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Ethical Decision Making

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man-fingers-crossed

Ethical decision-making is important for businesses. Trust and integrity must not be lost. There are three ethical concerns for the sales organization, which are (1) cheating, (2) misuse of company resources, and (3) inappropriate relationships with other employees.  

In fact, losing a customer or client’s trust is fatal stroke for businesses. Famous management expert Stephen Covey suggests that trust is the cornerstone for productivity in the market. Once customers lose faith and trust in an organization, that organization has lost ground in the market. 

Employees are motivated by different stimulus.  In fact, different employees have different motivations.  Motivation produces psychological forces that determine the direction of a person’s behavior in an organization.  In my technical field, there are few things that are impossible to accomplish; it’s a matter of time versus money. 

However, finding these solutions depend on a personal drive.  In many organizations,  supervisors search for the magical ingredient to improve employee performance so that the organization can be successful.  This initiative isn’t easy!   

For example, a salesperson might be motivated to earn high commissions at any cost. He knows his management is only concerned with the bottom-line. At the end of the year, his sales manager responses in anger to this salesperson, “You’ve committed the company to something to which we cannot commit.” Therefore, being promoting selfish behavior can cost a business in the long run.

 

Organizations must train and create a good ethical environment.  Gareth Jones and Jennifer George, authors of Contemporary Management, further argue effective managers fully utilize their human resources to gain a competitive advantage.  Developing the desired behavior in employees is invaluable. 

In many cases, employees exist in a transactional relationship (if you do this, you will get that).  For example, a sales representative for Mary Kay will get a pink Cadillac if she reaches the designated sales limit. In fact, business perks are pretty routine. 

Most people have an internal compass that allows them to distinguish right from wrong.  For example, an employee might be tempted to take a bribe from his company’s competitor.  Johnston and Marshall make a clear distinction between a gift and a bribe. A bribe is a financial present given to manipulate the purchase decision. 

In an effective ethical system, an employee would not compromise the trust with the company, including any internal customers (supervisor, manufacturing group, etc.). 

Finally, there will be numerous situations that test a person’s moral behavior in organizations.  Ethical decision making is a way of life. Businesses must create good ethical systems where employees are accountable for their conduct.  Trust must be at the center stage of the process. 

Discuss your professional experience with making ethical decisions in your industry. 

© 2014 by Daryl D. Green

2013 in Blog Review – From Dr. D. Green

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The WordPress.com stats helper monkeys prepared a 2013 annual report for this blog.

Here’s an excerpt:

The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 10,000 times in 2013. If it were a concert at Sydney Opera House, it would take about 4 sold-out performances for that many people to see it.

Click here to see the complete report.

Marketing for Professionals

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MM-boy-custom

Several years ago, I was riding the Metro subway in Washington, DC and got off at the end of the line.  The location was in a depressed area, and few businesses were there for commuters.  As I waited for my ride, I saw these two boys carrying a huge box of M&Ms in hopes of selling to weary commuters.

I found it amusing that these young men were hustling in such a manner. Yet, this spoke to the spirit of entrepreneurs.  The boys found an unmet need in the market.  Yes, with no stores located in the immediate area, these young men sold a lot of M&Ms to hungry commuters.

With increasing competition abroad, today’s professionals cannot afford to be ignorant in understanding business practices such as marketing.  The problem is that marketing is not second nature for all business professionals.

Sadly, most business owners do not have the time to take a long, drawn-out college course, while others want a simple process for understanding the basic concepts until they can take more formalized courses.  In fact, when you do not have a lot of money to spend on advertising your product, you have to be smarter and more creative in order to stay ahead of the competition. 

Marketing is the cornerstone of understanding today’s economic changes. Philip Kotler and Kevin Keller, authors of Marketing Management, argue the important of understanding marketing concepts for today’s professionals: “The first decade of the 21st century challenged firms to prosper financially and even survive in the face of an unforgiving economic environment.  Marketing is playing a key role in addressing those challenges…Thus financial success often depends on marketing abilities.”

Consequently, marketing gives individuals the ability to understand how to locate these opportunities and what to do with them when you find them.  According to the American Marketing Association, marketing can be defined as an organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers. However, the simplest definition is that marketing is about understanding and satisfying customer wants or needs.

In fact, there are times when customers do not know what they want or desire. Marketing then becomes that linchpin in the process of finding a solution for the consumer.  Traditionally, marketing has been defined in terms of four variables described as the marketing mix, or the 4 Ps: product/service, price, placement, and promotion.

https://www.youtube.com/watch?v=NQzYclR8ufM

In fact, the marketing mix is the controllable set of activities that entrepreneurs use to attract or respond to the needs of their target market.  In essence, entrepreneurs attempt to create value for their customers.  Value relates to the customer viewpoint, not that of the business.  Value relates to the benefits the customer perceives they are getting in exchange for their purchase of the product or service.

