Literature Review Chapter: Ethical Leadership

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[. . .] Ethical behavior is all about internally control one's behavior using the five essentials that have been discussed so far. These characteristics form the overall social responsibility stamina in a person and various other forms of responsibility involving the direction of one's behavior internally (Winter, 1992a).

Hence, if we are to describe an ethical leader, it would be like someone who feels responsibility for an agenda, is countable enough to work on it, is internally motivated and satisfied by working ethically on that agenda (instead of thinking only about the profits that project would make ). Responsibility itself has different facets. Responsibility is also referred to as feeling responsible for others (e.g., Blasi, 1983; Hoffman, 1982; Sartre, 1947). In other cases, responsibility could take the form of exhibiting self-control and learning to know what the outcomes of one's actions could be. Taking ownership of one's ideas and actions is another form of responsibility. For this study the researchers have chosen Corporate Social Responsibility Model developed by Carroll (1991) as the second theory.

Carroll proposed four levels (pyramid) of CSR which consists of economic, legal, ethical, and philanthropic responsibilities. Carroll (1991) defined economic responsibility as the expectation on the corporation to maximize the earnings per share. Legal responsibility refers to the obligation of obeying laws and regulations. Ethical responsibility is the responsibility of doing what is expected morally and ethically, while philanthropic responsibility refers to charitable expectations of the society towards corporation. Based on these four components, a socially responsible firm should strive to make a profit, obey the law, be ethical, and be a good corporate citizen.

Chapter 2: Literature Review

After having a proper understanding of the dynamics of ethics and framing a corporate leader in our minds, let us come back to the core issue of obsolescence mentioned at the start of this article. Few researchers take buyers perspective on innovation instead of supplier's perspective. Business interests do not leave any entity out of the famine of obsolescence. For instance, over 2000 components pass into obsolescence every month (Prophet, 2002) in case of military. While as far as the military aircrafts are concerned -- in 2003 military aircraft had an age of 22.5 years (U.S. Air Force, 2003) in contrast with 11 years for commercial aircraft (Bureau of Transportation Statistics, 2006). The military is just not an attractive customer for businessmen to keep parts in production (McHale, 2000) because of very low market share of it. (Condra, Anissipour, Mayfield, & Pecht, 1997). Other examples include electronics manufacturing (Carbone, 2006), aviation (Singh & Sandborn, 2006), heating/ventilation/air conditioning engineering (Goggins, 2007), media broadcasting (Blumenfeld, 2007), semiconductor manufacturing (Mutschler, 2008), and publishing (Charlesworth, 2007). One disruption to one of the global sources of supply affects many buyers today (Craighead, Blackhurst, Rungtusanatham, & Handfield, 2007). Moreover, supply risks have increased heavily after the initiation of war on terror. (Wagner & Bode, 2008). All of these factors will only worsen the situation with companies relying more on repairs than new purchases. The latest obsolescence field is marketing-based obsolescence which results due to mere introduction of new and newer products, automatically making the previous ones old (Buyer's perspective).

Like an economic supply and demand-based equilibrium price, the value is also based upon supplier and buyer's powers. The point at which the needs in the market intersect with the offerings in the market determines the portions of values captured by both of the parties (Brandenburger & Stuart, 1996). And just like a price below or above the equilibrium price results in supply or oversupply, so does a low or negative values captured by any party means a breakdown of relationship. An example is that of semiconductors market where the supplier's opportunity cost from lost profits on huge capital investments usually are way higher than buyer's willingness to pay (Brandenburger & Stuart, 1996).

The game played between buyers and suppliers in the semiconductor market is shown in Fig. 1 (at the bottom). According to the author, the result low or negative created during this process for buyers will cause obsolescence, letting the suppliers win. The amount by which the technical characteristics surpass those more attractive markets may lead to delay in obsolescence, but the buyers should be aware of the alternate markets. The supply and demand (supplier and customer) based explanation of obsolescence is considered much more comprehensive than the others in the literature relating to obsolescence as shown below (Brandenburger & Stuart, 1996).

Practices related to Planned Obsolescence:

In manufacturing design, a strategy of purposely scheming, preparing or developing merchandise with a defined utilitarian time so that it outdates after a specific time interval is called Planned obsolescence. To encourage buyers to purchase newer versions of the product is the purpose behind planned obsolescence. By reducing the time span of the item via using the following approaches of obsolescence companies increase the replacement requirement needs in the most efficient way.

To design a product in such a way that it is operational for a specific time span only, this phenomenon is also known as "death dating." A book published in 2006 called Slade stated that in the 1950s and 1960s death dating was used as benchmark for various devices. For example back in the olden day's handy radio sets were engineered to function for the duration of three years only so as to increase replacement requirement needs and earn profit (Slade, 2006).

Designed for restricted repairing:

Companies like Kodak and Fuji designed disposable single-use cameras which cannot be repaired after they have been used once, however small-scale recycling industries appeared for time being who could repair those cameras but Kodak and Fuji took them to tribunal on breaching the copyrights. It proposed that the cost of fixing for the consumer appliances promotes disposition and also the family financial gain or earnings is associated completely with the tendency to discard of and exchange goods rather than fix them (Adolphson 2004; McCollough 2007).

To lower consumer contentment by producing unpleasant designs:

The model of "faultless forms and surfaces" which provides a perfect and professional exterior but gets damaged rapidly due to daily usage. This has been used on items like small electrical devices. The end result of this has been that customers become disappointed which causes untimely dumping. Another strategy to attain earlier surrogating is to introduce latest products in the market which in turn will cultivate technical obsolescence (Cooper, 2005).

Devised for style and trend:

Nowadays vogue impacts many people's choice related to numerous items' exchange. Progressively more creators have employed tasteful approach to the designs of timepieces, music players (such as ipods, mp3 players, etc.), mobile phones and even notebooks (Slade, 2006).

Partial enhancement of products

Due to scientific advancements, businesses get the opportunity to increase the amount of applications or the advantages of the particular merchandise item or to enhance the execution degree on subsisting benefits. Examples of this could be introducing a touch screen element to a mobile phone or when a notebook manufacturer add more RAM and speed to the system or decreases the heaviness of the laptop. A point that should be observed here is that the in the beginning the latest degree of advancement may not be required by the consumers so if there are some evident profit sectors in a marketplace, then to achieve a sky-scraping cross electricity of demand items should be produced when required. In situations like these former versions should be held back until and unless there is a considerable desire for them and hence the cause of obsolescence will be less. The cause of obsolescence is usually potent when the clients comprehend the previous merchandise to be "obsolete" or once the additive attributes of the latest items are unanimously comprehended as valuable plus advantageous (Saunders and Jobber, 1994).

Facts which maneuver obsolescence and speedy replacement:

Firms that manufacture long-lasting products handle certain exception in sustaining a high value of gross increase. This "durables difficulty" is the major powerful authority behind planned obsolescence in every market system. It normally happens when budding vendors rapidly impregnate their markets. If merchandise is more authentic and enduring, the replacement phase would be more tenacious and the degree of gross revenue would be gradual. The rate of income of a company depends on two factors, if a company decides to let its products to be hired then it would [END OF PREVIEW]

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