BUS202: Principles of Finance

Employees can more easily make ethical decisions that promote a company's values when their personal values match the company's norms.

Learning Objective

• Explain the role of personal values in influencing behavior in organizations

Key Points

• Personal values provide an internal reference for what is good, beneficial, important, useful, beautiful, desirable, and constructive.
• Personal values take on greater meaning in adulthood as they are meant to influence how we carry out our responsibilities to others.
• To make ethical and moral choices, one needs to have a clear understanding of one's personal values.

Terms

• norms

  According to sociologists, social norms are the laws that govern society's behaviors.

• value

  A standard by which an individual determines what is good or desirable; a measure of relative worth or importance.

Personal values provide an internal reference for what is good, beneficial, important, useful, beautiful, desirable, and constructive. Over time, the public expression of personal values has laid the foundations of law, custom, and tradition. Personal values in this way exist in relation to cultural values, either in agreement with or divergent from prevailing norms.

Personal values are developed in many different ways:

• The most important influence on our values comes from the families we grow up with. The family is responsible for teaching children what is right and wrong long before there are other influences. It is thus said that a child is a reflection of his or her parents.
• Teachers and classmates help shape the values of children during their school years.
• Religion (or a lack thereof) also plays a role in teaching children values.

Personal values take on greater meaning in adulthood as they are meant to influence how we carry out our responsibilities to others. This is true in the workplace, especially for managers and leaders, who are charged with overseeing resources for the benefit of others. Because of their authority structures, social norms, and cultures, organizations can have a powerful influence on their employees. Employers do their best to hire individuals who match well with the organization's norms and values. In this way, they seek to promote their standards of ethical behavior.

Conversely, conflicts can occur between an individual's moral values and what she perceives to be those of others in their organization. Since moral judgments are based on the analysis of the consequences of behavior, they involve interpretations and assessments. One might be asked to do something that violates a personal belief but is considered appropriate by others. To make ethical and moral choices, one needs to have a clear understanding of one's personal values. Without that awareness, it can be difficult to justify a decision on ethical or moral grounds in a way that others would find persuasive.

Example

If you value equal rights for all and you go to work for an organization that treats its managers much better than it does its workers, you may form the attitude that the company is an unfair place to work; consequently, you may not produce well or may even leave the company. It is likely that if the company had a more egalitarian policy, your attitude and behaviors would have been more positive.