The Process of Sustainable Decision Making Process at Greenheart - Essay Example

? The Process of Sustainable Business Decision Making Process at Greenheart The Process of Sustainable Business Decision Making Process at GreenheartStudent’s Name College Name Professor Name Subject TABLE OF CONTENTS Abstract 3 1 Introduction 4 2 The Decision-Making Framework At Greenheart 4 2a. A Sociological Perspective 6 2b. “The trend of conventionality” 8 3 The Decision-Making Framework At Greenheart Plus 8 3a. A Sociological Perspective 9 3b. The Phenomenon of Paradox 10 4 Conclusion 10 5 Recommendations 10 6 Reference 12 Abstract This case study report uses a sociological viewpoint to examine the decision-making framework of the food company Greenheart, and its subsequent entity, Greenheart Plus. The main aim of this case study analysis is to evaluate whether the decision taken by an individual after consulting the group or decision made by a group of members will make a sensible decision making in a business. In arriving its final conclusion, this case study will examine various sociological decision making theories and will try to apply the same into its findings. At Greenheart, decisions were made essentially by one individual whereas at Greenheart Plus, The decision-making process changed to become one of consensus. Thus, this research essay employs a sociological outlook to spot out two major concerns of the company and also will make two proposals for the efficient decision –making of the company in the near future. Introduction The main aim of this research essay is to evaluate the decision-making process at Greenheart, a multinational food company which was taken over by another multinational food chain in 2001, which was known as Greenheart Plus after the merger. The research essay will be analyzing the environmental investment decision making policy at Greenheart, which was entrusted to the CEO (an individual) whereas it was delegated to TMT (a group of corporate top management team} and will be evaluating who was the best environmental decision maker, whether the individual CEO or the group team of TMT. It is to be observed that at Greenheart, much significance was given to environmental sustainability whereas at Greenheart Plus, much significance was given to the economic sustainability. Greenheart Plus relegated the environmental sustainability to the backyard by giving more significance to the economic sustainability as its core business –decision making process. This research essay employs a sociological outlook to spot out two major concerns of the company and also will make two proposals for the efficient decision –making of the company in the near future. The Process of Sustainable Business Decision Making Process at Greenheart As per Laclau and Mouffe (1985), the relationship between society and business organizations commenced at the start of 1970s due to materialization of social care movements and environmental activism in the USA, Europe and rest of the world. From the starting of 1990s, the societal care and environmental safety topped the business decision making. This can be evidenced from the new concept of ecological paradigm advanced by Catton and Dunlap in 1980s, which is a complete transformation to ecocentric thoughts from that of anthropocentric thoughts as advanced by Kennelly and Krause (1995).(“National Research Council,2005”) As per Levinger and Schneider’s (1969) social comparison theory, the people in group clusters act in a different way than individually. The general view is that the collective authority of a group outperforms the individual decision. Despite the individuals who are self-motivated can achieve an extraordinary ingenuity but working jointly as a team can generate astonishing outcomes and a better business decision. As per Guindham, as contrasted with individuals, business decisions taken by a group has proven positive as it offers commitment to their tasks. (Mullins, 2005p.569). A business decision may vary from individual to individual. As per “Herbert A. Simon”, a decision-making by an individual is subject to limits or bounds to rationality and is known as bounded rationality, which means that individuals with finite (limited) mental capability, mingled with external factors over which such individuals do not have any control. For instance, when Mark Hurd, was taken as the new CEO of Hewlett-Packard, he was applauded for his emphasis on execution instead of concentrating on new visions for the company whereas his predecessor, Carly Fiorina focused on future expansions and projects and not on business operations or execution. (DuBrin, 2008, p.153). Greenheart CEO treated sustainability as a core business value and earmarked huge budget to minimize the environmental impact of the business thereby neglecting the profitability, especially during economic difficulties. CEO gave importance to environmental concerns in the decision-making process of the company and their adoption into the business practices. Profitability of a business has a pivotal role, and it cannot be sacrificed and compromised for acknowledging and discharging social responsibility. But, it is to be noted that economic objectives of the business organizations have social impacts. It is to be remembered that the Coca-Cola Company was in trouble when there was an accusation that it had a high percentage of pesticide residues in their cool drinks in India in 2003. Here, Coca-Cola, India, so as to maximize its profitability had neglected its social obligation, and hence it had to correct its image by serving quality and sustainable cool drinks in India. Coca-Cola illustration proves that business cannot be managed by making policies, decisions, norms and systems, which are objectionable in terms of social goals and values. (Carroll & Buchholtz, 2012, p.649). In reality, both social accountability and profitability supplement each other. The CEO ignored the fact that business cannot be managed purely on social concerns, but these cannot be disregarded altogether. Thus, CEO decision to give more priority to environmental and social aspects can be regarded as sacrificing instead of maximising the revenue of the company, and it proved to be a peril to the sustainable development of Greenheart. (Moshal, 2006, P.3.6). 