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BJM
3,3 Employees’ values orientation
in the context of corporate social
responsibility
346
Janis Strautmanis
Banking Institution of Higher Education, Riga, Latvia
Received 1 September 2006
Revised 1 August 2007
Accepted 1 May 2008
Abstract
Purpose – The aim of this paper is to explore if there are any statistically significant values
orientations that determine the organizational culture environment and ascertain the factors that affect
the values orientation structures differences.
Design/methodology/approach – This study investigates the relationship between organizational
values and sensitivity to corporate social responsibility among current employees and business
students in Latvia. Using a questionnaire on value orientation, survey data were collected from a
sample of 718 employees, 125 first year business students, and 27 MBA students.
Findings – The research has contributed to the development of assessment instrument for
organizational culture environment values orientation – nine scales representing values orientation
typical of organizational culture. These scales were updated, analyzed by context and tested by
application of statistical methods.
Practical implications – Results of the research point out the necessity of social responsibility
facilitating ethics studies in entrepreneur training programs in universities and colleges. Universities
and colleges have important tasks in preparing the prospective managers. The time that has been
spent studying is an important stage in the personal development in the early adult age.
Originality/value – A structural model of nine values orientations describing organizational culture
environment has been developed. Results of the research identified significant factors determining
differences in values orientation: the gender and the type of the place of employment.
Keywords Social values, Corporate social responsibility, Employee attitudes, Organizational culture,
Latvia
Paper type Research paper
Introduction
Globalization processes in the world and structural changes in the work force have
significantly increased requirements to the enterprise by the stakeholders in its
operation as well as by the society on the whole. The society expects the enterprises to
cooperate in the resolution of the social problems in the community and facilitation of
welfare, environment friendly entrepreneurship and activities that comply with high
standards of ethics. Nowadays, progressive social activity means a valuable
investment in the long-term financial stability of the enterprise.
Over the last decades, it has become obvious that no extensive and perspective
development of economics is possible without due consideration of moral. (Fahy et al.,
Baltic Journal of Management 2005; McIntosh et al., 2003; Robbins, 2005; Siccone, 1998; Garleja and Vidnere, 2000,
Vol. 3 No. 3, 2008
pp. 346-358 Milts, 2000, Weiss, 2006) Economics is becoming more productive if maximum attention
q Emerald Group Publishing Limited
1746-5265
is focused on the principles of ethics. Moral factors are the causes of both – ecological
DOI 10.1108/17465260810902405 and economical recession, and it is difficult to find a moral non-related economical issue.
Employment and unemployment, labor division, salary, property, budget distribution, Employees’
proficiency, relationship between a seller and a customer, etc. are closely linked with the values
issues of justice, duty, personal development, freedom, rights, responsibility, conscience,
respect, and admiration and sense of life. It is important to note that the origin of moral is orientation
closely linked with economics. The term gain is a general sociological and economical
category that brings forward the term the good as ethical category that is facilitated by
upbringing in childhood. 347
Empirical studies (Kraft and Singhapakdi, 1991; Perrinjaquet and Furrer, 2005) of
the dimension of management ethics research factors that influence ethical decision
making, ethics of the action, spread and frequency of immorality in companies,
correlation between values and management success, acceptance of unethical
management by employees.
A number of researchers (Coughlan, 2005; King et al., 2000; Sims, 2003) have pointed
out that activities of people with strong values tend to be more ethical than they are
usually expected. Nonetheless, unethical situations are common anyway. Unethical
behavior is encouraged by the lack of understanding about ethics in the society as well
as the fact that unethical activities lead to success.
Behavior of leaders and managers is determined by their attitude and also – by the
organizational strategy, culture and relationship with the staff. These personal values
explain the choice and taste, and they are extremely difficult to change. A healthy
ethics system and moral code ensures grounded decision making and efficient
operation of the company.
On the management level, moral development is evaluated based on the
decision-making process and the style of management accepted by the company.
