A Summary of the Three Value Systems of European Managers - Corporate Governance and Business Ethics

In this section, two values studies are summarized, the first regarding strategic leadership and the next managers. Only the value systems elements of each study will be summarized.

Strategic Leadership Study

As part of strategic leadership research, Lichtenstein (2005) tested the proposition whether executives’ values are related to Maslovian needs in the first operationalisation of Maslovian categorization in a management context. In a study of 163 owner, senior and middle managers, executives’ personal values were measured, and separately executives were categorized in Sustenance Driven, Outer and Inner Directed value groups. The sampling frame of executives was inwork owner/managers (18%), senior managers (48%), and middle managers (34%) from the international business community. In total, 163 responses were received. Respondents were from a broad range of companies and industries from the UK (53%), the rest of Europe (32%), and other countries (15%).

To assess convergent validity, two instruments were used for the categorization of respondents. Firstly, respondents were categorised into the value groups of Inner Directed, Outer Directed, or Sustenance Driven groups based on Maslow’s (1970) theory using the Values Modes (VMs) instrument developed by CDSM. The results (Table) show a small percentage of managers were categorized as Sustenance Driven, which supports published reports (e.g., Wilkinson and Howard 1997) on the decline of the working age population in western society who espouse traditional values.



Secondly, Kotey and Meredith’s (1997) List of Values (LoV) that shows 28 items on a personal values scale (Cronbach α = 0.87) was also used to categorise variables into value groups by subjecting it to principal components analysis. Relying on Maslow’s (1970) theory of Inner Directed, Outer Directed and Sustenance Driven value groups, the a priori criterion (Sharma 1996) was used to derive a threefactor extraction. The rotated solution revealed all three factors showing strong loadings with theoretically predicted results: 1. The Sustenance Driven value system espoused the traditional values of loyalty, trust, compassion, and affection (Cronbach α = 0.79), 2. the Outer Directed value system espoused the core esteem-seeking values of power, prestige, ambition, and aggression (Cronbach α = 0.64), and 3. the Inner Directed value system espoused the entrepreneurial values of innovation, risk, and creativity (Cronbach α = 0.72). Table includes the key values for the Maslovian motivational groups of Inner and Outer Directed and Sustenance Driven. In a study by Higgs and Lichtenstein (2007) to explore the relationship between personality traits and values, they collected data from 73 in-work MBA students with at least five years’ working experience in organizations. Respondents’ values were categorized into the value systems of Sustenance Driven (loyalty, trust, compassion), Outer Directed (power, prestige, ambition), and Inner Directed (innovation, risk, and creativity) using Kotey and Meredith’s (1997) LoV (Cronbach α = 0.81 for the current research). As in previous studies, there were no Sustenance Driven managers. Moreover, the proportion of Outer Directed (38%) to Inner Directed (62%) value systems is approximately the same as in previous studies of executive values (Lichtenstein 2005) indicating a consistent pattern of value groups within the in-work managerial population. The next section will draw some implications in terms of what we expect to find in board-level research into values.



Implications for Board Research

Based on the previous research and our consulting experience, we would expect to find (i) very few if any directors with traditional values and (ii) a substantial proportion of ethically-oriented Inner Directed directors. Regarding the paucity of Sustenance Driven directors, the general shift of boards away from those with this value system indicates that it is unlikely they exist at board level. Previous samples of managers (Lichtenstein 2005) have found that out of 267 executives only two had Sustenance Driven needs and values. The Sustenance Driven world is context that business is moving away from, however, due to institutional lag and the need for survival, the residue of the Sustenance Driven value system is still prevalent.

Regarding the prevalence of Inner Directed directors, we predict a much higher proportion of the approximately 2/3–1/3 ratio of Inner to Outer Directed value systems pattern revealed in the European management values research. For example, we measured the values of participants (n = 16) attending our track at the 7th Corporate Governance and Board Leadership Conference and all were Inner Directed. We have found in our consulting experience that the higher up in organizations one goes the higher proportion of Inner Directed people there are as they have satisfied their Sustenance Driven and Outer Directed needs. This research supports the need for values research to be at the systems level vs. the individual item level and cries out for testing that must now be taken into the boardroom if the dynamics of integrity is to be understood and board engagement to be achieved.

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