Organizational Values:
The Inside View of Service Productivity
Dawn Dobni
UNIVERSITY OFSASKATCHEWAN
J. R. Brent Ritchie
UNIVERSITY OFCALGARYWilf Zerbe
UNIVERSITY OFCALGARY
In this study, we examined relations between organizational value systems assess empirically the presumption that organizational values promote higher performance in service firms. To do this, we
and the productivity of service workers. Research was conducted in 92
investigate the relationship between organizational value
sys-service firms to construct an empirical taxonomy of organizational value
tems and service worker productivity. Because the competitive
systems based on the content focus of values, and the resulting taxonomy
performance of service firms is driven largely by the
perfor-was used as a framework to examine the relationship between value
mance of the individuals who staff them, Peter Drucker (1991)
system types and individual productivity, conceptualized in terms of
job-predicts that the challenge of raising the productivity of service
related behaviors, attachment, and affect. Four value system types were
workers will dominate the management agenda for the next
identified, and, as predicted, were shown to be differentially associated
several decades. Incongruously, productivity is a concept that
with all three ingredients of service productivity. These findings indicate
has also been underexamined in the services context
(Filia-the importance of (Filia-the value system as a marketing and management tool,
trault, Harvey, and Chebat, 1996).
and underscore the need for services managers to determine the behavioral
We begin by examining the morphology of organizational
and psychological responses that define productive performance in their
or-value systems. Then, we elaborate the concept of productivity
ganizations and to diagnose and develop the value systems that will reinforce
as it relates to service employees, suggesting that its primary
them. J BUSN RES2000. 47.91–107. 1999 Elsevier Science Inc.
ingredients are job-related behaviors, attachment, and affect (Kopelman, Brief, and Guzzo, 1990). In so doing, we recognize that productive performance in service work is largely a func-tion of how individuals think, feel, and behave on the job.
J
udging by contemporary services management andmar-Next, the relationship between organizational values and pro-keting theory, organizational values are almost beyond
hy-ductivity is explored, and the methodology and results of perbole. An appropriately managed value system has been
research conducted to examine it are presented. Specifically, characterized as an essential mechanism that exists between
a taxonomy of organizational value systems is developed based service quality specifications and the service actually delivered
on the content focus of values, and the resulting classifications (Zeithaml, Parasuraman, and Berry, 1990), an important source
are used to compare employee behavioral and psychological for guiding and controlling the behavior of service employees
responses across value system types. We conclude by discussing (O’Reilly, 1989), a prerequisite to competitive excellence
(Par-implications for services marketing and management practice. asuraman, 1987), a lever for increasing service quality and
employee productivity (Pickworth, 1987), and a vital element
in the implementation of a service strategy (Gro¨nroos, 1990).
Morphology of Organizational
Despite this support at the theoretical level, servicesschol-Value Systems
ars have undertaken relatively few empirical studies of
organi-zational values. The purpose of this research is, therefore, to Organizational values are about the means and ends that matter most to organizations. Just as personal values define what individuals consider to be intrinsically desirable and Address correspondence to Dawn Dobni, 25 Campus Drive, University of
Saskatchewan, Saskatoon, SK S7N 5A7, Canada. guide their actions and judgments to these ends, organiza-Journal of Business Research 47, 91–107 (2000)
1999 Elsevier Science Inc. All rights reserved. ISSN 0148-2963/00/$–see front matter
92
J Busn Res D. Dobni et al. 2000:47:91–107tional values play an important guiding and directing role demand irregularities through price changes and influences on consumer behavior (Filiatrault, Harvey, and Chebat, 1996). in the functioning of the organization. Defined as enduring
preferences for certain modes of conduct and end states (Enz, Unfortunately, the primary emphasis of these strategies on cost or quantity of output often involves a trade-off with 1986), organizational values give direction to the hundreds
of decisions made at all levels of the organization every day quality. This has led such experts as Peter Drucker (1991) to suggest that increases in service worker productivity can only (Schmidt and Posner, 1983).
