Introduction
When an organization faces a major catastrophe that inherently destroys its repute and puts its future in jeopardy, its management face a great responsibility to deal with the core of the abuse ethically, and more importantly, take its stakeholders through a positive transformation. Only then, can it survive this storm.
The Bhopal chemical disaster 1984, in the city of Bhopal Madhya Pradesh state, India is considered to be one of the worst industrial accidents of all time. How the Union Carbide Corporation dealt with it, however, is even more tragic. According to (Ice, 1991) the management’s disillusionment with focusing more on financial and scientific context, and less on humanitarian aspect, eventually lead it to its downfall.
The core of this paper is to highlight how management can effectively lead crisis change situations; refocusing energy to maintain healthy employee relations, and ethically deal with the diffused public in general. This paper will also demonstrate some of the important leadership practices that should be taken into consideration whilst dealing with situations like these – taking Bhopal disaster as an example. For the very purpose, I shall be stepping into the top management shoes so that I may be able to prove my point of view, as in this case, the problem seems to be residing within that level. We will also comprehend if there is a “rational, systematic and comprehensive way” through which an organization may prepare for crises in midst of a change occurrence (Mitroff, Crisis Management: Cutting Through the Confusion, 1988).
On the dates 2-3 December, 1984, around 45 tons of Methyl Isocyanate (MIC) had leaked in the plant owned by the Indian subsidiary of Union carbide. The estimated death toll was around 20,000, with more than half a million suffering from respiratory problems, loss of sight and other diseases that were an effect of the poisonous fumes of the gas (Brittanica, 2015).
As stated by (Eckerman, 2005), Union Carbide Corporation and the Indian Government, both played roles of significance in the “magnitude of the disaster”. Initially, Union Carbide, with Government of India’s help, sent reinforcements and performed procedures of disaster control to help the victims. Slowly, however, this was pushed into the background. But once the Indian Government decided to represent the victims of the tragedy, Union Carbide retaliated by shifting the entire blame on one ‘disgruntled worker’ sabotaging the process, thus playing the victim (Ice, 1991; Weick, 2010).
When the reasons behind the mishap started to come to light, it was observed that the workforce at Union Carbide’s Indian facility was seriously under-trained, and over worked. (Chohan, 2005), an employee at the plant at the time of the event shares the data on the declining rate of trained employees over the years.
(Chohan, 2005)
It is also to be considered that a certain company of this nature, as dictated by its code of conduct, has to standardize its safety procedures and ensure its proper regulation wherever in the world it operates. During the trail in the Indian court, when accused for not following the standardized procedures in India as in United States, Union Carbide responded by saying that the procedures followed in India were the best they could offer, emphasizing that “India and US plants were different”, and that Indian plant was the responsibility of the that subsidiary (Ice, 1991). Warren Anderson’s claims (Union Carbide’s CEO at the time) that this incident could never occur at the US plant, were overridden by the leak at the Institute plant in August 1985 (Diamond, 1985c). This definitively proved that Union’s claims for safety standards were untrue.
Safety measures at Bhopal Plant (Chohan, 2005).
So far, Union Carbide’s efforts were that of differentiation, and denial. Its attempts to reduce the damage and save its reputation in the market were based on financial and scientific controlling. However, as aforementioned, Union Carbide ignored the human aspect of the situation. I will be explaining this later in the literature review. However to be precise, the company ignored both the concerns of its employees, and general public. Where Johnson & Johnson, in the case of Tylenol, launched their advertising campaign to regain trust of public, Union Carbide failed to do so (Ice, 1991).
To be more prudent in comparison, Bhopal incident has often been compared with a more recent one; BP Oil Spill. Where BP settled for $18.7 billion, Union Carbide paid a mere $470 million, with the waste site never being cleaned till this day (Siroshi, 2015).
As the components of pseudo-transformative leadership, of leaders acting in bad faith (Satre, 1992) above suggest, social costs of misusing power often lead to demise of the company. Union Carbide, despite its many attempts to recover from debts, and being taken over many times in the past years, was finally acquired by Dow Chemicals. My standpoint, as to how this could have been prevented will be discussed as we dive into theoretical practices of leadership change – would be saving key points of organisations facing change of an imperative standpoint.
