Decision Making Report: Ethical Considerations and Leadership

This report provides an analysis of decision-making processes within a business, focusing on the internal business environment. It utilizes the McKinsey 7S model to examine key elements such as strategy, structure, systems, shared values, skills, staff, and style within an outdoor power equipment company. The report identifies areas of concern, particularly regarding the impact of changing leadership and strategic shifts on the company's operations and investments. Furthermore, it delves into the importance of ethical decision-making and the leadership qualities required to successfully implement organizational change, including adapting to industry trends and maintaining ethical standards. The report also discusses the potential consequences of maintaining the status quo and emphasizes the need for a forward-thinking approach to strategic management.

Running head: DECISION MAKING
Decision Making
Name of the Student
Name of the University
Author’s note

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Executive Summary
The purpose of this assignment is to understand the importance of the elements that are
present in the internal business environment. The organisation that has been discussed operates
in the outdoor power equipment industry hence the internal resources of the company are
comparatively large. With the help of Mckinsey 7s model, the aspects of the internal
environment has been discussed in the process the area of problem or issue has been identified in
the report. Furthermore, the ethical decision making and leadership requirement of the company
has also been discussed.

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Contents
Introduction......................................................................................................................................3
Overview of the industry.................................................................................................................4
Mckinsey 7s model..........................................................................................................................4
Ethical decision making to successfully deliver change in the organisation...................................8
Implication of maintaining the status-quo.......................................................................................9
Ethical decision making.................................................................................................................10
Leadership required.......................................................................................................................11
Conclusion.....................................................................................................................................11
Reference list:................................................................................................................................12

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Introduction
The process of decision making for a company is driven to achieve the objectives of the
company. The management of the organisation has to constantly keep the process of operation
up to date with the changing dynamics of the business environment. Business organisations have
goals and objectives to achieve which is helped with the decisions that are made by the
organisations management. Strategic management and planning helps the company in achieving
the objectives and leading the company towards growth and development (Hill et al. 2014). Any
business unit operates under internal and external environments. Internal environment can be
defined as the factors of the business which are under the control of the unit; the management of
the business can influence these factors and manipulate their impact on the operations of the
business in order to achieve growth and advantage over the competitors in the industry (Hitt et
al. 2012). On the other hand the external environments cannot be manipulated by the company
and hence while taking any kind of management decision the company should keep in mind the
changing dynamics and should keep space for any kind of unforeseen circumstances; these can
either be in the form of threats or opportunities (Prajogo 2016). With the help of the
opportunities and the strength business organisations try to overcome the weakness and the
threats (Eden and Ackermann 2013).
The concept of global ethics is one of the most important aspects of decision making in an
organisation (Widdows 2014), ethics is more than just what is right or wrong it helps the
company develop goodwill in the industry and also helps them to build a relationship with the
customers or clients that are based on trust. Hence it is important that the management take

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ethical decisions (Crane and Matten 2016). There are several concepts and theories of
management that are coined by several authors which help the business in taking decisions. In
this assignment some of the business models and theories are going to be discussed which leads
in taking strategic decisions of the company.
Overview of the industry
The industry that is being discussed in the case study is outdoor power industry. The
outdoor power equipment industry is a heavy industry that involved large manufacturing and
production expenses in terms of raw materials, human resource and other resources
(Outdoorpowerequipment.com 2018). This industry has been infamous for the health and safety
issues of the human resource which has been improved over the years by the companies
operating in the market (Weber 2018); it also has to follow a lot of certification norms and
conditions due to nature of the products and services. Like any other industry there is a
significant external environment which impacts the operations of the business. Decision making
processes of these companies depend largely on the external factors. Maintenance is another
important and very evident operational function of the industry (Guertin 2007). The companies
which operate in this industry not only provide the customers or clients with the products, there
are several after sales services as well that accompanies with the product (strategyr.com 2018).
Mckinsey 7s model
The 7s model was developed by the consultants of the Mckinsey, Tom Peters and
Robert Waterman during the 1980s (Alshaher 2013). The consultants studied the internal
business factors and developed an efficient management instrument. The framework helps the
management to understand and break down the internal business environment factors in order to

