Definition of Management, Leadership and Stewardship
The three important terms singled out in this course are management, leadership and stewardship. The three important principles have demonstrated a close relationship and how they should be linked together to ensure desired outcome is obtained from the systems. Management is defined as an act of getting people together to accomplish the stipulated objectives and goals of a specific organization with the use of available resources effectively and efficiently. (Fuller, 2012) Management also constitutes planning, organizing leading, staffing and controlling the organization. Stewardship on the other hand is defined as a principle that entails the responsible planning and management of resources (Clifton, 2014). Leadership is seen as a concept that is advancing every single day. Leadership has been defined as a process of persuasion or example by which an individual or team induces a group to act. Effective leadership and management is what has contributed to the success or downfall of various systems and organizations in the world. Specific values and principles govern the administration of companies and having the right people in its management docket is what translates to the success of the organization as a whole. Organizational practices have been defined as activities and deeds in a corporation. The practices are beneficial if they are good practices and that way they will not receive any criticism from the general public. The organizational practices are known to be aligned to the core values and principles governing the institution and hence keeping the organization running actively with no hiccups and losses. Management practice on the other hand refers to the working methods and innovations that mangers use to improve effectiveness of work systems (Baker, 2014).
Organizational and management practices have been questionable in many instances, this is because many managers do not view ethics as an organizational responsibility. They view it as an individual responsibility. Unethical business practice has always been concluded to express the culture of the organization and not of the single rogue employee. For this very reason it is important that management takes keen considerations in ensuring the organization runs smoothly and that its practices are morally acceptable in the general public eye. (Fiscbacher-Smith, 2014)
It is the responsibility of the managers to mold organizational ethics and to make proper use of their position to establish an environment that can lead to enhanced relationship and standing on which the success of the establishment depends on. The world we are living in today is tough, in the sense that laws and legislations have been enacted and put in place to govern how systems run and also protect the health of its citizens. Administrators who give a cold shoulder to ethics are susceptible to numerous liabilities in the current harsh lawful setting. Any organizations whose management and organizational practices are questionable run the risk of losing their customers leading to losses which may later translate to ruining the company’s reputation.
Role of Management and Organizational Practices
Leaders and managers solve the problems arising when the organizational practices are questioned using the ethical and moral dimensions of organization theories. The theory states that ethics are an important part of the organization and its employees as well. The response to questionable practices is that leadership of any organization plays a critical part in the management of the organization. Leadership influences the image of the organization. Most organizations are centered upon the values that govern the functioning of the organization. Leaders are also tasked with the responsibility of empowering and motivating their members so as to ensure the achievement of the set goals and objectives. (Hassan, 2013)
Many organizations have been seen as highly effective and safety aware but also have the potential to fail and be criticized by the general public. Where there is an organization running its operation, there are some risks that may be encountered if anything goes wrong. Risks are frequent and severe in many manufacturing companies that we have in the country. Where there is a lot of human operations in direct contact with complex technologies, which may result in errors occurring leading to catastrophic occurrences which lead to loss of lives or affecting the health of people in the community in the cases of emission of poisonous effluents into the environment. The problem may be as a result of a specific fault but when the problem is investigated the investigators always try to answer the question of how prepared was the management of the organization in the event of such an occurrence.
The Volkswagen Company is an organizational case illustrating questionable organizational and management practices. It is an appropriate example of how the general public can question the operations of a specific company in its locality. (Balmer, 2013) What has been seen from the Volkswagen scandal is the ethical and political issues in the automobile manufacturing company. The Volkswagen group faced severe consequences for the actions and cut short its dream of becoming the leading automaker by 2018. The scandal in itself made the company to lose its market cap by one-third and also it incurred a lot of losses in the sense that they tried to compensate for the emission violations. The stakeholder theory was put into considerations when solving the issues that arose from the scandal. The company has well-equipped and able stakeholders with different gifts and talent. The stakeholders were consulted making it possible for them to have an amicable solution and put the company back to the market stage. What the company faced was emissions violations. The company was forced to apologize to the general public, it also led to the resignation of some the leadership of the organization and offering some recalls. It is not clear how such an organization may have been committing such offences for a very long time. In order to understand and examine the problem the issue was seen as issues with governance and unevenness (Arnold, 2012) on how information was passed in the organization. (Crete, 2016)
Importance of Ethics in Organizations
The offenses of the Volkswagen group came to play right after an experiment to test Diesel cars on the road the result was that Volkswagen cars released emissions that were above the acceptable limits. The findings from the report conducted by The International Council on Clean Transportation publically announced that Volkswagen had violated the Clean Air Act by emitting toxic gases to the environment that were above acceptable limits.
