Leadership and Ethics - Essay Example

? Leadership and Ethics: Reflections on Interviews number Publish Interviewees The chief focus of this interview was Philip Clarke, the Group Chief Executive for TESCO. Clarke has served in a variety of positions in TESCO ranging from the basic sales staff to the group’s head. The interviewee’s exposure to TESCO is multidimensional given a career spanning more than forty years in all. Clarke’s stances identified from the interview were compared against interview responses ascertained from other members of the Executive Committee of TESCO. Given the constraints on time, three members of the Executive Committee of TESCO were interviewed. These members were Laurie McIlwee, Matt Atkinson and Alison Horner. Laurie McIlwee serves as TESCO’s Chief Financial Officer, a highly critical position for any business operation in the modern economy. McIlwee has a well rounded career with sizable foreign exposure in the United States, Middle East, Central Europe and the United Kingdom. The interviewee was chosen for his decision making proximity to Clarke. Matt Atkinson currently serves as TESCO’s Chief Marketing Officer and presents a diverse career ranging from service in Asia to the United Kingdom. Atkinson is in constant contact with Clarke, especially in order to deal with any ethical controversies that may arise out of the group’s actions. Alison Horner is currently serving as TESCO’s Group Personnel Director with her initial joining in 1999 as a Personnel Manager in TESCO. Horner has witnessed the growth of Clarke over the years from his previous positions to the current position of Group Chief Executive. 1. Describe the ethical issue faced by the organization and explain how your chosen leader handled it. Do you agree with the individual's strategies for resolving the issue? TESCO is one of the United Kingdom’s largest retail operations and has found itself in various ethical dilemmas over time. It has been argued that TESCO has developed a supply chain network that forces other competitors to the ground and does not allow new competition to enter the market. The allegations were investigated by the Office of Fair Trading (OFT) but the possibility of TESCO’s monopoly was rebuked although there were concerns of TESCO’s large footprint in the industry (Office of Fair Trading, 2006). The organization’s leader allowed an investigation to take place without using any political influence or other forms of coercion. The investigation was carried out throughout the United Kingdom for all major retailers. The organizational leader ensured that all and any kind of information requested for the investigation was provided impromptu. In addition, TESCO has come under fire time and again for using suppliers exploiting cheap Bengali labor. TESCO’s suppliers are using labor that is paid roughly five pence every hour for an eighty hour week without any perks or benefits on the job (Ramesh, 2006). The allegations were not merely restricted to TESCO but to all major retailers operating in the United Kingdom (Label, 2006). In response to allegations of labor exploitation, TESCO’s leadership responded by stating that their suppliers were meeting the minimum national standards enforced in Bangladesh. The organization’s leader opined that all legal rules and guidelines were being met by both TESCO and its suppliers in Bangladesh so it did not make any sense to call these transactions as unethical. Moreover, the organizational leader held that TESCO was providing jobs for millions in Bangladesh which was aiding poverty alleviation in Bangladesh. Criticism has also been diverted towards TESCO on the issue of misleading price cuts projected through misleading advertisements. In order to bolster sales, TESCO reduced prices on unpopular items and slightly increased prices on popular items but advertised the overall sale as being uniform for all goods. In addition, TESCO’s buy one and get one free offers are speculated to increase wastage with special emphasis on food wastage (BBC, 2008). The organizational leader responded to these ethical issues by clarifying that sales are placed on items as per company policy and the walk in customer is under no obligation to buy the advertised products. Moreover, all TESCO stores around the world display the sales rate near the good’s stack to notify the customer so that the customer makes an informed decision. According to TESCO leadership, such allegations were baseless and absurd. Differences in labor handling strategies for TESCO’s United Kingdom and United States operations have also come under fire. TESCO lowered the sick pay in an effort to discourage unplanned employee absence. Consequently, it was speculated that employee’s in TESCO’s United Kingdom stores would be forced to come to work even under adverse health conditions (Ryle, 