Management Issues Ethics, Leadership, Power, and Decision Making

Management Issues: Ethics, leadership, power, and Decision Making
Challenges of organizational management are continually increasing with
the emergence of new concepts such as globalization, increasing
significance of ethics in management, and uncertainty of the future
business environment. Despite the high rate of increase of management
challenges, some organizations have been growing, by expanding
geographical coverage, diversifying market coverage, and product lines.
The purpose of this study is to provide discussion of four aspects of
management namely. An established organizational ethical climate is one
of the key success factors in a dynamic environment (Parboteeah, Chen,
Lin, Lee & Chung, 2010). In addition, the leadership behavior expressed
through communication influences all other aspects of the organization,
thus affecting the future progress. Power distance between management
and employees affects efficiency and performance of multinational
organizations (Bialas & Morska, 2009). An ethical climate, leadership
behavior, power distance, and decision making processes create the
difference between successful and unsuccessful organizations.
Importance of an organizational ethical climate in managerial practices
Organizations have varying perceptions of what they consider to be
ethically correct and the ways of handling these ethical issues should
be handled to benefit the organizations. Parboteeah et al., (2010)
studied organizational ethical climate with a focus on communication and
empowerment as the key determinants of a successful establishment of a
climate that is conducive for management practices. Good communication
practices (which is characterized by motivation, control, information
diffusion, and emotional expression) between the management and
employees affects organizational effectiveness and managerial
competencies. The link between communication and ethics is determined by
the fact that, stakeholders with the organization use communication to
convey meaning while lack of communication creates a vacuum, which is a
favorable environment for unethical practices (such as corruption) to
Empowerment, on the other hand, involves giving responsibilities to
employees to make decisions affecting their duties, thus giving them the
autonomy in executing their job-related functions. However, the
effective adoption of a climate that facilitates employee empowerment
requires workers to be self-determined and perceive that they have full
choice in matters that pertaining to their job activities. Based on
social exchange theory, Parboteeah et al., (2010) argued that empowered
employees feel that their contribution is recognized by the management,
thus making them behave in ways that are beneficial to the entire
organization. In addition, empowered employees are likely to enhance the
well being other members of the organization, which results in the
creation of a favorable work environment that is characterized by
respects for each other and improved performance.
The impact of leadership behavior on virtual and face-to-face
Communication within an organization has gained importance as a result
of globalization that has allowed companies to operate in different
geographical locations. Both face-to-face and virtual communications are
significant components to a modern leader organization leader because
they help in the establishment of network between different stakeholders
and priority setting (Zimmermann, Wit & Gill, 2008). Some of the key
aspects of leadership affecting communication within the organization
include trust, mission goals, shared values, strategy definition,
empowerment, and commitment. It is the role of leaders to ensure that
effective interactions exist between the team members, enhance a common
understanding of roles, and members’ commitment towards the
achievement of organization goals. This is achieved by minimizing
misunderstandings and enhancing information sharing among the team
members and between different teams.
There are three major domains that leaders use to establish effective
communication within their organizations. First, the task domain helps
leaders in enhancing information sharing and reducing misunderstanding
within and between teams by setting clear tasks (Zimmermann, Wit & Gill,
2008). This becomes more successful when leaders are more sensitive to
emerging business opportunities and monitor members` commitment.
Secondly, task and relationship domain is enhanced by leaders’ ability
to coordinate employees, synchronize contributions made by team members,
and operations in different time zones and use various computer mediated
means of communication. Third, the relationship domain help leaders in
maintaining shared values among team members as well as enhancing
cultural sensitivity among them.
Impact of power distribution on relationship between managers and
The increasing significance of globalization has popularized the
divergence approach towards the cultural impact on management practices.
This is because cross-cultural differences and power distance affect the
level of relationship between management and employees. People from
different cultural groups have varying levels of tolerance aspects of
power, which including pecking orders, inequality, and prestige.
According to Bialas & Morska (2009) communities with high power distance
perceive that power should be distributed unequally where people who
assume higher positions are naturally accorded with privileges.
Communities with low power distance, on the other hand, have a low level
of tolerance to unequal distribution of power. These cultural
perceptions towards power distance affect the type of management style
that should be adopted by multinational corporations in different
Power distance affects the relationship between managers and junior
workers and the management style that can help the management in
exploiting foreign market segments. The democratic style of management
is most suitable in countries with low power distance because it creates
a perception that the management staff and their subordinates are
partners. This implies the organizations operating in such countries
should reduce the distance between subordinate and management since
employees prefer direct contact with management to close supervision.
Autocratic style of management works best for countries with high power
distance because inequality is readily accepted (Bialas & Morska, 2009).
The high power distance creates a management environment that allows the
top management to take decisions and issue instructions to the junior
staff to execute decisions.
Balancing the interest of different stakeholders in decision making
Organizations have a wide range of stakeholders who include
shareholders, employees, management, suppliers, and customers among
others. The management teams bearing the responsibility of serving the
interests of all these stakeholders find the difficulty of satisfying
all of them. According to Reynolds, Schultz & Hekman (2006) the
difficulty of balancing the interests of stakeholders arise from
indivisibility of some resources and inequality of levels assumed by
stakeholders. In addition, the differences in the nature of claim of
resources by different categories of shareholders constrain the
management in balancing their interests. However, salience held by
stakeholders help the management in conceptualize and measure
stakeholders claim, thus making the decision on their priority in claim
for resources easy. The stakeholders’ salience varies depending on the
type of decision and the variation is determined by legitimacy, urgency,
and power of stakeholders’ claim (Reynolds, Schultz & Hekman, 2006).
An ethical climate, leadership behavior, power distance, and decision
making process are the key determinants of success attained by different
organizations. Organizational management should be expected to set
precedence for ethical practice among employees by creating a climate
that facilitates relationship between management and their subordinates.
This ensures that there is reasonable flow of information between the
management and junior staff, thus enhancing organizational efficiency
and performance. In addition, the conduct of organizational management
affects efficiency of communication within the organization. The
increasing significance of the concept of globalization, management has
the responsibility of facilitating both face-to-face communications
where possible and virtual communication with distance branches. Power
distance between management and the junior staff determines the
appropriate style of management that is appropriate in different
contexts. Moreover, the efforts of the management to balance the
interest of different stakeholders are highly influenced by the
divisibility of resources and level of salience held by different groups
of stakeholders.
Bialas, S. & Morska, A. (2009). Power distance as a determinant of
relationship between managers and employees in the enterprises with
foreign capital. Journal of Intercultural Management, 1 (2), 105-115.
Parboteeah, K., Chen, H., Lin, Y., Lee, A. & Chung, A. (2010).
Establishing an organizational ethical climate: How does management
practice work? Journal of Business Ethics, 1-13. doi
Reynolds, J., Schultz, C. & Hekman, R. (2006). Stakeholder theory and
managerial decision making: Constraints and implications of balancing
stakeholder interests. Journal of Business Ethics, 64, 285-301. doi
Zimmermann, P. Wit, A. & Gill, R. (2008). The relative importance of
leadership behavior in virtual and face-to-face communication settings.
Leadership, 4, 319-337. doi: 10.1177/1742715008092388

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