Red teaming is an excellent way to approach these expectations and then address any gaps with the right security protocols and processes. such as an assessment with agreed objectives and Red teaming is an excellent way to approach safeguards, start and end dates, as well as a time these expectations and then address any gaps to present the findings to the Executive Board. with the right security protocols and processes. And if vulnerabilities are detected, it means that There’s no easy answer though – it’s an ongoing the organisation can address them before being cycle because as technology advances and is exploited by a cyber attack. used to boost security, it can also be used by attackers to improve attack methods and create Conclusion new threat vectors. In a recent Ponemon report, the financial services industry demonstrates that there Anthony Young is a Founding needs to be more focus on cyber security as Director at Bridewell Consulting, the industry continues to be more dependent one of the UK’s leading independent on new technologies and systems in order to cyber security companies. He has improve margins and agility5. Over 70 per cent been involved in cyber security for of respondents stated using financial systems more than 16 years, with a background in infor- and software supplied by a third-party, yet only mation security, governance, risk and compliance. 31 per cent thought that their organisation was Starting his career with a small consulting effective in preventing cyber attacks. company, he joined Barclay Simpson to develop its contract information security division. This is something which the European Central Anthony founded Bridewell Consulting in 2013, Bank recognises only too well. Through its and built a world-class cyber security company banking oversight arm, the Single Supervisory that focuses on customer satisfaction and long- Mechanism (SSM), it is currently pursuing expec- term relationships. tations for the cyber resilience of large Eurozone banks. These expectations will have to address a References number of challenging issues, including questions 1. https://www.computing.co.uk/ctg/news/3078272/12-fold-in- about the governance of cyber risk, the expected crease-in-cyber- crime-financial-services speed of recovery from cyber breaches, and the 2. https://www.synopsys.com/content/dam/synopsys/sig-as- information that supervisors expect firms to setsreports/software-security-financial-services-ponemon.pdf share with the rest of the market6. 3. https://blogs.deloitte.co.uk/financialservices/2019/05/blog-eu -regulators-recommend-fresh-legislation-on-cyber-and-it-risk-in- the-financial-sector-.html 4 . h t t p : / / w w w. i n f o b l ox . c o m / w p - c o n t e n t / u p l o a d s / infoblox-whitepaper-sans-top-new-attacks-and-threat-report. pdf ?mkt_tok=eyJpIjoiWVdZeVpXSm1ObVEyTkRVMiIsIn- QiOiJPeHEwbXF2YXE2Z0VPWFRyMmYrclwvTzJVa3JhT- kUyTEp3VG1iVno0N0ZBUUNGV0lGWm4zUW5mNn- FRamlSZTRFU3NZenFLVFhsQTFFbnhXVmt3c29Hb3d4elp- LWThqOVFkRllPT3NwcFpMdU1NemI3RnU1UUlCZE- t5aWVnSm5EY1MifQ%3D%3D 5. https://www.synopsys.com/content/dam/synopsys/sig-as- sets/reports/software-security-financial-services-ponemon.pdf 6. https://blogs.deloitte.co.uk/financialservices/2018/05/cybe r-resilience-and-the-european-central-bank-.html worldfinancialreview.com 51
Artificial Intelligence Can AI Really Make Compliance Easy? BY COLIN BRISTOW AI is fast becoming a cornerstone of new The practical large and extremely dense documentation (the UK organisational strategies. Of the many business application of government’s guidance document for GDPR alone practices that AI is augmenting, compliance regulations is 201 pages). Identifying the appropriate actions is perhaps the least riveting; it’s necessary, currently relies mandated by these lengthy documents requires a without much potential for excitement. But great deal of cross-referencing, prior knowledge of there is high potential for value. To reduce the on human historical organisational actions, and knowledge of chances of compliance practices becoming a interpretation the relevant organisational systems and processes. cost centre1, businesses must learn how they and subsequent can extract maximum value from them. deployment of What’s more, several regulations attract fines a solution, with or corrective actions if not applied properly (like L ong and arduous compliance processes can tie heavy penalties the infamous “4% of company turnover” penalty businesses in knots, but technology can help for noncompli- attached to GDPR). untangle this. No business is irredeemable, ance. This is where with variated and tailored solutions available for AI can help In short, the practical application of regulations multinationals and SMEs alike. Understanding the currently relies on human interpretation and subse- pressures that individual businesses are under is vital quent deployment of a solution, with heavy penalties when it comes to finding solutions that offer ease for noncompliance. This is where AI can help, reducing and add value to each organisation. the workload involved and improving accuracy. Here are three key examples of how AI can help companies New routes to efficient compliance turn compliance into a value-added activity. The burgeoning RegTech (regulatory technology) industry is seeking to highlight how AI can be at 1Allow AI to help reduce risk the forefront of augmenting compliance practices. Following the deployment of compliance RegTech partly focuses on improving the efficiency processes, there is often residual risk. This can and effectiveness of existing processes. As part of be as a result of unforeseen gaps in compliance that improvement, organisations are starting to use processes, or unexpected occurrences that become AI, machine learning and robotic process automa- apparent when operating at scale. tion (RPA) to smooth the integration and processes between new RegTech solutions, existing legacy That’s partly because there are usually a lot of compliance solutions and legacy platforms. steps and processes to be carried out during the data collation stage of compliance programmes. Why look to AI for help? Recent regulations, such RPA can help reduce administrative load associ- as GDPR or PSD2, are handed down in the form of ated with these processes that include a high degree of repetition – for example, copying data from one system to another. AI can then help process 52 The World Financial Review November - December 2019
Businesses have to contend with a constantly evolving landscape, potentially across several regions. AI can help to optimise the processing of these regulations and the actions they require, helping companies keep up to date. cross-organisational documentation, combining internal and Working together with tech external sources and appropriately matching where necessary. AI and RegTech are not the enemies of humans in the job market. These systems are designed to integrate into existing AI can also help to reduce companies’ risk of noncom- teams to boost our productivity7. In fact, they’re already pliance with, for example, privacy regulations2. Furthermore, helping to automate low-level, repetitive tasks. Questions still using AI techniques, organisations can automate transforming remain: could some AI systems be biased8? Who has control and enhancing data3. Intelligent automation allows companies over these systems? How can transparency be increased? to carry out processes with a higher degree of accuracy. Consequently, AI’s role in simply acting as an assistant to existing teams should be maintained, balanced carefully with 2Maximise efficiencies with a hybrid approach a good level of manual oversight. Inefficient processes can also hinder compliance. For example, automated systems that detect suspicious Compliance is easier with AI involved. Documents can be transactions for anti-money laundering (AML) processes are reviewed quicker, fraud can be prevented at a deeper level, and sometimes not always as accurate as they could be. A recent new insights can be uncovered. Not only can it sort through a report highlighted that 95% of flagged transactions4 are wealth of complex transactions, but it is also helping workers closed in the first stage of review. Effectively, investigators to reduce monotony and complexity in their roles. SAS is spend most of their day looking at poor quality cases. using these very techniques to assist international banks in adopting AI and advanced analytics. Throughout the whole Use of an AI hybrid approach to detection ensures there compliance process, AI aims not only to increase efficiency are fewer, higher quality alerts produced. Furthermore, it is but, crucially, to add value as a team member, fully focussed possible to risk-rank cases which are flagged for investiga- on the unique goals of each business. tion, speeding up the interaction and relegating lower-risk transactions. Although AI forms an underlying principle Colin Bristow is a Customer Advisory Manager across most modern detection systems, maintenance is key at SAS UK & Ireland. With over 18 years of to managing effective performance. experience working in the financial services sector, Colin has spent time advising organisa- AI can also be used to bolster AML and fraud measures tions in usage of machine learning, intelligent more widely. For example, applying AI to techniques such as systems technologies and analytics for improvement and text mining, anomaly detection and advanced analytics can business advantage. Colin joined SAS in 2012 and since then, improve trade finance monitoring5. This, in turn, can improve he has been responsible for leading the customer advisory the regularity for document review and consignment checking, team for insurance firms, discussing strategy and direction improving the validation rates of materials as they cross borders. for usage of advanced analytics. 3Monitor regulations closely References Compliance never stands still. Businesses have to contend 1. http://www.acamsriskassessment.com/pdfs/Compliance-is-NOT-a-Cost-Center.pdf with a constantly evolving landscape, potentially across 2. https://www.freestyle.agency/blog/gdpr-artificial-intelligence/ several regions. AI can help to optimise the processing of these 3. https://support.sas.com/content/dam/SAS/support/en/books/free - books/artifi- regulations and the actions they require, helping companies cial - intelligence - with - sas.pdf keep up to date. Companies that need to effectively comply 4. https://www.reuters.com/article/bc-finreg-laundering-detecting/anti-money-laundering with several differing regulations require a wide range of under- -controls-failing-to-detect-terrorists-cartels-and-sanctioned-states-idUSKCN1GP2NV standing across all parts of the business. The size, complexity 5. https://www.sas.com/content/dam/SAS/en_gb/doc/other1/pointofview/trade - and legacy systems of the business can be significant obstacles. finance - fraud.pdf 6.https://www.allerin.com/blog/applying-deep-learning-to-natural-language-processing To mitigate this risk, companies can use natural language 7. https://www.sas.com/en_gb/customers/swisscom.html processing6 (NLP) to automate aspects of regulatory review, 8. https://www.mckinsey.com/featured-insights/artificial-intelligence/tackling - bias - in - identifying appropriate changes contained in the regulation artificial - intelligence-and-in-humans and then relaying potential impacts to the appropriate depart- ments. For example, AI could help geographically diverse companies determine whether changes in the UK have an impact on their Singapore office. worldfinancialreview.com 53
