The Expression of Espoused Humanizing Values in Organizational Practice: A Conceptual Framework and Case Study

Humanizing values respect the dignity of persons, promote care and service for others, support the personal and professional growth of employees and their families, advance the common good, and are committed to doing what is right even when it does not seem profitable or expedient (cf. the definition of “humanizing organizational culture” in Mele 2003, p. 3).

For example, one OECD guideline states “Encourage human capital formation, in particular by creating employment opportunities and facilitating training opportunities for employees,” but it does not specify how an organization might effectively translate those general ideas into specific practices.

Reell’s products include standard and custom hinges, wrap spring clutches, torque inserts, precision springs, and wire forms. Like many other for-profit business organizations, Reell has experienced structural and personnel changes in senior management, competitive market pressures, and periods of growth and contraction throughout its more than 40-year history. Reell grew from its original three founders and a few employees in 1970 to approximately 130 employees in 2012. It implemented an employee stock ownership plan in 1986. As of 2012 company employees owned 49 % of company stock and will soon be majority owners.

Some accounting researchers have used Schatzki’s practice theory to examine management accounting practice (e.g., Ahrens and Chapman 2007), while others have used Giddens’ structuration theory (for a review, see Englund et al. 2011). For comparisons of Schatzki’s ontology with other sociological theories, see Schatzki (1997; 2002, pp. xii–xiii; 2003, pp. 174–177).

Indeed, as Schatzki (2005, p. 477) put it:

Often…investigators do not need to track and register the potentially labyrinthine complexity of bundles, nets of bundles, and so on. In many cases, it is desirable and feasible to provide overviews of social phenomena and their workings that are couched in terms referring, not to the details of practice-arrangement bundles, but to entire formations and their relations…The present point is that, at whatever scale and with whatever conceptual apparatus social affairs are studied, social phenomena, ontologically, are aspects or nets of practice-arrangement bundles (Schatzki 2005, p. 477, emphasis in the original).

Shari assumed Ken’s human resource responsibilities in early 2013. Ken left Reell to continue his career at his former employer whose President asked him to return as Senior Director of Human Resources and help rebuild the company’s culture.

Carter (1996, p. 7) suggested that acting with integrity requires three steps: “(1) discerning what is right and what is wrong; (2) acting on what you have discerned, even at personal cost; and (3) saying openly that you are acting on your understanding of right from wrong” (emphasis in the original).

Reell’s Direction Statement and Declaration of Belief are distinctive but they are not unique. For example, Johnson and Johnson’s credo (reproduced in Simons 1995, p. 35) includes features that are similar to Reell’s first three spiritual principles.

Goodpaster (1999) documented the tensions raised by Reell’s spiritual character. Wahlstedt (August 16, 2012 interview) related the story of a Reell engineer who was agnostic and did not accept the founders’ religious beliefs. Wahlstedt described it this way: “[The first] non-founder engineer that we hired started in 1985 and shortly thereafter in reading the Direction Statement which at that time just said ‘We are committed to follow the will of God’. He came and started off by saying ‘I like the company, I like what we’re doing, I like the Direction Statement, I want to embrace it, but that phrase doesn’t mean anything to me’… [In response] we said it means to do what’s right, it means to do your best, it means to treat others the way you would like to be treated… And he said ‘Well I can do that, I can understand that.’ Then we actually put those words in [the Direction Statement].”

For some examples, in 1974 during the company’s first business downturn, the founders took a 50 % salary cut while the other employees took 10–20 % cuts; in 1982, shop workers took hourly and pay reductions for 2 or 3 months to adjust for reduced production volume; an across-the-board pay and hiring freeze was implemented for seven months in 1994; and after experiencing a significant reduction in orders from a major customer, a 10 % payroll reduction was implemented for four months in 1996 without a corresponding reduction in hours, with 80 % of the 10 % cut paid back to the employees by the end of the year when business rebounded (see Herrera 2006, pp. 28–32; Naughton and Specht 2011, p. 28; Wahlstedt, undated). During the pay reduction period in 1996, Reell’s senior executives took the biggest cuts and employees who were at or under the company’s target wage were exempt from the wage cuts (Alford and Naughton 2001, p. 147).

A later section elaborates on the practices–arrangement theme, whereby Reell’s available financial resources shaped and were shaped by its human resource practices, financial management practices, other internal operating practices and decisions, and the operating practices of Reell’s external competition.

The complete memo is reproduced in Naughton and Specht (2011, pp. 30–32).

Reell’s previous CEO pursued a high-volume, low-margin product strategy that later proved highly susceptible to pressure from competitors. Even before the 2008 recession, increasing globalization made Reell’s product lines more vulnerable to competition, as it gave their major customers more supply sources.

While most survey data are from lower level coworkers, some data are from senior management. Survey anonymity precludes separating out the senior management data. Only two out of 71 respondents on the 2012 survey optionally provided their names.

With the survey’s anonymity we cannot definitively attribute most of the lower ratings to lower level coworkers. A study by Ardichvili et al. (2012), however, suggests that lower level coworkers probably did provide the majority of the lower ratings. Specifically, the study surveyed more than 40,000 people from different hierarchical levels in business organizations in six countries and found that executives gave the most positive assessment of their organization’s ethical business culture, followed by mid-level managers and then by lower level employees who gave less positive assessments (Ardichvili et al. 2012, p. 348).

The majority of the other respondents gave operational suggestions, such as “Expand product line width” or “More product/catalog exposure through advertising.”