and trustees to act visibly, predictably and understandably.” 28

In recent years, perhaps in large part due to public scandals, employees of compa- nies in the United States have observed higher ethical behavior within their companies and generally view their upper managers as ethical. For example, in a recent Eth- ics Resource Center survey of 3,010 employees across the United States, 80 percent of employees said they were satisfied with the information they received from top management about what was going on in the company; 74 percent trusted that top management would keep its promises and commitments; and 89 percent stated that top management actively encouraged employees to do the right thing. Furthermore, 82 percent of employees believed that top managers would be punished and held ac- countable if they were caught violating the organization’s ethical standards. 29 For the foreseeable future, transparency is expected to remain the dominant business ethic related to communications.

You will soon be in leadership positions within your organization. You can cre- ate a transparent workplace by being accessible, acknowledging the concerns of others, and following through when you don’t have immediate answers. Trust- building behaviors include extending trust, sharing information, telling it straight, providing opportunities, admitting mistakes, and setting a good example by fol- lowing rules. 30

You likely will need to analyze ethical dilemmas in your business program, while training for your job, and once you are on the job. You probably recognize that “mak- ing the right choice” is not always obvious. In such situations, where the law and ethical principles do not provide a clear answer, transparency is key: Decision making needs to be open, documented, and based on the collective conscience of your work team and affected stakeholders.

Often employees fail to speak up when they observe potentially unethical behavior. Business professionals remain silent for four basic reasons: (1) They assume it’s stan- dard practice, (2) they rationalize that it’s not a big deal, (3) they say to themselves it’s not their responsibility, or (4) they want to be loyal.

Prepare now to speak up constructively when you observe unethical behavior. It’s part of your job. You can challenge rationalizations with questions such as these:

If this is standard, why is there a policy against it? If it is expected, are we comfortable being public about it? I may be new here, so I might not understand our policy clearly. But, shouldn’t

we . . .? 31 When you frame your concerns in terms of benefits to your team or organization, your colleagues and other contacts will often respond appropriately. Over the long run, you will be rewarded for having a reputation of speaking up when ethical dilem- mas arise. 32

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

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10 Part one Introduction to Business Communication

Corporate and Personal Values Corporate values are the stated and lived values of a company. The Society for Human Resource Management espouses corporate values as the essence of business ethics. It defines business ethics as “organizational values, guidelines, and codes,” and it emphasizes “behaving within those boundaries when faced with dilemmas in busi- ness or professional work.” 33

Most organizations have created a written code of conduct or code of ethics. Publicly traded companies are required by the Sarbanes-Oxley Act of 2002 to have a code of ethics available to all employees and to ensure that it is enacted. eBay’s culture of trust is embodied in its Code of Business Conduct (see Figure 1.3 ).

Aligning personal values —those values that individuals prioritize and adhere to— with corporate values is an important element of character. After all, if one is living corporate values that do not match one’s personal values, then there is a lack of integ- rity. Paul Polman, CEO of Unilever, was recently interviewed about the importance of corporate values:

One thing I’ve learned over the course of my career is that if your values—your personal values—are aligned with the company’s values, you’re probably going to be more successful in the long term than if they are not. Because if they aren’t, it requires you to be an actor when you go to work or to have a split personality.34

We do business according to the highest ethical and legal standards. This Code of Business Conduct highlights some of the laws and policies you need to know in order to meet that test.

Ever since Pierre Omidyar founded eBay, we’ve stayed true to some core values:

• We believe people are basically good. • We recognize and respect everyone as a unique individual. • We believe everyone has something to contribute. • We encourage people to treat others the way they want to be treated

themselves. • We believe that an honest, open environment can bring out the best in

people.

These principles support our basic purpose:

We are pioneering new communities around the world built on commerce, sustained by trust, and inspired by opportunity. These values and this purpose help make eBay a special company. And the Code you’re reading now helps us put them into practice. It’s not just a set of rules, but an intentionally broad statement of principles. We’ve written it in a way that’s meant to be easy to read. So please read it now, ask questions if you have them, and read it again and ask more questions down the line.

Of course, no code of conduct can cover every situation. All of us need to observe not just the letter, but also the spirit of this Code in all our dealings on behalf of the company.

We are an evolving company, and by our actions we continually shape our corporate culture. We want that culture to promote the reputation and reality of professional and ethical conduct. Please do everything you can to help us reach that goal.

— John Donahoe, President and CEO

FIGURE 1.3

eBay’s Code of Business Conduct Source: eBay’s Code of Business Conduct, http://investor . ebayinc .com/documentdisplay .cfm?DocumentID=649.

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ESTABLISHING CREDIBILITY Chapter one 11

Open and Honest Communication In Tamar Frankel’s excellent book on the role of honesty in American business culture, she chronicles the increasing abuses of honesty, including health care fraud, insurance fraud, check fraud, consumer fraud, identity theft, and student cheating, to name a few. She concludes her work with an appeal for more honesty:

The goal of honesty is not to reduce competitive ardor but to channel it in less destructive ways. Honesty encourages competition on the merits and prohibits competition by cheating. Honesty brings better quality of products and services and less shoddy products and fake services. If businesses do not compete on fraud, they can be more successful in gaining and retaining customers. 35

Frankel’s point about honesty at an institutional level also applies on a personal level. By staying honest in all situations and avoiding cutting corners in any man- ner, you allow yourself to perform based solely on merit. Over the long run, com- plete honesty not only forges your character, it helps you develop and maximize your competencies.

Nothing short of complete honesty is demanded in business for several reasons. First, the price of dishonesty on financial performance can be devastating. Over her corporate career, Meg Whitman became adept at identifying when executives were avoiding reality: “At some companies, board meetings are mainly a mind-numbing series of happy PowerPoints. From the agenda and the demeanor of the CEO, you would think that all is sweetness, light, and ice cream.” 36 Her comment points to three important issues. First, by avoiding open and honest communication of busi- ness problems, employees doom a business to poor financial performance. Second, dishonesty is among the primary reasons for lower employee morale. Nearly six in ten employees say that they’ve left an organization because of lack of trust—the key reasons being lack of communication and dishonesty. 37 Finally, dishonesty can be reason for dismissal. In some cases, dishonesty can destroy careers and even result in criminal charges.

Some business executives and managers view slight deviations from the truth in small matters as inconsequential. Often, they feel, these small lies are expressed with no ill will and without much impact on important business matters. Yet, experienced executives and management consultants have observed how damaging even minor dis- honesty can be. Drs. Dennis S. Reina and Michelle L. Reina focus on this point in their book Trust and Betrayal in the Workplace:

There was a time, many years ago, when we too assumed that what broke the delicate fiber of trust in relationships were large acts that had significant impact. However, our research and work over the last fifteen years have taught us differently. What gradually erodes trust and creates a climate of betrayal in our workplaces today are small, subtle acts that accumulate over time. When we don’t do what we say we will do, when we gossip about others behind their backs, when we renege on decisions we agreed to, when we hide our agenda and work it behind the scenes, and when we spin the truth rather than tell it, we break trust and damage relationships. 38

Today, most organizational cultures are moving to flatter, more open communica- tion structures. However, you will also find yourself in many situations where confi- dentiality is mandated. Companies often direct employees to maintain confidentiality about information that can harm profitability, productivity, and employees within the organization if it is disclosed. In some cases, confidentiality is required by legal con- siderations, such as laws regarding medical records, disclosure of insider information, or copyrights. In other cases, you may need to protect intellectual property. When Apple rolled out the iPhone, employees underwent a code of silence for months when they could not even talk about their work to family members. In fact, until the release of the iPhone, many Apple employees could not even speak about certain iPhone fea- tures to Apple employees in other divisions. 39

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12 Part one Introduction to Business Communication

Fairness in Business Communications Generally, others’ perceptions of your character—your unquestioned adherence to per- sonal and corporate values—are largely determined by your communications. More- over, your colleagues, clients, and customers will gauge your communications based on a judgment of how fair it is.

