Vision, Mission, and Values of an Organization

Vision, Mission, and Values of an Organization

Vision, mission, and values are key elements of the strategic planning of the organization. Both the vision and mission statements are based on the core ethical values of the organization and are necessary for its success since they give the organization its direction. Vision statement drives the long-term goals which determine where the organization is eventually like to be in the competitive land-scape. Mission statement is more concrete and specific to the competitive advantage of the organization and it is used to prioritize its activities. There are several benefits of a well-conceived and well-constructed mission statement. Vision, mission and values are required to be approved by the board of directors of the organization and are to be communicated to the employees and other stake-holders.

Vision and mission statements of the organization are conceptually very close to strategic management. From the theoretical frame-work point of view, it is very difficult to define a clear boundary between where one of them ends and the other starts. Despite the fact that it is problematic to prove the relationship between the vision, mission, and the economic performance of the organization, it is indirectly possible to assume that a well-formulated and clearly articulated vision, mission, and values, as well as the presence of a stable socially-oriented organizational culture, is the result of total quality management work which drives the organization in such a way that it creates and gives value to the share-holders on one hand and, gives value to other interest groups on the other hand.

There is no absolute consensus on the nature of statements of organizational vision, mission and values. There is however agreement that they are very important in communicating externally what the organization is all about and are very useful in aligning management and employee decisions in the direction of the organization.

Vision and mission statements, since they are being formulated at the highest level of the organizational management and contain the core values and movement trends of the organization, positively influences the definition of the organizational goals and the formulation of organizational strategies. It is necessary for the organization to have a well formulated vision and mission statements since they (i) strengthen the belief in actions of the organization, (ii) make sense of work, explain the sense of movement trends of the organization and its existence, (iii) can serve as an important decision-making criterion for day-to-day decisions, (iv) inspire and motivate the people, (v) support the achievement of consensus and hence the achievement of the organizational  goals, and (vi) serve as a control mechanism, which keeps the organization in the desired movement trend.

Vision and mission statements are close to each other, but the focus and the area they are trying to communicate are relatively separate areas of the organization. While the vision presents the target direction the organization wants to reach in the future, the mission represents the present position of the organization and pillars and values it is anchored on.

Vision and mission both relate to the organizational purpose and are typically communicated in some written form. These are statements from the organization which answer questions about what we want, who we are, what do we value, and where we are going.

Vision and mission statements play three critical roles. These roles are (i) to communicate the purpose of the organization to the stake-holders, (ii) to inform strategy development, and (iii) to develop the measurable goals and objectives by which to gauge the success of the strategy of the organization. These inter-dependent, cascading roles, and the relationships among them, are summarized in the Fig 1.

Fig 1 Key roles of vision and mission

There are three reasons why an organization is required to develop vision and mission statements. The first is that it helps the organization to focus upon what is really important. Although the organization knows what it is trying to do to improve its performance, yet it is easy to lose sight of this when dealing with the day-to-day situations which comes in the way of its operation. The vision and mission statements of the organization help employees to remember what is important as they go about doing their daily work. The second is the organizational vision and mission statements which let people to have a snapshot view of what the organization is and what it wants to do. When the organizational vision and mission statements are easily visible, people can learn about the organization without having to work hard for the information. Then, those with common interests can take the time necessary to learn more. The third is that the vision and mission statements are very helpful in having employees who are focused and bound together for common purpose. Not only do the statements themselves serve as a constant reminder of what is important to the organization, the process of developing them allows people to see the organization as their own organization. It is common sense that the people believe in something more completely if they had a hand in developing it.

There are several reasons to develop vision and mission statements.  For example, having clear and compelling vision statements can (i) draw people to common work, (ii) give hope for a better future, (iii) inspire employees to realize their dreams through positive, and effective actions, and (iv) provide a basis for developing the other aspects of organizational action planning process such as organizational objectives, strategies, and action plans

Vision, mission, and values statements for the organization are far more than slogans on a wall. They are to be sincerely held beliefs which guide the organizational path. Clear and compelling vision, mission, and values statements define the organization, by communicating where the organization is going (vision), why the organization exists (mission), and what it stands for (values). The leadership of every organization is required to regularly review the vision, mission, and values of the organization which they steward to be sure they are relevant, meaningful and current. Fig 2 shows relationships of vision, mission, values, and strategy.

Fig 2 Relationships of vision, mission, values, and strategy

Vision, mission, and values statements (Fig 3) serve as the foundation for the strategic plan of the organization. They convey the purpose, direction, and underlying values of the organization. When developed and implemented in a thoughtful and deliberate manner, these statements can serve as powerful tools which provide the organization with meaningful guidance, especially under times of rapid change. Hence, taking of the time to craft relevant vision, mission, and value statements is to be carefully considered.

Fig 3 Vision, mission, and value statements

Vision, mission, and values are normally made when the organization is primarily set up and incorporates them into its strategic plan. In leadership theory, a vision statement is used synonymously and inter-changeably with the mission statement, although the two statements are different from one another. All of the recognized organizations make vision and mission statements, which act as the basis for the organizational goal and these are critical and standard elements of the strategy of the organization. Without clear vision and mission, no organization can get any reputation towards the share-holders, stake-holders, and the customers but also can be harmful for the survival of the organization.

The vision and mission of the organization deliver a common logic of purpose, uniqueness, long-term intention, and connect internally and externally with the stake-holders of the organization. But the creation of the mission, vision, and values is also a continuous process of review to confirm that they are still appropriate for the present challenges, goals, and environment. Majority of the organizations find it beneficial to evaluate these at the beginning of their strategic plan development. The organizational management is to ensure that the organization functions reliably with its vision, mission, values, and ethical principles. These are to be associated with the foundation for planning and monitoring, expenditures, activities, and decision-making policies.

Before making any vision or mission statements, management of the organization is required to know what is the organization is going to offer for the future. In this way, the vision works as a foundation for the mission of the organization. The vision gives a calculated framework, which works as the foundation for the mission and goals. Vision statement is primarily thought to be the primary source to any strategy design process and represent the cause for the presence and value for the organization at large. Mission statement is the theoretical way to carry on the path of success as a purpose of the organization in line with the values and perception of stake-holders and provides the answer to the questions like ‘what type of activities the organization is in’ and ‘what for its activities are’. The vision statement is to include a perspective of corporate values and offer more than a direction. On the other hand, mission statement represent a broad frame-work around which other strategic aspects like strategic intent and capabilities, behavioural standards, goals, core values, objectives, and operational models etc. evolve.

Vision and mission are two distinct concepts reflecting different existential time frames. Vision is an idealistic projection of the organization in an undefined future, in a mature and successful position. Vision is not a dream and not a fantasy. It is an idealistic projection of what the organization can be and can achieve. However, the roots of this projected image are to be well defined in the present operational dynamics of the organization. Vision is a product normally of the managements of the organization, especially of those managements who have a visionary mind. Tab 1 shows the major difference between vision and mission.

Tab 1 Difference between vision and mission
S.N. Basis of difference Vision Mission
1TimeLong term orientedShort Term oriented
2FocusFuture orientedFocuses on the present
3Answer the questionWhere organization wants to be in futureWhy organization exists
4FlexibilityVision cannot changeMission can change
5FollowedVision is followed by missionMission is followed by the employees and the policies
6DevelopmentWhen development a vision statement management is to think about valuesWhen developing a mission statement, management is to consider about action

A strong organizational culture, organized by a mission statement known to all and driven by core ethical values, creates more effective employees along with larger efficiencies of scale and cost reduction for the organization. A motivated work-force can offer a formidable competitive advantage. An articulate and well-defined vision statement is necessary during times of organizational change, transition, or environmental turbulence, while the mission statement is key to driving the team effort in the organization toward the common goals.

Setting up a vision of the organization is considered to be a very important step in strategic management. It gives direction to the organization and acts as a reference point in the future. Vision tells also about the future and suggests how the organization needs to change. Similarly, the mission is to be defined before the strategy is developed. The mission defines the space in which the organization is going to operate. Once the vision and mission statements are established, the organization then set up goals and objectives. This process emphasizes on setting up of inspirational, motivational, specific, realistic, and easy to understand statements about the vision, mission, goals and objectives.