Data & Ethics The Key to a Sustainable Digital Future; HUMAN RIGHTS SAFEGUARDS BY SABRINA RAU This article will lay out some of the risks to The risk to privacy is larger scale allows business to better understand individuals in the digital society and suggest often highlighted with their customers and states to better understand how we can learn from the international human their citizens. The United Nations (UN) Sustainable rights framework to implement effective safe- new technologies Development Goals (SDGs), for example, use set guards. Safeguards that enable us to benefit and in relation to indicators measured against a tremendous amount from scientific progress while mitigating risks data breaches but the of data points to establish and better understand to human rights through effective due diligence. processing and sharing the progressive realisation of human rights.2 “Data of data can have is knowledge” is a common expression and one D ata is not good or bad. Data can be the serious implications on that holds true in today’s society, but is all gath- greatest asset and opportunity to learn and a wide array of human ering of data legitimate? Does data collection and innovate but also dangerous if processed rights well beyond processing pose a threat to our human rights? and used without human rights safeguards. It is Can businesses do anything to reduce the risks of the manner in which data is collected, processed privacy. potential malpractice in the collection, processing and shared and the purpose for which this is and sharing of data? done that determine its potential as an advantage or danger. Our lives are increasingly online and This article will lay out some of the risks to linked through smart devices and the internet individuals in the digital society and suggest how of things (IOT).1 From smart speakers to smart we can learn from the international human rights phones, from social media to cloud storage, our framework to implement effective safeguards. data is collected in various formats by a variety Safeguards that enable us to benefit from scientific of data controllers that include states, businesses, progress while mitigating risks to human rights NGOs and others. Your employer, bank, health- through effective due diligence. care provider, social media platforms and others all collect data on us in an effort to “personalise” Why we need to talk about human rights services and provide us with every day “conveni- and not ethics ence.” Yet, at what price? Human rights are important for understanding issues around data protection. The risk to privacy Data collection and processing can provide is often highlighted with new technologies and in numerous benefits in our everyday lives and on a relation to data breaches but the processing and sharing of data can have serious implications on 54 The World Financial Review November - December 2019
a wide array of human rights well individual such as affecting the right On a positive note GDPR contains beyond privacy. Human rights are to work, right to health and others. human rights language including “rights inherent to all human beings, In this way data, and particularly recitals on the right of data subjects. regardless of race, sex, nationality, big data and AI, can greatly affect This includes the right to receive ethnicity, language, religion, or any the enjoyment of human rights.6 information, the right to access data other status.”3 International Human about the data subject, the right to Rights law lays out the obligations of While data protection is one of rectification, the right to erasure of governments to protect these rights the objectives of GDPR which any data held about the data subject, and freedoms. Human Rights include the right to data portability and the right to work, right to effective coincides well with human the right to object.7 It also includes remedy, freedom of thought, freedom rights, the other objective of requirement of transparency, and of assembly, right to education, right GDPR is the free movement assessments of necessity and propor- to benefit from scientific advancement of data which more closely tionality which are directly borrowed and many more.4 reflect commercial and global from human rights law. It may appear through these references that this is The universal declaration of human competition objectives. a strong rights guidance, however rights and other human rights conven- implementation is made complex by tions together form a basis of rights Why GDPR is not enough the competing objectives. and freedoms every human being is One interpretation of the General entitled to. Knowing these freedoms Data Protection Regulation is that it is The underlying assumption and rights allows us to identify when a a human rights instrument hindering throughout GDPR is that data is harm has occurred. Most importantly, and limiting businesses and other being collected. The rights of the data human rights are universal, indivis- data controllers from their work. subjected are all consistent with opt-out ible, interdependent and interrelated. GDPR, however, does not prohibit features, illustrating the clear assump- While ethics are often spoken about data processing but merely limits the tion that data is being processed. This in company values and in relation means through which data processing is unlike the consent requirement which to data processing and AI, they are occurs. While GDPR contains has a strict opt-in model. not necessarily universal and can be elements that reflect a human rights extremely subjective, making them based approach, in practice the focus Because of the commercial objec- difficult to comply with and assess on human rights can many times be tives of the free flow of data to remain industry wide. It is for this reason lost due to the competing objectives competitive internationally, its imple- that it is more effective to speak about of GDPR. While data protection mentation is a challenge in a number human rights rather than ethics when is one of the objectives of GDPR of ways. One way in which this is it comes to the opportunities and which coincides well with human evident is through the ineffective use challenges of data processing. rights, the other objective of GDPR of consent online. Obtaining consent is the free movement of data which is easier for data controllers than it is In the context of data processing more closely reflect commercial and to justify the other six legal grounds for the right to privacy and freedom of global competition objectives. processing data.8 The reason for this is expression are commonly spoken that GDPR places an excessive burden about through data breaches or on the individual to be their own data content moderation such as in the manager with little negotiating power case of Cambridge Analytica and against large data controllers and rela- InfoWars.5 An infringement on the tively little information on the complex right to privacy typically does not data processing. stop at the interference with your personal data. If a data controller The problem of consent online shares data with another entity who According to GDPR, consent should uses it for another purpose and be “freely given, specific, informed aggregates it with data gathered and unambiguous indication of the somewhere else, the merging can data subject’s wishes by which he result in harmful outcomes for the or she, by a statement or by a clear worldfinancialreview.com 55
Data & Ethics affirmative action, signifies agreement to the In order to benefit framing this in terms of human rights, one can processing of personal data relating to him or from scientific consider questions of autonomy and self-de- her.”9 While this may sound good, in practice termination. Respect for individual autonomy this is difficult in a number of ways. progress and not underpins international human rights law, given stagger innovation, that the law focuses on respecting and fulfilling Informed consent requires the data subject acquiring adequate individual rights and freedoms. Considering to be given the information required to make an safeguards for data the central role that consent plays in our informed decision about what they are agreeing processing is key. society and the lack of meaningfulness online, to and the associated risks. When it comes to an we should think further about when consent is online context, however, the lack of foreseea- appropriate to use in a digital society. bility, specificity, clarity and accessibility make informed consent particularly challenging.10 In order to benefit from scientific progress and not stagger innovation, acquiring adequate “Freely given” consent speaks to the data safeguards for data processing is key. Rather subject’s control and choice. However, a than relying on ethical principles, which as person cannot meaningfully opt out of being noted earlier are too subjective and not meas- part of the information society nor has a urable, the UN guiding Principles on Business negotiating position when it comes to the and Human Rights (UNGPs) offer a frame- terms of the data collection. This is mainly work through which adequate safeguards can due to the existing power imbalances between be put in place mainly through effective due data controllers and data subjects and often diligence processes. the monopolies that certain businesses have over particular services and the networking How the UNGPs can be part of effect.11 The “unambiguous indication” the solution requirement of consent is also dependant on The UNGPs are the only official guidance the the context in which the data is collected and United Nations Human Rights Council have the nature of the information collected.12 endorsed for States and Businesses. They do not create new human rights obligations While it may appear that consent is but rather explain how existing human rights completely ineffective in the online/digital standards can be upheld. The three pillars of context, it is worth questioning the role of the UNGPs are: consent in other parts of our society. When 1. The State duty to protect human rights 2. The corporate responsibility to respect human rights 3. Access to remedy States in the first instance have a duty to protect human rights from third party harm according to the UNGPs. This may include regulations and policies that require mandatory due diligence practices and monitoring such as some countries already have put in place. Furthermore, knowledge sharing and providing expertise to policy makers to understand how data processing works is key to promoting policies that are conscious of the risks or data processing practices. When it comes to the responsibility of busi- nesses and corporations the actions look a little different. Businesses are not responsible for 56 The World Financial Review November - December 2019
protecting human rights but are required to A due diligence process must “identify, “respect” them. This means that they should prevent, mitigate and account for how they avoid infringing on the human rights of others address their impacts on human rights. and address adverse human rights impacts they are involved in throughout their value chain and the potential harms that can be caused by their business relationships.13 data processing beyond privacy. The second step should be the implementation of a human According to the UNGPs, a business should rights due diligence process that assesses have (1) a public policy commitment to human risks at every part of the process, from data rights, (2) a human rights due diligence process collection, to storage, analysis, processing and and (3) a process to enable the remediation of sharing, and that monitors and assesses these any adverse human rights impacts they cause practices in an ongoing manner. Implementing or contribute to.14 Having these elements in these safeguards allows data to be an instru- place allows for clear measurable standards ment for innovation while having the right to be in place through which due diligence safeguards in place to respect human rights. processes go though. A due diligence process must “identify, prevent, mitigate and account Sabrina Rau is a Senior Research for how they address their impacts on human Officer in the Human Rights, Big rights.”15 Further detail and guidance exist on Data and Technology (HRBDT) how these due diligence processes must be project based at the University of carried out, but important aspects of them are Essex. Her work focuses primarily the range of activities that must be covered as on rights, regulation and remedies and the role part of the process and the nature and context of business in the digital age. of its operations that may have human rights impacts. Another important aspect is that References a due diligence process should be ongoing 1. Morgan, Jacob, “A Simple Explanation Of 'The Internet Of “recognising that the human rights risks may Things” https://www.forbes.com/sites/jacobmorgan/2014/05/13/ change over time as the business enterprise simple-explanation-internet-things-that-anyone-can-under- operations and operating context evolve.”16 stand/#47ba1c1d1d09 2. SDG Indicators, found at https://unstats.un.org/sdgs/indicators Drawing the connection between effective / indicators - list/ due diligence processes and data processing, 3. https://www.un.org/en/sections/issues-depth/human-rights/ it is important to better understand the 4. Universal Declaration of Human Rights https://www.ohchr.org/ complexity of data processing, and specifi- EN/UDHR/Documents/UDHR_Translations/eng.pdf cally data sharing, to understand the risks and 5. “How Does Content Moderation Affect Human Rights? Commentary human rights harms that may be suffered at on the Case of Infowars” https://hrbdt.ac.uk/how-does-content-mod- different levels as a result. eration-affect-human-rights-commentary-on-the-case-of-infowars/ 6. HRBDT UDHR report https://48ba3m4eh2bf2 sksp43rq8kk- Human Rights Safeguards are wpengine.netdna-ssl.com/wp-content/uploads/2018/12/ the way forward UDHR70_AI.pdf The benefit of businesses committing and 7. GDPR Articles 12-23 applying the UNGPs within their business 8. GDPR Article 6 https://gdpr-info.eu/art-6-gdpr/ operations, including in their data processing 9. GDPR Article 4 (11) is that it creates more measurable reporting 10. Consent background Paper https://48ba3m4eh2bf2sksp43rq8kk guidelines that make human rights compliance - wpengine.netdna - ssl.com / wp-content / uploads / 201 9 / 06 / easier to understand and evokes a race to the 19.06.09 - Background - Paper - on - Consent - Online.pdf top of good corporate human rights perfor- 11. Consent background Paper mance. Data processing should have effective 12. Consent Background Paper impact assessments that assess the risk on 13. UNGP, Art. 13 an ongoing basis, in the same way as other 14. UNGP Art. 15 (a) supply chains. The first step is to understand 15. UNGP Art. 15 (b) 16. UNGP Art. 17 (c) worldfinancialreview.com 57
