Mgt501-Mba501 Lecture 11
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Transcript of Mgt501-Mba501 Lecture 11
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Leadership, Decision
Making & Ethics in Management
Assignment 3 Preparation
Please look at the Assignment
Marking Criteria (Resources)
Definitions
• ‘Organisational social responsibility refers to an
organisation’s obligation to act to protect and improve
society’s welfare as well as its own interests.’ (Bartol et al, 2011, p.106)
• ‘Managerial ethics are the standards of conduct or
moral judgement managers use in their work’
(Bartol et al, 2011, p.106)
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LO6 – Four contingency leadership models
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Situational theories
Fiedler’s contingency
model
Normative Leadership
model
Hersey & Blanchard’s
theory
Path-goal theory
Who should the organisation protect?
Social Stake-holders
Employees
Customers
Local community
Society
International community
Shareholders
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Of the organisations you
know, who do they protect
and why?
Three major types of managerial ethics
Immoral
• Lacks ethical principles
• Actively opposes ethical behaviour
Amoral
• Neither immoral nor moral
• Ignores or not aware of ethical issues
• Inattentive & Insensitive
Moral
• Follows ethical principles and precepts
• Success through ethical behaviour
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Ethics
• As individuals we have some choice over how we want
to behave.
• Carroll (1987 in Bartol et al, 2011, p.116) notes that
‘managers are characterised by three major moral or
ethical judgment levels: immoral management, amoral
management and moral management’.
• Which one are you? Immoral? Amoral? Moral?
• Does your position change depending on the context or does it remain the same at all times?
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LO7 – Ethical guidelines and support for managers
Obey the law Tell the truthShow respect
to others
Treat others as you would like to be treated
Do no harm
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What are the strengths and weaknesses of these guidelines?
Ethical Guidelines for Management
• Ethical standards vary by individuals, organisations,
cultures and nations.
• Setting guidelines about what is the correct ethical way
to behave means first deciding what ethical stance you
are going to take.
• O’Toole (1985) suggested that the following guidelines
might help individuals and organisations to think about
the ethical implications of their management decisions
and behaviours.
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O’Toole’s Ethical Guidelines1) Obey the law both in your home and host country, since the
consequences of not doing so may be severe both for the
individual and the organisation.
2) Tell the truth, since this builds stakeholder trust. How truthful one feels one should be will probably be driven by what their
moral view point is and whether they believe that they should
respond to societal forces, laws or their own inner
conscience.
3) Show respect for people.
4) Stick to the Golden Rule i.e. treat others how you would like
to be treated.
5) Above all do no harm. Again this is can be an unclear area. What level of harm is acceptable and necessary. For example
if a company was in danger of bankruptcy but could save
itself by closing down one of its organisational parts with the
loss of thousands of jobs, should it do so?14-9
Ethical dilemmas
Your partner is sick
There is a drug
You can’t afford it
No one will do a deal with you
What do you do?
Is your behaviour ethical?
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Look at the ethical
guidelines
Ethical Management Dilemma 1
• Let’s look at the Ford Pinto Case
• http://youtu.be/PAI5T8UecEY
• As we watch the video, please make note of the
following:
• What was Ford’s decision making process?
• Which ethical theory could be used to describe/justify
the decision that Ford made?
• What were the consequences of the decision made by the leaders at Ford?
• Are Ford’s leaders ethical in their decision? Analyse
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Ethical Management Dilemma 2
• Let’s look at the Nike’s Sweatshop Controversy
• Take note of the video documentary ‘Behind the
Swoosh’ http://youtu.be/M5uYCWVfuPQ
• Please make note of the following:
• What was Nike’s decision making process?
• Which ethical theory could be used to describe/justify
the decision that Nike made?
• What were the consequences of the decision made by the leaders at Nike?
• Are Nike’s leaders ethical in their decision? Analyse
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Ethical Management Dilemma 3
• Let’s look at the FoxConn Apple Factory Suicide Crisis
• As we watch the video http://youtu.be/Jk-xqPKOxl4 ,
please make note of the following:
• Which ethical theory could be used to describe/justify the decision that Apple/FoxConn made?
• What were the consequences of the decision made by
the leaders at Apple/FoxConn?
• Are Apple/FoxConn’s leaders ethical in their decision?
Analyse
• Further information here…
• http://youtu.be/jlTsaAqYMOw
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LO8 – Describe the situation factors influencing ethical behaviour and how to manage them
You as a manager
Your moral level
Organisational culture
Moral intensity of issue
Individual values
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Stages of Moral Development
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An Ethical Decision Making Model
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Moral Intensity
• All of these phases are impacted by the moral characteristics of the issue. Several characteristics have been identified:
a) The magnitude of the consequences i.e. How much harm or benefit will be done to those impacted by the moral act.
b) The social consensus i.e. What does the society in which the individual or organisation is working think about this type of moral act?
c) The probability of effect i.e. If this moral act happens, what is the likelihood that it will actually cause the harm or benefit predicted?
d) The temporal immediacy of the moral issue i.e. How long before the consequences of the moral act will be felt?
e) The proximity of the moral issue i.e. How much those deciding on the moral act feel close (socially, psychologically, culturally or physically) to those impacted by the moral act.
f) The concentration of effect i.e. How much the moral act will affect society generally.
