Functions And Characteristics Of Corporate Values Accounting Essay

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Corporate activity not based on any kind of values is practically unthinkable. At least the value You shall generate economic gain can be expected to be found as a wide-spread precondition for corporations. In the last few decades, societal expectation, isomorphic tendencies regarding certifications and reporting, and several other factors have motivated a large part of the corporations to proclaim some kind of "Be kind, be likeable" value declaration. It remains unclear, however, how these declarations are concretely rooted and expressed in everyday corporate life and why the declared actions serve the value in the way it has been declared. Although corporate values are deemed to be of high importance in a today's business environment, the means to structurally characterize and describe them remain surprisingly shady and volatile. The questions "What elements does a corporate value declaration consist of to be meaningful?", "What are the minimal definitional requirements for each of these elements?" or "When is a corporation successful with their values?" do currently not have systematic answers and can be addressed at each corporation's own whim. This dissertation project addresses the characteristics and functionalities of corporate values in a corporate environment to create the scientific basis for a framework using the example of sustainability values.

As a theoretical principle, sustainability is inconceivable without values, as the concept of sustainability is normatively value-based. Equivalent to social norms depicted in laws, corporate norms are in theory kept in explicit, written form (e.g. employee regulations) with minimal room for interpretation and thus maximal explanatory power regarding the corporation's way of business, its acting a supra-organism. This (theoretical) transparency gives all stakeholders an opportunity space to decide whether the corporation's way of business is in line with their own goals/interests/values and take a position on it. However, all explicit norms are subject to situational value-based implementation by individuals. Echoing a statement by Alfred Gmür when asked about the main challenge in implementing sustainability guidelines in the Swiss Youth Hostels, "Sustainability can only be learned to some extent. The entire rest is a question of attitude." It is this dissertation's goal to give corporate value declarations a scientific basis significant, transparent and flexible enough to exemplary harbor this attitude of sustainability.

State of General Research


The term of „values" is used in countless different research fields, discussions and contexts. Interestingly, its definition often covers an occurrence of a specific value or the consequences of a certain value occurrence without providing any previous (generic) concept of values. The lack of such a concept allows in everyday corporate practice for virtually any directive statement to pose as a value. As soon as the term is narrowed down by extending it to "corporate values", the inaccuracy even increases due to a lacking conception of this term. Intuitively it seems to be well-defined since we have an idea what values are and this particular kind of values now applies to corporations. However, as will be discussed below, such a self-evident parallelism of these two terms turns out to be misleading. The interdisciplinary approach of this dissertation is formed by the importation of established theoretical elements from foreign disciplines respectively debates concerning (corporate) values and fundamentally fertilizes this research.

In sociology values have been an essential term almost since the very beginning of this science discipline. Values are the breeding grounds for social norms which in turn are the basis for stability of groups, institutions and ultimately societies. In the early 20th century during the "Werturteilsstreit" ("value judgment dispute") Max Weber argued with Gustav Schmoller whether science ought to pronounce value judgments and proclaimed that values should not be part of scientific argumentation as it endangers its objectivity and interpersonal transferability. (Albert and Topitsch 1979; Weber and Winckelmann 1988) Nevertheless he acknowledged that the influence of values on human behavior is too strong to ignore it as an object of research in social sciences. (Weber 1922)

While values have been essential topics for many others (e.g. (Gehlen 1940; Geiger 1947; Parsons 1935)), a structural value description approach has been initiated by Clyde Kluckhohn's Value Orientation Method and its five aspects (estimate of human nature, relationship between human and nature, sense of time, mode of activity, and social relations) constitutional to human value orientation. While Kluckhohn is still describing individual values to get a picture of the entire value orientation and not addressing the generic structure of values itself, he for the first time created an approach structuring value functions. This dissertation will build on this principle, however not with a focus on the individual human being but on the individual corporate value. (Kluckhohn 1965; Kluckhohn, Strodtbeck, and Roberts 1961; Rokeach 1973; Rokeach 1979) In 1981 Jan Kerkhofs and Ruud de Moor initiated the first European Value Survey to test their hypothesis concerning value change in industrialized countries. As this survey generated a large, international interest, it was later on spread across several countries, mainly on the initiative of Ronald Inglehart, and now as the World Value Survey depicts people's values, how they change over time and what cultural cluster they are part of on a global scale. (Thome 2003)