Innovation Innovation and the Art of Transformational Leadership BY MOSTAFA SAYYADI Executives willing to succeed in the knowl- Illustration: leadership thought. There have been several shifts edge-based economy will need to adopt Shutterstock.com/ in the study of leadership, and subsequently newer transformational leadership at the highest Mangsaab approaches to leadership emerged leading up to the organizational levels in order to develop inno- emergence of transformational leadership as a key vation. This article adopts a holistic approach enabler for organizational innovation. to address the following research question: how can transformational leaders meet the need for A Look at Leadership Theories and Models innovative products and services? from a Critical Perspective Behavioral Theory Transformational leaders solve problems and Behavioral theory could have been the impetus for a people across industries members frequently change in the focus of leadership studies, and encour- solve technical problems and share their aged researchers instead to embark on empirical ideas and knowledge together – especially when it studies to identify leader behaviors and accompa- comes to charitable and disaster-type events. This nying categorization schemes.1&2 Ralph Stogdill, Alvin frequent contact and keenness to share existing Coons and Rensis Likert investigated the behaviors practice and knowledge in solving daily technical of leaders at both Ohio and Michigan Universities.3&4 problems can in turn enhance a shared under- These authors classified leadership styles resulting in standing among organizations that make up certain two aspects of task and people. These studies aimed industries and it does not even matter if they are in to portray the best leadership style when delegating the same industry. task to people, and also illustrate the behaviors of effective versus ineffective leaders. Task behavior To provide an array of leadership theories and tended to be elaborate and tenuous, leaving leaders models, the next section examines some theories exhausted at the end of the day while people behavior, and models that are directed at developing a better sometimes referred to as relationship behavior, led to understanding of the concept and evolution of leaders spending and inordinate time with followers also leading to exhaustion and, in some cases, Frequent contact and keenness to share frustration do the hand-holding and continuous existing practice and knowledge in solving daily feedback necessary to complete the work in question. technical problems can in turn enhance a shared understanding among organizations. 58 The World Financial Review November - December 2019
Ohio State Studies large corporations. However, the two supportive, collaborative, cooper- dimensions were considered important ative, and highly oriented towards To investigate effective behaviors when leaders determined how to utilize accomplishing high performance, in leaders, Ralph Stogdill and Alvin human resources, train people, and solving problems, and facilitating Coons conducted an empirical study guide them. conflict resolution. in which they employed a Leader Behavior Description Questionnaire Michigan University Studies It is number three above that began (LBDQ) for subordinates to evaluate Rensis Likert conducted another the new leadership research that large the behaviors of their leaders, using empirical study at the University of corporations needed to better apply 150 items that reflect important func- Michigan, which aimed to define leadership theory and models. Without tions of a leader.3 More importantly, the relationship between leader- a framework, the Ohio State studies Ralph Stogdill and Alvin Coons rated ship behavior, group performance and Michigan State studies did not these behaviors using a range between and processes within a group.4 This provide closure for leaders attempting two aspects – initiating structure and research adopted a mixed method to run corporations in a hypercompet- consideration. Leaders can score high approach, and used both survey ques- itive global environment. For example, or low on each of these aspects.3 tionnaire and qualitative interviews Peter Northouse posits that a leader to classify effective versus ineffective who practices participative leadership Initiating structure refers to the leaders. This classification highlights is one who invites others to share in behavior that organizes and defines several interesting differences in the ways and means of getting things relationships or roles, and establishes the behaviors of these leaders, and done.6 They work to establish a climate well-defined patterns of organization, reveals three styles of leadership that is open to new and diverse opin- channels of communication, and ways which emerge differently with respect ions. This type of leader consults with of getting the job done, consideration, to effective or ineffective leaders. others, obtains their ideas and opin- on the other hand, has been highlighted Accordingly, Rensis Likert suggested ions, and integrates their suggestions as the behavior indicative of friendship, the three leadership styles as: 4 into the decisions regarding how the mutual trust, respect, and warmth.5 1. task-oriented, which focuses on plan- group or organization will proceed. In Rensis Likert’s view, most effec- In Ralph Stogdill and Alvin Coons’ ning the work, organizing employees tive leaders have a dual concern for view, there can be four types of leader- and technically supporting them to task-orientation and relationship-ori- ship styles.3 These are classified as low achieve their business goals. These entation, and undertake a participative initiating structure and low considera- are similar functions to initiating leadership style to enhance a climate tion, low initiating structure and high structure as identified by the Ohio of openness within organizations.4 consideration, high initiating structure State Studies; Leaders in large organizations began and low consideration, and high initi- 2. relationship-oriented behavior to apply this knowledge and manage- ating structure and high consideration. that reflects supportive behaviors rial implications where beginning to Conceptually, these four leadership for subordinates, and is conse- surface as beneficial and worthwhile. styles resulted from a combination quently equivalent to consideration of initiating structure and consider- as described by the Ohio State In the corridors of universities, ation which ware on an X/Y chart studies, and; scholars challenged these two studies, with initiating structure on the left and 3. participative behavior which is because of the failure to account for consideration along the bottom. Based reflected by paying attention to both situational variables in order to recom- on this chart, transformation of leader- task-oriented and relationship-oriented mend the best leadership style, and ship approaches from a set of universal behaviors, and demonstrating some also the methodological limitations of traits to some context-dependent styles behavioral aspects such as being these studies.7&8 Gary Yukl explains left the behavioral model lacking the necessary application to be useful in Organizations today require a form of leadership in which “the freedom to explore new ideas and set its own agenda” in an empowering way which frees followers from the shackles of organizational missives. worldfinancialreview.com 59
Innovation The key is for exec- these limitations in that the selection of behavioral leaders to consider the impact that situational variables utives to inculcate items for a questionnaire is usually influenced by can have on the effectiveness of a behavior. a culture of trust preconceptions about effective leadership or the and transparency desire to develop a measure of key behaviors in a Peter Northouse is one scholar that critiqued this leadership theory.9 He also expressed that the sample theory and provides its strengths and weaknesses.6 In of knowledge of respondents is seldom systematic, and the accuracy his book titled “Leadership: Theory and Practice,” sharing within of most behavior questionnaires is seriously reduced he identified the limitations of situational theory. He organizations so by respondent biases and attributions. He criticized asserts that situational theory suffers from several that information can this construct of the theory for applying the funda- weaknesses. First, this theory has been challenged based be found and used mental assumption of factor analysis, which searches on the lack of empirical studies to test its hypotheses. instantaneously. for high association among variables in terms of a Secondly, there exists a high degree of ambiguity that similar category. Furthermore, he argues that this is highly reflected in a failure to theoretically justify the basic assumption could be effective for leaders when relationships between the variables presented in the they only need to take one alternative way among a models. The third criticism relates to the fact that even category of various behaviors – sort of satisficing to these models themselves lack a theoretical rationale by end the search for the optimal choice of action neces- which these relationships can be justified. Moreover, sary for high performance and productivity. While the studies replicated by other researchers could not the behavioral perspective adopts a new approach to have actually supported the fundamental prescrip- overcome the problems of trait theory, the empir- tions of this theory. In addition, this theory has been ical studies themselves suffer from several limitations criticized because of the failure to account for the leaving leaders in large companies salivating for a more critical role of demographics in its prescriptions. congruent and applicable theory or model. Furthermore, situational leadership failed to suffi- ciently differentiate between group and one-to-one Situational Leadership Model leadership within organizations, and consequently Situational Leadership is a model. Unlike theories, it could not have adequately addressed these concepts. has its good attributes but has not empirically been Finally, the methods of data gathering generally suffer tested. Therefore, scholars look at it as a passing fancy, from bias, particularly in those questionnaires that have a myth, or a schematic diagram that has not been tried been constructed to force respondents to describe and true. Unfortunately for scholars, this is not true. leadership style in terms of the specific parameters of Millions of managers were trained in situational lead- situational leadership…rather than in terms of other ership and