2a. “A sociological viewpoint” As per Gary Yuki, participation management means a type of decision- making process wherein subordinates are permitted to influence either the whole or some of the decisions made by a manager. In authoritative decision making, a leader makes a decision for the group. When the leader turns the decision making over to the group, it is known as laissez-faire. For instance , in recent Hurricane Katrina in USA , FEMA director Michael Brown decision making style could be called as laissez-faire as he allowed other group members to offer their suggestions and decisions were made on their suggestions thereby minimizing his involvement in the decision making process very minimal. When the leader makes the decision along with the group, it is known as participative and in this, group members are more committed to the result or outcome. (Dan O, 2008, p.309). According to Harrison, in group decision making, there will be flow of information and there will be a structure of communication network like chain, wheel, circle and completed connected network. (“Harrison, 1999, p.5”). The leaders’ status is fortified in the Chain and Wheel networks but there will be low level of satisfaction of group members. For non-routine decision-making process, both completely connected and circle networks are found to be more convenient. (Costello & Zalkind in Harrison, 1999: 226). In paradox decision making, group members remain just watch dogs with passive acknowledgement of a decision without disclosing and communication their true opinion. (Harvey in Teale, 2003:290) Under Johari window, the group members may converse to each other and offer their comments. (Luft in Teale, 2003:274) In Greenheart, the decision made by the CEO can be said to be a paradox decision as the group members remained silent with passive acceptance of the decision without revealing their true opinion. Thus, paradox decision- making process lacks involvement and the commitment from group members as the commitment from group members is an essential element for success of a decision making as quoted by Guth and MacMillan (as cited in Amazon, 1996). As per Bouquet and Birkinshaw (2008), due to perception gaps between MNCs head office and subsidiary conflict, there arises differences in implementing sustainable decisions. As per Asakawa (2001), much research empirical studies viewed that perception gaps always ends in dysfunctional conflicts. As per “Chini et al., (2005)”, recognizing the perception gap could be the most significant harmonization task associated in enhancing and sustaining the overall performance of MNCs. (Dorrenbacher & Geppert, 2011, p.206). In Greenheart, there existed between difference between CEO’s priority and subsidiaries priorities. Subsidiaries showed keen interest on enhancing the productivity thereby relegating the environmental sustainability to the back. Thus, CEO was, in fact, lacked the support and commitment of subsidiaries to promote environmental sustainability, and his decisions turned to be unsuccessful. 2b. “The trend of conventionality” The conformity trap happens when the objective of a business is to portray the environmental sustainability as its corporate brand image, which is differentiated and unique, but the result will be the exact opposite. As per Gerrig et al., (2012), phenomenon of conformity is the tendency for individuals to behave in ways presented by other group members. There was an absence of active cooperation of group members and due to the absence of support for environmental issues from a group of employees and hence Greenheart CEO’s decision could not be carried out efficiently. 3. THE DECISION MAKING FRAMEWORK AT GREENHEART PLUS At the Greenheart Plus, more significance was given to financial performance and profitability and the environmental sustainability was relegated to as a non-priority agenda. The shift in the company’s core objective is due to commencement of economic constraints caused due to the unforeseen external crisis. The Greenheart Plus unforeseen production problems can be compared to Taleb’s (2008) “Black Swan” theory, which connotes to an incident which not at all predictable and has a severe effect on the decision making. Due to the acute economic crisis witnessed by Greenheart Plus, the TMT had no other way but to concentrate on the enhancement of company’s output and profit. However, it did not desert the whole environmental sustainable activity but maintained some part of it as its core objective. Quinn’s (1980) incrementalism as one which mirrors the new decisions gets placed on the top in a logical sequence to the present one. Thus, Greenheart Plus gave priority to the profit and enhancement in output