In the closely related discipline of social psychology Shalom Schwartz built on Kluckhohn's and Parson's "ultimate values" on a macro-level of society and started several long-term studies trying to identify cultural-independent, universal values on the micro-level of society and regularities in their prioritization and/or classification. (Schwartz 1994; Schwartz and Bilsky 1987) The data and insight from these studies inspired a series of different studies concerning human values and their interaction with human life and institutions. In the course of these many studies Schwartz refined his theories (Schwartz, Cieciuch, Vecchione, Davidov, and Fischer 2012) and also discussed links into the work sphere and the corporate sector. Yet, he remains focused on individual human values and does not include corporate values as a distinct form of values differing from individual values. These two approaches will be used to account for culturally dependent as well as universal individual values, assuming that corporate values may or may not be culturally neutral. (Bilsky and Schwartz 2008; Borg, Groenen, Jehn, Bilsky, and Schwartz 2011; Knafo, Schwartz, and Levine 2009; Roccas, Schwartz, and Amit 2010; Schwartz 1999; Schwartz 2008; Schwartz 2011; Schwartz and Sagie 2000)

Corporate Values

Rooting in the stirring social and political processes of the mid-1980s and early 1990, a large increase of shareholder activity, as well as the rising of value-powered concepts in the maelstrom of the green movement and the idea of sustainability, corporate values that have not been an issue of any greater importance so far began to move into the center of attention. The semantic field of the term "corporate value" began to grow. It did not only describe the result of a summation of all economic values belonging to the corporation, but now also included a vague portrayal of corporate processes and procedures mixed with normative, often vague target definitions. Stakeholders, who not necessarily solely prioritize economic gain, began to populate the discussions. The sociological debate thrived in different, relatively isolated hotspots: On the one hand the economic sociology and sociology of organizations discussing values as external societal factors and on the other hand sociological fields of study broaching the issues of sustainability, social co-operation, corporate social responsibility, corporate citizenship, etc. (Bernet 1993; Binmore 1994; Humble, Jackson, and Thomson 1994; Joas 1993; Klemm, Sanderson, and Luffman 1991; McCarty 1994; Nelson 1991; Peck 1993) In-between these focuses a new sociological discipline began to form focusing on a until now neglected part of the business administration system: the management guild. The relatively young sociology of management began to rise approximately a decade ago (with an emphasis on German-speaking and Russian-speaking countries) and is therefore still a vivid environment.

While sociology of management has successfully distinguished between the agency of the individual and the structure of the organization by integrating the human aspects of role bearers (Baecker 1994; Buß 2007) and actively discussing value conflicts (Baecker 2003) and the predominance of personal values (Pohlmann 2011)it failed so far to reason back and not only discuss how the executive managers as acting in individuals interact with a corporate structure but also include the question about the corporate structure's interaction with its managing individuals (Buß 2011). The omission of half the analysis of the interaction between corporate structure and executive agents, between corporate values and personal values immobilizes the corporate structure rendering it unable to react to the actions of its agents. Corporate values, even without the somewhat stretched parallelisms to personal values, are still community values and have to fulfill their function as guiding beacons and guidelines. Due to their often vague nature and the concentration of platitudes and truisms acting as a verbal smoke screen, the danger of misunderstanding increases. The approach brought up by Wenstøp and Myrmel (2006) addresses this problem to a certain degree by setting minimal, categorical standards about which topics (or value contents) should be addressed in a corporation's value declaration. However, this approach still leaves a far-reaching uncertainty in the system by not addressing corporate values on a structural level but again focuses on the value content. Following the tendencies in Russian-speaking sociology towards abstraction and system analysis, Erushkina (2010) addresses organization structure types systematically, emphasizing that a role definition within an organizational structure inevitably frames the capacity to fulfill corporate values (Bondaletov and Ukrainets 2010). Whereas this aspect serves excellently to contextualize value declarations in an organization, the missing human perspective makes the approach heavily one-sided.

