MANAGEMENT MYOPIA Management myopia reflects a limited or narrow view of organizational capabilities, environmental forces, and strategies that may lead to major errors in judgment by senior executives (Levinthal et al., 1993; Levitt, 1960; Miller, 1993; Miller, 2002; Richard, Womack, & Allaway, 1993). Levinthal and March (1993) identified three forms of myopia that arise from simplifying experience and specializing adaptation. Spatial Myopia: It is the lack of awareness of other technologies, processes and routines available within or outside the organization (Miller, 2002). Learning favors technologies and routines near to the learner (Levinthal et al., 1993). Spatial myopia limits the set of alternatives considered for implementation. Spatial myopia is consistent with a focus on dominant technologies, core competencies, and the exploitation and development of existing firm capabilities. Temporal Myopia: It is the lack of awareness of, or interest in opportunities and investments beyond the near term (Levinthal et al., 1993; Miller, 2002). It involves sacrificing the long run for the short term (Laverty, 1996). Temporal myopia will

to reinterpret historical results in a more favorable light. Hubris encourages senior executives to overestimate their ability to manage uncertainty and risk. Hubris Myopia: It is unjustified overconfidence in an individual’s or an organization’s capabilities.often be reflected in a preference for low risk. . an outcome consistent with decisions made under spatial myopia. Temporal myopia. 1997. however.. relatively certain ventures and projects. Moreover. 1993). near term. Temporal myopia may contribute to spatial myopia through a focus on the more certain near technologies and opportunities. Webster's Dictionary definition of hubris is "exaggerated pride or selfconfidence.. an excessive interest in the short-term is often associated with a financial approach to strategic decisions. will likely discourage long-term investments in the current business. Kahneman & Lovallo. 1997). and to attribute success to abilities and failure to luck or external factors (Hayward et al. often resulting in retribution" (Hayward et al.

"there is no let up this evil . cars and foreign junkets to doctors may come to an end if the government accepts recommendations made by the parliamentary standing committee on health. But despite such codes. The Medical Council of India (MCI) too had formulated rules for doctors to oversee marketing of drugs in 2009.ETHICAL PROBLEMS MANAGER’S FACE IN DECISION MAKING LEADING TO MYOPIC BEHAVIOUR 1) MICRO LEVEL PROBLEM a) Confronting expense account cheating b) Confidentiality of company c) Continuing harmful environmental practices and failing or exceeding in managerial role d) Accepting Gifts EXAMPLE: The obnoxious practice of drug companies giving costly gifts such as gold chains. The parliamentary panel has recommended that this code by made mandatory. The department of pharmaceuticals has in place a code of conduct for drug companies to restrict such unethical practices. but it is voluntary in nature.

music systems. SOURCE FROM: (6th JULY . INDIA TODAY) 2) MACRO LEVEL PROBLEM a) Corporate Social Responsibility By laying Corporate mission / objectives . SOURCE FROM: (12th MAY.2011 HEADLINES TODAY) . the state government is set to cancel licences of all those found guilty of selling banned drugs. the report says. EXAMPLE: Punjab Deputy Chief minister Sukhbir Singh Badal has taken action on the chemist shops in Patiala selling banned drugs. gold chains etc to obliging prescribers who then prescribe costlier drugs as quid pro quo". While raids are being conducted on the shops. cars. purpose.2012.practice and pharma companies continue to sponsor foreign trips of many doctors and shower them with high value gifts like air conditioners.

Managers should be made understood that its far better to incur the cost of mechanisms to ensure ethical practices now than to incur costs of litigation later to overcome myopic behaviour of managers.HOW MANAGERS CAN OVERCOME MYOPIC BEHAVIOUR a) Young managers should understand & be aware of the reasons that underline ethical principles. c) d) Managers should be made awrae of state-of the – art legal matters. Managers have to inculcate proper ethical knowledge & develop mind create awareness through training. These are helpful in forecasting ability to reason when applying these principles. b) Managers should be made to realize their social responsibility. CONSEQUENCES OF MYOPIC BEHAVIOUR . Attention to ethics ensure highly ethical policies & procedures in the workplace. It is vital part of ensuring compliance by managers with company standards of conduct.

