Chapter 11 Strategic Leadership: Creating a Learning Organization and an Ethical Organization

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Chapter 11 Strategic Leadership Creating a
Learning Organizationand an Ethical Organization
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Linkages

• Scanning, monitoring, analyzing external
  environment
• Formulated your strategy(ies) to fit internal and
  external strengths/opportunities,
  weakness/threats
• To carryout (implement)
• Control
• Structure/Design
• Leadership/Learning/Ethics

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Slide Overview

• Three Key Leadership Activities
• Elements of Effective Leadership
• Emotional Intelligence
• Learning Organization
• Ethical Organization

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I. Leadership Three Interdependent Activities

• Leadership
• process of transforming organizations from what
  they are to what the leader would have them
  become
• Leadership should be
• Proactive
• Goal-oriented
• Focused on the creation and implementation of a
  creative vision

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Three Interdependent Activities of Leadership
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Setting a Direction

• Scan environment to develop
• Knowledge of all stakeholders
• Knowledge of salient environmental trends and
  events
• Integrate that knowledge into a vision of what
  the organization could become

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Setting a Direction

• Required capacities
• Solve increasingly complex problems
• Be proactive in approach
• Develop viable strategic options

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Designing the Organization

• Designing the organization
• A strategic leadership activity of building
  structures, teams, systems, and organizational
  processes that facilitate the implementation of
  the leaders vision and strategies.

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Designing the Organization

• Difficulties in implementing the leaders vision
  and strategies
• Lack of understanding of responsibility and
  accountability among managers
• Reward systems that do not motivate individuals
  and groups toward desired organizational goals
• Inadequate or inappropriate budgeting and control
  systems
• Insufficient mechanisms to coordinate and
  integrate activities across the organization

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Nurturing an Excellent and Ethical Culture

• Excellent and ethical organizational culture
• an organizational culture focused on core
  competencies and high ethical standards

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II. Elements of Effective Leadership

• Integrative Thinking
• Overcoming Barriers to Change
• The Effective Use of Power

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1. Integrative Thinking

• Integrative thinking
• the process by which people reconcile opposing
  thoughts to identify creative solutions that
  provide them with more options and new
  alternatives

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Integrative Thinking The Process of Thinking and
Deciding
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2. Overcoming Barriers to Change

• Reasons why organizations are prone to inertia
  and slow to change
• Vested interests in the status quo
• Systemic barriers
• Behavioral barriers
• Political barriers
• Personal time constraints

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Resistance to Change
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Tactics for Introducing Change

• Communication Education
• Employee Involvement
• Negotiation
• Coercion
• Top Management Support

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3. The Effective Use of Power

• Power
• a leaders ability to get things done in a way he
  or she wants them to be done.

• Organizational bases of power
• A formal management position that is the basis of
  a leaders power.

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A Leaders Bases of Power
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III. Emotional intelligence

• Emotional intelligence (EI)
• an individuals capacity for recognizing his own
  emotions and those of others,
• including the five components of self awareness,
  self regulation, motivation, empathy, and social
  skills.

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Emotions

• 7 Universal Emotions
• Happy/Joy
• Surprise
• Contempt
• Sadness
• Fear
• Disgust
• Anger

http//www.humintell.com/2010/06/the-seven-basic-e
motions-do-you-know-them/
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Emotional Intelligence Some Potential Drawbacks
and Cautionary Notes

• Effective Leaders
• ? Have Empathy for Others
• ? Overidentify with others (Cannot make Tough
  Decisions)
• ? Are Astute Judges of People
• ? Judgmental and overly critical, Dismiss other
  peoples insights

• ? Are Passionate about What They Do, and They
  Show It
• ? Close minded to other possibilities
• ? Create Personal Connections with Their People
• ? Too micromanaging

Manipulative, selfish, and dishonest ?
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IV. Learning Organization
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Inspiring and Motivating People with a Mission or
Purpose

• Successful learning organizations
• Create a proactive, creative approach to the
  unknown
• Actively solicit the involvement of employees at
  all levels
• Enable all employees to use their intelligence
  and apply their imagination

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Inspiring and Motivating People with a Mission or
Purpose

• A Learning environment involves
• Organization-wide commitment to change
• An action orientation
• Applicable tools and methods
• Guiding philosophy
• Inspired and motivated people with a purpose

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Empowering Employees at All Levels

• Top-down perspective
• Start at the top.
• Clarify the organizations mission, vision, and
  values.
• Clearly specify the tasks, roles, and rewards for
  employees.
• Delegate responsibility.
• Hold people accountable for results.