The first step in the strategic formulation process is to establish the strategic intent in form of vision, mission, goals and objectives. This the starting point of all the managerial actions. Vision and mission are frequently considered as a necessary part of the strategic management. Vision and mission are two important elements the strategic formulation process. Values play also an important role. In history, one can find beautiful examples of great visions which stay behind the organizational success.

In the organization, it is difficult or impossible to agree on strategic or even tactical decisions if everyone in the organization is not headed in the same direction, i.e., toward some common purpose. Hence, specialists believe that developing of the vision, shared mission, and values is the first step in laying a strong foundation for making strategic and tactical decisions which help the organization to grow and succeed. Several times the terms vision and mission are used inter-changeably, hence it is important to understand the differences between them. The vision and mission statements are frequently published in the organization’s annual reports, brochures, and fund‐raising materials.

The organization experiences success in team building as well as in its operation, if (i) it has clearly defined organizational vision, mission, and values, (ii) it has clearly articulated the vision, mission, and values, to everyone involved with the organization’s operation, and (iii) it has meshed the organization’s vision, mission, and values into every individual employee so that while achieving individual goals and objectives, organizational goals and objectives are also achieved.

Vision – Vision is the guiding star. It conveys the organization’s aims for how the world changes as a result of the organizational efforts. It provides an understanding of the organizational ultimate goals as an organization over the long term. From a practical perspective, a vision can be a quick, memorable way to describe the organization’s reason for being. This can be valuable in times of crisis when it helps to remember what is really important.

The vision is the source and the main idea of the organization. It refers to what the organization aspires to be in future. It acts as a roadmap for the organization and depicts what the organization wants to become. A vision paints a vivid picture of the organization and serves as a concrete foundation for the organization. It serves as an enduring promise and does not fluctuate from year to year. On the basis of vision statement, the organization aligns all its activities. In simple words, it can be said that a vision of the organization tells that where organization want to reach in future.

The vision sets out what the organization wants to accomplish, and it inspires employees and stake-holders. Vision statements describes (i) how things are different as a result of the activities of the organization, and (ii) how the organization wants to be seen by others. Good visions are aspirational. Some of them are hard‐to‐reach ideals while others are more modest or describe objectives which are achievable in the near future. In either case, the vision helps establish the unique contribution which the organization makes to society.

Nanus has defined vision as ‘realistic, credible, attractive future for the organization’. Over decades the management specialists have argued that vision is important to the management, strategy implementation, and organizational change. Clarifying the vision of the organization and communicating it to the employees of the organization can have powerful results. Visionary organization is capable of leading change, when the management realizes that the vision of the future is not a firmly fixed vision and it is flexible to accommodate change.

Mark Lipton has proposed that managing with a vision can benefit the organization in several ways such as (i) it improves a wide range of performance measures, (ii) it provides a basis for a strategic plan, (iii) it promotes change, (iv) it motivates employees and facilitates recruitment of talent, and (v) it keeps decision making in context.

The vision statement of the organization has a written format. It is to be inspiring and to provide a base to frame strategy for achieving the ultimate vision of the organization. The normal life span of a vision statement is 10 years to 20 years and it articulates the ultimate long-range goal of the organization. When developing a vision statement, the issues to be kept in view are (i) what the organization is to do for moving forward, (ii) when it is to be done, and (iii) how it is to be done. Some of the organizations while developing vision consider factors related to people, portfolio, partners, planet, profit and productivity. A powerful vision, when fully embraced and executed by the organization, can position the organization for industry-wide leadership.

As per Philip Kotler, a well worded vision statement is to be graphic (painting a picture of the kind of organization which the management intends to create), directional (indicate kind of organization and strategic changes which can be forthcoming), focused (i.e., it is to be specific so that management is able allocate resources and make decisions), flexible (i.e., it is to be capable of change whenever needed), feasible (i.e., it is to be achievable), durable (i.e., it is to cater to the long term interest of the stake-holders) and easy to communicate.

Collins and Porras have proposed that successful organizations create their vision statement through a ‘built to last vision frame-work’ according to which there are two major components of establishing an effective vision statement. These are (i) core ideology, and (ii) envisioned future. As per them, core ideology defines the timeless character of the organization which is integral to the process of setting up the vision of the organization. They emphasized that it is necessary to identify those elements of the organization which never going to change.

Core Ideology includes two components i.e., core values and core purpose. Core values are the handful of beliefs, guiding principles or tenets which are absolutely non-negotiable within the organization.  Similarly, the core purpose is the organization’s fundamental reason for being. The core purpose guides and directs the organization and it motivates and inspires the employees working for the organization. Purpose is essentially permanent, i.e., it can easily ensure for 50 or more years. Though it is never achieved, yet it is clear.

For example, an organization describes its winning culture and it list downs the values across the organization which are collaboration, integrity, accountability, passion, diversity, and quality. As an example, for passion, the organization has identified its value as ‘committed in heart and mind’. Similarly on quality, it has mentioned that ‘what the organization do, it does well’. The organization also strongly emphasize on values like ‘work smart’, ‘act like management’, and ‘be a brand’. One of the organization has identified its values which is to drive its employees to commitment as customer value, leadership by example, integrity and transparency, fairness, and excellence.

Collins and Porras suggest that the core values are to revolve around 3 to 5 major issues and more important the values are to be reflected in the actions and not merely on the organizational website or organizational related material. As per them, an envisioned future is the means through which core ideology is translated into a tangible goal. It includes a long-term goal which has been described by them as BHAG (big, hairy, audacious, and goals). BHAG can be measured and the organization can easily make an assessment on the progress. The goals are to be inspiring so that it stimulates the employees and get them going. The BHAGs can change once they have achieved the major milestones which take the organization towards its path of purpose. While formulating BHAGs, the organization is to think about the four categories which are the target, the common enemy, the role model, and the internal transformation.

The second part of the envisioned future is vivid description. It basically communicates about what the organization is going to be like when the BHAG are achieved. In simple terms, vivid narrative description pertains to the story of the organization as its preferred future. John Kotter has suggested that the vision is to be vivid, repeatable, and possible to convey it in no more than 5 minutes. As per Collins and Porras, the necessary parts of vivid description are passion, emotion, and conviction. Fig 4 shows Collins and Porras frame-work of setting vision.

Fig 4 Collins and Porras frame-work of setting vision

Visionary organization displays a powerful drive for progress which enables it to change and adapt without compromising its core ideals. Visionary organization achieves a long-term performance due primarily to the fact of having a vision and a clear direction of its evolution. It develops a strategic thinking with a well-defined energetic dimension. A good organizational vision is required to have the following six attributes.

Powerful – Even though a vision expresses the future, it is important to understand the present. The tension which comes from comparing the desired future with the present reality is what drives actions toward achieving the vision. A vision can become disconnected and powerless if the organization does not include in the vision the present reality.

Purposeful – Vision cannot be understood in isolation. In particular, it has to be connected to the purpose and the core values. The vision emerges from the fundamental values of the organization’s individuals, the fundamental purpose, and awareness of today’s reality, welded together to produce a shared future.

Self – determining – Vision is not relative. If the vision is connected to competition, then it can prove that the vision stops achieving greatness since that is what the competition has done.

Concrete – The vision is concrete, having a specific destination, presenting an image of the desired future.

Multi – faced – The vision includes more aspects, such as personal facets (health, and integrity), altruistic facets (helping the community, and serving the customer).

Emotional – The visions are developed using values. This implies that the visions are emotionally charged. This is very helpful since these emotions become the driving forces towards achieving the vision.

Vision statement which is effective is to be compelling and meaningful for the employees working in the organization. A vision statement can be evaluated on the basis of several characteristics such as (i) it is to be future focused i.e., it is to describe what the organization desires to be in future, (ii) it is to promote long term thinking within the organization, (iii) it is to be clearly articulated and is to be easy to understand for even the junior most employees in the organization, (iv) it is to be relevant to the organization in all times and is to relate with the history and values of the organization, (v) it is to be challenging enough and is to set high standards enabling the employees of the organization to perform, and (vi) it is to be inspirational i.e., it is to inspire the employees of the organization, move them emotionally, and guide them towards a meaningful purpose.

Vision is a strong integrator. People sharing together the same future image of their organization strive to find best solutions to transform the vision into reality. Hence, vision integrates the individual contributions in knowledge, intelligence, and values from all the employees, and becomes a driving force for increasing the potential of the organizational intellectual capital.

A well-crafted visioning exercise can have a major impact on the organization. While formulating or revising the vision the points which are to be considered are (i) where the organization is at present, (ii) where the management want it to go, (iii) at what position the organization is required to be, (iv) why it is important for the organization, (v) the obstacles which are on the way, (vi) the actions needed for overcoming the obstacles, (vii) what are the priorities for the management, and (viii) when the management know that the job of vision revision is on track.

Mission – Mission statements are not optional. It is crucial that every organization, regardless of size or industry, make a concerted effort to study, develop, codify, and institutionalize a strategic mission statement. Mission is an assumed responsibility of the organization born from its social goals. Mission reflects the way in which vision can be transformed into a tangible existence for the organization. In other words, the organization exists since it creates value for the customers and satisfies their needs. The mission of the organization represents the reason for existence and for creating value for the organization. It synthesizes the existential law of the organization and explains its vision.

The mission typically describes what the organization does to achieve its vision. Since the vision is frequently expressed as a dream or ideal, the mission helps clarify the practical aspects of what the organization actually do. Majority of the mission statements emphasize action, using such words as support, involve, assist, contribute, provide, and promote etc. The mission of the organization is to be compatible with its legal purposes and is required to meet the organizational requirements. A good mission statement is concise and precise. It identifies the key stake-holders of the organization and set out how the organization serves them.

The organizational mission differs from the vision in that it integrates both the goal of the organization and the basis for creating a competitive advantage. A good mission statement incorporates the concept of stake-holder management, a complex process through which organizations respond to multiple areas if they want to survive and prosper. Management, employees, customers, suppliers, different statutory authorities represent the main stake-holders, but their range can be increased.

There are some organizations which mention profit as a mission component. Profit maximization not only fails to motivate people but also does not differentiate between the organizations. Every organization wants to maximize profits over the long term. A good mission statement, by addressing each principal theme, is required to communicate why the organization is special and different. Two studies which have linked organizational values and mission statements with financial performance have found that the majority of the successful organizations consider values other than profits. The less successful organization focus almost entirely on the profitability.

Looking at the mission statement from a more practical view, people can say that it is more realistic than the organizational vision, answering such questions as who the organization is, what the organization wants to create, and why it wants to exist. All possible answers cluster around the customer needs, stake-holder interests, share-holder financial returns, and the organizational legacy to create value and competitive advantage.

A good mission statement is a strong integrator for the organizational intellectual capital. A good mission statement is required to have several characteristics namely (i) to reflect on the existential plane the vision of the organization, (ii) to incorporate the core corporate values, (iii) to be feasible, under-standable, and concise, (iv) to be generous in stating the organizational goals, (v) to have a semantic impact on all stake-holders, and (vi) to have a good literary formulation.

The mission statement provides the necessary guidance for developing strategy, defining critical success factors, searching out key opportunities, making resource allocation choices, and the pleasing stake-holders. The mission represents the synthesis of what the customers and the employees see as being the core operations, what products and services are to be realized, who customers are, and what values are to be delivered to them. One important role of the mission statement is to distinguish one organization from another, making clear its unique characteristics.

Mission gives the answer of why organization exists and also defines the path to achieve vision of the organization. Mission statement is a written process which communicates why the organization exist. The organizational mission describes the organization in terms of its operations, the customers it serves, and the skills it intends to develop to fulfill its vision. In other words, the mission statement is the heart of the organization. The mission statement guides the actions of the management, the employees, and the partners. The mission statement tries to answer the questions (i) what the organization do today, (ii) for whom it does today, and (iii) what the benefits are.

For example, the mission of the organization can be ‘to improve the wealth generating capability of the organization in a globalizing environment, delivering superior and sustainable stake-holder value’. Another example for a steel producing organization can be ‘to build the world…, to inspire moments of optimism and happiness…, and to create value and make a difference’.

There are no hard and fast rules to develop a mission statement. However, if the organization keeps in mind the following characteristics, it can develop an effective mission statement.

Be simple – Organizations normally tend to develop mission statements which are long and full of managerial jargons. Different studies have indicated that if the mission statements are small, they can not only be remembered but are also effective. Several specialists believe that mission statements which are made of eight words or less are easy to remember and are effective.

Be specific – A good mission statement is required to include some description about the functioning of the organization. For example, a mission which includes ‘become the industry leader’ does not specify anything and mean nothing to the stake-holders. However, if the mission statement indicates ‘to provide world class steel quality’ is more specific.

Be realistic – Mission statements are to be developed in a way that it includes something which is possible. Mission statements which have impossible to achieve statement discourage the employees at the later stage.

Strategic positioning – An effective mission statement is required to include a brief description of the strategic position of the organization within the market.

Relevant to stake-holders – A good mission statement is required to focus on the interest of the relevant stake-holders especially the customers. The mission statement is to aim at satisfying the customer needs.

Long term orientation – An effective mission statement is required to take a long-term view and is to be designed keeping in view a long-term perspective. However, the flexibility is not to be compromised.

Several specialists believe that the true impact can be expected if the mission statements focus on certain dimensions such as (i) it defines the organization, (ii) it includes the key values and beliefs, (iii) it has concern for satisfying multiple stake-holders, (iv) it shows distinctive competence, (v) it is broad enough to allow for creative growth, (vi) it includes desired competitive position, (vi) it reflects competitive strategy, (vii) it is specific to the products and service offered to the customers, (viii) it serves as framework to evaluate present activities, and (ix) it is stated clearly so that it is understood by all.

There are nine detailed categories which mission statements frequently discuss, specifying general goals. These are (i) target markets, (ii) principal products / services, (iii) geographic area, (iv) technological advantage, (v) economic goals, (vi) philosophy, (vii) identity, (viii) reputation, and (ix) employee concern. Not every mission statement contains all of these elements, and several are dependent upon industry, size of the organization, customer or operation orientation, strategic publics / stake-holders, competitive market position, and so on. However, these nine categories offer a relatively complete and flexible frame-work which guides the construction of the mission statement.

The key to a successful mission statement is its ability to focus the organization’s priorities, decision-making, resources, and the core components which drive its competitive advantage. A mission statement helps to improve the operations of the organization by minimizing or eliminating extraneous activities, allowing focus and team-work, and driving organizational priorities and activities. There are several factors which go into the construction of a mission statement. These are (i) management vision, (ii) vision statement, (iii) study (internal stake-holders, external stake-holders, and publics), (iv) analysis of core competencies in relation to competitive environment, (v) environmental factors (regulatory, industry, and technological etc.), (vi) leadership and management style, and (vii) core ethical values.

Mission statements are practical investments in the future of the organization for a number of reasons. They allow the prioritization of operations and resources. They also encourage commitment and motivation among internal publics and employees, and help to foster a collaborative, team-driven environment in the organization toward common goals. Even greater value of mission statements is that they encourage the long-term formation of relationships with stake-holders / publics by allowing the organization to be known. A visible and frequently referred-to mission statement allows both internal stake-holders and external publics to understand the priorities and rationale for management decisions.

Mission statements also have relationship outcomes since they underscore the credibility of the organization. An astute mission statement encourages consistency among management and in the organizational behaviour, minimizing distractions, and ventures into potentially problematic decisions. When a mission statement is used to organize and prioritize operations, a consistent focus on mission emerges. This consistency allows management to be known by external publics and internal stake-holders alike. Over time, consistency allows the organization to meet the expectations of stake-holders / publics. Ethical organizational behaviour has been conceived as a precursor to the formation of effective long-term relationships with stake-holders / publics.

Given that the organizational behaviour is ethical or values-driven, meeting the expectations of stake-holders / publics allows trust to emerge as a valuable component of long-term relationships. Organization-public relationships are built on trust, commitment, satisfaction, and shared control. Trust is arguably the most important component of relationships since it can insulate the organization from negative events (such as crises, natural disasters, and product failures), allowing it valuable time to study, explain, adapt, and recover while maintaining on-going, and  trusting relationships with the stake-holders. Mission statements are, hence, an invaluable component of strategic management and an important aid in building relationships between the organization and its stake-holders / publics.

Values – Values are the foundation of everything which the organization does, including its vision, mission, and operations. Values allow those working within the organization to agree upon what is considered good, worthy, or meritorious. They allow common goals which offer guidelines for both individual and group behaviour. The values need to be incorporated as the back-bone of the mission statement to highlight how it is being operationalized. They can also be used to help steady the organization in times of uncertainty or to help resolve different issues.

Values keep the organization to stay on track. They are guiding principles for how the organization is governed, functions, and behaves. They articulate the key priorities which the organization stands for internally and externally and serve as lenses to help guide both every-day and strategic decisions. Values which work best are authentic to the organization, and are practiced consistently across the organization.

Organizational intellectual capital is composed in its ultimate essence of knowledge, intelligence, and values. Each of these components represents integrated results of the individual contributions of all the employees. Values represent strong beliefs people get through their education in family, at school, and in society. Each person is born in a given culture and through the educational system a series of these cultural values are transferred from society to individual. Through personal experience some of these values are strengthened and others are weakened.

Values influence everything what the organization does, as well as its relationships with its stake-holders and its reputation. Values can be expressed as beliefs, guidelines or rules, and can be set out in a code of conduct. For example, values of the organization can be integrity and accountability, ethical practices, respect for quality, compassion and customer-focused responsiveness. A statement of values can provide guidance when tough decisions are to be made, for example in allocating scarce resources, or when put in a situation which is incompatible with the mission of the organization.

Values are important since they play the guiding role in any decision-making process. They are a set of beliefs and values which become embodied in an ideology or organizational philosophy hence can serve as a guide and as a way of dealing with the uncertainty of intrinsically uncontrollable or difficult events. All individual values of employees are integrated at the organizational level as per the operational power of the organizational integrators. The result consists of the organizational core values. These can be formulated in an explicit way and incorporated into the mission statement or they just flow through the organizational culture in an implicit way. They can be felt in an adverse environment, even if they do not have a clear formulated statement.

The organization is frequently said to have an explicit or implicit system of values, which is part of its culture. What is meant, is that the management team has a collective set of values, so that the organization is used as a short-hand expression for the collectivity of the managers. An example can be a dedication to the quality of what is offered to customers.

Defining the organizational values is a process linked to the new perspective of ‘corporate social responsibility’ (CSR), in which ethical values shape the frame-work of decision-making processes. They become a driving force for the organization. They provide a common frame of reference which serves as an unifying force across different functions, lines of operations, and employee groups. Organizational values communicated properly and shared by all the employees can become a strong integrator for the organizational intellectual capital. These values can be communicated as an independent statement or as a component of the mission statement.

As per the specific content of the dominant beliefs of the excellent organizations is also narrow in scope, including just a few basic values such as (i) a belief in being the best, (ii) a belief in the importance of the details of execution, (iii) a belief in the importance of people as individual, (iv) a belief in superior quality and service, (v) a belief that majority of the organizational employees are to be innovators, and its corollary, the willingness to support failure, (vi) a belief in the importance of informality to improve communication, and (vii) explicit belief in the importance of economic growth and profits.

In order to stress the importance of the value system for a successful organization, one is to refer to the one outstanding study, which says that the shared values define the fundamental character of the organization, the attitude which distinguishes it from all others. In this way, the study creates a sense of identity of the employees with the organization, making them feel special. Moreover, values are a reality in the minds of majority of the people throughout the organization, not just the senior executives. It is this sense of pulling together which makes shared values so effective.

Organization is required to articulate its core values. Indeed, organizational managements frequently talk a lot about their deeply held principles or philosophies but seldom articulate and enshrine them.  The values of the organization are the bed-rock of its operation. The values are not to change and they are not to be the subject to the changing winds of new board of directors, new employees or funding opportunities. The values are not much different than the personal values. In fact, they are really collectively held personal values.

Values can be described in single words such as integrity, diversity, respect, innovation, or learning but are more meaningfully crafted as short phrases such as ‘the organization is committed to empowering its employees’. Organizational values cannot be imposed, they are what exits within the organization. They are to be discovered or made visible. There is however be a consensus on what are the four or five most important values which are to guide the organization. These are the four or five principles which are not to be compromised.

It is foolish to try to operate with more than a few (4 or 5) values otherwise sooner or later some are going to be compromised. People typically have very different understandings of the meaning of certain value statements. It is not difficult to achieve consensus on the values of the organization. The effort which goes into discussing the ‘meaning’ of different values is very useful in bringing people together. Arriving at a values statement can be a powerful exercise in organizational dialogue. The values of the organization tend to be inclusive and confirming.


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