Cebu Roosevelt Memorial Colleges

San. Vicente St., Bogo City, Cebu

ARTICLE EVALUATION
of
What Does Your Business Stand For?
Why Building Trust Starts with Purpose

In partial fulfillment of the Requirements of the Subject

Accounting for Research Methods

Presented by:

URSAL, REDGIE MARK

DESUYO, ELMARIE V.
YOCTE, JENNY ROSE M.

Presented to:

RAYMUND COMETA, CPA

Instructor

Date of Submission
May 21, 2022
 What Does Your Business Stand For? Why Building Trust Starts with Purpose

26 APR 2022| by Dr. Ranjay Gulati

INTRODUCTION

Trust is at the heart of any good relationship—whether business or social. Building trust
does not happen overnight; it takes considerable effort and time. And it can be destroyed in an
instant. Trust and relationships are essential for conducting business that benefits both you and
the person with whom you have formed a connection. The degree of trust is a more important
factor in determining success because lack of trust is the most expensive factor for businesses.
Creating trust is only one part of the equation; the other is nurturing and strengthening it.
Organizations must first recognize that trust is a fragile commodity that must be nurtured over
time. The currency of business is trust and relationships, not money. For an increasing number of
businesses and their employees, the pursuit of profit is no longer enough. Organizations should
have a clear sense of purpose because this is where we can start to build trust and it can improve
performance and engagement by embracing a purpose that resonates employees.

The link between purpose and trust is paramount. Purpose-driven companies generate
more revenue, have more engaged employees and more loyal customers, and excel at innovation
and transformational change. Purpose goes from being a slogan to a set of lived principles.
Leaders must state their values clearly and then take strong action to support those beliefs. If
leadership has trust in the team, they can grant autonomy to team members. Leaders should
explicitly communicate confidence in their employees, enshrining trust as one of their
company’s core values. Leaders believed that allowing people to trust them increased employee
trust in the organization. "To win trust, you must provide trust," Dave Gilboa explains, "Trust is
a two-way street." By tapping into their purpose, leaders can help their organizations embody
the values and principles they espouse says Ranjay Gulati in his book entitled Deep Purpose:
The Heart and Soul of High-Performance Companies.
 This relationship between trust and autonomy was considerably heightened by purpose.
Purpose, according to scholars, improves businesses by encouraging employees to trust the
organization more. Purpose, according to some, creates trust inside organizations by clarifying
decision-making and increasing trustworthiness. Purpose changes the fundamental foundation for
workplace collaboration, transforming the company from a nexus of self-interested contracts to a
nexus of obligations.

Not every organization views purpose as an all-encompassing ideal. Some consider it

merely a tool to advertise who they are and what they stand for to capture more market share.
Others believe selling quality products at the lowest price point is the only thing that matters to
consumers. Companies that lead with purpose and build around it can achieve continued loyalty,
consistency, and relevance in the lives of consumers.
I. TITLE

“An Article Review on What Does Your Business Stand For? Why Building Trust Starts

with Purpose”

II. ARTICLE UNDER REVIEW

Ranjay, G. 2022. “What Does Your Business Stand For? Why Building Trust Starts with

Purpose” https://hbswk.hbs.edu/item/what-does-your-business-stand-for-why-building-

trust-starts-with-purpose?

III. MAJOR POINTS/ ISSUES

1. How does trust play a critical role in the survival of a business?

2. How to build trust with clients, suppliers, employees, and customers?

3. Why purpose matters in a company?

4. Building trust starts with a purpose

IV. DEFINITION OF NEW TERMINOLOGIES

Business -is defined as an organization or enterprising entity engaged in commercial, industrial,

or professional activities.

Employee -is a word for the 'way of life' of groups of people, meaning the way they do things.

High Performance Company - is an organization that achieves financial and non-financial

results that are exceedingly better than those of its peer group over a period of time of five years

or more, by focusing in a disciplined way on that which really matters to the organization.

Leaders -is someone who ensures their team has support and tools to achieve their goals.

Organizational Design -is the process of aligning the structure of an organization with its

objectives, with the ultimate aim of improving efficiency and effectiveness.

Public Relations - is the practice of managing and guiding perceptions of your business to

attract new customers and strengthen the loyalty of existing customers.

Purpose-driven Companies - go beyond their role of offering a product or service and develop

programs that have a social or environmental impact.