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Empowering Employees at All Levels

• Bottom-up View
• Start at the bottom by understanding needs of
  employees
• Teach employees skills of self-management
• Build teams to encourage cooperative behavior
• Encourage intelligent risk taking
• Trust people to perform

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Accumulating and Sharing Internal knowledge

• Open book management
• Numbers on each employees work performance and
  production costs are generated daily
• Information is aggregated once a week from top
  level to bottom level
• Extensive training in how to use and interpret
  the numbers

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Gathering and Integrating External Information

• Internet accelerates the speed with which useful
  information can be located
• Employees can use garden variety traditional
  sources to acquire external information
• Benchmarking
• Focus directly on customers for information

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Challenging the Status Quo and Enabling Creativity

• Create a sense of urgency
• Establish a culture of dissent
• Foster a culture that encourages risk taking
• Cultivate culture of experimentation and curiosity

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Best Practices Learning from Failures
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V. Creating an Ethical Organization

• Organizational ethics
• the values, attitudes, and behavioral patterns
  that define an organizations operating culture
  and that determine what an organization holds as
  acceptable behavior.

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Creating An Ethical Organization

• Ethical orientation
• the practices that firms use to promote an
  ethical business culture,
• Includes ethical role models, corporate credos
  and codes of conduct, ethically-based reward and
  evaluation systems, and consistently enforced
  ethical policies and procedures.
• Organizational ethics is a direct reflection of
  its leadership

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Creating An Ethical Organization

• Ethical values
• Shape the search for opportunities
• Shape the design organizational systems
• Shape the decision-making process used by
  individuals and groups
• Provide a common frame of reference that serves
  as a unifying force

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Integrity-Based versus Compliance-Based Approaches

• Essential links between organizational integrity
  and individual integrity
• Cannot be high-integrity organizations without
  high-integrity individuals
• Individual integrity is rarely self-sustaining
• Organizational integrity, rests on a concept of
  Purpose, Responsibility, Ideals
• As important responsibility of leadership is to
  create this ethical framework and develop the
  organizational capabilities to make it
  operational

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Integrity-Based versus Compliance-Based Approaches

• Compliance-based ethics programs
• programs for building ethical organizations that
  have the goal of preventing, detecting, and
  punishing legal violations.

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Integrity-Based versus Compliance-Based Approaches

• Integrity-based ethics programs
• programs for building ethical organizations that
  combine a concern for law with an emphasis on
  managerial responsibility for ethical behavior

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Integrity-based Ethics Programs

• Integrity-based Ethics Programs include
• enabling ethical conduct
• examining the organizations and members core
  guiding values, thoughts, and actions and
• defining the responsibilities and aspirations
  that constitute an organizations ethical compass.

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Approaches to Ethics Management
Characteristics Compliance-Based Approach Integrity-Based Approach
Ethics Conformity with externally imposed standards Self-governance according to chosen standards
Objective Prevent criminal misconduct Enable responsible conduct
Leadership Lawyer-driven Management-driven with aid of lawyers, HR, and others
Methods Education, reduced discretion, auditing and controls, penalties Education, leadership, accountability, organizational systems and decision processes, auditing and controls, penalties
Behavioral Assumptions Autonomous beings guided by material self-interest Social beings guided by material self-interest, values, ideals, peers
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Key Elements of Highly Ethical Organizations

• Role models
• Corporate credos and codes of conduct
• Reward and evaluation systems
• Policies and procedures

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Role Models

• Leaders are role models for their organizations
• Leaders must be consistent in their words and
  deeds
• Values and character of leaders become
  transparent to an organizations employees
• Effective leaders take responsibility for ethical
  lapses within the organization

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Corporate Credos and Codes of Conduct

• Provide a statement and guidelines for norms,
  beliefs and decision making
• Provide employees with clear understanding of the
  organizations position regarding employee
  behavior
• Provide the basis for employees to refuse to
  commit unethical acts
• Contents of credos and codes of conduct must be
  known to employees

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Codes of Conduct

• UTSA
• http//utsa.edu/infoguide/appendices/b.html
• http//www.utsa.edu/about/leadership/
• Starbucks
• http//www.starbucks.com/about-us/company-informat
  ion/business-ethics-and-compliance

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Reward and Evaluation Systems

• Inappropriate reward systems may cause
  individuals at all levels of the organization to
  commit unethical acts that they might not
  otherwise do
• Penalties in terms of damage to reputations,
  human capital erosion, and financial loss are
  typically much higher than any gains that could
  be obtained through such unethical behavior

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Policies and Procedures

• Should specify proper relationships with a firms
  customers and suppliers
• Should guide employees to behavior ethically
• Policies and procedures must be reinforced
• Effective communication
• Enforcement
• Monitoring
• Sound corporate governance practices

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The Goolsby Leadership Model
Source Quick, J. C., Macik-Frey, M., Cooper,
C.L. 2007. Journal of Management Studies, 44(2)
195.
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