and kept the sustainability at low ebb. (Brown & Grundy, 2011 p.32). Operational Teams (OTs) were established by Greenheart Plus, which encompassed the heads of different functional areas, the production manager, and head of subsidiaries. Therefore, after discussion within the team members, the decisions connected to environmental concerns were decided by OTs. In this way, the Greenheart Plus was able to improve the excellence of decisions and ensure the effective functioning of decisions. Thus, Greenheart Plus followed the Johari window principle, where the group members may converse to each other and offer their comments. (Luft in Teale, 2003:274) 3a. “A sociological standpoint” A group decision means that some consent happens among group members as to what course of action among the many alternatives available is most apt and suitable for accomplishing the company’s objective. At Greenheart Plus, the environmental practices were methodically tailored to production processes, and this was well acknowledged by the operational employees. This was a crucial accomplishment since full recognition of a decision by members can have a positive outcome on the mind-sets of group members toward group work (Nemiroff & King, 1975). Group decision making helps to share resources and to manufacture creative, innovative and quality decision, which was practiced by Greenheart Plus. Group decisions helped to avoid the internal conflict that existed earlier as the all the group members had the analogues’ goals which resulted in the commitment in the group’s employees to implement the decision made by the OT without fail. 3b. “The phenomenon of paradox” In paradox decision making where group members remain just watch dogs with passive acknowledgement of a decision without disclosing and communication their true opinion. (Harvey in Teale, 2003:290). In the Greenheart Plus, there existed the phenomenon of paradox where the relegation of environmental sustainability was not opposed by the OTs as those who supported environmental sustainability were marginalized by the majority. Due to this, the group could become a close-knit, and diversity may vanish. This may result in lack of positive disagreement, and may harm the capability of the group to be ground-breaking and creative (Johnson & Johnson, 2009). 4. Conclusion The bounded rationality and authoritarianism of the CEO in Greenheart restricted the decision-making process. Eventually, this endangered the economic endurance of the company. In Greenheart Plus, the spotlight transformed from environmental to economic sustainability. Decision-making also transformed to a harmony approach with the establishment of Operational Teams to replace Top Management Teams of Greenheart. As a result, the main goals of the parent company and its subsidiaries were more allied. Due to these changes, the operation of decisions became more successful at Greenheart Plus. Yet, there is a risk that the phenomenon of paradox in the Greenheart Plus which resulted in lack of innovation and creativity. 5. Recommendations Greenheart Plus was not in a position to measure its environmental barometer as there had been no data collection process that existed, which would be utilized to analyse the same. In business decision making, it is significant to recognize the significance of the range of information available. Thus, by using a quantitative approach, one can resolve the issues by employing the numbers rationally. Greenheart Plus should start the collection of data, mainly to generate high-quality decisions and improve the commitment of group members. (Curwin & Slater, 2008, p.7). Toyota, a leading automobile manufacturer actively followed and nourished contradictions and had applied management, mainly through paradox. Osono, akeuchi et al., found that the Toyota’s actually survived on paradoxes. It exploited opposing propositions to strengthen itself. (Storey & Salaman, 2010). Constructive disagreement could make a contribution to the eminence of decisions because a synthesis of diverse viewpoints tends to be more creative than a single homogenous standpoint Adopting Toyota’s principle , Greenheart Plus should encourage diverse viewpoints from its employees ,mainly to develop a heterogeneous harmony approach to the decision-making process. References Brown, L & Grundy, T. (2011). Project Management for the Pharmaceutical Industry. New Delhi: Gower Publishing Ltd. Carroll, AB & Buchholtz, AK. (2012). Business & Society: Ethics, Sustainability and Stakeholder Management. New York: Cengage Learning. Curwin, J & Slater, R. (2008).Quantitative Methods for Business Decisions. New York: Cengage Learning. Dan O, H. (2008). Strategic Communications in Business and the Professions. New Delhi: Pearson Education India. Dorrenbacher & Geppert, M. (2011). Politics and Power in the Multinational Corporations. Cambridge: Cambridge University Press. DuBrin, AJ. (2008). Essentials of Management .New York: Cengage Learning. Harrison, E.F. (1999). The Managerial Decision Making Process. New York: Houghton Mifflin. Moshal, B.S. (2006). Organisational Behaviour. New Delhi: Galgotia Publications. Mullins. (2005). Management and Organizational Behaviour. New Delhi: Pearson Education India. National Research Council (2005).Decision Making for the Environment: Social and Behavioural Research. New York: The National Academic Press. Storey & Salaman, G. (2010).Managerial Dilemmas: Exploiting Paradox for Strategic Leadership. New York: John Wiley & Sons. Read More