Multiple Levels of Decision Making Ethical Management in Various Business Contexts

Transcription

1 Multiple Levels of Decision Making Ethical Management in Various Business Contexts Marcel van Marrewijk Abstract: This article describes a set of ideal type organisations, constructed according to a developmental sequence. Each organisation type is based on a specific set of values or value systems. Because such systems shape institutional structures, they influence the role of leadership, governance and decisions. As they are based on Spiral Dynamics, known as Emerging Cyclical Levels of Existence Theory (ECLET), the organisation types are labelled as Order, Success, Community and Synergy. Moreover, they interact with changes in the environment, or Life Conditions, and can determine an individual s Worldview, causing different interpretations of common phenomena, such as Corporate Sustainability and Corporate Responsibility. As an overview, a Transition Matrix is presented which indicates the paradigm shifts per discipline or department, manifested in the subsequent ideal type organisations. Keywords Ethics, Decision-Making, Corporate Sustainability (CS), Corporate Responsibility, Corporate Sustainability and Corporate Responsibility (CS-R), Community-Driven Organisation, European Corporate Sustainability Framework (ECSF), Spiral Dynamics Abbreviations ACCA The Association of Chartered Certified Accountants CS Corporate Sustainability CS-R Corporate Sustainability and Corporate Responsibility ECSF European Corporate Sustainability Framework ECLET Emerging Cyclical Levels of Existence Theory RBS Responsive Business Scorecard Biographical note : Marcel van Marrewijk is Director of Virtu et Fortuna. He is the Initiator and Project Manager of the European Corporate Sustainability Framework (ECSF) Research Project, which is coordinated at Erasmus University in Rotterdam. He is also Director of the Great Place to Work Institute in the Netherlands. A Multiple Level-View on Business Practices 1

2 Inclusiveness and Connectedness In June 2004, on behalf of an international consortium, the Erasmus University Rotterdam formally delivered the outcomes of its research, the European Corporate Sustainability Framework (ECSF), to the European Commission/European Social Fund. In order to develop and test this new generation management framework, it thoroughly studied management concepts, system dynamics, evolutionary development and the current state of the corporate social responsibility (CSR) debate. In designing practical ways to managing complexity and corporate transformation towards higher performance levels as being sustainable and responsible operating organisations, ECSF researchers have come across interesting trends, robust concepts, innovative tools and assessment methods. They conclude that the general trends are increasing inclusiveness and connectedness. As purported by Wilber (1995) and Van Marrewijk (2003) evolution reveals more and more complex solutions to ever-changing Life Conditions, stipulated by Beck & Cowan (1996). Individuals, groups as well as societies learn to transcend traditional approaches that can no longer solve their problems. The mere act of transcending inadequate approaches demonstrates the move towards inclusiveness, since innovative ways are built on existing foundations and, thus, include them. Inclusiveness is manifested in the sequence of concepts of Corporate Sustainability and Corporate Responsibility, as advocated by Van Marrewijk (2003). These reflect the transition between organisations that were first oriented towards a single scale of reference, most often being profits, moving subsequently to a multiple scale, including the organisations impact on social and environmental aspects, be it the triple bottom line. In the former development level, organisations could ignore specific interests by referring to legislation which itself reflects democratically set minimal requirements. But those with a stake increase their countervailing power. Labour unions give employees a voice and, with increasing buyer s markets, consumers realise their spending power and make companies at least sensitive to their reputation. The world of organisations has grown and globalisation has literally mushroomed. Figuratively, managers include more aspects into their business operations in order to cope with new stakeholders. They have to adopt new values, learn new competences, apply new leadership styles, design more effective decision methods and structure their organisation accordingly. Hierarchies have loosened up; business excellence, entrepreneurship, risk management, brand strategies and human resources are examples of the new business arena that, currently, has dominance worldwide. With growth rates, profits and reputation as main drivers, the capitalistic way of doing business today encounters more and more criticism that, eventually, may jeopardise long-term existence or, indeed, survival. Consumerism, enormous waste and elitism are only a few of the complaints which international NGOs express at world business fora. Many leading organisations have already experienced their limits to growth internally. Combining processes into a company-wide approach, managing the supply chain, improving speed and teamwork as well as enhancing customer service have become serious challenges which can hardly be met with traditional approaches. For a long time, the most effective way to improve business excellence has been, and for many still is, to enhance process management. Most companies turn to managerial rather technical approaches, such as Business Process Redesign, Six Sigma and Just-in-Time management. In hierarchically-managed organisations with loyal and obedient employees, such techniques have brought significant successes. However, over the years, more efficiency 2

