Nokia is a leading multinational communications corporation engaged in the manufacture of mobile phone devices as well as offering internet services. The mobile devices produced cover the major market segments of GSM, W-CDMA as well as CDMA. Other undertakings of the company include provision of digital map information and navigation services. Research and development sites for Nokia Corporation are spread throughout the world. This document discusses the ethical implications of the company’s decision to lay off more than 1500 employees due to the current economic depression which has largely caused profitability levels to drastically reduce. Leadership failures in regard to the decision made will also be addressed.
Ethical issues confronting Nokia
Due to the failing consumer demand, Nokia is in the process of cutting down the number of employees. The employee cut offs targets the sales, marketing and some managerial dockets. In Finland alone where the headquarters of the company is situated approximately 700 employees are likely to lose their jobs. The Nokia phone sales have continually dropped due to the current global recession, and ‘it’s quite unlikely that many will continue to identify with their brand even in future. In April 2003, the networks equipment division experienced massive turnover problems thus the management resorted to organizational restructuring. The results of the move include diminished public image as well as court cases due to lack of due process in executing lay-off practice. In order to mitigate the negative effects of such undertakings, the leadership needed to put in place strong measures aimed at reducing costs thereby improving profitability levels of the company. Through laying emphasis on research as well as development programs aimed at increasing efficiency and productivity of the company, the leadership should have reversed the situation (Jennings, 2008).
Ethical and moral qualities of leadership
In traditional sense, the purpose of leadership lies in increasing the profitability of an organization. In recent times efficient leadership ensures that moral and ethical standards are adhered to. Thus efficient leadership is not pegged on competence but also on transforming the lives of people as well as the entire organization. Through ethical leadership, the Nokia Corporation need be involved in respecting the dignity of other people by deliberately indicating some reverence to its human capital. Integrity and character demonstrated by the Nokia corporation management largely impact on the ethical decisions made hence the reason why before implementing the layoffs, the necessary notification procedures have to be followed (Connors & Sampford, 2003). Total compensation has been undertaken since the leaders are people oriented thus before making any decisions, they consider the kind of impact the decision will have on the employees fraternity.
Role of negativity
Negativity plays a crucial role in making positive change in any organization. The negativity effect has the tendency to assign considerable weight to the negative outcomes of an organization. When complex decision making procedures are involved, several prejudices likely to impede the execution come into play. Since it is quite difficult to detect biases, complex scenarios in regard to the manner in which company activities and decision making is done proves problematic. Before making the decision to lay off the employees, the management had an ethical obligation to consider the general impacts that such move would have on the firm’s brand image. More often than not, during economic depression when sales volumes tends to decline drastically, the most obvious choice left to the company’s management is to cut down on costs of operation by reducing the number of employees through an appropriate approach justified under employment contract. Due to massive negativity existing in regard to improvement of the mobile phone technology market, it is not likely that the Nokia Corporation will implement the move to have the employees reinstated. Since problems in regard to organization performance are as a result of deviations from the already set performance standards, timely decision making is vital. This helps any organization to tackle the existing challenges by enabling the company become profitable again (Yukl, 2009). By removing possible negativity that would influence the resulting decision, the firm will deliberately enhance its ethical capacity in resolving internal issues under acceptable ethical approach. It is important that additional actions are also formulated in order to avoid and prevent adverse consequences which may result once an action is undertaken from bringing other unanticipated problems to the company again.
Role of Narcissism
The lay-off saga witnessed in Nokia Corporation has some element of narcissism exhibited by top leadership. This is because laying-off the employees denotes some form of elitism in the management team since they clearly demonstrate indifference in the plight of the employees involved (McDaniel, 2004). The welfare of the laid-off employees is totally disregarded. Exploitation of the employees results owing to the loss of their jobs and ultimately their livelihood as well. Since Nokia is a high profile corporation, its leadership and management team is largely concerned about making massive profits hence the reason why the management team holds that having many employees during the time of recession considerably reduces the profitability levels. Although the move to lay-off some employees may yield positive results, this is a short time mitigation measure. In the long run, the move normally drags down the firms move to expand, with the climax be felt during perceived increase in business units offered under the firm’s brand name.
Perks and temptations likely to cause leadership failure
Whenever an individual is set to a leadership position, several temptations likely to cause leadership failure come into be exhibited. For instance, the fear of declining profitability made Nokia Corporation to sack a considerable number of employees. Another temptation lies in the leadership desire to make decisions which would appeal to all stakeholders in an organization. While this is a sign of mediocrity, the leader avoids making tough decisions which would result to confrontations within the organization (Trevino & Weaver, 2003). Procrastination is another leadership lapse which result into some level of comprise on the firm’s profitability level. A leader need not neglect any details in regard to the implementation of ethical management practices. In order to avert the impact associated with poor decision making procedures, it’s paramount to institute delegation procedures as well as motivation strategies in a bid to empower employees for higher productivity levels.
In conclusion, good leadership largely involves responsibility especially to the welfare of particular group or organization. Thus every successful leader need make honorable choices and decisions which are not only ethical but also legal. Successful leaders need avoid mediocrity decisions which are largely influenced by negativity of the outcome on the entire process involved. Thus, the quality of the individual in leadership position matters a lot as the decisions made determine whether an organization will be successful or not. Whenever executive leaders of great capability and caliber are given leadership roles, the total outlook and productivity change owing to the expertise and efficient management they bring with them to the firm’s performance levels.