Business experts Donald Lehmann and Russell Winer point out that inaccurate information or incorrect analysis often leads to poor decisions about marketing a business product.  This flaw can hurt a business attempting to make a profit.  In fact, understanding competition is a point most executives miss.  Some of the questions executives should ponder include: 

  •       Who are my competitors?
  •       What are the competing product features?
  •       What is their positioning strategy?
  •       What markets do they currently own and their future?
  •       How do you distinguish your products from those of your competition?
  •      How do consumers make this distinction in products?

In today’s global markets, organizations cannot operate with a ‘trial and error’ mentality.  In fact, what worked yesterday is no guarantee that it will be successful in the future.  Business professionals who are less knowledgeable about marketing and marketing forces are a liability to organizations that aim for sustainable success.

Successful entrepreneurs understand how to tap into their target market instead of random selling.  Why should the expectations be any lower for today’s professionals?  Therefore, savvy professionals seek to understand and implement effective marketing strategies. 

Please discuss the value of understanding marketing concepts for professionals based on your own work experience.

© 2013 by Daryl D. Green

Communicating to Customers

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handshakes-business

Businesses attempt to persuade customers with their commercial messages. Consequently, they need to develop effective marketing communications. In a ‘marketing heaven,’ an organization would have the top brand in its category. In the real world, it is about a company showcasing itself in a good light with buyers.

Positioning involves a company putting its product or service in a favorable space in the minds of consumers. Therefore, positioning involves winning the customer’s perception over one’s competition.  For example, McDonald’s uses its brand to position itself over the competition. When parents travel with their children, most children automatically want to eat at McDonalds.

If a company has an existing product and the overall consumer attitudes do not rank the product as highly as its competitors, the company has a chance to improve its positioning. The company needs to do a lot of research to see why it is viewed in this light before setting new strategies.

Michael Solomon, author of Consumer Behavior, maintains that the way a consumer evaluates and chooses a product varies widely, depending on such dimensions as the degree of novelty or risk in the decision. Additionally, the attitude of the organization has an impact on buyer behavior.

For example, a bad experience with McDonald’s can sway a parent from going to McDonald’s; they may seek an alternative. In fact, Mark Johnston and Greg Marshall, authors of Relationship Selling, further argue that customers pick up on a salesperson’s attitude. Does good chemistry exist between the salesperson and the customer?  That’s an important performance measure.

When developing performance measurement with relationship selling in mind, good chemistry between the salesperson and customer should be a factor. Likewise, improved company attitudes can have a positive impact on customer behavior.  

Please discuss the value of effective marketing communications to customers.

© 2013 by Daryl D. Green

Meet the Agrarians

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Everywhere you turn life has become complicated.  With a cell phone in my pocket, people can reach me in remote places or traced me down with a GPS device. Ironically, that cell phone that helps me is also said to be possibly killing me at the same time. Yet, life was much simpler.

Before the Industrial Revolution, life was centered on land and labor. On this land, God gave man his divine “agrarian calling.”  Humanity was technology poor yet spiritually rich in the Agrarian Era. In the same framework, one can analyze the moral compass of society through the ages.

Agrarians had a love for community and order; a deep respect for the environment; and a genuine peace with their Creator. Family was first! Agrarians were independent decision-makers.  However, Agrarians went away from the land with every economic advancement.

From the steam engine to the Internet to nanotechnology, humanity has transitioned from the physical labor of the land to mental brain power away from the land.  Andres Edwards, author of The Sustainability Revolution, echoes the advancement of this period: “These inventions contributed to increase production and economic growth in the textile, iron, rail and steamship industries that have left an indelible mark on our current society.”

Yet, the effects were not all positive.  Farmers went from freedom in the land to industrial slaves. During this transition, managers controlled the factory workers. These forced interactions created conflict because farmers and industrial society had different value systems.

Each successive wave of technology brought with it giant leaps in productivity while expanding the moral decay of mankind.  In fact, the Industrial Era ushered in a period of materialism, competitiveness, self-sufficiency, and the supremacy of man. With each technological advance, social consequences also swept across the world like a tidal wave.

Are the principles of the Agrarians lost? If not, why?

© 2012 by Daryl D. Green

 

Sustainable Nonprofit Organizations

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Any student can tell you I set high expectations for them, regardless of their backgrounds and college classifications.  Yet, any time you ask some people to go beyond their comfort zone and stretch themselves a bit mentally, a professor is going to get some backlash. 