Literature Review
Organisational Change -Theories, Leadership Styles, and Behaviours:
“Today’s obsession with change focuses on that which is dramatically imposed from top”, (Mintzberg & Huy, 2003). However true this is in the modern management context, (Mintzberg & Huy, 2003) also point out that this process can be made more effective if a more systematic change (horizontal flow of change) is followed in times of crisis, rather than dramatic change (descending from top management).
Something similar happened in the case of Union Carbide; in attempts to return the company to its former glory, more damage followed. Employees were misguided and public coveted resistance (Mezais & Glynn, 1993).
A combination of leadership styles may help pave a pathway for two-way communication amongst the leadership and the followership (ethical and transformative in this case-scenario). Firstly, (Brown, Trevino, & Harrison, 2005) suggest that ethical leadership is the “normatively appropriate conduct through personal actions and interpersonal relationships, and promotion of such conduct to followers through two-way communication, reinforcement, and decision making.”
When faced with such adversity, as a top management leader, it should be my priority to take full responsibility of the actions that lead to the demise of several innocent lives. In the short run, this idea may seem adverse, as it did to the leaders of Union Carbide at that time. But, in the long haul, it would be beneficial. As with Merck, despite its ignorance early on to investigate the side effects of the drug, when it recalled Vioxx from the market; was an act of corporate social responsibility (Cavusgil, 2007). Despite its failures, Merck still prospers today in the name of its CSR.
As mentioned above, Union Carbide, acted as a pseudo-transformative, autocratic leader, heeding to the needs to elite, whilst ignoring the poor.
Similarly, in many ways, transformational leadership follows the same pathway as two-way process; that both leader and follower can be redefined as a whole through the change of their “values, motives, and attitudes” and have a positive outcome through the transformation process (Burns, 1978). Also, (Eisenbach, Watson, & Pillai, 1999) suggest that leaders who are transformational in their style, tend to fund intellectual stimulation (motivation; emotional intelligence) and intellectual stimulation (providing pathways to think outside the box).
Highlighted in the introduction, what Union Carbide lacked were the two way communication process. Consequently, the message delivered by the top management was being misinterpreted. While autocratic style was being followed, which again not suitable in the given situation, what really in need was charisma. As a leader, tt would be my responsibility to represent the team in such a way that as (Conger & Kanungo, 1987) suggest, the followers will not only attribute themselves to the leader, but will also change their own behavior as I, the manager would like them to be.
The transformational energy has to take roots in the top management in order to trickle down to the lower levels. The top managers need to realise the essence of the the adverse effects the differentiation and denial that the company followed in the long run. This may even mean a decentralized/ flatter structure so that the ideas are flown with more ease.
As it happens, deciding for change management consists of a team working on a solution for the said problem (Mitroff, Pearson, Clair, & Misra, 1997). (Pearson & Clair) have contended that crisis management works best when responses and solutions are built together with team support, rather than one person’s decision making. Inevitably, as a top level manager, I may have to communicate with my peers and board members, and get them out of comfortable energy by making them realise the need to slay the dragon i.e. prevent an incoming threat.
When miscommunication occurs, especially in a crisis situation, corrosive energy often blossoms. In this scenario, it is top management vs. the employees. The employees, in the state of resigned inertia (organizational burnout), were beginning to question the safety of their lives whilst doing the job. As mentioned earlier, ethical approach of the top management would have positive effect on the low level (Mayer, Kuenzi, Greenbaum, Bardes, & Salvador, 2009). While being completely honest may seem like a too high of a risk, it will also create the feeling of trust. The company will be facing competitive environment externally for many years to come, but once the internal energy has been refocused as one (for both top level and lower levels of management), they may work together to bring Union Carbide out of deep waters.
Limitations:
Given the nature of this essay, the research on the case of Union Carbide found in articles and journals were more of a critique, often citing personal bias upon the case. This may have had a potential impact upon the possible theoretical solutions given in the literature review. It is important to note, however, that the theories and leadership styles used for Union Carbide’s case were worked out after reading the critiques carefully and evaluating them for change process.
