“My son, if sinful men entice you, do not give in to them.” –Proverbs 1:14 NLT
When Anne M. Mulcahy took the leadership role at Xerox Corporation in 2001, the company was at the height of a crisis.
Xerox was barely surviving the murky $19 billion debt, and all observers, from media practitioners to investors, had one verdict: bankruptcy. Added to this was a plummeting stock price and an investigation by the Securities and Exchange Commission (SEC) for improper billing and accounting practices.
It was an uphill battle, but by 2005, Mulcahy made some improvement bringing in more than $900 million in profit and at least $15 billion in revenues. In 2006, Xerox cleared itself from the $19 billion core debt, and the inevitable bankruptcy did not materialize. Additionally, the company was able to settle the accounting irregularities case with SEC.
In 2005, Strategy+Business quoted Mulcahy saying that corporate values helped Xerox during the worst crisis in its history. For Mulcahy, living Xerox’s values together with specific objectives and hard measures helped the company made a historical comeback.
Mulcahy identified customer satisfaction, quality and excellence, premium return on assets, use of technology for market leadership, valuing employees, and corporate citizenship as Xerox’s corporate values. In 2008, Mulcahy was awarded “CEO of the Year” by Chief Executive magazine.
While it wasn’t clear how Xerox addressed its case with SEC, it was certain that corporate values have a role to play in dilemmas like that faced by Mulcahy.
According to Psychology Today, corporate values are often associated with strong positive cultures. The only problem is that they have been limited to tag lines and slogans. Worst, what companies referred as corporate values are not values at all. They are rarely rooted in fundamental philosophical convictions, morality, or ethics. Rather, they are usually attached to a financial concept.
Let’s take premium return on assets, one of Xerox’s six corporate values, as an example. The said value is a strategic goal for a dying company to be back on track, but it is more tied to a financial gain rather than a conviction, morality, or ethics. To be blunt about it, not one of the corporate values was crafted solely to address the root of the company’s accounting irregularities case.
For businesspeople following national events in 2001, Xerox’s financial status was not the big news. It was Enron’s bankruptcy. Like Xerox, Enron was embroiled with accounting irregularities. The only difference was that Enron became an icon of corporate fraud and corruption while Xerox bounced back and made astounding strides. Nonetheless, Enron and Xerox’s cases boil down to this: a company without solid corporate values will find itself in a mire of damaged reputation, costly new regulation, and a lifeless business.
The aforementioned factors were probably the impetus for Solomon’s warning in Proverbs 1:14. Dishonest gain does not amount to anything. Its perceived value is very fragile and will break and disappear once the dishonest act is discovered.
For Christian business owners and leaders, the issue is not whether someone will discover a dishonest act or not. Rather, it is about worshipping God through business practices. After all, God knows every detail of the business operation. He already knew an unlawful practice even before an auditing company, the Internal Revenue Services or the SEC make their investigation.
It is a fact that profit is the fuel of any business. However, Christian business owners and leaders should take to heart that any push for profit without regard to certain moral and/or ethical conviction is damaging in the long run.
In Built to Last: Successful Habits of Visionary Companies, James Collins and Jerry Porras found out that core ideologies were central to the success of visionary companies. Collins and Porras believed that a sense of purpose beyond making money has provided the 18 companies under study some staying power and products at par with the competition.
And yes, Built to Last and succeeding studies made by Collins and Porras were not without criticisms. But whether businesspeople absolutely buy or are highly suspicious of the results of the partners’ six-year study, there is no doubt that morality and ethics are central to the issue of corporate values.
Beyond profits, Christian business owners and leaders should institute ethical corporate values because it is the right thing to do. Moreover, while real corporate values may not have a direct impact to a business’ financial health, they directly impact the people who contribute to the financial well being of the business.
Honest profits are possible. It, however, takes solid corporate values and commitment to prevent leaders and employees from giving in to the call of unethical practices.
What can Christian business owners and leaders do to inculcate their corporate values among their employees? How could they help them stand by the company’s corporate values? These questions will be answered in the second and last part of this two-part series.
Originally published at cfcbe.com. © 2013, The Center for Christian Business Ethics Today. All Rights Reserved.
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