MBAA/NAMS 2013 paper presentation, "CEO Decision Making Challenges in a Stressful Environment: A Delphi Study." Bill Minnis, Eastern Illinois University and William Wilhelm, Indiana State University

1.
Perceived
Decision-­‐Making
Pressures
on
Community
Bank
Chief
Execu<ves
William
J.
Wilhelm
Indiana
State
University
William
C.
Minnis
Eastern
Illinois
University

2. Why
this
research?
• frac<onal
leave
of
absence
to
serve
as
president/CEO
of
a
community
bank
2008
-­‐2012
• discovered
troubled
asset
valua<on
issues
• a
guest
speaker
in
Dr.
Wilhelm’s
moral
reasoning/ethics
course
• a
member
of
the
president/CEO
community
during
period

3. Research
Objec<ves
• iden<fy
and
rank
the
most
stressful
issues
among
community
banking
execu<ves
• iden<fy
contextual
cues
(situa<onal
variables)
that
create
greatest
levels
of
perceived
pressure

4. Samples
• CEO
Forums,
Community
Bankers
Associa<on
of
Illinois
• Survey
(Delphi)
I,
n
=
12
(sent
to
22
CEOs)
• Survey
(Delphi)
II,
n
=
8
(sent
to
26
CEOs)
• Small
response
volume
in
both
surveys
noted

5. Survey
(Delphi)
I
–
Round
1
Q1:
“What
types
of
decision
dilemmas
cause
you
the
greatest
stress?”
– Open-­‐ended
response
requested

6. Q2:
:
“Please
describe
how
various
stakeholder
groups
(name
the
group)
cause
you
the
greatest
stress
in
your
decision
making.”
-­‐Open-­‐ended
response
requested

7. Phrase
Analysis
Round
1
• There
is
a
predominant
percep<on
of
diminishing
managerial
control
due
to
several
factors
including
regula<on
and
regulators,
higher
costs,
and
a
poor
loan
environment.
• There
is
a
perceived
challenge
concerning
the
management
of
change.
This
was
primarily
associated
with
examples
of
personnel,
board
of
director
makeup
and
regulatory
prepara<on.
• There
was
a
palpable
lack
of
op3mism
that
improvement
would
occur
in
the
“near
future.”
The
lack
of
op<mism
was
closely
associated
with
con<nuing
regulatory
development.

8. Round
2
(n
=
6)
Q1:
Provided
feedback,
requested
confirma<on
Ra<ngs
of
Round-­‐One
Interpreta<ons

9. Q2:
:
“Concerning
the
areas
of
diminishing
control,
management
of
change
and
a
low
level
of
op<mism,
how
will
you
alter
your
management
and
decision
style
to
deal
with
the
stresses?”
(n
=
5)
– always
be
a
proponent
of
change
– retain
more
capital
– stand
my
ground
in
balancing
regulatory
compliance
tasks
and
serving
customers
– lead
by
seang
a
posi<ve
example
– delegate
more
responsibility
to
the
management
team
and
“tread
water”
for
five
more
years
and
get
the
hell
out
of
banking.
• The
researchers
found
no
common
theme
in
this
range
of
responses
except
that
they
all
focused
on
performance
criteria.

10. Q3:
“Do
you
feel
Community
Bank
presidents/CEOs
are
struggling
with
ethical
conflicts
due
to
the
stresses
created
by
regula<on,
change,
and
the
uncertain
future?
If
you
do,
what
ac<ons
will
most
likely
be
involved?”
– not
struggling
with
any
ethical
conflicts
– few
ethical
cases
encountered
(no
clarifica<on)
– to
characterize
conflicts
as
ethical
“sounds
too
drama<c”
– Shouldn’t
cut
corners
to
save
costs
or
make
loans
– regulators’
efforts
are
not
“directed
correctly”
(no
clarifica<on)
The
researchers
did
not
iden<fy
any
common
theme
in
the
responses.
Further,
there
were
no
responses
that
clearly
addressed
the
ethical
percep<on
issue.

11. Analysis
Survey
I
• Pressures
primarily
from
regulators:
– diminishing
managerial
control
– change
management
challenge
– lack
of
op<mism
• Management
strategies
to
meet
challenges?
– No
common
theme
in
range
of
responses
except
that
all
focused
on
performance
criteria.
– No
responses
acknowledged
ethical
percep<on
by
public
•
Are
CEOs
struggling
with
ethical
conflicts?
–
No
common
theme
in
the
responses.
–
No
responses
acknowledged
ethical
percep<on
issue

12. Survey
(Delphi)
II
(n
=
8)
Q1:
:
“What
specific
issues
pressure
you
the
most
as
far
as
working
toward
profitability
and
also
ensuring
a
perspec<ve
among
stakeholders
that
your
organiza<on
is
performing
ethically?”

13. Q2:
:
“Please
describe
how
various
stakeholder
groups
(name
the
group)
cause
you
the
greatest
stress
in
your
decision
making.”
4
responses
-­‐
regulators
2
responses
-­‐
board
members
2
responses
-­‐
none

14.
Q3:
“How
do
you
deal
with
poten<ally
being
perceived
as
unethical
in
the
preceding
issues
that
you
iden<fied?”

15. Analysis
Survey
II
• Same
pressures
as
iden<fied
in
Survey
I
sample
• Despite
direct
ques<oning
about
public
ethical
percep<ons,
– responses
acknowledged
only
performance
metrics
– ethical
percep<on
issue
dismissed
as
not
relevant

16. Conclusions
• CEOs
in
both
surveys
did
not
recognize
any
ethical
contexts
inherent
in
iden<fied
stressful
situa<ons.
• This
may
be
manifesta<on
of
moral
decoupling.
• Moral
decoupling
heuris<c
warrants
further
inves<ga<on.

17. moral
decoupling
-­‐
wherein
judgments
of
performance
are
separated
from
judgments
of
morality

18. Future
of
Research
Effort
• Follow-­‐up
presenta<on
of
Delphi
findings
with
par<cipants
• One
more
opportunity
to
gather
data
from
their
response
and
consider
moral
decoupling
• Will
consider
longitudinal
study
to
measure
ongoing
changes
in
percep<ons
and
management

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