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Narrating values inside and outside the organisation: how do the top management espoused values shape organisational ethical reputation?
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Corporate reputation is an increasingly valuable intangible organisational asset. Reputation is perceptual, multidimensional, multi-themed, specific, and stakeholder dependent. Still, understanding the process of reputation formation is a challenge. The social construction approach to reputation uses stakeholder theory to understand how corporate reputation is formed. Stakeholder theory (Freeman, 2014) restores the centrality of values in organisational strategy, thereby setting the tone for the development of responsible management, responsible leadership and responsible strategic communication. Values through conversation (Freeman & Auster, 2011) address the dynamics of organisational values and their central role in strategy definition and organisation behaviours, stating that organisational leadership is responsible for starting this conversation. The organisational values adopted by the organisation's top management (espoused values) influence organisational dynamics. Still, studies on the connections between the values adopted by organisational top management and their visibility and effects on internal and external stakeholders are scarce. The main gap this study addresses is how the values that the top management espouses (Bourne and Jenkins, 2013; Freeman and Auster, 2011) for the organisation, enter the corporate reputation formation process (Ravasi et al., 2018), specifically the ethical character of the organisation (Chun, 2005.) The purpose of this study is then to understand how top management's espoused values shape corporate reputation. Resorting to a qualitative, processual approach and a narrative construction strategy, 62 in-depth interviews were conducted. First, with members of the management team of the largest Portuguese radio group and afterwards with various internal and external stakeholders. Interviews with 39 internal organisational members, from most of the organisation's departments, at several levels and diverse functions and 23 external organisational stakeholders, including clients, partners, commentators, artists, and beneficiaries. Also, archival data on cases and events identified in the interviews, totalling 28 cases, completed the data corpus for analysis. Using thematic analysis followed by narrative elaboration, 5 narratives emerged attesting to the ethical reputation stemming from top management's espoused values and their circulation within the organisation through individual perceptions, strategic internal and external communications, and events. Findings identify a process through which the salience of the values adopted by top management (espoused values) enters the organisation’s ethical reputation formation process. By examining the complex dynamics between top management's espoused values and the intricacies of how these values are perceived by internal and external stakeholders, this research advances knowledge on the shaping of communication flows within and outside the organisation. Specifically, by eliciting this process in the media sector, this study elaborates on the perceived ethical stances of a medium with two distinct yet intertwined missions: information and entertainment. This research thus responds to the call for a more fine-grained and deeper understanding of the corporate reputation formation process (Ravasi et al., 2018) and, particularly, the formation of the organisation's ethical character, or its reputation for being ethical (Chun, 2005). By tracing the “circulation” of espoused values inside the organisation, from their identification to their cueing for internal stakeholders, through organisational relationships, communications, and events, espoused values become available cues to external stakeholders, through the same mechanisms, and enter the ethical corporate reputation formation process. By examining organisational values dynamically, this work reinforces the importance of values as dynamic entities, available for reflection and conversation, as Auster and Freeman (2011) state. In addition, it operationalises their framework through Bourne and Jenkins's (2013) framework of organisational values, linking the literature on stakeholder theory and organisational values and informing organisational strategic communication. It proposes that the attributed values category from Bourne and Jenkins (2013) framework is useful in assessing both internal and external stakeholders' perceived values, and contributes to understanding organisational identity formation. It also reinforces the Bourne and Jenkins (2013) framework as an approach to organisational values, as perceived by both internal and external stakeholders. It supports the central role of values in stakeholder theory and their association with organisational intangibles, such as identity and ethical corporate reputation, particularly in its formation process (Ravasi et al., 2018). This process maps the values “circulation” within the organisation and their diffusion to internal and external organisational stakeholders, through relationships, organisational communications, and events. It also displays the mechanisms that lead to this diffusion, as well as the tuning and integration by organisational internal and external stakeholders. This process advances theory on the formation of corporate reputation. Specifically, it deepens understanding of the formation of an organisation's ethical reputation and how cues from organisational top management espoused values enter this process. The same proposed process is also useful when planning both internal and external communications to the organisation’s multiple stakeholders. For the industry, identifying a process to assess, discuss, and understand the circulation of espoused values within the organisation, and their queueing in ethical corporate reputation building, enables awareness, reflection, and management of internally and externally communicated espoused values. It also allows for developing more authentic and integrated communications strategies and raising the opportunity to elaborate strategy-focused communications evaluations, with a long-term focus, that align with the organisation's purpose and behaviours. Having a process to identify, reflect on, and understand the effects of espoused values on organisational internal and external stakeholders enables planning, assessing different values “clusters,” and identifying internal tensions. It also helps in understanding internal and external relationships with organisational stakeholders and acting on potential arising tensions.