...October 2015 Professional Reading Assignment In the book The Five Temptations of a CEO: a Leadership Fable, author Patrick Lencioni tells a story about Andrew O’Brien- CEO of a major company, who meets an older, much wiser man, Charlie, on his supposed train ride home. This man, whether he is real in life or a figment of imagination, lectures Andrew about the complications of being the CEO of a big company and what causes most of them to fail in regards to the five temptations. Charlie starts off with the first temptation which is choosing your status over results. He says that this is the hardest temptation to break and in short rather than caring about how their company is doing and its accomplishments, some (if not most) chief executives are more worried about securing their position. Next he explains the second temptation, striving to be popular instead of being accountable. He insists that instead of CEOs trying to be liked by their employees, they need to tell them what is expected of them and give ultimatums if said expectations cannot be upheld. Andrew then asks about temptation number three, the temptation to certainty over clarity. CEOs at times may wait too long to make an important decision until they know for sure that it is the right one because they are more scared of being wrong; which ties in with them being unable to hold themselves accountable. In transition they come to the fourth temptation, the desire for harmony. Another man explains that harmony is like...
Words: 798 - Pages: 4
...Business Ethics Dirty To The Core Seandel Gibson Business-Law Professor- Mr. McLamore June 11, 2012 Business Ethics Abstract Ethical behavior isn’t an act but a habit, just as good health requires cultivating the habits of getting enough sleep and eating wholesome food, Aristotle believed that right action was the result of developing good moral habits. In a business context, this means training and, at the deepest level, something we call “corporate culture.’ Although Ethical management is being given a higher priority by many management teams, a wealth of evidence reveals that managers are still unclear about how to institute strategies and systems that encourage ethical conduct and help create a moral corporate culture. Many managers have opted for the simple route of promulgating rules and instructing everyone to follow them. Not only is this approach providing ineffective in today’s decentralized business environment, it also denies employees any chance to become part of the ethical fabric of the organization. Business Ethics Corruption is defined by transparency international as the misuse of public power for private gain. It takes many forms and can be intensely...
Words: 1364 - Pages: 6
...The author has been inspired by his beloved sister, Jeanne, who is also willing to write a book that challenges conventional stasis. Marcus Osborne and Pauline Goodwin were also his inspirations[xiii] Q.4 Yes, it shows why it is important for brands to have profitability more than market share because what good is a greater market share if it doesn’t generate good profitability and it really changes the perception on why brand managers should work on retention branding rather than acquisition branding.[26] The book tells how the sustainability of a brand derives from the ability to leverage customerknowledge to do business on customer terms[194] ‘I know what branding is all about and how important it is. But I am frustratedbecause my CEO and CFO do not understand branding. What book can Irecommend that will explain branding to them?’If you face a...
Words: 1181 - Pages: 5
...their investments were safe, incurring huge losses when Lehman defaulted. Investors lost faith. The consequences were devastating as it created a systemic crisis of confidence in the banking industry as all other banks froze lending to reduce their exposure of Lehman’s undesirable Repo 105. Lehman’s employees suffered too as they lost their jobs overnight. 2. After extensive research, it was apparent that a written “Code of Ethics” was present at Lehman Brothers. However, for an ethics code to be effective, the tone at the top executives needs to be set right so that the entire organisation can feel connected to the firm’s ethical values and beliefs. The obvious failure we witness in Lehman’s case was that the top management, led by Ruld (CEO) and Erin Callan (CFO), were guilty of unethical negligence and wrongdoing. Therefore, it is vital for the Shareholders to screen through their selection of the Board of Directors extremely stringently to ensure the appointment of the right leaders....
Words: 1040 - Pages: 5
...performance. This paper examines five academic and practitioner-theory focused research articles by (Baker et al, 2006; Babchuk et al, 2003; Hartzell et al, 2003; Murphy et al, 2003; and Kathleen et al, 1989) on the subject of corporate performance and compensation. The purpose of this essay is to advocate the best form of compensation for corporate executive for optimizing long –run performance based on the listed above studies. The components of CEO compensation are classified into four categories: salary, bonus, long-term incentive rewards (e.g., stock options), and benefits. In examining these components, equity based compensation and agency theory were employed and investigated as key factors of analysis. Many academic scholars advocate that the issues of CEO compensation have been a subject of debate and research, due to the agency problem. Thus, for the past three decades, issue of executive compensation was approached from the perspective of the principal-agent relationship. Agency problem, in the context of the five papers mentioned above ‘is the possibility of conflicts of interest between the shareholders and managers of a firm’. According to agency theory, each firm consists of principals (shareholders) and agents (managers). The assumptions of agency theory are that agents are motivated by self-interest, are rational actors, and are risk-averse (Kathleen et al, 1989). Thus, an agency problem exists when an agent such as a CEO has established an agenda that...
