Management Theory And Practice: An Analysis Of Mitsubishi Motors Corporation

Ethics, Leadership and Decision-Making in Business

Write essay on management theory and practice.
 

Ethics, leadership and decision-making are the three important pillars of any business that can set the reputation of any organisation as well as can increase the market (Raymond, 2014). These three characteristics are the most essential managerial perceptions that need to be observed properly to maintain the business in an appropriate manner. The ethics are the organisational principles that should be followed by every organisation to remain in a good term in the business while the leadership helps the organisations to lead in a right way. On the other hand, decision-making is the main process of any organisation to use the ethics, powers, moral imperatives etc. If these are not applied in any organisation then the company have to face many problems to keep their reputation the same. According to Campbell, (2014), it is noted that when an organisation has failed to incorporate any one of these three characteristics then the organisation has to face an ethical dilemma, which has ruined the reputation of the organisation very badly. Therefore, it can be said that the ethics, leadership and decision-making are the vital managerial responsibilities for business.

The Mitsubishi Motors Corporation, Japanese automobile manufacturer, has faced an ethical dilemma due to breaching the organisational norms. The company has faced a dilemma of manipulating fuel economy tests for 625,000 cars that was recognised by the Japan government and Nissan group when a huge number of cars have failed to deliver the promised fuel consumption (Coombs, W & Holladay, 2013). This has created a bad reputation to the customers of the organisations and has shaken the trust to the company.

Managerial theory helps the organisations to develop a proper plan and to implement appropriate business strategies to lead the organisation in right direction to attain the desired profitability (Mseitif, 2014). The company, which has mentioned in this study, has faced the ethical dilemma due to not following the principles and CSR (Corporate Social Responsibilities) of the organisation that has failed to gain sustainability in the business. The organisation practices a diverse management system that is able to adapt the regular changes in the business but still the company has breached the norms of the ethical values and has failed into the controversy. Therefore, in the study the researcher is discussing about the ethical dilemma of Mitsubishi Motors Company and then has analysed the related theories and linked them with the company how it has used the leadership styles in their organisation.

The Ethical Dilemma Faced by Mitsubishi Motors Corporation

The ethical dilemma that the  has faced in recent time was the controversy regarding the manipulation of the fuel economy data for the vehicles that they made (MIZUO, 2013). The company has continuously done the manipulation of the fuel economy data that was changed in the time of testing and then the false data were published for the cars. The company was doing this falsifying case for a long time and most of the cars from this company were failing to gain the customers’ trust and the other companies who were with them in the joint venture tie up. According to Zelenkova, (2013), the employees of Mitsubishi Motors has flattered the data of actual mileage rates during the test of fuel capacity and has presented the wrong data to the seller of the vehicles. This was completely an activity of breaching the customers with their false information about the products. They had used this trick to gain more profits and to increase their circle of business in the world with more joint ventures activities with others. However, this was not the right thing to do for a company and therefore it was proven to lessen the shares of the company. As per the report, the falsifying of the fuel economic data by the company has affected almost 600,000 vehicles in Japan and the company has lost their 50% of shares. 

The Nissan Group, who were the joint partner of them, first noticed the issue of falsification of Mitsubishi Motors in manipulating data of the fuel tests. As opined by Heidl et al. (2014), the employees of the company was hiding the actual data of the fuel test and then the data that they were providing was a little higher than the true number. In the company, the fuel test is done in the process that was almost against the rules and laws of the Japan government. According to the law of the government, this was not the process of checking the fuel capacity of any vehicles or car (Caldararo, 2016). The company was checking the tyre pressure figures in the test of their own procedure where they can easily change the actual data of the test result. In later the president of the company has admitted that they have done the falsification deliberately to gain the high profit levels and with this false data, more than 600,000 cars were sold in the market of Japan. Among them almost 470,000 cars were for the Nissan Group that was faced problems and customers’ poor review. This has forced the Nissan Group to investigate the matter very minutely to find out the real problem regarding the vehicles that they can sort out their faults. In the time of investigation, they found the inconsistency in their vehicles mileage then they were able to understand the main problem that was continuously created by the Mitsubishi employees. Therefore, the controversy has lessen the rate of the company’s share in the market of Japan and lost the reputation that they have acquired until then.

Managerial Theory and Its Importance in Business

The managerial ethics is the main foundation of every organisation’s ethics based on which all the activities of the companies are taken to implement the appropriate and actual rules and regulation for leading the company (Haskin, 2016). The ethical behaviours of any organisation are driven by the values and principles and it helps the organisations to develop their business policies and strategies for the future of the company. The ethics helps the organisational managerial to understand the right and wrong steps for the company as well as the good and bad things too. There are many ethical theories that help the management of the organisations to understand the ethical values and its importance in the workplaces to implement the business strategies and other policies to increase the business and to get the establishment in the market. Therefore, the researcher is discussing about two managerial ethics theories that can be used by Mitsubishi in their organisation to save their ethical values in the time of giving service.

