For the individual
For the organizations
For the society
The public value concept estimates the way in which an organization’s core business influences the functionality of a society. In contrast to unilateral focal points, such as the stakeholder value, or shareholder value, this concept takes a holistic view of corporate activity as a public value creation. The public value concept focuses on an organization’s societal role. This can be private companies, non-profit organizations, or public administrations.
Consequently, issues which do not attract attention when regarded individually, or are apparent within other surveys, come into focus. For example, the public value approach addresses challenges, that cannot be managed through a balance of interests between stakeholders. The goal is not to give preference to a particular approach. The solution lies in a balanced approach, and, thus, in a holistic consideration of the conflict areas between different evaluation perspectives. It depends on the acceptance and the appreciation within the societal environment, which balance is considered as acceptable.
The following figure illustrates the different prioritizations of the individual approaches.
The Public Value Atlas is a project of the Center for Leadership and Values in Society (CLVS-HSG) of the University of St.Gallen. The CLVS alone specified the content of the scientific study and the analyzed companies and organizations. Ernst & Young AG Switzerland, as well as the Ernst & Young GmbH auditing company, Germany, supports the scientific work financially. The analyzed organizations were not asked whether they wished to be part of the study. The CLVS has established research cooperation with certain individual institutions.
The data collection for the Public Value Atlas has been completed. You are welcome to join the discussion via the rubric “News” and the social media channels (facebook/gemeinwohlschweiz or @GemeinwohlCH). In addition, you can share the function “weights” of your individual value system with us.
The Public Value Atlas reflects company contributions to public value from the public’s point of view. The data base can be considered a point of departure for a fact-based discussion and invites reflection on companies’ activities through different perspectives. Each company is entitled to draw its own conclusion from the Public Value Atlas results and, if it wishes, to identify its areas of activity.
We endeavor to take a variety of important organizations and companies into account in our survey, and would like to include even more organizations in the Public Value Atlas. Beside methodological limitations (e.g., the organization’s sufficient familiarity), financial and staff expenses also restrict the expansion of the Public Value Atlas; therefore, only a limited number of companies are represented in the Public Value Atlas at the moment. In the coming years, we will try to introduce more focal points and to increase the number of organizations and companies.
The data refer to external perceptions of companies and organizations. Companies and organizations were not included in the data collection to avoid a comparison between self-image and public image.
No. The “Volksbanken Raiffeisenbanken,” as well as the “Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR),” are included in the Public Value Atlas. While the “Volksbanken Raiffeisenbanken” are responsible for actual banking business and were included in the familiarity questionnaire as one of the most popular financial institutions for salary and current accounts (source), the “Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR)” ― one of the representatives of the interests of “Volksbanken und Raiffeisenbanken” ― originates from the list of the largest associations according to their membership numbers (source). As an umbrella organization, the BVR represents the interests of cooperative banks in Germany and acts in an advisory function for its members. The respondents are sufficiently familiar with both organizations for them to be included in the main survey. The organizations differ in their contribution to public value (public value score of “Volksbanken Raiffeisenbanken”: 4.05, public value score of BVR: 4.25).
The classification of the respective industries follows the classification of the business sectors of the German Federal Statistics Office. Some sources (see methodology: selection of analyzed organizations) have no direct link to the company’s activity (e.g., the 50 most valuable brands). The composition of the banks was put together as follows: Beside the seven most popular financial institutions for salary and current accounts, the following organizations in the banking sector are sufficiently familiar to be included in the main survey: the European Central Bank from the additionally added organizations drawn from the public sector, American Express, as well as Santander from the selection of the 50 most valuable brands (source: BrandFinance). The association of the Sparda banks as representative of the interests and the merger of the Sparda bank group, is listed as a representative of interests.
The public value scores ranged from 5.72 and 2.37. These values are valid and/or “true” for the analyzed sample, i.e., the respondents. In order to infer the underlying “true” value applicable to the entire population, a statistical tool, namely the confidence interval, needs to be used. The confidence interval indicates an area, or interval, with a defined probability of being a “true” value. In this way it is possible to cope with the fluctuations or variances in the answers and the number of respondents. A confidence interval with a confidence level of 99.9% was specified to classify the groups. This means there is a 99.9% probability that the “true” value will lie within the identified value range between the upper and lower boundary of the interval. A higher selected confidence level leads to a lower risk of wrong assessments, but a wider interval. The confidence interval is individually calculated for each organization, because they have different characteristics: the number of respondents, the variance, or standard deviation, and the mean.
A higher number of surveyed persons leads to a narrower interval. More precisely, the width of the interval decreases with the square root of the sample size. Thus, the more respondents, the more one can assume that the resulting value applies to larger groups of persons. For example: Let’s allow first two and then 18 persons to evaluate organization Z:
Organization Z, two persons with the values [3; 4]. Mean = 3.5
Organization Z, 18 persons with the values [3; 3; 3; 3; 3; 3; 3; 3; 3; 4; 4; 4; 4; 4; 4; 4; 4; 4].
