Ethical MBA Students- Keys to Future Success

The rise of the 'ethical' MBA student

Historically, students chose to practice even further education into MBA programs as a quick route to boosting their career and paychecks, according to the article I just read. Yet, recently a new Green MBA program at Marbella University tries to take a new and more ethical approach to educating the future leaders of the world.

"According to a recent survey of the mindset and aspirations of MBA applicants by career and education specialists QS TopMBA.com, the number of MBA candidates searching for an "ethical" MBA degree or one that has sustainability and social responsibility at its core has increased dramatically over five years."

The article also states that people don't want to work for unethical companies in controversial industries such as tobacco or defense. Instead, there is an increasing number of MBA graduates applying for UNPAID positions in non-profit organizations.

"Humanity and the world need new leaders and experts to resolve the global problems. The MBA programs at Marbella University entail a vanguard approach to international business with a strong focus on 'human factors' and the complexity of today's global business world." 

Our keynote speaker during Business Week, CFO of COUNTRY Financial Dave Magers, had something to say that I think relates heavily to this topic as well. He states that they hired people from the start with high integrity. Here are students who are looking to work for the better of the world as a whole, instead of just trying to boost their own profits right off the bat.

I think that these students are displaying what we all should strive for. According to page 388 of our book, "...attending to others is the primary building block of moral leadership," also, "Effective leaders see their own personal vision as an important part of something larger than themselves - a part of the organization and the community at large."

These students see that their service to the Green movement, using their Green MBA Program knowledge, and their unpaid time is all given to these non-profit organizations and the world as a whole. I think it is inspiring and something to think about. Maybe the world isn't so unethical as we have seen in the past, and maybe if future leaders act as altruistically (working for the better of others) as these students, we are all in store for a better world.

-Melissa Beechy

Ethics in Organizations

This article was interesting to me because it brought up relevant question in today's business environment; who is responsible for individual unethical decisions in organizations, the individual or the organization? The paper talks about how most ethical discussions take into account only the "individualistic approach" to moral responsibility. This says that each individual is responsible for their own actions and are in charge of changing the behavior themselves. On the other hand, the paper mentions a less talked about approach in the "communal approach." Here individuals are viewed not by themselves, but as members of communities that are partially responsible for the behavior of their members. The article says that it is necessary to take both of the approaches into account to explain ethics in the organization.

I think this relates closely to our discussion about virtue-based leadership and utilitarianism. Virtue based leadership tells leaders not to tell people what to do, but who to be. While utilitarianism is creating the greatest good for the greatest number of people. These are relevant to this article because they are how I feel a leader should act in an organization. Rather than focus on whether or not to look at the individualism approach or communal approach, look at both. Leaders need to strive to be virtue-based leaders and preach to their followers how to act, but also to be utilitarianism and have their organization create the greatest amount of good for the most people. By doing this, they cover both parts of ethical leadership, rather than placing the blame on the organization or individual.

This is closely related to the google executive who supposedly created all the turmoil in Egypt. Who's fault is this really? The organizations? Or the individual? Do you think that Utilitarianism and Virtue based leadership is a good match for this article, or do you feel there are better theories to help leaders in organizational ethics?


http://www.scu.edu/ethics/publications/iie/v2n1/

-Ryan Schaumburg

Emergent Leadership in Japan

The following article describes the recent situation in Japan. During this time of crisis, it may be hard to pick out particular leaders or even to say if there is any leadership taking place. This isn't anything new to Japan. In fact, the article pointed out that Japan has went through four Prime Ministers in the past four years. This is an astounding number of leaders that have failed in leading the country. It is crucial that in this time of great need, a leader emerges and aids the nation during their time of grief.

This situation reminds me a lot about what we learned about emergent leadership when studying the 9/11 situation. People came together out of the woodwork to help the situation. Although I think it would benefit Japan to have a public leader, I think citizens emerging as leaders is just as important. In fact, the everyday people of Japan and other volunteers are likely to make the biggest difference.

This concept is directly related back to what we recently learned about the complexity theory. This theory involves the concept of open systems. Open systems made up of a large number of active elements that are diverse in both form and capability. Japan serves as the open system in this case, and was disrupted when the adaptive tension reached beyond the critical values it could sustain. This resulted in chaos and uncertainty. This far from equilibrium state led into emergent self organization. People have taken on roles that they normally wouldn't, and are working together for the common good. Being thrown into a situation, much like the catastrophe in Japan, results in emergent leaders being formed.

Although this article is criticizing the fact that there are no leaders stepping up and taking charge in this situation, I believe that once time passes people will realize that there were thousands of leaders. What do you think? Do you think that leaders will emerge and be recognized as time goes by, or do you think there is a complete lack of leadership- both by public officials and citizens?


http://www.msnbc.msn.com/id/42114871/ns/world_news-asia-pacific/

- Kelly Moran

Why Alibaba's CEO had to go

As stakeholder's are starting to hold companies up to maintaining corporate social responsibilities, more companies are being revealed as fraudulent. This specific article is a perfect example of this.  The Internet firm Alibaba-Taobao has been a company that many people looked up to thanks to "its success and to it's brash, charismatic founder and chairman."  Jack O' Ma started the online commerce company in the late 90s and has become one of the most prominent Chincese companies.  They went on Hong Kong's stock exchange in 2007 and raised $1.7 billion right behind Google and eBay.  This would be a sound of success for the company until the inner-workings of the company had recently been revealed.

