I have been following the reportage on the Two Serendra explosion with great interest. At the personal level, I have been seriously considering moving into a condominium for the convenience it will afford in terms of nearness to the workplace and general security. Still, I’ve always been wary about being too close and wall-to-wall with people I may not even know, and whose unknown behaviors may ultimately affect my own safety. I’m also rather skeptical about the quality of professional property management nowadays. The Two Serendra case gives me more to think about.
As a management researcher and business ethics educator, I’m interested to know whether the building management did its part in adequately protecting the safety of the residents. A government fact-finding panel concluded that the explosion was due to a gas leak. While fault has not been attributed to property manager, Ayala Land President Tony Aquino announced that it has permanently shut down the centralized liquefied petroleum gas (LPG) distribution system at the building.
The merits of this decision is being debated. After all, piped-in LPG is used in many residences and malls all over the country and the world. Moreover, no direct link between the company’s system and procedures and the explosion has been made. This is a costly decision on the part of the company which, I can only assume, was taken only after much reflection.
Reflection is critical to sound managerial decision-making. A manager’s decision to apply what may be called “an abundance of caution” even when he may not be clearly at fault can only generate the trust of stakeholders. The legal counsel representing individuals affected by the explosion expressed surprise at the company’s early decision, calling it an “implied admission” of fault. But such a proactive decision by a company in the face of a safety issue, while rare, is not unheard of. In 1982, Johnson & Johnson recalled Tylenol when a number of people died after swallowing cyanide-laced capsules of the best-selling pain-killer. James Burke, the company’s chairman, led the recall decision despite the lack of any fault attributed to the company. Burke explained that the company’s mission commitment to the welfare of those who use its drugs was the primary consideration for the recall.
Ayala Land’s and Johnson & Johnson’s approach is in stark contrast to the approach of Ford in the infamous Pinto fires in the 1970s. According to research on the case, the company knew that the car had a design defect that would make it explode when rear-ended with sufficient force. Yet, the company only decided to recall after a number of passenger deaths, a growing public outcry and legal pressures.
Dr. David Coghlan, author of Doing action research in your own organization and visiting scholar on management reflection and action research at De La Salle University, explains that “reflection is the process of stepping back from experience to question it, and to have insights and understanding with a view to planning further action.” Thus, when managers think out of their usual frame—normally involving profits and costs—they are able to see the implications of their action or inaction, both for the company as well as its stakeholders. This enables them to act with greater prudence, and even leadership, during crisis situations.
I admire managers who can accomplish targets and bring in the numbers. But beyond this, I admire more those who can reflect.
Dr. Benito Teehankee is the chairman of the Management and Organization Department at De La Salle University. He may be emailed at email@example.com. The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty and its administration.