According to Burke, (2016),  is based on the concepts of the stakeholders’ point of view. The main emphasis of the theory is that any action should not take on considering only one’s utility rather the theory refers to the managers to look beyond the self-interest and think about the profits of others too. As stated by Mayer et al. (2012), if the managerial of any organisation only thinks about a particular group of people’s benefit then it can harm the other people within the organisation. However, the organisation mainly affected by any action of the management then the consequences of that action has to be considered before taking the decision. It is argued by Zhang et al. (2013) who thinks that the theory is not focussing on any one perspective of the management. It is emphasising on the various approaches of an action rather focussing on the moral acts or ethical values and rules. The Utilitarianism theory of managerial is expressed in various ways. The theory can be interpreted in the way that there is no such morality or ethical rule that is said as appropriate. Therefore, the theory is mainly focussing on the actions of the management that they are taking the right or wrong steps in the organisation. In this case, the organisation has faced the ethical dilemma when they used the non-ethical decisions in their firm due to which the scandal has reached in the situation. If the management of the Mitsubishi Motor Corporation has applied this theory then they might have saved the situation to go this much worse. The management in the company has implemented the wrong strategies to gain the profit for the company by using the unethical decision.

Two Ethical Theories Suitable for Mitsubishi Motors Corporation

Apart from this, there is another ethical theory that can be helpful for the companies to set their ethical values and this will also help the management of the companies to know about their right decision making power. The theory is Justice based ethical theory that refers to the three main components upon which the managerial ethics are dependant. The three components are the equality, fairness and the impartiality. According to Schaubroeck et al. (2012), the first component of this theory is the equality, which refers to the equality of the management in taking any decision. In the time of taking any decision, the management have to be equal to all. Therefore, the management of any organisation has to take the decisions equally that it cannot create any controversy regarding the unequal decision that can be considered as unethical. Another component is referring the fairness of the management to the employees, which is the main basic of trust in an organisation. If the management always take every decision fairly and disclose all the information regarding any decision taken for the organisation to the employees then it will never be fail to gain the trust of the employees and will develop a good relationship between the employees and management. Apart from these two components, another one component is very important for any organisational management to increase their ethical business. The main base of the theory depends on a component that is impartiality (Hannah, Avolio & Walumbwa, 2014). In any organisation if the management focus on the impartiality, then the organisational management will be automatically become ethical. In this case, the management of the Mitsubishi Company has not followed the three components of the theory. They did not follow the ethical value of equality and impartiality. In addition, they also ignored to become fair about their strategies that they have taken to gain more profit. They did it unethically and without following, any ethical values that can justify their action of falsifying the fuel test of the vehicles in Japan. 

The ethical values of the organizations have to be maintained by the management of the company otherwise the company will fall into the situations like the automobile company Mitsubishi Motor Corporation has fallen. Therefore, it is the responsibility of the management of every organisation to keep the ethical values and moral norms of the organisation to remain true to the customers as well as employees (Zelenkova, 2013). The managerial theory that is evaluated in the study above has mentioned the Utilitarianism theory of ethics and the Justice based ethical theory. These two are the theories that can describe the dos and don’ts for the management of an organisation to avoid the ethical dilemmas. As per the managerial theories every organisation has to abide by the rules and principles of the organisation that saves the organisational values and ethics. If there is no ethics of an organisation then their business cannot be trusted by the customers and the employees (Campbell, 2014). The main message of these two theories is the same that the companies have to maintain some features of managerial ethics such as the management have to be very clear to the employees and stakeholders to lead the business properly; they have to be conscious about the after effect of any action that they are taking on behalf of their business strategy; and in addition they have to be very conscious about their impartial actions and fairness to the stakeholders to gain the trust and dependence of their co-workers to lead the company towards high profit. This can be happened only with a good leadership approach that the automobile company of Japan, Mitsubishi Motor Corporation, lacked in. According to Caldararo, (2016), if the company has a good leadership approach and if the leader has acted with ethical values then the company has not to face this kind of ethical controversy.

