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BELLOWS: How companies like Boeing can win trust

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How companies like Boeing can win trust

Airlines Boeing 737 Max 8
A grounded American Airlines Boeing 737 Max 8 is towed to another location at Miami International Airport on March 13, 2019 in Miami, Florida. PHOTO | AFP 

Kenya, Ethiopia, and the world watched in horror as Ethiopian Airlines flight 302 fell off radar last week. Our worst fears then were realised as the full scale of the tragedy came to light and families and friends of those on the fateful plane began to question, contemplate, and grieve.

The journey of truth to understand the causes of the catastrophe and how to prevent future disasters will be long and painful.

Since the calamity, much attention now focuses on the Boeing 737 Max 8 and 9 aircraft and whether the airplane’s sophisticated anti-stalling system actually caused a system failure.

Sometimes a company’s good intentions yield horrible unintended results. Painful questions have emerged and will continue to arise including: What did Boeing know and when? What did global regulators know? Why did no regulator act sooner? Could quicker action and earlier delivery of the long-awaited software fix following the Indonesia Lion Air flight 610 tragedy have prevented the Ethiopian Airlines flight 302 disaster? Why did Boeing wait until after regulators to ground its entire Boeing 737 Max 8 and 9 fleet?

Generations of MBA students will study Boeing and how they handled the response to the two tragedies. Will Boeing be able to regain the aviation world’s trust?

Social scientists Graham Dietz and Nicole Gillespie provide guidance for how companies, such as Boeing, should react following an organisation-level failure in order to rebuild trust.

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Organisation-level failures come in several different forms. Boeing’s perceived likely failure hinges on a fatal yet avoidable accident due to a safety flaw in its key product. Other organisation-level failures can include accounting frauds, deceit, incompetence, exploitation of vulnerable people, massive compulsory job losses, bankruptcies, and catastrophic collapses in organisational finances. When an organisation undergoes an entity-wide failure, customers reduce demand for their products or services. But what about employees of the firm? Staff too lose trust in their employer following an organisation-level failure.

In speaking to Kenyan friends and former colleagues in the Chicago area, Boeing’s headquarters, and Seattle, Boeing’s manufacturing hub, the mood among Boeing employees seems dismal. They appear to exhibit the demotivation and gloominess of working for an organisation with a massive failure.

Boeing and other organisations with entity-wide failures can expect mass employee turnover, low staff motivation, increased employee sick leave, slow employee completion of tasks, decreased innovation, and slumping sales.

How can organisations like Boeing and others repair employee trust under such scenarios?

The scientists provide a well-researched four-stage process that must be followed. First, the company must do an immediate response that verbally and quickly acknowledges that an incident took place, expresses regret, announces a full investigation, and commits resources to prevent a re-occurrence.

Then simultaneously the firm must take action in the form of interventions against known causes of the incident. Second, the business must conduct a diagnosis. The investigation must prove accurate, systemic, multi-level, timely, and transparent. Many companies fail in this stage due to a lack of transparency in the diagnosis.

Third, the organisation must undertake reforming interventions. The firm must verbally apologise subject to culpability and make reparations where appropriate. Then it must simultaneously take action as derived from the diagnosis investigation, fully implement corrective action, and prioritise mechanisms to fix faults according to the failure type.

Fourth, the company should conduct an evaluation of their response and actions that also proves accurate, systemic, multilevel, and timely.

Only after the above four trust repair techniques take place following an organisation-level failure can a company fix the negative perceptions of its employees and start to turnaround the firm on the path to recovery.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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