1 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION STRATEGIC MANAGEMENT BUAD 4980

2 2 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Leadership  The process of transforming organizations from what they are to what the leader would have them become  Desire to change the status quo  Vision of the desired future  Process for bringing about change Organizational Leadership Attributes STRATEGIC MANAGEMENT – BUAD 4980

3 3 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION Organizational Leadership Attributes STRATEGIC MANAGEMENT – BUAD 4980

4 4 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Setting a Direction  Understand the organization and all of its stakeholders – capabilities, limitations, potential  Understand the current environment, environmental trends and “futures”  Create a vision that positions the company in a future state – what it should become to realize its potential relative to its future environment Organizational Leadership Attributes STRATEGIC MANAGEMENT – BUAD 4980

5 5 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Designing the Organization  A strategic leadership activity of building structures, teams, systems, and organizational processes that facilitate the implementation of the leader’s vision and strategies  Requires a lot of insight, decisions and internal organizational support to implement Organizational Leadership Attributes STRATEGIC MANAGEMENT – BUAD 4980

6 6 CREATING A LEARNING ORGANIZATION AND AN ETHICAL 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 Organizational Leadership Attributes STRATEGIC MANAGEMENT – BUAD 4980

7 7 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Developing an excellent and ethical organizational culture  The organizational culture should reinforce core competencies and high ethical standards  Leaders are the role models for the organizational culture  Leaders who fail to demonstrate ethical behavior undermine the ethical standards of the organization Organizational Leadership Attributes STRATEGIC MANAGEMENT – BUAD 4980

8 8 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Integrative Thinking  The process by which people reconcile opposing thoughts to identify creative solutions that provide them with more options and new alternatives  Identify and consider multiple avenues and conflicting ideas  Determine multiple outcomes from following each idea to its logical conclusion  Decide on the best or most feasible outcome Elements of Effective Leadership STRATEGIC MANAGEMENT – BUAD 4980

9 9 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Overcoming Barriers to Change  Reasons why organizations are prone to inertia and slow to change  Risk aversion and resistance to change  Systemic organizational barriers  Individual behavioral barriers - mindset  Political barriers – power relationships  Personal time constraints Elements of Effective Leadership STRATEGIC MANAGEMENT – BUAD 4980

10 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION A Leader’s Bases of Power STRATEGIC MANAGEMENT – BUAD 4980

11 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Key Leadership Traits  Technical Skill (Applied Knowledge)  Cognitive Ability (Analytical Capability)  Emotional Intelligence Leadership Traits STRATEGIC MANAGEMENT – BUAD 4980

12 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Emotional Intelligence  An individual’s capacity for recognizing his own emotions and those of others  Encompasses five components of self awareness:  Self Awareness  Self Regulation  Motivation  Empathy  Social Skill Leadership Traits STRATEGIC MANAGEMENT – BUAD 4980

13 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION Emotional Intelligence STRATEGIC MANAGEMENT – BUAD 4980

14 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Effective leaders have empathy for others  Effective leaders are astute judges of people  Effective leaders are passionate about what they do, and they show it  Effective leaders create personal connections with their people Leadership Traits STRATEGIC MANAGEMENT – BUAD 4980

15 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  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 Inspiring and Motivating People STRATEGIC MANAGEMENT – BUAD 4980

16 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Top-Down Approach (Control-Oriented)  Start at the top  Clarify the organization’s mission, vision and values  Clearly specify the tasks, roles and rewards  Delegate responsibility based on demonstrated capability  Hold people accountable for results Empowering People STRATEGIC MANAGEMENT – BUAD 4980

17 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Bottom-Up Approach (Trust-orientated)  Start at the bottom  Learn the needs of employees and what motivates them  Teach employees self-management skills and model desired behaviors  Build teams to encourage cooperative behavior  Encourage innovation and intelligent risk-taking  Trust people to perform Empowering People STRATEGIC MANAGEMENT – BUAD 4980

18 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Open Book Approach  Track daily, weekly and month-to-date performance metrics at all levels of the organization  Share metrics with all levels of employees  Teach employees what the metrics mean and how they influence them  Share key financial results tied to metrics and explain what they mean Sharing Internal Knowledge STRATEGIC MANAGEMENT – BUAD 4980

19 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Benchmarking  Comparing basic performance metrics and financial indicators across comparable organizational units  Internal benchmarking compares key metrics and financial indicators across similar functional units of the same company  External benchmarking compares key metrics and financial indicators across similar functional units of the same industry Sharing External Knowledge STRATEGIC MANAGEMENT – BUAD 4980

20 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Create a sense of urgency to change and improve  Allow challenge of the status quo and dissenting opinions  Foster innovative risk taking  Foster curiosity and experimentation Stimulating Creativity and Challenge STRATEGIC MANAGEMENT – BUAD 4980

21 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Organizational Ethics  The values, attitudes, and behavioral patterns that define an organization’s operating culture and that determine what an organization holds as acceptable behavior Creating an Ethical Organization STRATEGIC MANAGEMENT – BUAD 4980

22 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Organizational vs. Personal Ethics  Organizational ethics policies benefit the organization by creating boundaries that limit legal liability and maintain regulatory compliance  Organizational ethics are also valued in customer and supplier relationships, and convey a sense of social responsibility and trust in the marketplace Creating an Ethical Organization STRATEGIC MANAGEMENT – BUAD 4980

23 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Organizational vs. Personal Ethics  Management leadership at all levels provides the role model for ethical behavior  Personal ethical values that are inconsistent with organizational ethics can create organizational conflict  Punitive actions taken against employees who violate ethical standards are after-the-fact and not likely to change personal values  Recruit employees whose ethical values are consistent with the organizational standards Creating an Ethical Organization STRATEGIC MANAGEMENT – BUAD 4980

24 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Compliance-Based Ethics Programs  Programs for building ethical organizations that have the goal of preventing, detecting, and punishing legal violations  Integrity-based ethics programs  Programs for building ethical organizations that combine a concern for law with an emphasis on managerial responsibility for ethical behavior Creating an Ethical Organization STRATEGIC MANAGEMENT – BUAD 4980

25 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION Creating an Ethical Organization STRATEGIC MANAGEMENT – BUAD 4980

26 CREATING A LEARNING ORGANIZATION AND AN ETHICAL ORGANIZATION  Elements of Corporate Ethics Programs  Leadership role models and involvement  Corporate codes of conduct  Detailed policies and procedures defining specific situations and issues  Employee training with management involvement and leadership  Review of rewards and incentive systems for potential conflicts with ethical standards Creating an Ethical Organization STRATEGIC MANAGEMENT – BUAD 4980