Telling the Truth is a Good Business Practice essay

Document Type:Essay

Subject Area:Economics

Document 1

Good business practices premised on honesty positively impact the corporate image of an entity and encourage the initiation of a competent governance structure for better outcomes. The paper will undertake an analysis of the Enron case to demonstrate the consequences of lying and the benefits of telling the truth as a good business practice. The truth develops the foundation of trust and facilitates the capacity to run businesses sustainably. Analysis of the Significance of Truth in Business Trust is a critical aspect in business since different stakeholders make their decisions to engage in trade depending on the level of trust they have on a brand or business leadership. Trust is a difficult position to earn both in personal and business environments since it takes years of demonstrating the capacity to be reliable when it comes to fulfilling the different pledges set out.

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The falsifying of Enron's financial statement was meant to mislead the public but could not be sustainable for the business to maintain the lie forever since it would be discovered in one way or the other. A business built on lies would eventually fail since it stands on quicksand that would one day collapse to erode all the gains realized over time. Lies significantly threaten the difficulties of building trust across markets which have established a renowned brand since it would go down tumbling when the public discovers the truth. The cost of lying is a risky undertaking for businesses since it destroys all the efforts put out at promoting the company in the past making it lose a substantial market share ones the truth is known in the market.

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The business environment has substantially evolved and judging from past corporate scandals, stakeholders have become more concerned about corporate governance as a model to guide their decisions on which entity to trust (Smieliauskas et al. Truthful and deceitful leadership practices are common in contemporary society as competition levels surge across different market frontiers. The competition has inspired a broad range of interventions that are premised on both ethical and unethical leadership practices to position the various organizations in the top industry charts (Weiss, 2014). The ethical standards have inspired the development of great leaders that inspired a great crop of aspiring leaders through providing direction based on telling the truth. On the other hand, leadership practices premised on deceit are equally alive in most business demonstrating the lack of moral standard hence the downfall of legendary names in the different professions.

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The ethical practices such as being truthful positively impact the organization through inspiring the inclusion of employees towards the achievement of a shared vision (Langlois, 2011). The competitive environment should be challenged through consistent research and development that creates innovative ways of inspiring the needs, tastes and preferences in the market. A change initiative involving truthful practices will go a long way into enhancing organizational performance through building trust in the market and substantially eliminating the threat of failure due to consistent lies peddled over time. Change is an essential tool in any organization that hopes to move in the right strategy to appeal to the ever-changing demands of the business stakeholders. Truth should be the binding factor in any business engagement since it provides reliance and credence of the organization even when it comes to accessing funding from financial institutions and investors to grow.

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