Strategy -is a clear set of plans, actions and goals that outlines how a business will compete in a

particular market, or markets, with a product or number of products or services

Trust -belief that someone or something is reliable, good, honest, effective, etc.

Values - what your business stands for, your principles or philosophy, your reason for being.
V. DISCUSSION AND REVIEW OF RELATED LITERATURE

Why Trust Matters

While business-to-customer relationships are very different from interpersonal

relationships, the majority of the core foundations are very similar. Trust and respect are at the
heart of consumer decision-making, especially in an age when customers value transparency and
socially conscious practices more than ever.

For a company to have customers, you need a name that is trustworthy and capable.
Anything less and you may find yourself skating on thin ice – ice that is likely to crack and sink
your business for good.

 Six Building Blocks of Trust

Since trust is so crucial in both professional and personal relationships, how can we keep
track of it, strengthen it, and repair it when it is broken? It's helpful to think of trust as a natural
reaction to specific attributes in a person, group, or organization, and that the lack of these
qualities reduces trust. These characteristics are:

1.Reliability and Dependability

A person or group who keeps their word and follows through on their promises builds
trust.

2.Transparency

When people are not told about a new development, they are fearful of the unknown and
tend to assume the worst. Team members might easily feel skeptical when management meets in
secret or fails to provide crucial information. When people communicate their opinions, feelings,
and concerns, or when an organization, generally through its leader, informs its members about
what is going on, everyone knows where they stand, and trust can grow.
3.Competency

This is another crucial aspect of establishing trust. You cannot trust someone, a leader, or
an organization if you believe they are incapable of performing what they are meant to do. As a
result, even if someone has a nice heart or good intentions, and we like them personally, they
won't be able to earn our trust if they can't deliver on their promises.

4.Sincerity, Authenticity and Congruency

People can often sense when someone says something that is not aligned with what they
are feeling inside. People don't believe what a leader says if he or she is insincere or unauthentic.
A leader who says one thing and does another is totally inconsistent. It's difficult to believe
someone who says they want to listen but never gives you a chance to speak, or someone who
claims to care about people yet appears to be planning layoffs. Others can readily identify a lack
of honesty or consistency, even if people believe they can disguise their genuine feelings or
contradictions. This is when trust begins to crumble.

5.Fairness

Some people act as if the needs and desires of others are not important, or they don’t truly
listen to or respect both sides. Trust cannot grow in a relationship where it’s all about one person
or in a workplace where all the energy is focused on the company or leader.

6.Openness and Vulnerability

If a person never says they are wrong and apologizes or acknowledges their mistakes,
other people do not feel comfortable disagreeing with them or sharing their own thoughts. A
leader who is “never wrong” never gets the truth from others. Yet a timely apology or admission
of being wrong is a powerful weapon to build or rebuild trust.
  Five Reasons why “Purpose” Matters

Organizations should find their purpose, i.e. what societal goals they have beyond the
need of making a profit they need to survive and thrive. If carried out correctly, this search for
meaning can lead to significant progress in the areas of corporate governance and corporate
development.

1 – A Clearer Strategy

Many companies today offer extremely similar products or services within a sector.
When they're trying to differentiate themselves from the competition, they frequently fall back
on the same strategies: lower costs or better marketing techniques to encourage consumption.
The issue is that these levers can be difficult to employ in a stressful economic environment.

Yet there is another strategy organizations can embrace: their purpose. Defining the
purpose of an organization’s activities means, in a way, redefining the competitive space of one’s
business. A product or service that, in addition to its initial purpose, conveys meaning (such as a
reduced impact on the environment or a more positive socio-economic impact), is one that stands
out. When an organization clarifies its strategy and redefines its value proposition it
differentiates and becomes easier to identify.

2 – A More Positive Reputation

A company’s reputation is the collective perceptions of the company’s past interaction

and the expectation regarding its future endeavors.

Many studies point towards this direction: a company focused on having a positive
impact objective is better perceived socially. According to the Edelman Barometer, 80% of
citizens believe companies should act to solve problems of general interest.

This is quite logical: a company that defines its role in society is better perceived by its
stakeholders, and this is all the truer among young people, the consumers of tomorrow.
3 – Increased Customer Loyalty

As a result, it stands to reason that firms operated with a sense of purpose that extends
beyond economic and financial gains will enjoy greater customer loyalty.

