Ideals-Based Accountability and Reputation in Select Family Firms

Abstract

We develop a model of ideals-based accountability (IBA) which we have witnessed at work in several long-thriving family businesses. The owners and managers of these firms eschew individualism and materiality in the pursuit of ethical ideals such as supporting democracy and bettering the human condition. Although accountability is to these ideals, not for outcomes such as profitability or even reputation, IBA has resulted in outstanding reputations for some firms. We characterize IBA according to its missions, leadership, culture, and stakeholder relationships. We also contrast it with traditional forms of accountability and differentiate IBA from related stakeholder, stewardship, and CSR perspectives. Finally, we examine its manifestations within five long-lived family enterprises, in the process generating propositions to advance the concept.

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Fig. 1

Notes

  1. 1.

    According to Schlenker and Weigold (1989, p. 36) accountability to self “exists when (a) important internalized principles for conduct are salient; (b) actors believe those principles apply to their conduct in the situation, (c) actors take personal responsibility for the implications of their conduct as it relates to those principles; that is they perceive personal control over conduct and related outcomes.”.

  2. 2.

    Certainly, felt responsibility is to the segment of society served by the ideal; however in no way are those embracing IBA answerable via concrete reporting to any specific person, group or institution.

  3. 3.

    This happened from 1945 to 1954 at Renault when the French government owned the firm and CEO Pierre Lefaucheux, a hero of the Resistance, embraced the ideal of post-war economic recovery in the French manufacturing sector at considerable personal cost to himself and to Renault short-term profits, but to the great benefit of the French economy (Miller and Sardais 2011).

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Correspondence to Isabelle Le Breton-Miller.

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Appendix 1: Source Materials

Appendix 1: Source Materials

For the present study, we collected information on the five companies whose histories we believed best represented IBA. We had examined 20 other major family firms some of which were just as good examples of IBA and many others that were not. Search was done both on the internet and in used bookstores, and books, journal articles, and trade publications were used, only some of which are listed below. We also conducted interviews with top executives and two top level strategy consultants of Corning and Timken in order to garner insights into the ideals of these firms and their owners, and their manifestation in corporate behavior.

Again, we must reiterate the modest claims of our analysis. We cannot claim that the instances we present of IBA will inevitably have the manifestations and outcomes we describe. The case examples are given to illustrate the various components of our theorizing (or perspective). They are in no way a test of that perspective.

Information on Corning was taken from interviews with former CEO and Chairman (retired 2007) James Houghton, Mike Beer, a former top manager of Human Resources, articles on the company, and books by:

  • Dyer, D., & Gross, D. (2001). The generations of Corning: The life and times of a global corporation. New York, NY: Oxford University Press;

  • Gillis, J. (2001). Corning’s latest reinvention: Glass firm enters the uncertain gene-chip market. Washington Post, May 9, E1;

  • Graham, M.B., & Shuldiner, A.T. (2001). Corning and the craft of innovation. New York, NY: Oxford University Press.

Information on Hallmark was taken from:

  • Brailsford, T.W. (2001). Building a knowledge community at Hallmark Cards. Research-Technology Management, 44(5), 18–25;

  • Culhane, J. (1974). Roses are red, some verses are blue; There’s plenty of money in ‘I love you’. The New York Times Magazine, 10–11;

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  • Hall, J.C., & Anderson, C. (1979). When you care enough: The story of Hallmarks Cards and its founder. Hallmark Cards;

  • Loon Hoe, S. (2006). The boundary spanner’s role in organizational learning: unleashing untapped potential. Development and Learning in Organizations: An International Journal, 20(5), 9–11;

  • Papson, S. (1986). From symbolic exchange to bureaucratic discourse: The Hallmark greeting card. Theory, Culture & Society, 3(2), 99–111.

Information on Michelin was taken from:

  • Amdur, K.E. (1998). Paternalism, productivism, collaborationism: Employers and society in interwar and Vichy France. International Labor and Working-Class History, 53, 137–163;

  • Ball, R. (1974). The Michelin man rolls into Akron’s backyard. Fortune, 90(6): 138–143;

  • Browning, E.S. (1990). On a roll: Long-term thinking and paternalistic ways carry michelin to top. Wall Street Journal, January 5, A1;

  • Gueslin, A. (1993). Les hommes du pneu. Les ouvriers Michelin à Clermont-Ferand (18891940). Paris, FR: Éditions de l’Atelier;

  • Gueslin, A. (1999). Les hommes du pneu. Les ouvriers Michelin (19401980). Paris, FR: Éditions de l’Atelier/Les Éditions Ouvrières;

  • Harp, S. (2001) Marketing Michelin. Johns Hopkins Press;

  • Joly, H. (2008). Diriger une grande entreprise française au XXe siècle: modes de gouvernance, trajectoires et recrutement (Doctoral dissertation, École des Hautes Études en Sciences Sociales (EHESS);

  • Lauer, S. (2001). Michelin finit par dévoiler sa machine ‘révolutionnaire’: Le ‘C3 M’, entièrement automatisé, permettrait de quadrupler les cadences. Le Monde, September 22, 24;

  • Laux, J.M. (1976). In first gear: The French automobile industry to 1914. McGill-Queen’s University Press-MQUP;

  • Michelin, F., Levaï, I., & Messarovitch, Y. (1998). Et pourquoi pas? Paris, FR: Grasset;

  • The Economist. (1997). Michelin Gets a Grip. The Economist, 342, no. 8006, March 1, 63–64.

Information on The New York Times was taken from:

  • Corry, J. (1993). My Times: Adventures in the news trade. New York, NY: Putnam Pub Group;

  • Frankel, M. (1999). The times of my life and my life with The Times. New York, NY: Random House;

  • Goulden, J.C. (1988). Fit to print: AM Rosenthal and his Times. New York, NY: Lyle Stuart;

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  • Talese, G. (1969). The kingdom and the power: Behind the scenes at The New York Times: The institution that influences the world. New York, NY: World Pub. Co.;

  • Tift, S.E., & Jones, A.S. (1999). The trust: The private and powerful family behind the New York Times. Boston, MA: Little Brown.

Information on Timken was taken from books, articles, and interviews with two former strategy consultants including:

  • Lubinski, C. (2012). “Fighting Friction: Henry Timken and the Tapered Roller Bearing (1831–1909)”, In Hausman, W.J. (Ed.). Immigrant Entrepreneurship: German-American Business Biographies, 1720 to the Present, vol. 2. German Historical Institute (https://www.immigrantentrepreneurship.org/entry.php?rec=28Cite);

  • Pruitt, B. H. (1998). Timken: From Missouri to MarsA century of leadership in manufacturing. Boston, MA: Harvard Business School Press.

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Le Breton-Miller, I., Miller, D. Ideals-Based Accountability and Reputation in Select Family Firms. J Bus Ethics 163, 183–196 (2020). https://doi.org/10.1007/s10551-019-04225-5

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Keywords

  • Ideals and values
  • Accountability
  • Reputation
  • Family firms