VALUES

IN
ETHICS

Namrata Kishnani,
Asst. Professor – Dept. of Management
The Bhopal School of Social Sciences
 • Human values are the virtues or individual beliefs
that motivate and guide people to act one way or
other, interacting with other people or situations.
HUMAN VALUES • Values are fundamental beliefs that help us to determine
what is important to us. They describe the personal
qualities we choose to embody to guide our actions and
decisions.

• It is the manner in which how we treat ourselves or

others and how we expect others to treat us.

• Values are the standards or criteria to guide the

evaluation of policies, people and motive behind
purposeful actions.
 HUMAN VALUES
Basic human values refer to those values which are at the core of being human. The values which are
considered basic inherent values in humans include integrity, fairness, honesty, accountability, teamwork,
loyalty, love, peace, etc. because they bring out the fundamental goodness of human beings and society at
large.

Importance of Human Values

 Provides understanding of the attitudes, motivation and behaviours
 Influences our perception of the world around us
 Represents interpretation of “right and wrong”
 Provides a way to understand humans and organization.

Human values are integral part of one’s personality and affects employability quotient. Many
employers are inclined to hire those who have better human values.
 MAIN FUNCTIONS OF VALUES
•1. Values play an important role in the integration and fulfillment of man's basic
impulses and desires in a stable and consistent manner appropriate for his living.

•2. They are generic experiences in social action made up of both individual and
social responses and attitudes.

•3. They build up societies, integrate social relations.

•4. They mold the ideal dimensions of personality and range and depth of culture.

•5. They influence people's behaviour and serve as criteria for evaluating the
actions of others.

•6. They have a great role to play in the conduct of social life.

•7. They help in creating norms to guide day-to-day behaviour

 • Ethical values are a set of moral guiding principles that determine
how a company conducts business. These principles seek to serve
and protect others above the organization’s self-interest. Beyond
fulfilling legal obligations, ethical values in business show strong

VALUES moral character from leaders and employees.

& • This makes people act as better leaders who are capable of
guiding their organizations toward a sustainable, impactful future.
ETHICS
• Values are the core principles or standards that guide behavior and
decision-making within an organization. They reflect what an
organization believes in, shaping its culture, ethical stance, and
interactions with stakeholders.
 • Values are essential to ethics-it is concerned with human
actions, the choice of those actions and the values that
underlie them.

• Ethics and Values together lay the foundation for

VALUES sustainability, wherein ethics are the set of rules that govern
& the behaviour of a person, established by a group or culture.
ETHICS Values refer to the beliefs for which a person has an
enduring preference.

• Ethics are consistent system of moral principles, which

compels to follow a particular course of action. Whereas
values are different for different persons, which is the
ETHICAL VALUES & BUSINESS
❖In ethics, value denotes significance of a particular action in organization
and explains the expected line of behaviour of employees.

❖Creates an Ethical Workplace.

❖Defines Corporate Culture and communicate their company and core values,
beliefs and preferred code of conduct.

❖Impact Decision-Making.

❖Responsible Value-driven Leadership and dealing with unethical business values.

❖Develops Integrity and Fair Treatment with all stakeholders.

❖Evaluates underlying organizational and ethical values as basis for policy

formulation and long term accountability.
 • Subjective: Values are based on individual beliefs, generic
and societal belief system. They vary from person to person

• Enduring: Values tend to be relatively permanent and stable

over time so quite consistent.
Nature of
Values
• Influential: Values impact decision-making and behavior in
personal and professional settings of an individual.

• Judgmental: serve as criteria for evaluating the actions of

self and others, guiding every day decisions.
 • Guiding Principles: Values serve as fundamental guidelines
for behavior and decision-making.

• Normative: They express what is considered acceptable or

unacceptable in a given social or business context.
Nature of
Values • Universal and Specific: While some values like integrity or
trust are universal, others can be specific to a company’s
culture or industry.

• Non-Quantifiable: Values are abstract and cannot be

measured directly, but their impact can be observed through
behavior and outcomes.
SIGNIFICANCE OF ETHICAL VALUES IN BUSINESS

❖Foundation of Ethical Behavior: Values like integrity, honesty, and

responsibility are the foundation of ethical practices in business.
❖Cohesion and Unity: Shared values bring employees together, fostering
a sense of belonging and unity.
❖Brand Image and Reputation: Organizations known for strong values
tend to build better reputations and customer loyalty.
❖Decision-Making Framework: Values provide a framework for making
business decisions, especially in complex or ambiguous situations.
SIGNIFICANCE OF ETHICAL VALUES IN BUSINESS

❖Trust and Relationships: Values like trust and fairness enhance

relationships with stakeholders, including employees, customers, and
partners.
❖Sustainability and Social Responsibility: Companies that
emphasize values related to sustainability and ethics can better
respond to societal challenges like climate change or social equity.
❖Employee Motivation and Engagement: When employees align with
an organization's values, they are more likely to be engaged,
motivated, and committed.
❖Adaptability and Resilience: In times of change, strong values
provide stability, guiding the organization through uncertainty.
ROLE OF ETHICAL VALUES IN BUSINESS
Shaping Organizational Culture and Promoting Ethical Behavior: Organizational values
ensure that decisions and actions align with ethical standards, minimizing conflicts of interest
and promoting fairness. They are the backbone of a company’s culture, determining how
employees behave, communicate, and work together.
Driving Strategic Goals: Values influence the company’s strategic direction, ensuring long-
term sustainability and alignment with broader social or environmental goals.
Building Trust and Loyalty: Values foster trust between the organization and its stakeholders
(employees, customers, partners), ensuring long-term relationships and business success.
Guiding Leadership and Management: Leaders are expected to reflect the organization’s
values in their actions, thus inspiring others to do the same.
Enhancing Corporate Social Responsibility (CSR): Organizations with strong values are
often committed to CSR activities, contributing to the welfare of society and environment.
Navigating Conflicts: Values help organizations resolve conflicts or ethical dilemmas,
ensuring that decisions are in line with the company's core principles.
Formation of Values
Formation
of values
Importance of Human Moral Compass: Human values serve as a
Values moral compass, helping individuals
distinguish right from wrong

Ethical Decision-Making: Values guide

ethical decision-making in personal or
professional contexts and commitment to
social responsibility.

Harmonious Relationships: Values

promote understanding and cooperation,
leading to healthier relationships among
teams.
 • Instrumental Values: Values that
reflect the means or methods
used to achieve goals

Types of Values
• Terminal Values: Values that
represent the desired end-states
or outcomes
• Personal Values: Personal values are an individual's Types of Values
core principles and beliefs.

• Social Value : Those qualities of behavior, thought, and

character that society regards as being intrinsically
good, having desirable results, and worthy of
emulation by others. They are highly subjective.

• Organizational Values: Organizational values are

principles that guide a company's culture and decision-
making
 Cultural Values
• Cultural values are shared beliefs, customs, norms,
traditions, and principles that shape the behavior,
within a specific cultural or societal group.

• It encompasses a wide range of aspects, including

language, religion, family structure, social
etiquette, moral codes, and historical narratives.
• Cultural values impact social norms, communication,
and behavior within a society.

• Examples: Individualism vs. collectivism, high vs. low

power distance, long-term vs. short-term orientation
(Hofstede's Cultural Dimensions).
• They are deeply rooted in a society's history,
geography, religion, and social dynamics. Cultural
values can vary significantly from one culture to
another.

• Scope: Cultural values influence various aspects of

life, including communication styles, decision-making
processes, work ethics, and social roles within a
culture.

• Importance: Understanding cultural values is crucial

for effective cross-cultural communication, respectful
interactions, and successful international business
ventures.
 Aesthetic Values & Spiritual values
• Aesthetic values refer to an individual's or
society's subjective judgments and preferences
regarding beauty, creativity, and the
appreciation of art, music, literature, design, and
other forms of expression, that promotes
creativity, and inspire innovation in various
fields, including marketing and design.