It would seem far more plausible to unite the steady top-down view describing corporate values from the perspective of pre-defined business roles and the volatile bottom-up view describing corporate values as the sum of an endless number of individual decisions to capture the functions and characteristics of corporate values without following the well-travelled path of voluminous lists containing various versions of different value content but barely information concerning the characteristics of corporate value itself.

State of Own Research

Having experienced the large, manifold gaps in the practical implementation of value-based decisions and the lacking guidelines for value-based strategies first-hand during the years in private economy, I turned my attention towards the basis of value-based approaches and spheres of activity. In 2009 in addition to the official start of my dissertation, I joined the Research Group of Prof. Paul Burger and regularly attended their colloquia to deepen the sustainability aspects of my research. Having volunteered to advice and support, I was likewise involved in the setup and organization of the International Sustainability Conferences ( ISC 2005, 2008 and 2012 (as an employee of UoASaA NW Switzerland) in Basel, a joint project of the University of Basel and the University oAS Northwestern Switzerland aiming to promote the exchange on a broad variety of social and economic aspects of sustainability.

The insights and experiences collected in the state-funded project "Sustainable Management in Non-Profit Organizations" [1] formed the nucleus of the practical guideline for sustainable project implementations (Frecè, Scherrer, and Daub 2012) and at the same time inspired rather theoretical reflection (Scherrer, Frecè, and Daub 2012) regarding an organization's self-perception concerning the value basis their actions and non-actions rest upon. The editorial work currently in progress for a special issue of "Sustainability" [2] again demonstrates the broadness of conclusions rooting in the same (obviously widely uncharacterized) values forming the sustainability concept(s).


This dissertation's aims are fourfold. On a theoretical level (1), it strives to contribute to a better understanding of the functional expectations from a social and individual value-perspective towards corporate values. On an empirical level (2) it seeks to shed light on the interdependency between declaration of corporate values, the structures of corporate value propagation within an organization and the acceptance and implementation of those values by the active [3] stakeholders. Finally, on a practical level (3) it aims to inform the fundament of a future practical framework supporting practitioners in defining and declaring corporate values.

Questions to be Answered

The leading research question of this project is: "What conditions does a declaration of a corporate value have to fulfill to foster corporate-value-aligned (collective) actions?"

To be able to address this question the following sub-questions have to be clarified beforehand:

What are justified societal and Individual expectations towards corporate values based on an understanding of corporate values rooting the generic value term? (aim 1)

How does the conceptual scheme of a values look like taking the pre-conditions defined in a? (aim 1)

What are pitfalls of corporate value propagation with regard to value acceptance and implementation by active stakeholders? (aim 2)

What are cornerstone of a framework supporting practitioners in defining and declaring corporate values building on the results of b and c? (aim 3)

How are sustainability values depicted in corporate value declarations and why do they (not) live up to the recommendations worked out in d? (aim 2)


The term "corporate values" has never been properly defined regarding its minimal definitional requirements. Due to its obvious derivation from the term "value" many properties were vaguely transferred but never established. Hence, the so far reviewed literature indicates that not only a scientifically proper defined value declaration (e.g. including interconnections between different values, value motivation, value exceptions, value measurement and achievement criteria, value addressees, etc.) but equally important a value declaration fit to survive the journey from the value definition workshop to its daily implementation. Consequently, it seems values cannot be implemented in a corporate organization in an effective way without adjusting the corporation's structure and chain of command. The conditions of a corporate value declaration surpass the pure definitional requirements of a value declaration and include new processes with a tighter connection to concrete value goals and respective value reporting, two areas widely ignored these days.

