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Isn’t it time to get America’s businesses out of court?
By Lauren | June 8, 2009
The ongoing recession is causing American companies to take drastic steps to cut costs. They’re laying off workers, slashing travel budgets, closing regional offices, and clamping down on marketing expenses. But when it comes to defending lawsuits, companies may think that they have no choice but to spend, spend, spend.
Some experts estimate that litigation consumes up to 20% of companies’ profits each year. That’s a real hit to the bottom line of even the largest corporations, and enough to put a smaller company out of business entirely. And that only counts the financial cost. Lawsuits are not only expensive, they can wreak havoc with morale, impose untold stress on executives, damage companies’ reputations, lower stock prices, and make it extremely difficult to keep daily operations running smoothly.
It’s time to try a different approach.
What if, instead of hiring defense counsel and hunkering down to fight, companies honestly admitted to their mistakes, apologized, and offered reasonable compensation? In most instances, that approach is much less costly, and resolves problems more quickly, than litigation does. It also leaves companies freer to defend themselves vigorously when truly frivolous claims are made against them.
Yes, it’s sometimes necessary to stand and fight. But more often, a sincere “we’re sorry,” accompanied by appropriate restitution, is by far the less costly way to go.
Topics: Apologies, Business Ethics, business communications, corporate responsibility, customer relations, ethics |
June 16th, 2009 at 3:09 pm
[...] Read the rest of this great post here [...]