The starting point for an organization to prevent and, if necessary, solve ethical problems is its philosophy. The statement of philosophy identifies values and principles reflecting the moral right and wrong for the organization, thus distinguishing the acceptable from the unacceptable. It is helpful if the philosophy statement is sufficiently precise that performance in achieving it can be measured. At minimum, the statement of philosophy must be consistent with the law.

The starting point for an organization to prevent and, if necessary, solve ethical problems is its philosophy. The statement of philosophy identifies values and principles reflecting the moral right and wrong for the organization, thus distinguishing the acceptable from the unacceptable. It is helpful if the philosophy statement is sufficiently precise that performance in achieving it can be measured. At minimum, the statement of philosophy must be consistent with the law.

The statement of philosophy is different from the mission statement and should be developed separately. The philosophy statement provides a context for the mission statement; the mission statement is subordinate to it. Some organizations include references to values in their mission statements. A mission statement that “the corporation owns and operates hospitals to provide care for the sick and injured” provides no information about the moral context of care. A mission statement that “the hospital provides care for the sick and injured in the context of humanitarian principles” is imprecise but provides a clearer values or moral context than the first.
Health services organizations with no specific, written philosophy nonetheless have an identifiable de facto or operational philosophy. The aggregate decisions and actions taken by the governing body and management reflect implicit, if ill-defined, philosophical bases. Management actions may be contradictory or inconsistent, and this suggests another negative aspect of not determining prospectively a comprehensive organizational philosophy. This lack of continuity and consistency will lead to incompatible, even contradictory, policies, procedures, and rules. The effect is diminished efficiency. Equally important is that the mixed, even contradictory messages that staff members receive will confuse and frustrate them, with a resulting decline in patient focus and quality.
The importance of identified and shared values in organizations is now widely understood, if less frequently operationalized. In the early 1980s, however, it was a new concept, one that was synthesized by Peters and Waterman in their study of successful American corporations.1 The quote attributed to IBM’s former president Thomas J. Watson, Jr., is instructive: “The basic philosophy of an organization has far more to do with its achievements than do technological or economic resources, organizational structure, innovation, and timing.” That statement’s context was the focus on customer service so important to IBM’s reputation and financial success at the time. If consumers and service are important to IBM, which has many characteristics of a products-based organization, consider the importance of customers and service in healthcare. The centrality of shared values is shown in Figure 5, the 7-S Framework, developed by McKinsey & Company.
Deal and Kennedy2 also identified the characteristics of successful companies:
• They stand for something—that is, they have a clear and explicit philosophy about how they aim to conduct their business.
• Management pays a great deal of attention to shaping and fine-tuning these values to conform to the economic and business environment of the company and to communicating them to the organization.
• These values are known and shared by all the people who work for the company—from the production worker right through to the ranks of senior management.
Building on the importance of shared values or philosophy that make up a culture, Deal and Kennedy3 identified the essential elements of a culture: 1) understanding and fitting into the business environment—the single greatest influence in shaping a corporate culture, 2) values—the basic concepts and beliefs of an organization, 3) heroes who personify the culture’s values and are role models for employees, 4) rites and rituals that show employees the kind of behavior expected of them, 5) ceremonies that provide visible and potent examples of what the company stands for, and 6) the cultural network—the primary (but informal) means of communication within an organization that is the “carrier” of the corporate values and heroic mythology.
In further explaining corporate cultures, Kennedy4 noted the following:
Culture isn’t a single thing. It’s not a budget; it’s not a plan; it’s not the shape of a building. It is an integrated pattern of all the things that go on in an organization on a day-to-day basis. Each company has its own unique culture, values, and standards communicated internally by style, dress, expectations, and assumptions.
New people in the workplace find out what is expected of them because their peers take them aside and say, “Look, don’t wear jeans here. Come in to work on time, or you do this or that.” They lay out some of the unwritten rules of behavior that are required for entrance into your workplace. That’s how culture transmits itself to each new generation of persons. They don’t come in and invent a whole new style of organization. They come in and learn from those around them what’s going on in the organization and how they are expected to behave.
An organization’s values are inextricably linked to its culture. To transform the organization so that its culture is a living reflection of values that facilitate the mission and vision, management must know which values are present in the culture. This presents somewhat of a chicken-and-egg situation. Regardless, management must biopsy the culture. This can be compared to a financial audit, except it is the organization’s values that are being audited. Direct measures such as observation, staff surveys, exit interviews of departing staff members, and focus groups can be used. Proxy measures of culture include patient satisfaction surveys and service area surveys. Regardless of how it is done, however, management cannot effectively transform the organization’s culture until its present content and course are known.

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