Significance of the Project

The significance of this project can be seen on two levels: a scientific one (a) and a practical one (b):

In a general understanding, the spirit and purpose of corporate values is to guide and limit the corporation's actors in their decisions and actions. Thus, corporate values are included in reporting standards striving to capture the characteristics of a corporation. While there are vivid debates about ethical catalogues recommending certain values over others based on their morale superiority (thus their value content), there is no scientific-based system recommending certain value declaration standards over others based on their explanatory degree. This project broadens the debate, as it does not ask "which corporate value is more morale than the other?" but rather strives to provide an academic basis for a framework addressing the question "which corporate value is clearer defined and therefore better comprehensible than the other?" and therewith supplementing the current debate regarding the quality of corporate values.

A corporation determined to define its values with a focus on explanatory power instead of marketability and sunshine slogans is currently thrown back on itself without any framework to support its initiative. This dissertation provides the scientific basis and applied examples for a future framework providing guidance for such a corporate value declaration. Obviously, such a framework, once developed, could not only be used for corporate values, but for most other organizational bodies. In addition, third parties can use the framework to analyze and well-grounded compliment on or criticize a corporation's value declaration.

Inside a corporation, the new approach to define corporation values provides more certainty and protection, as active stakeholders now have clearer indicators how to interpret and weight their corporation's values and are not subject to volatile interpretation by different exponents of the corporation's management body. Outside the corporation, passive stakeholders often do not have any means to estimate the quality of the declared values and therefore equally depend on a framework where explanatory power and goal achievement of a corporate value declaration can be evaluated. Especially ambiguous concepts with many layouts and designs, like the sustainability concept, are hard to grasp in the way they were meant, without additional guiding information. This is the main reason, why they will be used as a perspicuous example in this dissertation.


While primarily building on sociological theories, particularly sociology of values and sociology of management, due to its interdisciplinary character, this project utilizes theories and methodologies rooted in sociology, psychology, philosophy and economy. All these disciplines have different conceptions of value and corporate values even within their own disciplines. In order to depict a preferably genuine meaning of corporate values individual and societal values being addressed in the first three disciplines will be used as a point of reference. This aims at ensuring the criteria for corporate values do not conflict with the disciplines' guide rails, such as value theory's "theoretical questions about value and goodness of all varieties", with Gehlen's "limitation of determination pressure and decision guidance", with Schwartz' ten (or rather eleven) types of universal values, etc. At the same time it incorporates Strong Structuration Theory connecting the macro and micro levels, introducing fundamental uncertainties and thereby hampering absolute entitlements brought up by value theories. The last work package test drives the declared sustainability values of self-declared corporations with sustainability focus through the basis of the development framework.

Literature overview in the value debates (aim 1)

To contrast and illustrate the different discipline-specific views of the current debates in sociology of organizations, sociology of management, universal value theory, and partly sociology of economy regarding the important aspects and functions of values, the different conceptions are analyzed in detail. Presumed focal points for this examination are the topics of value origin, value legitimization, value addressees, value exceptions and value sanctions. As a result of this work package, an overview of functional expectations towards values will allow setting up the requirements for corporate values on a solid theoretical basis. This result will form the first chapter of the dissertation and establish the conceptual basis of all following chapters.

Transfer of requirements clusters to corporate values (aim 1)

Building on the disciplinal definitional minimal requirements worked out in b and the statements regarding corporate values by sociology of organizations, sociology of management and marketing/economy, generic requirements concerning corporate values are shaped and the differences towards individual/societal values are stressed. Based on the literature research so far, the expected characterizations can be pre-clustered in two groups almost parallel to b. The first group addresses problems of value delineation and consists of requirements regarding value vindication, value prioritization (or value conflict), extent of value validity, etc. The second group addresses instances of value transgression and includes the conceptions regarding value compliance measurement, value sanction systems (positive and negative), role definitions tied to compliance and sanction measurement, etc. Using a coding approach in the second step, a generic functional typology (across all codes) of a corporate value will be established. As a result of this work package, an array of value requirements will depict the expectations directed towards a corporate value on the part of the theoretical orientations listed above, in a consolidated way. This content constitutes chapter two, the first major chapter of the dissertation.

