Wednesday, November 9, 2016

Role of Values in Shaping Organizational Culture - A Brief Literature Review

Organisational Values as "Attractors of Chaos”: An Emerging Cultural Change to Manage Organisational Complexity

Dolan S.L, Garcia S., Diegoli S, Auerbach A
Working paper // Department d'Economica i Empresa, UPF, 485.
Year 2000


The parameters that characterize a complex environment:




Fuzzy Logic

Chaos theory tries to understand the relation between chaos and order. In this way, it is
possible to follow both directions, from order to chaos, or from chaos to achieve order.

In the first case of order to chaos, the system passes through a period of uniformity (order) to oscillation cycles and to turbulence and chaos, until it self-organises. Conversely, the chaos -to-order analysis uses an element called "strange attractors", a phenomenon that absorbs or catches the system’s final status of order.

A strange attractor concept has two behaviour patterns:

1. It is deterministic because it defines the system behaviour. In mathematical terms, one should say that the attractor is the system limit. The “limit function” represents the situation where the system tends to be, instead of determining its path

2. It is chaotic because such behaviour is unforeseeable; it's impossible to know where the system limit is moving through at each moment.

The most important thing to notice is that the presence of a "strange attractor" guiding a system’s behaviour is what distinguishes between chaos and randomness. A random situation is totally unforeseeable, whereas in a chaos situation the system’s set of future behaviour possibilities can be approximately predicted.

We're proposing that chaos cannot be controlled, but it can be guided by behaviour parameters, which we prefer to call "values". Value become the "strange attractors" of the chaos theory in organizations.

According to authors,  companies are not the product of deterministic rules and regulations, but rather they are product of chaotic dynamics that should be guided by establishing and incorporating values.

There are four inter-connected trends associated with an increase in the complexity and
uncertainty in companies, namely,

1. The need for quality and customer orientation.
2. The need for professional autonomy and responsibility.
3. Need for transformational leaders instead of “bosses”.
4. The need for flatter, more agile organisation structures.


In the early 20th Century, Management by Instruction MBI was necessary due to the characteristics of assembly-line production. In expected stable environments,  the objective was to maximize quantity through rationality and discipline, managers instructed and employees obeyed.  [Also when new systems were designed by engineers and managers, instructions have to be given by the designers and others have to follow them to operate the system to get the output for which they were designed].

As members of the organization use a system repeatedly, they understand the system's working as well as its current idiosyncracies better than either designers or top level managers and hence Management by Objectives (MBO) is more suitable approach.

Management by Value's (MBV’s) function is to absorb the organisational complexity that comes from its increasing change adaptation necessities in highly turbulent environments where centralized design departments alone cannot come with adequate solutions. Especially to provide a
vision through directing the strategic action to where the company aims to be in the future, its attractor (vision is an attractor). The explanation of these approaches shows that in turbulent environments, neither instructions nor simple objectives can guarantee organisational success. The company has to accept the chaotics and must develop the capability  of self-organising. Its capacity of self organisation comes directly from the fact that its internal components have a set of shared values and their independent actions or in line with shared values.


The word "value" can be understood in many ways. Axiology is the study of values; for ancient Greeks, axios meant guidance. Consider values as strategic references indicating that acting in one way is more appropriate to achieve goals than behaving otherwise.

Values can also be categorized into two main groups: finals and instrumentals. Final values can be explained as existential objectives, or, the answer to the question, “What do you/your company intend to be/achieve in the future?” The answer, often embodied in the corporate mission statement, can be economic benefits, excellence in products and services, customer or employee satisfaction, personal fulfilment, happiness, and so on. To achieve these final values, one must define the instrumental ones. Actually, it's necessary to clarify the set of the instrumental values that will be used to reach the future. Instrumental values can be organised in two groups: ethical and competence values
(Rockeach, 1973). The ethical values refer to the conduct, the means that are justified to achieve the final values). Usually, these are associated with social values such as honesty, integrity, sincerity, and loyalty (social values are related to behaviors that lead to social outcomes or effects on others in the society or relations). Competence values are more individualistic and have to do with the personal activity, and beahaviour related to personal outcomes  necessary to achieve final values, or to be competitive. Examples include creativity, patience, flexibility, order, intelligence, and health. Instrumental values are the system internal values that will lead or organise the chaotic system to its self-government and self-organisation.

