Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance

The Enron affair has produced a flood of books on business ethics. Far too few of them engage fully with the real issues. This one does. The author has produced a definitive guide to the factors that make attention to organizational ethics an imperative in business thinking and to sound practical approaches to dealing with ethical issues. In the process, she demolishes the sloppy thinking that has surrounded much of the discussion of business ethics, in particular the view that an organization is and should be an amoral entity and the related view that the only ethical duty that a corporation owes is that to maximize the wealth of its stockholders. More important, she establishes clearly that ethical commitment and economic advantage are separate domains, with a degree of overlap that depends on context and timescale. The ethical dimension cannot be absorbed into the financial dimension with the cosy, but often untrue, assertion that 'ethics pays'. There is an area of activity within which ethical and economic considerations run together, but there are areas of activity where they are opposed. If one wants a simplistic assertion to support ethical behaviour, the author suggests that it should be 'ethics counts' rather than 'ethics pays'. The advantage of this formulation is that it establishes the ethical domain as existing in its own right. The author suggests that the two domains are different but complementary and need to be recognized as such. What are the circumstances in which ethical behaviour and profitable behaviour are most likely to coincide? As a broad rule, the longer the time frame being considered and the more closely the corporation adheres to the standards of ethical behaviour accepted in first world countries, the more likely it is that ethical practice will coincide with profitable practice. The author discusses both the principle and some of the difficult and perplexing departures from it. There is no pretence that decision-making is easy where ethics and profitability do not run together, but there is guidance, in two chapters entitled 'A Compass for Decision Making' and 'The Center-Driven Company'. In the course of the book, there is an excellent brief history of views of the corporation and its capacity to be a moral entity and an overview of the current situation, in which the full range of theories and behaviour from high to non-existent ethics can be found, but there is a discernible trend toward recognition of the importance of ethical behaviour. This is driven by community expectations, greater access to information (and greater difficulty of concealing unethical behaviour), and slow but progressive shifts in the law, as well as by the expectations and standards of managers and employees. The move is complicated by globalization, because increasingly the large corporations are operating in countries with a wide range of cultural frameworks where issues of corruption, near-slavery conditions for workers and so on m

In this book Lynn Paine does an excellent job of unravelling and clarifying the complicated issues surrounding business ethics. She convincingly argues that a new definition of business success is emerging, one which includes financial performance but also embraces wider considerations. A lot of current writing on the topic of corporate social responsibility is based on the vaguely defined concept that "ethics pays". Paine agrees that there are many tangible benefits for companies embracing wider responsibilities, but shows that ultimately an "ethics counts" approach has more to offer. She backs up her perspective with business examples from around the world, and with illuminating philosophical and legal analysis.I strongly reccommend this book for anyone interested in the future of business.

There is an emerging standard of corporate performance that encompasses moral and financial dimensions.Lynn Sharp Paine, a lawyer and professor at the Harvard Business School, argues companies are being rated as if they were human beings; they are being asked to provide more than profits to their shareholders. The market demands that corporations respect their employees, be reliable to their customers and communities and be transparent with their investors.The author argues "ethics counts" provides corporations with value-added in the truth, loyalty, gratitude and reciprocal respect it engender among its stakeholders. The new bottom line: a corporation's success comes down to the quality of its decision making. Moral scrutiny is becoming as important as financial performance in stakeholders' evaluations.

In this engagingly written and easy to read book, Paine makes a compelling case for the integral role values and ethics should and do play in successful corporations. As a somewhat cynical 20-something, I took solace in Paine's detailed examples of the culture and actions of ethical corporations as they allow for the possibility that corporations could, if they wanted, consider many stakeholders beyond the shareholder when making decisions. The corporations that do integrate ethics and values into their operations are good neighbors, good employers, and good investments. Paine's thoughtful and logical writing also serves to debunk the notion that corporations possess no moral responsibility to society. This is a must read for anyone who is concerned about the role of businesses and corporations in society.