Adidas’ Choice

In a recent Business Week article, Herbert Hainer discusses his choices about the Adidas/Reebok merger. Herbert acquired Reebok in 2006 and has faced criticism ever since. The initiative to withdraw from such retailers as Wal-Mart and Tesco caused sales to decline for Reebok, combine this with the declining economy and Reebok was headed for disaster. Despite all of the failure Herbert Hainer faced he remained strong in the and continually encouraged workers to openly discuss their concerns about the two companies.

According to the class lectures and Herbert’s reflection on this issues it is clear to see there was an over estimation of Reebok. Leaders need to maintain open communication in their organizations regardless of the current state of business such as growth, decline or maturity. Herbert’s only regret was his inability to manage expectations for this merger.

I feel that leaders as more than the center of organization, they are the heart of motivation. There are several theories that place vast amounts of responsibility on the leader. To name only one would be unfair to the entire leadership structure.

Penned by: Drew Alfrey

http://www.businessweek.com/magazine/content/11_16/b4224088507393.htm

Challenges in the First Week As Google CEO

Just two days after taking over the reins as CEO for Google, Larry Page has run into several challenges. Though the transition from Eric Schmidt to Page is not surprising, as Beecher Tuttle mentions in his article, Larry Page to Face Several Challenges as Google's New CEO, "it does suggest that Google may be looking to alter its direction and image." Page has several ideas in mind, such as having the top executives of Google make several changes to running meetings in order to be more productive and running meetings in public areas to include lower level "Googlers." Page will also need to face the challenges of the recent failures of several new launches, such as Google Wave, and issues with user privacy.

In order to change the image of Google, Page may need to take a transformational leadership approach. In order to create change, transformational leaders model the way for their followers. Page will need to set examples to the top executives of Google for the way meetings should be held in order to achieve higher productivity and include lower level "Googlers," as well as inspire the vision he sets out for the company that will help to change it's image. As mentioned in our textbook, this vision will provide a conceptual map for where Google will be heading, which can help to deal with the competitive challenges in social networking and issues with user privacy.

The company already has a good approach to enabling employees to act and encouraging over 24,000 employees, by providing many benefits and different perks to the job that many other companies to not have. This great support will help Page through the process of changing the image of Google and coming up with a social network that will be able to compete with Facebook and keep Google as a tech giant. Page will also need to focus improving Google's standing in China, which could be the market that will allow Google to become more innovated and open more growth opportunities. This will require Page to challenge the process, and take it one step at a time in order to make Google stand out for years to come.

Tuttle mentioned in his article, "Many industry analysts have speculated that the return of Page is, in a way, an effort by Google to return to its roots and start to think "big" again." If so, this is Page's chance to use a transformational leadership approach to think big again, and remain a tech giant despite the growing competition and new search engine and social network threats that will be against them.

Article Link: Larry Page to Face Several Challenges as Google's New CEO

Post by: Rebekah Pinson

Nokia CEO Is a Man in a Hurry

Nokia has seen a big shift in the way that they conduct business, mainly due to recent advances in technology. These advances have primarily come from competitors such as Apple and Google, whom are developing smart phone technology that has taken off in recent years. This loss of high end market share leads into why Nokia has to change its strategy; and they must do it soon.
Stephen Elop, who took over as Nokia's CEO last autumn, is in the midst of a major change effort. A recent Wall Street Journal article has outlined that several senior managers within Nokia will be leaving the company. These people are leaving as part of the CEO's plans to revamp the company. This is one step in many that will lead to motivating the entire company to reach a common goal.
The path-goal leadership theory can be applied to this situation in the way that basic ideas of the theory are laid out in the few actions that the CEO has taken thus far. A defined goal is apparent in Nokia, to surpass their close competition in the smart phone industry. A clarified path has been outlined by Elop in the way of far-reaching goals and changes to current strategy, especially in the U.S market. Removing obstacles can be attributed to many top managers leaving the company, whom may have been complacent and resistant to change. Providing support is aided by a fourth-quarter report that posted falling earnings, analysts say that this gives Elop legitimacy to undertake such deep surgery on the company's structure. 

