Introduction
The case study under review concerns Arthur Lawrence, a successful text broker who bought a shipyard to save his favorite town. He revived the yard after the 2021 post-war depression by having the company manufacture cargo vessels. Since 1939, the company has been in trouble due to the effects of the great depression. Lawrence knows he has to get funding, or he will have to lay off all employees because he cannot pay.
However, he receives a bid to build takers for the Romanian government. He is put in an ethical dilemma when he is asked to pay a bribe of £20,000 for him to get the contract, an action that would be illegal under British law. This review will discuss their strengths and weaknesses of Lawrence, the best decision that is recommendable for him, and an analysis of the importance of a code of ethics.
Strengths and Weaknesses of Arthur Lawrence
Strengths
One of Arthur Lawrence’s strengths, as seen from the case study, is his commitment to the shipyard and the town of Blackley in general. Commitment is a unique strength for a leader as it demonstrates dedication to their goals and inspires followers to trust and follow their lead (Saleem et al., 2019). Lawrence’s decision and willingness to invest his fortune into the shipyard to save it from closure shows that he is committed to his work and passions.
Furthermore, the shipyard owner is committed to ensuring that he takes care of the people of Blackley by taking his time to go to Bucharest to secure the contract despite knowing the possible risks of dealing with corrupt governments like the Romanian ones. Lawrence’s commitment to the shipyard is so high that he is considering breaking laws where he could end up imprisoned if caught. His commitment to work and business is a good guide for other leaders. Apple Inc. is an example of a company with a committed leader (Kim, 2020). Like Lawrence, Steve Jobs was attentive to detail and could inspire the company’s workforce.
The second leadership strength Lawrence possesses, and one taught in many managerial courses, is strategic thinking. George, Walker, and Monster (2019) define strategic thinking as synthesizing ideas and data to develop a clear understanding of a particular situation. Strategic thinking also entails identifying all factors affecting a particular situation and creating a plan for the best action to take as a leader or otherwise (Joiner, 2019). An example of a popular strategic thinker is Queen Elizabeth, who, at a time when monarchs across the globe were collapsing, managed to keep the UK monarch relevant (Bartex and John, 2021).
In the case study under review, Lawrence demonstrates a comprehensive and forward-thinking approach to his decision-making by evaluating all the possible alternatives and their consequences before deciding on the best course of action. This ability can be considered a strength in leadership, as only some people can make informed choices based on data and insights (Saleem et al., 2019). Lawrence recognized that the shipyard needed an alternative funding source due to tough economic times and made contact with the Romanian marine who needed small tankers. Students learning about leadership strengths could benefit by understanding Lawrence’s thinking process.
According to the case study provided, Lawrence’s third strength is a high commitment to high ethical standards. His decision to invest his money in the shipyard of his favorite town so that he can save it from closer is an indicator of strong moral responsibility. Moral responsibility is an invaluable leadership strength since it makes a person ethically responsible for their decisions.
Studies show that moral responsibility leaders can inspire trust, create transparency, and foster loyalty among their followers (Bandura, Kavussanu, and Ong, 2019; Heiss, 2023). The CEO of Microsoft, Satya Nadella, is known to be committed to ethics, prioritizing security, privacy, and inclusion for all (Marda, 2021). As narrated, Lawrence is rich and can easily let the shipyard fail, with him being personally impacted. However, he takes responsibility for ensuring that the workers and the community that rely on the shipyard do not suffer due to its closure.
Weaknesses
Despite Lawrence possessing many strengths in his leadership, he also has a few weaknesses.
First, Lawrence has a high-risk tolerance, as the case study shows that he jumped on the first opportunity to meet Romanian officials without accessing the risks involved. Lawrence seems ready to deal with the corrupt foreign officials to save his business and Blackley from economic ruin. This is a character weakness since such a decision could negatively impact himself, his shipyard, and the town. Ainia and Lutfi (2019) argue that high-risk tolerance increases overconfidence, leading to the underestimation of risks.
If Lawrence had taken a risk-calculated approach, he would have discovered the nature of Romanian officials and avoided dealing with them. He should also have consulted legal professionals who would have conveyed to him the dangers of dealing with corrupt officials. Besides putting himself and his business at risk, he contributed to the corrupt culture of the Romanian government by visiting them. An example of a leader whose high-risk tolerance was a weakness is Richard Fuld, former CEO of the Lehman Brothers (Gottschalk and Benson, 2020). Fuld continued investing in risky investments despite warnings from experts, ultimately resulting in the collapse of his company, which in turn contributed to the 2008 economic crisis.
Lawrence is too idealistic to his ethical standards and moral values, and his decision to refuse to pay the bribe may bring unintended consequences for him and his shipyard. While remaining ethical is commendable, the leaders who maintain and follow these moral philosophies face negative consequences. In some countries, such as Romania, in the case study, paying bribes is the norm, and failing to pay bribes often results in discrimination (Bensassi and Jarreau, 2019).