Competence values can be either control oriented or development oriented. Depending on their balance, they are responsible for expanding or disciplining organisation processes. Efficiency, discipline, responsibility or punctuality are examples of control-oriented values. Trust, creativity, freedom, or having fun on the job are examples of development-oriented values. The two sets of values have to coexist in a balanced manner. Values oriented toward development are essential to create new opportunities for action. These include self-learning, initiative, diversity, self-organisation, and flexibility. The control values, on the other hand, are also necessary to maintain and bring together the various organisational sub-systems. Thus, they guide such activities as centralization, planning, order, certainty, and obedience.

Organisational Changes

Adaptive organisational  changes occur when the company is redirecting its internal processes in order to become more competitive. On the other hand, significant changes that cause reconfigurations
and transformations are the cultural recreation of new beliefs and values that are responsible for defining the organisation’s collective identity. The transformational change does not only establish new rules of interaction with the environment but mainly define new political and internal interactive rules, such as employee autonomy.


True leadership of a progressive 21st century company must operate through values.


Anne Reino

Rokeach's  definition of values “A value is an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or endstate of existence” (Rokeach, 1973: 5). Rokeach (1973) distinguishes between two types of individual values: instrumental values (modes of conduct) and terminal values (end-states of
existence). Terminal values are self-sufficient end-states of existence that a person strives to achieve (e.g. wisdom and comfortable life). Instrumental values (e.g. honesty, helpfulness) describe behaviours that facilitate attainment of terminal values.

Roe and Ester (1999) stress that holders of values are not necessarily individuals but may also be groups of people (e.g. organisation, occupational group, subculture, etc). Like an individual holds several values, so do organisations. Thus we have reached the issue of organisational values.

Enz defines organisational values as “the beliefs held by an individual or group regarding means and ends that organisations “ought to” or “should” identify in the running of the enterprise, in choosing what business actions or objectives are preferable to alternate actions, or in establishing organisational objectives” (Enz, 1988: 287).

 Values enable members’ activity through self-control and social mechanisms and being clearly communicated to organisational members, they will become the criteria for making decisions and choices in everyday work (Vadi, 2000). Organisational values may replace the traditional control mechanism within an organisation and they have an impact on human resource management (Vadi, 2000).

Some authors (e.g. Argyris, Schon) distinguish values “in use” from “espoused” values (Meglino, Ravlin, 1998). Values are socially desirable and therefore there is a pressure to express ideal values publicly (“espoused values”) whether or not they are held internally (“in use”). In case of organisations, there could be a great difference between the values expressed publicly and those which are actually shared inside an organisation. In some organizations, values are communicated and used informally and therefore at least partly held unconsiously.  That makes the question of studying internally held values even more complicated.

Methods of organisational values research 

One has two possibilities to do research in the field of organisational values – the choice is between using either qualitative or quantitative research methodology.

Qualitative methods are very often used as a starting point of investigation as they may help to develop conceptual frameworks. Content analysis, focus groups discussions, in-depth interviews, critical incident technique and mapping value systems are but a few of the methods used in the first phase of research to clarify the range of organisational values relevant to the study.

Quantitative research methods are considered to be useful in values research as they enable us to compare the values of different organisations and assess the relationships between different factors.

Several authors have developed questionnaires and scales for measuring organisational values. Hofstede et al, (1990) constructed a questionnaire that consisted of 135 precoded questions, 57 of which dealt with the subject of organisational values.  The Organisational Culture Profile (OCP) was worked out by O’Reilly et al (1991). OCP consists of 54 statements about the organisational values to be rated. The degree to which organisational values are shared can be investigated by the intercorrelation among raters, using a variation of the Spearman-Brown general prophecy formula.  The third instrument for measuring organisational values, the Focus instrument, was developed by Van Muijen et al (1999). This instrument is based on Quinn’s Competing value model which describes four organisational culture orientations: support, innovation, rules, and goal orientation (Van Muijen et al, 1999). These values clusters are similar to OCP culture dimensions (innovative, stable, respect of people, outcome oriented, detail oriented team oriented, aggressive) and those of Hofstede and his colleagues’ questionnaire.

