Value and Values
In the previous two posts, we explored the concept of value. To recap, we first discussed the relationship between utility and value, concluding that for something to have value, it must be useful in satisfying a desire (i.e., have utility) and it must also exist in a limited quantity (i.e., there must be scarcity). Then we discussed the idea that value is determined subjectively, with respect to the anticipated benefits acquired from a good compared to the anticipated costs to acquire it. In this post, we will dive more deeply into the source of these subjective assessments – our values.
The distinction between value and values is very important. But what exactly are values? Researches have defined values as follows:
“Our values are the principles by which we live. They are the core beliefs, morals and ideals of individuals and are reflected in their attitudes and behaviours in society.” (1)
And more specifically:
“… values are (a) concepts or beliefs, (b) about desirable end states or behaviors, (c) that transcend specific situations, (d) guide selection or evaluation of behavior and events, and (e) are ordered by relative importance.” (2)
We see that values are something fundamental to behavior. Our values define the end states, or objectives, that we want to achieve. By defining what is desirable, values provide everyone with the objectives to strive toward and the criteria for defining our success.
Related to the concept of value, our values determine how we place subjective value on different goods or courses of action. In particular, since values can be ordered by relative importance, values help us act in the world. After all, if everything was equally important to us, we wouldn’t know where to start. We couldn’t pursue any meaningful course of action – everything would be equally as worthwhile. Ranked values help us make trade-offs and economize our limited resources. When we are about to commit resources to something, our values inform us about whether something is worth it:
“The values held by individuals influence their perception of the world and, more specifically, their assessment of products and services. Hence, values frame the assessment of value.” (1)
Values play a special role in decision making. Ralph Keeney states that values “are principles for evaluating the desirability of any possible alternatives or consequences. They define all that you should care about in a specific decision situation. …they should be the driving force for our decision making. Alternatives are relevant only because they are a means to achieve values.” (3)
The reason you make a decision to do activity X or buy product Y does not rest in the action performed or object purchased, but rather in how the chosen alternative helps you achieve your underlying values. Keeney calls this idea “value focused thinking” – putting values first in the decision making process, rather than alternatives, can actually help to develop better alternatives and leads to better decisions.
In summary, the value that we place on things is defined by the values that we hold. Everyone is acting out their values on a daily basis. By better understanding your own values, you will be able to better achieve the objectives that are important to you and your business.
At Collier Research Systems, we can develop strategies and decision support tools to help you achieve the objectives that are aligned with the values of your business. To learn more, visit: www.collierresearchsystems.com.
(1) D.S. Thomson, S.A. Austin, H. Devine-Wright, G.R. Mills. 2003. Managing value and quality in design. Building Research & Information, 31(5), 334–345.
(2) S.H. Schwartz, W. Bilsky. 1987. Toward a universal psychological structure of human values. Journal of Personality and Social Psychology, 53(3), 550-562.
(3) R.L. Keeney. 1994. Creativity in decision making with value-focused thinking. MIT Sloan Management Review, Summer 1994, 33-41.