3 campaigns fail probably because of the lack of a supporting culture and personal commitment from those directly involved. As a next step in business improvement, many companies try to boost speed and improve teamwork, particularly as increasing speed implies the integration of processes up to a company-wide system which requires dedication to co-operate between departments, disciplines, affiliates, and so on. In general, engaging and collaborating with employees and stakeholder groups demand innovative and social competences within organisations and, above all, a culture of trust. Employee satisfaction is not the only thing that matters, but a perception of mutual respect, credibility and fairness are also material, as expounded by Van Marrewijk (2004). In the main, increasing numbers of professional workers are not just inspired by hierarchical commands and bonuses alone. In order to bring their whole selves to work, be creative as well as dedicated and committed, employees need to match their values, personal drivers, capacities and ambition with their work environment. The alignment of personal and collective interests has become essential to contemporary business. No longer can companies treat their employees as resources, numbers or costs and need to view them as human beings. As far back as the early 1950s, Drucker (1954) states that if an employer hires a worker, he always hires a whole man. Therefore, in addition to muscles and brain power, employees also bring their own social, emotional and even spiritual being. Once management considers employees as assets rather than liabilities and regard them as the ultimate source of corporate success, the workplace culture becomes a competitive parameter. Since price cuts can be met overnight, building trust in the workplace, as affirmed by Van Marrewijk (2004), might turn out to be timely, effective and not so easily copied by competitors. Ideal-Type Organizational Structures Based on Spiral Dynamics Developing an ideal type organisation could be based upon the core value system, as defined by Graves (1974), founder of the Emergent Cyclical Levels of Existence Theory. His successors, Beck & Cowan (1996), renamed it Spiral Dynamics and successfully introduced Graves academic achievements to a wider audience. Based on extensive empirical research, Graves - Professor in Psychology and a contemporary of Abraham Maslow - concludes that mankind so far has gradually developed eight core value systems. Each level of existence, constructed around a core value system, provides its own hierarchy of needs. Values are considered as coping mechanisms to meet specific challenges and aid institutions to influence behaviour. A value system is a way of conceptualising reality; it encompasses a consistent set of values, beliefs and corresponding behaviour, whether for the individual, the company or society. It develops mainly as a reaction to specific environmental challenges and threats. The system can brighten or dim as life conditions, consisting of historic Times, geographic Place, existential Problems and societal Circumstances, change. All entities, including organisations, eventually have to meet the demands encountered or they risk the danger of oblivion or even extinction. For example, should societal circumstances change by inviting corporations to respond and, consequently, reconsider their role within society, it is implied that they have to re-align their value systems and their business philosophies, such as mission, vision, policy deployment, decision-making, reporting and corporate affairs. The quest to create an adequate response to specific life conditions would result in a wide variety of survival strategies, each founded and demonstrated on a specific set of values. It must be understood that the development of value systems occurs in a fixed order of Survival Security - Energy & Power Order Success Community - Synergy - 3

