In his superb book on corporate behaviour, How: Why HOW We Do Anything Means Everything ... in Business (and in Life), Dov Seidman tells the story of the New York City doughnut seller who taught him a valuable lesson in business trust.

A glazed doughnut cost Seidman 75c. The first time he made a purchase, he offered a dollar bill. The doughnut man took the dollar, gave him his doughnut and nodded towards a pile of change on the counter. Seidman then noticed that other customers were making their own change, each taking the equivalent of a quarter from the pile of change. Seidman was impressed.

Over ensuing weeks he observed other doughnut sellers, working their carts on busy New York sidewalks. The doughnut man who trusted his customers to make their own change was selling twice as many as his competitors. What's more, Seidman returned to the original seller as a customer.

In addition, it's reasonable to surmise that many customers wouldn't have bothered making up their change, so there was an extra profit for the doughnut man in extending this measure of trust.

This is the kind of story that makes Seidman's book interesting and why it is having such an impact in the United States, and increasingly in Australia.

In a June New York Times column, Tom Friedman focused on Seidman's analysis of why the how of doing business has become so significant in an age of instant global communication. Seidman, incidentally, is the CEO of a business ethics advisory firm, LRN.

Friedman wrote: "His book is simply called How. Because Seidman's simple thesis is that in this transparent world 'how' you live your life and 'how' you conduct your business matters more than ever, because so many people can now see into what you do and tell so many other people about it on their own without any editor. To win now, he argues, you have to turn these new conditions to your advantage."

Above all, business reputation is of paramount significance. Reputation which may take decades to earn, but can be lost in very short order. As Seidman notes, word of mouth now crosses continents.

Reputation, of course, can be damaged in different ways, from insurgencies and disputes on boards, as characterised at the National Australia Bank (NAB) or the National Roads and Motoring Association (NRMA) some years ago. Reputation can only then be repaired carefully and deliberately over time as it has been with both these organisations.

Or damage can occur as a result of a strategic misstep, as Qantas discovered recently during its failed takeover. Again, reputation needs to be restored quietly and patiently, as Qantas has set about doing.