Understanding Organizational Culture: A Key Leadership Asset  

Fred C. Lunenburg Sam Houston State University

 The competencies and values of employees and leaders play a key role in determining the effectiveness and success of an organization.

The concept of organizational culture was first noted as early as the Hawthorne studies (Mayo, 1933; Roethlisberger & Dickson, 1939), which described work group culture.  It was not until the early 1980s, however, that the topic came into its own.

Changing Organizational Culture

The following components are likely to be involved in the culture change cycle (Frost, 1991): (a) external enabling conditions, (b) internal permitting conditions, (c) precipitating pressures, (d) triggering events, (e) cultural visioning, (f) cultural change strategy, (g) culture change action plans, (h) implementation of interventions, and (i) reformulation of culture.


Mitja Gorenak, International School for Social and Business Studies, Slovenia,
Suzana Košir, International School for Social and Business Studies, Slovenia
Management, Knowledge and Learning, International Learning 2012.

Svetlik (2004, p. 323) says that organizational values are values that are being pushed forward by the management and have proven itself as a good foundation for development of organization. Same author also says that organizational values are intended to inspire employees with creative energy that will push organization forward towards desired goals. Cingula (1992, pp. 499–500) sees organizational values as: “what people within organization think is good for organization, what needs to happen within organization and what might be needed within organization in the future”. He also says that due to mentioned above organizational values reflect the mission and strategic goals of the organization.

The research question: To see if there is any correlation between how organizational values are stated within organization and how organization performs in its sector.

Data used in this article is a part of a much wider survey that included 303 companies within Slovenia. Companies were randomly selected

Among all organizations there are 65,2 % of those that have organizational values explicitly noted within the organization, 76,4 % of those that have organizational values implicitly shown within organization and 61,4 % of those organizations that do not have organizational values noted within organization and are slightly above average of the sector.

Overall we can say that How are organizational values stated within your organization influences Organizational performance – combined with a 5 % risk interval.

Structural Approach to Changing Organizational Cultural Values 

Mohammad Essawi Al-Qasemi Academic College of Education P.O. Box 124, Baqa El-Gharbieh 30100, Israel
Oleg Tilchin Al-Qasemi Academic College of Education P.O. Box 124, Baqa El-Gharbieh 30100, Israel
International Journal of Business and Social Science,  Vol. 3 No. 20, Special Issue – October 2012

The goal of changing organizational culture and the ways of its attaining are determined by a functional approach. Function approach decides which values are to be changed to attain the new goals,  A structural approach examines the process of changing the values and its effect on behavior. We may say it is concerned with interdependencies between  levels (elements) of culture.

The  process of value internalization by employees can be realized as a result of performance of corresponding behavioral tasks.

The desired organization's values are interdependent. It means that internalization of some value by employees may require prior internalization of one or several values preceding this value. Consequently, value interdependence entails the order of internalizing the values.

Change of organizational cultural values is guided by a leader of an organization and  leadership team members serving as change agents. The leader should delegate organizational accountability  for changing the organizational cultural values to a leadership team. Then, he should assign individual responsibility  for changing the values to the team members according to the determined extent of accountability. The team members in  turn have to guide each individual employee to  internalize the desired organizational values.

A Structural Approach to Changing Organizational Culture Values                                               

 The goal of the structural approach is to provide effective internalization of desired organizational values by employees through a determined order of realizing this process.
 According to the approach, changing organizational cultural values involves: building structure of  desired values of organizational culture, determining the order of internalization of the values by employees, forming behavioral tasks performance which is needed for internalizing the values, providing effective performance of behavioral tasks, and monitoring of the value internalization process. The approach is realized by the following sequence:

 Building the structure of the desired organizational culture values 

The structure of the desired values caused by their relations may be represented by an ordered set  (vi, vj), if internalizing value vi is required prior to internalizing value vj. The values may also be represented by a network when two or more values are to be internalized parallelly before another value is internalized.