(Velasquez, 2002) This analysis describes the ethical leader in connection with the
moral development levels. If the leader impersonates ethical values, if they are fair,
tactful and compassionate, he/she becomes a model worth copying. Inspired by high
principles, the aforementioned leader makes (appropriate) consistent decisions that are
understood and accepted by their employees. Business is – people, however, business
ethics is a system and type of confidence of how we treat each other.
The term “a responsible enterprise” is closely linked with – “a successful enterprise”,
because compliance with the social and environmental aspects by the enterprise facilitates
matching the needs of the customers along with meeting the requirements of other
members of public, for example, respect to employees, suppliers and the community.
Consequently, positive impact on the society and impact of the enterprise on the
environment, may turn out extremely favorable and ensure long-term competitiveness.
Most often definitions and interpretations of the corporate social responsibility
include the following aspects:
.
corporate social responsibility includes the social and environmental aspects;
.
corporate social responsibility by its nature should not be separated from the
business strategy and transactions; it should rather be turned into an integral
part of the enterprise and make the enterprise take into account the social and
ecological consequences resulting from entrepreneurship;
. corporate social responsibility by its nature is a voluntary activity; and
.
one of the most important aspects of corporate social responsibility is interaction
of the enterprise with the stakeholders.
BJM Corporate social responsibility can be as well referred to as business ethics because the
3,3 strategy of the corporate social responsibility and the Code of Ethics or Conduct
determines the attitude of the enterprise to its shareholders and stakeholders. The
following definition of the above term arises from the aforementioned: “successive
compliance with the ethical norms of the enterprise and participation in the economical
development along with improvement of employees’ living standards, their family
348 members and the society on the whole.” (Holme and Watts, 1999).
One of the arguments in favor of the corporate social responsibility is the fact that
successfully implemented strategy by the enterprise, for example, improvement of the
living and work conditions of the employees, produces favorable economical effect on
the enterprise itself, and promotion of public welfare provides favorable grounds for
entrepreneurship. Consequently: successful implementation of the corporate social
responsibility helps the stakeholders (employees, society as such, suppliers, etc.) to
develop a good impression of the enterprise. This creates a positive long-term image of
the enterprise, increases its value and forecasts bigger profits in the future. The above
is closely linked with the fact that since the middle of the previous century, the concept
of the obligations of the enterprise toward the society has changed dramatically, and
what used to be considered an act of favor by the enterprise, has become a must
nowadays.
Another aspect in favor of the corporate social responsibility and its implementation
is a fact that job seekers tend to prefer enterprises that have proclaimed themselves as
socially responsible. According to the research on the correlation between the
implemented practice of the corporate social responsibility and appeal of the enterprise
on the labor market (Backhaus et al., 2002), labor relations, relations with the society,
environment protection and quality of the production are found at the top of the job
seekers’ priorities. Moreover, these are mentioned as the main criteria for choosing the
place of employment.
In the contemporary global economics, a socially responsible manager is the key
provision for the implementation of the corporate social responsibility imperative of
today. Moreover, the manager is spiritually mature to be able to independently make
ethically responsible decisions; he is well educated and has a good knowledge of the
alternatives and possible solutions as well as possesses appropriate value orientations.
Mastering the social responsibility approach by the prospective managers and
employees and further development of the above skills is a crucial task, therefore the
studies and teaching methods have to focus on the progress of the students, readiness
to live and work in a changing environment, willingness and capability of learning new
things and approaches. These provisions are extremely important for management
study programs. According to the contemporary requirements, enterprises and
organizations need a thinking, analysing and professional manager. Professional skills
of the manager as well as of the entrepreneur are not limited to the economical
information alone (finance accounting, analyses, control, and forecasts). The manager
has to be able to work out decisions regarding the management of human resources,
where psychological, pedagogical, ethical and social grounds are as important as the
economic and legal information. The manager has to have professional competence so
that the decisions do not contradict the personal independence of the employees and
public needs; he has to follow psychological and pedagogical models of behavior,
peculiarities of the organizational culture environment as well as the principles of
approach and balance. The newest management theories increasingly emphasize the Employees’
imperative of the corporate social responsibility. Therefore, colleges and universities values
have to take on responsibility for their students – prospective managers and
entrepreneurs’ knowledge of the corporate social responsibility. orientation
The research is based on the employees of small and medium size enterprises of Latvia.
