Question

What does it mean when we say that "corporations need to create shared value" and think beyond just the shareholder. What are some examples of shared values that companies can create?

Answer 1

Organizational culture shapes the unique social environment of the Organization on the basis of the shared values, beliefs and philosophies, etc. These traits comprise both, of written and unwritten rules that gradually develop over a period of time in an Organization. However, they must think beyond shareholders. This is so because, since managers deal with the various stakeholders in the business, it is essential that their interests are taken care of, both on the basis of the ethical groundwork as well on the basis of the law. The role of business ethics and Corporate Governance is hence of significant importance at the workplace as far as the managers are concerned with the management of their respective responsibilities and attempt to think beyond just the shareholder.

Further, it shall help to achieve the following by the Companies:

• It is the cognitive reaction to respond positively when people of a particular social group share the values strongly. This positivity in their attitudes, enables the realization of the group’s goals successfully. Hence the sharing of values, be it personal or organizational, is rewarding to the people.
• The values of the people on personal front may be different. But it is to be noted that a considerable portion of the people, is spent at the workplaces. Hence, it becomes essential to have organizational values being shared by its members so that even if the personal values differ, it brings the group closer by sharing the organizational values strongly with each other.
• Sharing of values brings back the members of the group in the track, if such members are getting misled. The unified goals and values associated around achieving the same, acts as the guidance to the members towards abidance of various ethical and legal regulations of the organization.
• Makes the process of decision-making smoother and faster.

For example, Nestle customized its products to create value for the people of India. Similarly, groups like ADIDAS, BMW, H.J. Heinz, etc. have successfully attempted in creating a culture of social responsibility as well, to ensure that the decisions that these companies make, have a positive impact upon the stakeholders of that Organization.