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Leaders and Organizational Culture

Running head: LEADERS AND ORGANIZATIONAL CULTURE

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Leadersand Organizational Culture

A leader is defined as a person who influences others to follow in his or her footsteps and achieve greatness. A leader is a person of integrity and drive, and a person who stimulates people to become high performers (Bateman, & Snell, 2007). Leaders motivate and inspire their followers to join forces and work together toarticulate common visions and goals. Leaders show their followers how toimplement a plan of action (Munner, 2007). Effective leaders create environments where people want to gain knowledge and experience while exploring their strengths and overcoming their weaknesses. To become a leader, a person does not have to have a management title. A person must become a leader first and a manager second. Different roles and responsibilities such as the ability to create a vision, leadership motivation and self confidence are some special skills leaders need to maintain a healthy organizational culture. Leaders must take on these roles and responsibilities in order to be deemed an effective leader (Banutu & Banutu, 2007).

The path to a healthy organization is through leaders. When faced with corporate decisions in the business world, managing a business is more than numbers and profits. The key to a healthy organization is managing personalities. Leaders must be able to lead by example, have a clear vision of what needs to be achieved and delegate responsibilities effectively (Banutu & Banutu, 2007). For example, by taking a situational approach in leadership leaders can first analyze a situation before deciding what steps to take. This can be effective when dealing with a corporate decision and determining which employee will be suitable for the task (Bateman, & Snell, 2007). Organizational culture outlines the collective attitudes experiences and values of an organization. The philosophy of organizational culture includes the beliefs of what goals should be. Having a strong organizational culture allows businesses to grow and leaders to thrive with experience, allowing them to pass on their knowledge to men and women of the future (Allen, Hartman, 2008).

Having a vision is important in any organization. Leaders of a company must have a vision or mental image of where they want the future of an organization to be. By sharing that vision with other followers, and allowing them to take part in achieving that vision, all individuals will benefit from the successful results (Bateman, & Snell, 2007). Not only do leaders have to create a vision, but they also have the responsibility of inspiring people to produce meaningful changes within an organization. Leadership communicates the company’s vision to the employees and inspires them to overcome barriers for change. It energizes people and brings about positive and meaningful results.Leadership skills of a leader are reflected in the performance of followers who have taken the steps of previous leaders. The ability to implement strategies in an organization is critical as a leader’s responsibility (Munner, 2007).

The Sarbanes-Oxley Act (SOX) was passed in 2002 and is a United States Federal law. It controls changes in corporate governance that affect executive compensation, shareholder monitoring, and board monitoring. The Act includes provision that affects companies (Allen, & Hartman, 2008). Having strong management teams to make the right decisions that follow the regulations of the SOX is important for any company. The decision makers of these companies will have to make the right decisions and develop a structure for the company that provides oversight, communication and governance. There is a provision that requires CEOs and CFOs to give their profits from bonuses or stock when the act is considered unethical. The CEO from Tyco who was convicted of fraud, Mr. Kozlowski, has to repay Tyco $60 million. This eliminates company leaders misreporting financial reports. This Act also allows leaders to know that serious repercussions exist if a company does misreport on their financial reports (Allen, & Hartman, 2008). Specific SOX provisions deal with the shareholders of a company.

These provisions do not allow shareholders to do any inside trading. The shareholders can not disclose the company's finical reports. The SOX requires the company to fill out detailed forms which makes it hard for a company to manipulate their reports which helps control the shareholders information. A company would try to manipulate these forms to increase the company's stock price and should they be caught, there would be consequences that the company would have to deal with. The SOX Act makes it hard for companies to manipulate their statements so companies cannot cheat the system (Allen, & Hartman, 2008). The company has to hire auditors from outside the company to audit the business. This provision is called board monitoring. This eliminates companies from lying on the statements and requires them to show that they are being honest by hiring an outside auditor. The provision increases the outside auditors with power and independence (Allen, & Hartman, 2008). Companies have to spend a great deal of time on financial reporting to ensure accuracy because of the SOX Act. This Act has developed criminal penalties for companies that misreport on there financial statements. This provision has had the biggest impact on companies. This is because companies have to spend so much more time in the finical department and make sure that every thing is accurate. The companies have also increased their budgets for this department because of the new requirements like having an outside auditor come and audit (Allen, & Hartman, 2008).

In business, organic growth is a concept where a company seeks to grow by increasing the turnover of its existing business, in contrast to those companies that seek growth by acquiring other companies. Considering the company's past scandal, was this strategic plan the best choice to go with? As CEO Ed Breen put it in Tyco's 2004 Annual Report, "Thanks to our customers and our dedicated employees, we had a very good year in 2004. Our success was based on a simple strategy: to make operational excellence a core competency, to build a platform for sustainable organic growth, to invest in our people, and to hold ourselves to the highest ethical standards... To that end, I am extremely pleased to report that our sustained progress throughout the year resulted in Tyco meeting or exceeding all of our financial goals." (Allen, & Hartman, 2008). Goes to show just how a good strategic plan could bring a company about. Tactical Planning Along with strategic plans, upper management also takes on the task of creating tactical plans. Designed to interpret the strategic plans and goals with a bit more detail, tactical plans consist of specific goals and plans established for upper to mid level management to carry out in their designated departments and or divisions.