4 Holistic life system. Each includes and transcends the previous one, thus forming a natural hierarchy or holarchy, as expounded by Wilber (1995). Relevant to the corporate business world of today, four core value systems, set by Beck & Cowan (1996), are focused upon, using colour coding. The selected systems are Order [Blue], Success [Orange], Community [Green] and Synergy [Yellow]. The transition zones between them are not analysed. Each of the four business contexts and features of ideal type organisations are presented and each is introduced via its underlying value system and its dominant worldview; it is also related, often with psychological explanations, bringing forth supporting institutional arrangements and decision structures. A. Order (Absolute Order Blue) Introduction to the Value System Before mankind experienced Order, it was able to function at three levels of existence, characterised by Survival, Security (bonding order) and Energy & Power (powerful self). Historically, loose tribes evolved as clans, seeking refuge in kinships, rituals, holy ancestors and mystical nature. The value system supporting Security [Purple], observed in the motherchild relationship, can be experienced through feelings of pride and belonging as well as in the identity of organisations. Freeing themselves from kinships and family ties, people gradually experienced ways of expressing themselves guiltlessly and selfishly so as to find immediate pleasure, gratify impulses and senses immediately and avoid shame in a world of domination, threats and ego. Power & Energy [Red] can be easily recognised in feudal states, in perseverance when the going gets tough and in negative manifestations such as traffic road rage, hooliganism and the party animals - Red lacks the capacity for long-term sequential thinking. Individuals tend to manifest such energies, especially when young, by setting and testing limits, as well as in competitive games and adverse times, as those experienced by CEOs and admirals. Such manifestations relate to an environment with limited possibilities and shortage of sources, provoking entities to fight to gain control and/or get fair share. When individuals learn to transcend the self and experience consequential thinking, they are able to live up to higher ideals, find pride and fulfilment in work and accept sacrifices now so as to obtain rewards later. New values emerge that match a quest for Order, meaning and purpose. History displays empires transcending the feudal states. Christianity, communism, armies and bureaucracies represent Absolute Order, providing a master plan that puts people in their proper places. Impulses are controlled through discipline, guilt and punishments. The rightful authorities seek order and stability; they also succeed in making people believe in future rewards for current sacrifice. People with a lot of Blue live by the book and try to comply with laws, regulations, procedures and structured agendas. Life is relatively simple : for each problem, there is a proven practice and a guidebook to help them resolve it, step by step. Organisational Features Associated With Order Such organisations have a clear purpose, often explicitly or implicitly founded on principles, in history and in religion, with a strong sense of moral duty. They are structured in strict bureaucracies, with the status of each individual linked to his/her position in the hierarchy. The archetype leadership activity is managing, that is formulating top-down planning schemes and policy deployment, determining control systems and budgets, designing and maintaining procedures as well as allocating a clear division of tasks. Taylorism is an approach typically linked to Order, with principles of standardisation, specialisation, maximisation, concentration and centralisation being typical features according to which 4

5 business is to run. The Deming Quality Circle and other traditional quality tools, as well as optimisation techniques and resource allocation, can also be applied to economise on costs and expenditures. Focusing on various departments within an organisation, it can be observed that the production system is based on internal priorities and is mainly technology-oriented so as to create economies of scale and vertical integration. These often dominate or tend to include the supply chain within the hierarchy. Innovation is often incremental and usually applies to product development. The human resources department is, in the main, an administrative unit; the employees fulfil their tasks assigned by line managers. Corporate behaviour can often be characterised as authoritarian and custodial, as reported by Newstrom (1997). In relation to market strategy, this is primarily a supply-push approach, charging consumers a price based on integral costs plus a justifiable margin. Ethical dilemmas are resolved through clearly-written codes produced by top management; they are regarded as formal rules on behaviour and are available to all employees. Success in Order is measured in terms of material wealth. The traditional scorecard format is the annual financial report that is produced for such institutions as the Tax Authorities, Chambers of Commerce or Stock Exchange. It is determined by law and is carefully described by accountancy bodies, such as the ACCA. Organisations in Order expect governments to provide clear legislation and subsequent enforcement to be effective and visible. The role of business in society is independent and social welfare is the exclusive responsibility of the state. The concept of the licence to operate is applicable to organisations which are compliance-driven, thus matching Order. However, some functions are best carried out in the Blue way, such as maintenance, book-keeping, contracts, energy production and transport. Banking systems and courts practices are embedded in Absolute Order. With too much emphasis on values such as discipline, truth, loyalty, duty, guilt, conformity, justice, obedience and order, the Blue way can attract adverse effects such as: Limited problem solving capacity and reluctant creativity; Suffocating rules and procedures; Planning and regulation perceived more important than objectives; One truth, one right way, always seen as categorical. These could create seeds for a new value system to emerge. Right circumstances could again change paradigms. In such a scenario, rather than people being what they are meant to be, more and more, they long to be who they could become. B. Success (The Enterprising Self Orange) Introduction to the Value System The Enterprising Self knows how to grow into something larger and gain control over destiny. Success is the new name of the game in an environment which offers many opportunities to compete, win and improve. In Order, people compare to the standard whilst in Success, multiplistic thinking not only evolves offering options and choices but also benchmarks against competition and the number one. People with a lot of Orange recognise that change is the nature of things, creating new niches and introducing new technologies, thus enhancing life. They work hard, preferably making others work hard for them, and risk time and money - but not their life as in Red - to achieve prosperity and material gain. They seek 5

