What are Guiding Principles?

Definition: Guiding principles are a set of moral values that establishes a framework for expected behavior and decision-making. It is a list of highly-regarded and expected principles set by an organization.

What Does Guiding Principle Mean?

Guiding principles are normally found in company’s descriptions. They are also called core values or moral standards. The term “guiding” refers to the fact that these values are established to lead the organization in any situation it might face. They are essential in decision-making processes, since no decision should contradict any of these principles. They are commonly drafted by the founders of the organization but they can be modified in the future if a particular principle is identified as crucial for the operation.

These values are non-negotiable and even when the nature or goals established might change over time, these principles normally remain unchanged. Some of these principles might be courage, honesty, respect, transparency or excellence, among others. They should be effectively communicated to every member of the organization to make sure they understand the moral framework of the activities they perform.

Example

A company called Continental Air Co. manufactures air conditioning equipment for industrial facilities. The company was founded three years ago and by that time the owners didn’t set a list of guiding principles since they thought it wasn’t important at that time. Three years later, the company has grown to be one of the largest suppliers of air conditioning equipment to many industries in the U.S. East Coast. Currently, their advisors urged them to establish these principles, to make sure all employees and stakeholders understand how the company conducts itself ethically.

They developed a short list of five guiding principles that will be communicated to the entire organization through advertisements and training programs. They concluded that these five principles were the ones that built the company to its current stage: honesty, hard work, consistency, discipline and respect. This will be the framework that will guide all the activities performed throughout the different departments and units of Continental Air.