reliability. The bank was founded in 1996 as Trust Merchant Bank. managers of the bank started in engaging in non-core activities. performance . This was attributed to weak controls and risk management systems. In 2004.5 million. with shareholder's equity of $14. it had become the largest bank in Zimbabwe by balance sheet size. the bank's total asset valuation was reported as US$38. its growth came with several problems.8 million. As the Zimbabwean economy deteriorated. This worsened its liquidity position. paving the way for its transition to Trust Banking Corporation. it was closed down by the Reserve Bank of Zimbabwe (RBZ). The major reason was that the bank was illiquid and its managers had been irresponsible in managing depositors's funds. However. measurement. banks such as Standard Chartered . which had hitherto started to deteriorate. In December 2003. Prior to this corrective action. TQM includes high priority on certain operating values. It transformed its banking licence to commercial banking licence in 2000. the national banking regulator. As of December 2011. Example: Trust among shareholders. The bank grew rapidly. Trust has suffered a ZW$7 billion fraud committed by its own staff.OF MANAGERS a) Devaluating TQM (TOTAL QUALITY MANAGEMENT). and by 2003. EXAMPLE Trust Bank is a small financial services provider in Zimbabwe.

ZimbabaweTrust_Banking_Corporation) b) unethical practices by myopic behavior tarnishes company image in long run HOW MYOPIC BEHAVIOUR CAN BE . It was kicked out of the central clearing system several times SOURCE FROM: (www.Zimbabwe and Stanbic Bank Zimbabwe began rejecting to settle Trust Bank cheques because of its precarious liquidity position.

AVOIDED? Managers can avoid myopic behavior if they ascertain ethical behavior in following concerns: a) Environmental issues b) Product & work place safety c) Security of company record d) Shareholder interests .

TYPE OF ETHICALLY QUESTIONABLE MANAGERIAL RULE RELATED ACTS LEADING TO MYOPIA 1) MANAGERIAL ROLE DISTORTION FOR THE ADVANTAGE OF FIRM ARE: a) Bribery b) Price fixing c) Manipulation of suppliers 2) MANAGERIAL ROLE OVER EXERTION: a) Unauthorized high-risk investment b) Continuing harmful environmental practices c) Failure to cooperate with regulatory agencies .

FACTORS LEADING TO MYOPIC BEHAVIOUR BY MANAGERS a) Managers deviate when they are trying to meet goals and have to cut corners to do it. who himself may not know what is going on. ethical codes can satisfy this need for guidelines. f) They take poor decisions without thinking of implications g) Ambiguous situations create problem in integrity. Competition b) Pressure of budget system c) Promotion system or merit pay system under which they work d) They feel that management wants them to save money even at the price of unethical behavior e) They follow orders of someone . EXAMPLES OF FEW COMPANIES THAT HAD OVERCOME MYOPIC BEHAVIOUR: . However.

They are not likely to engage in theftsand frauds. b) Hewlett-Packard maintains high ethical standards in their treatment of customers. So employees are loyal to company. Their managers felt to protect the public & took over all the capsules from all places world over. They provided high quality of product and services c) Johnson & Johnson: Several persons died after consuming TYLENOL capsules contaminated with poison. A crisis incident that might have destroyed the company became a catalyst that boosted its image in eyes of millions of consumers SOURCE FROM: (BUSINESS ETHICS AND MANAGERIAL VALUES BY S. This has helped them to get more business share and raise in prices. IBM management do not have monitoring & keeping watch on them. PAGE60) a) EXAMPLES OF FEW COMPANIES THAT WERE ENTANGLED BY MYOPIC .K BHATIA .IBM cultivated a tradition of ethical treatment of employees.

it is only targeting eight: the Galaxy S 4G. Galaxy S II AT&T. Galaxy S II Skyrocket. A hearing which was held on 20 September. As for the meat of that verdict — the $1.1 tablet and Samsung's smartphones to be infringing on Apple's patents. At the moment. Apple has said it has the right to ask for bans on all 28 of the Samsung Android phones that were found to be infringing. Galaxy S II T-Mobile. Galaxy S II Epic FAILURE OF MTNL .05bn in damages that Samsung has to pay Apple for past infringements — Samsung has filed to have that put on hold while the court decides on its appeal. 2012. though. banned Galaxy Tab 10.BEHAVIOUR: SAMSUNG AND APPLE CASE: The judge in the US Apple-Samsung case has banned of eight or more Samsung Android smartphones. Droid Charge and Galaxy Prevail SOURCE FROM: (David Meyer | August 29. zdnet. Galaxy S Showcase.