By adopting his strong moral compass, Lawrence risks losing his Romanian contract and consequently having his workers lose employment and income. If his decisions eventually have a rippling effect on Blackley, then his ethics should be considered a weakness. Martin Luther King is an example of a leader often cited for being too idealistic and thus slowing down the progress of the movement (Thompson, 2022). Student leaders should also gauge their morals and find a balance between remaining too moral, which could be hazardous, or flowing with no morals, which could also bring trouble.
Best Decision to Take
Lawrence can make different decisions based on his approach and perspective. According to Bench-Capon (2020), the consequentialism approach states that something is bad or good only based on its outcomes. Based on this approach, it would be best for Lawrence to pay the bribe and save the shipyard, as this would be a utilitarian approach. On the downside, this action would be a violation of the law and would hurt Romanian citizens. Lawrence can also take a deontological approach, which states that morality is based on the fact that the action is right or wrong. If the shipyard leader takes this perspective, the right approach would be not to pay the bribe.
I recommend that Lawrence not pay the bribe, regardless of the possible repercussions. By adopting the deontological approach, Lawrence would put himself at a short-term risk of a negative outcome but a longer-term chance of increased confidence in himself. I would offer him alternative solutions for seeking funding from uncorrupt governments. This decision would set Lawrence as an icon in the fight against corruption.
Importance of Codes of Ethical Practice
Codes of conduct, also called codes of ethics, are the behaviors or standards that people in an organization are expected to maintain, particularly in the workplace. Codes of conduct are now relevant to many organizations since they help them comply with governmental legal and regulatory demands. Organizations that maintain this culture relieve themselves of unwarranted legal suits. Many organizations value these codes of ethics because they promote a positive work culture and prevent unethical practices. Organizations want all their staff to be ethical to ensure consistent behavior within the organization.
The uniformity of good behavior consequently results in a development of trust between the internal and external stakeholders. The codes of ethics also bring a positive work culture where the workers feel pride in being part of a team where they share beliefs. Studies show that this results in job satisfaction, retention, and motivation within the organization (Jamal Ali and Anwar, 2021). Furthermore, codes of conduct provide a guideline for managers on how they should handle ethical dilemmas like the one facing Lawrence in the case study.
Conclusion
As a leader, Lawrence possesses strengths and weaknesses; therefore, it is important for him to consider the importance of a code of ethics when deciding on the best decision. His common strengths include commitment, strategic thinking, and high ethical standards. Two of Lawrence’s weaknesses are being risk-averse and being too idealistic. To make the best decision, Lawrence should consider ethics and how they bring consistency and positivity to the workplace. Based on ethical perspectives, I advise Lawrence to refuse the bribe and seek funding from sources other than the Romanian government. The refusal would be the best decision over the long term for the company.
Case Study Two: Organisational Culture and Change
The case study of the failed merger between Daimler-Benz and Chrysler in 1998 tells the reader about the benefits and importance of managing different cultural backgrounds while conducting mergers and acquisitions. The case reveals a need for more trust between Daimler-Benz’s and Chrysler’s staff members. The lack of integration of Chrysler’s egalitarian approach and Daimler’s centralized decision-making led to the separation of the two. The review will address leadership styles that could be used to bridge cultural differences, methods of ensuring effective team engagement during change management, and the methods and theories managers take to manage cross-functional teams.
Leadership Styles for Bridging the Cultural Differences
As demonstrated in the case study, Daimler-Benz and Chrysler had corporate cultures that differed greatly and limited the success of the merger between the two. The leadership team at Daimler-Benz preferred a hierarchical management style where they emphasized that employees respect authority, all members conform to bureaucratic authority, and major decisions in the organization are made from one centralized location.
On the other hand, Chrysler’s leadership team preferred a flatter management structure. Studies show that when companies with different cultures merge, the is usually a 30% chance that the integration will fail (Oh and Johnston, 2020). In the case study, the post-merger disintegration was caused by the inability of companies to join their different cultures successfully, resulting in a lack of cooperation between the organization’s staff and leaders. This problem could, however, have been solved by selecting appropriate leadership styles when performing the merges.
One of the styles that the managers of the two companies need to implement the gap between the two effects is transformational leadership. This form of leadership goes beyond the normal expectations of a leader to benefit themselves by putting more importance on inspiring their subordinates (Nguyen, Shen, and Le, 2021). Transformational leaders understand the importance of collaborating when solving problems facing their organizations. If transformational leaders headed the merger between Daimler-Benz and Chrysler, they could create a sense of shared vision and responsibility within the organizations, thus bridging the cultural divide the two have.
The main purpose of the merger was to have the two car producers synergize, but the current leaders needed to take the appropriate measures to ensure that they dealt with post-merger acquisitions. Transformational leadership offers great merger value and reduces conflicts when used in conjunction with other leadership styles, such as servant leadership principles.
Servant leadership, like the transformation leadership style, could be used in the context of the case study under review. Like the transformational leadership style, servant leaders prioritize the needs of their subordinate staff over their own, with more focus on building relationships and promoting collaborations (Eva et al., 2019). Servant leadership can be particularly useful when dealing with people who have different cultures, as it entails the leader putting himself in the shoes of his subordinates and, therefore, seeing things from their point of view. If the leaders of Daimler-Benz and Chrysler had prioritized servant leadership, they could have built a strong relationship with the employees. This strategy would have created a culture of trust and understanding during the post-merger days, offering the leaders a platform to address the cultural differences.
