Over the past two decades many companies have launched values initiatives, ethics programs, and legal compliance efforts. Why, then, have so many companies-Enron, WorldCom, Xerox, and others-recently come under scrutiny for questionable business practices? Harvard Business School Professor Lynn Sharp Paine argues that the problem lies not in a sudden outbreak of corporate venality but in a mismatch between how many companies are managed and what's expected of them by society today. Instead of adding more new programs and initiatives, today's corporate leaders need to go back to basics and adopt a qualitatively different kind of management. In Value Shift they will find an approach that is suited to the corporation's contemporary role in society-an approach aimed at melding high ethical standards with outstanding financial results.

It is not enough for today's leading companies to create wealth and produce superior goods and services. Companies are expected to behave responsibly, adhere to basic moral principles, and manage their own values and commitments. Gone are the days when companies were thought of as purely amoral devices for managing pools of capital and carrying out commercial activities. You need to look no further than today's headlines-from accounting scandals to calls for stiffer penalties for unethical behavior-to see proof of this "value shift" in the business world, signaling a new business ethic and a higher standard of corporate behavior globally.

Value Shift articulates exactly why the superior performers of the future will be those companies that can satisfy both the social and financial expectations of their constituencies. By explaining the larger forces driving the current focus on scandals and ethics, Value Shift points to a new era in the corporation's development and shows what managers can do to align their companies' performance with the higher standard expected today.



Contents :

Preface and Acknowledgments ix

Chapter I The Turn to Values I Chapter 2 Does Ethics Pay? 29

Chapter 3 Time for a Reality Check 55

Chapter 4 The Corporation's Evolving Personality 81 Chapter 5 A Higher Standard 107

Chapter 6 The New Value Proposition 133

Chapter 7 Performing at a Higher Level 167

Chapter 8 A Compass for Decision Making 199 Chapter 9 The Center-Driven Company 227 Appendix: Emerging Standards 251

Notes 257

Index 295



About the author :

LYNN SHARP PAINE, D. Phil., J.D., is a John G. McLean Professor at the Harvard Business School. She is a member of The Conference Board's Blue-Ribbon Commission on Public Trust and Private Enterprise, and consults to companies worldwide on leadership and values. Her articles have appeared in Harvard Business Review and other major business journals, and she is the author of the casebook, Leadership, Ethics, and Organizational Behavior: