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Chapter 9 The Role of Values McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 9-2 Introduction • Benjamin Franklin formed the Junto – Goals were community fellowship and service – Character was a concern – His values were: • Temperance • Justice • Order • Moderation • Resoluteness • Cleanliness • Industry • Humility • Sincerity 9-3 Introduction • Some organizations view values as a requirement for success – Johnson & Johnson CEO James Burke took Tylenol off the market after seven people died during poisoning events • Results of a study of the financial performance of companies with written value statements: • Net income increased by a factor of 23 during a period when the GNP grow by a factor of 2.5 9-4 Values • Values are a social glue – They provide structure and stability for people with diverse backgrounds • Jack Welch, former CEO of General Electric, sees management values as a source of corporate identity – Values provide guidance for members who are independent decision makers 9-5 Values • Values: – Can mask hypocrisy – Must enter into daily practices of the organization – Must reflect enduring commitments • Leaders must: – Examine their own value systems – Put good intentions into actions that others can witness 9-6 Values • Things that reduce the character and strength of the organization: – Unclear values – Failure to enforce the values – Lack of agreement on core values • Author Leon Wieseltier writes: – The problem with society is that people believe in too much – Much is too easily acquired and too thoughtlessly held 9-7 When to Clarify or Reinforce Values • Red flags: – Members lack understanding about how they should behave as they attempt to meet goals – Different individuals and groups have different value systems – Top leaders send mixed messages about what is important – Day-to-day life is disorganized – Members complain about the organization – The organization has values, but does not practice them 9-8 Values • Management author Peter Drucker states: – Each organization has a value system influenced by its task • Health is the goal in every hospital in the world – For an organization to perform at its highest level: • Leaders must believe that what the organization does has value to people and society 9-9 Values • In A Business and Its Beliefs: The Ideas That Helped Build IBM, Thomas Watson, Jr. explains the importance of values: • To survive and achieve success, an organization must have a sound set of values • Leaders must adhere to those values • To meet challenges, organizations must be able to change everything about itself • Be open to change, but always remain true to core values 9-10 Values • Watson also said that IBM was successful because of three core values: – Respecting the individual – Giving the best customer service – Performing every job with excellence • When IBM has gone astray, it is because it deviated from these core values 9-11 Values and the Importance of Courage • Values in the American workplace: – Honesty – Respect – Service – Excellence – Integrity 9-12 Values and the Importance of Courage • When people define character: – What they say is important – What they do is more important – What they sacrifice for is most important • In its highest form, character is based on a value system that is known, cherished, stated, lived, and lived habitually • The highest form of living by one’s values is caring to the point of personal sacrifice 9-13 Values and the Importance of Courage • Character and leading by values require courage: – Philosopher-psychologist Rollo May explains the importance of courage: • Courage is the foundation that underlies and gives reality to all other virtues and values • Without courage, love pales into dependency and fidelity becomes conformism • “Courage” comes from the French word coeur meaning “heart” • It makes possible all the psychological virtues 9-14 Values and the Importance of Courage • Leadership situations are characterized by: – Ambiguity – Uncertainty – Danger • Leaders must act in spite of these factors • Leadership requires courage to act and live by one’s convictions 9-15 Traditional Definitions of Good • English philosopher Alfred North Whitehead wrote: – We are in the world, not the world in us – What is considered right and wrong depends on the universe and a person’s place in it – We are evolving creatures in an evolving world – Human ethics are changing also • What ought to be has had different meanings in different times and circumstances 9-16 Traditional Definitions of Good • There are been many definitions of the ethical person in Western culture: – Good and right have been defined in terms of: • Power • Personal integrity • Natural simplicity • The will of God • Pleasure • The greatest good for the greatest number • Duty and right action 9-17 Power • Italian diplomat and political writer Niccolo Machiavelli believed: – The best individuals adapt to market forces and become masters of manipulative relations – Flattery, deceit, and murder may be necessary to win and retain power – People should never cultivate private virtues that in public life would prove political suicide – People should develop vices if helpful to one’s rule – Ends justify means and might makes