The path-goal theory was developed to explain how leaders motivate subordinates to be productive and satisfied with their work. To do just this, Elop is using directive behaviors to map out instructions to subordinates about their task to regain market share within the smart phone industry. One way they will go about doing this is to hire experienced new heads of operating systems and R&D. This can also be seen as a participative leadership behavior because Elop is allowing executive recruiters to do this new hiring. He will support their decision, another leadership behavior, in hiring people to implement steady change. The last behavior of this theory is achievement-oriented, which deals with the leader challenging subordinates to work at their highest level. This will be seen by the CEO in the far-reaching goals and strategy changes he is to outline.

By: Jon Pieper

http://blogs.wsj.com/source/2011/02/07/nokia-ceo-is-a-man-in-a-hurry/?KEYWORDS=CEO+current+news

Warren Buffett's successor?

Serena Ng and Erik Holm wrote an article about Warren Buffett’s current aide David Sokol in The Wall Street Journal. This article presents the facts about a recent trade Sokol made and the negative impacts it has on his future at Berkshire Hathaway.

Warren Buffett as well as many people close to this situation thought that Sokol would succeed Buffet at Hathaway. However, the trade deals that Sokol performed have led to his resignation from the organization. This is significant because due to the amount of trust Buffett had in Sokol. Leaders of today’s organizations need to be careful with their succession plans, despite Buffett selection it all boils down to the candidate. Sokol is not a bad person but this one decision has negatively affected his future.

I feel that this story relates to the presentation Dave Margers made during his keynote speech. “You can win with integrity,” this appears to be a contradiction but the fact of the matter is that today’s business transactions require more trust and integrity than ever before.

Even a great leader and investor like Warren Buffett was blindsided by this transaction, which imposes an extra degree of caution when key decisions are made. We all are exposed to these decisions everyday and it is never easy to win with integrity but it will lead long –term success. While ethics play into this news story I feel that the actions of Sokol may lead to Buffett being placed under further scrutiny. We shall see how this plays out for Buffett…

Penned by: Drew Alfrey

Article information

Serena Ng and Erik Holm, The Wall Street Journal, "Buffett Jolted as Aide Quits" Page A1 3/31/2011

Are Women Leaders Overlooked for CEO Positions?

An article titled Women Leaders, Overlooked for Chief Executive Positions, written by Cedric Moore Jr., discusses the effect of the glass ceiling in the workplace. Moore also mentions the many different leadership approaches we have discussed in class and how these work together in association with women leaders. It is still evident today that women have a very small stake in the upper management position of companies, and a question posed is do women have the appropriate leadership styles that many companies look for to run their organization? Even though women have proved they are capable of leading organizations and the glass ceiling is slowly breaking down, how long will it be before the leadership gap is more proportional? As Moore mentions about the human services field, "women are more likely to occupy direct care and middle management positions rather than top management positions even though there are more women than men employed in this field."

As we have seen in chapter 13 of Northouse, women tend to lead in a more democratic way than men do and that women also tend to be "devalued when they lead in a more masculine manner, occupy a typically masculine leadership role, and if their evaluators are men" (303). Moore also mentions this as a reason that women are found less in top management positions, saying that women have lower self-efficacy about the positions than men, citing different research studies that show that women who led with masculine traits  received poor evaluations as leaders. This results in women choosing a more democratic model of leadership because it will lead to better evaluations. So how much does self-efficacy play a part in a woman's ability to lead in a CEO position? Are women less confident in their performance that in turn is resulting in more coworkers not identifying them as leaders, or is prejudice still a reason? Moore states in the article that "the correlation between high self-efficacy and masculine traits appears to be a blue print for success as a leader."

 Overall, women and men only have slight differences in leadership style, noting that women have an advantage in a more feminine leadership style and do better with transformational leadership. Still, the leadership gap of CEOs in Fortune 500 companies is immense, where women hold only 3% of the positions. Research shows that family related obligations are one reason to the lack of women CEOs as well as having less work experience and they are more likely to work part time. It is also found in research that "as the number of women at the top increases, so does financial success" for the company (306). The glass ceiling is starting to break, and as more women strive to overcome the prejudice and stereotypes against them and their leadership style, there will be a higher likelihood that the leadership gap will close.

Article link:  Women Leaders, Overlooked For Chief Executive Positions

works cited:
Northouse, Peter Guy. "Women and Leadership." Leadership: Theory and Practice. Thousand Oaks: Sage Publications, 2010. 303, 306. Print.

