Tuesday, September 23, 2014
Fundamental Credibility
Tesco, the UK grocery chain, is learning the hard way about credibility and reputation. You can't fake numbers and maintain either. It is obvious but someone (or a group of executives) did it anyway. Now the facts are emerging and the company is under stress. What would possess the executives involved in undertaking such a stupid move? A desire to protect bonuses? Fear of revealing bad news that would reflect on their stewardship? They should have known that the factual numbers would eventually come out and they would have explaining to do. It is possible in the internet age to hide but not for long. Someone will discover discrepancies soon enough. The managers thought they could insulate themselves from the world within their corporate walls. They know now that they can't. Tesco has months, maybe years, to regain its credibility and reputation because of a fundamental transgression against transparency. It is a case study and a reminder to other executives who might be considering similar tactics.
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