They represent the following fields of activity: finance mediation, wholesale and retail
sale, hotels and restaurants, real estate transactions, rent and other kinds of
commercial activity.
Respondents to the research (n ¼ 618) are managers, experts, public servants,
service and trade providers of different levels. However, the research does not cover
workers – both unskilled and those representing simple professions.
In order to obtain the data for comparison, the following additional respondents
were questioned: 100 employees from state budget institutions (state and municipality
administration, State Revenue Service, the Bank of Latvia and educational institutions)
and 125 first year students of entrepreneur management – the prospective employees.
The second stage of the poll included 27 MBA students.
The values orientation poll contains information provided by 870 respondents.
By the means of cluster analyses, the 91 statements on the questionnaire were
grouped into nine groups/scales, each of them representing different value orientations
typical of the organizational culture environment. The number of questions in each
values orientation group varied from 6 to 13. Kronbah’s a test was used to check the
mutual conformity of the questions and their compliance to the respective group.
For the purposes of the research, nine values orientation scales were developed.
BJM A structural model of nine values orientations describing organizational culture
3,3 environment has been developed (Figure 1).
The first values orientation scale includes statements that describe employees as
organizational success oriented. This type of orientation is characterized by a row of
external features – facilitated buildings and premises, presence of international
contacts and export. Due to precise work and responsibility division as well as career
350 possibilities, the employees are proud of their success, they possess sense of
commonality, feel involved and secure. The management views employees as a
significant factor of organizational development, and they try to demonstrate a positive
example. The first values orientation scale can be conveniently referred to as
orientation to the visible success and development of the organization.
The second values orientation scale includes statements that describe employees’
orientation to efficient functional organizational culture: precisely defined decisions,
delegating, performance, control, communication, incentive and loyalty. This means
focus on providing employees with the sense of security. The second values orientation
scale can be conventionally referred to as orientation to internal communication or
functional organizational culture.
The third values orientation scale includes statements that describe employees’
orientation to availability of information, explanation of goals and assignments, their
purposeful fulfillment as well as individual respect and admiration. The third scale of
ORGANIZATIONAL
SUCCESS
HUMAN ORGANIZATIONAL
0.85 FUNCTIONALITY
RELATIONSHIP
0.80
0.77
0.84
DEMOCRATIC ORGANIZATIONAL 0.79
CULTURE EMPLOYEES’
AND FRIENDLY
ENVIRONMENT INVOLVEMENT
MANAGEMENT
0.82 0.82
PERSONAL
QUALITY DEVELOPMENT
0.79
Figure 1. PROFESSIONALISM
Structural model of nine 0.56
values orientation
describing organizational GROUP
culture environment, VALUES
Kronbath’ a test
values orientation can be conventionally referred to as orientation to employees’ Employees’
involvement and participation. values
The fourth values orientation scale includes statements that describe employees’
orientation to the necessity of improving knowledge as a condition for the development orientation
of professional competence and personal improvement. The fourth values orientation
scale can be referred to as orientation to the importance of continuing education or
personal development. 351
The fifth values orientation scale includes statements that describe employees’
orientation to individualism as opposed to collectivism, orientation to common free
time activities, and importance of the religious or national belonging. The fifth values
orientation scale can be conventionally referred to as orientation to group values and to
individualism in favor of work collective.
The sixth values orientation scale includes the statements describing employees’
orientation to professional qualities – knowledge, experience, incentive,
purposefulness, discretion and work quality. The sixth values orientation scale can
be conventionally referred to as orientation to professionalism.
The seventh values orientation scale includes statements that describe employees’
orientation to competitive products and services, which is possible to reach by
extensive knowledge in market economy, sufficient resources, highly motivated staff
and demanding management. The seventh values orientation scale can be
conventionally referred to as orientation to quality.