Posted by: Rebekah Pinson

AT&T and T-Mobile Merger? How Will This Change Leadership?

In a recent deal proposed by CEOs from AT&T and T-Mobile there could be a possible merger between these two companies. The fact that there are currently two separate CEOs that will merge into one organization, could present multiple problems for the new company. Before we continue to exam this issue at hand, it is critical to understand that this deal is awaiting approval by Federal Communications Commission (FCC). Two authors from The Wall Street Journal, Ante and Schatz explain in detail some of the complications this deal could be faced with (Ante & Schatz, 2011). The basis of this post is not to examine every possible barrier these two companies could face. This post’s purpose is to examine leadership barriers that may arise from this merger/acquisition.

As discussed in class the complexity leadership theory proposes an idea that “when organizations move away from stability and into a “region of complexity”, adaptive tensions give rise to emergent self-organizations.” This definition and theory is not a simplistic model but it does provide some important indications about how two companies merging into one may respond to change. We can assume that AT&T and T-Mobile are two independent organizations prior to this merger however, after merging the organizational structure may change in a dynamic manner. This will put pressure on the top leaders from both companies so that the newly formed organization can remain profitable. If the leaders from T-Mobile and AT&T fail to guide this change emergent leaders may arise to the challenge. This theory present the idea that when there is any sort of change the expected leaders are not always the “playmakers” that it is the first line support that can actually make the change happen successfully.

So, my question everyone that reads this, if we can examin any major merger within the United States how do you think change actually happens in the leadership change? Is it top down or bottom up? What is the ideal situation baring this deal gets approved by the FCC?

Works Cited

Ante, S. E., & Schatz, A. (2011, March 21). T-Mobile Deal Faces Antitrust Barriers. Retrieved March 21, 2011, from The Wall Street Journal: http://online.wsj.com/article/SB10001424052748703292304576213050651047200.html?mod=WSJ_newsreel_business

Penned by: Drew Alfrey

Harriet Lamb - CEO of Fairtrade Foundation

For the first time I have examined a CEO of a nonprofit organization.  Fairtrade Foundation, based in the U.K., is a company that strives to give farmers in developing countries "sustainable" prices for their crops, which intern improves their overall quality of life.  Harriet Lamb, CEO, is not set out to increase shareholder value or create record profits.  Her job is to make an actually difference in the world through the improvement of people's lives that are less fortunate than many of us. 

It is quoted in the article in the Wall Street Journal, that Ms. Lamb "wants to stress that it isn't charity that tugs at the heart strings.  It's not charity.  It's commercial common sense."  At one point in the article, Ms. Lamb tells a story about how she brought a chief executive of a major cocoa and chocolate manufacturer to some Ghana cocoa producers in 2009.  The chocolate executive saw first hand the poverty farmers where enduring and how it could endanger his business.  To create this sense of urgency and the need for these large profitable companies to invest back in the producers that supply them would be a huge step in the long-term success of this industry and many more. 

In analyzing concepts from out text to this situation, transformational leadership comes to mind.  Ms. Lamb  fits into the definition of this process which changes and transforms people through emotions, values, ethics, standards, and long-term goals.  To further examine her transformations leadership qualities, I will use the four leadership factors that are apart of this process.

The first, idealized influence, is something that describes leaders who act as strong role models for followers.  Ms. Lamb displays this factor by way of ethical marketing.  She wants to do the right thing and give these farmers the right wage for a comfortable and productive life.  In doing the right thing, many have followed her actions, not only in the Fairtrade Foundation, but large companies such as McDonald's and Starbucks.  Consumers have also recognized the need for ethically sourced products and a boost in profits have been recognized.  The second factor, inspirational motivation, is descriptive of leaders who communicate high expectations to followers, inspiring them through motivation to become committed to and a part of the shared vision in the organization.  In this article, Ms. Lamb is quoted with "We have high standards," stating that she is confident and expects results.  Another way she motivated people in and around her company is with the trip that she took the cocoa executive on, showing him first hand the need for these fair trade standards.  The third factor, intellectual stimulation, deals with stimulating followers to be creative and innovative and to challenge their own beliefs and values as well as those of the leader and organization.  Ms. Lamb uses this factor by way of recognizing that commitment to ethical supply will cost businesses more.  This is their obstacle that they have to work together to improve the prices that farmers receive.  She is not shying away from the issue, but challenging people to work at it head on.  The final factor in transformational leadership is individualized consideration, which deals with a supportive climate in which leaders listen carefully to the individual needs of followers.  She gets others to do this first of all because this is a non-profit organization which is set out to improve the lives of others, not to make money.  She then listens to the demand of a growing consumer segment, and strives to give them more fair trade products. 


