In the first instance, every company represents a physical and cultural place of collaboration between people, and therefore has a unique and inalterable social dimension based on the amalgamation of values, culture and purpose. Often this dimension tends not to be taken into consideration when it comes to evaluating the actions of companies, while, in my opinion, this aspect embodies the corporate environment and is therefore absolutely essential to acquaint yourself with. Therefore the company, for those who manage it, is part of a process that begins with clearly determining what is the purpose, mission and values to be placed at the base of the achievement of results.
These are explicit and implicit values which, by influencing the behaviour of individuals and, from the point of view of ethics, guide their actions. Basically, the company’s value system directs its ethics as it directly influences the behavior of individuals within the company. Without a clear and shared communication of these aspects it is very difficult to determine the commonality of values and behaviors that represent the distinctive trait of every corporate culture.
A first positive consequence of an approach based on explicit sharing of the company’s value system is that an environment is determined within which the individual feels enabled to act and contribute. And above all, to take on increasing responsibilities, as the context within which its actions will be assessed is clear.
Companies that are strongly oriented towards innovation and value creation generally have this type of organization, which represents a real pre-condition, since the creation of a new company must necessarily rely on a strong ideals motivation and on an organizational context that rewards entrepreneurial spirit and dynamism.
Instead, in the absence of this framework of shared and clearly represented values, a context of bureaucratic regulation of behaviors is determined in which action is not encouraged, but regulated by bureaucratic practices and procedures.
If we wanted to use a “Weberian” category, we could define it as “idealtipica” of the structural aspect of the public sector, but in reality it is very well rooted even in many private business situations. In these circumstances, on the one hand, the precise definition of an individual’s area of responsibility is strongly standardized, and career paths are well defined. On the other hand, the individual’s autonomy is very limited, as is his ability to exercise his creativity.
It is extremely important, in my opinion that within each organization there is detailed and unrestricted reflection on these issues, because it is not secondary, but fundamental in determining company performance. Since we have said that the results are strictly dependent of the behavior of the individual and that these behaviors are in turn strictly influenced by the values system, the correlation between company performance and the company’s principles is evident.
A strong results orientation, for example, cannot be accompanied by an excessively bureaucratic organizational system, in which the non-total adherence to established procedures and practices is excessively denounced. Strong orientation towards results, on the other hand, requires a clear framework of values within which the individual can autonomously determine his own path. One could not imagine the phenomenon of Italian districts, as well as that of Silicon Valley, without a base of common values related to business creation, a strong drive for innovation and a sense of widespread entrepreneurship.
Also in this case the values are transformed into culture, which ethically orients the behavior of the company. But how do you concretely achieve this ability to direct the behavior of the company on the basis of the value system? First of all, a crucial role is played by leadership.
In fact, culture feeds on examples and displays that are typically expressed in the leadership style; every value not represented in the behavior of the leadership is drained of all importance. Another fundamental aspect to position the ethical dimension of a company is represented by the mechanisms of selection, promotion and remuneration of the people. If it is absolutely vital to clarify the horizon of the company’s reference values, it is also crucial that these values are placed at the basis of people evaluation processes. Only by doing so is it possible to fuel a virtuous circle that allows the company to operate within an efficient social system.
Meritocracy solidly observed, in a repeated and consistent way, is an extraordinary and powerful feeder of ethical orientation. However, it is only feasible if there is a clear reference ecosystem, represented by the interaction of values, leadership and organization.
The ethical dimension has much to do, in my opinion, with the sense that we attribute to what we do and is strongly anchored to the fundamental values that each person brings with him. The task of leadership is to ensure that within an organization can live and be valued common values, which are more than the sum of individual values, but that can in harmony with them determine the action of an organization.
Massimiliano Magrini
Published in the book “Etica anticrisi” Fondazione Banca Europa.