Delhi and Mumbai but ever since 2002 its shares started declining in the market. SOURCE FROM: (MTNL LINK) Bhopal Gas Leakage Tragedy . FOLLOWING ARE THE REASONS FOR FAILURE: a) came up with 2G & 3G long after other companies b) broadband connection problem c) high prices d) poor services. This was the result of the shortsightedness of the managers & the management. MTNL was set up on 1 April 1986 by the Government of India with the aim of upgrading the quality of telecom services. The company had a monopoly in Mumbai and Delhi until 1992.Mahanagar Telephone Nigam Limited (MTNL) is a state-owned telecommunications service provider in the metro cities of Mumbai and New Delhi in India and in the island nation of Mauritius in Africa. e) Late entry in tablets. when the telecom sector was opened to other service providers. expanding the telecom network. introducing new services and raising revenue for the telecom development needs of India's key metros .

and 1.000inhabitants to flee in panic. Images of stunned families burying or burning their dead and blaming Union Carbide for their agony were broadcasted worldwide. 70. By the end of the week more than 2000 people had died from inhaling the gas. The Indian Government accused the plant management of failing to take adequate safety precautions and indicated that it held the parent company ultimately responsible. There were immediate repercussions for Union Carbide and for the chemical industry as well. quickly killing hundreds-including many children. Lawsuits brought by American lawyers on behalf og the victims asked for billions of dollars in compensatory and punitive damages and threatened to send the company into bankruptcy.Shortly after midnight on December 3. Officers in the United States and India called for increased regulation and inspection of chemical processing plants. The choking gas covered the town. India a cloud of deadly methyl isocyanate gas leaked from a pesticide owned by the Indian subsidiary of Union Carbide. who were less resistant to gas than adults-and forcing Bhopal’s 6. Union carbide’s stock price plumtered. 1984 outside Bhopal. making Bhopal’s ‘night of death’ the worst industrial disaster in history. Several .50. it halted production of methyl isocyanate at the one west Virginia plant that produced the chemical in United States.S localities considered passing “right-to-know” laws that would require chemical companies to provide detailed information about hazardous materials to the employees who make them and to residents living near the plants.000 more had to be hospitalized for respiratory and eye damage. Many U.

“There’s no criminal responsibility here”. while expressing profound sympathy for the Bhopal’s victims and promising to make a fair restitution. appeared paralyzed by the magnitude of Bhopal’s suffering. In the wake of protests against Union carbide in the other parts of the world. Union Carbide. Corporate chairman Warren Anderson rushed to India to inspect the site and was briefly arrested by Indian authorities. Union Carbide’s one hundred thousand employees observed a moment of silence for the dead and injured. production at many plants temporarily dropped. said Anderson. However. some multinational corporations claimed that the Bhopal disaster had chilled the international climate for U. many donated money for disaster relief.companies countered with voluntary right-to-know programs to head off public sentiment for government regulation. Morale at the company was low. Union Carbide maintained its essential innocence. SOURCE FROM: (BUSINESS ETHICS AND MANAGERIAL VALUES BY DR.S business. ABAD AHMAD) THE TOBACOO COMPANIES . Top management spent sleepless nights grappling with the company’s crushing problems and uncertain future. which had earned an above-average record for industrial safety over the decade preceding the disaster.

if the U.Phillip Morris. Liggett. to design a safe product. VELASQUEZ) . despite published research showing that smoking causes cancer.S. SOURCE FROM:(BUSINESS ETHICS CONCEPTS AND CASES BY MANUEL G.On May 24. Reynolds.S Department of Justice(DOJ) proved that since 1953 they knowingly conspired to deceive the public about the risks of smoking and its addictive nature. 2004. the company instead did no research and tried to suppress research on smoking risks. District Judge Gladys Kessler ruled the big Tobacoo Companies. In1950s .. U. the group advertised “ there is no proof that cigarette smoking is one of the causes” of lung cancer and from the 1960s to 1990s advertised that “ a cause and effect relationship between smoking and disease has not been established” . failed before 1969 to warn of the risks and addictive nature of smoking and targeted children who could not know true risks of smoking. The DOJ claimed that in1953 the companies met in New York and formed a group called the Tobacoo Industry Research Committee that began a “ conspiracy to deny that smoking caused diseases and to maintain that whether smoking caused diseases was an ‘open question’ despite having actual knowledge that smoking did cause diseases”.would be liable to pay $280 billionalmost all their profit during the last 50 years. designed “low nicotine” cigarettes whose risk were same as regular cigarettes. and to warn users of all dangers. Finally DOJ claimed that while companies had a uty to test their product.

48.(12th MAY.BIBLIOGRAPHY 1) Business Ethics Concepts and 7) (www. 274-275 2) Business Ethics and Managerial Values. 6th EditionManuel G.S.K Bhatia. Velasquez.60. INDIA TODAY) 4) Headline today. zdnet.ZimbabaweTrust_Banking_Corporation) .81 3) India today.2012.2011 HEADLINES TODAY) 5) MTNL Link 6) (David Meyer | August 29. 11-19. 2012.(6th JULY .

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