6 out the good life and abundance, rather than rewards thereafter. The expression to keep up with the Joneses is typically Orange. Organisational Features Associated with Success In a world with plenty of viable alternatives for progress, prosperity and material gain, organisations realise that, though change is in the nature of things, (personal) success is the name of the game. Both people and organisations act in a calculated manner whilst striving for autonomy and independence as well as seeking progress and success through best solutions. If given the opportunity, they would master nature and exploit its resources. They also make use of an active hierarchy, with informal and pragmatic lines of communication. Through typically Orange values, such as image, quality, innovation, productivity, creativity, career advancement, enterprising and control, companies are result-oriented through improvement and the stimulating desire to compete and develop. The archetype role of leaders is that of the Entrepreneur : discovering niches as opportunities for success, putting together new çombinations, creating necessary means and enjoying the fruit of their labour. Burton Klein s Happy Warrior and Schumpeter s perennial gale of creative destruction are classic illustrations of the entrepreneurial drive behind capitalism. In this context, Success is primarily measured in terms of money and commercial assets. With production building forth upon traditional Blue ways, organisations tend to focus on the marketing efforts in order to gain market share. Related practices such as communication and advertising are also important activities in Success, with often make believe as its underlying intentions. The term window dressing was invented in Orange. As far as employees are concerned, Human Resource managers might support them with bonuses, various benefits, training facilities and so on when convinced that higher revenues and corporate success will be ultimately generated. In the same way, CS-R is accepted only as an opportunity to gain success as well as significantly reduce risks or enhance reputation, image, prestige and personal esteem. Thus, CS-R activities are only supported if there is a business case. Ethical dilemmas are discussed within the hierarchy, but often a pragmatic stance is chosen with reference to performance results. When reputation and brand value are at risk, they often seek a responsible approach, whether sincerely or not, as they are aware of the immediate adverse impact. Being short sighted, many organisations, with a strong drive for success, learn the hard way. A commonly applied measuring format, typically matching Success and Entrepreneurship, is the Balanced Scorecard, established by Kaplan & Norton (1992). Its anchor point remains the financial position of the organisation, but also identifies three contributory elements: customers, people & processes as well as corporate learning [Figure 1] : Order Success & Entrepreneurship Financiers & Owners Financiers & Owners Customers People & Processes 6 Corporate Learning

7 Financial Report Balanced Scorecard Figure 1. Two Ways of Reporting and Measuring Corporate Performance Organisations expect governments to abstain from over-regulating markets, as these may jeopardise profits and interfere with the sense of freedom. They perceive governments role to create and maintain a level playing field, thus allowing companies a licence to grow. The voluntary character of corporate sustainability and responsibility, particularly, must not, or indeed never, be violated. Best performed in Success are entrepreneurship and those activities akin to the commercial capacity of organisations, such as marketing, sales and promotion. People with a lot of Orange tend to be pragmatic, giving rise to ethical issues as the end as more important than the means. Because the strong gains at the expense of the weak, the Entrepreneurial system inevitably generates drop-outs. Inclined towards elitism, Orange is inattentive to fair distribution. Looking at quantity and profits rather than quality and durability, Success creates consumerism with a huge waste stream. Thus, striving for success can often become compulsive, leaving little time to enjoy the fruits cultivated. C. Community (The Egalitarian Order Green) Introduction to the Value System The Purple reciprocity and the Orange accumulation of material wealth pave the way for Green redistribution of society s resources among all. The self is once more being sacrificed but, this time, in a world where love and belonging are paramount and where everything is relative; truth becomes a matter of context and the group s needs. Community liberates individuals from dogma and greed, promoting a sense of unity. Solidarity is felt by the weaker and drop-outs who become victims of a system which exploits resources and causes unequal distribution of material wealth. Community-sense people and organisations try to explore their and others inner beings. They refresh spirituality and seek to bring New Harmony. In general and since everyone is unique, Community is anti-dogmatic, antilabelling and anti-hierarchy, but highly tolerant. Organisational Features Associated with Community In Community, the process of organising has become an end in itself. It is not the organisation as such that matters but the group of people engaged in that process through the involvement of all others, within and outside the work environment. Community values support competences enhancing the ability to engage, listen and dialogue. It is the human being behind the employee or customer that is likely to be recognised, together with his/her emotional and spiritual dimensions. Such capacities allow persons to better understand each other as well as create a two-way flow of information, turning conversations into dialogue; as a result, this improves teamwork. Persons and organisations with a lot of Green are convinced that individual achievements alone are not sufficient to adequately confront the challenges that Community organisations face; cooperation beats competition, where the 7

