Functions of Management and Leadership

Jan 11

The primary textbook in my Leadership course this semester is Leadership, Theory and Practice by Peter G. Northhouse. The book is broad in scope and aims to synthesize the last century of academic effort to define Leadership. Each chapter is packed with references to related and supplementary material. The introductory chapter included a figure that is packed with insight, at least for me. It speaks to the differences between the role of leader and manager. The idea that management seeks order and consistency while leadership drives for change and movement sets important expectations. There have been times in the past when I hired someone without a clear expectation of whether I wanted order or change. I may even have expected both at the same time. There are also work situations in which expectations on my performance were not clearly identified. I lean toward change and movement. I find it difficult to engage it tasks designed primarily to produce order and...

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Leadership Erosion

Jan 11

Values represent those principles and desires to which individuals ascribe meaning and purpose. In the extreme, values guide individuals in life and death situations. In routine daily activities, values inform decisions that affect quality of life, happiness and even personal liberty. Values guide the assessment of outcomes and in many cases compose an image of an ideal society. Peaceful, harmonious society is most often a reflection of common shared values. Contentious societies result when there is discord related to core social values. Alignment of values and its effect on communities is central to a discussion of leadership. The effectiveness and power of a leader is proportional to both alignment of and individual commitment to common values. Where there is alignment and commitment, leaders can effect transformational changes in a society. Where alignment and commitment are absent, leaders will struggle to establish consensus and unity. Leaders and followers must share common values in order for a leader to be effective in his position. Erosion of Leadership As consensus regarding core social values erodes, so does the ability of leaders to emerge and create unity. As value segmentation increases, the scope of a leader’s influence diminishes. This erosion of leadership with its inherent dangers was a principle concern to the founders of America. In his farewell address, George Washington cautioned that segmentation of this nature could be used to undermine the power of the people. “However combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.” There is evidence of this having occurred in the persistent gridlock of American government today. Segmentation of common values is indicated by the growing number of political parties which represent increasingly diverse constituents. When the influence of powerful lobbying groups is factored in, the overall effect of leadership erosion is significant. When no single leader or value base can rally a majority opinion, there can be no society wide movement or change....

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Pitfalls of Vendor Selection and the Future of Higher Education

Jan 01

External vendors can be an effective business tool when internal expertise is unavailable or limited. In education, textbook publishers have been an essential external vendor for centuries. A recent experience has led me to question whether current trends in higher education, such as Internet based companion resources to textbooks which provide coursework and exams, are beneficial to the educational process. I believe that, when used properly, publisher resources can add to the educational process. When used poorly, these resources can result in a poor educational experience. When used exclusively, these resources are an insufficient substitute for highly trained and capable professors. A Tale of Two Classes My two classes last semester provided highly contrasting experiences. One class was taught by a practicing attorney with about 30 years of experience. He teaches in the evenings and had recently taken several years off before coming back to teach my class. The other class was taught by someone who has spent the past 11 years as a professor, during which time she completed her PhD. The outcomes from each class were surprising and provided me some insights into vendor selection and its effects on higher education. What’s interesting is that the first thing each professor said was how much he or she disliked the assigned textbook. That was the last thing the classes had in common. As a result of his displeasure with the assigned textbook, the instructor for my ethics class added two additional books to the required reading for the semester. For each class session he assigned a half dozen or more papers, articles or topics for study. These included some of the most profound writings on ethics from all time. This amounted to hundreds of extra pages of additional reading aside from the textbook. One of the papers he assigned us to write near the start of the course solicited a statement of personal ethical inclination. When he found that most of the class leaned toward one particular ethical persuasion, he adjusted the future course content to include critical analysis of that persuasion. I’ve had similar experiences with other professors. It seems that there is always something about a textbook that’s not to a professor’s liking and they supplement...

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The Ultimate Ethics Reading List

Dec 16

My ethics course was taught by an adjunct professor who is also a local attorney in Boise. On the first night he mentioned that there were some things about the course text that he didn’t like. In order to compensate for this, he provided dozens of additional resources which covered the topics and perspectives that he considered most important for a study of business ethics. Through initial writing assignments he observed that the predominant ethical inclination of the class was Aristotelian. He adjusted the later sessions in the course to focus on strengths and pitfalls of Aristotle’s philosophy with respect to business. Much of the reading was extremely valuable and enlightening, so I wanted to record some of the ancillary reading list here. Not all of these are freely available, but for those that are I have included a link. You may need to visit a university library to track down the others. This list is not a comprehensive review of the material covered. It also includes multiple perspectives, which means it shouldn’t be expected to convey a single coherent view on business ethics. In fact, the value of these resources is that they provide arguments and counter arguments for a well-rounded perspective. “Is Business Bluffing Ethical”, by Albert Carr “The Business of Ethics”, by Norman Chase Gillespie “Moral Mazes:  Bureaucracy and Managerial Work”, by Robert Jackall “Corporate culture: poison for whistleblowers”, by Brian Martin (review of Jackall’s article) “The Social Responsibility of Business is to Increase its Profits”, by Milton Friedman “Profit and the public good”, in The Economist (related to Adam Smith, Wealth of Nations) “Corporate Social Responsibility Can Be Profitable”, by Rubén Hernández-Murillo and Christopher J. Martinek “Moral Theories”, Seven Pillars Institute for Global Finance and Ethics (this includes a review of Consequentialism, Deontology, Justice, Utilitarianism and Virtue Ethics). There are other links from that page to a more detailed review of each moral theory. “The Ethics of Whistleblowing”, by Ben O’Neill “The Normative Theories Of Business Ethics: A Guide For The Perplexed”, by John Hasnas “Business Ethics and Stakeholder Analysis” by Kenneth E. Goodpaster “Inside Job (2010)” “The Role of Character in Business Ethics” by Edwin M. Hartman “Moral Compromise and Personal Integrity: Exploring the Ethical Issues of Deciding Together in Organizations” by Jerry...