Thus, in all your communications, you should consider whether you are being fair to others. For routine communications, you make this calculation quickly. For important, less straightforward, and perhaps even controversial communications, you should spend a significant amount of time evaluating the best way to be fair. You might consider talking to your supervisor, peers, and other trusted individuals to ap- praise the situation. Meg Whitman explained this principle based on her experience at eBay:

Ultimately the character of a company, like the character of a person, is an accumulation of many, many moments when the choices are not necessarily clear and we make the best decisions we can. But over time the logic and reasoning that we use to make those decisions, the moral compass to follow in making those decisions, is the essence of our authentic self, our character. 40

One way to evaluate your communications is to use the FAIR test (see Figure 1.4 ). The FAIR test helps you examine how well you have provided the facts ; how well you have granted access to your motives, reasoning, and information; how well you have examined impacts on stakeholders; and how well you have shown respect. As you

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

FIGURE 1.4

The FAIR Test of Ethical Business Communication

Are Your Communications FAIR?

Facts (How factual is your communication?)

• Have you presented the facts correctly? • Have you presented all the relevant facts? • Have you presented any information that would be considered misleading? • Have you used the facts in a reasonable manner to arrive at your conclusions and

recommendations? Would your audience agree with your reasoning?

Access (How accessible or transparent are your motives, reasoning, and information?)

• Are your motives clear, or will others perceive that you have a hidden agenda? • Have you fully disclosed how you obtained the information and used it to make

your case? • Are you hiding any of the information or real reasons for making certain claims or

recommendations? • Have you given stakeholders the opportunity to provide input in the decision-making

process?

Impacts (How does your communication impact stakeholders?)

• Have you considered how your communication impacts all stakeholders? • Have you thought about how your communication will help or even hurt others? • How could you learn more about these impacts?

Respect (How respectful is your communication?)

• Have you prepared your communication to recognize the inherent dignity and self- worth of others?

• Would those with whom you are communicating consider your communication respectful?

• Would a neutral observer consider your communication respectful?

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ESTABLISHING CREDIBILITY Chapter one 13

respond to questions such as those posed in Figure 1.4 , you ensure that your commu- nications are fair to yourself and others.

High-Trust Relationships, Ease of Communication, and Improved Work Outcomes Establishing credibility allows you to communicate more easily and more influentially. Extensive research has shown that high-trust relationships lead to more efficient and superior work outcomes. 41 In terms of ease of communication, credibility leads to less resistance from others, increased willingness to cooperate, and less likelihood of miscommunication:

In low-trust work environments, people tend to assume the negative regarding others’ actions. In higher-trust work environments, people tend to give others the benefit of the doubt and assume the positive, until proven otherwise. 42

In high-trust relationships, since individuals willingly and freely give the benefit of the doubt, communication is simpler, easier, quicker, and more effective. 43 As Dr. Stephen R. Covey, among the most respected management writers of the past three decades, stated regarding trust:

It simply makes no difference how good the rhetoric is or even how good the intentions are; if there is little or no trust, there is no foundation for permanent success. . . . What we are communicates far more eloquently than anything we say or do. We all know it. There are people we trust absolutely because we know their character. Whether they’re eloquent or not, whether they have the human relations techniques or not, we trust them, and we work successfully with them. 44

The level of trust in working relationships strongly impacts work outcomes and finan- cial performance. In a recent survey of 453 executives across the globe, the executives were asked about recent collaborative projects. In projects where they had complete trust in a key individual, the projects were successful 92 percent of the time. By contrast, in projects where they had little trust, the projects were successful just 45 percent of the time. 45 These executives also described the impact of various breaches of trust on their projects. As you can see from Figure 1.5 , in 88 percent of the cases, illegal acts both de- stroyed trust and halted the project. In only 7 percent of the projects involving illegal acts did the project continue, but even in these cases, trust was damaged, and the possibility of assigning new projects for the team was doubtful. Even a missed deadline (the lowest bar on the chart) had an impact on trust and current and future projects. Generally, issues of character (i.e., purposeful misleading or misrepresentation) had more serious impacts than issues of competence (i.e., accidental misstep, missed deadline).