Words: 1942 - Pages: 8
...Johnathon Reckford is the prime example of a good leader and educated professional. Beginning his career as a senior executive in the private sector, moving on to become executive pastor of a Presbyterian church and into his final and current role as CEO of a global religiously based non-profit organization better known as ‘Habitat for Humanity’. He explains his experiences in depth within his lecture, sharing his own personal milestones and animating the particular steps necessary to becoming a great leader. Leadership is hard Reckford explains, the more people you attempt to lead, the harder It seems to get. He explains the five assets to being a good leader in great depth. First of all is the importance of having good role models in your life, almost everyone has someone in their life that they want to emulate, whether it be counselors, teachers, bosses or parents. In his case it was three very important women. His mother, which was very active in the civil rights movement, his grandmother and New Jersey congresswoman who encouraged him and his siblings to think about what they wanted to do to serve the lost and left out in the world and to be useful. Lesson two was devoted to the importance of observing those you may be hiring and/or may be offering to hire you. Paying special attention to how they treat people not only toward those that could potentially have a positive influence to benefit them personally. The core of good leadership is to...
Words: 690 - Pages: 3
...Search | Full Site HOME > STRATEGY & LEADERSHIP SHARE TOPICS Leading with Intellectual Integrity One skill distinguishes the effective CEO: the ability to make disciplined and integrated choices. Published: May 28, 2013 / Summer 2013 / Issue 71 by A.G. Lafley and Roger Martin, w ith Jennifer Riel By the time people reach the most senior levels of a company, they are expected to have a degree of personal competence and a strong gut feel for making good executive decisions. Otherwise, they wouldn’t be considered for a top job. But how do they attain this acumen? At Procter & Gamble (P&G)— where we (A.G. Lafley and Roger Martin) served as chief executive and one of the senior advisors to the company, respectively—we developed a systematic approach to cultivating that skill among emerging and senior executives. We found that business literature contains a great deal of advice for chief executives about strategy and execution, but much less is written about how to become the kind of person who can bring the right judgment to bear on business decisions, especially when facing a disruptive environment. Thus, many CEOs develop their own form of on-the-job training, quietly honing their own heuristics for strategic thinking. That makes it difficult to tease out and develop the personal attributes that separate successful leaders from less-successful ones. In our view, leaders would do well to take a more systematic approach to developing their decisionmaking capabilities...
Words: 4532 - Pages: 19
...apprehension, stress, or disapproval. Words do not seem to have the same meaning for them as they do for us, we are unsure if they even grasp the meaning of their own words, Cleckley called this condition “semantic aphasia” (What is a Psychopath?). Secondary psychopaths take more risks, react to stress, worry more, and feel more guilt. They are just as vulnerable, but tend to expose themselves to stress more than the average person. These people began developing their own rules at a young age; they tend to be adventurous and daring. Secondary psychopaths have a much like that of a child, the more something is forbidden to them the more they are attracted to it. They have a strong desire to avoid pain but are often times unable to resist temptation. Primary and secondary psychopaths are then subdivided into two subcategories (What is a Psychopath?). Distempered psychopaths are your explosive, risk taking personality. These are usually men with extremely high sex drives; they seem almost to be obsessed. This personality also tends to be characterized by addiction; they crave the endorphin “high” that is created by activities with high risk of danger. Finally, there is the charismatic...
Words: 736 - Pages: 3
...The objective of a properly designed executive compensation package is to attract, retain, and motivate CEOs and senior management. Despite substantial heterogeneity in pay practices across firms, most CEO compensation packages contain five basic components: salary, annual bonus, payouts from long‐term incentive plans, restricted option grants, and restricted stock grants. In addition, CEOs often receive contributions to defined‐benefit pension plans, various perquisites, and, in case of their departure, severance payments It has been seen that the increase in executive compensation has far outweighed the rise of regular employee compensation the objective of this paper is to investigate the pay-for-performance link in executive compensation. In the context of executive compensation, an analysis needs to be undertaken both from an economic as well as a regulatory policy perspective. To provide a holistic understanding both global as well as Indian Organisations are considered for the analysis. From the economic perspective we look into the following • Executive Compensation and Agency Problem • Executive Compensation and Risk Management • The sensitivity of CEO wealth to firm performance • The relation between CEO incentives and firm value • Explaining CEO compensation: Rent extraction or competitive pay? From the regulatory and legal perspective • Regulatory controls as under o SEC o SEBI • Tax Code Changes o Tax Law 162(m) signed in 1993 of the Federal...
Words: 1768 - Pages: 8
...Kathleen Waddington BLW 411 Rough Draft Corporate culture has a top down affect on everyone in a company. Top management sets a clear example of the expectations for its employees by the actions they engage in and the choices they make. Actions clearly speak louder than words and role-modeling behavior is a very powerful tool that leaders should use to develop and influence their corporate culture. Leaders can use role modeling, teaching, and coaching, to reinforce the values that support the organizational culture. Employees look to leaders for cues as to what is truly appropriate behavior. Corporate cultures must reward ethical conduct while penalizing any wrongdoing at all levels in a corporation. Values matter and trying to ignore trouble spots or the blaming of underlings is an unacceptable practice. A company is measured by the traditions they build and the way they manage all their relationships with shareholders, employees, and the communities they live and work in. Enron went bankrupt and disappeared over 10 years ago but the impact it has made on ethical standards have never faded. Thousands of people lost their retirement savings, and the energy industry was greatly affected by the downfall of Enron. The collapse of Enron is now used in many textbooks and research papers as an example of the importance of an organization’s behaviors an how much of impact unethical acts can have from top management all the way to new hires. Company leaders do not always...