Alibaba recent report: "2,326 high volume sellers who pay a fee to the company to peddle their wares on the site -- 'gold suppliers,' as they're called-- defrauded customers over the course of to years."  These people could not have created such fraud to customers without the assistance of Alibaba employees.  Once reported both the CEO, David Wei and COO, Elvis Lee, both resigned on the same day.  It's unfortunate that neither leader of the company could accept the responsibility of their fradulent actions.  Of course, the public needs to recognize that just like in Enron's case, fraud becomes a culture of an organization and it is more accepted by leaders who accept these behaviors.  It has been known that business ethics in China are still being reviewed and going into progress, although not fully there yet.  The fact that two years had passed without stakeholders nor employees reporting the fraud is astounding.

The article refers to the founder of Alibaba to be charismatic, as mentioned above.  As we learned in class, a characteristic of a charismatic leader is "a special personality chqaracteristic that gives a person super human or exceptional powers and is reserved for few, is of divine origin, and results in the person being treated as the leader," (Northouse, 173).  This idea sets the tone for the company.  If leaders portray an unethical practice, the chances of the followers accepting this idea from a charismatic leader are high. According to House's charismatic theory, there are effects that show the direct result of charismatic leadership including; follower trust in the leader's ideology, similarity between the followers' beliefs and leaders' beliefs, unquestioning acceptance of the leaeder, expression of affection toward the leader, follower obedience, identification with the leader, heightened goals for followers, and increased follower confidence in goal achievement.  Obviously, follower trust with a charismatic leader has led to his employees making unethical decisions. This also alighs with the similarity between the leader's beliefs along with the followers.  Because he was accepting of exchanging inside information, his followers believed it was not only ethical, but accepted through the culture of the firm.

Do you guys believe that if Jack O' Ma's charismatic leadership offered it's followers a more ethical approach, this situation could have been avoided?

Also, what do you think about the CEO and COO resigning?  Does this set yet another ethical dilemma for the company that shows they can't own up to their responsibilities?


http://tech.fortune.cnn.com/2011/02/22/why-alibabas-ceo-had-to-go/

-Lauren Mowers

Good, Bad, or just Ugly?

After looking at several articles on the topic of David Sokol I have a real good understanding of the issues he is facing and whether they are unethical or not.  David Sokol is a former top executive of Berkshire Hathaway and there were some questions raised about whether Sokol was participating in insider trading while working with the firm.

It all started when Sokol recommended to Warren Buffett to use the companies cash to buy out the company Lubrizol.
"According to The Wall Street Journal, Sokol's initial interest in Lubrizol was piqued during a Dec. 13 meeting with Citigroup bankers to discuss a list of "possible transactions." According to Dealbook, Sokol bought 2,300 shares of Lubrizol on Dec. 14, which he then sold on Dec. 21."
These actions started to raise question when Sokol bought 96,060 additional shares on January 5th.  The very next week he pitched the idea to Buffett to purchase Lubrizol.  Just two months later Berkshire's board announced the $9.7 billion it spent to acquire Lubrizol boosting Sokol's stock holdings by 27%.  After Buffett soon realized what had happened he removed Sokol from Berkshire in fear of public embarrassment.


These behaviors represent what we consider insider trading, which by definition states, insider trading requires the perpetrator to possess "material nonpublic information at the time he bought or sold the stock and to have breached a duty to his employer.  Different lawyers have assessed the situation and have suggested that Sokol would be not found in violation, because at the time of the purchase of the stocks he did not know if Berkshire was going to buy out Lubrizol.  This is a very gray area being that the facts point fingers at Sokol because of his large profits he incurred during his last months at Berkshire. 

This is a clear issue of unethical behavior and I feel that David Sokol portrays the theory of Ethical Egoism.  His actions show that he is more concerned with the greater good for himself.  This theory is usually good when it is applied to the entire organization as a means to maximize profits.  However when one single person  revolves all of their decisions around that mentality, there is room for error, and unethical behavior seems inevitable. 

The biggest question is do you think that David Sokol is unethical in his ways of conducting business?
Do you think that he was in violation of insider trading, even though technically by law he was not?

Below are all of the articles I read over to gain full knowledge on the topic:

http://www.dailyfinance.com/story/market-news/warren-buffett-successor-david-sokol-resigns-lubrizol-stock-trade/19898158/

http://seekingalpha.com/article/261170-what-david-sokol-s-departure-means-for-berkshire-hathaway

http://blogs.forbes.com/frederickallen/2011/04/04/sokols-behavior-under-buffett-unethical-executives-agree/

A Win-Win Situation

http://www.businessweek.com/magazine/content/11_15/b4223025579541_page_2.htm

Still in the topic of ethics when companies are going green. In the article ”Why Sustainability Is Winning over CEOs”, Duane Stanford states that executives are trying to come up with innovative ways to realize meaningful cost savings, and at the same time go easier on the environment. He argues that being socially responsible has typically meant handing out checks, but now it has the premise that saving the planet can save big bucks: “Sustainability has emerged as a factor in determining which companies win in the marketplace, and smart CEOs are investing in a more rigorous approach to the environment."

For me, as a costumer, it is nice to read about companies going green. They seem to be more eco-conscious, but the aim of a company is profit maximization, and going green for the sake of going green is a conflict of interest. The question is if these CEOs’ green approach only maintains as long the costs can be reduced. This focus reminds me of ethical egoism, which is an approach where leaders make decisions regarding moral conduct. Ethical Egoism states that a person should act to create the greatest good for herself. In a business context it is the same as making decisions to achieve the goal of maximizing profits.

