The Values Statement
The values statement, also called the code of ethics, differs from both the vision and mission statements. The vision and mission state where the organization is going (vision) and what it will do to get there (mission). They direct the efforts of people in the organization toward common goals. The values statement defines what the organization believes in and how people in the organization are expected to behave—with each other, with customers and suppliers, and with other stakeholders. It provides a moral direction for the organization that guides decision making and establishes a standard for assessing actions. It also provides a standard for employees to judge violations.
However, managers cannot just create a values statement and expect it to be followed. For a values statement to be effective, it must be reinforced at all levels of the organization and must be used to guide attitudes and actions. Organizations with strong values follow their values even when it may be easier not to. Levi Strauss & Co is an excellent example of a company that is driven by its values.
When Levis Strauss began to source its manufacturing overseas, the company developed a set of principles called the Global Sourcing and Operating Guidelines for overseas operations and suppliers. One of the principles covered the use of child labor:
Use of child labor is not permissible. Workers can be no less than 15 years of age and not younger than the compulsory age to be in school. We will not utilize partners who use child labor in any of their facilities. We support the development of legitimate workplace apprenticeship programs for the educational benefit of younger people.
Levi Strauss found that one of its contractors was employing children under 15 in a factory in Bangladesh. The easy solution would be to replace those workers, but in Bangladesh, the children’s wages may have supported an entire family. And if they lost their jobs, they may have had to resort to begging on the streets. Levi Strauss came up with a different solution, one that supported its values of empathy, originality, integrity, and courage: it paid the children to go to school. Levi Strauss continued to pay salaries and benefits to the children and paid for tuition, books, and supplies.[3] Even though it would have been easier to just fire the child laborers and consider the problem settled, Levi Strauss was driven by its values to find a better solution.
Together, the vision, mission, and values statements provide direction for everything that happens in an organization. They keep everyone focused on where the organization is going and what it is trying to achieve. And they define the core values of the organization and how people are expected to behave. They are not intended to be a straitjacket that restricts or inhibits initiative and innovation, but they are intended to guide decisions and behaviors to achieve common ends.