The biggest tragedy of the Volkswagen Scandal was the release of nitrogen Oxide gas into the atmosphere. (Hotten, 2015)The gas is associated with adverse health conditions which include the inflammation of the airways, conditions such as bronchitis and asthma. It was noted that the repercussion of the Volkswagen scandal was to have long-lasting negative effects on the ecosystem as a whole.
What is commendable about the leadership of the Volkswagen group is the management of the scandal. Soon after it was made public that the company had cheated in the US emission test, the company admitted the offense and even gave a specific number of the vehicles that had been fitted with the device, a number that was higher than what the regulatory agency had given. (Ewing, 2015) It was clear that the Volkswagen group was doing so well at scandal management by being brutally honest and the leaders pledging to fully cooperate with the law enforcement and regulators. (Rhodes, 2016) After the resignation of the Chief Executive officer who was in power during the occurrence of the scandal, the management took a shorter period of time to appoint another leader who would bring in better management approaches and skills in ensuring the company regained their lost customer trust.
The company also vowed to set aside $ 7.3billion to be used to fix the cars to comply with the pollution standards. (Brooks, 2016) The company also recalled all the vehicles that had been fitted with the device so as to make the necessary adjustments and to ensure they sold healthy cars to general public and their customers in particular. The scandal revealed that there was something wrong with the leadership and the management styles of the organization, however the company was willing to streamline the company’s operations so as to avoid an occurrence of such as scandal. (Marshall, 2016)One of the executives stated that they needed an environment where problems were not hidden but openly communicated to the superiors. (Griggs-Hall, 2015) They were ready and willing to adopt a culture where it was possible and acceptable to argue with superiors about the best way to go.
Leadership’s Influence on the Image of an Organization
The above practice of the leaders at Volkswagen group demonstrate that they stewards and were willing to take responsibility of their actions and correct the situation.
Theory that came to play in the event of the Volkswagen scandal was the stakeholder theory. It has clearly demonstrated that it is difficult to balance the many competing interests especially when it seems so easy for the company to attract buyers or reduces costs. The scandal demonstrated that it is the extraordinary values-based leader who is aware of the interconnections in life and how one choice results to numerous unpremeditated outcomes. Having that in mind the only safe thing to do is to try to do what is right by all the stakeholders involved. Most organizations are made up of Stakeholders who have competing interests. What is evident is, respect is accorded to the leaders who try to do things right and to also do the right things. Leaders are seen as individuals who have the best interest of the members at heart and the result of the decisions and efforts is the achievement of goals and all the stakeholders winning in the long run. It is clear from the Volkswagen scandal that the leader did not have respect, dedication and the trust of the other stakeholders and for that reason the result was the scandal that affected the Volkswagen Company a great deal. When stakeholders trust a leader they are willing to be loyal supportive dedicated and productive. It is a clear indication that if a company is values-based then it will cut through the waters that might male it sink because the communities, customers and suppliers will have the interests of such an organization at heart. From the case of the scandal we derive the principle that cheaters never prosper and that the consumers are willing and ready to reward operate fairly and punish those that try to cheat their way to making better profits without incurring costs. (Zhakypova, 2016)
The Agency theory also took center stage in the Volkswagen Company. The areas where the Agency problems may have risen in the Volkswagen group is on the area on man versus machine conflicts. The presence of specific software in place is a clear indication that machines played a significant role in the manufacturing processes of the organization. (Johnson, 2018) This might have bred conflicts between shareholders and employees, because the use of artificial intelligence cuts costs and also maximizes production. The automation of many practices in an organization may benefit the shareholders but also lead to increased unemployment rates. Which may lead to conflicts in an organization. In an instance where the shareholders and employees are conflict it is said that the organization is having agency problems according to the agency theory. (Panda, 2017)
Risks Faced by Organizations