Ryan mentions in an earlier blog post that Big box retailers as Wal-Mart are violating less green “sins” than green specialty shops. Wal-Mart is an example of a company that is in the front line of the green movement in this article too. Stanford argues that Wal-Mart has realized that they are saving money by working with retailers to reduce packaging, which translates into lower freight and warehouse costs. It seems as if Wal-Mart can achieve its goal of maximizing profits by going green, but are the ethical egoism a sustainable approach to actually improve the environment? What happens when the costs cannot be reduce anymore?

The article also presents PepsiCo’s CEO, Indra K. Nooyi and her strategy “Performance with Purpose”, which links green efforts in all businesses to the bottom line. Nooyi and her strategy have been mentioned before in this blog by Kelly, when she states that "Performance with purpose” means to generate profit and remain socially responsible at the same time. Stanford quotes an official from PepsiCo: "We are able to do the right thing for the organization from a financial return and significantly reduce our greenhouse gases". In this example, you can argue that Stanford’s description of the CEOs’ green focus has a more utilitarian approach. Utilitarianism means that we should behave in order to create the greatest good for the greatest number. Nooyi and other CEOs seem to maximize social benefits, while minimizing social costs, when they focus on realizing cost savings, while they at the same time go easier on the environment.

Based on the examples in the article, do you think that these CEOs have an ethical egoism approach or a more utilitarian approach? That CEOs and companies can save money by being green is a “win-win” situation, but which leadership style do you think would help a CEO to maintain this green focus?

-      Eva-Lena Juhlin

Green Marketers

http://www.businessweek.com/managing/content/oct2010/ca20101029_631610_page_2.htm

In "Green Marketers are still sinning" Andrew Wilson cites problems with marketers claiming their products are green. The five things he cites in this article about green marketers are: number of products making some sort of green claim is rising fast, majority of products claiming to be green are still committing at least one "sin", the sin of "worshiping false labels" is on the rise (false eco-labels are becoming a problem because 70% of them are false), categories with a long track record of green claims are doing the best, and claims about toxicity are on the rise.The article goes on to mention that their is evidence that large retailers "sin" less in green products than specialty green stores.

 This brings up important issues that are mentioned in chapter 15 of Northouse's textbook. First off, leaders need to strive to act altruistically. They should try and do the greatest good for the greatest amount of people. Not only their followers, but customers as a whole. If marketers are violating "sins" on their "green products" they are essentially lying to consumers. Consumers buy products they believe are helping the environment. Companies who are guilty of these "sins" are not being altruistic at all, but rather ethical egoistic. They are using the environmental friendly products (which are obviously not as environmentally friendly as they are stated to be) to trick consumers into buying them. Not only are these companies doing wrong, but they are setting the standard, basically saying it is alright to exaggerate their environmental friendliness. Yes, it could be an honest mistake, however I do not feel it is in most of these cases.

The next point that is mentioned is that large retailers are violated less "sins" than all of green specialty shops. This is astounding and exciting for us as consumers. Big box retailers such as target and Wal-Mart seem to be taking the green movement very serious. Although it has been said that going green is saving these companies millions of dollars in costs, it is still impressive to see it. On the other hand it is troubling that the specialty stores are having so much trouble violating green sins. I think we can all agree, we would expect it to be completely reversed. However, since these big box retailers are where most of us shop, it is positive, to say the least, that they have adopted a green philosophy.

On a ending note, this article raises several interesting ethical issues. It is troubling that products are sinning and exaggerating their green benefits. But, it is positive that big box retailers are doing such a good job keeping their products green. Who's responsibility do you believe the problem with the gree "sins" falls on? Do you believe they are honest mistakes? Lastly, would you go as far as to say (like the author did and a sample of evidence has shown) that big box retailers are doing a better job of not violating green sins than specialty green stores?

-Ryan Schaumburg

A Servant Leader

http://www.nytimes.com/2011/03/20/business/20corner.html?pagewanted=1&ref=business

This is an interview with Irwin D. Simon who is C.E.O. of the Hain Celestial Group (a natural and organic food and personal care products company).When I was reading this article I thought that this must be a perfect example of an ethical leader.

In Northouse´s book, Greenleaf´s Servant Leadership is presented. In servant leadership perspectives is the leader-follower relationship central to ethical leadership. A servant leader focuses on the needs of followers and helps them to be more knowledgeable, free and autonomous. Greenleaf emphasizes the value of everyone´s involvement in community life and the importance of listening, empathy and acceptance of others.

It is apparent in the interview that Simon has a servant leadership style. He emphasizes the importance of empowering people and argues that he does not need to have the control. He shows that he is very focused on his followers when he talked about his philosophy of “no closed doors”. He brings interns into board meetings and asked their opinions and thoughts about different decision. Simon also encourages them to be involved in the community and tp go out of their comfort zone.

Simon says: “I love people to move to other parts of the world, just to see how the world works. I try to push people to do other things and see other things.”

In article I also noticed that Simon uses several concepts from the Leader-Member Exchange Theory. Northouse´s book presents the concepts of in-groups (more influence, information and concern from the leader) and out-groups (less compatible with the leader). Leadership making is a theory that the leader should develop high-quality exchanges with all the followers. 

Simon talks about these concepts in a similar view. He has earlier work experience when he was doing well if he was behind the right people (which is comparable with in-groups) and when he didn´t support certain people he was off the team (out-groups). Simon believes in the idea that they´ll are on the team together. The philosophy of brining everybody in is similar to Leadership Making.