Nevertheless, I designed a new final project called Real World Application based on one of the top tiered business schools.  The objective was to provide students in my Operations Management course some practical applications from the course and assist  local organizations with their problems.   This is when I fully understood the challenges that many nonprofit organizations faced in this economic climate.

Most students selected private businesses while a few opted for nonprofit organizations.  Noriko Chapman, the past guest blogger, got me involved more with her project since she complained she needed to do well in my course.  Her project entailed assisting the Tennessee Vocational Rehabilitation Center (TRC’s), located in Maryville, to be more efficient and effective. TRC’s mission is to provide services that help lead individuals who have a physical and/or mental disability to employment and are designed to meet individual needs.  

Her employer, DENSO, had been working to assist this nonprofit organization with a contract that allowed disabled workers to earn income.  Her research helped TRC become more efficient.  Noriko’s final project was the main inspiration for her new book, Second Chance: An In-depth Case Study on Nonprofit Organization’s Resource Allocation and Operational Maximization.

During the economic crisis this year, the organization nearly lost $72K from government funding.  It was clear to me that nonprofits needed to get their act together and create more value to the sponsors and customers or face extinction.

With shrinking funds for programs and a more competitive environment, nonprofit organizations will need to rethink their corporate strategies for future success. In 2005, there will be approximately 1.4 million nonprofit organizations registered to the IRS.

The majority of nonprofits depend on volunteers at various levels.  In fact, 74% of all public charities and 83% of all foundations are small; they have less than $500,000 in expenses and limited staff. 

Nonprofit organizations are different from traditional organizations and require special considerations in their operations. Operations management (OM) has been a vital instrument in the pursuit of greater productivity in the business sector.

OM includes planning, coordinating, and executing all activities that create goods and services. Robert Jacobs, Richard Chase, and Nicholas Aquilano, authors of Operations & Supply Management, suggest that implementing OM assists organizations to be more competitive: “Compared with most of the other ways managers try to stimulate growth – technology investments, acquisitions, and major market campaigns, for example – innovations in operations are relatively reliable and low cost.” Today’s businesses have built elaborate systems for better efficiency and effectiveness. Yet, most nonprofits are forced to rely upon low-end technologies and outdated practices.

Demanding contributors and the public in general are demanding more accountable and efficiency after several high profile scandals.  Nonprofit organizations are often influenced by their stakeholders that include clients, board of directors, committees, government officials, community leaders, staff, and volunteers.  

However, most nonprofit organizations haven’t completely embraced this rigor due to various reasons (i.e. limited resources and the lack of knowledge).  Yet, nonprofit organizations have a greater need for increased effectiveness in their processes during this economic crisis.   

Describe your professional experiences with nonprofit sustainability issues.

© 2011 by Daryl D. Green                                    

 

 

Sustaining Ethical Behavior

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Americans are increasingly worried and cynical of today’s leaders. Traditional institutions are losing favor, leaving citizens unable to trust their neighbors, churches, and government.

Additionally, America has a history of unethical behavior by leaders. The private sector has been riddled with tons of examples (i.e. Enron, Exxon, etc.) of unethical behavior on Wall Street. Furthermore, political parties market family values and personal integrity like they are selling used automobiles.

In the quest for power and their own personal ambition, many government officials have been drawn to deadly vices that have led to their personal self-destruction. Graham Tomblin, The Seven Deadly Sins, notes this natural selfish behavior has destroyed families, friendships, happiness, and peace of mind.

These moral break downs can seep into other factions of the political landscape. For example, in 1998, the media reported the sexual exploits of Democratic President Bill Clinton with Monica Lewinsky. However, political scandals are nothing new for the federal government. During the months of May to August of 2007, Republican President Ronald Reagan’s administration was suspected of trading weapons for hostages in the Iran-Contra hearings.

This topic explores the American political environment and how amoral behavior associated with ‘seven-deadly sins’ impact contemporary organizational culture.   For this discussion, we evaluate Congressman Mark Foley’s scandal. Foley was a Florida congressman, who was reported to have sent sexually explicit emails to male pages who were high school students.

He abruptly resigned on September 29, 2006, which set-off a political landmine. House Republicans had to do damage control, whileDemocrats went on the attack. Some Democrats claimed that some House leaders knew for months of Foley’s inappropriate behavior. House SpeakerDennis Hastert found himself on the political hot seat. Hastert declared he knew nothing about Foley’s actions, but others disagreed with his proclamation. Hastert continued his claim of innocence as he asked the JusticeDepartment to investigate this matter.