8 phrase together we stand strong is apt. Fairness is a highly regarded value, as exampled in issues relating to the supply chain and pricing policies. In order to compare, Success organisations mainly exploit resources to improve whilst Community organisations learn to collaborate. Examples for increasing internal coherence include quality orientation shifting from process to organisation-wide, a people-driven philosophy and significantly improving workplace culture and practices. The engagement primarily commences as a consequence of corporate responsibility, emphasising that the organisation is accountable for its impact on others. By effectively working together with internal and external stakeholders, thus tapping into their own competences and capacities, organisations would discover new opportunities to boost performance with respect to the triple bottom line: people, planet and profits. The archetype leadership style in Community is that of coaching, that is the servant leader, a term coined by Greenleaf (1977) which implies a state of being, not doing. The first and important choice for a leader is the choice to serve, without which his/her capacity to lead is profoundly limited, according to Senge (1996). Instead of providing solutions, managers should allow the group to create answers. With typical values such as consensus, conflict avoidance, teamwork, equality, participation, honesty, openness, harmony and being a decent person, decision-making in the context of Community is a group process that is often, not just time consuming, but also costly. Once the decision is reached, the buy-in is guaranteed and implementation can be rapid. This type of consensus-oriented decision-making indicates that a novel type of corporate governance structure has emerged : a new role of management, a flat organisation structure and shareholder value being balanced against the interests of other legitimate stakeholders. Organisations supporting Community values try to be accountable about their impact on others and seek responsible ways of doing business. Unfortunately, balancing stakeholders demands, which are often conflicting, generates numerous ethical dilemmas. In this context, codes do not assist in resolving such situations since specific conditions always require unique solutions. In Community organisations, the term Human Resources is no longer applicable to employees; their satisfaction alone as an indicator is surpassed by the level of trust which exists, or ought to exist, between management and employees as well as between employees and other stakeholders such as customers, suppliers, shareholders and neighbours. The term Human Potential Management seems a more appropriate terminology, indicating its emphasis on the development of individual employees and the recognition that they are valued assets rather costs. According to Hardjono (1995), the focus on the material and commercial assets and competences are somewhat fading in favour of socialisation among employees and other stakeholder groups. Organisations that recognise that only collaboration will lead to espoused performance levels are likely to adopt Community values and become more stakeholderoriented. As such, a few steps can be identified : (i) the recognition of stakeholders and those who are able to represent their genuine interest adequately, (ii) a process of engagement which is pleasant, sincere and communicative, and (iii) the identification of what stakeholders want and what can be offered to them. In order to manage expectations and monitor progress with respect to goals - especially commitment to specific stakeholder groups - an organisation, which functions primarily in the Community context, needs a measurement format aligned to such a stakeholder orientation. However, since the ECSF researchers conclude that no such measurement format exists, they have created a new format, the 8

9 Responsive Business Scorecard, which includes four stakeholder groups, each with an interactive relationship with a fifth entity being the organisation itself [Figure 2] : Community Employees Customers & Suppliers Corporate Performance Improvement s Financiers & Owners Society & Planet Figure 2. Responsive Business Scorecard As can be seen, the middle box, Corporate Performance Improvement, functions as an anchor point linking Community with Success in the same way as Financiers and Owners link the Balanced Business Scorecard to the Financial Report (Order). The word Responsive emphasises the Communion principle, as advocated by Wilber (1995) and Van Marrewijk (2003). It represents willingness to interact with stakeholders and be accountable for actions and impact on others. The stakeholder groups are structured in the same format as the Dutch INK Management Model and is similar to the EFQM Business Excellence Model. The Responsive Business Scorecard differs from these because it emphasises the relationship with the main stakeholder groups and the extent to which the outcome contributes to the improvement of corporate goals. Relationships with groups can be managed by applying the old Deming learning cycle of Plan Do Check Adapt or, more appropriately, utilising that of Community, that is Identify Engage Involve Agree Show. Trying to be a decent person, pleasant and loving is highly regarded as a quality in Green. Yet, conflict avoidance can have negative consequences. With criticism smothered with love and judgments made relative to the situation at hand, the decision-making process risks nonfunctional and abstract outcomes. Using each other s qualities for mutual growth, Community is able to create good learning conditions. However, the aura of an expert is adversely regarded in Green, where consensus is more important than expertise and incompetence is not a reason to be dismissed. With rising complexity levels, Community no longer provides the ultimate solutions to situational problems at hand and, moreover, equality and consensus building may lead to the pooling of ignorance. Thus, being confronted by chaos in the world of risk, typical Community features, such as lack of leadership and expertise as well as the emotional and economic cost of caring, are important arguments to stimulate the development of new ways to cope with more complex challenges. D. Synergy (The Integrating Self Yellow) Introduction to the Value System 9

