Doing The Right Thing by Making A "Hurd" Decision

Question 1

Mark Hurd has been known as a low profile CEO, which has earned him respect, not only among his peers but also in Wall Street. Exposing his personal life to the public, especially to the existing and potential shareholders, might not have been the best decision. It reflects badly on the entire management team. One of the options that the board would have considered is stripping him the board chairmanship while retaining him as the CEO. Over the two-year period that Mark had the affair privately, the company’s performance remained strong. He has able to boost the investor confidence and the share value improved significantly. By stripping him the chairman role in the board, the company could have appointed an interim chairman citing a transfer of leadership in a turnaround strategy. In such a case, Mark should have been allowed to resign from the post voluntarily. There exist several approaches that can be used to handle crises in an organization. One such measure is giving culprit a chance to air their opinions before making a decision. Such a move ensures that there is equality which helps in making sound decisions that include all parties. In this case, no one is entitled to make decisions for the organization, and no one is blamed for wrong decision making considering that the whole organization is involved. It also helps in producing improved decisions for the organization to enhance growth and development. Collective decision making initiates a brainstorming process that helps to resolve the expediency issue. This is where people consult each other on the suitability of their ideas. It also gives people the chance to know if their ideas are good or what can be done to improve them.

Question 2

In my opinion, the board did not do the right thing to expose Mark Hurd. By publicizing this incidence, the board was aiming at boosting the people’s trust on its commitment to the core values. However, there is a high chance that the action triggered mistrust and fear over the company’s future. First, the company was involved in a spying scandal not long ago before this incidence. In as much the public might want to believe that top management is in unison, the evidence of chaos is printed everywhere. The top management does not have each other’s back and are willing to do anything to save their own skin. Second, this affair had been going on for two years. Given the fact that Mark Hurd was going out on expensive dates and paid vacations, the board, through the internal audit department, should have been able to identify misappropriation of funds and advise accordingly. This is an evidence of incompetence.

There is a high chance that Mark Hurd was a victim of circumstance, given the history of the ‘contractor’. This seems to have been a well-orchestrated move to by the ‘contractor’ given the fact that Mark Hurd had a history of competence and integrity. His ability to scoop another board position almost immediately in an equally strong tech company is evident that the incident did not lower the public’s confidence in him. As Larry Ellison pointed out, it was one of the worst personnel decisions on the part of the company.

Question 3

Giving the CEO a second chance can mark the beginning of a strong successful relationship. Slapping the CEO on the wrist will be a win-win situation for all the stakeholders. First, the company will be able to recover the misappropriated funds. On the other hand, the Mark Hurd will be able to retain his position and reputation while the shareholders will not be sent into panic. In such a case, the CEO should be allowed to present his case so as to explain how he intends to mitigate the risks that are associated with such a case.

In the current era of technological advancement, the ability of an organization to perform well consistently based on having a competitive advantage. Transformational improvement provides an alternative turnaround strategy to the existing business approach so as to improve one or more areas of the organization. Among the major objectives of transformational improvement include increasing efficiency, turning around a crisis and cutting costs. Nevertheless, transformational improvement is used to shape the company’s outlook so as to boost the investor confidence.

One of the models of transformational improvement that can be used improve organizational performance is the cost cutting strategy. High operational costs in an organization tend to reduce its profitability. Another transformational improvement model that can be applied is the establishment of good customer relations. Good customer relations are built through addressing key issues affecting the customers as soon as they emerge, consistent marketing and product quality improvement ( Deichmann & Stam, 2015) . A strong brand is key to the performance of an entity. It helps in both building and sustaining a market share. A strong brand creates credibility among the customers. Once a strong brand is created, it should be reciprocated in the quality of the product. This will help in boosting both the short-term and long-term performances.

References

Deichmann, D., & Stam, D. (2015). Leveraging transformational and transactional leadership to cultivate the generation of organization-focused ideas.  The Leadership Quarterly ,  26 (2), 204-219.