While ethical leadership has said to have a positive effect on the organsational structure in the long run, it may as well be the cause of resigned inertia (burnout). Given the situation of the company, it may have taken many years to gain back confidence of the public, and shareholders. To renew company’s repute, the work structure would need to gain momentum more than ever. This, combined with employees having insecurity about their own safety doing this job, would be unhelpful.
To further explain this, any transformation that involves change in physical structure (safety measures in this case) in an organisaion, requires capital. In Union Carbide’s case, top management needed to facilitate both its employees, and public (i.e. advertising campaigns, ensuring proper safety standards, training of the workers, compensation). All of these procedures necessitate a huge amount of capital. Safe to say, that if the company had not spent much trying to defend itself and instead had tried to mend its mistakes, it would not have had gone into ever-growing debt. But, the risk of losing, with having least amount of financial security, cannot be ignored nonetheless; (questioning the certainty of getting the princess upon slaying the dragon).
Finally, there may be an alarming corrosive energy in the top management as well, nevertheless. Human nature would compel people to separate their personal goals from organisational goals. It may be difficult to handle a massive amount of negative energy, if everyone is attuned to self-preservation (precisely what happened at Union Carbide).
Having said that, however, this will be a worthwhile area for future research, for change management in an organsation is an ongoing process, and builds upon all levels of hierarchy. As proposed by (Meindl, 1995), followership’s social constructs are based upon the different constants in an organisation that shape up an individual’s behavioural values. Thus, reflecting upon how each member may be able to contribute positively to the arena is an also interesting aspect for future research.
Reflections on skill development:
“A company’s perception of a crisis as a threat or an opportunity does appear to influence a company’s willingness to engage in primary crisis activities”, (Penrose, 2000). However Union Carbide’s case is a crisis situation within itself, but the context here to be realized is that management has to commit itself fully to yield success for the organsation.
Change comes from within. A good leader is always represented as the voice of his/ her subordinates. For the very reason, good communication forms an integral part of a leader’s routine. For the role that I have selected for myself, I would not only have to be a good speaker, but also a keen listener. Often most of the problems in an organization arise due to lack of understanding what the other party is saying. Not only this will eradicate the miscommunication, but also strengthen human ties.
This case also highlights the need for charismatic leadership. The people of the company are in need of inspirational motivation. I should be empathetic (individual consideration) towards their concerns, and reason with my peers to provide the much needed safety measures. Again, as I have mentioned before, it would benefit company in the long run, as it will promote loyalty. This will also increase the chances of productive energy that the company in all seriousness, is severely lacking.
Finally, there is a definitive role of strategic thinking in this to become a success story. I would have to demonstrate the role of decentralized workforce at horizontal peer level. Seeing that Union Carbide has a rigid bureaucratic structure, I may need to engage in unending discussions with my fellows, and as (Burnes, 1996) suggests, decentralized workforce works best in times of emergent change.
Conclusion:
The aim of this essay were to assess what leadership skills are needed in a change situation, and in what manner may these be qualities be industrialized. One of the primary inputs of change management is to be able to develop the necessary skills to lead people through that change.
First, ethical leadership is highlighted to be the main muscle of any organization; responsibility in business for those affected by the practices of the organization. Second, transformation leadership has been stressed upon as the creative energy flowing in an organizational setting that brings about revolution, both for the company, and the individuals working in it.
The study has investigated the overall effects of both ethical and transformational leadership, in a combined form for a crisis management change situation. The framework shows that these both styles are important for top management to follow (as lead by examples of other companies throughout). Moreover, the linkages between the two have been rationalised to being beneficial, using theories and concepts.
Although the literature review has emphasized more on the top level management, the situation setting applies generally the same in horizontal leadership context; reflections on how to prepare the leadership styles have also been given a thought upon. Role of the every single individual in an organisation should never be neglected, as firms have become more decentralized in the today’s world, the value of an individual’s commitment to the organization has increased tantamount.
Every aspect of an organsational setting has negative effects, as it has positive effects. Leadership styles, without their necessary elements, will in time lose their desired effect. This has been discussed further in the limitations.
Finally, the skills, that I as an individual need to develop as a leader in this organizational context have been elaborated. Further longitudinal research for this topic would be beneficial; reassess the evaluations through series of qualitative studies.