RMIT UNIVERSITY VIETNAMCOMM2384 CLIENT MANAGEMENT

TRUST:CLIENTS VS. AGENCIES

Group members:Tran Nguyen Ly (s3309992)

Nguyen Duc Hanh (s3312619)Nguyen Quang Tan (s3324430)

Table of Contents

• TRUST: The Definition

• The Eight Enemies of Trust Case Study 1: Bankers Trust

• Recommendation for Leaders Case Study 2: Severn Trent

• Ethics of confidentiality Scenario

• Conclusion

• References

But first, let’s see how good your memory really is..!! :evil laugh:

3. Prospect/Contact

1. Acquaintance/Customer

6. Expert for Hire

2. Steady Supplier/Supporter

5. Trusted Partner

4. Advisor/Advocate

Adapted from: Payne, Christopher & Peck 1995

We know you can do it..!! =]]

3. Prospect/Contact

1. Acquaintance/Customer

6. Expert for Hire

2. Steady Supplier/Supporter

5. Trusted Partner

4. Advisor/Advocate

Adapted from: Payne, Christopher & Peck 1995

About ‘TRUST’

• Trust is ‘an aspect of a relationship’ (Shoorman et al 2007), ‘a wiliness to rely on an exchange partner in whom one has confidence.’ (Moorman et al. 1992)

• There are 3 kinds of TRUST in workplace:

Trust within organization

Trust between organizations (clients) & organizations (agencies)

Trust between organizations & customers

Is building trust within organizations more

complicated than building trust between clients and

agencies?

Galford and Dapreau’s answer is YES, because:

• The flow communication,

• Goals,

• Ability to solve problems,

• Ability to end the relationship.

(Galford R & Dapreau AS 2003)

The Eight Enemies of Trust

• Inconsistent Messages

• Inconsistent Standards

• Misplaced Benevolence

• False Feedback

• Failure to Trust Others

• Elephants in the Parlor

• Rumors in a Vacuum

• Consistent Corporate Underperformance(Galford & Drapeau 2003)

Case Study 1: Bankers Trust

• Bankers Trust is an American banking organization which used to be one of the leading financial Institutions.

• In 1994, the bank was accused of misleading contracts which cause financial loss to their clients (Federal Paper Board Company, Gibson Greetings, Air Products and Chemicals and Procter & Gamble)

• In addition, BT bankers were caught on tape remarking that their clients would not be able to understand what they were doing.

BT suffered irreparable reputational damage and had to pay $288 million for out of court settlement.

“The issue here is Bankers Trust's selling practices.”

(Edwin L. Artzt, P&G's chairman 1994)

Case Study 1: Bankers Trust

How did they lost trust..?!

• BT were not experts of derivatives but they still took speculative positions to make money. Inconsistent Messages

• After the accusation, BT made their clients enter into other contracts in anticipation of recovering money which cost them even more. Consistent Corporate Underperformance

So what should leaders do when trust is low..?!

• Play win-win• Keep it simple and consistent • Listen hard, talk straight• To give is to receive

(Reichheld 2001)

• “Before you tell clients or colleagues what you think, tell them what you know.”

(Solomon 2006, p. 107)• Ethics of confidentiality

Case Study 2: Severn Trent

• Severn Trent Water is a water company regulated by Ofwat which is responsible for economic regulation of the privatised water and sewerage industry in England and Wales.

• In 2008, STW was pleaded guilty for providing false information to Ofwat regarding its operational performance data over a five-year period.

“A sustained and successful campaign of dishonesty.”

(Dietz & Gillespie 2012)

The intervention:

• Despite Ofwat’s permission to raise water bills, STW offered to refund every household, reducing their next two years' revenue. ensure Ofwat the company has not profited in any

way. to give is to receive

• STW willingly took the £35.8m fine by Ofwat. admit the mistake Ofwat’s get the lost turnover while STW’s image is

no longer worsen. win-win situation

Case Study 2: Severn Trent

The evaluation:

• Ofwat agreed to conclude the trial with a further £2m fine (reduced from £4m which could have been unlimited) and renew their relationship with STW.

• Severn Trent won ‘Utility of the Year’ for significantly improved performance relative to its peers in 2009.

Case Study 2: Severn Trent

Ethics in Confidentiality

• “...to breach confidentiality is to break a promise…”

(Clark C 2006)

• “A member in public practice shall not disclose any confidential client information without specific consent of the client.”

(Balog I 2011)

Once upon a time…

A true story of Hanh Nguyen from Scarlet Communications..!!

Conclusion

• There are four enemies in the total eight that could potentially damage trust between agencies and clients.

• From the case studies, you should flexible when building trust.

• Confidentiality is a must in the code of ethics.

ReferencesBalog, I 2011, ‘The Ethics of Confidentiality’, Pennsylvania CPA Journal, Summer.

Clark, C 2006, ‘Against Confidentiality? – Privacy, Safety and the Public Good| in Professional Communications’, Journal of Social Work, Vol. 6, no. 2, pp. 117-136.

Dietz, G & Gillespie, N 2012, The Recovery of Trust: Case Studies of organisational failures and trust repair, Institute of Business Ethics, London, UK.

Galford, R & Drapeau, A S 2003, ‘The Enemies of Trust’, Havard Business Review, 01 Feb, pp. 89-95.

Grayson, K & Ambler, T 1999, ‘The Dark Side of Long-Term Relationships in Marketing Service’, Journal of Marketing Research, vol. 36, no. 1, pp.132-141.

Khatkale, S nd, ‘A Case Study on Bankers’ Trust: How they Lost Trust’, ICFAI Business school, Pune, India.

Moorman, C, Zaltman, G & Deshpande, R 1992, ‘Relationships Between Providers and Users of Market Research: The Dynamics of Trust Within and Between Organizations’, Journal of Marketing Research, vol. 29, August, pp. 314-328.

Payne, A, Christopher, M & Peck, H 1995, Relationship Marketing for Competitive Advantage: Winning and Keeping Customers, Butterworth-Heinemann, US.

Reichheld, FF 2001, Loyalty Rules! How Today’s Leaders Build Lasting Relationships, Harvard Business School Press, US.

Shoorman, F D, Mayer, R C, Davis, J H 2007, ‘An intergrative model of organizational trust: Past, Present, and Future’, Academy of Management Review, vol 32, no. 2, pp. 344-354.

Solomon, R 2006, The Art of Client Service, Kaplan Publishing, New York, US.