AccuForm Ethical Leadership And Its Challenges In The ERA Of Globalisation Case Solution

The business places a high significance on ensuring the integrity of its personnel in the process of carrying out their job tasks. The company is also committed to wellbeing of its workforce and environmental protection. The fundamental values of the company are producing high quality, consistent featured chemical coatings globally. DynaCoat is a responsible corporate citizen. In comparison, CreaseFree Hong Kong, which is original equipment manufacturer of wrinkle-free attire, possesses values that are in dispute with DynaCoats. The company’s driving strategy is low cost leadership in its industry. CreaseFree Hong Kong is committed to follow this strategy by any way within the law. While DynaCoat endeavors to surpass social expectations, CreaseFree only strives to discharge its legal necessities. Similar to several other conventional Chinese businesses, CreaseFree take no notice of formal control arrangements and rely on personal connections to achieve its objectives. 

The outcome of this fact is that gratuitous gift giving, special treatment, and bribes all qualify as customary and tolerable business doings at CreaseFree. The business has no regard for corporate stewardship. With the growth of AccuForm’s business activities, CreaseFree’s culture became more and more visible. Greater proportion of Kim’s employees has been moved from CreaseFree or they are Chinese locals. These employees have carried their ingrained values and business behavior with them. Kim does not possess required moral courage to put his foot down and he has allowed them to carry on working with the conduct that they deem appropriate. Greater proportion of this problem originates from the fact that Kim’s corporate goals are all focused on the immediate benefits for the business – for instance, growing market share, creation of patent and enhancing sales revenue. Kim fundamentally adopts a cultural relativist approach. This means leaving all of DynaCoat’s moral values, because his accomplishment at meeting the quantitative goals is contingent on the performance of the Chinese workers. On looking back, it might have been most useful to institute stringent standards that bring together values of both organizations in equal manner. 

2. Analysis

Kim’s Leadership Style

A causal aspect in the collapse of AccuForm is Raymond Kim’s low moral courage and his lenient management approach. There is no question on Kim’s abilities and competence; it is evident that the managerial approach of Kim to lead at AccuForm is too submissive for the particular circumstances. This dilemma is related to the corporate cultural disparity. Kim deliberately overlooked the contradictory values of the two organizational cultures even though he conflicted with CreaseFree’s informal practices of offering bribes and gaining favors. 

The net outcome of this behavior is that the unethical behavior of Chinese workers is condoned because as his silence is perceived as a symbol of acceptance. It is evident that when senior managers have as if ethics don’t matter, the rest of the employees of the organization will begin to behave in the similar manner.  It is Kim’s submissiveness which has led others (like Ching) to take advantage of his limitations and to assume risks without regard for any repercussions. 

The second problem is that Kim devalued his own inherent worth as he sidelined his own moral values and adopted the undemanding route of simply accommodating CreaseFree’s workforce. Kim also positioned an unjustifiable amount of trust in AccuForm’s staff. Trust can only be placed after sufficient experience has been gained pertaining to a person or group. One example of this behavior is that Kim bestowed complete access to R&D staff. 

Kim’s perception was research and development staff should be given supplementary privileges and superior authority. He permitted open admission to the research labs, unhindered access to company’s resources and chemicals and bestowed authority over spending decisions to employees like Ching. Despite his years of experience, he ignored the indispensable business precept of separation of duties among staff. As a result, internal control flaws were exploited. Ching took up the responsibility to supervise waste disposal, exhausted funds for entertaining clients, and put in long overtimes. Kim naively construed these characteristically questionable measures as signs of dedication and hard work.

Kim accentuated end goals but on no account expressed the means by the staff should obtain those goals, further than the nominal vital specifications. This simply allowed for unethical actions since right and wrong was never defined. For example, R&D team’s performance was calculated by quantitative metrics and rewarded with monetary benefits. Combination of these monetary rewards with the increased authority given to staff, it was uncomplicated to resort to traditional Chinese business practices like offering bribes. After all, this was the action to which they were accustomed to. Fundamentally, Kim was prompting such behavior by rewarding those who met the quantitative goals but on no account investigated the ways these goals were accomplished. iI general, adopting such a hands-off approach would have only been appropriate provided that ethical standards and general processes were recognized and sincerely regarded at AccuForm.

Ignoring Red Flags

Auite a few warnings signs of ethical problems were hidden within AccuForm’s day-to-day operations numerous of which pursued conventional Chinese business schemes and the cultural observations of ‘guanxi’. Had Kim examined how work was carried out, he would have observed that the philosophy of ‘guanxi’ was being used out of context. Primarily, Kim failed to comprehend the common culture in which he was functioning. Chinese culture is very communalist and at all time emphasized deference for one’s elders and for community’s ranks. These factors, when shared in the workplace, are the ideal breeding ground for the bureaucratic behavior and ethics. 

Ching was able to control these distinctive aspects of culture to his own personal advantage as portrayed by the uneasiness of the whistleblower, who submitted to his superior’s unethical orders. Most likely a lower ranking Research and Development worker, the whistleblower knew that it was immoral to accept bribes but ended up being compliant owing to the high pressure to obey the rules. Given the conditions in countryside China, it is quite probable that the worker had to yield in order to maintain his job. Ching overlooked the fundamental human value of respect for human dignity and utilized employees at lower levels of hierarchy as a means to an end. The absence of a code of conduct or lack of a whistleblower hotline made it unattainable for this worker to oppose the unethical practices existing in AccuForm.