• Spiritual values are concerned with the pursuit of

meaning, purpose of life, and connection to
something greater than oneself, through
mindfulness and intuitive philosophy.
Organizational Values
• Organizational values are principles that guide a company's culture
and decision-making. Examples: Innovation, customer focus,
teamwork, sustainability, and transparency.

• Organizational values shape the workplace culture, ethics, and

strategic goals. They refer to the core principles and beliefs that guide
the behavior, decisions, and culture within a business entity.

• They shape the identity and ethical framework of an organization.

• They are moral and ethical compass of a company. This Photo by Unknown author is licensed under
CC BY.

• They provide a sense of direction, defining what the organization

stands for and how it conducts business.
 • Internal Focus: They guide employee behavior,
teamwork, and the company's internal processes
Scope of
• External Focus: Values extend to how the
Organizational Values
organization interacts with customers, suppliers,
and the broader community

• Strategic Alignment: Values align with the

company's strategic goals and mission

• They are instrumental in shaping a positive

corporate culture and fostering ethical conduct.
Encourage organizations to assess and align their
values with their mission and goals.
 • Shaping Corporate Culture: Organizational values play a key role
in creating a cohesive company culture where employees share a
Role of common sense of purpose and direction. This helps foster unity and
Organizational collaboration within teams.

Values • Driving Ethical Behavior: Values like integrity, transparency, and

fairness ensure that business operations are conducted ethically.
Employees are encouraged to make decisions that align with these
core principles.

• Influencing Leadership and Management: Leaders and managers

are expected to embody the organization's values, serving as role
models. Their behavior sets the tone for the rest of the organization,
promoting accountability and ethical leadership.
 • Enhancing Decision-Making: Values provide a framework for
Role of decision-making, especially in complex or uncertain situations. For
Organizational example, when faced with a dilemma, employees can refer to the
organization’s values to guide their choices.
Values
• Building Trust and Relationships: Organizational values
contribute to building trust with employees, customers, and other
stakeholders. When values like honesty and respect are prioritized,
strong and lasting relationships are formed.

• Aligning Employees with Company Goals: Values help

employees understand the broader goals of the organization and
align their individual actions with the company’s mission. This
alignment fosters higher employee engagement and productivity.
Significance • Fostering Employee Engagement and Retention: This leads to higher
of retention rates and increased job satisfaction.

Organizational
• Establishing Brand Identity: Organizations that are known for ethical
Values practices and strong values tend to have stronger relationships with
customers and a positive public image.

• Enhancing Decision-Making and Innovation: Values provide a

consistent reference point for making decisions. employees are
empowered to innovate and take risks within the boundaries of the
company's ethical framework.
Significance • Promoting Corporate Social Responsibility (CSR): Organizations
with strong values are more likely to engage in CSR activities, for
of welfare of society, sustainability and the environment.
Organizational
Values • Attracting Talent and Customers: Companies that emphasize values
such as inclusivity, innovation, or environmental responsibility are
more likely to attract top talent and loyal customers.

• Long-term Business Success: Companies that consistently uphold

their values in decision-making, operations, and customer interactions
tend to be more resilient, adaptable, and sustainable over time.

• Guiding Organizational Change: In times of change or crisis,

organizational values provide stability and direction. They help ensure
that the company’s core identity and mission remain intact.
 • Differing Interpretations: Employees may
interpret values differently, leading to
conflicts or misunderstandings.

Challenges in • Alignment with Actions: Values must align

Defining with actual practices; a disconnect can
Organizational erode trust.
Values • Evolving Values: As the business landscape
changes, values may need to be adapted to
remain relevant.
A value crisis occurs when the core principles and values that
guide the behavior and decisions of an organization are
compromised or become ineffective, leading to ethical conflicts,
reduced employee morale, and loss of stakeholder trust.
Types of Value Crisis