Because of Foley’s resignation, he couldn’t be punished by his peers. Foley also apologized publicly, sought treatment for his alcoholic addicted, and pointed to a childhood abuse experience by a priest as a cause of his problem. Once again, Americans were asked to address another ethical issue among government officials.

In many cases, unethical decisions made by individuals who allow their ethical principles to influence their decision-making, led to laws being broken or the compromise of organizational values.  Moral principles, values, or beliefs about what is “right” or “wrong” are known as ethics.

Consequently, individuals who make decisions outside of the organization’s values sustain their moral principles internally. Ethics and organizational culture can impact the success of an organization. In fact, ethical behavior is directly related to culture.  

In the long-term, unethical behavior impacts an organizations ability to function effectively.  Employees watch what leaders do more than what they say.  Therefore, organizations that want to sustain future success must pay attention to their ethical behavior, at all levels.

Describe your professional experiences with ethical behavior by executives as well as others in the organization. Discuss what can be done to instill good ethical behavior throughout the organization

© 2011 by Daryl D. Green

The Designful Leader

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Last night I was reviewing the Design School Boot Camp Bootleg, an interesting document put out by the Hasso Plattner Institute of Design at Stanford. In the opening of the 36-page PDF is the “Design Mindset” or “D. Mindset” (supposedly because everything looks cooler when you shorten a word to one letter and add a period). As I read them again, I started to wonder if they couldn’t also apply to leaders. The D. Mindsets are as follows, with my leadership commentary below:

Show, don’t tell

We all know how frustrating it is to receive “orders” from a leader who is solely focused don telling, especially if what we need is to see the action, behavior of value from the leader first before engaging in it ourselves.

Create Clarity from Complexity

Much of the role of leadership is sense-making, reducing the complex system they view to a tangible action or behavior that followers need to understand. Leaders make sense.

Be Mindful of Process

While making sense of complexity for followers, leaders also have to juggle their attention on the overall process of their objective. In addition, leaders need to know that their development and the development of their followers is a process.

Collaborate across boundaries

In most organizations, the leaders who get things done are often those who step outside the lines of hierarchy to do so. Collaboration is becoming increasingly more vital…and that doesn’t even consider the effects of globalization.

Take Bias toward actions

In the end, leaders influence others toward action. Leaders who can get to that action the quickest (with sufficient background knowledge) are of distinct advantage.

Get experimental, and experiential

As the literature on innovation grows, our understanding of the need to experiment grows with it. Leaders need to let followers experiment, and experiment themselves. In addition, leaders ought to consider the experience of what it is like to work on their team and build a positive experience.

Focus on human values

I’d love to think this one is obvious, but many “tactical” or “transactional” leaders are focused on accomplishing the objective first and appealing to human values second. While this may work in the short-term, it is not sustainable.

Seven mindsets billed as required for engaging in proper design. Still, I can’t help but wonder if they ought to be re-billed as the “L. Mindsets.

Please provide comments or feedback to our guest blogger.

David Burkus is the editor of LeaderLab, a community of resources dedicated to promoting the practice of leadership theory. He is a consultant, a speaker and an adjunct professor of business at several universities. David focuses on developing leaders putting leadership and organizational theory into practice.

David is a graduate of Oral Roberts University and holds a Master of Arts in Organizational Dynamics from the University of Oklahoma. David is currently pursuing a Doctorate of Strategic Leadership from Regent University. He can be reached at david@davidburkus.com.

Beyond the Breakeven Point of Value Creation

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Every year it’s my ritual to take off from work, join other professionals, and meet at a university for two days to share our corporate experience with undergraduate students. 

As my trademark routine, I love to engage the young group and gain insight on their future aspirations. Yet, I am saddened by the lack of student preparation for future employment opportunities.  Many of these students are graduating seniors who are not ready for the harsh realities of life (your parents won’t be able to sustain you forever). 

 Furthermore, most students are unaware of current events, how to utilize their career center, and what to do to gain the attention of prospective employers.  

Yes, I understand them! College is fun with few obligations and adult responsibilities for the average traditional student. It’s an opportunity to live like an adult without any sever consequences due to the fact that parents will continue to fund their college experiences and bail them out of most situations.

The problem is that today’s college students cannot afford to be unfocused during this economic crisis. If they are to be employed and enjoy life, college students, as well as most of us, must understand the upmost importance of creating value to our customers.

An advanced education can create value for prospective employees. According to Georgetown University’s Center on Education and the Workforce study, a college degree adds 84% to salary over a lifetime versus just a high school diploma. Individuals need to realize that like corporations they must understand their customers in order to build value for them.  

