Thesis on "Ethical Leadership and Decision-Making"

Thesis 7 pages (2009 words) Sources: 7 Style: APA

[EXCERPT] . . . .

Ethical Leadership and Decision Making

The aim of this paper is to identify one organizational issue which raises questions as to the morality and ethics of a corporate employee. In achieving this, the organization will be succinctly presented and the situation emerged within it will be revealed. The ethical and legal issues linked to the incurred situation will also be presented and will be followed by some assumptions relative to other forces which could have generated or supported the creation of the situation discussed. Then, several alternative courses of action will be revealed to the reader, with emphasis on that strategy that is likely to have retrieved the most beneficial results. The paper will come to an end with a part on the personal reflections of the writer, and a summary and conclusions section.

Introduction

Throughout the past recent years, organizations have undergone numerous processes of change in order to respond and adapt to the modifications in the micro and macroenvironments. The most outstanding changes refer to the incorporation of the latest technologies, the desire for global expansion or the increased focus placed on customer and employee on-the-job satisfaction. All corporate endeavours are now more than ever oriented towards the satisfaction of the various categories of stakeholders. This implicitly means that more focus is being placed on the morality of the organizational ventures. The field of ethics can simply be defined as a field concerned with the well-being of individuals and emphasising on moral values such as trust, honestly, loyalty and so on (Kraut, 2007).

Economic agents are required to act in accordance with the norms of ethics and morality, but infringements of these values often occur. The breaking of the ethical norms is generally explained through the numerous temptations that exist, temptations which could increase the utility to the individual, but in the detriment of his peers or the society (Bourg, 2003). This happened within the DFR Insurance Corporation. The company was established in 1981 and it currently employs 250 individuals. Recently, the organization has undergone the process of corporate change and a new managerial team has been appointed, with the aim of getting the organization through the financial difficulties threatening the entire world.

3. The Situation

Under the former executives, DFR Insurance Corp. continued to register financial losses, revealing as such a need for change and a fresh approach. A new Board of Directors was appointed; their aim was to develop and implement a process of corporate change that would minimize losses, increase operational efficiency, increase profits and ultimately, help the company through the internationalized financial crisis. While all the executives were changed, most of the operational managers continued to occupy their positions, for the simple reasons that they were the ones most capable to handle their departments. Several insurance agents and administrative staff (secretaries, human resource etc.) were downsized.

The new CEO strived to create and implement a new organizational culture, based on the full satisfaction of the customer needs and wants. This new culture saw the employee at the core of corporate operations and assumed that he would be highly dedicated to supporting the corporation reach its overall goals. The ethical problem raised by this situation revolves around the poor motivation of the employees in offering their support to the organization. Otherwise put, the insurance agents and the administrative staff were expected to increase their efforts and work harder than ever in order to help the company get passed the crisis.

4. Ethical and Legal Issues

As it has been established in the previous section, the ethical dilemma refers to the improper treatment of the staff members in a situation of financial difficulties and corporate change. The occurrence of this situation led to the breaking of several ethical norms, but also some legal regulations. The most relevant of these issues generated by the ethical dilemma are succinctly presented below:

Legal issues:

the employees were not allowed to go on holiday whenever they wanted; situations occurred when an employee was prohibited from going on holiday because the organization needed him several employees were taken out of their training programs (promised in the additional clauses of the employment contracts) in an attempt to reduce costs several employees hired on a temporary basis were fired before the expiry date of their employment contracts

Ethical issues:

the DFR Insurance employees were required to put in extra hours; these were often unpaid, constituting as such a legal issue as well the leaders acted in a way that was seen as favourable for the overall organization, but disfavoured the individual employees the employees were not properly informed as to the reasons of the changes, generating as such tensions the employees were pressured into increasing their performance, leading to the creation of a tense and stressful working environment premiums, bonuses and salary increases failed to materialize as initially promised (verbally, not in contracts) as all resources were employed to support the change the management style became rather autocratic, with the employees having only to follow the managerial specifications; their opinions were never asked and they were not motivated or rewarded for their increased efforts, as these were taken as a given in these times of difficulties

5. Assumptions with Impact on the Situation

In a perfect working climate, this situation would not have occurred. Ergo, it becomes obvious that an assumption of the already existent internal organizational problems could be real. Then, another assumption which could have generated the current situation is that the business community, despite its major recent developments, has yet to learn how to properly address the needs of its stakeholders. The stakeholders are composed from all individuals and groups of individuals who directly or indirectly impact the organization and who are also impacted by the corporate endeavours (Vartiainen, 2003). They include the employees, the customers, the business partners (distributors, purveyors etc.), governmental and non-governmental institutions. The highly skilled and capable entities are able to address the needs of a stakeholder category without jeopardizing the satisfaction of the other; most companies however fail to achieve this. DFR Insurance is in such a situation as the better satisfaction of its customers led to the dissatisfaction of its staff members. This then means that the company was insufficiently prepared to handle a change of such magnitude.

Also, one could assume that the Human Resource Department was improperly skilled and that it should have intervened sooner. Numerous other similar assumptions could be made and they all emerge from within the corporation and refer to the human errors of the managerial teams. However, the situation would not have gone as far as it did if the employees had taken action and had given a response to the unethical behavior. The question hereby posed then refers to the reasons for which the DFR employees accepted the situation. The assumption comes from the macroenvironment and relates to the contemporaneous financial crisis, in which several organizations declare bankruptcy or massively downsize their staff members. Consequently then, it is most probable that the insurance agents and the administrative staff accepted the unethical behavior for fear of losing their positions within DFR Insurance Corp.

6. Alternative Courses of Action

First of all, one should address the original generator of the tensions, that of the change in the managerial team and their implementation of a new corporate culture. Despite the fact that this endeavour is to be embraced as the direction was good, the pace and rhythm of implementation should have been a slower one, simply as it would have been less challenging and the staff members would have accepted it better and adjusted to it more effectively (Weick and Quinn, 1999). Then, aside the rhythm of implementation, the executives at DFR Insurance Corp. should have placed a greater emphasis on the ethical side of their change. Today, there are numerous specialists who counsel organizational agents on how to act in accordance with the ethical norms. "There are today thousands of lawyers, philosophers, and religion scholars offering moral counsel in the corporate, judicial, and medical worlds" (Marino, 2004). The new Board of Directors at the insurance organization should have requested the consultancy of ethics specialists and the issues, however still presented, would have manifested at a reduced level.

Another thing the managers at DFR should have done was to focus on operational efficiency and effectiveness, rather than means of reducing costs and increasing profitability. The process would have "refine (d) the processes, structures and assignments of authority and accountability for each business and function so that well-qualified managers can most competitively anticipate, commit, and perform more profitably in response to each and all customers' needs" (Miraglia, 1994). The organizational structures also refer to the employees and the managerial behavior towards the employees. Otherwise put, more emphasis should have been placed on the worker and the role he plays within the process of corporate change.

It is indubitable that the executives at DFR had to implement change in order to help the company overcome these hard times of financial difficulties. In… READ MORE

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