ABSTRACT
A company’s strategy rests on basic ideas about what the company wants to achieve—its purpose, mission, vision, or goals. While we do not need a formal mission statement or vision statement for a company to run effectively, the managers and employees of a company must have a clear understanding of the company’s strategy.
Inherent in a company’s strategy are the company’s ethics and values—what the company will or will not do. We can use two criteria to think about whether a company should or should not do something. The first asks whether a decision rule or behavior would have value if everyone engaged in it, requires the rule treat everyone with respect, and applies the rules to all. The second simply asks whether you would be willing to state your position publicly.
While debate exists about the value of external restrictions on corporate behavior, we believe that free markets without at least some regulations or restrictions on corporations’ actions will quickly devolve into markets that are the opposite of free.
