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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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