right 9-18 Personal Integrity • German philosopher Friedrich Nietzsche believed: – Human resoluteness, born of independent judgment, was the highest good – Individuals should be independent in thought and strong in conviction – Nature is filled with conflict spilling over into society – The best humans exhibit moral virtue (wisdom, justice, courage, and other ideals), regardless of loss or gain 9-19 Personal Integrity • German philosopher Marvin Heidegger believed: – In the Greek ideal of nobility – That adhering to personal principles in the face of social pressure to conform is important – That personal integrity is good, regardless of the results – That people must choose their lifestyle and commitments carefully 9-20 Natural Simplicity • Frenchman Jean-Jacques Rousseau wrote that: – Nature in essence is good, ergo so are human beings – To achieve the highest good, one must strive to be purely natural – Corruption comes only with civilization – Children should be raised in a state of simplicity 9-21 Natural Simplicity • Henry David Thoreau, author of Walden: – Wrote in a spirit of naturalness and simplicity – In this spirit, many people today resist technological changes, complex lifestyles, and artificial creations • French writer Vauvenargues, on the importance of naturalness: – Naturalness gets a better hearing than accuracy – It speaks the language of feeling – It is better than logic and rationality because it is beautiful and appeals to everyone 9-22 Will of God • Religious leaders announce visions and make moral judgments, drawing on the authority of a supreme being – Muhammad decreed the five pillars of Islamic faith: • Repetition of the belief • Prayer five times daily • 30-day fast of Ramadan • Alms giving • Pilgrimage to Mecca – These beliefs are held sacred by 723 million Muslims today • Nearly 3 billion adherents of other religions also define ethical good as the “will of God” 9-23 Will of God • Christianity: – No other body of thought has been embraced by so many people – The core of Christian character is based on the life and teachings of Jesus of Nazareth – The ethic Jesus taught was to love God and to love humanity • Belief in love is the ethical ideal of millions of people 9-24 Pleasure • The idea that pleasure is the highest state of goodness dates back to Aristippus (435-366 B.C.) – Experiencing pleasure and avoiding pain should be human goals – Pleasure of the moment should not be postponed for uncertain future pleasures • In “Reflections and Maxims,” Vauvenargues wrote: – We display indifference toward moral truth because we indulge our passions – We do not hesitate to act in order to satisfy desire 9-25 Greatest Good for the Greatest Number • Two of the principle architects of this belief: – Jeremy Bentham and John Stuart Mill • Moral philosophy of utilitarianism: – Reflects the ethics of both American democracy and Marxist communism – Proposes weighing the consequences of moral behavior and considering the interests of everyone involved 9-26 Duty and Right Action • Immanuel Kant, author of Criticism of Practical Reason and Fundamental Principles of the Metaphysics of Morals, believed: – People must choose the obligations that become their duty – People must be responsible for their own actions – A person with character will choose duty to conscience and will not succumb to base desires – Acts from a good motive and sense of duty are good, regardless of the consequences • This view greatly influenced Western civilization 9-27 Duty and Right Action • Personal conscience and duty are seen in the words of Israeli stateswoman Golda Meir: – “If I felt it was the right thing to do, I was for it, regardless of the possible outcome” • When faced with an ethical question, a person with character tries to sort right from wrong – Traditional definitions of good have guided Western culture – “People must stand for something, otherwise they will fall for anything” 9-28 Honesty as a Leadership Value • Effective leaders hold truth as a central value and the foundation for other values – The Bible: “Know the truth and it will set you free” – Shakespeare: “To thine own self be true” – Herb Kelleher, former CEO of Southwest Airlines: “Be yourself” 9-29 Honesty as a Leadership Value • The Bible, Shakespeare, and Kelleher agree that: – Character begins with truth – Truth is inside the person – The leader must be true to his values • Thomas Jefferson wrote: – In matters of principle, stand like a rock – Character is what you are – It is different than reputation, which is from other people – True character is in you 9-30 Full-Swing Values • Full-swing values: – Used to assess the strength of one’s values – Important for people in leadership positions – A full-swing is needed to hit a “home run” • True for questions of right and wrong, good and bad • Axiology is a branch of philosophy dealing with values 9-31 Full-Swing Values • Five Points: – Point 1: know one’s values – Point 2: cherish one’s values – Point 3: declare one’s values – Point 4: act on one’s values – Point 5: act habitually on one’s values 9-32 Your Personal Value Orientation • Cases of Jim, Jane, Jack, Jill, and John – Jim-knows values, has not examined others – Jane-knows and cherishes values – Jack-knows, cherishes, and declares values – Jill-knows, cherishes, declares and acts on her values – John-knows, cherishes, declares, acts and does it habitually 9-33 Your Personal Value Orientation • Full-Swing Values 9-34 Full-Swing Values • In every field, the highest level of leadership is full-swing – Leaders are impelled to act because the act is deemed good – Conscience dictates that the act is the right thing to do • The quality of doing the right thing for the right reason is called integrity – It is possessed by all truly great leaders 9-35 Leadership and Values • Why is it important for an organization to have values? • What is the role of the leader in establishing and enforcing these values? • There are many ideas on these questions • Few are as influential as those of the philosopher Plato 9-36 Leadership and Values • In Plato’s story The Republic, he retells the “Myth of Gyges” and the invisible ring – A shepherd finds a magic ring that makes one invisible – He uses the ring to eavesdrop, steal, and trespass – In a short time, he amasses wealth, kills the king, seduces the queen, and rules the land 9-37 Leadership and Values • Moral of the story: – Given power without accountability, an individual may do deeds that are harmful – People need the values of a just society and the oversight of wise and caring leaders – A republic is needed for the good of all individuals • A leader with false or harmful values can be injurious to others – Hitler Stalin, and many other tyrants in history are examples – Hence, leaders need to be caring, good, and strong 9-38 Leadership and Values • Culture shapes a leader’s values, which influences actions – African Society: • Ubuntu represents a collection of values, including harmony, compassion, respect, human dignity, and collective unity • Each of us is human through the humanity of other humans – A Zulu maxim: …a person is a person through other persons: my humanity is caught and bound inextricably in yours 9-39 How Leader Behavior Influences • Leaders who are immoral and non-principled: – Are difficult to forgive – Lack moral authority – Are not trusted or respected • The leader’s values determine the rightness and wrongness of what they do – The leader’s actions set the tone for other’s behavior and performance on the job – Leaders who are honest, unselfish, and dedicated help the group succeed 9-40 How Leader Behavior Influences • Warren Buffett’s order to senior managers when the took over the failed firm of Salomon: – Instantaneously and directly report any legal violations or moral failures by employees • Buffet understood that basic values are crucial for building trust – Honesty and responsibility are crucial for building trust, which is the bedrock of organizational survival and growth • Almost all business schools now require ethics courses 9-41 How Leader Behavior Influences • In general, a leader’s belief or value system will determine his/her success – Six values of caring leaders: • Honesty • Consideration • Responsibility • Persistence • Excellence • Commitment 9-42 How Leader Behavior Influences • Overall value of the caring leader is to serve – The caring leader focuses on the welfare of: • Customers • Employees • Shareholders • Community • Values affect everything a person does or is – What values do I wish to promote? – Are my actions helping accomplish that goal? 9-43 Personal Values • Aspects of society require leaders to commit to certain ideals and goals – This is addressed in “The Study of Values” by Gordon Allport, Phillip Vernon, and Gardner Lindzey • Complete Exercise 9-1 to discover your own value orientation 9-44 Study of Values Model 9-45 Interpretation of Questionnaire • Theoretical: – Interest is the discovery of truth – Concerns order and systematize knowledge, and understand the meaning of life • Economic: – Primary interest in what is useful – Major concerns: practical education; surpassing others in wealth 9-46 Interpretation of Questionnaire • Aesthetic: – Primary interest is high satisfaction in form, harmony, and beauty – Major concerns: life is a procession of events; individualism, self-sufficiency, and idealism • Social: – Primary interest is love – Major concerns: love is most suitable form of human relationships; kind, sympathetic, and helpful 9-47 Interpretation of Questionnaire • Political: – Primary interest is power and influence – Major concerns: social influence and exercise of authority • Religious: – Primary interest is spiritual peace – Major concerns: highest and most satisfying value experience; find meaning in the affirmation of life and active participation 9-48 Evaluating Personal Values • All values on the questionnaire are positive • Culture influences personal values • The questionnaire provides an overall value orientation • A person’s life allows maximum expression of personal values • Value systems are firm by the time most people reach adulthood • Different organizations reflect and endorse different value; leaders must promote the value system 9-49 Personal Value Questionnaire • Points to Remember: – Does not measure other important factors, such as aptitude, personal interests, temperament, or morality – Different values can enrich a group or organization 9-50 Core Values • Exercise 9-2 can be used to clarify individual and organizational values