http://online.wsj.com/article/SB10001424052748704608504576208123457763158.html?KEYWORDS=CEO+news

By: Jon Pieper

Obama - A Leader, a CEO, or both?

   The article speaking on Barack Obama as our country's leader talks about how we need Obama to be a transformational leader. Not a transformational leader for a thriving company like Steve Jobs at Apple, but a transformational leader like Mark Hurd at Hewlett-Packard. Hurd transformed the culture and nature of HP in a period of tough times. When things looked dim, Hurd made changes and transformed HP into the giant that they are now.

   While Barack Obama is obviously not an actual CEO, the article paints the picture of Obama as the CEO of the United States (the company). It seems fitting to have a class focused on leadership and a blog focused on CEO's culminate with an article on America's CEO, Barack Obama. As we all know by now, transformational leadership is discussed in Chapter 9 of Northouse's "Leadership." It talks about changing the way people think or feel by appealing to emotions, values, ethics, and standards. Obama is obviously viewed as more of a transformational leader due to his "Yes We Can" way of speaking and his constant cries for change in America. The interesting part of the article is where the author begins to speak about Hilary Clinton and how she is much more of a transactional leader focused on rigid policy and solution-driven structure to problem solving.

   I think it is absolutely important to realize how the Presidency is structured for success. By choosing his own cabinet, Obama is able to overcome some of his personal deficiencies that accompany such a transformational leader. The criticisms of transformational leadership discussed on page 188-189 of the textboox set up all the ways in which Obama can cover his shortcomings, or weaknesses.

Political affiliation aside, do you feel that America currently needs a more transformational or transactional leader?

Online: http://www.huffingtonpost.com/chip-conley/barack----our-transformat_b_152792.html

Lucas Miller

Women and Leadership

   The CEO of eCert, an e-mail security leader, was recently named "the top female businesswoman in security by the industry's leading information security research and advisory guide." eCert's CEO Kelly Wanser has been extremely innovative and ambitious since taking the reins. Specifically, Wanser's efforts in the area of security authentication have been a leading factor for their continued success. There have been many other awards which eCert has received under Wanser's leadership, and is a breath of fresh air for all leaders to read, but specifically women.
  
   I feel that this article is of particular importance because it focuses on an entire chapter that we recently covered in class. Chapter 13 in Northouse's Leadership textbook illustrates women and leadership. It paints many different pictures and looks at the positives, negatives, and stereotypes associated with women leading in the workplace. Northouse states that studies have proven the only robust difference is that women lead in a more democratic style than men. I feel this is evident when reading the article about eCert because it speaks about Wanser's visionary efforts and how participative she is as a leader. She seems to rely on her able-bodied staff and value their opinion. Another important topic would have to be the idea of the glass ceiling in which advancement of a female at a lower level is stopped because of discrimination. This is obviously an example of the opposite because we not only see a woman as CEO, but she is receiving top industry awards.

Such an article can only beg the question of whether or not there is any difference between female and male CEO's as long as they are successful?

Lucas Miller

Online: http://finance.yahoo.com/news/eCert-CEO-Receives-Top-Women-bw-2336529779.html?x=0&.v=1

Googles CEO Shake Up!