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My Position on Business Ethics

Dec 09

One uniquely human characteristic lies in our desire to hear and tell stories, fiction and non-fiction alike. By way of story we vicariously experience emotion and conflict through another person or object. The human quality of empathy binds us to the characters in story in such a way that we ask ourselves what we would do in similar circumstances. This introspection is what makes literature so powerful, and so meaningful. After all, it is in the moment of anguish or bliss, when nothing will be the same, when an irreversible choice is in front of us, that we discover who we really are. Context When the moment of decision comes, what will I do? Will I become sharp, focused and relentless, as Jonathan Harker did when striving to save his dear Mina? Will I surrender to my lusts as Claude Frollo did when entranced by the beauty of La Esmeralda? Will my resolve crumble in the face of fear and torment, as Winston Smith did when tortured or could I so completely change my constitution, as did Sydney Carton, and surrender my life to save the life of the man who would be my rival in love? Great literature provides an expansive collection of contexts in which to explore the depth of human choice. Some characters grow into strength while others shrink into oblivion. There is enormous value in these vicarious choices, made through the movements of well scripted characters, particularly when those choices result in resolutions. When the moment comes to make the same types of choices in our own lives, a comfortable library with ample time to review these literary works is unlikely. The choices were made long before that crucial moment, just as with the characters mentioned above. Gap in Reality (Pressure) In his book Story, Robert Mckee explains that story, like those mentioned above, happens whenever there is a gap between subjective and objective reality. The subjective reality is what the character anticipates will happen. Objective reality is what actually happens. For example, when I pursue a business arrangement, I anticipate that all parties will be honest and forthright. That is my subjective reality. When objective reality fails to align with my subjective reality there is a...

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Why the Future Needs Us

Nov 25

Many science fiction writers have painted a picture of a future where humanity and technology merge and the lines between man and machine blur. Some scientists have gone so far as to argue that the future doesn’t need us, apparently lending credence to science fiction stories. While this is fertile ground for ethical analysis of choice, it depends on some false assumptions, which are discussed below. One characteristic human tendency is to defer blame or avoid direct responsibility. For example, the phrase “The devil made me do it”, which some say traces it’s origins back to the bible, suggests that we are not the masters of our own destiny. We mistakenly attribute to technology the responsibility for the bad things that happen in our day, while simultaneously celebrating it for the good it accomplishes. Such a bipolar perception of man vs. technology has the potential to confuse the ethical analysis of human choice whenever there is a technological component involved. At the root of the false assumptions mentioned above is the mistaken association between compute capacity and sentience. Compute capacity refers to the ability of a machine to mimic human thought, such as a processor in a modern computer. When a processor performs math or renders three dimensional pictures or simulates complex systems, it is doing what it has been taught to do by a human. As a result, some humans refer to the processor as the ‘brain’ of a computer and attribute human characteristics to it, such as labeling a computer as ‘smart’. Observation of nature is often the impetus that inspires technological invention, which may make this type of association feel natural. However, regardless of how much compute capacity grows with future technological advances, by it’s nature it lacks subjectivity. The human who writes the program remains the subjective party. Real risk is unbounded trust Trust is a result of repeated experiences where expectations agree with outcomes. In Bill Joy’s article, linked above, he did accurately identify that human trust in technology can lead to dependence. “… the human race might easily permit itself to drift into a position of such dependence on the machines that it would have no practical choice but to accept all of the machines’...

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Cost Drivers in Accounting

Nov 09

Both direct and indirect contributions affect total costs in a manufacturing context. Direct costs include direct materials and direct labor. Indirect costs may include clerical staff, rent, utilities, etc. Indirect costs are incurred regardless of whether any manufacturing takes place. Direct costs are incurred in proportion to the amount of product produced. With increasingly sophisticated manufacturing environments, there is value in associating indirect costs with specific manufacturing activities. The association of a specific indirect cost or activity with a specific manufacturing output gives managers a more accurate picture of the cost of those outputs. The resulting measure is called a Cost Driver. Cost drivers may include machine setups and maintenance, design changes and special requirements from customers, such as inspections. Cost driver analysis is not limited to manufacturing. It can also apply in the services sector. Whether in manufacturing or services, meaningful association of indirect costs to output can be complicated and subjective. Whenever possible, objective measurements should be identified that clearly tie an indirect cost to an output in a consistent way. From Management Accounting: Cost Driver: A cost driver is an activity or variable that causes a cost. For example, increased production volume causes increased investment in production equipment and, in turn, higher levels of machine depreciation. The number of miles driven in a car is the cost driver for the cost of gasoline. The term cost driver is also used for the activity whose quantity is the denominator for a cost driver rate or predetermined overhead...

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