However, considering the cultures and external environments of both Daimler-Benz and Chrysler, it is clear that no one leadership style can help solve all the problems during the post-merger acquisition days. For instance, the external environment of Daimler-Benz and Chrysler at the time of acquisition was characterized by rapid technological changes, increasing competition, and constantly changing customer preferences. In such an environment, a rigid leader subscribing to one leadership style would not outperform a flexible leader willing to change with the changing times. Autocratic leadership could be used in situations where the leader has to make a swift decision. Democratic leadership could be used when the leader needs to build inclusivity in the organization. Laissez-faire leadership is appropriate when the leaders know their subordinates can make good decisions. Other leadership styles that could be integrated when dealing with an ever-changing external environment are transactional leadership and charismatic leadership.
Ensuring Team Engagement in Change Management
One of the main goals leaders have when addressing change management is ensuring that the changes are done smoothly without disrupting the organization’s activities and achieving the desired and pre-defined outcomes. Effective team engagement is vital during change management since it ensures that the workers understand the need for change and are motivated and inspired by it. There are several strategies that leaders can take to ensure effective change management. One way is communicating clearly and frequently with their teams. Effective leaders should ensure that they leverage active listening to understand the problems of their workers and act on them.
A real-life example of a case where leaders demonstrated effective communication during change management was in 2011 when Nokia announced a reconstruction plan. Faced with the challenge of having to do layoffs, Nokia did a commendable job of communicating clearly with its workers and informing them of the need for change (Routa, 2020). Managers and leaders who communicate openly and frequently with subordinates help their organizations manage change effectively by supporting their teams.
In change management, involving the employees in the change process from the beginning to the end is mandatory. The leaders can do this by forming cross-functional teams, which ensure that the workers remain engaged and teams from different departments are adequately represented. A real example of a company that leverages cross-functional teams is Unilever, which is comprised of members with differing skills, experiences, and perspectives. The company states that it enjoys improved collaborations, innovations, and increased engagement as a result of employing this strategic leadership style. Common crossectional functional teams employed by companies like Unilever include project management teams as well as quality improvement teams.
Training effectively addresses change management and ensures the workers possess the skills needed for new cultures and external environments. One of the advantages of providing training is that it reduces resistance to change, thus increasing the chances for success in a new situation. For instance, if the managers of Daimler-Benz and Chrysler had ensured that their workers got the cultural differences and external influences that made the merger a failure, it would have been mitigated. According to Solberg, Traavik, and Wong (2020), IBM’s transformation in the 1990s is an example of leveraged company training to mitigate change. During this period, IBM faced the challenge of reduced profitability because of the decline of mainframe computers caused by the invention of personal computers. IBM designed training sessions for its employees, ensuring that the technology provider could adapt to the external environment.
Approaches to Managing Cross-Functional Teams
Based on the case study, it can be observed that the two companies have cross-functional teams responsible for undertaking different tasks, including designing, manufacturing, distribution, marketing, and sales. However, cultural differences have hindered effective team collaboration, making organizations need to try new methods to manage the teams effectively. One of the theoretical methods that could be used to manage these teams effectively is Tuckman’s team development model. According to Patterson (2022), this model involves four stages: forming, storming, norming, performing, and adjourning.
The forming stage would entail members meeting and familiarising themselves with each other. The storming stage happens when the members develop conflicts and ideas in the process. In the norming stage, cohesion is created between team members, who are usually free with each other. In the performing stage, the team members are highly cooperative and develop trust with one another (Patterson, 2022). Finally, the recently added adjourning stage is where the projects are completed, and members are free to pursue new avenues.
Another model that can be used to manage teams effectively at Daimler-Benz and Chrysler is Belbin’s team roles theory and model. The theory identifies the roles that individuals within a team naturally adapt to, such as coordinator, implementor, and evaluator (Rahmani et al., 2021). In adopting Belbin’s team’s roles theory, leaders should seek to ensure that the preferred roles of each team member are identified and that the members are placed in teams that will foster their growth. Additionally, managers need to follow the situational leadership theory and principles where team members are placed into teams based on adaptability to the team (Schildkamp, 2019). Practical approaches to managing the teams in the merger between Daimler-Benz and Chrysler would include focusing on effective communication, collaboration, and team building. A common goal must be established for all team members to make sure everyone is working towards common objectives.
Conclusion
Daimler-Benz and Chrysler’s merger in 1998 would have been better if it had employed an effective leadership style, ensured team engagement in change management, and adopted management theories to guide cross-functional teams. Examples of leadership styles that help organizations bridge cultural differences and change the extremal environment include adopting transformational leadership, servant leadership, and situational management theory for unexpected events. Training, encouraging communications, and forming cross-functional teams could help Daimler-Benz and Chrysler create engagement during change management. Theories that would help manage the teams include Tuckman’s model of team development, Belbin’s team’s roles theory, and situational leadership theory.
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