1. Values for Decision Making Harrison, Ch. 4 Fred Wenstøp

2. 2 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

3. Fred Wenstøp3 Hierarchy of values  Individual values  Group values  Organizational values = managerial values  Societal values

4. Fred Wenstøp4 American individual values 1.Happiness  Maximum results  Satisfaction 2.Lawfulness 3.Harmony 4.Survival 5.Integrity  Self-respect 6.Loyalty Personality is determined by the weights of these values

5. Fred Wenstøp5 Classification of values I Values 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

6. Fred Wenstøp6 Business organisational values  Profits  Survival  Growth According to Bernthal 1962

7. Fred Wenstøp7 Classification of values II Means 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

8. Fred Wenstøp8 Classification of values III Rokeach 1973 Private business managers

9. Fred Wenstøp9 Classification of values IV  Performance measures  Key ratios  Cost of capital  Growth  Market share  Stakeholder values  Etc…  Core values (9 on top)  Integrity  Honesty  Fairness  Equality  Loyalty  Commitment  Respect  Prudence  Tolerance

10. Fred Wenstøp10 Ranking of managerial values England 1966, Lusk & Oliver 1972 Business valuesPersonal valuesGroup values Org. efficiencyAchievementMy company ProductivitySuccessCustomers ProfitCreativityManagers Org. growthJob satisfactionMy boss Ind. LeadershipIndividualityMy subordinates Employee welfareMoneyEmployees Social welfareInfluenceCo-workers PrestigeOwners

11. Fred Wenstøp11 Value judgement  A judgement is an ultimate category  It can only be evaluated by another judgement  Judgement addresses reality (facts) and value  Predictive 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)