Values for Decision MakingHarrison, Ch. 4
Fred Wenstøp
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The concept of value
Values are subjective and belong to a person They cannot be proven or disproved It is useful to distinguish sharply between facts and values
We have beliefs about facts – what is We have feelings concerning values – what one ought to do
Values guide choice Hume: ”Reason is the slave of passion” Personal and organizational values permeate all decisions
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Hierarchy of values
Individual values Group values Organizational values = managerial values Societal values
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American individual values
1. Happiness Maximum results Satisfaction
2. Lawfulness3. Harmony4. Survival5. Integrity
Self-respect
6. LoyaltyPersonality is determined by the weights of these values
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Classification of values IValues and norms
It is useful to distinguish between values and norms Values
something we appreciate something we want as much as possible of England 1967: Preferential values
Norms standards of behaviour or rules that are regarded as unbreakable
• Not lying
• Legal rules
England: Normative values
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Business organisational values
Profits Survival Growth
According to Bernthal 1962
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Classification of values IIMeans and ends
Intrinsic value (end value, terminal value)Something that is of value in itself
• food
Instrumental value (Mean value)Something that is valuable because it lead to intrinsic
values• money
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Classification of values IIIRokeach 1973
H o ne s tyF a ilu ree vo ke s g u ilt
M ora lv a lu es
S ki llsF a ilu ree vo ke s sh a m e
C o m p e te n cev a lu es
In strum e nta l v a lueM o de s o f co nd u ct
S a lva tionP ea ceo f m ind
P e rson a lV a lu es
W or ldp ea ceB ro the r-h ood
S o cia lv a lu es
T erm ina l v a lueD e sira b le s ta tes
V a lue
Private business managers
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Classification of values IV
Performance measuresKey ratiosCost of capitalGrowthMarket shareStakeholder valuesEtc…
Core values (9 on top)IntegrityHonestyFairnessEqualityLoyaltyCommitmentRespectPrudenceTolerance
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Ranking of managerial valuesEngland 1966, Lusk & Oliver 1972
Business values Personal values Group values
Org. efficiency Achievement My company
Productivity Success Customers
Profit Creativity Managers
Org. growth Job satisfaction My boss
Ind. Leadership Individuality My subordinates
Employee welfare Money Employees
Social welfare Influence Co-workers
Prestige Owners
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Value judgement
A judgement is an ultimate categoryIt can only be evaluated by another judgement
Judgement addresses reality (facts) and valuePredictive judgement (facts)Evaluative judgement
Subjective value judgement remains the principal means for evaluating and selecting from numerous variables in each function of the decision-making process (Waddell 1970)