Happiness of the Employee

http://gulfnews.com/business/opinion/employers-must-create-feeling-of-happiness-1.784694

The above article is a direct reflect of topics we have covered in our class. We have learned how employee responsibility and happiness can make employee's strive for greater results.

Many of the top accelerating companies such as Nike, Apple, and Google realize that their employees are the key to success.  This article states that managers need to realize that not just money or education can benefit their employees.

The main focus is to reassure your employee's that you are noticing the hard work they are putting in.  Especially in the economic time, many people value different rewards.  I do believe an employee should be able to choose a specific reward according to their liking. Treating all employees the same with the same rewards would be bad for the company.  Many managers don't realize this.

How do you guys think would be the best way to distribute rewards on an individual basis for a company? Should they choose from a list or be drawn randomly?  Also, do you guys think that there is anything missing in an employee contract that you wouldn't mind seeing more? By contract I mean job offer.

-Matt Blachowicz

Power Over Principal

http://www.nbcnewyork.com/news/local/Madoff-Points-Fingers-at-Banks-Wants-to-Teach-Ethics-119537264.html

This article is about how Madoff is getting recruited by top business schools to teach about business ethics.

I feel this is ridiculous.  I understand that he committed and was successful for quite some time in getting away with it. However, how are you going to reward the person, who stole from many patrons, give him the power and gratitude at teaching at pristine business schools.

Our book talks about power as an organizational behavior topic.  By granting someone power in this situation to control, I feel we are in someway ignoring the crimes this guy committed.  The person who finally caught and had enough values and ethical responsibility to report him should be the one teaching the class.

We need to start rewarding people for doing the right thing. By setting up rewards, more people will be motivated to do the right thing when ethical situations come up.  There are many different motivational strategies that involve rewards that could be put into effect.  By having a reward system, we are able to highlight and recognize the people who hold high standard of values.


-Matt Blachowicz

Bases of Power in an Unethical Light

“Wright Medical CEO Resigns After Doctor Kickback Settlement”

Bloomberg: April 5, 2011

By: Alex Nussbaum

Availability: Wright Medical CEO Resigns After Doctor Kickback Settlement

Leaders are always the driving force of an organization. The way these individuals plan, organize, lead, and control the company is indicative their success. Often, such leaders are faced with ethical decisions; since the Sarbanes-Oxley Act of 2002, companies have been held to higher standards of decision making. 

At Wright Medical, the company came under scrutiny because of allegations that Wright was paying doctors to use its replacement hip and knee devices. Regardless of the case’s outcome, upper management knowingly implemented or turned a blind-eye to the matter. Wright Medical’s leaders used not only legitimate power to enforce these decisions, but they also used reward power in an unethical manner to compensate the doctors to implement Wright’s medical devices.

As we continue to study bases of power in our Organizational Behavior class, we will become more familiar with the sources influencing leaders to use their powers. To further analyze the bases of power in Wright Medical, we can examine how upper management used its legitimate, reward, coercive, expert, information, and referent powers to engage in unethical behavior of paying doctors to use Wright’s products.

Legitimate power and reward power was used in ways indicated above, but coercive power can be viewed as being used to control subordinates. Similarly to Enron or Arthur Anderson, there is simply no way that not one employee at Wright Medical did not know any details about the unethical decisions being made by upper management. Coercive power could have possibly been used to punish an employee for noncompliance or whistleblowing.

Obviously the individuals making the decisions to engage in such behavior had sufficient knowledge and skills, or expert power, and special access to specific information, or information power, which allowed them to implement such decisions. 

Lastly, employees could have viewed these leaders as not only superiors, but also as mentors; the level of respect and admiration among employees gave upper management referent power to implement unethical decisions to pay doctors to use Wright’s products. Regardless of what the leaders of Wright Medical did with the business, their subordinates may have followed simply because they saw their superiors as great leaders.

These categories of power and their uses are important to understand because the connotation of their implementation can have both positive and negative effects. In the case of Wright Medical, those bases of power were used in an unethical manner to increase profitability.

- Jon Worthey

Buffet's Policies: Still Effective?

“Buffet’s Policies Went Unheeded”

The Wall Street Journal: April 6, 2011

By: Leslie Scism, Erik Holm, and Jean Eaglesham

Availability: Buffet's Policies Went Unheeded

Warren Buffet is one of the most successful businessmen of the recent millennium. His business strategy and innovative leadership distinguishes him from his competitors and other such leaders in the industry.

Moreover, Buffet’s policies have become just as revered as the man himself; the insider trading policies and procedures, as noted in a recent memo sent from Buffet to his key directors and officers, reiterated the legal and ethical significance of these policies.

