Thursday, August 18, 2005

The Value of Corporate Values

An outstanding in-depth article on the Value of Corporate Values can be found in an article by Reggie Van Lee, Lisa Fabish, and Nancy McGaw in this month's S+B.

Based on a survey at 365 companies in 30 countries, the authors claim "increasingly, companies around the world have adopted formal statements of corporate values, and senior executives now routinely identify ethical behavior, honesty, integrity, and social concerns as top issues on their companies’ agendas".

The highlights of the survey and article are:

  1. A large number of companies are making their values explicit. That’s a change — quite a significant change — from corporate practices 10 years ago. The ramifications of this shift are just beginning to be understood.
  2. Ethical behavior is a core component of company activities.
  3. Most companies believe values influence two important strategic areas — relationships and reputation — but do not see the direct link to growth.
  4. Most companies are not measuring their “ROV.”
  5. Top performers consciously connect values and operations.
  6. Values practices vary significantly by (continental) region.
  7. The CEO’s tone really matters.

The article provides quantitative data about these 7 findings and concludes with "A commitment to corporate values may be in vogue, but the public will remain suspicious until corporations both understand and can demonstrate that they are committed to using values to create value".

2 Comments:

Anonymous Anonymous said...

There's no ethical behavior happening at Home Depot, I can tell you this right now! If you follow the rules and play their game you might have a job. But if your trying to take care of a cust. install problem and you show any concern for the cust. your screwed. I know someone who worked for H.D. for 11.5yrs and was let go for trying to get a cust. install problem (for the 10th time) taken care of, and at the end of conversation, the installer was not going to fix the problem, the associate let their HRM, who by the way was encouraging the associate during the conversation see them upset for the cust., HR said you did great go take a walk and relax, she later wrote that person up and got them fired. When other long term H.D. associates heard that this associate got let go, their comments where we all need to fear of jobs if they let this associate go because no one Bleeds ORANGE more than this associate.

8:21 PM  
Blogger David Obarowski, Esq., EthicNet.com said...

Thanks for citing this intriguing study of ROV by Booz Allen Hamilton. A distinction should be made (as noted in the BAH study) between “measuring” and “managing”. In fact, the study revealed that nearly half of the companies surveyed do indeed have processes in place to measure ROV. The real breakdown rather occurs when companies attempt to manage those measurements, to operationalize their values into a closed-loop system of true self-governance.

I’ve written about the ROV study in my blog, EthicNet.com at:

http://ethicnet.typepad.com/ethicnet/2006/09/trends_does_you.html

4:07 AM  

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