Thursday, March 22, 2018

Crisis and Everyday Ethics

Ethical dilemmas are often posed in the scenario of a crisis situation.  If there are only so many seats on a lifeboat, or so much space in a bomb shelter, whom do you take in and whom do you turn away? It is presumed that the choices people make in a difficult situation reveal their true character.  

The same is said of companies who face a crisis, and people watch to see “who comes first?” as a way of gauging the company’s ethical values and true character.   Do the managers set up golden parachutes from themselves?   Do they seek to protect profits?   Or do they take care of their customers and employees?

There is a strong distaste for firms that put profits first, and the widespread perception that when companies are faced with a product recall, 93% of US adults believe that this is an opportunity for the firm to “show their true colors and demonstrate whether they care about customers.”   Particularly in industries where human life is at stake, people expect firms to put profits aside and do the right thing.

Unfortunately, the traditional approach of companies is first to attempt to cover up the incident so that no-one will ever realize that a mistake was made.   If it cannot be hidden, to maintain a stiff upper lip and show no sign of panic so that people think that they are well in control of the situation.   This sort of cold reserve that causes a leader to be regarded as cold and unconcerned, or even ignorant or in denial, in non-emergency situations.

There is some merit to the notion that people will recall companies that have to issue defects as being incompetent, but survey results do not bear that out.  One survey reported that more than 90% of respondents agreed that “even the best run companies can make mistakes that can lead to product recalls.”    As such, only 10% of people assume that a company that made the mistake is incompetent – and it is presumed the majority seek competence not in the form of perfection, but in being effective in responding when mistakes occur.

From another perspective, this can be interpreted to imply that 10% of the market will judge a company by its behavior in a crisis situation - but 90% of the market will see behavior in a crisis as an exception, and will be trusting and forgiving of a brand that mishandles a crisis, but maintains a high standard of ethics in its ordinary (non-crisis) operation.

In the end, crisis and non-crisis behavior are not two entirely separate things.    When it comes to individuals, it's found that their behavior in a crisis situation reflects the values and behaviors that person practices in everyday life: there is very seldom an instance of crisis in which a person's actions  are diametrically different than their everyday character - and likely the same is true of firms as well.

No comments:

Post a Comment