2004). Additionally, TESCO refused to negotiate with its United States operation labor unions in an effort to stall any negotiations on wage rates, working conditions and the like. This led United States President to call upon TESCO leadership to begin negotiations with the union leaders at TESCO. The union leaders for TESCO’s American brand “Fresh and Easy” eventually resorted to coming to the United Kingdom in order to initiate negotiations with the senior management (Teather, 2008). TESCO’s leadership did not relent on the sick pay issue and the states of affairs continue as such. On the other hand, TESCO’s American brand’s labor unions were able to force the leadership to negotiate over basic issues such as wage rates, overtimes, perks and benefits etc. 2. Which leadership model did the individual use to devise strategies? Was it successful? Why or why not? The leadership model used by TESCO’s leader in focus is a managerial grid leadership model that keeps adapting to the provided situation. Clarke’s decision making clearly shows that he follows the situational leadership theory model so that he modifies his behavior in response to the provided situation. The situational leadership model provides that the leader has to change strategies in order to fit his solution to the provided situation based on the available constraints (Griffin & Ebert, 2010). The managerial grid model superimposes the constraints as being concern for people and concern for production (McKee & Carlson, 1999). Clarke’s decision making in various situations demonstrates that he utilizes the available constraints in order to find a suitable solution. In cases where concern for people must take precedence, such as in the case of TESCO’s American employees, Clarke resorted to negotiations in order to resolve the issue. In contrast, in other situations such as in the case of Bangladeshi workers and their underpayment, Clarke chose to defend his suppliers even though TESCO’s stance is unjustified on an ethical scale. Clarke’s strategies are successful if considered on the production scale alone. It has to be appreciated that under Clarke’s leadership, TESCO has not come to any grinding halts such as labor strikes, government investigations, store closures etc. On the other hand, Clarke’s decisions regarding concern for people are a mix of successes and failures. 3. Comment on the success and failure of the model in resolving similar dilemmas citing relevant facts through independent research. The managerial grid model coupled with the situational theory model of leadership provides a flexible framework to deal with various forms of ethical dilemmas. The managerial grid model expounds a number of different options ranging from the meekest to the optimized. The real contention in the managerial grid model is to develop a balance such that it optimizes both labor satisfaction and productivity. The primary objective of the managerial grid model is to achieve the aims of Theory Y which provides that workers are well motivated and ready to work productively at all times and under all situations (Griffin & Ebert, 2010). This position is augmented by the situational theory of leadership where the leader optimizes outcomes based on the available constraints (McKee & Carlson, 1999). The success or failure of such a leadership style depends on how success is essentially defined. In case that success is defined in terms of concern for productivity, the presented leadership model provides success in most cases. However, the presented model is unable to offer concern for people since it tends to deviate from Theory Y’s premise that workers are already well motivated to achieve organizational objectives. Bibliography BBC. (2008). Get one free deals boost waste. Retrieved April 1, 2013, from BBC News: http://news.bbc.co.uk/2/hi/uk_news/politics/7365373.stm Griffin, R. J., & Ebert, R. W. (2010). Business essentials. Upper Saddle River: Prentice Hall. Label, L. B. (2006). Who Pays for Cheap Clothes? 5 questions the low-cost retailers must answer. Norwich: Labour Behind the Label. McKee, R., & Carlson, B. (1999). The Power to Change. Austin: Grid International Inc. Office of Fair Trading. (2006). Grocery Market: Proposed decision to make a market investigation reference. Lahore: Office of Fair Trading. Ramesh, R. (2006). An 80-hour week for 5p an hour: the real price of high-street fashion. Retrieved April 1, 2013, from Guardian: http://www.guardian.co.uk/world/2006/dec/08/clothes.ethicalliving Ryle, S. (2004). Tesco axes sick pay to reduce 'days off' cheats. Retrieved April 1, 2013, from Guardian: http://www.guardian.co.uk/business/2004/may/16/supermarkets.uknews Teather, D. (2008). American unions bring Tesco fight to UK. Retrieved April 1, 2013, from Guardian: http://www.guardian.co.uk/business/2008/jun/05/tesco.supermarkets Read More