An experience at eBay, related by Meg Whitman, also illustrates the relationship between trust and long-term workplace outcomes. In June 1999, eBay faced a daunting dilemma. The company was experiencing a system outage that had lasted 22 hours. Top managers discussed how to deal with the service agreements with eBay sellers. By contract, eBay was obligated to pay refunds to all sellers whose auctions were scheduled to close during the system downtime. However, top managers also recognized that the lengthy outage had severely disrupted other auctions as well. If eBay refunded all eBay sellers, not just those it was legally obligated to refund, it would cost an additional $5 million.

“What is the right thing to do?” Whitman asked her managers, and then she left them to discuss their course of action. The team quickly decided that they would re- fund all eBay sellers who had active auctions. Furthermore, they immediately estab- lished a policy that eBay sellers would be refunded the listing price for any auction that was disrupted for more than two hours. Meg Whitman explained her perspective on the experience:

Now, this is a nice story, but it is not a story about the importance of always making the customer happy and worrying about the bottom line later. This . . . is about success

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14 Part one Introduction to Business Communication

in both business and life. The reason I wanted to share this story is that while eBay’s stock price was unstable during this crisis, Wall Street did not panic at the prospect of us missing our earnings targets as a result of the refund. Our users did not abandon us. Instead, . . . we forged an even stronger bond of trust with our users all over the world, and a better working relationship with our technology partners. We vowed to fix our computer system, and in short order we did that, too. I believe all this happened because we were a company that had made a clear and deliberate choice to behave according to a set of values. 46

FIGURE 1.5

Consequences of Breaches in Trust For Collaboration on Workplace Projects

Illegal act (e.g., insider trading, embezzlement) 88%

65%

63%

54%

47%

34%

34% 48%

51%

53%15%

11% 34%

31%5%

23%

39%

27%

28%

7%

Deliberately misleading to benefit themselves

Sharing of proprietary information beyond the organization

Deliberately misleading to cover mistakes

Misrepresentation to benefit themselves

Misrepresentation to cover mistakes

Sharing of proprietary information within the organization

Failure to produce as promised

Accidental misstep

A missed deadline

Trust destroyed, project halted Trust damaged, project continues, but new projects doubtful

0% 20% 40% 60% 80% 100%

How You Can Improve Your Communication Skills

This textbook is designed to help you improve your skills in a variety of professional settings so that you can become a credible and trusted communicator. Overall, you may feel that you excel at some communication skills but not others. For example, you may feel more confident in your presentation skills than your writing skills, or vice versa. Regardless of your present skill level, this textbook gives you opportuni- ties to deliberately and consciously elevate your communication skill set. It also gives you tools to continue developing your communication abilities over the course of your career.

Figure 1.6 provides an overview of the topics we will cover in this textbook. Chap- ter 1 focused on the credibility of the communicator, since at the core of all communi- cation is the issue of trust (explored further in the Communication Q&A with Melvin Washington on page 16). The techniques and skills covered in the rest of this textbook are of little use if you are not considered credible.

Once you have established yourself as a credible communicator, the techniques and skills in other chapters can greatly increase your communication effectiveness and career opportunities. Thus, later chapters focus on core principles, such as the

Source: From Economist Intelligence Unit, The Role of Trust in Business Collaboration. Copyright © The Economist Newspaper Limited, London. Based on a survey of 453 business executives around the world who were considered expert collaborators.

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ESTABLISHING CREDIBILITY Chapter one 15

interpersonal communication process, emotional intelligence, active listening, team- work, and intercultural communication (the middle ring in Figure 1.6 ). These chapters lay out principles that also are important for written communication. For example, we discuss the listening-centered approach to communication, which is critical to effec- tive writing.

You will also find chapters about planning and preparing written messages: routine messages, persuasive messages, email messages, bad-news messages, and public rela- tions messages (the outer ring of the figure). And you will learn about conducting busi- ness research, writing business reports, and delivering presentations. You will work at developing résumés and preparing for job interviews.

