engleski

Impact of Balanced Organizational Values on Business Performance

Theories of organization and management have offered several concepts and models indicating that organizational values are an important factor in running organizations. The key question raised in this study is whether contemporary organizations, considering the fact that they operate in a dynamic environment and that they usually want to achieve several different and even conflicting goals, should develop balanced organizational values. To explore balanced organizational values in contemporary business practice, we tested two most frequently used value models, i.e., the Competing Values Framework and Schwartz’s values model, on the sample of the Fortune 100 companies. Research results demonstrate that these models are not fully applicable in the research of balanced organizational values. Therefore, this dissertation proposes a new model of balanced organizational values named Mission-based model of organizational values which proved itself to be more appropriate for researching balanced values in contemporary business practice. In addition, other goals and related hypotheses were set up in order to explore and determine the impact of balanced organizational values on business performance, particularly on organizational commitment and organizational effectiveness. A research in 24 Croatian companies was conducted - in each of these companies, between 27 and 50 employees were surveyed giving a total sample size of 874 respondents. In addition, indicators of organizational effectiveness were collected through interviews with top management, as well as through analysis of publicly available financial reports. The results of statistical analysis indicate that the degree of imbalance of organizational values has no significant effect on the higher level of organizational commitment. The same applies to the two separate components of organizational commitment—affective and normative. However, the existence of medium-sized negative correlation between the degree of imbalance of organizational values and continuance component of organizational commitment was determined, indicating that organizations with more balanced values achieve a higher level of continuance commitment. The results also indicate that organizations with balanced organizational values are, in general, more effective than organizations with imbalanced values. Moreover, this correlation was found not only for the overall level of organizational effectiveness, but also for the most perspectives of organizational effectiveness based on the Balanced Scorecard approach. In this context, it was found that a higher level of organizational values balance directly affects financial perspective, learning and growth perspective, and strategic perspective of organizational effectiveness. On the other hand, such correlation was not found for only two perspectives of organizational effectiveness—customers perspective, and internal business processes perspective.

organizational values ; balanced values ; model of organizational values ; business performance ; organizational effectiveness ; organizational commitment ; Fortune 100 companies

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