Establishing a solid business philosophy not only sets an ethical precedent within a company, but also enables an organization to improve relations with employees, partners and customers.

Because so much of business success stems from a good reputation, experts suggest that instilling an effective corporate philosophy early on can enhance daily interactions by leaving a positive and lasting impression with both clients and company team members.

One critical step in practicing a company’s philosophical structure is assessing potential employees’ values during the interview process. As Inc.com suggests, it may be beneficial to hire those that match the established culture: “You can craft your interview questions to elicit the traits you value most in prospective hires.”

By posing interview questions that reveal a person’s ethical standpoint, employers can develop a clear idea from the get-go whether a candidate might be an appropriate fit.

“Many [businesses] are now, if they haven’t already done so, publishing their philosophy and using it as the basis for both employee selection and development,” career expert Richard H. Beatty advises in his book The Interview Kit.

Answers to questions that delve into a person’s past, such as how he or she has handled certain career decisions and what he or she has learned from their mistakes, may indicate ethical behavior in his or her new position.

Of course, it is only fair that prospective employees have a clear idea of the type of company philosophy they may soon be immersed in, so it is essential to articulate the core philosophy of your business.

One professional approach involves formulating philosophical questions to ask, such as, “What are the principles of the business in regard to working with customers, developing and selling product and internal management?” marketing experts Roman G. Hiebing and Scott W. Cooper advise in their book The One-Day Marketing Plan: Organizing and Completing a Plan That Works.

Effective methods include identifying what your business is and how you want your consumers to identify you. Then, as RealtyTimes suggests, write it all down.

“As the founder or owner of your company, you should extrapolate your values by running through a number of hypothetical scenarios,” Inc.com suggests to entrepreneurs. “Create quandaries for yourself, in which there are tradeoffs between profits, customer experience, and ethically questionable practices. See how you think the company should behave in each of these circumstances and a picture of your values will begin to emerge.”

It is essential that business owners do not assume they can do this effectively on their own. Seeking unaffiliated feedback, such as from professionals outside the company, may help improve the business structure.

“[E]xercises can include brainstorming what words or concepts you want, or perhaps more tellingly, seeking out your biggest critics and soliciting their input,” Inc.com explains.

In their book Corporate Cultures: The Rites and Rituals Of Corporate Life, leadership expert Terrance E. Deal and management consultant Allan A. Kennedy pinpoint common philosophical characteristics of successful companies, based on their research.

Thriving businesses include those that have a clear, “explicit philosophy,” businesses in which management takes care to assess and tailor values to “conform to the economic and business environment of the company and to communicating them to the rest of the organization,” the authors explain. Finally, sharing and practicing values of the company at every level will ensure that everyone is on the same page.

Furthermore, unifying staff via a philosophy helps strengthen teamwork and overall productivity.

“When you share a philosophical concept or a world view, you create alignment, whether it’s with a colleague, a trading partner or another stakeholder. Without that shared vision, relationships often bog down in low-level squabbles,” Dov Seidman, founder and CEO of LRN, which helps companies create more ethical cultures, writes at Bloomberg Businessweek.

While a company philosophy often takes time to formulate, it is essential to avoid becoming overly elaborate. A philosophy should be clear and memorable, according to experts, particularly during times where it needs to be practiced, as when dealing with a demanding customer.

An effective approach to corporate philosophy is incorporating high ethical standards, as McKinsey Quarterly explains (registration required). This tactic helps ensure maximum success between employees and in relationships with consumers.

Such high standards are seen in successful companies such as Google, which cites on its corporate information page, “You can make money without doing evil,” a reminder that practicing “The Golden Rule” does not have to conflict with generating profits.

Related

What’s Your Corporate Culture?

Building (and Rebuilding) a Reputation

Is Good Will Bad Business?

Resources

How to Create a Company Philosophy
by Josh Spiro
Inc.com, Mar. 18, 2010

The Interview Kit
by Richard Beatty
Wiley, John & Sons, September 2003

The One-Day Marketing Plan
by Roman Hiebling and Scott Cooper
The McGraw-Hill Companies, May 2004

Company Philosophy: The Way We Do Things Around Here
by Marvin Bower
Inc.com, Apr. 9, 2003

What’s Your Business Philosophy
by Denise Lones
RealtyTimes, Sept. 23, 2008

Corporate Cultures: The Rites and Rituals of Corporate Life
by Terrence Deal and Allan Kennedy
Basic Books, January 1984

Philosophy is Back in Business
by Dov Seidman
Bloomberg BusinessWeek, Jan. 12, 2010

Corporate Information
Google.com, September 2009