Leadership making contains three phases: the stranger, the acquaintance and the partnership phase. The second part, the acquaintance phase, begins with an offer by the leader for improved career-oriented social exchange. When Simon brings interns to the board meeting is a good example of when he tries to move an employee to the acquaintance phase.

In both Leadership Making and Servant leadership, the leader-follower relationship is a central part. Leader-Member Exchange Theory seems to be a good and ethical theory for leader to practice. Can you find something unethical in this theory? Is Simon´s leadership making a good way to be a servant leader or can you find some unethical consequences?

-          Eva-Lena Juhlin

Women in Leadership- Indra Nooyi

Indra Nooyi is perhaps one of the most successful women CEOs of all time. Indra became CEO of PepsiCo in 2006 after serving for several years as VP. Indra capitalizes her leadership on "performance with purpose." "Performance with purpose"  means to generate as much profit as possible, but still remain socially responsible at the same time. Nooyi's effort to lead this type of change can be related to transformational leadership. She is inspiring not only her workers, but also the public of her desired change. Nooyi has a clear vision of successfully leading PepsiCo, but she also is highly focused on the greater good of the world. She clearly demonstrates all five aspect of Kouzes and Posner's model. I beleive the most important of all of the five aspects, is enabling others to act. Nooyi needs to listen to the views of others, include them in the process and decision making, and get others to follow her in her mission. 

Both in the present time while serving as PepsiCo's CEO, as well in the past before becoming CEO, Indra doesn't believe her leadership style has changed much. In the article, she talks about the fact that she believes all leaders should possess the necessary knowledge and skills to be successful throughout their entire career. By reflecting on the past leaders of a particular company and learning from their triumphs and mistakes, new leaders will be much more successful when combining all of the traits and characteristics of the leaders in the past. Taking all of this into consideration, it is clear that Indra believes that leadership can be a learned. This relates back to the skills approach we learned about earlier in the semester. Indra Nooyi is no longer worried about about the basic production lines at PepsiCo, or the small every day business that goes on inside the PepsiCo factories. Rather, she must focus much more on the conceptual ideas.

One of these ideas is that of "performance with purpose" which focuses on going green. In order to remain successful through the economic downturn, companies are going to have to come up with new and creative ideas. So far, Indra Nooyi has done an excellent job of using both her conceptual and human skills, much like the three-skills approach describes. 

It is also evident that Indra Nooyi encompasses many of the genuine and empathetic characteristics that are seen in more women than men in leadership. In the second article I posted, Nooyi mentions the fact that she doesn't think many corporations, or the government for that matter, have caught onto the idea that many women are looking for things such as daycare for their children at work. Part of this struggle for women in the workplace is due to the glass ceiling. I think many people would agree, including Nooyi, that the class ceiling is definitely still prevalent in today's workplace. Prejudice and stereotyping still exists, and it is up to not only the men in companies, but also the women to help lead, mentor, and guide female employees in order to break free of the glass ceiling. 

All in all, Nooyi has proven her ability to develop innovative ideas in order to stand out in the marketplace and yet still feels compassion for other working mothers. Most importantly, she has broken free of the glass ceiling, and is doing her best to help other females break free as well. 

I believe that Indra Nooyi's view on learned leadership is what has made her so successful. By listening, reflecting, and learning from what others have done, she has acquired a much deeper level of knowledge. By also encompassing a sense of transformational leadership in her effort for both environmental and work-life balance change, she is capitalizing on many of the leadership characteristics that women display more than men. So, what do you think? Do you believe that Indra Nooyi's transformational leadership combined with her view of skilled leadership is what defines a good leader? 

http://leadership.bcg.com/americas/nooyi.aspx

http://www.womenonbusiness.com/condoleeza-rice-and-indra-nooyi-talk-about-women-business-and-the-glass-ceiling/

- Kelly Moran 

Indonesia needs more altruistic leaders

Altruism is an ethical approach to leadership that suggest that actions are moral if their primary purpose is to promote the best interest of others.  In fact, Altruism entails that a leader may even go against their own morals and values as long as it is in the best interest of others.  In this article I was looking at, Indonesia is in a time of crisis where the Country is going into debt and the rich keep getting richer and the poor keep getting poorer.  With the standard in Indonesia that high ranking officials get big annual pay raises and luxury cars it is hard for the lower class of people to advance anywhere in society.


There is the argument that pay increases deter from corrupt officials and keep everyone in the cabinet honest and loyal.  There is the argument however that if officials are not paid enough then they cannot support their family and then in return they will end up stealing money from the state.  But how can high ranking officials argue over money when more than half the country in earning less than half of what the top ranking officials are. 

Indonesia is in desperate need of a altruistic leader and in need of one fast.  The people need a leader who can take a step back and look at what is happening to their followers and act accordingly to help.  Even though it is against the beliefs of way the officials should get paid, they need a leader who will go away from their personal beliefs and act to help the greater population.  Indonesia needs to freeze the pay raises to high ranking officials and needs to spend time and money on the people and restore their faith in their country.

Do you think it is right for a President to continue to give officials pay raises when the greater population is stuggling?

Do you agree or disagree with me that the President of Indonesia needs to display more Altruistic characteristics?

http://www.thejakartapost.com/news/2011/01/30/indonesia-needs-more-altruistic-leaders.html

-Kyle Turner

Team Leadership and Ethical Egoism

http://www.businessweek.com/managing/content/nov2010/ca20101119_303832.htm

In the article “Leadership Skills for Driving Innovation”, John R. Ryan argues that creativity, and the ability to nurture it, is going to be the most important leadership skills for the future. The main focus in the article is that you would “never fool yourself into thinking your business doesn't have time or money to foster creativity”.  In the article he presents a plan for leaders to unlock innovation in his or her company through collaboration. This focus on spending money to collaborate innovation, even during economic crisis, made me think of other things that could be more necessary. I wonder if what Ryan argues for can lead to “Ethical Egoism”.

