Organizational Values
2.8 Organizational Values According to authors Thompson, Strickland, and Gamble (2004, p. 27), a company’s values are “the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company’s business and pursuing its strategic vision and strategy.” In some organizations, such norms are democratically derived and clearly stated, if not rigorously followed. In many other organizations, no explicit values statement exists. Does it matter? In today’s business world, whether a formal state- ment of organizational values exists, individual executives may feel at liberty to behave any way they want. It is more the rule than the exception that money and greed are what drive such behavior.
The corporate graveyard is littered with companies whose executives acted unethically and when caught brought the company down with them. The high profile cases of Enron, Arthur Andersen, WorldCom, Adelphia Communications, Qwest, and Tyco International, are but a few examples. Enron, for example, had publicly stated values of respect, integrity, communication, and excel- lence; yet its executives violated every one of them. The values were not sufficiently ingrained to prevent the unethical, even criminal, behaviors that were eventually exposed. In fact, corporate corruption is widespread. According to a 2011 survey conducted by the Ethics Resource Center (2011), 45% of U.S. employees observed wrongdoing within their organizations. We can assume that public exposure of these incidents would erode consumer perceptions of credibility and trust in those companies—and that would be disastrous for brand reputation.
Stop and think for a moment about all the places where you shop or do business and why you do. Which ones get your patronage because of how they treat you? Do you buy their products
Finally, GE has developed a grading system for evaluating its 85,000 managers and professionals every year, placing them into one of five tiers: the top 10%, the next 15%, the middle 50%, the next 15%, and the bottom 10%. Everyone in the top tier gets stock options, no one in the fourth tier gets any, and those in the bottom 10% are weeded out of the company. The CEO personally reviews the performance of the top 3,000 managers. According to Jack Welch, GE’s CEO from 1980 to 2001, “The reality is, we simply cannot afford to field anything but teams of ‘A’ players” (Thompson, Strickland, & Gamble, 2004).