Values are basic convictions about what is right and wrong. Usually values would influence the attitudes and behaviors of business person for their decisions making. Values on the part of business are Operating philosophies or principles that guide an organization’s internal conduct as well as its relationship with the external world. Whereas attitudes are predisposition or a tendency to respond positively or negatively towards a certain idea, object, person, or situation. Attitude influences an individual’s choice of action, and responses to challenges, incentives, and rewards (together called stimuli).
Four major components of attitude are: (1) Affective: emotions or feelings; (2) Cognitive: belief or opinions held consciously; (3) Conative: inclination for action; and (4) Evaluative: positive or negative response to stimuli. The values that may have contributed to areas like the “Valley of Death” may be profit motives of entrepreneurs, cut-off of cost, constantly increasing productivity, regarding government intervention as a threat. In certain countries ethics comes on a poor second when it comes to doing business successfully. Successfully” here means generating large amounts of profits. For this purpose the business houses need to expand their territory, coverage and products to capture large chunks of the market. Creating a base for such activities can be done in two ways: Go the hard way – advertise, consolidate, build brand and image in the national and international market segment you prefer. This involves money, effort and tremendous perseverance; Go the easy way – bribe your way through government and other corridors which would help you create a niche market almost overnight.
Often the amount of money and efforts spent on bribes is less than. Corporate houses feel that their stakeholders would appreciate the fact that they generate wealth for them – by whichever means. While it is true that the public does like a hike in the profits, the ‘by whichever means’ acceptability is debatable. If you go down to the grassroots, ethics is still an important threshold in the values of the common human being. By opting for the second option, the attitudes of businesses would be cognitive as entrepreneurs will react in order to increase profits.
It would not cause any disturbance for them knowing that they are creating the “Valleys of Death”. In order to promote and facilitate the drafting of legislation and regulations regarding the protection of the natural and social environments in which they operate they need to work with the government. However in the case of “Valleys of death”, it seems that industrialist in the region would not appreciate if an external body such as the government would mingle in their daily activity. Businesses are leery about allowing an outsider with a different agenda to be involved in their activities.
For these reasons, businesses maintain a comfortable distance from government, so they can focus on their business pursuits, unencumbered. Social pressure plays a major role in determining corporate strategy and performance according to an award-winning paper coauthored by Professor David Baron. The researchers find that social pressure and social performance reinforce each other, greater social pressure is associated with lower financial performance, and financial and social performance are largely unrelated.
Social pressure can hurt a company’s reputation, brand equity, or productivity. If activists call attention to a company’s poor environmental record, the pressure could dissuade consumers from buying its products, cause some investors to shun its stock, and reduce productivity by hurting employee morale and motivation. In general, social pressure tends to boost corporate social performance while hurting financial performance. “Social pressure from government, NGOs, and activists has two kinds of effects,” says Baron. “It leads firms to increase social performance.
And social pressure tends to be penalized in financial markets. ” Among industrial companies, financial performance is negatively associated with social performance. That’s because responsible behavior can be expensive, and there are no consumers to directly reward an industrial company. Owing to these mindsets of industrialist, they would prefer to reduce cost of productions like using cheap materials causing pollutions rather than investing hugely on new technologies that can reduce pollution and decrease their profitability at the same time.
One answer to the question of why business knowingly commits unethical actions is based on the idea that organizations often reward behaviors that violate ethical standards. Consider, for example, how many business executives are expected to deal in bribes and payoffs, despite the negative publicity and ambiguity of some laws, and how good corporate citizens who blow the whistle on organizational wrongdoing may fear being punished for their actions.
Jansen and Von Glinow (1985) explain that organizations tend to develop counter norms, accepted organizational practices that are contrary to prevailing ethical standards. Indeed, governmental regulations requiring full disclosure and freedom of information reinforce society’s values toward openness and honesty. Within organizations, however, it is often considered not only acceptable, but desirable, to be much more secretive and deceitful. The practice of stonewalling, willingly hiding relevant information, is quite common.
One reason for this is that organizations may actually punish those who are too open and honest. In that respect, business will continuously create “Valleys of Death” as they know that are untouchables and very few or nobody can take actions against them. Baucus and Near also suggest that conditions of opportunity and predisposition are antecedents of illegal behavior. That is, rather than tightening conditions creating pressure for illegal acts, it may be that loosening ambiguous conditions create opportunities to behave illegal.
As noted above, organizations operating in certain industries tend to behave unethically. Certain industry cultures may predispose organizations to develop cultures that encourage their members to select unethical acts. If an organization’s major competitors in an industry are performing well, in part as a result of unethical activities, it becomes difficult for organizational members to choose only unethical actions, and they may regard unethical actions as a standard of industry practice. Such a scenario results in an organizational culture that serves as a strong precipitant to unethical actions.