Values provide a framework for making choices between desirable and undesirable responses. Values also refer to priorities that an individual assigns to multiplicity of goals. These thus provide direction to and determine intensity of individual responses. The stronger the value system, the more intense will be the action in pursuit of that value. For an organisation to achieve unity of action amongst diverse employees, it is imperative for them to articulate core values and seek adherence to those values by every individual. The core values of an organisation are derived from the vision and expectations of strategic stakeholders.
Defining Values
Values may be defined as a specific mode of conduct or end-state of existence that is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence.As organisations struggle to survive in a highly uncertain and turbulent environment, they have no option but to carve out a space for themselves in the global economic order. Organisations can no longer afford to remain passive recipients of environmental forces; instead their sustained growth will depend on becoming active agents in transforming the environment to make it conducive to give expression to their ideas and intentions. It is these compulsions that have led most organisations to develop vision and articulate a set of values providing focus on their responses to the demands of internal and external stakeholders.Values are derived from the basic assumptions held by a group of people about themselves, others and the world. They provide a framework enabling individuals to prioritise their actions, make a choice of options, determine preferred ways of responding and distinguishing between desirable and undesirable responses. Values thus influence all our decisions and actions and have a self-prophetic impact on our being. Given its significance, it is obvious that unity of action amongst employees towards the common purposes of the organisation cannot be achieved unless they adhere to a common set of values.Values operate at three levels: individual, socio-cultural and organisational.
At individual level, values tend to differ in terms of their importance and intensity. Every individual therefore develops a hierarchy of values. Individuals belonging to the same socio-cultural milieu may differ in terms of their value system. Socio-cultural value systems are derived from the basic belief about the nature of society and its relationship with environment. It has its historical
roots in cultural traditions and heritage of the society and in its triumphs and trials. Likewise an organisation designed by people develops its own value system arising primarily out of compulsions to survive as a viable entity.Most organisations articulate core values such as quality, customer satisfaction, environmental protection, human resource development, human dignity and respect, technological development, social responsibility, etc.
Adherence to Core Values: Most organisations articulate certain core values that must be adhered to by the employees. Identification with these values by the employees is significant, as it becomes a substitute for sacrifices made by them by virtue of their membership in the organisation. Employees learn to accept these values and start believing that the organisation will not do anything that would hurt them. The personal costs of working long hours, meeting strict schedules and the like are overcome by adhering to higher human values such as serving the community or the society with high quality products and services. In the power sector, some of the private utilities have demonstrated better adherence to core values than public sector undertakings. That is why the political leadership is forced to privatise distribution of power. How far is it true in the case of your utility?
Value Actualisation: Core values developed by an organisation must be internalized by all members so as to bridge the gap between the value system of the individuals and the whole. In the absence of conscious effort to develop shared value system, the employees will continue to adhere to their archaic value system derived from the old assumptions, or by the pre-dominant value system prevalent in their socio-cultural milieu. In either case, the organisation will not be able to optimally channelise the energies and efforts of its members towards purposive action.
Although organisations have been quick to realize the significance of value driven responses, and have thus articulated their core values, adherence or internalization of those values on the part of the employees still remains an illusion. Because of abstract nature of values, employees often find it difficult to give concrete shape and translate them in their day to day activity, divided as they are along the lines of function, hierarchical levels, nature of product and services’. It is advisable therefore within the overall framework of the corporate value system that every department, every function and identifiable product or service group must develop operational values relevant to the demands of their task and their respective contexts.What should be the core values in a power utility? Managing the operation and maintenance of equipment to ensure good quality power supply,preventing commercial losses, instilling confidence in customers about correct billing, prompt redressal of grievances and above all giving them sympathetic hearing should be the minimum core values.
Globalisation and Core Values: One of the major challenges faced by the organisations functioning in the global economy is to maintain its core values,despite differences in respective local cultures in areas of its operation. It is quite likely that core values of an organisation are not congruent with the existing societal value system. This would necessitate special drive for upholding its core values. For example, most multinationals working in India have service orientation as an important core value. However, for an Indian company, due to the legacy of the state controlled economy, service orientation as a value is attached much less importance.
Box gives the Vision, Mission and Core Values of NTPC, a reasonably successful Indian enterprise in power sector.
Box : Vision, Mission and Core Values of NTPC
Values may be defined as a specific mode of conduct or end-state of existence that is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence.As organisations struggle to survive in a highly uncertain and turbulent environment, they have no option but to carve out a space for themselves in the global economic order. Organisations can no longer afford to remain passive recipients of environmental forces; instead their sustained growth will depend on becoming active agents in transforming the environment to make it conducive to give expression to their ideas and intentions. It is these compulsions that have led most organisations to develop vision and articulate a set of values providing focus on their responses to the demands of internal and external stakeholders.Values are derived from the basic assumptions held by a group of people about themselves, others and the world. They provide a framework enabling individuals to prioritise their actions, make a choice of options, determine preferred ways of responding and distinguishing between desirable and undesirable responses. Values thus influence all our decisions and actions and have a self-prophetic impact on our being. Given its significance, it is obvious that unity of action amongst employees towards the common purposes of the organisation cannot be achieved unless they adhere to a common set of values.Values operate at three levels: individual, socio-cultural and organisational.