it has advanced into law-enforcement, leadership behaviors.6 Therefore, this finding supports parenting, and customer service. Basically, situational Claude Graeff's argument that the situational approach leadership was developed to highlight the importance cannot even represent a theory or a practical model of situational factors and how they impact the effec- to study leadership.12 Barring this sporadic but relevant tiveness of leadership. Albert Murphy argues that criticism, situational leadership provides prescriptive leadership is naturally situational, and that leader- and anecdotal applications that leaders and supervisors ship study calls for a situational approach; this is a can grasp. It is straightforward and uses a variety of fundamentally sociological viewpoint, not a psycho- guidelines for both leaders and followers alike. logical one.10 Transformational Leadership: The Focal According this model, leadership does not reside Point of Innovation in a person. It is a function of the whole situation or Executives around the globe realize that they play a a particular situation. Henry Sims, Samer Faraj and critical role to achieve the best climate and for creating Seokhwa Yun also explain the fundamental idea of innovation and growing the organization. Engaging situational leadership, and highly recommend that followers and getting them to participate in leader- one type of leadership will be effective in one situa- ship activities is an important part of organizational tion while but may be ineffective in other situations.11 innovation.13 Success is dependent upon how exec- Consequently, this model, unlike behavioral and trait utives formulated their organization’s mission and theories, highlights that there is no best single leadership vision. The key is for executives to inculcate a culture style for all the situations, and conversely encourages of trust and transparency of knowledge sharing 60 The World Financial Review November - December 2019
within organizations so that information experience.16 Organizations today require effective business outcomes. The key is to can be found and used instantaneously. a form of leadership in which “the see the practices, consider implementing freedom to explore new ideas and set them for followers and anticipate a large Two prominent scholars on organiza- its own agenda” in an empowering change in the leadership gaps that exist tional innovation are Ikujiro Nonaka and way which frees followers from the in the organization. Dave Ulrich who suggest that executives shackles of organizational missives.16 build a climate of trust for individuals The outcome is success which narrows Mostafa Sayyadi, CAHRI, to exchange ideas.14&15 Like tacit knowl- the gap between success and failure and AFAIM, CPMgr, works with edge, individual knowledge can become this can be achieved by the commit- senior business leaders to a valuable resource by developing an ment of its members and facilitated effectively develop innova- organizational climate of trust for by an executive acting as a transfor- tion in companies, and helps members to exchange their ideas and mational leader for the purposes of companies – from start-ups to the insights. A climate of trust is a big part organizing meetings and communica- Fortune 100 – succeed by improving the of organizational innovation and can tion. Thus, transformational leadership effectiveness of their leaders. He is a busi- inspire organizational members to share theory is a necessary precursor to ness book author and a long-time their individual knowledge to generate create new knowledge in organizations. contributor to HR.com and Consulting new ideas within companies. This is And transformational leaders enhance Magazine and his work has been featured where the transformational leader can competitive advantage by creating new in these top-flight business publications. attempt to achieve the best corporate ideas and storing knowledge that can be climate and inspire followers to achieve tapped into at the right place and time. References business goals–stemming from a shared 1. Marturano, A., & Gosling, J. (2008). Leadership, or distributed form of leadership across In Conclusion London: Routledge. pivotal areas on the organization. By facilitating and fostering a culture 2. Pierce, J.L., & Newstrom, J.W. (2008). Leaders & the leader- that enables followers, transformational ship process: Readings, self-assessments & applications. Boston, It is apparent that transformational leaders are effective trust builders who MA: McGraw-Hill, Irwin. leadership theory is associated with develop innovation and provide a flow 3. Stogdill, R.M., & Coons, A.E. (1957). Leader behavior: Its trust-based relationships for centuries of knowledge and ideas. Clearly, trans- description and measurement. Columbus, OH: Ohio State that go back to Sun Tzu. An example formational leaders unfold results in University Bureau of Business Research. of this comes from the work of Jon organizations, influencing employee indi- 4. Likert, R. (1961). New patterns of management. New Pemberton, Sharon Mavin and Brenda vidual interests to align with institutional York: McGraw-Hill. Stalker, who posit that communities interests, and through inspiring employees 5. Yunker, G.W., & Hunt, J.G. (1976). An empirical comparison of that work in tangent with each other as to develop trust-based relationships and the Michigan four-factor and ohio state LBDQ leadership scales. a group of like-minded people whose create new ideas and innovations for Organizational Behaviour and Human Performance, 17(1), 45-65. interconnectedness brings richer and 6. Northouse, P. (2010). Leadership: theory and practice. more comprehensive knowledge and Thousand Oaks, CA: Sage Publications. 7. Fisher, B.M., & Edwards, J.E. (1988). Consideration and initi- ating structure and their relationship with leader effectiveness: A meta-analysis. Proceedings of the Academy of Management. Anaheim, CA. 8. Bryman, A. (1992). Charisma and leadership in organizations, London: Sage. 9. Yukl, G. (2012). Effective leadership behavior: what we know and what questions need more attention. Academy Of Management Perspectives, 26(4), 66-85. 10. Murphy, A.J. (1941). A study of the leadership process. In J.L. Pierce & J.W. Newstrom (Eds.), Leaders & the leadership process: Readings, self-assessments, & applications, Boston, MA: McGraw-Hill/Irwin. 11. Sims, H.P., Faraj, S., & Yun, S. (2009). When should a leader be directive or empowering? How to develop your own situational theory of leadership. Business Horizons, 52(2), 149-158. 12. Graeff, C.L. (1997). Evolution of situational leadership theory: A critical review. The Leadership Quarterly, 8(2), 153-170. 13. Merat, A & Bo, D. (2013). Strategic analysis of knowledge firms: the links between knowledge management and leadership. Journal of Knowledge Management, 17(1), 3-15. 14. Nonaka, I. (1994). A Dynamic Theory of Organizational Knowledge Creation. Organization Science, 5(1), 14-37. 15. Ulrich, D. (1997). Human resource champions the next agenda for adding value and delivering results. Boston, MA: Harvard Business School Press. 16. Pemberton, J., Mavin, S., & Stalker, B. (2007). Scratching beneath the surface of communities of (mal)practice. Learning Organization, 14(1), 62-73. worldfinancialreview.com 61
Art & Business Why art is the secret weapon in the battle to make business more productive BY PATRICK MCCRAE The positive impact of art on our physical sampled said artwork and photography provisioning and mental health has long been understood. Florence Nightingale recognized this 160 in their workspace was 55% satisfactory or less. years ago – long before the term ‘wellbeing’ had been coined – when she wrote: ‘Little as we know Research by Dr Jenny Thomas, Director of about the way in which we are affected by form, by colour, and light, we do know this, that they have an Performance Consultancy, found that, whilst many actual physical effect.” organisations had installed artwork in their recep- However, the potential to build more creative, productive workplaces through the power of art tion or meeting rooms, few had introduced it to is rarely discussed. Research has shown that the character of a workplace affects job satisfaction, the main office area. Seven out of ten workplaces motivation and mood. Art needs to become part of this conversation. had no artwork installed and 95% of people could Some business leaders might be sceptical that not see any art from their workstation. art can improve the quality of their staff ’s work, but the concept is supported by a solid evidential She conducted experimental studies, changing base. Dr Oshin Vartanian, from the University of Toronto, has conducted extensive research on aspects of a workplace, including the tempera- the neuroscience of aesthetics and creativity; he found that art activates the brain’s default mode ture and air movement and providing access to a network – the area associated with internally orien- tated thinking – helping us to retrieve memories new breakout space, but the biggest impact came and think about the future, as well as engaging our pleasure and reward systems. Art activates the from introducing artwork. Staff said they were brain’s default mode In 2019, a survey of 81,000 employees for the network – the area more alert in the afternoons, avoiding the tradi- Leesman Index, a comprehensive study of work- tional post-lunch dip in concentration, and the art places, found a median satisfaction of office and associated with promoted social interaction. office photography of just 37%. 75% of those internally orientated thinking – helping us Research by ARTIQ suggested that people were to retrieve memories and think about the 14.3% more productive when they were in a work- place that featured art compared to a workplace future, as well as engaging our pleasure that featured no art; According to research by and reward systems. the British Council for Offices in 2013, 61% of employees said artwork inspired them to think and work more creatively. We should not be surprised because art enables positive, cognitive distraction and creates spaces that are both active and connec- tive. It engages staff and clients, helping them to think beyond the four walls that surround them. 62 The World Financial Review November - December 2019
Art has this impact because it is An office art collection Investing in an office art collection innately human, encouraging the viewer should tell a story; might sound like the preserve of big to engage and find meaning. Yet having it should connect to corporates, but in fact it does not have artwork in the workplace is meaningless the brand values and to be unaffordable. An art rental model if no thought has been given to its rele- heritage of a business, allows any business to host an expertly vance to the specific environment. An creating a clear and curated collection without breaking office art collection should tell a story; authentic narrative. the bank – £1,600 a month might be it should connect to the brand values typical for a medium-sized business. and heritage of a business, creating a art – and bridging the gap between the It also allows a business to refresh the clear and authentic narrative. corporate and creative worlds. collection every few months, making it a continuing talking point amongst staff Global law firm Mayer Brown recently Investec, the international banking and a point of interest to clients visiting worked with ARTIQ to develop an art and wealth management group, wanted the workplace. collection for its London office, following the art collection at two of its London an extensive modernisation and refur- offices to reflect its culture of diver- But, above all, an art collection is a bishment programme. An art committee sity and innovation and to compliment compelling way for a business to articulate was set up, bringing together a group of the design by architectural and design its values and express its identity – both to partners and employees from across the firm tp bennett. Reflecting the busi- its own staff and to the wider world. office to choose works for the collec- ness’ heritage, the collection features tion, including painting, sculpture, prints the work of vibrant, dynamic South Patrick McCrae is Chief and street art. It was developed around African artists alongside London- Executive of art consul- the themes of diversity and equality to based artists, telling stories of identity tancy ARTIQ He founded reflect Mayer Brown’s commitment to and diversity. ARTIQ in 2009 to bridge promoting a diverse workforce – 86% of the gap between the art the art is by female artists. Artists from ARTIQ catalogued the collection and business worlds and to promote a outside the UK, or who have recently and worked closely with Investec to fair deal for artists. ARTIQ is now on graduated and are trying to build a career, design and build an online auction plat- of the UK’s leading art consultancies, are also well represented. form, giving employees the opportunity working with businesses to embed crea- to purchase the artwork that has been tivity into their culture and to harness the Not only has the art collection part of their working environment for great power of art. In 2017 he was become a talking point amongst staff, many years. The initiative worked on named ‘Creative Industries Entrepreneur it is also a visual representation of two levels: first, as an effective means of the Year (London and South East)’ the firm’s values, which can easily be of employee engagement, including a at the NatWest Great British explained to visitors and prospective pop-up exhibition to mark the launch Entrepreneur Awards. clients. By supporting emerging artists, of the new collection; and secondly, as a the firm is also acting as a patron, way of supporting contemporary artists. supporting the creative economy at a time when it is under increasing strain – the UK invests 40% less than the European average as a % of GDP in
