MBA Research

Trend #17: Increase in Shareholder and Consumer Lawsuits and Employee-initiated Audits

Business Trend

In our ongoing conversations with the business community, we asked them to identify business trends impacting the workplace. One frequently cited trend is: Increase in shareholder and consumer lawsuits and employee-initiated audits. Businesses that have experienced an increase in lawsuits have also noticed a decline in investor and consumer confidence.

Workplace Implications

Businesses continue to increase their focus on customer satisfaction and quality. They expect employees to be responsible for customer satisfaction and quality within their own job function and are tying performance measures and metrics to quality goals. When mistakes occur, they expect employees to take ownership of their mistakes and to communicate their mistakes quickly to the right individuals in the organization. They expect employees to work with management and others toward an amicable solution.

Similarly, employees are expected to uncover and to help resolve any issues that come to their attention that could affect staff and internal and external customer satisfaction. This expectation exists regardless of whether the issues are related to their specific job responsibilities and duties. Employees are also expected to follow internal protocols on reporting incidents, use of social media, and the sharing of confidential information so that the business’s exposure to lawsuits or audits is limited.   

Classroom Implications

Students need to understand how to manage operations and brand cost-effectively while always maintaining a view of protecting the company (e.g., disclaimers) in an environment that has an increasing emphasis on consumer protection.  They need to understand that risk mitigation, quality, and safety are everyone’s responsibility.  They cannot look at their jobs as just doing XYZ; they need to understand how they impact the final product or service and how their behaviors affect the overall workplace environment.

Students could research recent product recalls and discuss the factors that led to the recall. They could analyze the effect of the recalls on the business (e.g., brand/reputation, consumer confidence, employee satisfaction, sales, lawsuits, and settlements). Teachers could also reinforce this concept through classroom activities that require students to predict the effect of a particular action on customer satisfaction and loyalty. They could engage students in a series of what-if discussions dealing with increasingly more complex situations but always focused on action taken or not taken by lower-level, front-line employees. Students should be encouraged to consider how long it takes and how much it costs to re-establish trust once broken.