The Volkswagen scandal is an occurrences that had important lessons to other organizations and those individuals eyeing multibillion production. The lessons learnt from the event are several. One of the lesson is that sneaking predicaments are challenging to control. (Bovens, 2016) The slithering catastrophes have been defined as events which gradually form and unexpectedly over pours getting to the attention of the general public and the company is caught up in a situation. It is necessary to have an incident aware culture, which will ensure that potential risks are signaled to the top management to ensure containment before it becomes a crisis that will lead to the company having losses. (Cavico, 2016)The other important lesson learnt is that crises cause by internal practices have proved the most challenging to contain, especially if the cause was deliberate. The consequences of such actions have proved to be tasking and very expensive as it may cost the organization a lot of finances. (Glazer, 2016)
The importance of communication is also an important lesson derived from the Volkswagen scandal. It is evident that when communication is consistent between the management and the stakeholders such events may not be experienced. In the occurrences of such incidents the organization should try as much as possible to put the interests of their victims before its own. The company should be seen to put the interest of community before its personal gains. (Babalola, 2016) Information is paramount in an event where public safety is concerned. (Glazer, 2016)It is necessary to clearly illustrate what is happening and what commodities are affected and the remedy that the organization ought to take to correct the situation and to ensure such an incident does not repeat itself.
The ethical and moral dimensions of organization theories is they theory that will govern the amends to be made in the Volkswagen Group. It is evident that the scandal was an ethical challenge, because the leaders adopted measures and put its self-interest first which is termed as ethical egoism to be competent also known as utilitarianism so as to compete with other organizations in the market . The ethical and moral dimensions theory states that it is the responsibility of the leaders to object anything illegal and unshakably maintain their stand on the issue (Nunes, 2016).
The consequentialism ethics and the Deontology ethics (Mulgan, 2014) are to be applied in the Volkswagen case because it was an issue on ethical dilemma. The concept is to be applied to the ethical violation that led to the Volkswagen scandal. The concept of utilitarianism is an action that determines whether the results of the decisions made in the organization will lead to overall good for all or not.
The Volkswagen Scandal
It is important for the management of the Volkswagen group to make specific adjustments and changes in the company so as to gain acceptance and trust of the communities once more. The company may consider re-branding as a strategy to make it important and viable in the market. Re-branding may be done by making sure that they portray themselves as an organizations that minds the environment and one that is willing to protect the safety of its customers by all means. Such practices will translate to the organization gaining recognition and improves transparency within the organization. Re-branding also enables the company to do things differently from how it did before. It gives it an opportunity to collaborate with other key players in the company to foster compensation and to also ensure that a repeat of the previous occurrence is not witnessed again. Having clear financial systems in place enhance transparency within the organization. (Glazer, 2016)
The Volkswagen Company should also consider joining forces with other independent groups so as to foster the customer trust. It is necessary that the organization joins other institutions that are concerned with customer protection and creating a sustainable future for the business. Such organizations have specifics codes of conduct and a viable method of compliance which measures normal and acceptable operations and singles out what may cause future problems. Joining such prominent organization will lead to increased company credibility which will gradually translate to having the company bounce back to its initial position in the market. (Zhou, 2016)
The other recommendation is that the company may go ahead to sell one of its own brands as a way of promising the general public that it shall correct the faulty operations and ensure that it only produces vehicles that do not endangers the lives of people by emitting poisonous emissions to the environment. This will result in the restoration of faith in the Volkswagen brand. (Zhou, 2016)
Conclusion.
From the above discussion it is evident that the various management theories play a significant role in the operations of an organization. The theories form the basis and models that if followed appropriately the organizations will run smoothly. It is also evident that leadership, and stewardship play a critical part in the general functioning of an organization they are independent principles that supplement one another. The management of any organization is seen as one that will determine the direction to be taken by the entire organization. Management is also seen to positively or negatively influence the productivity of the organization.
References.
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