Typically, these plans may range a period of months to a year or two. The objective being, that as departments meet or exceed their goals, it will help the overall company to close in on completing its goals. Such was the case with Kendall, a business unit of Tyco Healthcare that is a division of Tyco International, following the organizations strategic plan announcement to further company organic growth. "As part of Tyco Healthcare's push to grow internally or organically, Kendall is making what it calls "the next generation of hypodermic needles" with the Monoject Magellan Safety Needle." (Tyco Worldwide, 2004, 1). The products success, lead to Kendall manufacturing 210 million units to meet client demands in a single fiscal year. Kendall's success, aided Tyco Healthcare to meet the goals placed before them, which in turn aided Tyco International. Operational Planning While tactical plans and goals help to establish the direction a department or division will proceed to, it is the operational plans that specify the procedures and processes that frontline managers and their employees will follow to meet the give goals. Carried out on a daily bases, these plans can involve tasks such as production runs, quality assurance testing, and progress reporting. In the past such procedures and processes where drawn up by management and the workforce simply followed them accordingly. For most companies today, the creation of an organizations procedures and processes comes from a joint effort between management, employees, vendors, and even customers. Though referred to as lower level plans, operational plans can be just as important as strategic or tactical. This is ever so evident at M/A-COM, a business unit of Tyco Electronics that is another division of Tyco International. They manufacture and supply high-grade communication equipment and caballing to both Boeing and the United States National Aeronautics and Space Administration (NASA)."The products are specially designed and manufactured at M/A-COM's facility in Lowell, Massachusetts (USA) where they undergo extensive qualification programs to satisfy Boeing and NASA requirements. Further, they are subject to rigid manufacturing controls and in-process inspections, in addition to extensive acceptance test procedures." (Tyco Out of This World, 2004, 3). For when it comes to equipment and services upon which peoples lives are dependent on, Tyco sees to it that everything either meets or beats the standard. Contingency Planning Another type of planning and one that many companies today take into greater consideration are contingency plans. These types of plans consist of alternative courses of action an organization can take during the progress of a project when and if obstacles arise. Such plans can also exist in the form of backup or secondary systems designed to take over when a primary system fails. Tyco and its divisions believe in making an effort to have the best contingency plans possible. In fact, they help develop backup plans and systems for clients as was done by M/A-COM when they assisted with creating an emergency communications backup plan for the city of Slidell, Louisiana. A plan that saw action in 2005 when hurricane Katrina struck, leaving much devastation in its path. "The City of Slidell's 800 MHz system, manufactured by a different vendor, was knocked offline by the storm. In response, officials in Slidell turned to their backup preparation plan, which utilized M/A-COM radios that linked onto the fully operational St. Tammany Parish Sheriff's Office system."(Allen, & Hartman, 2008). Thanks to that contingency plan, a backup system was on hand and operational for emergency first responders to communicate as they moved in to start rescue and recovery operations. Legal During the planning process, as management makes their way through the different levels of planning, it is important to observe and adhere to factors such as legal responsibilities. Just as people are bind to obey the laws implemented in our society, organizations are as well not above the law and must abide. In addition, most companies must as well adhere to guidelines, rules, and business laws established by governing agencies such as the Securities and Exchange Commission (SEC). Unfortunately, our society is not perfect as there are those with greedy desires and tendencies to abuse and misuse whatever they can in order to fulfill a need or want. Alas, organizations are not immune to such personnel and their hidden agendas, which can be very alarming when such personnel exist among the hierarchy of a company. Tyco International is no stranger to such scandals as when its former CEO Dennis Kozlowski and CFO Mark Swartz faced prosecution for "larceny and conspiracy, falsifying business records and violating business law."(Tyco Worldwide, 2004, 1). They reportedly misappropriated money and assets from the company for personal use totaling in the range of $210 million dollars, only to then engage in inappropriate acts to conceal the larceny from the company's stakeholders. The act supposedly took place from 1995 until mid 2002 when anonymous tips to the SEC spawned investigations and brought about both men's resignation and finally indictment. Sadly, the company's stakeholders suffered the most. Ethics In addition to legal, organizations have ethical factors influencing the various levels of planning. Noted as the study of values and or quality, ethics covers the analysis and employ of concepts such as right, wrong, good, evil, and responsibility. Prior to 2002, most organizations operated with neither little to no worries about the ethics of its employees nor where there any major business laws regarding the subject. Working ethically was more of an unwritten rule that people simply followed. However, following the rising number of corporate scandals from 2000 to mid 2002, United States government agencies such as the SEC, Department of Justice (DOJ), House of Energy and Commerce Committee, Federal Bureau of Investigation (FBI), and various congressional committees collaborated in efforts to establish new business laws against unethical practices. This is how the Sarbanes-Oxley Act of 2002 came to be. The Act brought about the establishing of an oversight board charged with overseeing, regulating, inspecting, and disciplining organizations accounting practices as a method of enforcing better ethical practices. Social Responsibility Another factor influencing company planning is that of social responsibility. The concept of which suggests that commercial corporations have a duty of care to all of their stakeholders whom are influenced by or can influence the organizations decisions and or actions. Stakeholders being, but not limited to, employees, customers, vendors, community organizations, subsidiaries, business collaborates, local community, investors, shareholders, and even the environment. It is important that organizations do not take social responsibility lightly as that in today's world; society can have an overwhelming affect on companies. Thus, organizations should see to maximize any positive effects it has on society that would help the company gain better acceptance among the public, while minimizing negative ones.

References

Allen, J. Scott, Hartman, S. Nathan.(2008). Leadership Development: An Exploration of Sources of Learning.S.A.M. Advanced Management Journal,73(1),10-19,62,2. Retrieved August 30, 2008, from ABI/INFORM Globaldatabase. (Document ID:1451832141).

Bateman, T., & Snell, S. (2007) Management: The New Competitive Landscape (7th ed.)
McGraw-Hill/Irwin, 2007

Münner, M. (2007, Winter2007). Personal transformation as leverage for organizational transformation. The TEA Program as a facilitator of cultural change management. Organization Development Journal, 25(4), P49-P54. Retrieved August 30, 2008, from Business Source Complete database.

Tyco Out of This World (2004). Out of This World. Electronic document retrieved December 9, 2006. URL: