A discussion of the importance of values in the context of business and management can be conducted across a wide range of domains occupied by the individuals, formal and informal communities, organizations, societies, and cultures that are affected by them. Each has its own values, which influence and are influenced by all the others. As a result, an organization, to be effective, must comprehend this environment, achieve an understanding of its own place in it, and integrate that awareness consciously into its corporate goals.
But there is another fundamentally related issue, here: trust. At bottom, that is what makes the modern world of organizations work. No amount of legislation or regulation, no contractual obligations – and certainly no ostentatious professions of corporate values can take its place. No matter how many such formal structures there may be, if we don’t trust each other simply to do what we say we will, we cannot conduct business as we do in the modern world.
So, how do we know we can trust each other? Well, of course, the presence of shared values is a strong indicator of our ability to do that. But it doesn’t always take the form many of us expect.
I asked him what was the great difference between the way business was done in China and what he told me, I will never forget. In his clipped English he explained that in the US, we have a class of people who do business and an extraordinary system of openness and trust – that you don’t have to know your banker to know he won’t steal your deposits. In China conversely, you don’t do business with strangers.
One might think that the suggestion implicit in this story, which is encountered often, is that Western values make modern business possible to a degree that is not experienced elsewhere. Moreover, it is often greeted with amazement and a sense of liberation by those from other cultures who see it at work for the first time.
And in fact, that is how it is often interpreted, and by both Westerners and others. But actually the conversation reveals a deeper truth: both environments find ways to get business done in their own ways. And they way they do it has a lesson for all of us.
One generates trust arising from the peculiarly intense group dynamics of close networks, typically but not exclusively based on the family, which are fundamental features of collectivist cultures. The other produces an atmosphere of trust from the system of shared values often consciously formed in individualistic cultures which enable their members to interact safely and productively while maintaining their individualism.
The key issue here for us as managers and for our organizations is to recognize the uniquely secular role played by values for our purposes: it produces trust. It expresses our trustworthiness in ways that are recognizable to the individuals, networks, and organizations in the seas in which we swim, so that we can do business with each other to our mutual benefit.
The ultimate ambition of any organization is to accomplish its goals. But in order to do that, it must establish its trustworthiness among those with whom it must interact in order to reach those goals. And in order to do that, it must consciously, meaningfully, honestly – and genuinely – integrate trust-generating values in appropriate ways into its goal-generating activities.
Who would have thought that trust and values had such strategic import?
Today’s tip: Speaking of the strategic importance of frankly addressing corporate values in cross-cultural circumstances, generating trust, and accomplishing organizational goals, please see this piece from Business Week about the increasingly desperate mess created by one European firm that may have paid insufficient attention to this.
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