The eight values orientation scale includes statements that describe employees’
orientation to positive, respectable, friendly management and appropriate qualities of
the manager. On the whole, this creates free, democratic and mutually beneficial
environment and comfortable conditions in the organization. The eighth values
orientation scale can be conventionally referred to as orientation to democratic, friendly
and benevolant management.
The ninth values orientation scale includes statements that describe employees’
orientation to mutual assistance, which is determined by humane and friendly
interpersonal relations between the manager and the subordinates as well as among
the employees. The ninth values orientation scale can be conventionally referred to as
orientation to human relations.
Basing on the results of the research, the disperse analyses was used to identify the
significant factors that have impact on values orientation differences arising from the
organizational culture environment: these are the gender and the type of the place of
employment (Table I).
Factorial feature F p
Organisation
Gender type
Scale Values orientation F p F p
Males Females
Values orientation Mean Std. error Mean Std. error
orientation research basis. This enables us to conclude that the results of the research
are comparable. In order to obtain a more complete idea about the MBA students’
values orientation differences, the research compared the averages. MBA students
evaluated the importance of the given statements against a growing scale from 1
(minor) to 7 (extremely important).
On the whole, compared to employees’ poll, MBA students’ assessment was higher
by points with the average index of 5.267, while the employees’ was 4.339 on Likert’s 7
point scale. This difference can be explained by the relatively more positive outlook on
the organizational activities by the young educated people. Apart from that, MBA
students showed uniformity of answers: there were no distinct values orientation
scales assessment favorites and tail offs, with a single exception of scale 5 which
describes reducing personal integrity in favor of the work collective. Likewise,
employees’ assessment was low too. Scale 6 has been rated highest by MBA students
– orientation to professionalism: orientation to professional qualities – knowledge,
experience, incentive, purposefulness, discretion and work quality. Scale 6 is closely
followed by another social responsibility facilitating values orientation – orientation to
efficient organizational functional culture: precisely defined decisions, delegating,
performance, control, communication, incentive, loyalty. It is likely that the knowledge
obtained by the students during the course of studies has contributed to the high
assessment of this scale.
Likewise, orientation to quality – care for output, product and services – was
ranked highly. This feature was assessed as “very important”.
Comparison of the analyses of the average describing the MBA students’,
employees’ and other organizational staff’s poll shown in Figure 2, reveal significant
differences in assessment of several scales.
Scale 8 – orientation to professionalism which was ranked highest by MBA
students, scored nearly 2 points less by employees and was ranked 5. Moreover, values
orientation to positive and friendly management and appropriate character features of
the manager, which ensures free, democratic and mutually favorable environment in
HUMAN RELATIONSHIP Employees’
8 values
EMPLOYEES’ PERSONAL
INVOLVEMENT 6 DEVELOPMENT orientation
4
2 355
PROFESSIONALISM 0 QUALITY
DEMOCRATIC AND
FRIENDLY ORGANIZATIONAL
MANAGEMENT FUNCTIONALITY
Figure 2.
ORGANIZATIONAL Comparison of the average
SUCCESS assessment of values
orientation poll by MBA
MBA students employees students and employees
Conclusions
Corporate social responsibility develops under the conditions of adequate personal and
society benefiting values orientation. Results of the values orientation research
emphasize focus on quality, professionalism, personal development, employees’
involvement and participation. The distinctive values orientations that form
organizational culture environment have to merge towards human mutual relations:
tolerance, sympathy, empathy. Social responsibility is part of organizational culture
and a value in the organizational culture environment. Condition for the development
BJM of social maturity is intelligence, unity of professionalism and social competence, and
3,3 human relations.
Development of social responsibility is a change in values orientation, whose task is
shaping the attitudes, transformation of the personal position so that it matches
individual and public interests. Values orientation takes place in the course of
accumulating experience. Therefore, studies at a higher educational establishment
356 (university, college, professionalism development courses) are of great importance as
they facilitate accumulating experience and the principles of social responsibility.