Performance of the behavior tasks by employees. 

The result of a task's performance by an employee is represented by a behavioral cultural norm.  It serves as explicit exercise of value which is implicit in its essence. The measure of task performance varies from zero (the task is not performed) to one (the task is performed completely). The meanings of the measure are determined by the member of the leadership team. A value is internalized by an employee, if all tasks needed for internalizing the value are performed completely. Therefore, required state of the value is equal to the quantity of the tasks which should be performed for its internalizing.

In case of resistance to change, creation of constructive confrontation processes of internalizing desired organizational values by employees through use of different stimulation and facilitation mechanisms is to be employed.

Monitoring of the value internalization process 

 Determining the fitness of current states of internalizing of the values by employees to their required states is realized by the step. The step involves the following:
 Calculating the extent of internalizing a desired value by an employee. Internalizing the desired value requires performance of a set of tasks. Consequently, the extent of internalizing the desired value is the sum of performance measures of suitable behavioral tasks.

Core Values and Beliefs: A Study of Leading Innovative Organizations

S. Sai Manohar • Shiv R. Pandit
J Bus Ethics (2014) 125:667–680

15 leading innovative organizations are chosen. Between 50 and 60 respondents in each organization in the ratio 1:2:3 top, middle, and first line managers participated in the study. A total of 1,100 questionnaires were administered to executives in 15 organizations, 794 complete responses
were received, which worked out to achieving a response rate of 72.18 % for the whole survey

The ‘‘Innovation Culture Questionnaire’’ sought responses and compared six key areas of culture: Organizational Climate, Leadership, Core Values, Customer Focus, Creativity, and Envisioning Future at each of these organizations. In addition an ‘‘Innometer’’ tool was used to measure the success rate of innovation at these organizations. The findings of this study suggest that innovative
organizations have a common set of core values and beliefs that are responsible for the consistent success of these organizations.

Core Values

Regardless of the innovation activity they might be engaged in, they all seemed to be very concerned with seven values in their day-to-day operations: (1). Intense customer focus; (2).Product quality; (3). Innovation leadership; (4). Striving to be a pioneer in the industry; (5). Profits; (6). Organizational
agility; and (7). Emphasis on cutting edge technology

Impact of Core Values on Performance

A regression analysis between core values of highly innovative organizations and success rate of new products launched by them reveals that when core values increases by 1 unit, success rate increases by 30 units. This shows that there is a significant relationship between core values of an organization and success rate of new products launched by the organization. The R value is 0.678, which indicates a high degree of correlation.

Balanced Organizational Values: From Theory to Practice

Ivan Malbasˇic´ • Carlos Rey • Vojko Potocˇan
J Bus Ethics (2015) 130:437–446

This article addresses the issue of balancing of organizational values by providing an initial
empirical study which examines relationships between three different value models when tested on a sample of Fortune 100 companies.

Barrett (1998) advocated that balance in organizations is as important as in individual lives. Accordingly, he offered a tool called The Balanced Needs Scorecard, which represents the primary needs of an organization: corporate survival (profits, finance, and funding), corporate fitness
(productivity, quality, and efficiency), and customer/supplier relations (sales, service, and product excellence).

Quinn and Rohrbaugh (1983) presented the competing values framework (CVF model), the most famous concept of balanced values, in order to explain different types of values existing in different organizations.

Schwartz’s values model (Schwartz 1992) defines ten different motivational types of values represented by 56 specific values. What is unique in Schwartz’s values model is that motivational types of values form a circular structure on the basis of the dynamic relations between them;
in this mode of representation compatible types of values are next to each other, and conflicting types of values are positioned opposite each other.