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formulate policies and decisions of the organisation (Chen and Liu 2010). Value and competence
of the internal resources and factors of the organisation can be analyzed with the help of this
concept (Singh, 2013). There are seven elements or factors that are discussed by the authors of
this model which is essential to focus upon in order to facilitate the decision and policy making
process of the organisation. In order to be successful in the business, the organisation has to align
these factors. All the factors discussed all begin with the letter of the alphabet “S”. The
constituent in this framework has been divided in two subdivisions Soft and Hard (Chong &
Preece 2014).
The soft aspect
Skills: The skills of the organization are the expertise that the human resource of the company
posses in order to keep the operations of the business running, for any organisation it is
important to focus on the skills as it is the area of strength for the company, the management of
the company have skills to understand the potential of the company and take decisions
accordingly. The people have enough knowledge about the company and the ones who are newly
recruited also ensure that they have a good understanding of the industry and fulfill the
requirement of the position they are hired for. All the departments had managers and leaders who
efficiently help the skilled employees to achieve the objectives of the organisation (Naipinit et al.
2014).
Staff: The human resource of the organisation is one of the most important internal factors of
the organisation that can be used as strength. The staffs are responsible for the delivery of the
product or service recruitment, training and skill development, encouraging and inspiring as well
as remuneration and incentives are some of the factors associated with the Human resource of

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the organisation. The company does not have issue in this segment as the people who are
recruited or are promoted are analyzed on the basis of their interview and performance (Gyepi-
Garbrah and Binfor 2013). They ensure that they have the best people in their place in order to
improve the efficiency of the operation process.
Style: The process by which the management of the organisation guides and supports the people
towards the objectives and goals of the organization. The leadership style that is incorporated by
the management of the organisation is a mixture of transformational in nature the leaders accept
that changes are required to survive in the industry and hence they welcome new ideas and adapt
to the changes (Hanafizadeh and Ravasan 2011). The area of issue that has been identified here
is that the process is not followed up and the decisions are made very quickly. Adapting to
changes does not mean that the changes will overlap each other; this creates issues in the
department as mentioned in the case study. The department that was set up in India had lost
touch with the HQ as the CEO of the company had been changed and the new person has new set
of ideas and vision for the organisation where the idea of low cost procurement did not have any
position. In this case the investment of the company in setting up an operational unit in India was
loss as it did not complete the objective with which it was set up (Arvand and Baroto 2016).
Shared Values: The shared values from the base of the 7s framework. These are the values,
beliefs and principles that guide the management to develop course of action for all the
operations and people associated with the business. The goodwill, reputation and the image of
the company is based on this element (Ravanfar, 2015). The management of the company works
for the financial development and improvement of the organization, hence all the decisions and
the policies that are undertaken by the company are all based on the financial development of the
organisation hence it can be said that the company prioritizes the benefit of the company over

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any other stakeholder of the organisation (D'Aveni et al. 1995). The higher management of the
organisation has the ultimate voice in formulating any decision of the business. The objective of
the organisation was to increase the profitability in order to get an edge over the competitors,
instead if the objective was to improve the quality or to diversify a product according to the
requirement of the customers would have been considered then the focus would have shifted
from profit to analyzing the customers and hence the system would have followed accordingly.
This would not lead to the mismanagement and negligence of a segment oversees (Mustafa and
Kingston 2014).
The hard aspect
Strategy: Any organisation irrespective of tits goals and objectives should have an organized
plan of action which helps the company strive towards its objectives (Barclay and Benson 1990).
Is the process by which an organisation plans the course of action in order to achieve the
objectives which will lead the organisation to reach its mission (Hurt and Abebe 2015). The
strategy of the company is based on the leadership style that has been discussed above, the
company is observed to plan and strategies according to the challenges and the difficulties that
the company is facing but the company does not think of the strategy on the long run basis
(Spaho 2014). The strategy that the company had readily accepted and invested failed to reach its
success as the support of the head quarter was taken away abruptly due to the change in the
objective, such an investment of setting up an operational unit in another country is expensive
hence the company should have invested in terms of support and resource to the oversees unit of
low-cost procurement even after the change of the management. It is one of the responsibilities
of the higher management to carefully deal with the decisions and investments (Junarsin 2012).