Ryan´s plan has many similarities with the “Team Leadership” approach in Northouse´s book. According to Ryan, the right style of leadership is important to create innovation, and the breakthrough ideas almost always arise from collaborative creativity. He does not suggest actually team, but that people inside the organization must collaborate and the steps he presents are applicable in the Team Leadership model. Leadership Decisions is the first step in the model. The leader will decide if he or she should take action or monitor the situation. The leader will also decide if the issue needs task or relational support, and if he or she will intervene internally or externally. The main focus of this article is that the leader needs to take action to handle an insecure future.  Ryan aims that the people in the organization need to change how they think (relational) and that the leader provides the followers with the environmental resources that’s needed (externally). In the Team Leadership model means external operations for the team and executive action that the leader acts to prevent any negative changes in the environment from hurting the team. That’s I similar to Ryan view because he suggests that the leader should stimulate collaborative creativity to make the company succeed in an unsettled future. Next step in the Team Leadership model is the Leadership Actions. Ryan states that the leader must give the fundamental resources of people, time, money and intellectual property to succeed with the collaboration. That is comparable with negotiating support (secure necessary resources, support etc.) under the External Leadership Actions in the model. The last step in the model is Team Effectiveness, where development (cohesiveness of the team etc.) is one of the parts. This could be comparable with Ryan´s opinion that people inside the organization must collaborate to be motivated and feel satisfaction during to process to create innovative solutions.

This focus on spending money to succeed with innovation is a strategy to make the company succeed, but could it also be an ethical question? Ryan suggests that companies even during bad times would spend a lot of money on resources for collaborating. Does the Team Leadership Model create a too strong focus on the team that will lead to that the other things are forgotten? How about individual achievements or community good? Obviously, the company must have a strategy to succeed, but to what costs? In Northouse´s book states Ethical Egoism that a person should act so as to create the greatest good for herself or himself. Ethical Egoism is common in some business contexts to make decisions to achieve its goal of maximizing profits. Is the strong focus for innovation only a strategy to succeed or an example of maximizing profits and Ethical Egoism?

- Eva-Lena Juhlin

Leading by Example

As we have all grown up, we have had people that we look up to. The examples our parents, older siblings, relatives, and even teachers showed are what have helped shape our own attitudes and behaviors about life. If we are older siblings or have younger relatives, we have heard about being a good "role model." There are people who look at our actions as examples of how to act, just as we have looked to our elders.

This happens in the workplace as well. If we see a manager talking on their cell phone in the back room, we assume that we can do it as well. If they are acting unethically by lying to a customer, misrepresenting financial figures, or practicing favoritism, we assume that these are acceptable behaviors to use as well.

Hewlett Packard's CEO Mark Hurd was a successful leader in the company, and was even considered a "TopGunCEO" by Brendan Wood International, an advisory agency, in 2009. He had a lot of success and was a good example of how to lead effectively, and ethically, as far as the public was concerned.

However, in April of 2010, he was sued for sexual harassment by a former contractor. He was not convicted, but was found to have acted unethically in the workplace. According to this article on huffingtonpost.com, "Hurd's 'systematic pattern' of submitting falsified financial reports to hide the relationship convinced the board that 'it would be impossible for him to be an effective leader moving forward and that he had to step down,' HP general counsel Michael Holston said."

This brings us to the question of leadership ethics. In our book we read about how ethics is defined. Page 378 relates ethics in this way:
            "Ethics is concerned with the kinds of values and morals an individual or society finds desirable or appropriate."                          and,
            "The choices leaders make and how they respond in a given circumstance are informed and directed by their ethics.'

This article also gives good examples on considering if we act ethically or not in the workplace, and even mentions Mark Hurd's situation. 

Hurd did not have very strong values or morals concerning honesty and following company policies. The appropriateness of paying a woman for work she did not do and the choice he made in this circumstance heavily relay the message of just how unethical Hurd really was/is.
 

"Hurd acknowledged there were 'instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP.'"

He was found to have falsified expense reports and other financial documents to conceal the relationship with the woman who had sued him. We can all agree that falsifying reports is not right and is an unethical practice. But what is he showing those who look up to him? The article states that he has two children, now what is he showing those kids? How can they look up to a father who helped a company prosper, yet had to find another job because he lied in financial documents in the end?

Considering an article I posted before in this blog concerning the severance packages of unethical leaders, Hurd was given a $12.2 million severance payment and nearly 350,000 shares of HP stock worth about $16 million. Now what kind of example does this give? Even though he lied he still left millions of dollars richer?

Overall, leaders have a choice to make while in their positions. They can act ethically within the domains of conduct and character (Page 378 in our book explains theories on conduct and character; look to Table 15:1), or they can chose another route.

If they are successful enough before the cheating, lying, etc., they may receive millions of dollars upon their severance from the company, thus creating a great example for those who look up to these leaders. 