1. PERSONAL VALUE CRISIS (Individual challenges)

2. ORGANIZATIONAL VALUE CRISIS
3. CULTURAL VALUE CRISIS (societal shift due to changes)
4. ETHICAL VALUE CRISIS (individual or organizational ethics)
5. POLITICAL VALUE CRISIS (Political beliefs / ideologies)
6. ECONOMIC VALUE CRISIS (economic exploitation, crisis)
7. RELIGIOUS VALUE CRISIS ( religious beliefs & values)
8. GENERATIONAL VALUE CRISIS (difference in generations)
For 14 years, until the practice was exposed in 2016, hundreds of
thousands of Wells Fargo employees opened customer accounts
without consent to meet sales targets and generate fees for the bank.
The financial consequences included the following:
● The bank paid more than $7 billion to settle government
investigations and private lawsuits.
● Wells Fargo lost business from the state governments of California
and Illinois, as well as from the cities of Chicago, Philadelphia, and
Seattle, among others who cited the illegal behavior as the reason.
● In response to the scandal, in 2018, the Federal Reserve imposed
a limit on the bank’s growth, putting Wells Fargo at a competitive
disadvantage and costing it an unknown amount of potential
increase in customers and loans.
● The company lost $220 billion in stock market value in the two and
a half years after the enforcement action. The stock hit a 10-year
low in May 2020, faring far worse than its peers.
● The bank has racked up heavy expenses related to the crisis,
including legal fees, investigation costs, and spending on an ad
campaign aimed at restoring consumer trust.
Crisis Management Lesson: Live Up to Your Company Values
to Avoid Scandals

According to the government, Wells Fargo executives were

aware of the abuses as early as 2002, but failed to act despite
espousing a culture of integrity. The executives imposed such
aggressive sales targets for staff that many employees said
they felt they had no choice but to engage in the illegal
practices. The government is pursuing some individual
executives for their roles.
 Reasons for Value Crisis in Business Organizations

● Leadership Failures: neglect of organization's values in pursuit of short-term

financial goals, leading to unethical decision-making and mismanagement.

● Profit-Driven Focus: In highly competitive environments, businesses may prioritize

profits over ethics, resulting in unethical practices like corruption, fraud, or
exploitation.

● Lack of Clear Values: When organizations lack a well-defined set of values, or if

these values are not clearly communicated, employees may be uncertain about
expected behaviors, resulting in inconsistent actions.

● Cultural Misalignment: Mergers, acquisitions, or rapid expansion can create cultural

misalignment leading to conflicting values and confusion.
 Reasons for Value Crisis in Business Organizations

● Weak Corporate Governance: Poor governance structures can lead to a lack of

accountability, where violations of organizational values go unchecked.

● External Pressures: Economic downturns, regulatory changes, or market

competition can push organizations to compromise their values to survive.

● Lack of Ethical Training: Employees may not be adequately trained in ethical

decision-making, leading to actions that contradict the company's values.

● Inconsistent application of Values: If leaders being exempt from the rules that
apply to employees, it creates confusion and a loss of trust.
Key features include:

● Erosion of Ethical Standards: The organization may experience a

breakdown in ethical behavior, with decisions driven by short-term gains
rather than long-term values.

● Lack of Alignment: There is a disconnect between the stated

organizational values and actual behavior, leading to confusion and
mistrust among employees and stakeholders.

● Cultural Decline: The company's internal culture deteriorates, often

marked by unethical behavior, conflicts of interest, and a lack of
accountability.
Key features include:

● Poor Leadership: Leaders in the organization may fail to embody or promote the
company's values, resulting in a loss of direction and purpose for employees.

● Decreased Trust and Reputation: Customers, employees, and other stakeholders may
lose trust in the organization if they perceive that values are being compromised,
damaging the company’s reputation.

● Low Employee Morale: A value crisis often leads to low employee engagement, job
dissatisfaction, and high turnover as workers become disillusioned by the gap between
what the organization claims to value and what is practiced.
Measures to Overcome Value Crisis in Business Organizations

Encourage Open Communication: Promoting a culture of transparency

where employees feel safe to voice concerns about ethical issues without fear
of retaliation can help identify and resolve problems early.

Align Values with Business Strategy: The company’s business strategy

should be aligned with its values, ensuring that decisions made for growth or
profit are also ethical and in line with the organization's principles.

Regular Audits and Reviews: Conducting regular ethical audits and reviews
can help organizations identify potential value misalignments and take
corrective action before they escalate into a crisis.