As you read this book, you will be invited often to reflect about what you are reading. Try to apply what you read to your current challenges and your past ex- periences. Envision what you want to accomplish in your career. Imagine yourself communicating in business situations. Mentally evaluate your strengths and weak- nesses. Turn off your phone and television. Reflect. You will be rewarded often during your career for staying aware of your communication skills and striving for consistent progress. 47

FIGURE 1.6

Overview of Book

Principles and Types of Business Messages

Principles of Interpersonal Communication

Credibility Competence

Caring Character

Chs. 5 & 6 Planning, Style, and Design for Business

Messages

Ch. 7 Electronic

Messages and Social Media

Ch. 8 Routine

Messages

Ch. 9 Persuasive Messages

Ch. 10 Bad-News Messages

Ch. 11 Public Relations

and Crisis Communication

Chs. 12 & 13 Reports and Proposals

Chs. 14 & 15 Presentations,

Public Speaking Ch. 2

Interpersonal Communication

Process

Ch. 4 Intercultural

Communication

Ch. 3 Listening, Teamwork,

Difficult Conversations

Ch. 16 Job Applications and Interviews

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16 Part one Introduction to Business Communication

Commu nicatio

n Q&A

Melvin Washington has worked in senior manage- ment positions for over 20 years at Anheuser-Busch and ARA Services. He has supervised hundreds of employees in opera- tions and supply logistics roles. He currently is a professor of marketing at Howard University.

CONVERSATIONS WITH CURRENT BUSINESS PROFESSIONALS

Pete Cardon: How important is trust in the workplace? Melvin Washington: When people trust you, they listen and respond. It really does not matter whether the communication is internal or external. When you have the reputation of being an honest and trustworthy manager, people will listen. They may not agree with every suggestion or policy you bring to the table, but they will respond with objectivity and honesty.

A business environment is analogous to a team sport. Each team member is trusted to do his or her part. At Anheuser-Busch, I was responsible for forecasting the sales of hundreds of products for an array of market segments. The distributorships trusted me to provide the correct information in order to provide an adequate supply of product to each region. Simi- larly, I depended on and trusted the sales team to provide me with accurate information, enabling me to forecast future sales correctly. Reliable information was the key to success. In other words, we depended on and, most of all, trusted each other to accomplish our corporate goals.

One aspect of trust is confidentiality. If a trust is betrayed, it may never be regained. It does not matter whether you’re the best employee the company has ever hired, if you can’t be trusted, you can’t be tolerated. A manager at one of the past distributorships where I was employed was an extremely competent employee. She was what you would call a “go-to per- son.” Her performance reviews were among the best in the company. However, she couldn’t be trusted. She did not know how to keep matters confidential and constantly repeated informa- tion that was told to her in private. Hence, many of the employees ignored her, and it became increasingly difficult for her to function effectively on the job. Eventually, she became incompat- ible within the company climate and resigned from the job.

PC: How important is trust when working with customers and clients? MW: In the business world, customers and clients are our lifeblood, and trust holds our business relationships together. Customers trust us to be competent and to look out for their interests. As business communicators, we must be careful to build and maintain that trust. In fact, if customers and clients do not trust us, many times they will not be honest with us.

During my tenure as a sales representative, I had a prospective customer who declined to speak with me. He did not carry any of our products in his establishment even though his store was in a market where the sale of our products had skyrocketed. After several attempts, how- ever, he finally consented to a meeting. When I asked him why he did not want to do business with our company, he told me one of our past sales representatives had been untrustworthy. Apparently, this representative had promised him some incentives for promoting our product, which he never received. The merchant was willing to lose money by not selling our product because of a broken trust years before.

PC: How important is credibility for leaders? MW: Credibility has to do with followers believing in their leaders. It is about leaders being trustworthy and following through on their promises. Also, employees are more willing to follow a leader who exhibits genuine care for them. Many managers are perceived as credible dur- ing the infancy of business relationships, but as the relationships continue, their honesty comes into question.