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Leadership Explore SOFT LEADERSHIP aspirations and expectations of all stake- to Achieve Global Stability, holders are rising rapidly. For instance, Peace and Prosperity children demand more from their parents; students demand more from BY M.S. RAO educators; subordinates demand more from superiors; employees demand This article explores “soft lead- Introduction more from employers; followers ership” to achieve global peace, “An eye for an eye only ends up making the demand more from leaders, and people prosperity, and stability. It explains whole world blind.” demand more from nations. In fact, the causes, effects, and reme- people are becoming more rights-ori- dies for global conflicts and wars, – Mahatma Gandhi ented rather than duty-oriented. outlines a blueprint to achieve global peace and prosperity. It Presently people across the globe There must be a shift in the mindset illustrates with inspiring examples are getting impatient, intolerant, and of the people. There must be a need of great global leaders including agitated on others for petty issues. for tolerance and respect toward others. Mahatma Gandhi, Martin Luther It appears that there is a lack of People must be duty-oriented rather King Jr, Mother Teresa, and respect for others' religions, regions, than rights-oriented. Empathy is the Nelson Mandela. races, languages, ethnicities, cultures, answer to several pressing global chal- and communities. Additionally, the lenges. Empathy is the ability to step into the shoes of others and look at the issues from others’ perspectives. However, presently people rarely empa- thize with others. When we empathize with others most of the global chal- lenges and conflicts can be resolved easily. Through empathy, we can put an end to intolerance, impatience, and instability. Through empathy, we can worldfinancialreview.com 65
Leadership The present global scenario calls for a new leadership perspective emphasizing respect to all regions, religions, communities, and ethnicities. It calls for a new leadership perspective involving negotiation and persuasion with an emphasis on empathy. resolve several global challenges amicably. Empathy is essen- soft skills; make decisions by blending your head, heart, and tial for global peace, prosperity, stability, and security. gut; and take action keeping the ground realities and goals in your view without compromising people-orientation. There Some people resort to violence to settle their scores. are 11 Cs that constitute soft leadership. They are character, Some countries wage wars to settle their long-pending charisma, conscience, conviction, courage, communication, issues. Violence is not the solution to several global issues. compassion, commitment, consistency, consideration and Ralph Waldo Emerson rightly remarked, “Peace cannot contribution. It is highly challenging for people to cultivate be achieved through violence, it can only be attained these 11 characteristics. However, if people possess more through understanding.” Hence, people must shed their than six traits they get into the fold of soft leadership. violent attitude and respect others through empathy and understanding. How to Excel as a Soft Leader? When you want to excel as a soft leader there must not be Global Conflicts ‘character gap’, ‘communication gap’, ‘commitment gap’ People often use force to settle their scores resulting in and ‘courage gap’. When you stick to these four princi- conflicts and nations use their military force resulting in ples you can excel as a soft leader. ‘Treat the people the wars. They hardly understand the fact that there is always way you want to be treated’ is the old adage. But as a soft room for dialogue and discussion to resolve their vexing leader, you must treat all people with respect especially issues. Some nations go for a war on pride and some leaders the people who are lower to you. The soft leaders possess declare war to show their strength and supremacy. Some humility and a servant attitude. They help their people religions declare war on others to show their supremacy. grow beyond what people dream of growing. That is the Some nations go for war to divert attention from their hallmark of soft leadership. internal challenges. Likewise, there are many reasons for alarming conflicts and wars globally. Growing Intolerance Globally There are several reasons for the current growing intolerance Need for Soft Leadership and conflicts globally. Here are some of them. People are very The present global scenario calls for a new leadership impatient. They want immediate results. They lack patience perspective emphasizing respect to all regions, religions, and perseverance. They fail to empathize with others. communities, creeds, and ethnicities. It calls for a new lead- They try to prove their point right rather than looking at ership perspective involving negotiation and persuasion the points from others’ perspectives. They want to resort with an emphasis on empathy. It calls for partnership, not to short cuts, not smart cuts. They want to win their case followership. Hence, emphasize “soft leadership” to resolve through win-lose, not through win-win. various conflicts globally through discussion, dialogue, persuasion, and negotiation. This innovative leadership Causes for Global Conflicts perspective can also be used to lead people assertively; There are several causes of growing intolerance and global to turnaround ailing global organizations; and to achieve violence. The basic ones include scarcity of resources, a organizational excellence and effectiveness. threat to one's position or authority, ego, miscommuni- cation, use of gut rather than head and heart, irrational What is Soft Leadership? thinking, superstitions, and supremacy. When some sections Leadership depends on three aspects – how you communi- of people are oppressed for a long time, it leads to conflicts. cate with others; how you make decisions; and how you take Hence, understanding the root cause of the conflicts helps action. When you can execute these three activities effec- resolve issues amicably. At times, the fundamental forces tively you become a successful leader. However, to evolve create violence in the name of their religions. Remember, as a soft leader, you must communicate with an emphasis on 66 The World Financial Review November - December 2019
no religion preaches violence. All religions empha- than violence. Additionally, we must develop If you want to size tolerance and brotherhood. compassion toward others. change society, you need citizens We must create a space to accommodate others. Mahatma Gandhi’s principles were not only who are highly Let us be tolerant as intolerance has no place in the confined to India’s freedom struggle but also relevant committed and history of any religion and any part of the world. If to the world. Martin Luther King Jr. once remarked, dedicated. Hence, you want to change society, you need citizens who “If humanity is to progress, Gandhi is inescapable. let us build a global are highly committed and dedicated. Hence, let He lived, thought, acted and inspired by the vision society of citizens us build a global society of citizens with universal of humanity evolving toward a world of peace and with universal brotherhood and fraternity to achieve our ultimate harmony.” Currently, the world is encountering brotherhood and objective of global peace, prosperity, and stability. several challenges including intolerance, impatience, fraternity to achieve and terrorism. Hence, it is essential to follow the our ultimate Resolve Global Conflicts Amicably ideas and ideals of Mahatma Gandhi especially truth objective of global Some leaders opine that militarization is the and non-violence to achieve international peace peace, prosperity, symbol of masculinity. It is, in fact, a myth indeed! and prosperity. and stability. The greatness lies in the person who is bearing the pain than the one who is inflicting the pain. It Replace Religion with Love is the truth and non-violence wins, not violence. See good in others. Improve your attitude to make this Mahatma Gandhi achieved India’s independence world a better place to live. Grow as a global citizen through truth and non-violence when the entire with a universal mindset. Treat all religions as equal world believed in violence. Hence, there is a need to and respect them. Remember, no religion preaches look at resolving global issues with peaceful means violence. It is the misguided elements who spread emphasizing what is just and right. Additionally, wrong messages in the name of religion to create look at what is right or wrong, not who is right or ill-will among the individuals. Above all, we must wrong to achieve the desired outcomes. remember that given the choice between the sword and spirit, it is the spirit which is always stronger than Groom Global Citizens the sword. Hence, develop the spirit and replace reli- Groom people as global citizens to enable them to gion with love to promote world peace. become not only well-rounded personalities but also worthy citizens in the world. Here are some tools Soft Leadership is the Solution and techniques to achieve international peace: Be a It is essential to adopt soft leadership to achieve humanist first. Have a positive, right and strong atti- global peace, prosperity, stability, and security. I tude. Cultivate the attitude of letting go and moving have coined this new leadership perspective which on with your life. Be magnanimous to forgive others. is gaining global recognition and attention. People Accommodate others with a big heart. Demonstrate compassion. Look at the character in people, not color. Evolve as a global citizen with a global mindset rather than with a local mindset. Respect all people. Love your mother but don’t hate another person’s mother. Mahatma Gandhi and Non-Violence The person who puts up with an attack is stronger than the person who attacks. The person who has the stamina to bear pain is stronger than the person who inflicts pain. The person who pioneers non-vi- olence is stronger than the person who practices violence as Mahatma Gandhi rightly remarked, “Nonviolence is a weapon of the strong.” Hence, it is essential to preach and practice non-violence worldfinancialreview.com 67