In January Google named a new CEO, Larry Page, while the former CEO, Eric Schmidt, stepped down to executive chairman of the company. The co-founders, Page and Brin, of Google had started the company straight out of college and had no corporate experience at all. The only reason Schmidt was hired at Google was because investors wanted a CEO that had experience to run the company as Google started to take off.
The leadership strategy that Google used was more of a three way leadership triangle, which follows the Contingency Model. Page, Brin and Schmidt pretty much took turns being leader at different points and in different situations. With Google being run this way Google was able to handle almost every situation/problem that was thrown at them. Having three leaders means that they were able to easily match which leader would be best to handle the situation at hand.


http://www.newsweek.com/2011/01/21/what-s-behind-the-google-ceo-shakeup.html

Juliann Brouette   

Pumas New CEO

The German company has named a new CEO because the old CEO has been promoted to over see the lifestyle of division on Puma owner, a French company PPR SA. Pumas new CEO, Franz Koch, is only 32 and is ready to make a difference. "We've gone through tremendous changes in the last three years," Mr. Koch said on a conference call. He added that he intends to "just focus on the long-term strategic plan. (Quoted from the Wall Street Journal).
Koch can be seen as some what a path-goal theory leader, that he has a goal set to meet a certain quota and will try and read it the best he can and help his employees do the same. Koch is now running an international company that has a good reputation for being good quality and on the higher end of the fashion market, so with Puma being so popular all over the world Koch needs to make sure he takes into consideration the different cultures that Puma reaches. Koch can also be seen as a transformation leader, he was to inspire his followers to make good products so they can sell them with good quality and at a high cost to keep Puma profitable. Koch can also take a situational approach, he most likely will has to get involved with all different aspects of the company, and all the different tasks at hand for making shoes, shirts, shorts, and bags. So Koch will have to change how he acts/leads based on the demands of the different situations.

http://online.wsj.com/article/SB10001424052748704893604576200452302421790.html

Juliann Brouette

Naoto Kan, Japan's "Leader"?

Considering this blog is geared toward CEO’s and their importance in the business world I would like to take a moment and focus attention on the recent tragedy of Japan. Japan’s Prime Minister Naoto Kan is the highlight of this article for because his next action will not only impact Japan but the world as we know it.

Japan’s Prime Minister Naoto Kan is under a lot of stress considering that Japan is facing nuclear tragedy. A recent article by Yoree Koh for The Wall Street Journal explains how Kan’s current transactional approach to leadership is doing more harm to Japan than it is good. Kan’s approval rating has dipped below 20% (Koh, 2011).

Despite the furthered explanation Koh provides, it is clear to see that Kan is approaching his leadership tenure in a transactional manner due to several key actions. When Burns described transactional leadership he states that the “focus (is) on the exchanges that occur between leaders and followers” (Northouse, 172). This loose definition of leadership explains why certain leaders simply follow a transaction basis, that this is just another brick in the wall rather than a unique situation. When leaders utilize this approach as their primary focus, their followers will lose motivation in the change effort.

Japan is on the edge of a severe nuclear crisis and while you are reading this blog, the conditions are not getting any better, but why? In one, word “Kan” despite the recent event facing Japan Kan has neglected to make his followers feel empowered or important to the country as a whole. When a crisis as far reaching as this tsunami occurs any leader is going to be put to the test to see if they can correct the situation.  Yet Kan has been nonexistent in the media, there are simple short messages even when he does make an announcement to the struggle company. “Remain calm,” that is the message Kan recently gave his compatriots.

There needs to be a plan if Japan has any hoping of restoring itself to pre-tsunami levels. This is not an impossible task but with Kan’s lack of leadership the task appears to be impossible. Especially in a crisis, transformational approaches will produce more productive and permanent change when compared to the current transactional approach.  Some citizens have faith in Kan despite the vast majority of citizens disagreeing with him completely. Kan has to make the internal change before his followers will believe any action he chooses.  

Is it too late for Kan? Does a new leader need to be in place before Japan is ruined forever?

Works Cited

Koh, Y. (2011, March 16). Crises Tests Kan's Leadership Ability. Retrieved March 16, 2011, from The Wall Street Journal: http://online.wsj.com/article/SB10001424052748703566504576202282101031702.html?KEYWORDS=leadership

Penned by: Drew Alfrey

CEO of Starbucks Howard Shultz

I recently read an article about how the CEO of Starbucks is to join the board of the new and very successful online coupon company, Groupon.  He was elected to this position because Groupon is soon to launch a public offering, and the leadership that Shultz has displayed in the past is something that is very inticing.  Shultz helped build the Starbucks empire, left the company for a short time, and then returned when the company struggled through a downturn.  This article indicated that he lead Starbucks back to a period of growth by laying off workers, launching an instant coffee line, and implementing a digital network.