10 Comprehension, understanding and co-ordination are the buzzwords of Synergy. A person and organisation with a lot of Yellow would articulate views but never at the expense of others or nature, so that all life may continue in the most natural, sustainable and fitting manner. They recognise the inevitability of nature s flows and understand that the complexity of today s world cannot be resolved within the current systems, more so as their awareness of broad interconnections grows. Yellow can find synergy in a mix of conflicting truths, for it is able to see more colours and use more senses at the same time. By focusing on functionality and applying competencies to get buy-in from others, Yellow is able to create win-win options, seeking self-interest without doing and without getting personal. There is room for authenticity as internal motivations matter considerably and existentialism is strong. Organisational Features Associated with Synergy In order to achieve their drive, that is to be, to learn and to discover, persons with a lot of Yellow function best in a network with a strong sense of direction as Yellow demands flexibility and open systems. Values such as insight, long-term orientation, ability to reflect and tolerance for uncertainty and paradoxes support this drive for self-development as well as boost ability to learn and apply knowledge. They are able to learn from any source; yet, with a mind that can quickly wander, maintaining focus can prove difficult. Larger organisational entities, whether transforming or breaking up into network structures, demonstrate the drive behind Synergy. The Hollywood movie industry is a good example of a once highly successful oligopoly which broke up into numerous small professional clusters working together in a network for the duration of a project. Not far from Hollywood, in Silicon Valley, a network structure emerges bottom up, with independent professionals clustering into networks and creating the necessary competences to meet the challenges facing Synergy. The archetype leadership activity in Yellow is the Connected Leader, who is both visionary and able to link the various qualities into one effective and coherent approach. Real leadership is no longer confined to what people do but is to be grounded in who people are. An authentic choice to serve life increases an individual s capacity to lead by allowing life to unfold, as stipulated by Jaworski (1996). As such, the hierarchy between the leader and the led remains healthy if leadership is never dominating nor abusing raw power. The leadership potential can be developed in everyone, through identifying the personal responsibility and alignment between one s personality and ambitions with one s role within the network. Essentially, leadership is about learning how to shape the future. The basic guiding principle between people and their organisation is the alignment between collective and individuals needs and motives and can also take place between the various entities within the network, including stakeholders. Van Marrewijk and Timmers (2003) believe that corporate behaviour in this context can be characterised as motivational. Managers want to support their employees, often professionals, in order to bring them into the flow, accomplishing both own and organisational objectives, thus creating a feeling of selfactualisation. As such, ethical decision-making is based on dialogues with relevant stakeholders and the full understanding of the situation at hand, including the feelings of those involved. It is consent rather than consensus that governs discussions which lead to often innovative and together-we-win solutions. Employees accept career advancements only when they feel they are competent and when it is a satisfying job, with typical negative manifestations of Synergy-driven people and organisations which relate to an all-round lack of commitment. They might appear aloof and disinterested or, indeed, operate as loners. They are intolerant of rigidity and demand open 10