An alternative view regarding this question was proposed by Cardona and Rey
(2008) in a model called Management by missions (MBM),
with the idea of distributing the corporate mission to all
company levels. The basic line of reasoning of these
authors is that OV must ‘‘be seen as being encompassed
within the concept of the mission’’ (Cardona and Rey 2008,
p. 86), based on the anthropological foundations of the
company and not only under a psychosocial view. Thus,
OV should consider a taxonomy of values based on organizational
mission fulfillment that are grouped into four
different categories. These four categories are seen as
representing different and sometimes opposed values that
are necessary to carry out the organizational mission, and
they are (Cardona and Rey 2008, p. 94):
(a) Business values—refer to the organization’s business
and profit-making activity (e.g., perseverance,
efficiency, professionalism, results orientation),
(b) Relational values—promote quality in interpersonal
relations (e.g., communication, team work, respect
for people),
(c) Development values—aimed at differentiating and
continuously improving the company (e.g., innovation,
creativity, learning, continuous improvement),
(d) Contribution values—aimed at doing more for stakeholders
than strictly required by the business relationship
(e.g., customer satisfaction, interest in people,
social responsibility).

A fundamental challenge of the chosen research area is the
question whether the aforementioned models of OV do
represent the balance that is pursued in the contemporary
business field. we state
following research question:
How does literature taxonomies of balanced values
(psychosocial and mission-based) fit the values that
are actually pursued by companies in the business

 Among the 100 largest companies on that
list, 94 of them had publicly released their OV on the
official company website. These companies indicated 446
concrete (specific) OV, and all further results of our
research are related to these companies.

In determining which OV are most relevant for observed
companies, methods of content analysis, descriptive statistics,
and a classification method have been used.

After determining OV of the researched companies, each
of the identified specific OV was classified into a specific
category of values, according to the all three observed values
models: (A) CVF model, (B) Schwartz’s values model, and
(C) Mission-based model of OV. This has enabled the
comparison of three different value models, in order to
conclude which of these models is most appropriate for
researching balanced values in contemporary business

In their work, Yilmaz and Ergun operationalized the
degree of imbalance as the sum of the absolute values of
the pair-wise differences between the different categories
(of values). Following a similar method, we took the differences
between the score of each category (of values) and
overall average score of all value categories.

 In order to answer the proposed research
question and achieve the objective of the research, we have
calculated the degree of imbalance of values for each of the
three observed value models, and they were: (A) 2.206 for
CVF model, (B) 1.982 for Schwartz’s values model, and
(C) 0.404 for Mission-based model of OV. Since a higher
degree score means a greater imbalance among values in the
observed companies, these results indicate that the Missionbased
model of OV is more representative of balance
between OV in contemporary business espoused values than
the other two models.

Papers Presented and Discussed during 2016 - 17 Fellow Program Course

Organisational Values as "Attractors of Chaos”: An Emerging Cultural Change to Manage Organisational Complexity
Dolan S.L, Garcia S., Diegoli S, Auerbach A
Working paper // Department d'Economica i Empresa, UPF, 485.
Year 2000

Anne Reino

Understanding Organizational Culture: A Key Leadership Asset
Fred C. Lunenburg Sam Houston State University

Mitja Gorenak, International School for Social and Business Studies, Slovenia,
Suzana Košir, International School for Social and Business Studies, Slovenia
Management, Knowledge and Learning, International Learning 2012.

Structural Approach to Changing Organizational Cultural Values
International Journal of Business and Social Science,  Vol. 3 No. 20,Special Issue – October 2012

Core Values and Beliefs: A Study of Leading Innovative Organizations
S. Sai Manohar • Shiv R. Pandit
J Bus Ethics (2014) 125:667–680

Balanced Organizational Values: From Theory to Practice
Ivan Malbasˇic´ • Carlos Rey • Vojko Potocˇan
J Bus Ethics (2015) 130:437–446

Additional Reading

Understanding Human Values
Milton Rokeach
Free Press, 1979
Simon and Schuster, 30-Jun-2008 - Psychology - 230 pages

This volume presents theoretical, methodological, and empirical advances in understanding, and also in the effects of understanding, individual and societal values.

The Value of Corporate Values
strategy+business: Corporate Strategies and News Articles on Global Business, Management, Competition and Marketing
Summer 2005 / Issue 39 (originally published by Booz & Company)

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