These qualities of leading change really emphasize the path-goal theory of leadership and displays the leader behaviors that are within.  This theory is about how leaders motivate subordinates to accomplish goals, which in this case can be considered as returning Starbucks back to a growth stage of a business model.  The directive leader behavior, defined as giving subordinates instructions about their task, is seen in Shultz because he has conveyed to his company that Starbucks will return to growth through these new products and services.  An achievement-oriented behavior, which challenges people to perform at the highest level, can also relate to that fact because he knew it would not be easy to once again become the coffee chain leader, but it was very possible.  I believe that the supportive leadership behavior, a considerate quality, was also shown in this article because he decided to come back to Starbucks, even during a downturn, a try to regain its dominance.  The last leadership behavior, participative, which consists of inviting subordinates in the decision-making process, was a large part in this situation as well.  After not being with the company for a while, he had to listen his subordinates' ideas and opinions to best understand the situation at hand.  

Posted by: Jon Pieper

http://news.yahoo.com/s/ap/20110210/ap_on_hi_te/us_groupon_schultz

Should More CEOs Be Fired?

Research has shown that if it wasn't for the close personal ties that CEOs have with their board of directors most CEOs would have been fired sooner. This relationship not only applies to keeping the CEOs on staff but also to the severance pay they receive when leaving the company, like when Googles CEO was let go the Google gave him a 100 million option and stock grant. When company's give huge stock options like this it hurts the regular stock holders by lowering the value of their stock and is giving stock past CEOs really that great or a parting gift? The CEOs dont have to keep the stock so when they sell it they end up getting even more money for doing absolutely nothing.

The percentage of  CEOs that research shows is 2% but as Taylor did more research he figured that the true percentage would really be closer to 13% if it wasn't for the relationships that were developed. When the board of directors saw that a CEO wasn't doing such a great job and hurting the company, instead of letting them go they would just move them to a different position in the company which decreases the turnover rate. The board of directors take a big risk when they decide to let a CEO go, they risk losing their position on the board because the new CEO wants to put people on the board that they know and already have relationships with.  The new CEO has the five bases of power, referent power because the old board of directors is going to like the new CEO so they can keep their jobs. Expert power because the CEO has to be good at their job if the made it all the way to CEO. Legitimate power because the hold the CEO position. Reward Power being able to give out rewards even tho is seems as if the CEOs get most of the rewards the board of directors also has this power when they give out bonuses. Coercive power, the CEO has this because they are CEO and in charge of the company, but the board of directors also has this power by being able to vote against the CEO and having them resign.

Some researches think that the board needs to redesign their hiring and firing practices, the board needs to look at all aspects of the new leader and not just certain traits or skills that the potential CEO has. If a board of directors is using the trait approach then maybe they should start to use the skills approach, or the board could incorporate both approaches.   



Post by: Juliann Brouette
Article can be found at http://management.fortune.cnn.com/2011/02/08/should-more-ceos-be-fired/

Co-CEOs: A Good Idea Or Not?

Many companies such as Goldman Sachs and Unilever have tried unsuccessfully to have two CEOs running the company. Yet the retail chain Aéropostale decided to appoint President Mindy C. Meads and Chief Operating Officer Thomas P. Johnson as the new CEOs to succeed Julian R. Geiger. Matthew Boyle, the author of the article "When the CEO Job Is Split in Two", believes that this could be sabotage to the company's recent outstanding performance. The question posed is whether or not a company can continue to be successful with clashing egos and skills of two CEOs.

Some companies, such as the California Pizza Kitchen, have been profitable with two CEOs, but many wonder if a company can flourish if the co-CEOs did not start together when the company was small. Both newly appointed CEOs have their own set of skills and expert knowledge, as Boyle highlights in the video that can be found in the link at the bottom of this blog. Meads is a merchandising expert and Johnson is a store operations expert. They both have separate crystallized cognitive ability, personalities, and career experiences that can work together to continue the success of Aéropostale, yet could these also get in the way of leading together? Could their separate knowledge acquired over their careers create problems in solving complex problems as a whole? It is clear where their skills lie, but will their skills and egos get in the way when it comes to deciding the direction for the company? The skills approach that we have discussed in class could be applied differently for the two CEOs at Aéropostale, and this could impact the high performance of the company if they cannot successfully work together.

