02300_00266_01_preiv.qxp 6/27/2006 09:28 Page i MANAGING BY VALUES 02300_00266_01_preiv.qxp 6/27/2006 09:28 Page ii All readers of this book are invited to have a personal online Value Audit Assessment by using the following link: www.mbvsuite.com 02300_00266_01_preiv.qxp 6/27/2006 09:28 Page iii MANAGING BY VALUES A Corporate Guide to Living, Being Alive, and Making a Living in the 21st Century Simon L. Dolan, Salvador Garcia and Bonnie Richley 02300_00266_01_preiv.qxp 6/27/2006 09:28 Page iv © Simon Dolan, Salvador Garcia and Bonnie Richley 2006 Forewords © John Abrams and Belmiro de Azevedo 2006 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2006 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN-13: 978–0–230–00026–1 ISBN-10: 0–230–00026–6 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Dolan, Simon. Managing by values : a corporate guide to living, being alive, and making a living in the 21st century / by Simon L. Dolan, Salvador Garcia and Bonnie Richley. p. cm. Includes bibliographical references and index. ISBN 0–230–00026–6 (cloth) 1. Management—Moral and ethical aspects. 2. Business ethics. I. Garcia, Salvador (Sanchez Garcia), 1955– II. Richley, Bonnie. III. Title. HF5387.D646 2006 174’.4—dc22 2006046257 10 9 8 7 6 5 4 3 2 1 15 14 13 12 11 10 09 08 07 06 Printed and bound in Great Britain by Creative Print & Design (Wales), Ebbw Vale 02300_00266_02_prexxviii.qxp 6/28/2006 09:23 Page v To Adela, who really taught me the art of blending ‘living’, ‘being alive’ and ‘making a living’ … Simon L. Dolan To Amparo, who provided the tender, loving and care, facilitating the pursuit of my utopian thoughts … Salvador Garcia To Anthony, for always making my dreams come true … Bonnie Richley 02300_00266_02_prexxviii.qxp 6/28/2006 09:23 Page vi Every effort has been made to trace copyright holders, but if any have been inadvertently overlooked the publishers will be pleased to make the necessary arrangement at the first opportunity. 02300_00266_02_prexxviii.qxp 6/28/2006 09:23 Page vii Contents Foreword by Belmiro de Azevedo x Foreword by John Abrams xiv The Authors xviii Acknowledgements xx Introduction xxii Part I Management by Values: Logic and Content 1 Managing by Values: Its Foundation and Evolution 3 The evolution of MBV: from MBI, through MBO, to MBV 6 Triaxial model and key factors of MBV 14 MBV as the means for integrating strategic management with ‘people’ policies and building commitment 17 MBV and corporate ethics: two close, but disparate concepts 22 Summary 24 2 Values: But, What Actually Are They? 27 The meaning of the word ‘value’ 27 Moving from beliefs to behavior, via values 36 Beliefs and outcomes: the emergence of stress 39 Value formation in an organization 43 The power of values towards generation of knowledge and success in organizations 46 Summary 49 3 Renew or Die: The Importance of Culture Change 50 Understanding organizational culture and why it matters 50 Why should an organization change? 51 What should the change involve and how far should we go? 60 The need for ‘gearing’ between strategy, structure, processes and people: the role of values 61 More of the same or ‘a change in the way of changing?’ 64 vii 02300_00266_02_prexxviii.qxp 6/28/2006 09:23 Page viii viii CONTENTS When is the right time to change? 67 Summary 68 4 The Logic of Two Different Cultures: Control versus Development 69 The necessity to alternate and integrate control-oriented management with development-oriented management 70 The meaning of values in control-oriented and learning and development-oriented organizations 77 The rational-economic culture and why it fails 80 The formal and bureaucratic structure: can it work forever? 84 Revisiting the Hawthorne studies 89 Revisiting the humanist beliefs 90 The ‘socio-technical’ approach to management 91 Are organizations evolving? 93 Summary 94 Part II Practices Associated with Management by Values (MBV) 5 The Relationships Between Organization Development (OD) and MBV 97 What is organization development? 97 The innovative company: the learning organization 106 The structures and processes to be re-designed for cultural evolution from control towards development 109 Surviving and thriving in the 21st century 113 Summary 115 6 Creating a Culture Shift: Roles and Managing Resistance to Change in Your Company 116 Roles and responsibilities in implementing culture change 116 Roles to be assumed by the change leader(s) 119 The 3 phases of change 126 Moving from ‘doing things’ and ‘getting things done’ to ‘enabling things to happen’ 130 Resistance to change 133 The role of communication in managing resistance to change 134 Managing the political dynamics of cultural change 135 Managing the emotional dynamics of cultural change 138 Culture shift and MBV 146 Summary 146 02300_00266_02_prexxviii.qxp 6/28/2006 09:23 Page ix 䉴 CONTENTS ix 7 A Step-by-Step Process for Putting MBV into Practice 148 Phase 0: pre-change 149 Phase I: distilling the essential values 154 Phase II: we are actually changing! it’s time to put the project teams to work 182 Phase III: designing human resource policies based on values 187 Phase IV: monitoring operational values via culture audits 195 Summary 197 8 Putting MBV into Practice is Not Easy: 24 Likely Problem Areas, and Suggested Answers 199 9 Postscript: An MBV Voyage – Past, Present and Future 207 The birth of MBV: a synergy based on the authors’ experiences and beliefs 207 The dynamics and evolution of MBV 209 Culture, challenges and frontiers in MBV 214 Living, being alive and making a living: ‘pendulum’ and ‘kaleidoscopic’ perspectives of MBV 216 A final word to the reader 218 Driving your high-performance MBV organization to success 219 Appendices 221 On-line instrument for auditing and measuring value gaps and benchmarking in your organization (the MBVsuite – www.mbvsuite.com) 221 Instrument for measuring leadership readiness for championing culture change 222 References 228 Index 234