Leadership are taking it seriously and applying it to the organizational objectives with an Japan to recover from the Second World achieve organizational excellence and emphasis on soft skills. It is based on War. To summarize, conflicts must be effectiveness. It can be applied to indi- the right mindset, skillset, and toolset. resolved amicably through discussion and viduals, organizations, and nations. Here dialogue. So, adopt soft leadership during is the description of this new leadership Love Your Mother but Don’t Hate the dialogue and discussion to achieve perspective in a nutshell: another Person’s Mother global stability, peace, and prosperity. “I’m a little pencil in the hand of a writing Soft leadership is a blend of coura- God, who is sending a love letter to the world.” Note: This article is an adapted excerpt geous leadership, thought leadership, from the author's bestselling book, “Soft servant leadership, and inspirational – Mother Teresa Leadership: An Innovative Leadership Style leadership. It characterizes 11C’s such to Resolve Conflicts Amicably through Soft as character, charisma, conscience, Love your mother but don’t hate Skills and Negotiation Skills to Achieve conviction, courage, communication, another person’s mother. As your Global Stability, Peace and Prosperity” URL: compassion, commitment, consist- mother is precious to you, another https://www.amazon.com/Soft-Leadership- ency, consideration and contribution. person’s mother is equally precious to Innovative-Negotiation-Prosperity/ It suggests a soft approach rather than them. As your race, religion, region, dp/1628655909 a hard approach. It believes in a trans- language, ethnicity, culture, and commu- formational rather than transactional nity are precious to you; they are equally Professor M.S. Rao, Ph.D. approach. It appreciates people-orien- precious to others. is the Father of “Soft tation rather than task-orientation. It Leadership” and Founder of underscores partnership rather than the People must learn to empathize with MSR Leadership Consultants, so-called traditional command-and-con- others to make a difference in the lives India. He is an International trol approach. It is the need of the hour of others. We need empathetic leaders Leadership Guru with 38 years of experi- for the new generation especially millen- like Mahatma Gandhi, Martin Luther ence and the author of over 45 books nials who are eager to apply it to unlock King, Mother Teresa, Nelson Mandela, including the award-winning ‘21 Success their potential to contribute their best to Mikhail Gorbachev, and Dalai Lama; and Sutras for CEOs’. He is a C-Suite advisor organizations. It stresses on soft skills religious leaders like Jesus, Buddha, and and a sought-after keynote speaker glob- rather than hard skills. It emphasizes Muhammad to achieve global peace, pros- ally. He brings a strategic eye and personality, attitude, and behavior rather perity, stability, and security. Remember, long-range vision given his multifaceted than technical competency or domain what Mother Teresa said when asked professional experience including military, knowledge which can be acquired when what you can do to promote world peace: teaching, training, research, consultancy, people possess the right attitude and “Go home and love your family.” As and philosophy. He is passionate about behavior. Succinctly, soft leadership can charity begins at home, let us promote serving and making a difference in the be defined as the process of setting goals; global peace by loving our families and lives of others. He trains a new genera- influencing people through persuasion; empathizing with others first. tion of leaders through leadership building strong teams; negotiating them education and publications. His vision is with a win-win attitude; respecting their Conclusion to build one million students as global failures; handholding them; motivating “War does not determine who is right - only leaders by 2030. He advocates gender them constantly; aligning their energies who is left.” equality globally (#HeForShe). and efforts; recognizing and appreci- ating their contribution in accomplishing – Bertrand Russell References 1. https://www.amazon.com/Soft-Leadership- Conflicts must be resolved Starting a war is easy but nobody Innovative knows when it ends, where it ends, and -Negotiation-Prosperity/dp/1628655909 amicably through discussion how it ends. However, we can imagine 2. http://www.emeraldinsight.com/journals.htm? the damage and suffering that causes to articleid=17087126 and dialogue. So, adopt soft the humanity. Hence, war is not the solu- 3. http://onlinelibrary.wiley.com/doi/10.1002/ltl.2 tion to all problems. Many people die and 0019/abstract leadership during the dialogue there is a loss to nations. It brings agony 4. http://www.ila-net.org/Webinars/Archive/Rao to the people and takes the nations back- 082012.html and discussion to achieve global ward by many years. We have seen how many years it took for Germany and stability, peace, and prosperity. 68 The World Financial Review November - December 2019
Leadership FedEx Corporation’s Philosophy Employees First, Customers Second, and Shareholders Third BY M.S. RAO The Silent hours. They are driven for upward mobility, and Generation, are less comfortable with rapid growth in tech- “Much of our success reflects what I learned as a Marine. also known as nology. They care for their parents and children. The basic principles of leading people are the bedrock of the Greatest Generation X, also known as Baby Busters value the Corps. I can still recite them from memory, and they are Generation, freedom, and are flexible and adaptable. They are firmly embedded in the FedEx culture. We teach them daily Veterans, latchkey kids, skeptical and ironic. They are task-ori- in our own Leadership Institute, which turns out the thou- Traditionalists. the ented and comfortable in job-hopping. Millennials sands of managers needed to run our operating companies.” Mature Generation are impatient to achieve their goals and objectives. or “The Lucky They crave for recognition and look for challenging – Frederick W. Smith, CEO, FedEx Few” are logical, roles and responsibilities. Their self-esteem is high, conservative, and their personal, professional and social lives are T here are several generational cohorts globally conformist, and merged with smartphones. based on the duration of their birth. Currently, historical. there are four generations in the workplace. Frederick W. Smith – A Traditionalist They are The Silent Generation (born the mid-1920s When you look at famous people including Martin to early 1940s); Baby Boomers (born early 1940s Luther King, Jr., Queen Elizabeth II, Sandra Day to early 1960s); Generation X (born early 1960s to O’Connor, Miles Davis, Mikhail Gorbachev, Bob early 1980s); Millennials who are also referred with Dylan, John McCain and Fred Smith, they all different names including Generation Y (born early belong to The Traditionalists. The Traditionalists 1980s to early 2000s). are known as The Silent Generation because the children born between 1922 and 1946 worked hard The Silent Generation, also known as the and kept quiet. Greatest Generation, Veterans, Traditionalists, the Mature Generation or “The Lucky Few” are logical, Frederick W. Smith is the Chairman, President conservative, conformist, and historical. They and CEO of FedEx Corporation that is headquar- are loyal to their organizations and respect rules, tered in Memphis, Tennessee. He was born on follow the hierarchy and crave for job security. Baby August 11, 1944 in the United States. Hence, he falls Boomers are hard workers and willing to work long in the generational cohort of Traditionalists. He is a successful CEO with a military background. He is a decorated U.S. Marine Corps combat veteran who worldfinancialreview.com 69
Leadership Fred Smith served as an officer from 1966 to 1970. He founded ahead of times and technologies. Here are some keeps people FedEx in 1971 and has grown it into a $43 billion leadership lessons you must learn from Fred Smith. before profit. company. He is a risk taker who goes by his gut His leadership and intuition. His military training has taught him Fred Smith–Leadership Lessons philosophy several leadership skills and abilities. He said, “The “ I do not believe I could have built FedEx without the is people- Marine Corps is the best when it comes to teaching skills I learned from the Marine Corps.” service-profit. people how to lead other folks.” There are other iconic CEOs with military background such as –Frederick W. Smith, CEO, FedEx Daniel Akerson of General Motors; Alex Gorsky of Johnson & Johnson; Robert A. McDonald of Follow Your Passions: He followed his passion to Proctor and Gamble; Robert Myers of Casey’s be a US Marine and subsequently followed his passion General Store; James A. Skinner of Walgreens; to found his own company. He rightly remarked, Herb Vest of H.D. Vest; Richard Kinder of Kinder “You’ve got to enjoy what you’re doing, and have Morgan; Ken Hicks of FootLocker; Sumner some fun, and be able to laugh at yourself a bit.” Redstone of Viacom; Clayton M. Jones of Rockwell Collins; Tom Dent of Lumetra; Lowell McAdam Walk Your Talk: He set an example for others to of Verizon; James Mulva of ConocoPhillips; and follow. He practiced whatever he preached. There is Robert J. Stevens of Lockheed Martin. no chasm between his words and deeds. Employees First, Customers Second, and Build Trust: He built trust and encouraged Shareholders Third transparency to carry all the stakeholders. “Our ‘People, Service, Profit’ philosophy insists that our people be treated fairly. If we give good service and we come Be a Good Listener: A good leader is a good up with a reasonable profit, we make that a good deal for listener. He is a good listener and speaker. our employees, with profit sharing, promotions, complaint procedures. If you spend any time looking at the culture of Emphasize Organizational Culture: He strove FedEx you’ll find that PSP philosophy is the foundation of for excellence and emphasized organizational everything else.” culture. He remarked, “We have a culture that allows us to change without threatening the people – Frederick W. Smith, CEO, FedEx that work at the company.” His employees have the Purple Promise in which they declare, “I will make Fred Smith keeps people before profit. His every FedEx experience outstanding.” leadership philosophy is people-service-profit. For instance, during the 1990s, when UPS workers Build a Strong Team: He built a strong and went on strike, thousands of FedEx employees successful team. worked numerous hours to process the additional 800,000 packages that flooded into FedEx centers. Emphasize Excellence: He continuously inno- Fred Smith1 rewarded his employees with special vated and improved his services. He acquired it bonuses while taking out full-page newspaper ads from his military experience. to thank them for their hard work. He followed the philosophy of ‘employees first, customers second, Empower Others: He built a strong team and and shareholders third’ much before the philos- empowered them to make their decisions. ophy came into vogue. It clearly indicates that he is a visionary leader who could see the invisible well Be a Risk Taker: He took risks in his business life. He gambled to raise finances to fund his ailing company which is an incredible turnaround story to many people globally. Be Part of the Solutions, not Problems: He explores solutions rather than to brood over the problems. He inculcated this great trait from his military training. Be Simple and Humble: Fred’s leadership Research shows that companies with military trained CEOs commit corporate frauds much lesser than their counterparts with civilian backgrounds. The Korn/Ferry research shows that CEOs with military experience deliver better performance and have longer tenures. 70 The World Financial Review November - December 2019 1. http://www.encyclopedia.com/people/social-sciences-and-law/ business-leaders/fred-smith#3498000041
principles and practices are simple, and his atti- Soldiers can Does Military Training Make Better Leaders? tude toward people is humble. He once remarked, work under “My four years in the Marine Corps left me with an indelible “People say leadership is complicated. But there’s pressure. They understanding of the value of leadership skills.” no mystery about leadership.” are resourceful and work with – Frederick W. Smith, CEO, FedEx Believe in Shared Leadership: He involved what they have others to be an integral part of decision-making and from where The military training equips soldiers with and encouraged the participative leadership style. several qualities such as leadership, emotional they are. intelligence, team building, communication skills, Be a Voracious Leader. He is a voracious tenacity, resilience, confidence, adaptability, frater- reader who invests his time in reading books. He nity and honesty. Soldiers excel as strong leaders read lots of books on history, generals, presidents since they work under grueling conditions. In fact, and famous people. The book that inspired him testing times make them tough leaders. They are was Death Be Not Proud. It was about a young boy filled with energy and enthusiasm with a heart to who had a brain tumor and how he handled it. serve others. They are strategic thinkers, trust- And the book that influenced him was the biog- worthy, risk takers, learn lessons from failures, and raphy of General Lee. He recommends the book, motivate others when there is no light at the end Modern Times by Paul Johnson for millennials, and of the tunnel. They are highly focused on hitting the books authored by David Halberstam for all the bull’s eye. However, military leaders must generations. develop the flexibility to adjust to civilians. They are honest and straightforward but often lack tact Fred Smith’s Entrepreneurial Highs and Lows and diplomacy. “Fear of failure must never be a reason not to try something.” Soldiers can work under pressure. They are – Frederick W. Smith, CEO, FedEx resourceful and work with what they have and from where they are. They lead by example and Fred Smith’s entrepreneurial journey has not been take care of their people. They are highly disci- a cakewalk. He encountered several highs and lows plined, dedicated, prompt and punctual. They while running his company. Initially he incurred maintain an elegant dress code. Fred Smith once losses in his business. He went to the blackjack tables remarked, “Even in a blue pin-striped suit, I still in Vegas, won $27,000, and wired back to FedEx to make sure that the right-hand edge of my belt keep his business afloat. Currently, the company2 buckle lines up with my shirt front and trouser fly. sends more than 12 million packages on a typical I shine my own shoes, and I feel uncomfortable if business day, employing 640 airplanes, 100,000 vehi- they aren't polished.” cles and 400,000 people. Hence, entrepreneurship is for brave hearted, not for fainthearted. The soldiers look for similarities, not differ- ences. They believe in fraternity and equality. They are fair and just. They are good time managers and smart in making decisions quickly in spite of inadequate information. They are competent to handle volatility, uncertainty, complexity and ambiguity (VUCA) successfully. They are bold to encounter organizational challenges and elegant in overcoming them effectively. Those who made use of their military background succeeded as leaders and CEOs. Research shows that companies with military trained CEOs commit corporate frauds much lesser than their counterparts with civilian backgrounds. The Korn/Ferry research shows that CEOs with military experience deliver better performance and have longer tenures. Here are some observations: 2. http://www.forbes.com/profile/frederick-smith/ worldfinancialreview.com 71
Military training teaches beyond domain skills such as conceptual skills and human skills. Soldiers turn out to be the jack of all trades and master of their domains. They are equipped with transferable skills which are crucial to succeed irrespective of the industry and in civilian life. Clayton Jones, CEO of Rockwell Collins notes, “At a Conclusion very young age, you get a chance to be in leadership posi- “Leadership is simply the ability of an individual to coalesce the efforts tions of significant magnitude. You become comfortable in of other individuals toward achieving common goals. It boils down to a leadership role.” looking after your people and ensuring that, from top to bottom, everyone feels part of the team.” The late Michael H. Jordan3, who served as Navy lieu- tenant and was a former CEO of Electronic Data Systems, – Frederick W. Smith, CEO, FedEx commented in the report: “What the military is really good at doing is teaching you to plan and program. The essence Fred Smith is a charismatic and visionary leader with of being an officer is to figure out how to deploy forces and tenacity and resilience. He is a philanthropist who added resources to get something done. From a management stand- immense value through corporate giving. He is an inspiring point, that is one of the really great lessons.” example for leaders from civilian and military background cutting across generational cohorts. He is an ideal leader to Military Training Emphasizes Transferable Skills be emulated by others globally. Military training teaches beyond domain skills such as conceptual skills and human skills. Soldiers turn out to be Note: This article is an adapted excerpt from my book titled, “Soft the jack of all trades and master of their domains. They Leadership for Millennials: Leading Generational Differences in are equipped with transferable skills which are crucial to the Workplace Successfully.” succeed irrespective of the industry and in civilian life. However, most of them don’t get adjusted quickly with civilian life. Hence, they must develop the flexibility to jell with civilian society to succeed as professionals and leaders. From Battlefield to Boardroom Professor M.S. Rao, Ph.D. is the father of “Soft Leadership” and founder of MSR It is often observed that CEOs with civilian background Leadership Consultants, India. He is an emphasize on “ends” whereas the CEOs with military back- International Leadership Guru with 38 years of ground emphasize “means.” Although we cannot conclude experience and the author of over 45 books that the CEOs with military background alone will succeed, including the award-winning ‘21 Success Sutras for CEOs’.4 the fact is that the military background is definitely an asset. Most of his work is available free of charge on his four Hence, the success rate of leaders and CEOs with a mili- blogs including http://professormsraovision2030.blog- tary background is certainly higher because they build trust spot.com. He is also a dynamic, energetic, and inspirational in others and stick to their commitments. Additionally, leadership speaker. their confidence and communication help them stand out from others. Dr. Irwin Mark Jacobs, founding chairman References and CEO emeritus for Qualcomm once remarked, “A great 1. http://www.encyclopedia.com/people/social - sciences - and - law/business - leaders/ leader must lead by example, not by fiat. He or she must fred - smith#3498000041 set an example of integrity, of openness to new ideas, 2. http://www.forbes.com/profile/frederick-smith/ of understanding details as well as the larger picture, of 3. http://blog.al.com/spotnews/2012/04/fedex_founder_frederick_smith.html communicating well, and of not shooting the messenger 4. www.kornferry.com/institute/download/download/id/17026/aid/190 when a problem arises but helping find a solution.” Most 5. http://www.military.com/veteran-jobs/career-advice/military-transition why - military- military leaders possess these qualities to excel as successful officers-are-good-ceos.html leaders and CEOs. 6. http://www.businessinsider.in/11 - Things - The - Military - Teaches - You - About - Leadership/articleshow/31125136.cms 72 The World Financial Review November - December 2019 3. http://www.military.com/veteran-jobs/career-advice/military-transition/ 4. https://www.pwc.com/m1/en/services/consulting/documents/millennials-at-work.pdf
Knowledge WHAT'S THE MOST HOLISTIC intellectual capital) forms. Intangible MODEL FOR KNOWLEDGE? resources, in form of intellectual capital, exist primarily as knowledge BY MOSTAFA SAYYADI in human resources and cannot be easily imitated. This, by far, is why Insufficient consideration of origins and foundations stem from some organizations are successful and the completeness of knowledge the resource-based view of the firm. some are not. The reason for success management models has been The resource-based view highlights and failure of organizations, based on exposed and the author attempts the role of organizational resources in this resource-based view is that there to address this concern for the first achieving a higher degree of compet- are two capabilities – causal ambiguity time. This article investigates the itiveness. When executives embrace and social complexity. Operational crossover potential of scholarly the resource-based view, organi- risk of large organizations is at risk research and how it can be applied zational resources are crucial for if they can be easily imitated by the in the organizational boardroom. competitiveness if they are valuable, competition. Therefore, decreasing rare, inimitable and non-substitut- the imitability of an organization’s Strategic Management and the able. However, internal resources of products or services also decreases the Knowledge-based View companies manifest themselves in operational risk. While causal ambi- Although the knowledge-based view tangible (such as physical properties guity refers to multiple interpretations emerged in the field of strategy, its and machinery) and intangible (such as of knowledge, social complexity has been regarded as “the extent to which resources are embedded in multiple organizational members and the rela- tionships among them”.1 Thus, harder to copy or imitate. Executives know that disconti- nuity exists at all levels of product and 74 The World Financial Review November - December 2019
services and they do not want to find them- account for the commitment of various To remain competitive, selves caught off guard and become obsolete. groups that may have special knowledge from executives realise that To remain competitive, executives realise that competitors or different types of organiza- they have to quickly create they have to quickly create and share new ideas tions.4 In addition, Baiyin Yang, Wei Zheng and share new ideas and and knowledge to be more responsive to market and Chris Viere believe that there might be knowledge to be more re- changes. Organizations are “social communities differences in how to manage individual sponsive to market changes. that specialise in the creation and internal transfer knowledge from managing knowledge at the Organisations are “social of knowledge”.2 Importantly, knowledge held organizational level, and they observe that this communities that specialise by organizational members is the most strategic model has also failed to pay attention to this in the creation and internal resource for competitive advantage, and also matter.5 Barring the criticisms, this model can transfer of knowledge”. through the way it is managed by executives. immediately be applied to large organizations and executives can have someone on their Knowledge Management Models May Shed team implement it accordingly. Light on Executive Success Executives need to at least take a look at models Executives can use Learning with Knowledge associated with knowledge management, which Cycle Model is directed at developing a better understanding Another easy model for executives to use of the concept of knowledge management is Rowley’s knowledge management model. within organizations. This model includes knowledge creation and construction, knowledge articulation, knowl- Knowledge Creation Model edge repository updating, knowledge access, Hirotaka Takeuchi and Ikujiro Nonaka argue knowledge use, and knowledge revision. Jennifer that tacit and explicit knowledge interact through Rowley says learning in organizations is the ulti- four processes, including socialisation (i.e. tacit mate outcome of the knowledge cycle by which to tacit), externalisation (i.e. tacit to explicit), implicit knowledge is created and acquired combination (i.e. explicit to explicit), and inter- by connecting knowledge with other compa- nalisation (i.e. explicit to tacit).3 Executives nies that want to share successes and failures.6 can use socialisation which is associated with This leads to converting acquired knowledge coaching and mentoring activities by sharing into organizational processes and activities to experiences gained by imitating, observing and practicing. In the externalisation process, tacit Figure 1: Spiral of Organizational Knowledge Creation knowledge is articulated into formal language that represents official statements, and is equivalent to Epistemological explicit knowledge. Executives have their internet Dimension technology departments to create a combina- tion which reshapes existing explicit knowledge Externalization to more systematic and complex forms by, for example, using internal databases. Most impor- Explicit Combination tantly, in internalisation, explicit knowledge is Knowledge internalised through “learning by doing” which is more engaging. Figure 1 illustrates how knowl- Tacit Socialization Internalization edge can be converted to create new knowledge Knowledge that executives can view and implement immedi- ately in managerial decision making. Individual Group Organization Interorganization Ontological Dimension While executives can use this model for knowledge management, they must be aware Knowledge Lever of some criticism from other scholars. For example, René Jorna criticizes Nonaka and Takeuchi’s model, because of its failure to worldfinancialreview.com 75