Nine value orientations were found. They help to describe organizational culture
and formation conditions of corporal social responsibility. The value orientations can
be grouped by their impact on the corporate social responsibility in the company:
.
High degree of improving CSR: human relationship; involvement; personal
development; orientation to quality; professionalism.
.
Lower degree of improving CSR: friendly management; organizational success;
functionality of organization; group values.
In the future, through the application of the aforementioned value orientations, it would
be possible and beneficial to continue the research into the consolidation of the
principles of corporate social responsibility in organizations.
The factors that determine the differences among the value orientations that form
the organizational culture, were specified. During the course of the research, important
factors that have impact on the differences within the organizational culture shaping
value orientations, were discovered. They are: the gender and type of the company
– enterprise, bank, state institution or business school student.
The research showed that with respect to the significance of value orientations, we
distinguish statistically important differences among the different analytical groups.
Males, who work in companies located outside the capital city, significantly differ from
all other analytical groups. The main cause of the great number in the differences is the
comparatively low level of education in this group. The above circumstances are a
potential threat to the personal development, social equality and integration into the
society of the analytical group “males employed in enterprises outside the capital city”.
The growing differences might facilitate the social nihilism of the people in the above
group. Consequently, the organization, its management and the society as a whole
might face increasing difficulties to motivate these people about the usefulness and
necessity of higher esthetical standards and social responsibility principles of the
company. The aforementioned group should enjoy enhanced attention of the
organizers of adult lifelong education, and employers among them. Lifelong learning is
an important condition for the facilitation of the entire concept of corporate social
responsibility. It includes the course of business ethics, moral reasoning at universities
and company organized training.
Implications
Long-term success and competitiveness of the enterprise are largely dependent on the
employees’ knowledge, competence, talent, creativity as well as motivation and loyalty.
By following the laws, the employer meets the basic needs of the employees.
By showing their interest in the improvement of the working conditions and
increasing the level of employees’ satisfaction, the employer acknowledges employees
as assets of the enterprise and appreciates employees’ input in the success of the Employees’
enterprise. By employees’ involvement in the resolution of vital issues, the managers values
get a lot of good ideas, gain trust and loyalty of the employees, and this helps to
facilitate efficiency of the enterprise. orientation
In order to ensure better understanding by the employees of the values and
operating principles of the enterprise, managers have to facilitate internal
partnership environment in the enterprise. This can be achieved through mutual 357
trust between employees and managers and by consulting the employees on the issues
vital for the enterprise as well as offering career possibilities in the enterprise.
An important step towards implementation and facilitation of corporate social
responsibility approach is defining its goals, principles and values. This is the first
stage towards employees’ trust. The aforementioned is followed by staff training,
explanation of principles, improving understanding and case analyses regarding
appropriate action in the event of moral dilemmas. Employees will accept the declared
values if they match theirs and if the management demonstrate positive personal
example and are open to the dialogue.
Public information is of equal importance, where the values, standards and goals of
the enterprise are clearly defined. Positive opinion and attitude of the clients, suppliers
and community shapes the greatest value of the enterprise – reputation.
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Further reading
Adler, P. (2002), “Corporate scandals: It’s time for reflection in business schools’”, Academy of
Management Exective, Vol. 16 No. 3, pp. 148-9.
Carroll, A. (1999), “Corporate social responsibility – evolution of a definitional construct”,
Business and Society, Vol. 34 No. 1, pp. 51-89.
Hughes, R., Ginnett, R. and Curphy, G. (2002), Leadership: Enhancing the Lessons of Experience,
McGraw-Hill Book Co, Singapore, p. 604.
About the author
Janis Strautmanis received his PhD in Economics from University of Latvia. He is an Associated
Professor of Management and Head of Management Department at Banking Institution of Higher
Education, Riga, Latvia. His main areas of research and teaching are related to management and
human resource management in business and educational management. Janis Strautmanis can be
contacted at: Janis.Strautmanis@ba.lv