Critical assessment of value definition, value declaration processes and value legitimization on a typical corporate macro/micro level (aim 2)

To analyze the everyday potential of the insights from c organizational implementation processes of corporate values throughout the managerial chain will be analyzed using Strong Structuration Theory. The goal of this analysis is to describe the processes running as a reaction to managerial changes within a hierarchical organization, across several hierarchical steps, with potential conflicts of interest resulting in a conglomerate of intended and unintended consequences. As a basis, existing empirical studies focusing on individual reactions (particularly forms of resistance) as a rection towards managerial changes in corporate environments will be consulted (Jack and Kholeif 2007; Krauss 2010). As a result of this work package, a map of external and internal structures can be laid out throughout the managerial chain. Consequently, the points of conflict between corporate and individual values, the pitfalls of non-personal value communication, the uncertain degree of value compulsion, and their consequences become evident and can finally be scientifically described. This description will form the core of the second larger chapter three.

Definition of the consequences for the general requirements of a tool framework (aim 3)

Taking in account the requirements towards corporate values carved out in c and the conditions (especially constraints) rooting in particular human social behavior analyzed in d, an analytic induction will combine the definitional requirements with human behavior. As a result, a set of definitional basic conditions for a future applied framework assessing declarations of corporate values can be created and substantiated. In contrast to ethical discussions of existing corporate values, no value content analysis will be done. The focus shall be purely on the explanatory power of value declarations and the probability and reasons of failure on its way from managerial decision to everyday implementation. Chapter four will comprise this line of thoughts.

Corporate values and the value(s) of sustainability (aim 2)

In the last work package the basic conditions of the framework set up in e will be used to analyze corporate value declarations with regard to sustainability. To avoid blurring by third-party interpretation actual value declarations will be taken directly from the corporations' webpages or annual reports. To comprise a wide spectrum of relevant corporations, the top 5 corporations (by adjusted weight in %) listed in the Dow Jones Sustainability Index (DJSI) Europe, DJSI North America, and DJSI Asia Pacific will form the case sample. Analyzing five corporate values addressing sustainability per corporation will provide an international and intercultural overview across corporations declaring themselves and therewith their values as sustainability-oriented. Matching those value declarations against the backdrop of the basic conditions defined in e, the explanatory strengths and weaknesses of the sample's value declarations can be demonstrated and justified. Taking the role of a passive stakeholder trying to match sustainability concepts with sustainability value declarations, the high risk of miscommunication or non-communication as well as possible solutions to this problem can be pointed out in this last major chapter of the dissertation.


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Schedule of the Project

Work package [4] 

Planned time slot

Literature overview in the value debates (aim 1)

Week 1-11

Transfer of requirements clusters to corporate values (aim 1)

Week 12-23

Critical assessment of value definition, value declaration processes and value legitimization on a typical corporate macro/micro level (aim 2)

Week 24-35

Authoring and publication of a paper

Week 36-44

Definition of the consequences for the general requirements of a tool framework (aim 3)

Week 45-56

Corporate values and the value(s) of sustainability (aim 2)

Week 57-64

Revising and finalizing the thesis

Week 65-72

Reason of Choice of research institution

Relevance for personal career development

Successfully finishing my dissertation project and achieving a PhD degree represent the cornerstones for a career along the lines of corporate values, not least due to the fact, that a dissertation is needed in order to be eligible and qualified for further research and teaching activities at most applied sciences universities. Hence, this dissertation does not only provide the scientific basis for the next steps, but also constitutes the missing link for a long-term career in applied universities A guideline framework could be designed in such a later project to enable non-experts to approach the topic. In its wake, a further education course applying the developed insights to (future) leading personal could and should be developed and propagated.

In addition to the career development potential in the applied science and further education, due to the time restrictions of the dissertation project, the unusual method to describe and categorize corporate values leaves uncharted scientific space for continuative scientific research.

Planned publications