In the wake of corporate scandals of, for example, Enron, and WorldCom in the US, as well as Skandia in Sweden, the issues of ethics and trust in brands have become increasingly discussed. The globalization of capital, labor, products and images, followed by larger distances and lower transparency, increases the importance of companies’ showing their ethical and moral behavior systematically. Today it is not enough to care about employees or about the effects of corporate activities on the environment (Jackson, 1996); ethics, corporate social responsibility (CSR) and trust in companies are asked for, by consumers, employees, investors, and other stakeholders alike. Many companies place issues of ethical and social responsibility within the marketing area, because the brand’s reputation has to be protected and enhanced. Consequently, there is a need to formulate strategies for managing ethics and trust in the corporate brand.
The aim here is to explore CSR, brand trust and reputation from a management perspective, in order to give recommendations on how to build and sustain brand trust and corporate ethics through brand management and marketing communications. What do top managers, with responsibility for the marketing communication strategies, say about their ethical commitment, brand reputation and trust? Are they building an image of trustworthiness, or genuinely trustworthy behavior?
In this paper, two empirical research studies, in total consisting of 20 qualitative interviews with CEOs and managers of 14 large corporations with well-known brands in Sweden. For example, Coca-Cola, McDonald’s and IKEA are represented.
An interpretive and qualitative approach was used in the two empirical studies (Alvesson and Sköldberg, 2000; Hackley, 2003; Marsh and Stoker, 2002; Thompson, 1997). The informants were CEOs or top managers responsible for marketing and communication strategies. The choice of informants is inspired by Schroeder (2002), whom suggests that the initiative for ethical business cannot come from beneath, but has to be driven by top management. The interviews with managers were conducted at the Swedish corporate headquarters and lasted between 60 and 90 minutes. The meanings interpreted from the depth interviews with corporate managers will be communicated and complemented with examples, such as quotes from the interview material (Hackley, 2003).
Aasland (2004: 4) suggests that it is difficult to apply ethics, understood as putting the other above oneself, in a business context, because the only strategy for ethics in business is to promote an image of an ethical company, rather than actually acting responsibly (Roberts, 2001). Further, closing the gap between theories on CSR (which are more empirically and descriptively focused, with increased long-term profits as main motivator) and normative ethical theory is a challenge (Garriga and Melé, 2004; Swanson, 1999). However, Juholin’s (2004: 22) perspective on CSR theories overlaps the two theories somewhat, since it “includes the openness or transparency of companies as well as the will and expectations of their stakeholders”. Consequently, Juholin (2004) suggests that today companies function better, when business aims are coordinated with outcomes for all stakeholders; this includes the importance of being proactive in the company’s social responsibility work, and not merely abide to regulations and calculated stakeholder responses in order to serve self-interest.
Farrell and Cobbin (2000: 6) suggest that values and judgments play a determinate role in the marketing of ethical decisions. The values and principles held by individuals in organizations and stakeholders color the actions taken by companies. Moreover, norms and values of top managers tend to influence the ethical considerations made by the organization (ibid; Donaldson, 2000; Schroeder, 2002). Further, more and more people have to take responsibility at work for decisions involving moral problems. “Ethical problems are not a matter of costs, image or job contentment, they are a matter of what is right and wrong” (Brytting and de Geer, 1992: 112).
In order for brands to have stakeholders’ trust, cultivating ethics and a personal element to the brand are useful (Delgado-Ballester, 2004). Influential definitions of trust come from sociology, political science, and philosophy. Feminist philosopher, Annette Baier defines trust as “reliance on another’s good will...” (1986: 234). One advantage of this definition of trust is that it holds the possibility of trust between parties in a relationship that is unequal and where at least one party does not have complete knowledge of the other’s personality and psychological motive for her/his actions. Within marketing, research on trust has often focused on the problems of trust in retailing over the Internet (Trifts and Häubl, 2003) or on the reflection of quality in pricing (Hjort-Andersen, 1984; Kaufman et al., 1991). However, in this paper we will focus on the personal relationships qualities of trust, and its application in brand - stakeholder interaction.
Fombrun (1996) has suggested that a brand can recover faster from a crisis if it has a high level of stakeholder trust before the crisis and if brand management makes efforts to address stakeholders’ concern in terms of the brand’s trustworthiness during, and after, the crisis.
Whereas trust is long-term, reputation (i.e. the brand’s image of trustworthiness) is a more short-term guarantee of quality and trustworthiness (Holt 2003). However, de Chernatony (1999) suggests that brand managers should monitor reputation rather than brand image (i.e. consumers’ view of what the brand values are). In Fombrun et al.’s view (2000: 87), a corporate reputation is a reflection of the performance of a company “that crystallizes the firm’s ability to deliver valued outcomes to its stakeholders”. Further, it has been argued that “brands serve as containers of reputation.” (Holt, 2003: 5).
Through an analysis of the empirical data and a conceptual exploration of business ethics, CSR, trust and reputation, we will contribute with insights on trust and ethics in marketing, and give recommendations for management. This kind of work on business ethics within marketing can add important insights on how brand trust and ethics can be managed and systematically shown towards stakeholders.
Ethics, Trust, Management, Brands, Reputation, Corporate Social Responsibility, Qualitative research
The European Business Ethics Network-UK Conference (EBEN UK), Cambridge: Cambridge University, April 10-12, 2006.