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Ethicalbehavior, Inc Organizational Behavior Analysis

Essay by   •  June 25, 2012  •  Case Study  •  6,388 Words (26 Pages)  •  1,583 Views

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This case study is about a detailed analysis of EthicalBehavior, Inc. (EBI), which provides the most innovative online ethics training programs to different businesses. The case study includes the analysis of recently retired CEO's leadership style, the power structure, communication patterns and organizational culture at EBI. Based on this information, an action plan is devised for the newly appointed CEO, Mary Elliot. The action plan includes the leadership style, communication patterns and a list of priorities she needs to address for initial six months. This research is based on the limited information perceived from Mary Elliot's interviews with the key managers of the organization and two focus groups of employees. So the analysis and action plan is bases on this information.

A Review of the Case Study

EthicalBehavior, Inc. (EBI), founded by Fred Lominson in 2001, provides online learning platform to provide ethics training programs in banking and finance industries. EBI has seen a steady growth till the banking crisis in 2007, after which there was an exponential growth in its business. Mary Elliot has recently joined EBI last month after the retirement of former CEO, Jack Sherman, who retired in December 2011 due to his health issues.

After joining EBI, Mary started interviewing the key members of the leadership staff to understand their points of view on the company culture. Then she held two focused groups with fifteen members each. The group members were selected across the organization to get a better understanding from all types of employees.

The purpose of this case study is to analyze the feedback Mary received from the key members and the focus groups to understand the current organizational culture by understanding the following items:

1. Former CEO's leadership style

2. Organizational power structure

3. Current communication patterns

4. Recommendation for possible organizational cultural change

Based on this analysis, an action plan will be devised for Mary Elliot that will include:

1. Recommended leadership style

2. Recommended communication patterns

3. A list of priorities for her for next six months

An Analysis of Jack Sherman's Leadership Style

While interviewing the key members and focus groups, Mary found out the following information about Jack Sherman:

Jack was an outspoken and energetic person who used to communicate with the employees at all levels. He was also a little proud of personally hiring all the employees. He made all the decisions in the organizations by himself by consulting his own inner circle of three senior employees. He did not create formal procedures in the organization and also disagreed to introduce a formal performance evaluation process.

Jack Sherman's Personality Traits Analysis

Jack was talkative, outgoing and enjoys communicating with the employees at all levels in the organization. So he was an extrovert. He made all his decisions by himself in the organization, and by consulting with the inner circle of three managers. He did not trust the decision making capabilities of rest of the employees. For example Sally Mills, the marketing director was not authorized to make any marketing related decision, and those decisions were made by Jack himself. That shows that his personality was lacking the agreeableness trait.

He also lacked conscientiousness in his personality. For example, when Pat Jackson, the Human Resource Manager, recommended introducing a formal performance evaluation process in the organization, he overruled her recommendation. Similarly he also avoided written policies and procedures in the organization.

Jack Sherman was a creative person and always welcomed new ideas that show openness in his personality. That was why he avoided introducing formal protocols and procedures in organization as he felt that would discourage employees to come up with new ideas.

Moreover, Jack was a leader with high self-esteem and self-confidence in his personality. He had a pride in his personality that he had hired all the employees in the organization by himself. Similarly, focus groups' feedback also confirmed that employees respected him and listened to him that show high self-esteem personality.

Jack Sherman's Decision Making Style

Since Jack Sherman was making all the key final decisions by himself but after consulting and using the skills, and ideas of his inner circle members, his decision making style was consultative (Brown, E. (2007, September 02). Leadership styles: Dictatorial, authoritative, consultative, participative. Retrieved from

Also, as per the Leader-Member Exchange (LMX) Theory, Jack had high-quality LMX relations with his the three members of the inner circle, also known as "in-group" members (Mind Tools Ltd. The Leader-Member exchange theory. Retrieved from, that includes Tom McGraw, Michael Monroe and Stephen Boone. They were the most trustworthy employees for him and Jack gave more attention to them. However his "out-group" members with relatively low-quality LMX relation were Pat Jackson, the Human Resource Manager, and Sally Mills, the Marketing Director. There was a lot of turnover in Human Resource department, and Pat was a new employee in EBI hired only six months ago. She was still in the phase of building her trust level by performance and the refusal of implementation of performance appraisal system testifies the low-quality LMX relation. On the other hand Sally Mills was one of the oldest employees at EBI; however her perception in the management was that she was not a trustworthy person and that she could not perform her duties well as a marketing director.

Jack Sherman's Leadership Style

After analyzing Jack's personality traits and his involvement in decision making, we observe that Jack was well respected in the company. He had integrity and always tried to set good example to its employees. Generally he encouraged the employees to innovation, being an extrovert by personality, he went and directly spoke with the employees at all levels by giving them personal care. He had



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