11 access to information. In short, if they do not get enough interesting work, they will abandon their position. The Transition Matrix The ECSF research project developed a transition matrix (Van Marrewijk & Werre, 2003), suggesting the ideal type institutions per value system and colour coding [Figure 3] : Principles Environmental challenge Values examples Duty, obedience, loyalty, guilt, discipline, stability, clarity, justice, one truth Organization structure Decision structure Ethics Main stakeholders Neighbourhood Compliance-driven Order (Blue) Profit-driven Success (Orange) Care-driven Community (Green) Systemic-driven Synergy (Yellow) Ordered relationships Many viable alternatives The gap between people Complex problems that requiring legitimisation in for progress, prosperity and their (material) cannot be solved within order to ensure stability and material gain since possibilities has become the current systems as and security for the future change is the nature of disproportionately large awareness of broad things interconnections grows. Productivity, personal Harmony, equality, Insights, tolerance, esteem, image, reward, consensus, honesty, integrity, long tern satisfaction, competition openness, trust orientation, systemsthinking Strict hierarchy; Hierarchy, but more As possible, since A network structure with a functional departments flexible; often a matrix everybody is equal common goal, while structure anchored in previous Top down, while applying the procedures from higher authorities Leadership style Manager planning & control; budgets and resource optimalisation Communication People Management style 2 Dept. People Management Workplace environment Top down, but good info from the bottom is always welcome Bottom-up; group decides; sociocratic, seeking consensus. systems Top-down and bottom-up balance; based on understanding of the matters at hand The authorities provide Ethical dilemma s are the Ethics are an end and Ethics are integral part of ethical codes for their authority s responsibility optimal solutions are sustainable together-win subordinates and are judged against the found only based on solutions for all relevant business case consensus between all stakeholders stakeholders Management and board Idem + owners, banks, Idem + employees, Idem + society at large politicians and customers volunteers, and neighbourhood Compliance with relevant High visibility projects Supporting Together win approach regulations; charity boosting reputation neighbourhood (richesse oblige) development Entrepreneur: creating Servant leader: act as Connected leader: service and process coach in supporting applying long term, innovations; getting stakeholders (esp. visionary approach; things done colleagues) in obtaining achieving buy-in with the organization s goals relevant stakeholders in order to create added value for all. Top-down announcement Esp. supporting A platform for Inspiring people to act in of decisions; codes and marketing efforts; stakeholders to express accordance with the vision. procedures seduction themselves; binding Custodial; Supportive; Collegial; Motivational; Authoritarian Manipulative Participative, supporting Interactive Personnel Organization: administrative & Compliance: meeting physical and safety requirements; Standardization of work Safety & Health Compliance with regulations; Inventory of common Human Resource Management: optimalisation and satisfaction Cost-effective actions to improve employee satisfaction in order to increase productivity and decrease employee turnover Cost-benefit appraisals of possible improvements Human Potential Human Capital Management: Management: aligning competence development and trust individual and collective interests Endeavours specifically Individual and collective to increase personnel alignment of requirements well-being; and facilities, supporting Corporate culture is often dedication and individual considered a major theme motivation Management system on safety and health, including socio- Pro-active policy, linked with people management (HRM) and custom made 11

12 problems and systematic psychological dimensions arrangements for response individual employees Diversity Homogenic labour force Diversity only receives Policies for emancipation Women and minorities in attention when it of women, coloured and management positions increases results disabled persons (provided they qualify) Consumers Company oriented, Market oriented, but still Discovery of the human Truly customer oriented: supply push basically supply push being behind the e.g. co-creation, design for customer all Suppliers As few as possible; focus Sub-contracting based on Introduction of comakership Strategic partnerships on economies of scale strict cost based contracts (together win approach); and vertical integration (win-lose approach); Process control and Externally verified audits (hierarchies); output control internal audits Prices based on: Integral cost price plus Market price/value Fair price Perceived value Figure 3. The Transition Matrix The matrix demonstrates one of the ECSF conclusions : in the various management disciplines, the paradigm shifts do match the transformations between value systems or contexts. They show the main institutions per discipline, stakeholder, topic and so on, as they correspond with the said various value systems or contexts. For instance, the transition matrix suggests four leadership styles: the manager, the entrepreneur, the servant leader and the connected leader, whose roles relate to different contexts or value systems and where latter roles include and transcend the previous ones. In fact, the same would apply to decisionmaking in relation to ethical dilemmas. Conclusion Continuous improvements and evolutions do not tend to emerge in a linear way. A specific context allows for a specific approach with which people, groups and societies can generate adequate responses to specific challenges. In the norm, organisations concentrate on the optimisation of resources and processes. Once these are managed well, progress can only come about by tending to a more stakeholder-oriented (or people-oriented) approach. A set of ideal-type organisations has been described, constructed according to a developmental sequence. Each organisation type is based on a specific set of values or value systems. Because such systems influence as well as shape institutional structures, they strongly impact on the role of leadership, governance issues and decision-making. Paradigm shifts in management disciplines often coincide with each of these ideal-type organisations. As can be seen, the presented Transition Matrix provides an overview of such shifts as manifested in the subsequent ideal-type organisations. It appears that, focusing on ethical decision-making, the following developments have emerged. Traditionally, dilemmas are solved by the authorities and made available through a set of codes. However, as these do not always provide adequate answers, ethical dilemmas remain the authority s responsibility and are judged against the business case accordingly. Brand value, corporate reputation, costs, risks, revenues and profits are all part of the equation, leading to realistic outcomes. This gives rise to further ethical issues as the end is more important than the means. Optimal solutions are only found to be based on consensus between all stakeholders but, yet, this approach can be time-consuming and expensive. The ultimate approach is where ethics become an integral part of sustainable together-we-win solutions for all concerned. 12

