Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance

Harvard Business School professor Lynn Sharp Paine had been studying corporate malfeasance long before the Enron debacle. In her forthcoming book, Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance, she attempts to introduce readers to an ''emerging new standard of corporate performance one that encompasses both moral and financial dimensions.'' Based on her researching, teaching and consulting experiences over the past 20 years, Paine has amassed an in-depth understanding of corporate values. She uses examples culled from these experiences to explain the growing emphasis on values, why this changing attitude is important and what the shift means for managers. She ends the book with advice for managers on setting up an organizational infrastructure, hiring employees whose views align with a company's value system and more. This is an important book for ethics-minded managers. Copyright......Page 5 Contents......Page 9 Preface......Page 11 1 The Turn to Values......Page 19 What's Going On?......Page 22 Risk Management......Page 26 Organizational Functioning......Page 30 Market Positioning......Page 34 Civic Positioning......Page 38 A Better Way......Page 41 Beyond Value-Free Management......Page 45 2 Does Ethics Pay?......Page 47 The New Math......Page 49 Invisible Savings......Page 54 A Positive Angle......Page 59 The Reputation Connection......Page 65 From Values to Value......Page 69 3 Time for a Reality Check......Page 73 Another Side of the Story......Page 74 A More Complicated Relationship......Page 78 A Closer Look......Page 85 The Importance of Context......Page 91 A Dynamic Relationship......Page 94 4 The Corporation’s Evolving Personality......Page 99 A Glance at History......Page 101 Theory versus Practice......Page 106 A Pervasive Presence......Page 109 A Gradual Evolution......Page 115 5 A Higher Standard......Page 125 Employee Perspectives......Page 126 Customer Perspectives......Page 127 Community Perspectives......Page 129 Investor Perspectives......Page 130 A New Performance Paradigm......Page 133 Forces of Change......Page 143 6 The New Value Proposition......Page 151 A Winning Combination......Page 152 A Better Slogan......Page 156 Learning from the Critics......Page 162 Sentimental Psychology: “It’s too late”......Page 164 Comforting Self-Delusions: “We don’t need it”......Page 167 Misleading Creation Myths: “It’s beyond our authority”......Page 172 A Tragic Non Sequitur : “It will harm the world’s poor and powerless”......Page 178 7 Performing at a Higher Level......Page 185 An Unsettling Experience......Page 186 Rethinking Alignment......Page 190 The Organizational Infrastructure......Page 194 A Comprehensive Approach......Page 199 Performance Measurement......Page 204 Compensation and Rewards......Page 205 Information and Communication......Page 206 New Project Development......Page 207 Acquisitions and Restructuring......Page 208 Category Confusion......Page 209 8 A Compass for Decision Making......Page 217 Ask, Don’t Tell......Page 219 Purpose —Will This Action Serve a Worthwhile Purpose?......Page 221 Principle —Is This Action Consistent with Relevant Principles?......Page 222 People —Does This Action Respect the Legitimate Claims of the People Likely to Be Affected?......Page 223 Putting the Compass to Work......Page 227 Correcting for Blind Spots......Page 235 Center-Driven Decision Making......Page 241 9 The Center-Driven Company......Page 245 Center-Driven Leadership......Page 246 Innovations in Workforce Restructuring......Page 249 Innovations in Managing Safety......Page 251 Innovations in Supply Chain Management......Page 253 Innovations in Battling Corruption......Page 255 Breakthrough Thinking......Page 259 Limitless Opportunity......Page 264 Appendix Emerging Standards......Page 269 Notes......Page 275 Index......Page 313 About the Author......Page 321 "Lynn Paine has an optimistic analysis of the need for--and the value of--bringing ethical values into business decision-making. The 'meltdown' of so many high-flyers reecntly suggests that lesson had been lost on too many companies during the boom years. The time has come to take account of what she writes."--Paul A. Volcker "This book presents a way of broadening the role of the corporation in our society, an interesting and exciting role. It's a good read for young leaders in all walks of life."--John C. Whitehead, former Chairman, Goldman Sachs "Value Shift provides a timely and compelling argument for why companies must incorporate values into their strategies--that no one in business can afford to ignore."--Daniel Vasella, Chairman + CEO /Novartis AG This text takes a look at ways in which values do - and do not - enhance financial performance. By synthesizing both sets of concerns - economic and ethical - it presents an approach to management that is not only more realistic, but also more fun. Focuses on blending a company's need for profitability with adherence to ethical principles