This concept isn’t easy because customers want different things. Value is defined as the net bundle of benefits the customer derives from a product or service.  Value creation focuses on an organization’s ability to convey the worth of its product or service to customers. 

Leaders must be attuned to value creation if a flow down is to take place throughout the value chain.  This is true even for new leaders. Michael Watkins, author of The First 90 Days, maintains that effective leadership seeks to add value as much as possible.

Watkins explains, “The breakeven point is the point at which new leaders have contributed as much value to their new organizations as they have consumed from it….new leaders are net consumers of value early on; as they learn and begin to take action, they begin to create value.”

John Gamble and Arthur Thompson, authors of Essentials of Strategic Management, further explored the concept of value as a strategic advantage. Businesses can create unique capabilities and valuable resources that rivals can’t easily duplicate. This includes companies launching a variety of strategies including low-cost, differentiation, or niche. The authors suggest, “Resource-based strategies may be used in tandem with any of the three strategic approaches…and are keyed to delivering customer value in ways rivals are unable to match.”

Regardless of the industry, value creations needs to be the cornerstone of any business strategy.  What’s important to the customer should be important to the businesses. College students, looking for future employment, should always keep this in mind in their job preparation.  If individuals keep the concepts of value creation in their mindset, they will be able to overcome many of the disruptive changes to come.

How does value creation relate to sustainability for today’s leaders?

© 2011 by Daryl D. Green

Human Factor Buy-in

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Steve Proud gets his biggest promotion as the latest senior executive to run this troubled business. With lots of talent and experience, the organization struggles to meet performance goals. Being on the fast-track, Steve quickly makes significant changes to impress the corporate board. He fires the old managers and surrounds himself with the better talent. His team rolls out a comprehensive strategic plan.

The corporate board starts seeing positive results.  However, things change within two years. Many employees view Steve as a ‘paper manager.’ Despite his ‘talk about empowering workers,’ his actions demonstrate he cares little about any worker’s opinions. Steve cannot understand why his strategy failed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Most organizations move swiftly ahead reacting to market forces without truly empowering workers to make organizational decisions. Managers preach that employees are a critical asset to an organization’s bottom-line. However, few managers ever show it. Given that percept, we will discuss the final component of effective socio-technical systems. It is the human factor buy-in. Organizations must shift their paradigm to viewing workers as more than mechanical parts for their organizational objectives.

According to a USA Today poll, nearly half of those interviewed said that corporations can be trusted only a little, or not at all, when it involves looking out for the best interest of employees. Michael Hackman and Craig Johnson, authors of Leadership: A Communication Perspective, argue that a leader’s credibility is directly related to the quality of his relationship with followers.

Marios Katsioloudes, a researcher specializing in socio-technical analysis, explains that as profitability of mechanization increases, the importance of technology is implied while there is a devaluation of the workers. Clearly, U.S. businesses cannot point to the lack of employee performance for mismanagement errors.

Japan, a long-time benchmark for American companies, is being defeated by American employees. Today, the average U.S. worker puts in 36 more hours than Japanese workers (1,825 vs. 1,789). Over the last two decades, balancing work and home life have been difficult since Americans have added 200 hours to their annual work schedule.

Employees want to be valued. Felix Harris, a financial director with over 8 years in the banking industry, acknowledges the importance of people in a socio-technical system. He states, “When employees are appreciated, they work harder.  A machine is only as good as its operator.”  Jeffrey Pfeffer, author of The Human Equation, acknowledges that organizational success is directly related to implementation, and this capacity comes from the workers, how they are treated, their skills, and their efforts as it relates to the organization.

Managers should see followers as more than mechanical parts for their organizational objectives. Managers assume that giving employees new technology is enough to keep them happy. Likewise, leaders should view followers as vital components of the socio-technical system.

Today’s managers in technical organizations must understand the delicacy of balancing a socio-technical system. The recent mirage of culture changes such as outsourcing, scandals, and unethical dealings by both governmental and business senior managers have made American employees skeptical about the seriousness of organizations implementing corporate values into their workplace.

Furthermore, today’s executives are falling short in promoting the desired values to support socio-technical systems due to understanding the value of employee buy-in.

In fact, this insight would be valuable to any manager, trying to integrate the man – human interface mechanism. Understanding the uniqueness of the socio-technical system may increase leadership effectiveness and better management strategies for your organization.

How can organizations best gain employee buy-in when they possess less than a stellar track record of worker empowerment?  

 © 2010 by Daryl D. Green