Words: 1780 - Pages: 8
...564 $ 250,941 Inventory turn days Building supplies 32 34 31 33 27 Lumber brokerage 7 6 6 Gross margin Building supplies 20.1% 18.5% 18.6% 19.1% 18.0% Lumber brokerage 3.9% 4.1% 4.2% Required Analytical procedures show that inventory turnover decreased from 31–34 days to 27 days, and gross margins declined to the lowest level in five years. What might this indicate about the risk of misstatement with respect to inventory and inventory purchases? 2. (Analytical procedures) In audit planning the...
Words: 1162 - Pages: 5
...top level BSC is created for the board of trustees, and then is cascaded down the organization to the department level. This is done with a team-based collaborative approach that consists of an “organizational change expert” as the leader (Kacakulah 2007). This “organizational change expert” should be the head of human resources. A HR manager is best suited for this role in many ways in which will be discussed later ( ). In the case study of Peer Memorial Hospital, Harber (1998) explains that a combination of financial and internal approaches: “The “deliverable” is the ability of staff and teams to align accountabilities, activities, and resources in support of the vision and goals of the organization.” It might have been a temptation for Peel to extend the...
Words: 1200 - Pages: 5
...1990’s, when a period of rapid stock market growth and crashes rocked the system (Introduction to SOX, n.d). During that period, companies such as Enron and Sunbeam Corporation abruptly filed for bankruptcy or devalued overnight. This occurred largely because they concealed the real state of their financial health on audit reports (Livingston, 2003, p.7). In response to these scandals the US Congress passed the Sarbanes-Oxley Act of 2002 (SOX). Many of the provisions in SOX give additional powers to the SEC, including jurisdiction over the new Public Accounting Oversight Board and oversight over private industry Generally Accepted Accounting Principles (GAAP), and Generally Accepted Auditing Standards (GAAS). Moreover, U.S. public company CEOs and CFOs must certify the accuracy of financial statements, and disgorge equity and incentive based compensation when required. The act ensures that U.S. public company officials are prohibited from influencing independent auditors, and makes it a felony to “knowingly” manipulate documents or impede an investigation (Livingston, 2003, p. 7). This paper will discuss the implications of SOX on the financial community as it relates to changes...
Words: 3587 - Pages: 15
...REVIEW OF ACCOUNTING ETHICS: HEALTHSOUTH CORPORATION SCANDAL Dannie Lover Professor Seedgrass Financial Accounting South University October 9, 2013 THE ORGANIZATION In 2003, the Securities and Exchange Commission (SEC) charged HealthSouth Corporation, the nations’ largest provider of outpatient surgery, diagnostic and rehabilitative healthcare services, and its Chief Executive Officer and Chairman Richard M. Scrushy with a massive accounting fraud. Scrushy, along with several of his former colleagues allegedly inflated HealthSouth’s pre-tax earnings. [Knapp] Founded in 1984 in Birmingham, Alabama, with more than 50,000 employees and nearly 2000 facilities across all states, HealthSouth earned recognition as a top-five performer in the S&P 500 index. This thriving company grew rapidly and became publicly traded within two years of existence. The company is believed to have overstated its profits by at least 1.4 billion since 1999, in order to meet or exceed Wall Street earnings expectations and maintain market price for stock. [Press Release 2003] THE ALLEGIATION The allegation came just after an earnings restatement and insider-trading charge triggered the investigation, sending HealthSouth stock tumbling to a record low. [Romano 2003] Many attempts at whistle blowing were suppressed, when employees expressed concerns due to falsification of documents. One accountant in particular, was quickly silenced and moved to a dead end job outside of Accounting...
Words: 1328 - Pages: 6
...Reporting Practices and Ethics Lindsey Petway HCS 405 December 14, 2014 Professor Jennifer Noren Reporting Practices and Ethics Introduction Success comes from effectively implementing the four elements of financial management: planning, controlling, organizing, and decision-making. These four recognized elements allow health care organizations to adjust the inflow and outflow to achieve the most beneficial outcome. A health care organization’s success depends on more than just providing excellent service to patients. One of the most important aspects of any business, including health care, is to stand by their ethical standards. It is vital for health care organizations to conduct their businesses and report finances ethically and in compliance with all laws and regulations. Four Elements of Financial Management Planning is one of the four important parts of managing a company. Planning consists of identifying the best way to achieve the organization's goal. First the manager needs to identify the main objectives needed to reach the goal. Then the manager needs to recognize what steps need to be taken to reach each objective. Essentially, the manager is developing a plan by breaking up one large goal and categorizing it into smaller goals (objectives). These objectives can then be delegated to appropriate teams with steps on how to reach each one. Controlling is another vital element...
Words: 1149 - Pages: 5