Knowledge Implicit knowledge is incorporated into formal language and subsequently becomes available to be shared within organisations. improve or discontinue processes that either grow both professionally for individuals and contribute or inhibit success. profitably for all stakeholders. There are other scholars that feel that “mean- Executives must be aware of some of the ingful learning in social contexts requires both limitations of Rowley’s (2001) model. For participation and reification to be in interplay,” example, Baiyin Yang, Wei Zheng and Chris and highlight the strategic role of communities Viere argue that this model is not concerned of practice in enhancing a shared understanding about how knowledge moves from one stage to among members.7 another, and only described the activities related to each stage separately.5 Secondly, the model Etienne Wenger also sees communities does not visualise the potential interactions of practice as social “containers” of compe- between implicit and explicit knowledge, and tences, and defines them as “groups of people fails to account for the critical role of dynamic who share a concern or a passion for some- interrelationships among followers and busi- thing they do and learn how to do it better ness units in enhancing learning processes as they interact regularly”.8 Executives can within large organizations. The model is help followers add meaningfulness to their challenged in that the processes of use, meas- work in ways utilizing social contexts or social urement, and revision for implicit knowledge, containers to enhance engagement. if not impossible, are very hard. Although Rowley’s model strongly contributes to the Implicit knowledge is incorporated into formal conceptualisation of knowledge conversion language and subsequently becomes available to from the individual level to the organizational be shared within organizations. Moreover, organ- level, this model itself suffers from several izing explicit knowledge using databases and limitations. While the limitations of the model archives can make knowledge available throughout may only be at the surface level, executives the organization – organized knowledge can be may miss opportunities to fully develop knowl- disseminated and searched by others. edge management systems based upon these weaknesses. On the other hand, Baiyin Yang, As executive trainers, I agree with Jennifer Rowley who suggests training courses as an Figure 2: Learning with Knowledge Cycle Model effective way to share explicit knowledge. Most importantly, applying knowledge aimed Knowledge articulation at providing better decision-making and work related practices and creating new knowledge Knowledge creation Knowledge respository updating through innovation. Knowledge has to be meas- and construction ured in some way, many trainers talk about return-on-investment of training which is hard Knowledge revision Knowledge access to measure, training satisfaction measurement Knowledge use by participants and their desire to apply it to the workplace is a an excellent barometer of learning new skills or building upon old ones. Once knowledge is accumulated, the current processes may be supplemented or even substi- tuted. Figure 2 depicts this knowledge cycle based on Rowley’s model. The key point in the model is the knowledge use section coupled with testing and re-testing to ensure that the knowledge is actually helping the organization 76 The World Financial Review November - December 2019
Wei Zheng and Chris Viere extensively propose a Table 1: KM Processes of Holistic Knowledge Management Model holistic knowledge management model that may be more appropriate to encompass more aspects Dimension KM Processes Definition of knowledge management. Socialization Creating new practical knowledge Holistic Knowledge Management Model using actual experiences. As executives attempt to apply the holistic knowledge management model, they incorporate Systematization Converting technical knowledge perceptual (i.e. implicit), conceptual (i.e. explicit), acquired from individuals into and affective (i.e. sentiment and emotion).5 These organizational systems and scholars argue that their model is more appro- databases. priate for executive use because knowledge could be managed in the three epistemological areas; Transformation Leading firms’ values and visions technical, practical, and critical, and also in six toward to a higher degree of social ontological dimensions; institutionalisation, responsibility and productivity. indoctrination, externalisation, internalisation, inspiration, and integration. These scholars posit Formalization Structuring practical knowledge that the levels of knowledge are enhanced – into organizational systems. especially at the technical level. This is strongly relevant to conceptual knowledge that is found to Epistemological Routinization Implementing technical knowledge be at the higher echelons of large organizations. into practical knowledge. Furthermore, activities that executives perform relate to managing formal procedures and rules. Evaluation Determining firms’ values in rules The practical level can be associated with percep- and procedures for organizational tual knowledge such as social norms and shared members. experiences which can add to cultural norms. Affective knowledge, which is reflected in moral Orientation Justifying the rules and procedures and ethical standards and the degree of aware- for organizational members. ness about organizational visions and missions can in-turn be used in strategic decision making. Deliberation Collecting the shared beliefs of Another important aspect of this model for exec- organizational members about the utives is Ann Tenbrunsel, Kristina Diekmann, Realization current values of the firm. Kimberly Wade-Benzoni and Max Bazerman’s Putting these shared beliefs to view.9 These scholars look at moral emotions in Institutionalization practical knowledge. neuroscience that are manifested in a trichotomy Converting conceptual knowledge of prediction, action, and recollection. This Indoctrination gained from individuals into aspect can further develop executive decision guidelines. making because there is significance evidence of Externalization Transmitting formal rules and an influence upon various cognitive functions requirements to members. such as problem-solving. Ontological Articulating individuals’ implicit knowledge to shared practical Executives are faced with challenging economic Internalization knowledge. conditions today with global competition increasing Describing the current mental and the need to be number one or two in an industry Inspiration models for organizational or fail to keep up with the market place. This new members. economic environment may have a negative emotion- Aligning employees through unit- ality that can seriously reduce people’s capabilities in ing aspirations and values. changing and overcoming challenging situations.10 The trichotomy is described further with Ann Tenbrunsel, Integration Enhancing members’ aspirations Kristina Diekmann, Kimberly Wade-Benzoni and Max and values by focusing on mutual adjustments. worldfinancialreview.com 77
Knowledge Figure 3: Holistic Knowledge Management Model Executives can review the nine knowledge manage- ment processes in the three epistemological areas Critical of technical, practical, and critical knowledge are Knowledge described in the following table. (Transformation) In Conclusion Executives embrace the holistic knowledge Inspiration Integration ReaDliezalibtieornation management model because it takes a task-based approach by translating the management of knowl- OriEevntalatuiaotinon Affectual edge into a complete set of processes. In fact, the Knowledge holistic knowledge management model develops an integrated approach by which organizational Individual knowledge provides a significant contribution to Members financial objectives through the context-dependent way it is managed. Institutionalization Conceptual Perceptual Externalization Knowledge Knowledge Mostafa Sayyadi, CAHRI, AFAIM, CPMgr, works with senior business Critical Indoctrination Internalization Critical leaders to effectively develop innovation Knowledge Knowledge in companies, and helps companies – from start-ups to the Fortune 100 (Systematization) (Socialization) – succeed by improving the effectiveness of their leaders. He is a business book author and a long- Routinization time contributor to HR.com and Consulting Formalization Magazine and his work has been featured in these top-flight business publications. External Economic, Social, Political, Technological Environments References Bazerman who posit that “people predict that they will Executives 1. Reus, T.H. (2004). A knowledge-based view of international acquisition behave more ethically than they actually do, and when embrace the performance (Doctoral Dissertation). The Florida State University, USA. evaluating past unethical behavior, they believe they holistic knowledge 2. Kogut, B., & Zander, U. (1993). Knowledge of the firm and the evolu- behaved more ethically than they actually did”.9 Ergo, management tionary theory of the multinational corporation. Journal of International the ruination of corporate giants such as Enron and model because it Business Studies, 24(4), 625-645. WorldCom just to name a few fiascos. takes a task- 3. Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating company: how Japanese based approach companies create the dynamics of innovation, New York: Oxford University Press. To offset the negativity associated with widening by translating the 4. Jorna, R. (1998). Managing knowledge. Semiotic Review of Books. Faculty of Arts the gaps of success and failure, Baiyin Yang, Wei management of & Science, University of Toronto. Zheng and Chris Viere propose nine knowledge knowledge into 5. Yang, B., Zheng, W., & Viere, C. (2009). Holistic Views of management processes in the epistemological dimen- a complete set Knowledge Management Models. Advances in Developing Human sion, including socialisation (i.e. implicit to implicit of processes. Resources, 11(3), 273-289. ), systematisation (i.e. explicit to explicit), transfor- 6. Rowley, J. (2001). Knowledge management in pursuit of learning: mation (i.e. affectual to affectual), formalisation (i.e. the learning with knowledge cycle. Journal of Information Science, 27(4), implicit to explicit), routinisation (i.e. explicit to 227-237. implicit), evaluation (i.e. affectual to explicit), orien- 7. Wenger, E.C. (2010). Communities of practice and social learning systems: tation (i.e. explicit to affectual), deliberation (i.e. the career of a concept. In C. Blackmore (Eds.), Social Learning Systems and implicit to affectual), and realisation (i.e. affectual to communities of practice. Berlin: Springer Verlag. implicit).5 This may be the answer executives need 8. Wenger, E.C. (2009). Communities of practice a brief introduction. The but may also lack the fundamental fortitude neces- University of Sydney. sary to be an all-encompassing model to predict 9. Tenbrunsel, A.E., Diekmann, K.A., Wade-Benzoni, K.A., Bazerman, customer satisfaction, employee or follower satis- M.H. (2009). The Ethical Mirage: A Temporal Explanation as to Why We Aren’t as faction, and financial profitability. Figure 3 portrays Ethical as We Think We Are. Harvard University. these processes within organizations: 10. Okon-Singer, H., Hendler,T., Pessoa, L., Shackman, A. (2015). The neurobiology of emotion–cognition interactions: fundamental questions and strategies for future research, Frontiers in Human Neuroscience, 9, 1-14. 78 The World Financial Review November - December 2019
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