Every management book always talk about value in their early chapters. However, the question is :How values actually impact on the business practices in real life? As my personal management hero Jack Welch said "Value are just behaviors--specific, nitty-gritty, and so descriptive they leave little to the imagination. People must be able to use them as marching order because the are the how of the mission, the means to the end--winning." Companies should not be able to function properly without clear, logical and consistent value statements in theory. But is it?
The short answer is YES. Surely value statements can rally shake-holders to perform in effective and consistent ways within and outside companies. These statements acted as laws in our societies. It defines right or wrong and good or bad behaviours by management.
However, here is the catch, companies DO NOT necessary need value statements to make enough money to survive or even maintain their market leading positions, especially in mature industries. Why? Some companies have some other powerful advantages to mitigate value statements effect. For examples, obtaining state-of-the-art technology, having powerful network, having huge marketing share, having weak customer bargaining power etc.
So why should we care about the value statements then? Although, companies do not need value statements to survive or maintain their current positions, lacking value statements undermine their competitive advantages in the long run. Political conflicts would become severe within companies. Just like a country without laws to govern their citizens. They would do whatever they can do to get whatever they want. Disciplining and rewarding citizens become more subjective than objectives. This unfair treatment will drive talented employees away from the companies. Only those people who know to play the political game well remain in the companies.
All the sudden, organisations shift from value-creation driven mechanisms (outward looking) to political arenas (inward looking). This movement can explain why some successful companies fall.
Therefore, a set of good value statements can be one of the most valuable assets to protect and drive companies to long term success.