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Chapter Takeaway for Establishing Credibility LO 1.1. Explain the importance of establishing credibility for business communications. ( pp. 3–6 )

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

LO 1.2. Describe how competence, caring, and character affect your credibility as a communicator. ( pp. 6–8 )

At the heart of effective business communication is credibility. It is a refl ection of your competence, caring, and character.

LO 1.3. Define and explain business ethics, corporate values, and personal values. ( pp. 9–11 )

Business ethics are the commonly accepted beliefs and principles in the business community for acceptable behavior. Corporate values are those values that are the stated and lived values of a company. They are often provided in a formal code of conduct. Personal values are those values prioritized and adhered to by individuals.

LO 1.4. Explain the FAIR approach to ethical business communications. ( pp. 000–000 )

See example questions for the FAIR test in Figure 1.4 .

You often operate from a deficit of trust when conducting business. In the post-trust era, skepticism is high. By establishing credibility, your colleagues, clients, customers, and other contacts will respond far more favorably to your communications.

FAIR TEST

Facts: How factual is your communication? Access: How accessible or transparent are your motives, reasoning, and information? Impacts: How does your communication impact stakeholders? Respect: How respectful is your communication?

Competence relates to your proven set of skills and knowl- edge to accomplish business tasks. Others will judge you by your track record of success.

Caring shows that you will act in the interests of others, cultivate a sense of community, and demonstrate accountability to others.

Character shows that you will adhere to high personal, corporate, and business values. You can be counted on to do the right thing.

LO 1.4. Explain the FAIR approach to ethical business communications. ( pp. 12–16 )

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18 Part one Introduction to Business Communication

business ethics (p. 9) caring (p. 7) character (p. 8) code of conduct (p. 10)

competence (p. 6) corporate values (p. 10) credibility (p. 3) ethics (p. 9)

personal values (p. 10) post-trust era (p. 5) stakeholder (p. 7) transparency (p. 9)

ll

Key Terms

Note : Check with your instructor to see how she or he would like you to approach these exercises. Sometimes, you will work indi- vidually; other times, you’ll work in teams.

1.1 Chapter Review Questions (LO 1.1, LO 1.2, LO 1.3, LO 1.4)

Answer each of the following questions with one to three paragraphs:

A. Explain the importance of establishing credibility in business communications.

B. Explain the three components of credibility: competence, car- ing, and character. How do they interrelate?

C. Define and explain business ethics, corporate values, and the relationship between them.

D. Explain the FAIR approach to evaluating ethical business communications.

E. Describe how credibility impacts communication efficiency and effectiveness.

1.2 Communication Q&A (LO 1.1, LO 1.2, LO 1.3, LO 1.4)

Read the Communication Q&A with Melvin Washington, and write a one- or two-paragraph response to each of the following questions:

A. What points does Melvin Washington make about the impact of competence in establishing credibility?

B. What points does he make about the impact of caring in es- tablishing credibility?

C. What points does he make about the impact of character in establishing credibility?

D. Which of his comments or experiences do you view as par- ticularly insightful or helpful? Why that one?

1.3 Character and Rules (LO 1.2)

As a former chairman of the United States Federal Reserve once said, “Rules cannot take the place of character.” In two to three paragraphs, explain what you think he meant by this statement.

1.4 Transparency (LO 1.3) As Drs. Dennis S. Reina and Michelle L. Reina explained in their book Trust and Betrayal in the Workplace, “Some leaders assume that . . . they are obligated to tell employees only what they specifi- cally need to do their job. This couldn’t be further from the truth.” 48 In three to five paragraphs, explain the meaning of this statement. Why might leaders provide information about their activities and decision making, even when employees may not be directly affected?

1.5 Gather Information from Websites about Ethics in Business (LO 1.3)

Read at least three blogs or articles about trust and/or ethics from a reputable organization or other source. Choose an issue that interests you, and in four to five paragraphs, summarize key findings related to that issue. Consider the following options for gathering information:

• Ethics Resource Center (www.ethics.org) • Ethics/Sustainability Resource Center for the Association to