are value-based organizations more succesfull? for...are value-based organizations more succesfull?...
TRANSCRIPT
Are value-based organizations more succesfull?
Kristel M. SkorgeAssociate professor
Department of Business Administration
Link to general topic – People, Planet, Profit
• How is this question connected to the theme? Deals with organizations with more than onepurpose – to make a profit, but also to achieveother goals…. (make a difference – both to internal and external stakeholders)
• Important question: Should organizations spend more time on organizational purposes, valuesand visions?
• Or – will a focus on values make theorganizations more succesfull (increasedeffectiveness/legitimacy)?
What are values?
• Values are deeplyheld principles thatpeople adhere to when making descisions
• Individuals expresstheir values throughtheir actions and behaviour
• Organizations express their valuesthrough theirworking culture
Previous research
• Many claim that value-driven organizations aremore succesfull (Senge, Collins & Porras, Kotterand Heskett )
Why?- Values drive culture- Culture drives employee fulfillment- Employee fulfillment drives customer satisfaction- Customer satisfaction drives shareholdervalue
Kotter and Heskett
• In corporate cultureand performance, Kotter and Heskettshow thatcompanies with a strong adaptive culture based onshared valuesoutperformed othercompanies by a significant margin.
Collins and Porras
• ”Profitability is a necessary condition for existence and a meansto more important ends, but it is not the end in itself for many of thevisionary companies. Profit is like oxygen, food, water and bloodfor the body; they arenot the point of life, butwithout them, there is no life.”
What companies need (according to Collins & Porras)…
Senge
• To create a learningorganisation thatwill survive and prosper over time, people need to feelthat their own visionand values areconnected to thecompany’s….
So far so good….
• But how easy is it actually to manipulateorganizational culture or for employees to internalize organizational values?
Difficult….
• Joanne Martin (1992, 2002)
• Proposes threedifferentperspectives onorganizationalculture –integration, differentiation, fragmentation….
Differentiation/fragmentation
• In a differentiation–perspectiveemployees willrarely share thevision and values ofmanagement and will not increasetheir effectivenessbased on a greaterfocus on this….
• In a fragmentation-perspective, employees willsometimes sharethe vision and thevalues ofmanagement, butwill chose what suitsthem…. People canbe motivated by common values–but they also have their ownmotivational base.
Martin continued…..
• The link between a strong sharedorganizationalculture and adherence to common goal and purposes and increased effecti-veness/success has not been proved…
• Although the cultur-profit hypothesis is very popular it has not been proved to be right….
Complex…
• Organizations maypretend and adoptpractices (imitating) but without manyinstrumental effectsin the organization.
• However, it mayhave effects on theorganizationlegitimacy…
My own research…
• A study of theeffects (if any) ofa greater focuson organizationalvalues in a publicsectororganization –Sandnes Kommune.
Three core values and a vision
• Romslig, modig, sunn…Tolerant, brave, healthy
• I sentrum for framtiden…. At the heart of thefuture…
The intention…
• To create a common focus for the organization(increase organizational effectiveness)
• To strenghten the organizational culture and theemployees pride and sense of belonging(increase organizational effectiveness)
• To strenghten the image and the reputation ofthe organization in the eyes of stakeholders (increase organizational legitimacy)
Organizations - a conceptualframework
The behavioralsystem
The coalitionsystem
The managementsystem
The transformationsystem
The organization
Findings
• Is organizationalculture shared? No hardly….
• Did the focus onvalues increaseorganizationaleffectiveness?
Both yes and no…
• Did it increasethe legitimacy ofthe organization?
Clearly yes…
Findings
The increased focuson values in theorganization did not make peoplechange theirbehavioursignificantly, and individuals or leaders did not report increasedeffectiveness on a personal level…
• However, it clearlyincreased theeffectiveness of themanagementsystem….
Legitimacy, identity and image
• People clearly felt prouder to work in theorganization and perceived the organization as more professional with a clearer image….
4,5 4,55 4,6 4,65
Omdømme
Omdømme 2007
Omtaler du Sandnes Kommune positivt?
2007
2008
Conclusion
• Shouldorganizationsspend more time on organizationalpurposes, valuesand visions?
• Yes, there arepositive effects, but do not thinkthat it will solveall yourproblems….