At individual level, values tend to differ in terms of their importance and intensity. Every individual therefore develops a hierarchy of values. Individuals belonging to the same socio-cultural milieu may differ in terms of their value system. Socio-cultural value systems are derived from the basic belief about the nature of society and its relationship with environment. It has its historical
roots in cultural traditions and heritage of the society and in its triumphs and trials. Likewise an organisation designed by people develops its own value system arising primarily out of compulsions to survive as a viable entity.Most organisations articulate core values such as quality, customer satisfaction, environmental protection, human resource development, human dignity and respect, technological development, social responsibility, etc.
Adherence to Core Values: Most organisations articulate certain core values that must be adhered to by the employees. Identification with these values by the employees is significant, as it becomes a substitute for sacrifices made by them by virtue of their membership in the organisation. Employees learn to accept these values and start believing that the organisation will not do anything that would hurt them. The personal costs of working long hours, meeting strict schedules and the like are overcome by adhering to higher human values such as serving the community or the society with high quality products and services. In the power sector, some of the private utilities have demonstrated better adherence to core values than public sector undertakings. That is why the political leadership is forced to privatise distribution of power. How far is it true in the case of your utility?
Value Actualisation: Core values developed by an organisation must be internalized by all members so as to bridge the gap between the value system of the individuals and the whole. In the absence of conscious effort to develop shared value system, the employees will continue to adhere to their archaic value system derived from the old assumptions, or by the pre-dominant value system prevalent in their socio-cultural milieu. In either case, the organisation will not be able to optimally channelise the energies and efforts of its members towards purposive action.
Although organisations have been quick to realize the significance of value driven responses, and have thus articulated their core values, adherence or internalization of those values on the part of the employees still remains an illusion. Because of abstract nature of values, employees often find it difficult to give concrete shape and translate them in their day to day activity, divided as they are along the lines of function, hierarchical levels, nature of product and services’. It is advisable therefore within the overall framework of the corporate value system that every department, every function and identifiable product or service group must develop operational values relevant to the demands of their task and their respective contexts.What should be the core values in a power utility? Managing the operation and maintenance of equipment to ensure good quality power supply,preventing commercial losses, instilling confidence in customers about correct billing, prompt redressal of grievances and above all giving them sympathetic hearing should be the minimum core values.
Globalisation and Core Values: One of the major challenges faced by the organisations functioning in the global economy is to maintain its core values,despite differences in respective local cultures in areas of its operation. It is quite likely that core values of an organisation are not congruent with the existing societal value system. This would necessitate special drive for upholding its core values. For example, most multinationals working in India have service orientation as an important core value. However, for an Indian company, due to the legacy of the state controlled economy, service orientation as a value is attached much less importance.
Box gives the Vision, Mission and Core Values of NTPC, a reasonably successful Indian enterprise in power sector.
Box : Vision, Mission and Core Values of NTPC
Values and Attitudes
Values are expressed in terms of attitudes, which, in turn, provide direction to one’s responses. For example, a Professor who believes strongly in the work ethics will tend to exhibit certain attitudes towards students and methods of studies as a means of reflecting this value.
In the pre-liberalisation era, value system in organisations grew primarily out of the societal value system. The organisations were thus microcosms of the larger society. In the current and emerging scenario, organisations need to make deliberate choice with regard to developing value systems which would enable them to gain and maintain competitive edge.Aspects of Management
Work Ethics
The Industrial Revolution in Western Europe together with the growth of science and technology highlighted the importance of work ethics with focus on improvement in productivity and efficiency in formal organisations. It was believed that productivity improvement in organized sectors of economy was for the common good. Work ethics thus was seen as a natural consequence of capitalism and individualism. Contrary to the Western thought, Oriental cultures focused on work ethic in a non-individualistic setting. This notion of work ethic was derived from the joy of community activity. The Indian culture gives expression to work ethics in the Bhagavad Gita which enumerates the virtues of work and action as an affirmative step against inaction and alienation, and also condemns the magical ritualism of the earlier societies.Ethics influences most of the managerial decisions and internal and external activities of an organisation. While ethical behaviour includes good, right,just, honourable, and praise-worthy behaviour, unethical behaviour includes wrong, reprehensible behaviour or failure to meet an obligation.Work ethics is no longer confined to efficiency and productivity improvement but encompasses a wide range of behaviour, including tolerance and compassion, associated with managerial roles in organisations. Work ethics therefore has to be broadly seen in the context of organisational ethics. Organisations are experiencing pressures both from the government and public to become transparent in their dealings with and accountable to various stakeholders like the public, the government, customers, and the employees.On the other hand, there is compulsion on the part of the organisations to maintain high level of efficiency and productivity, and be competitive for their sheer survival.