What do you think? Is it a good idea to appoint co-CEOs? Or should companies not even bother appointing co-CEOs?


link to article and video: When the CEO Job Is Split in Two


Blog by: Rebekah Pinson

Coca-Cola CEO

Coca-Cola is one of the most successful global companies in the world today, and its CEO, Muhtar Kent, is a big reason why this is so.  He has fostered a culture that is continually changing in order to stay competitive in many different cut-throat markets.  The video link below, from fortune.com, describes the best advice that Coca-Cola's CEO has ever received.  This advice has instructed Kent to always look forward into new endeavors and to not stand still and look in the mirror.  This is an essential business principle as it has worked for Coca-Cola and many others.  A combination of both task and relationship approaches to leadership are found in this clip.  The task is evident to keep innovating and looking for opportunities to grow while the CEO also enforces the importance that he uses this advice in his personal life.  With this being said, this leader is conveying to his followers that he really believes in what he is doing.  Take a look at this video and see what you get out of it.  He seems like an interesting person.   

http://money.cnn.com/video/news/2011/02/04/best_advice_muhtar_kent.fortune/

Blog by: Jon Pieper

Raise or No Raise?

With the growing age of CEO distrust and corporate failures, now is the time for investors to look at top management for guidance.  Within in the last week The Securities and Exchange Commission (SEC) has announced that companies “whose stock-market value exceeds $75 million must give shareholders the opportunity, at least once every three years, to voice their approval or disapproval of how top management is being paid” (Zweig). This change is now allowing investors to determine if CEO’s pay is related to their performance. However, investors need to have information presented to them in a clear and concise manner if an accurate decision is to be made. Zweig further states that there will be a “standardized model of pay disclosure” thus allowing investors to actually read the proxy statement before voting.  The fact that this is now mandatory for the companies that meet the requirements could generate a higher CEO turnover among other issues.

Upon further review of this topic, it is clear to see that the SEC is enforcing a process definition of leadership by allowing the shareholders of a company to have feedback on the pay of top management. There is now a two-way communication between CEO’s and shareholders, which is a first for most large companies. This communication model supports the theory that leaders need constant feedback from everyone in the organization, including shareholders, in order for the company to prosper. Whenever there is an open door policy such as this, there is a large margin of error. As mentioned in class when leaders are presented with feedback from followers some are too honest while others are too timid to voice their true emotions. Group think could result from from majority shareholders overpowering the minority. This is dangerous, considering that for every 1% increase in a "NO" response, there will be a maximum wage decrease of $220,000 (Zweig). So what is preventing the shareholders from either going with the majority's lead or simply denying every pay raise presented to them? Nothing. The SEC is more concerned with the current disclosure issues on pay rates more than they are concerned with executive's pay level. If the leaders of these organizations band together and sway the vote of shareholders in their favor, this mandate will become useless. There needs to be thorough research to invoke this change in the way that it was intended, as it stands right now there are too many work-arounds that will soon be explored by CEOs wanting to continue their current income increases. The idea sounds great as of right now, but the implementation will need to have a strong enforcer, or leader to make this work properly.

The SEC has made a bold move by creating this mandate, and forcing CEO’s to present clear information about payment structure. Yet, if the SEC plans to dig deeper and force more transparency within an organization, how long will it be before shareholders will have their hands on the meeting notes from last Friday?

How much is too much?

Posted by: Drew Alfrey

For more information please read this article which can also be found online here.

*Zweig, Jason (2011, January 29-30). A Chance to Veto a CEO's Bonus. The Wall Street Journal, pp. B1, B17.

Introduction

Welcome to the CEO's Blog

In this blog we will discuss how CEO's actions impact not only their industry but the nation as a whole. While most CEO are ideal leaders, the actions of some have blurred more than just ethical decision processes. This blog will provide insight on the changing trend and requirements of today's CEO. Following the Wall Street Journal and other reputable news sources will provide you the most up to date information, however this blog will provide an analysis based on class discussions and leadership theories.

Team members:

Luke Miller      

Jon Peiper       

Drew Alfrey  

Rebekah Pinson   

Juliann Brouette