Therefore, it can be said that an ethical leaders can handle this kind of situations to stop running the company towards an ethical dilemma. The ethical leader or a moral leader can control these kinds of situation ethically without harming anyone while decision making. The Mitsubishi Motor Corporation lacks the ethical leader in their organisation to guide the employees from involving themselves in the ethical dilemma situation. As stated by Hannah, Avolio and Walumbwa, (2014), if the company has practiced a moral leadership approach then the employees cannot did this kind of falsifying activities with the stakeholders as well as the customers by manipulating the data only to increase their profit value. This has influenced the decision making procedure too that the leaders could not taken this type of unethical decision to attain the high profitability as it was strike them that the act was completely unethical (Jordan et al. 2013). Therefore, the management of the company should have been followed the ethical or moral leadership style to impalement the proper business strategies for the company ethically and to lead the employees and others as per the ethical norms of the organisation. Therefore, it can be said if the company has not implemented this unethical strategy in their company and has not hide the real data of fuel economy test then the vehicles had not faced this type of inconsistent service and has not received poor reviews from the customers. Moreover, the unethical way of the management has proved their lack in decision making power as well as their wrong leadership approach, which have to be revised to gain the previous reputation and trust of others to sustain in the market for a long time. 

According to Mayer et al., (2012), ethical leadership is related to directing the employees of the organization towards ethical standards so that they can maintain ethical belief in their work process. On the other hand, Jordan et al., (2013) opined that ethical leadership is highly concerned with protecting values and dignity of others from outside and inside of the organization. According to Schaubroeck et al., (2012) leaders can ensure that ethical decision has been met in the organization through keeping transparency in the decision and sharing it with all the stakeholders of the organization. On the other hand, Moore et al., (2014) opined that the leaders should establish ethical standard in the mind of the employees in such a way that they should not do any unethical activity in the work process that can hamper the trust of the customers.

According to Kacmar et al., (2013), it has been found that the employees of Mitsubishi have falsified the tyre pressure of Nissan cars in term of mileage rates. On the other hand, Schaubroeck et al., (2012) opined that the employees had intentionally falsified the mileage information of the cars so that customers are highly motivated to buy the cars. This incident prominently shows the unethical behaviour of the employees. According to Mayer et al., (2012), in this case, the leaders were unable to take ethical decision and communicate it properly with the employees for keeping consistency in the organization. On the other hand, Kacmar et al., (2013) opined that the leaders of this organization has failed to show ethical behavior for influencing the employees and thus, ethical code of conduct has not been maintained thereby, became the joke due to inability of the leaders in living up their published code of conduct.

According to Jordan et al., (2013), ethical leadership is beyond being a well person and it is related to make ethical standards in making decision about the organization. On the other hand, Moore et al., (2014) opined that in order to make ethical decision, the leaders of the organization should make ethics a consistent a clear part of the agenda of the organization. In case of decision-making, the leaders should set appropriate set of standards and model behavior so that every employees in the organization hold accountability towards their job role. When taking any major decision about the organization, the leaders should take the interest of the stakeholders and try to fulfill that interest with maintaining transparency with them. According to Kacmar et al., (2013), ethical leaders of the organization make an ethical culture within the organization so that the employees can perform according to the set ethical standards. On the other hand, Moore et al., (2014) opined that this kind of culture help the employees in internalize the exact value of the organization and thereby, the employees do not perform any fraud activity in the organization that can make the customers disappointed. Apart from that, the ethical leaders also initiate high level of penalties and punishment in regards to the violation of the ethical standards by the employees a making any unethical decision in the organization. 

Conclusion

In this study, the researcher has focused on the ethics, leadership and decision-making of the organisations and the importance of these three components in managing the ethical values of the organisations. It is found that the ethical values are very essential to keep in mind in the time of implementing new ideas and strategies for the company. Therefore, the management of the companies have to focus on the ethical value of the organisation while taking the decisions for the company. If the decisions will not be taken according to the managerial theoretical concepts then the management of the organisations have to face a huge ethical dilemma in business, which can damage their reputation in the market as well as ruin their loyalty to the customers and to their employees. The researcher has also discussed the ethical values and the importance of moralities in the organisations to maintain the goodwill of the company and it can be earned with good works and services. The study has disclosed that an appropriate leadership approach can avail this goodwill for the company. Therefore, it can be concluded that an organisation can lead their business activities without falling in any ethical dilemma with an appropriate leadership approach, which will be rich with moral leaders and good organisational management.

The case study of Mitsubishi Motors Corporation shows that the company has participated in unethical decision-making, which is influences by the leadership approach of the organization. According to Jordan et al., (2013), the leadership approach of an organization is solely responsible for monitoring the decision-making process performed by an organization. However, Kacmar et al., (2013) argued that it is not possible to monitor activities of every individual; employees. Therefore, the company should be transformational in terms of leadership approach. This leadership approach will help the organizations to maintain business sustainability. If managers of an organization put extra and unrealistic pressure on the employees, then the employee may adopt unethical activities for meeting the objectives (Heidl, Steensma & Phelps, 2014). Therefore, it is highly important to be realistic while setting organizational goal. In this manner, the company would be able to maintain ethical business practices. 

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