According to a recent Sustainable Brands research, 80% of consumers feel they are more
loyal to a company if it helps them live a better life - one that includes balance, simplicity,
meaningful connections, personal development, and so on. In other words, a company that
contributes to a positive social impact has a higher level of consumer loyalty. More consumers
are willing to suggest a product if it comes from a company that has a good influence.

4 – Increased Innovation Capacity

When people feel free to communicate, express their ideas, and when they trust their
employers and superiors, they are more prompt to innovate and come up with new solutions.

According to a Deloitte Insights study, companies with a clear purpose (or those that
significantly thought about this idea) can be perceived as more innovative by their employees.
They would also tend to leave more room for the creation of new business opportunities and new
development models.

This is confirmed by an EY / HBR study: business leaders from organizations with a

strong focus on their reason to be find that their business more proactive than others and is better
equipped to launch successful innovations or organizational transformations. It seems that by
adopting new objectives in terms of positive impact on society or the environment, companies
betting in purpose are more open to new fields of innovation and reflection.

5 – Greater Economic And Financial Growth

Having a more accurate purpose defined is also a way of increasing profitability.

According to a Kantar survey, companies perceived as having a strong positive impact on society
have seen their brand value increase by almost 180% over the last 12 years.
The companies perceived as having an average impact on society would have only increased
their value by 86% over the same period.

In summary, having a clear and defined higher purpose can lead to a better reputation, to
greater consumer loyalty and to higher levels of innovation and economic growth. These are
more than good reasons why organizations who haven’t yet given it much thought should focus
on finding and working towards their purpose.

 In the following section, we discuss and demonstrate the significance of purpose-led

business, offering insights into why some companies choose to drive business from purpose
and how others learn from such purposeful practices to evolve their own thinking.

 Purpose with an Impact

Many organizations are successfully driving purpose into their businesses for three main
reasons:

Purpose is a core differentiator

Purpose-oriented companies have higher productivity and growth rates, along with a
more satisfied workforce who stay longer with them. In a research it shows that such companies
report 30 percent higher levels of innovation and 40 percent higher levels of workforce retention
than their competitors. While traditional trends might dominate purchasing behavior, new
opportunities exist to connect with customers through purpose.

Purpose means something to all people

Purpose-driven businesses factor in the experiences of all humans they touch, as people
want to work for and support a company whose purpose is focused on the greater good of society
Organizations that don’t clearly articulate their purpose to their customers, workforce, and
partners may run the risk of falling behind or failing entirely.
 On the other hand, brands that have an authentic relationship with all their stakeholders
can create meaningful connections with them, enabling those stakeholders to identify with and
feel ownership of the brand’s purpose. This trend is only set to strengthen as young people
around the world are growing up with a deeper sense of purpose than previous generations and
are seeking out products that directly support causes about which they care.

Purpose is who they are

Purpose-driven businesses truly embed purpose in every action, aiming to leave an

enduring impact on people’s lives. Increasingly, customers are looking to engage with companies
that help them achieve their goals. Whether it’s Kellogg’s aim to “nourish families so they can
flourish and thrive” through nutritious breakfast cereals; Patagonia being “in business to save our
home planet”; or Sumo Salad aspiring to “make Australia a healthier and happier place”—
orienting business around purpose can help companies drive their operations toward outcomes
people value, and in turn, deliver what stakeholders value.

VI. APPLICABILITY TO THE LOCAL SETTING

Companies with a purpose come in all shapes and sizes, and they can be found in
industries all over the world. They all share a clear understanding of what they stand for, as
well as a willingness to take a stand in ways that create long-term value for their company
and all the people they serve. Trust is build between the company, consumers, employees
and other stakeholders having a clear purpose.

 Fixed economic problems

 Strengthen resilience and create value

 Address social issues


VII. CONCLUSION

Overall, purpose is key for building trust, and in turn driving business performance.
Especially with the pandemic, it’s particularly key for organizations to start thinking about their
impact on the world and how they can strive to do better. More and more customers are
conscious shoppers – this fact cannot be ignored.  To stay ahead of the game, brands should tap
into this and focus on why they matter, what they believe in and how they can make a wider
impact.

VIII. RECOMMENDATION

REFERENCES

 5 Reasons "Why" Companies Should Bet On Their Purpose (youmatter.world)

 https://www2.deloitte.com/us/en/insights/topics/marketing-and-sales-operations/global-
marketing-trends/2020/purpose-driven-companies.html