-Melissa Beechy

Patagonia - Yvon Chouinard

After reading up about Yvon Chouinard, I have noticed that he has led a revolutionary change to how he runs his business.  He is the founder of the company Patagonia.  Many may be familiar with the climbing and environmental brand.  He quickly found a way to make higher quality and less damaging climbing equipment over the last 40 years.  His focus has more shifted to empowering his employees in order to become a higher quality company. "Under Chouinard's fearless leadership, Patagonia has been a consistent innovator in coporate practice, giving away a percentage of its gross annual sales to small-scale non-profit work around the world and switching to only organically grown cotton and other recycled materials in its production."  This is an example of how Chouinard is keeping in tact with CSR.  He focuses on leading his company through long-term sustainability and good citizenship.

He has recently wrote a book called "Let My People Go Surfing."  This is a book concentrated on how his company has turned into one of the world's most inspiring companies.  In order to keep sustainability within the company, he takes very good care of his employees.  Not only does he encourage his employees to volunteer their time, emphasize the importance of the environment, and let his people leisure throughout the work day, he only hires people who's goals match up with the company's goals.  He provides surfboards for his employees to enjoy while they are on their lunch and break.  He also has a bicycle rental for employees that need to go somewhere on their breaks, to cut back on putting chemicals into the air by using cars.  The building itself has solar panels in order to create energy for the company to operate.  He blends work, play, and social duty in order for his comany to be successful.

This article shows a great example that Chouinard offers of his leadership through the "Team Leader Management" of the Blake & Mouton Model.  He offers very high concern for his people, and also has very high concern for the product or "task" at hand.  Through the examples I have mentioned above, he has covered both of these aspects.  He treats his employees with very high respect and in return sees the same.  He wants to satisfy relationships and work culture by offering them different opportunities for leisure.  This enhances their liking and caring for the environment, which is a common goal for the company and its employees.  He is agreeable and eager to help his employees.  There is a high degree of dedication and team work because the employees are actively involved in the CSR quality of the company.

I also believe this is an example of the Leader-Member Exchange, and treats all of his members as "in-group" employees.  He offers them a high quality relationship and the employees are more dependable.  They are highly involved and communicative because these leisure activities are offered to them.  They become more involved with the company by doing volunteer work that Patagonia offers for them.  Graen & Uhl-Bien's studdies found that high-quality leader-member exchanges resulted in greater organizational committment.  It is also known that Patagonia's employees stay with the company for extended amounts of time because of this. 

All in all, Yvon Chouinard possesses many leadership qualities and traits that are obviously shown through his work at Patagonia.

http://www.patagonia.com/us/patagonia.go?assetid=4626

-Lauren Mowers

Moral Ethical Decisions

http://www.nytimes.com/2011/02/06/magazine/06FOB-Ethicist-t.html

This is a great article from the New York Times, highlighting how hard ethics can be in some situations. It mentions two stories, the first is about a guy who has been out of work for a long time and has a job offer setting up off shore help jobs. He is at a crossroad because his father's auto industry was outsourced and he does not agree with outsourcing at all. Should he accept the job or not? The second story is about a girl who is to have her tonsils out, but mother is on her way to jail for 5 years. The doctor is on the crossroads of whether or not to ask the courts to allow the child's mother to come sit with her daughter during the operation. The doctor does not believe the mother deserves a break, but that the little girl does.

It is very easy for someone to say they wish to be ethical. However, in a situation like the one above, what is the ethical choice? It is not easy to discern between ethical and unethical. In the first story, the wife tells the husband to accept the job because if he doesn't someone else will. This is true, but can be applied to any situation. I am sure it is frustrating for him not having a job and struggling to make ends meet, but is a job worth compromising what you believe in? I think it depends on the situation. Obviously, this guy is doing the best he can, but what if he is having trouble putting food on the table or supporting his children? In this situation I believe it is necessary to take the job. In the second story, the biggest questions is whether or not the girl should be punished for her mother's actions. She will no doubt be without her mother for years, which is why I believe the mother should be allowed to sit at the operation. This 10 year-old girl did nothing wrong, and even though the operation is not severe, it is important for her to have all the support she can.

Ultimately, the guy declined the job due to moral principle and the doctor appealed for the mother to be at the procedure and was denied.

This article is a great example of the ambiguity involved in some ethical decisions. I feel the situation is different in every case, which makes it important for business people to step back and look at the situation as a whole, before making a decision on a course of action.

Do you agree with my analysis of the situation?

-Ryan Schaumburg

Middle of the Road

http://articles.cnn.com/2009-03-06/politics/navarrette.obama.centrist_1_obama-justice-department-president-obama-liberals?_s=PM:POLITICS


This article does a good job of outlining some of the reasons why President Obama started out in the middle of the road during the beginning of his term as President.  The issue of President Obama being a centrist or in the middle of the road had many of his followers wondering if he was indeed a liberal and would support them in the future.  Many conservatives were looking at Obama's support on the $787 billion stimulus bill which goes against the beliefs of many of the the people who voted him in office.   Obama started in the center when he began picking his cabinet members who strongly supported ideas that Obama has gone against his entire career.

Though a middle of the road leader does compromise to both sides keeping a balance and equilibrium, in some leadership roles this approach is very questionable.  Obama did a great job of taking the people into account while still outlining where he wanted to go with his term as President.  He maintained the morale of the people at a reasonable level, however people were beginning to question whether they elected the correct President. 

I feel that the middle of the road approach can develop some unethical traits among leaders that use this in their leadership style.  For Obama to go against his original thoughts and beliefs about political topics and hire people who supported against him in his cabinet that to me seems unethical.  I feel that if you are a leader you need to be very truthful from beginning to end to your followers to ensure their loyalty and confidence in you.  This is a very small scale of being unethical, but it does raise some concern when a leader becomes hypocritical and goes against the original plan that he/she has outlined.   

