Leadership, Trustworthiness, and Ethical Stewardship - Building a Better Company Culture

The problem to be investigated is the relationship between leadership, ethical stewardship and trustworthiness in corporate organizations. Understanding the relationship between these three elements is central to the understanding of emerging trends in organizational culture and stakeholder need paradigms in the global market. The relationship that seems to be present is one that is based on the needs of stakeholders to be able to expect specific things from the company so that they can develop a stable reliance on that company (Kantsperger & Kunz, 2010; Castaldo, 2007, p. 57). This indicates that leadership of a company needs to ensure that they develop an organizational culture that uses ethical stewardship to develop a sense of corporate trustworthiness among its various stakeholders so that it can enhance its sustainability in a highly competitive market (Caldwell, Hayes & Long, 2010).

Trustworthiness

The concept of trustworthiness in corporate relationships is one that has a solid theoretical basis and it is a concept that is supported by a number of theorists and researchers. Individuals such as Covey and Paine suggest that in order to establish a sustainable corporation, that long-term trustworthiness is essential (Coldwell, Hayes & Long, 2010). This need to establish trustworthiness is logical as trust is an essential component of any social relationship, as it acts as a stabilization factor (Castaldo, 2007, p. 57). A social relationship that has trust as a foundational basis has the ability to initiate both ad hoc and contractual interactions quickly and easily. This is because each person understands what is expected of them and what they can expect from their partner (Coldwell, Hayes & Long, 2010). The trust reinforces this expectation and it enhances the fluidity of exchanges between the partners. A social relationship that is without trust, on the other hand, will usually be plagued with commitment and other exchange problems that impede the development of sustainable exchanges between partners.

The sustainable exchange problems for companies that have executives that have failed to establish trustworthiness within their organization can be illustrated by the effects of the decline of the morality of corporate culture in modern society. For example, the unethical behaviors of executives from companies like ENRON have led to multiple company collapses that not only financially ruined employee and investor stakeholders, but that have also led to a decrease in overall industry confidence as well (Li, 2010). This example demonstrates how the failure of employees in a few select companies within a specific industry to act trustworthy can impact an entire economic system.

Stakeholders

In order to be effective the application of trustworthiness by corporate executives and employees has to be systemic. This means that all stakeholders have to be confident in the company's overall trustworthiness in order for the full benefits of trustworthiness to be reaped (Caldwell, Hayes & Long, 2010). The first stakeholders that company managers need to establish a sense of trust with are employees. An employee's job satisfaction and company loyalty is greatly influenced by their perception of the trustworthiness of the organization (Caldwell, Hayes & Long, 2010). Their need to feel as if their employer is acting ethically and responsibly is essential to their confidence in the company and to their willingness to dedicate their loyalty to the company (Caldwell, Hayes & Long, 2010). When employees feel that their company is trustworthy then they will be more productive and loyal to the company, however, when trust is in question then company loyalty and employee productivity will both suffer costing the company time and money.

The second key stakeholder that needs a sense of trust when working with a company is the customer. For customers there are two components of trust that need to be established. The first component is the "belief or expectancy about specific characteristics" of the company (Kantsperger & Kunz, 2010). For example, the customer may have an expectancy that quality products will be delivered when promised. In order for this element of trust to be developed the company will need to consistently deliver to their customers quality products at specified intervals. Once the expectancy element of trust has been developed the next step is for the customer to reciprocate trustworthiness by consistently buying from the company (Kantsperger & Kuntz, 2010). This establishes expectancy on the side of company management.

Corporate Culture

The importance of trust in relationships that corporation leaders have with stakeholders has been well established. Most companies operating in modern economies understand that being trustworthy is important for their sustainability; however, problems develop when this understanding is not integrated into the company's organizational culture (Verhexen, 2010). As a result of this failure, company leaders and employees either do not understand the importance of trustworthiness to company sustainability or they do not share the value of trustworthiness, which can lead to ethical and professional breaches that weaken the company.

In order to integrate trustworthiness into corporate culture it is essential to develop a professional philosophy of ethical stewardship. Ethical stewardship can be defined as a "morally established duty and a fiduciary obligation" (Caldwell, Hayes & Long, 2010). It can be evolved as a simple mission statement that clearly defines the dedication that the company's employees need to have to ethical and moral behavior, or it can be defined in a fully developed ethical stewardship policy that clearly outlines what ethical and moral responsibilities the company's leaders and employees have in terms of customer relationships, professional performance and social services.

The purpose of integrating ethical stewardship into a company's culture is to ensure that it is a value that is shared and supported by all levels of a company, and not just specific individuals within the company (Alvesson, 2002). The results produced by the use of an ethical stewardship program in a company has the potential to enhance the sustainability of an organization by building trustworthiness into the culture of the organization; however, if company leaders are not actively managing and promoting their ethical stewardship program, or if they fail to demonstrate the concepts of this program through their own actions, then the program will fail to provide the company with any sustainable benefits (Verhezen, 2010). This is why it is essential for company leaders to practice what they preach if they expect measurable results.

Linking Leadership, Trustworthiness and Ethical Stewardship

I believe that there is an interdependent relationship between leadership, trustworthiness and ethical stewardship. The primary structure of the relationship between these elements is that trustworthiness is essential to stabilize the relationships between company leadership and company stakeholders. In order to develop trustworthiness ethical stewardship programs need to be developed and integrated into the company's organizational culture by company leaders. Finally, company leaders have to manage the ethical stewardship program by promoting the principles that are outlined in the ethical stewardship program and by demonstrating the principles through their own actions.

In order for the relationship between leadership, trustworthiness and ethical stewardship to successfully contribute to the sustainability of an organization, every element has to be fully developed and each element has to contribute to the support of the other two elements. For example, leaders need to support ethical stewardship in order to develop a sense of trustworthiness between the stakeholders and the company, the ethical stewardship program has to be fully developed and integrated into the culture in order for company employees to understand what is expected of them by the company leaders and what they can expect from the company leaders, finally, trustworthy relationships need to be established and supported by all stakeholders including company leaders, employees and customers in order to stabilize the balance of power involved in normal business transactions. A failure at any point in this relationship, i.e. leadership, trustworthiness or ethical stewardship, will lead to a collapse of the stability of the interdependent relationships and a collapse of the sustainability of the company.

Conclusion

Sustainable corporations depend upon the stability of the relationships that the company leaders have with employees and other stakeholders. This stability can only be achieved through the development of trust between stakeholders and the company's leaders. The establishment of trust, however, is a two way street and it has to be reciprocated by the actions of the stakeholders. In order to reap the sustainability and stability benefits offered by trustworthiness in business relationships, it is essential that company leaders utilize ethical stewardship as an organizational culture value. If this is done successfully then employees at every level of the organization will recognize the importance of trustworthiness in their professional behaviors and relationships, and they will adopt this value into their own personal code of professional ethics. As a result, the company will be able to recognize the competitive advantages offered by stable trade relationships.

References

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Castaldo, S. (2007). Trust in market relationships. Northampton, MA: Edward Elgar

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Kantsperger, R. & Kunz, W.H. (2010). Consumer trust in service companies: A multiple

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Li, Y. (2010, Oct.) The case analysis of the scandal of ENRON. International Journal of

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Verhezen, P. (2010, Oct.) Giving voice in a culture of silence. From a culture of compliance to

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