13 Acknowledgments The author wishes to thank Christopher Cowan and Marco Werre for their support in the drive to not only understand and comprehend Spiral Dynamics but to also use their sources. References Beck, D. & Cowan, C. (1996) Spiral Dynamics, Oxford, Blackwell Publishers Drucker, P. (1954) The Practice of Management, New York, Harper & Row Graves C. (1974) Human nature prepares for a momentous leap, The Futurist Magazine, April, pp Greenleaf, R. (1977) The Servant Leadership: A Journey Into the Nature of Legitimate Power and Greatness, New York, Paulist Press Hardjono, T.W. (1995) Ritmiek en Organisatiedynamiek: Vierfasenmodel, Deventer, Kluwer Jaworski, J. (1996) Synchronicity - The Inner Path of Leadership, San Francisco, Barrett- Koehler Publishers Kaplan, R.S. & Norton, D.P. (1992) The balanced scorecard measures that drive performance, Harvard Business Review, Vol.70, No.1, January-February, pp Newstrom, J.W. (1997) cited in K. Davis (1997) Organisational Behaviour Human Behaviour at Work, New York, McGraw-Hill Senge P. (1996) cited in J. Jaworski, J. (1996) Synchronicity - The Inner Path of Leadership, San Francisco, Barrett-Koehler Publishers, p.xv Van Marrewijk, M. (2003) European Corporate Sustainability Framework, International Journal of Business Performance Management, Vol.5, Nos.2/3, pp Van Marrewijk, M. & Timmers, J.(2003) Human capital management, Journal of Business Ethics, Vol. 44, No.2/3, May, pp Van Marrewijk, M. & Werre M. (2003) Multiple levels of corporate sustainability, Journal of Business Ethics, Vol.44, Nos.2/3, May, pp Van Marrewijk, M. (2004) The social dimension of organizations : recent experiences with Great Place to Work assessment practices, International Journal of Business Ethics, Vol.55, No.2 December (I) 2004,, pp Wilber, K. (1995) Sex, Ecology, Spirituality: The Spirit of Evolution, Boston/London, Shambhala Bibliography. 13

14 Collins, J.C. & Porras, J.I. (1997) Built to Last - Successful Habits of Visionary Companies, New York, Harper Collins Dutch INK Management Model - Hardjono, T.W. & de Klein P. (2004) General introduction to the European Corporate Sustainability Framework, International Journal of BusinesEthics, Vol.55, No.2 December (I) 2004,, pp Maslow, A. (1982) Toward a Psychology of Being, Wokingham, Van Nostrand Reinhold Van Marrewijk, M. & Hardjono, T.W. (2001) The social dimensions of business excellence, Corporate Environmental Strategy, Vol.8, No.3, pp Van Marrewijk, M. & Hardjono, T.W. (2003) European Corporate Sustainability Framework for managing complexity and corporate change, Journal of Business Ethics, Vol.44, Nos.2/3, May, pp Van Marrewijk, M., DeCleyn, W., Wuisman, I., Timmers, J., Panapanaan, V. & Linnanen, L. (2004) A developmental approach to business excellence, International Journal of Business Ethics, Vol.55, No.2 December (I) 2004,, pp Van Marrewijk, M. & Becker, H.M. (2004) The hidden hand in cultural governance : the case of Humanitas ten year period of transformation, International Journal of Business Ethics, Vol.55, No.2 December (I) 2004,, pp Wempe, J. & Kaptein, M. (2002) The Balanced Company : A theory of Corporate Integrity, Oxford, Oxford University Press Wilber, K (2000) A Theory of Everything: An integral vision for Business, Politics, Science and Spirituality, Boston/London, Shambhala World Business Council for Sustainable Development (2000) Corporate Social Responsibility: Making Good Business Sense, Geneva, WBCSD 14