Foster a Culture of Accountability: All employees, regardless of position,

must be held accountable for adhering to organizational values. Implementing
strict consequences for violations can help deter unethical behavior.

Engage Stakeholders: Organizations should actively engage stakeholders

(employees, customers, partners) in discussions about values and ethics. This
ensures that all parties understand and align with the organization’s core
values.
 Measures to Overcome Value Crisis in Business Organizations

● Strengthen Leadership Commitment: Leaders must take responsibility for

upholding and promoting organizational values. This involves acting as role
models, embedding values in everyday decision-making, and creating a culture
of ethical leadership.
● Clear Definition of Values: Organizations must clearly define their core values
and communicate them consistently to all employees and stakeholders. These
values should reflect the company's mission and long-term goals.
● Create a Strong Ethical Framework: Developing a comprehensive ethical
code of conduct that outlines expected behaviors and provides guidance in
dealing with ethical dilemmas can prevent value crises.
● Training and Education: Regular ethical training programs should be
implemented to ensure employees understand the importance of organizational
values and how to apply them in their work.
● Improve Corporate Governance: Strengthening corporate governance
structures can help ensure accountability and oversight. This includes clear
reporting mechanisms for unethical behavior and strong enforcement of ethical
policies.
 In 2017, Equifax, a credit reporting bureau, suffered a data breach
that gave hackers access to sensitive personal information for 147
million consumers. The incident was the most expensive data
security breach to date. In 2020, four members of China’s People’s
Liberation Army were indicted in the United States in the breach.

● The company had $1.7 billion in legal settlements, fines, fees

for consultants, lawyers, and investigators, and the cost of
providing credit monitoring and identity protection to
Case consumers.
study ● In the week after Equifax disclosed the breach, the company
lost $5.3 billion in market valuation as its stock price declined
31 percent.
● For the first time ever, a credit rating agency downgraded its
outlook on a company over cybersecurity concerns. A credit
rating downgrade increases a company’s borrowing costs.
Moody’s dropped its rating on Equifax to negative from stable in
2019, two years after the breach, citing continued high costs
related to the hack. Moody’s further projected that the spending
would continue to hurt Equifax’s profitability.
 Crisis Management Lesson:
A congressional investigation found that relatively basic mistakes at Equifax led to the
breach. For example, the attack occurred through a server vulnerability that was a known
issue. Equifax had previously notified its system administrators to patch the issue, but the
person responsible for the point of entry did not get the message because Equifax’s email
list was out of date.
An expired digital certificate allowed malicious network activity to stay hidden. Proper data
governance protocols, which limit user access to sensitive information, were not in place

Case — this allowed the attackers to run about 9,000 queries to find the consumer data. The
attack lasted about 76 days before it was discovered.
study The company’s public response contained many missteps (including directing consumers
to a website that had bugs, according to IT experts) and as such, did not inspire
confidence. For example, the site asked consumers, who had just had personal
information stolen via Equifax, to enter most of their Social Security numbers to find out if
they were included in the hack. The company mistakenly tweeted a phishing link for the
response website four times instead of the correct URL, according to Wired magazine.
Crisis management experts said Equifax lacked comprehensive prevention and response
plans and faulted the company’s slow disclosure. (Equifax discovered the breach in July
2017 but did not reveal it until September 2017.) Given the sensitivity of the information in
their database, Equifax should have had much more robust preparation, experts said.
 • In summary, values are shared beliefs and plays a significant role in
shaping human experiences and impacting personal, social, and business
contexts.

• Understanding and respecting these values is essential for effective

communication and building inclusive and culturally sensitive
environments in both personal and professional life.
Conclusion • A value crisis in business organizations can have severe consequences,
including a breakdown in culture, loss of trust, poor employee morale,
and reputational damage. The root causes of value crises often stem from
leadership failures, a lack of clear values, or external pressures that
compromise ethical standards. To overcome a value crisis, organizations
must focus on leadership commitment, ethical education, accountability,
and strong governance. By embedding values in the organizational
culture and decision-making processes, businesses can prevent value