Mean = 3.5
A smaller sample has a larger uncertainty. With 18 persons, the uncertainty is only a third of what it is with two persons if all the other parameters stay constant.
In addition to the number of respondents, the fluctuations, or variance, of the answers are also relevant. This, for instance, is the case when an organization is controversial, or when different persons provide evaluations with large differences. Example: let four persons each evaluate two organizations Y and Z :
Organization Y: [1; 5; 1; 5]. Mean = 3
Organization Z: [3; 3; 3; 3]. Mean = 3
The means of organizations Y and Z are equal, but the fluctuations in the answers are not. While organization Y’s variance is quite large, organization Z’s variance is zero (which is almost never the case).
The same principle of the confidence interval was also applied to the mean of all the organizations, forming the basis of the organizations’ classification. The mean of all the organizations is also an estimation based on the means of all organizations. When these fluctuate, the mean of all the organizations also fluctuates.
An organization thus enters the top group if the lowest value of its confidence interval is above the highest value of the confidence interval of the mean of all the organizations. Only then can we maintain that the mean of the particular organization has a 99.9% probability of being above the mean of all the organizations. Consequently, an organization with a high mean when compared to other organizations in the top group may sometimes not be included in this group, due to the marked fluctuations in the answers and, thus, a too wide confidence interval. Under such circumstances, an organization’s confidence interval overlaps the mean of all the organizations.
Reciprocally, an organization can enter a top group if the highest value of its confidence interval is below the lowest value of the confidence interval of the mean of all the organizations.
With this approach, we follow the example of the CHE university ranking. This is a recognized ranking of German-speaking universities, technical colleges, and vocational academic institutions.
Marketing, public relations, and advertisement certainly have a huge impact on the public perception of companies and organizations. However, a positive image conveyed by these is not sufficient to be perceived as beneficial for public value. Sooner or later the actual accomplishments of companies, or organizations, also become important. Whether an organization acts positively, or negatively, in the sense of public value, the population’s attitude is the one that ultimately counts. In short, public value is what the public values. If companies and organizations do not keep their promises, the general public will, over time, not regard their conduct as legitimate, or appreciate them.
The raw study data are generally not published on the website. However, if you wish to analyze the data scientifically, you are welcome to contact us via firstname.lastname@example.org.
Whether, or to what extent, companies’ public value contributions lead to economic success, is one of our long-term research questions. We presume that relations exist which will require further examination.
In practice, the public value concept is already very well received. The DAX-listed company, Fresenius Medical Care, already uses a public value scorecard in addition to a balanced scorecard. By incorporating an external point of view, the company wants to gain a better understanding of the social benefit of healthcare services rendered by private providers.
Every two years, the "Deutsche Gesellschaft für das Badewesen e.V." (German Association for the Recreational and Medical Bath Industry) gives a public value award to a public bathhouse. In this way, public swimming pools that create a special public value contribution are rewarded. In addition, the "Bundesagentur für Arbeit" (Federal Employment Agency) uses the public value concept to understand and realize its societal contribution, which reaches far beyond its simple task fulfillment, and to assist with management decision making. FC Bayern Munich uses the public value approach to structurally include the challenges of the club’s societal role, in order to grow into a global entertainment brand. German international schools abroad view the public value concept as a possibility to capture their value holistically, and in various value dimensions.
Public broadcasting corporations adopted the public value concept broadly and were some of the first organizations that wanted to determine their public value contribution. They feel obliged to justify their public funding with their public value contribution. The BBC assumed a pioneer role by having new channels undergo a public value test. ARD and ZDF in Germany, as well as ORF in Austria, use similar methods to determine the public value contributions of new broadcasting formats. In Switzerland, various companies and organizations already apply this concept.
For an overview of experiences with public value in practice, also see Zeitschrift für Organisationsentwicklung (2013). Was wirklich zählt. Organisationen entdecken ihren Public Value, 4. http://www.zoe-online.org/fruehere-ausgaben_2013-04-was-wirklich-zaehlt.html
The second Public Value Atlas Switzerland was published on 20 September 2015. This enables transnational identification of differences and similarities in the evaluation process. For example, it is interesting to compare international companies which were evaluated in Switzerland and Germany, as well as single industries, with regard to their cultural priorities.
The results show that the population attributes a higher public value contribution score to social sector organizations. Large multinational companies are at a disadvantage here. But ultimately all categories of organizations either have a positive, or a negative, influence on social wellbeing, and they should therefore be evaluated according to the same evaluation standards. We included filter options in the data visualization to allow comparison within certain sectors and industries.
There is no standard recipe for this. Society has the final decision on what is considered right or wrong. The public value approach does, however, help companies and organizations better understand their role in society. The public value scorecard is an important tool to scrutinize company decisions with regard to public value and, in addition to the company’s profitability, also takes basic human needs into account.