Values are expressed in terms of attitudes, which, in turn, provide direction to one’s responses. For example, a Professor who believes strongly in the work ethics will tend to exhibit certain attitudes towards students and methods of studies as a means of reflecting this value.
In the pre-liberalisation era, value system in organisations grew primarily out of the societal value system. The organisations were thus microcosms of the larger society. In the current and emerging scenario, organisations need to make deliberate choice with regard to developing value systems which would enable them to gain and maintain competitive edge.Aspects of Management
Work Ethics
The Industrial Revolution in Western Europe together with the growth of science and technology highlighted the importance of work ethics with focus on improvement in productivity and efficiency in formal organisations. It was believed that productivity improvement in organized sectors of economy was for the common good. Work ethics thus was seen as a natural consequence of capitalism and individualism. Contrary to the Western thought, Oriental cultures focused on work ethic in a non-individualistic setting. This notion of work ethic was derived from the joy of community activity. The Indian culture gives expression to work ethics in the Bhagavad Gita which enumerates the virtues of work and action as an affirmative step against inaction and alienation, and also condemns the magical ritualism of the earlier societies.Ethics influences most of the managerial decisions and internal and external activities of an organisation. While ethical behaviour includes good, right,just, honourable, and praise-worthy behaviour, unethical behaviour includes wrong, reprehensible behaviour or failure to meet an obligation.Work ethics is no longer confined to efficiency and productivity improvement but encompasses a wide range of behaviour, including tolerance and compassion, associated with managerial roles in organisations. Work ethics therefore has to be broadly seen in the context of organisational ethics. Organisations are experiencing pressures both from the government and public to become transparent in their dealings with and accountable to various stakeholders like the public, the government, customers, and the employees.On the other hand, there is compulsion on the part of the organisations to maintain high level of efficiency and productivity, and be competitive for their sheer survival.
Corporate Governance and Business Ethics
Corporate Governance is the need for transparency, social accountability and social responsibility. Effective corporate governance requires a clear understanding of the respective roles of the board and of seniormanagement and their relationships with others in the corporate structure. The relationship of management with stockholders and employees should be characterised by candour and fairness, their relationship with the communities in which they operate should be characterized by good citizenship and their relationship with the government should be characterised by a commitment to compliance.
A good corporate governance structure is a working system for principled goal setting, effective decision-making and appropriate monitoring of compliance and performance. Through a vibrant and responsive structure, the management can interact effectively and respond to changing circumstances,within the framework of its corporate values. Xerox, Enron and Arthur Anderson are some of the biggest names in business, which have failed in adhering to corporate governance and the norms of business ethics. Corporate governance is attracting the concern of investors and the public in general. Organisations are required to comply with legal requirements, ensure respect for people, communities and the environment. A good example of such an initiative is of an NGO called Parivartan, which has decided to promote openness in governance. It empowers the citizens to access government files through incredibly simple mechanisms of filling a form and submitting it to the department concerned.
Corporate Governance is the need for transparency, social accountability and social responsibility. Effective corporate governance requires a clear understanding of the respective roles of the board and of seniormanagement and their relationships with others in the corporate structure. The relationship of management with stockholders and employees should be characterised by candour and fairness, their relationship with the communities in which they operate should be characterized by good citizenship and their relationship with the government should be characterised by a commitment to compliance.
A good corporate governance structure is a working system for principled goal setting, effective decision-making and appropriate monitoring of compliance and performance. Through a vibrant and responsive structure, the management can interact effectively and respond to changing circumstances,within the framework of its corporate values. Xerox, Enron and Arthur Anderson are some of the biggest names in business, which have failed in adhering to corporate governance and the norms of business ethics. Corporate governance is attracting the concern of investors and the public in general. Organisations are required to comply with legal requirements, ensure respect for people, communities and the environment. A good example of such an initiative is of an NGO called Parivartan, which has decided to promote openness in governance. It empowers the citizens to access government files through incredibly simple mechanisms of filling a form and submitting it to the department concerned.
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| Business Ethics of Corporate Management |
The Right to Information Act can also be seen as a step forward in this direction. In the power sector, BSES and NDPL are good examples of better corporate governance. Box is an exhibit of the corporate governance philosophy of InfoSys International Inc.’s principles. Can it be applied to your utility?
Box : Principles of Corporate Governance Philosophy of InfoSys International Inc.
1) Satisfy the spirit of the law and not just the letter of the law. Corporate governance standards should go beyond the law.
2) Be transparent and maintain high degree of disclosure levels. When in doubt, disclose.
3) Make a clear distinction between personal conveniences and corporate resources.
4) Communicate externally, in a truthful manner, about how we run our company internally.
5) Comply with the laws in all the countries in which we operate.
6) Have a simple and transparent corporate structure driven solely by the business needs.
7) Management is the trustee of the shareholders’ capital and not the owner.
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