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(Doc) Assignment for Business Leadership

   

Added on  2021-06-16

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Running head: BUSINESS LEADERSHIPBUSINESS LEADERSHIPName of student:Name of university:Author note:

1BUSINESS LEADERSHIPQ1.Ans. Scholars associated with the field of business administration have propounded that it is bothpersonal traits of the leader as well as the environment of the company. It has been found thatoverconfidence among the CEOs is a cause of them becoming irresponsible towards the integrityof the company. The overconfident attitude of the CEO leads to defective decision-making andhas been envisaged by Chen, that overconfidence is the cause of biasness among the leaders inthe context of information-processing as well as in making erroneous judgement (Aebi, Sabato &Schmid, 2012). Regarding the ethical framework that guides the company it needs to be kept inmind that if the agent fails to properly reflect on the situation due to overconfidence that emergesduring the course of making a decision then the agent needs to be held responsible by the boardof governors by keeping checks and balance on the CEO. The board of governors need to ensurethat the CEO is communicated that the overconfident attitude is unethical and it is not inconjunction with the interest of the company (Sageer, Rafat & Agarwal, 2012). There have beenseveral studies that have documented the tendency of overconfidence among the CEOs but therehave been few studies that offered solution. Petit and Bollaert (2012) have discussed about thedevelopment of virtue of reverence among the CEOs as a kind of internal mechanism ofprevention. Overconfidence, unscrupulous nature and shirking of duties among the CEOs can beprevented through the alternation in the corporate culture. The institutional investors and theboard of governors can monitor the attitude and actions of the CEO and restrain anyoverconfident attitude. They can further prevent the CEOs from engaging in inappropriate andunethical decisions through the addition of an external and systematic factor that would impedethe CEOs from acting and executing in an unethical and unscrupulous manner. The agency

2BUSINESS LEADERSHIPtheory underscores that the misaligned interest of the corporate managers provokes them tomaximize their profit through opportunistic behaviour rather than through maximization of thewealth of the shareholder. Managers have been found to exploit the free cash flow of thecompany by resorting to investments that have negative impact on the present value (Riucciuci,2015). Managers have the tendency to overdbid with the purpose of providing personal benefitsto the mangers rather than for building the empire. Managerial overconfidence and inefficiencycan be demonstrated in the poor investment as managers have been found to overestimate theinvestment project returns and thereby there is overinvestment (Park & Chung, 2016).Institutions, in this case the board of governors need to ensure that that there is effectivemonitoring of the overconfident and the unscrupulous CEOS that would prevent them frommaking overinvestment. Firms that have higher institutional monitoring system in place reportlower levels of negative outcome from the CEOs. There needs to be the most robust approach tothe institutional ownership through the quarterly ownership. The board of directors need toensure that the leader of the organization, in this case the CEO is committed towards establishingan ethical culture both in the boardroom as well as in the public square. This can be done throughinspiring the CEO (Chief Executive Officer) of the company to engage in CSR (Corporate SocialResponsibility) activities and incorporate it as a part of business practise. The value of CSR needto be infused into everything and it should not be considered as a standalone discipline.Q2.Ans.) Qualities of a high-performing leader- According to the case study, good governance isconcerned with the management of people in an efficient manner. It has been argued that theleader needs to reflect the traits of confidence, honesty, integrity and accountability that wouldinspire the workforce to deliver their best performance. The values and action of the leader is

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