Do you agree with me that this was a little unethical of President Obama?

Do you think that there is another leadership style that would be better in the "leadership grid" found on page 74 of our text book?

-Kyle Turner

Integrity and Ethics

According to dictionary.com,
Integrity equals: adherence to moral and ethical principles; soundness of moral character; honesty.

I never thought about the amount of integrity and how it affects an organization until recently when I read this article: http://www.moneyweb.co.za/mw/view/mw/en/page292681?oid=527025&sn=2009+Detail+no+image&pid=287226

The article made the amazing point that companies with higher integrity had less misconduct, higher financial strength, stronger long-term shareholder returns, and overall higher business performance, all of which I feel are major goals of the company.

Considering leadership, if a company's leader is more focused on hiring people with high integrity, everything else will fall into place. If leaders can motivate employees to make the right decisions, the company can reap the benefits. Instead of asking a potential employee what they did in a time of conflict, why not ask about a time they felt they acted with integrity? Instead of worrying about a task, why not worry about how ethically (or unethically) the task is accomplished? I feel that if integrity (and ethics) were more of a concern at the bottom of an organization, they can climb their way to the top and stop unethical behavior from the core.

Posted By: Melissa Beechy

 

Starbucks Ethics and going green

http://business.timesonline.co.uk/tol/business/industry_sectors/leisure/article5240824.ece

With Starbucks recently being named one of the most ethical companies, I was looking for an article that outlined all of their key ethical practices that landed them on the list. Instead, I found an article from 2008, based out of the UK, that highlighted some of the worries people were having relating to the ethics of Starbucks. This article highlighted some of the things we don't normally think of when deciding what goes into making an ethical company.

With consumers becoming more price sensitive, it is becoming harder for companies to act ethically and still make a profit. Developing products that are good for the environment is also very costly. Companies need to be sure consumers are going to buy a product that is good for the environment if they are investing millions of dollars.

Do you think money is a major motivator for both consumers, as well as companies, in the effort to go green?

- Kelly Moran

Values and believes in a new CEO

http://www.businessweek.com/managing/content/jan2009/ca20090130_544017.htm#readerComments

Still in the topic of social responsibility and the CEO's responsibility to support the employees and the community. This article was appealing to me because I think this is a good example of using utilitarianism values in leadership. The founder and CEO for the ad agency Hill Holliday wanted to find a insider to take over after him in the company. He wanted someone who shared his values: “about the work itself, the way both clients and employees were treated, and about the agency's commitment to charity.” I think his values and believes are example on good ethical leadership. He is not only concerned about the company and it profits. His main responsibility is the idea of the company with happy employees and commitment to charity.

This view seems to be similar to the Conceptual skill we can read about in our course book in chapter 3 Skills approach. A leader have the conceptual skill if he or she comfortable talking about the ideas that shape an organization and the intricacies. According to the book is this skill most important in the top management. These skills seems also to be the ones that the founder looking for in a new CEO in the article. 

Do you think this skills are important when you looking for a new CEO?  Do you need to pick an insider to a CEO to keep the company´s values and commitments, or is it possible to recruit outside the company and hang on to the same things?


- Eva-Lena Juhlin

Corporate Ethics All Start with CEOs

http://web.ebscohost.com.proxy.lib.ilstu.edu/ehost/pdfviewer/pdfviewer?hid=107&sid=05669493-6db5-46de-8eb6-587f6def2f95%40sessionmgr114&vid=2

Staying with the CEO theme on our blog, I found a great article that gives a first hand experience of corporate ethics from the CEO of SPL World Group. His thoughts on the issue are consistent with Robert Greenleaf's "servant leadership" and using utilitarianism values in leadership.

The author stresses the tendencies in today's business environment for CEO's to treat each market issue as a chance for market advantage for the business to fulfill duty to maximize shareholder's profits, rather than fulfilling their duty to their employees and the community as well. He believes that as CEO HE is responsible for making sure that the firm is always a good citizen, respectful of laws and values, supportive of the markets to which they profit from, and most importantly supportive of the communities to which they operate in. This is where the utilitarianism values come from, the welfare of helping out the communities to where businesses operate. He then goes on to mention the importance of treating employees with respect. A great quote from the article, that is spot on with servant leadership says, "i cannot create enduring value from my investors, unless i create real value for my employees." The author really recognizes that his employees are the driving force of the company, and by creating long-term benefits and rewards for them it not only gives them a reason to stay, but keeps the organization in a positive light among the employees as well.

It is not always cost efficient for a organization to help out the community, however it is always a good idea. Social irresponsibility is a sure way to weaken public image, lower profits, and most importantly hurt the surrounding communities who buy your products or services. I agree wholeheartedly with the author, that ethics start with the CEO. Making speeches and changing ethical guidelines can only do so much, the CEO needs to model the way. When employees in the organization see their leader practicing the ethical responsibilities required of the them, the organization will follow.

Please respond with your agreements or disagreements with the topic!!


-Ryan Schaumburg

CEOs' Ethical Lapses Put Boards in Tough Spots

http://blogs.wsj.com/dispatch/2010/08/09/ceos-ethical-lapses-put-boards-in-tough-spots/

This article was appealing to me because it focuses on the idea that CEO's put their boards in tough spots, when in reality the CEO should be responsible for the unethical decisions that they make. When referring to putting boards into "tough spots," I disagree.  I believe that board members should not feel guilty when questioned and answering to the truth.  I believe it is a tough decision to let the CEO of a company go, especially because they are the immediate successor of the business, but if the CEO has been unethical and has gotten caught, chances are there are other spots in the business where he/she has chosen to be unethical as well.