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Structure: this is the structure of the company and the ways in which the departments of the
company have been segmented and divided this is usually heavily dependent on the nature of the
business and the operations of the unit. It stands for the responsibility an organisation have and
for its operations. As a large scale business unit the structure that is being identified is line
organisational structure (Alkaraan 2016). The departments have only direct vertical relationships
between other levels in the structure. Clearly there is a hierarchy that has been maintained by the
organisation. The case discusses about the support unit manufacturing unit, procurement unit.
The communication process in the company is also linear hence it reduces the issue of
communication gap if it is not intentional in nature (Teh and Corbitt 2015).
Systems: According to the strategies that are formulated by the management the process is
developed to take the decision forward (Kurnia et al. 2017). In the case study the challenge was
identified by the department and a solution for the issue was immediately strategies by the
management which initiates immediately after the approval of the higher management, the
company immediately sent five officials to India and set up an unit in Mumbai, they also hired
local people to assists the work, the system that followed the strategy is quite streamlined and
effective (Ravanfar, 2015).
Ethical decision making to successfully deliver change in the organisation
No matter how traditionalist an organization is the operation of the business have to go
through changes in order to adapt to changes in the trends of the industry and the business. The
factors that have been studied in the above model help in identifying the gaps in the management
of the company and is also justified on the basis of ethical decision making as the area of
problem that has been identified is shared values, these are the aspects of the organization that

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leads to ethical decision making (Vitell and Foo 1997). The company should have shared the
values of customer focus and product quality instead of focusing on profitability in order to
ethically take the decision of change (Musbah et al. 2016). Similarly the style that has been
adopted in terms of leadership does not match with the situation the organisation is in, the
company needs a visionary leader in order to focus on the long-term goals and take decisions
based on proper analysis of the decision (Andrews 2014). It is on the leader to ensure that all the
decisions of the management be followed or if he or she thinks that the decision that has been
taken by the previous management is incorrect, rectification should be the solution and not
abandoning an ongoing project (Susong, 2013).
Implication of maintaining the status-quo
In order to maintain the status-quo in the industry the company should understand the
importance of communication among the authorities of the organisation. The fact that a member
of the team had to physically fly down to the headquarters in order to understand the situation
should not occur within a business organisation. The position of a CEO is important as it is one
of the highest managerial post the company should inform every employee regarding such a
change. Lack of communication can further lead to a number of issues and challenges.
Hasty decision making process is another issue that can be identified from the case study.
The company has taken the decision to source more form a cost-competitive country was a
theoretically good idea but not every idea that is theoretically appropriate may work equally well
in the practical application. it is mentioned that a business plan was drawn which was
immediately accepted by the higher management, instead if the company would focused on a

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long term solution to the problem that would involve all the departments of the company like
skill development or innovation then it would be more effective in this case.
Ethical decision making
While formulating a decision or policy of the management, the company should ensure
that the new decision is ethical considerate of all the stakeholders of the company. The ethical
theories are widely segmented in three divisions:
 Consequentialist theories: these concepts are mainly focused with the ethical
consequences of the plans ,decisions or actions taken in the process of operation (Cohen
and Peterson 2017)
 Non-consequentialist theories, they tend to be essentially concerned with the aim or
motive of decisions which is focused on particular actions of the decision
 Agent-centered theories, unlike the other theories, this is more concerned with the by
and large ethical position of the company to identify the morality of the decision that has
been taken by the management (Samsonova-taddei and Siddiqui 2016).
This theory that the company should incorporate in the decision making process is the agent-
centered theories as it will help in developing the values and principles of the organization that in
the long run adds to the reputation and goodwill of the organization. In strategic management it
is important for the company to understand the importance of goodwill in the industry from a
business perspective as well (Ford and Richardson 2013).

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Leadership required
The leadership that is required in the organisation is a mixture of transformational and
transactional leadership style (Allen et al. 2017). A more contemporary style of leadership that
has gained popularity in the research field is visionary leadership, this is when a leader is
farsighted and ensures that the goal is achieved with the help of effective strategies which is not
only impactful in the short term but will also help the company in its growth process in the long
run (Birchfield 2013).
The concept is a mixture of the two aforementioned traditional styles hence in order to
successfully implement changes in the this style would be appropriate as the leaders are open to
new ideas and innovations (Cheema et al. 2015) but are also equally analytical and calculative in
nature which makes the process of implementation of the strategies are full proof (McQuade
2013).
Conclusion
It can be concluded form the above discussion that the company needs to incorporate
ethical decision making process in order to ensure that the interest of all the stakeholders of the
organisation are intact. The leadership style that is observed to be perfect for the company is
visionary leadership as the company has been investing in projects which are later ignored by the
management and then the project fails to succeed as the support of the management is taken
away from the initiative.