Reminders of the severity of penalties for such behavior were also included: three times the profits earned or losses avoided from his or her investment, a criminal fine of up to $5 million, and a possible jail sentence of up to 20 years (Insider Trading Policies and Procedures Memo, WSJ, 2011). 

David Sokol, Mr. Buffet’s top lieutenant and likely heir to the Berkshire Hathaway throne, left the company shortly after Hathaway acquired a chemical manufacturing firm in which Sokol had recently purchased shares. Furthermore, Sokol advised Buffet and Birkshire Hathaway to buy the company after purchasing those shares, a direct violation of company insider trading policies and procedures.

Was Sokol’s investment a simple mistake or was it intentional? Should Warren Buffet have pressed Sokol for a more sound explanation of his intentions regarding the possible insider trading situation? More importantly, what motivated Sokol to acquire shares of a company his employer was just about to purchase based on his recommendation?

In my opinion, David Sokol made an unethical decision; while he willfully resigned from Birkshire Hathaway, Sokol obviously had an underlying agenda separate from the best interest of the company. Whether this assertion is validated by his need for power as stated in David McLelland’s acquired-needs theory, or the need to achieve self-actualization as stated in Abraham Maslow’s Hierarchy of Needs is debatable.

Buffet noted that Sokol had tried leaving Birkshire Hathaway in several instances before, but Buffet talked him into staying with the company in hopes of further mentoring his future successor. There were obviously reasons for Sokol’s consistent pattern of desire to resign: maybe his work was not stimulating or satisfying anymore; maybe he no longer fit the organizational structure, or maybe Mr. Sokol simply did not think his need for power and self-actualization need could be fulfilled as long as he was employed at Birkshire Hathaway.

This story brings about an interesting topic; certain experiences are meant to challenge and hone an individual’s professional development that creates the schema in which they learn and live. Each step of life can only offer so much until the individual moves on to the next phase and restarts the process. For David Sokol, regardless of the underlying insider trading accusations, he could simply be ready for that next phase. However, the devil’s advocate inside of me wonders if the most powerful man in the corporate world had more of a say in Sokol’s resignation than reported.

The hallmark of this post is to understand the importance of an individual’s needs.  Without the opportunity to fulfill those higher-level needs, employees – like David Sokol – might be more prone to engage in such unethical, and possibly illegal, behavior that proves detrimental to the success of the company.


- Jon Worthey

CSR and Toothpaste?

The following post related to the following link: http://business-ethics.com/2010/12/21/5050-controversial-chemical-poses-disclosure-challenge-for-colgate-palmolive/

Colgate has come under recent fire from the FDA for use a chemical in their toothpaste that has been proven to fight gingivitis, but the effects of that drug on people and the environment is still questionable and has been noted as being harmful. Triclosan, the drug in question, is used in many consumer products including food, clothing, furniture, toys and other products.

Colgate does not currently have a warning label on its toothpaste with the chemical which is dangerous considering they could face litigation's in the future even though the FDA has approved the chemical, they might soon find it necessary to re-evaluate their decision. Colgate does not seem keen on removing the chemical from their product or providing warning labels. I think that as a leader in the industry they should take the initiative to be more socially responsible and warn their customers about the potential dangers of triclosan.

Hypothetically, if I was the CEO of Colgate, I would form a team from members of the R&D department to evaluate and test the chemical triclosan in conjunction with the FDA for its potency and potential harm to humans and the environment. I would have them brainstorm alternatives to the chemical and try to find a less controversial chemical that served the same purpose as Triclosan. In the situation facing Colgate what course of action would you take and how does your decision relate to OB terms and concepts?

Posted By: Grant Luther

The following information is in regards to the linked article about Nike: http://business-ethics.com/2010/01/24/2154-nike-corporate-responsibility-at-a-tipping-point/

In the early 1990s Nike wasn't known for its sustainable corporate initiative  and philanthropic behavior. In fact, it was the exact opposite. Nike was found responsible for running outsourced sweatshops in underdeveloped countries. Ever since the corporate scandal Nike, realizing the error of their ways, shifted gears and engaged in corporate citizenship, which has since, been very successful.

This change has undoubtedly altered the way employees view the company and had positive repercussions. Developing a successful corporate citizenship strategy and a more sustainable supply chain will help to motivate employees to perform well since they will be able to trust the corporation to make ethically sound decisions.

Nike CEO Mark Parker boldly stated, "That its time for the world to shift." "We see sustainability, both social and environmental, as a powerful path to innovation, and crucial to our growth strategies.” That being said, I am wondering what you all have to say about this shift and if Nike is correct that all businesses should be responsible not only for their own benefit, but also that of society. How it could affect the organizational structure of corporations both large and small? What implementations on the culture or organizational behavior need to be made in order to reach a state of corporate citizenship?

Posted By: Grant Luther