The article moves into different executive ethical lapses including: Steven J. Heyer of Starwood Hotels & Resorts, David Edmondson of RadioShack Corp., Harry Stecipher of Boeing Co., and Thomas M. Coughlin of Walmart Stores Inc. All of these executives that employees look up to have acted unethically and have either stepped down from their position or were replaced.

Board members are facing problems when finding a warning sign because it may later on become a much bigger scandal.  I believe by facing the warning sign early on, the chances of avoiding a scandal will become higher.  I believe there should be a zero tolerance on unethical behavior in the workplace in order to create a productive and ethical environment of a firm.

Your thoughts? Have you heard of any specific scandals of corporations that could have been avoided due to an early warning sign that was overlooked?

-Lauren Mowers

Green = Good?

In the article "Going Green's Unexpected Advantage" G. Michael Maddock and Raphael Louis Vitón discuss the advantages for leaders to make their employees and business go green. They argue that the green approach makes a key driver of innovation and carries a huge competitive advantage. The main arguments G. Michael Maddock and Raphael Louis Vitón  point out are "It makes no sense to sail against the wind", "It can save you a lot of money" and "It's not that hard to apply a green lens".

My first thought was: does this caunt as ethical leadership on today´s society? Go green seems to be a good way for a leader to be ethical and take public responsible, but none of the arguments talk about some good for the environment. Only to act as you do something good for the society. The last argument (“not that hard to apply a green lens”) mainly suggest that you don´t need to do a big difference to be classified as green. That means that the green stamp is something meaningless that doesn´t make any difference.

 In this view,  the green approach seems to be more a competitive advantage for the business than cause of corporate social responsibility. What do you think? Can the green aproach do more harm than good?

Article: http://www.businessweek.com/managing/content/dec2010/ca20101220_742780.htm

Posted by: Eva-Lena Juhlin

Salary Packages and Regulations

http://finsec.wordpress.com/2010/11/22/5-59-million-westpac-ceo-salary-package-unethical/

In this article it brings light on other issues around the world happening relating to CEO's acting unethically.  The article comes from New Zealand where the CEO of a company received a salary package of $5.59 million, which was the largest in New Zealand corporate history.  This package has been described as unethical because the economy is struggling and average workers have had zero or limited growth in their own salaries. 

This topic has raised concern in New Zealand for the need for executive salary controls.  This article interested me because of the global aspect of it.  It shows that CEO's all over the world are acting unethically and the talk of regulations is becoming more and more popular.

Does anyone have an opinion on regulations for CEO salaries? Should they exist?

-Kyle Turner 

Interesting Numbers

http://money.usnews.com/money/business-economy/articles/2010/07/27/6-unpopular-ceos-who-still-collect-millions

This is just an article I found extremely interesting. The amount of money the CEOs in this list have made since acting unethically is astounding. I wonder what else they do that we don't/won't even know.

Is this fair at all? Think of what the company could be doing with the money they are instead paying their failed leaders. They could be investing it, helping the company grow, paying out dividends, donating to a good cause, etc. This kind of stuff really bothers me, and makes me think about how they are pretty much rewarding the CEOs for their unethical behavior. That sure is what it seems like...

Posted by- Melissa Beechy

Two Different Types of CEO's

This article is highly representative of both our class focus on different types of leaders, as well as the topic of our blog.

http://boss.blogs.nytimes.com/2011/02/02/there-are-two-kinds-of-c-e-o/?scp=2&sq=enron&st=cse

After reading this blog, it had me wondering if what the writer, Jay Goltz, was saying was true. I think it is wrong to stereotype CEO's as good or bad based on the size of the company, but then again it makes perfect sense. Almost everyone would agree that small business owners do invest more in their companies than the CEO's of large corporations. However, I think we may just hear more about large corporate scandals than we do about small business scandals. A scandal involving a CEO of a small/mid sized company is much less likely to make the news than a large corporate scandal is.

How do you feel? Do you think CEO's of smaller companies tend to be more ethical since they do have so much more invested? Or, do you think it doesn't matter the size of the company, or how much a CEO has invested? One thing is clear though: the good, the bad, and the ugly exist in any sized company.


Posted by: Kelly Moran

Team 4 Topic Introduction

Welcome to MQM382 Team 4's Official Blog.  Our team consists of: Ryan Schaumburg, Lauren Mowers, Melissa Beechy, Eva-Lena Juhlin, Kelly Moran, and Kyle Turner.  The topic that will be discussed throughout this blog will be "The Good, the Bad, and the Ugly."  This will consist of an in depth discussion of ethics, scandals, and corporate social responsibility and their effect on organizations as a whole.  This will feature not only controversial leaders of specific organizations, but also role models of organizational leadership.

We will seek to answer the question: "What makes an ethical leader in today's society?" In order to answer this question, we will explore different ethical situations and it's public response.  Today's competitive environment brings many different ethical dilemmas that leaders and employees alike have to deal with on a daily basis.  By defining an ethical leader we hope to offer a better individual understanding of right from wrong in organizations.  The more examples of ethical situations, good or bad, the better we can describe what makes an "ethical" leader.

Please feel free to give us your thoughts and opinions on any issues relating to this topic, as we will periodically post & discuss specific ethical situations! Objections & constructive criticism are welcome in a respectful manner. Hope you enjoy our insights.