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Individual Value Perspective
What is your value
system?
Practical
Moral
Gratifying
Economic
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Do you think these value
perspectives change as
you age?
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Preparing to make good ethical decisions
Anticipating ethical
conflicts
Assessing your own values & protecting yourself
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How do you
do this?How do you
do this?
LO8 – Describe the situation factors influencing ethical behaviour and how to manage them
External factors Internal factors Ethical management mechanisms
Environmental competitiveness
Pressure for high performance
• Increase awareness of diversity
• Get top management commitment
• Establish a code of ethics• Establish ethics
committees• Carry out ethics audits
• Set up an ethics hotline• Have ethics training
Level of environmental
bounty
Labour dissatisfaction
Extreme dependency on
others or resources
Delegation &encouragement to
innovate
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How do these ethical management mechanisms help manage these
external and internal factors?
Normative Leadership Decision Styles
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Hersey & Blanchard’s Situational Leadership Theory
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Path-goal Theory
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Transformational leadership
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LO3 Steps in an effective decision making process
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LO4 Overcoming barriers in decision making
Barriers
• Complacency
• Defensive avoidance
• Panic
Proactive decision making
• Deciding to decide
Guidelines
• Appraise credibility of information
• Ascertain importance of threat or opportunity
• Determine the need for urgency
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The cost of additional information
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LO5 Decision making biases and avoiding them
Processing biases
Framing
Representative-ness
Availability
Anchoring and adjustment
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Decision escalation:
Later decisions are
based on earlier
decisions leading to
escalation situations
LO6 The advantages & disadvantages of group decision making
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Improving group decision making
• e.g. devils advocacy• Dialectical inquiry
• Real options analysis
• Computer assisted decision making tools
• Including unique and varied perspectives
• Include those with information and knowledge important to decision quality
Involve the experts
Consider group
composition
Pick members focused on
organisational goals
Utilise decision making
techniques
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Example of Real Options Analysis
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LO7 Creativity – Three basic ingredients and four stages
• Gather information
• Divergent thinking
Preparation
• Thinking subconsciously
• Divergent thinking
Incubation• New insight
gained• Convergent
thinking
Illumination
• Is insight relevant?
• Convergent thinking
Verification
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Supporting skills needed are domain and creativity
relevant skills and motivation
LO8 How to enhance group creativity
Brain-storming
And/orNominal group
technique
Enhanced group
creativity
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Planning and decision aids
Forecasting
Quantitative
Time-series methods
Explanatory/
Causal Models
Regression models
Econometric models
Leading indicators
Technological /
Qualitative
The Delphi Method
Scenario Analysis
Judgmental forecasting
The jury of executive
option
Sales-force composites
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Quantitative Forecasting techniques
Time-series methods
Uses historical data on seasonal and cyclical
patterns to forecast the future
Limited value in predicting present or future actions managers might take to
produce change
Explanatory or causal models
Identifies major variables/factors causing past conditions and then uses
them to try to predict the future
Three major types: regression models, econometric models and leading
indicators
Generally better than time-series models at predicting future conditions
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Technological or Qualitative Forecasting
The Delphi Method
1) Anonymously an expert panel identifies a list of scientific
breakthroughs over a period of time
2) This list is given to a panel to decide if breakthroughs will come
within required time frame
3) List with comments is returned to experts for their renewed
consideration.
Scenario Analysis
Tries to identify the impact of key influencing factors on
environments in order to identify possible futures
Then strategies can be developed to manage these possible futures
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Types of Judgmental Forecasting
Judgmental forecasting
Jury of executive opinion
Sales-force composites
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Project Planning and Control Models
Project planning and control models
Gantt charts
The program evaluation and review technique (PERT)
Linear programming
Queuing or waiting-line models
Routing or distribution models
Simulation models
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Example of a Gantt Chart
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Quantitative Aids for Decision Making
Quantitative Decision
making aids
Payoff tables
Decision trees
Break-even
analysis
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Example of a Payoff Table
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Example of a Decision Tree
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Example of a Break-Even Analysis
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Resources to use for the Assignment
• Textbook: Linstead, S., Fulop, L., & Lilley, S. (2009). Management & Organization: a critical text. Houndmills,
Basingstoke: Palgrave, Macmillan.
• Bartol et al, Management: A Pacific Rim Focus, 6e
• Schermerhorn, J.R. (2012) Exploring Management 3e, John Wiley and
Sons
• Academy of Management Journal
Academy of Management ReviewAdministrative Science Quarterly
Harvard Business ReviewJournal of Business Ethics
• Journal of Business ResearchJournal of Management Studies
Journal of Organizational BehaviourLeadership Quarterly
Management ScienceOrganisation Science
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Conclusion
• How we act towards our social and ethical
responsibilities may be influenced by multiple factors:
– External environmental factors.
– Internal environmental factors.
– Societal values and expectations.
– Our own personal viewpoint.
• Whilst ethical and social responsibility decision
guidelines help, it needs to be recognised that these
types of decisions are often complex.
• Clear organisational guidelines and support
mechanisms are needed.
• We need to understand the consequences of our social
and ethical decisions before we make them.
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