Attesting to their impact, organizational values are often come from “working smarter.” This can be done, he says, be defining the essential task of any given service job, by used interchangeably with or as a proxy for organizational
culture. There are several reasons for this, among them that concentrating work on that task, and by understanding what productive performance in a job actually represents. De-this level of the multilayered and enigmatic culture construct
is “deep” yet accessible (Rousseau, 1990a), is tractable to pending upon the organization’s strategic direction, the latter might be defined anywhere on a continuum ranging from operational definition and measurement (Badovick and Beatty,
1987; Wiener, 1988), and is considered to be an absolutely quantity of output to quality of output. Cleghorn (1992) simi-larly emphasizes the symbiosis between productivity and qual-fundamental component of organizational culture (Enz, 1986;
ity, suggesting that both can be maximized if organizations Rousseau, 1990a).
concentrate on doing what is important and on doing the At the risk of oversimplifying, an organization’s value
sys-right things sys-right. He consequently urges organizations to re-tem can be described using three dimensions: direction,
perva-examine the way they work and the thousands of processes siveness, and intensity. These refer, respectively, to the content
that animate organizational life. and combination of values that comprise the value system, the
In an approach that subsumes this focus on key tasks, degree of consensus among organizational members regarding
Kopelman, Brief, and Guzzo (1990) propose that organiza-what the value system emphasizes, and the extent to which
tional productivity is a function of individuals’ behavior, and the value system dominates the organization’s control
mecha-that individual productivity is, in turn, the combination of nisms. Collectively, these dimensions are manifest in the
performance, attachment, and citizenship-related behaviors. course the organization follows and its methods of operation,
These refer, respectively, to carrying out one’s formal organiza-its tendency to develop value systems in layers that are less
tional role, to minimizing absenteeism and turnover from than organizationwide, and the level of pressure put on
em-work, and to exhibiting nonmandatory constructive or cooper-ployees to behave in value-prescribed ways (Kilmann, Saxton,
ative gestures that contribute to organizational effectiveness. and Serpa, 1985).
If employees engage enthusiastically in role-prescribed and constructive extra-role activities and maximize their tenure
Nature of Service Productivity
with the organization, it is expected that gains in productivity will occur through increases in the quality or quantity of Although an organization’s values have been widely creditedoutput or decreases in labor costs. with affecting the productivity of its workers (Deal and
Ken-Intuitively, this focus on behavioral and affective responses nedy, 1982; Ouchi, 1981; Parasuraman, 1987; Peters and
as the primary ingredients of productivity seems particularly Waterman, 1982; Pickworth, 1987), in the services sector,
appropriate for service firms, where often the only “product” there has been little systematic research on this link. This
that is produced is literally the demeanor and decorum of may be because the conceptualization and measurement of
individual employees. Theoretically, it is supported by a col-productivity is complicated by the inherent characteristics
lection of works that links the ways in which people think, of services. Their intangibility and variability preclude the
feel, and behave at work to their own role and extra-role counting of a finished goods inventory, and customer
partici-performance and longevity on the job and, consequently, to pation in the service process complicates control of and
ac-the performance of ac-the organizations to which ac-they belong countability for output (Shiffler and Coye, 1987). Similarly,
(Carlson, Charlin, and Miller, 1988; Isen and Baron, 1991; the service encounter has a “human” element as well as a
Kopelman, Brief, and Guzzo, 1990; O’Reilly and Chatman, technical one, which is very difficult to dissect and discuss
1986; Schuler and Jackson, 1987; Shore and Martin, 1989). in precise operational terms.
As a result, most strategies for enhancing service
productiv-ity have come straight from the industrial engineering camp.
Linkages Between Value Systems
These include working employees harder, investing in more
and Service Productivity
efficient equipment, automating labor tasks, eliminating
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Organizational Values J Busn Res 2000:47:91–107
at a different level of analysis” (Mowday and Sutton, 1993, For example, Hochschild (1983) recognized that the emotions that employees express on the job are not always a reflection p. 189). As a specific feature of its social context, an
organiza-of their true feelings, but rather are organiza-often socially constructed tion’s value system has been found to influence a wide range
to reflect existing organizational norms. This form of influence of individual perceptions, behaviors, and psychological states
is believed to have impact whether agreement about the under-(Hochschild, 1983; O’Reilly, Chatman, and Caldwell, 1991;
lying value system is real or only perceived. Calling the latter Sutton, 1991). Fundamentally, these links are based on the
a co-orientation approach to consensus, Scheff (1967, p. 33) notion that organizational members do not think, feel, or
explains that “if no one agrees with a view, but everyone thinks behave in isolation (Cappelli and Sherer, 1991; Mowday and
that everyone else does, the effect on behavior is sometimes the Sutton, 1993; O’Reilly, 1991).
same as if everyone actually agreed.” Under this logic, organizational values have been
systemati-Normative influence is particularly relevant in services or-cally related to both affect and attachment at the individual
ganizations because of the distinctive characteristics of services level. Studies have found that such outcomes as job
satisfac-described earlier. These make the organization’s operations tion, organizational commitment, inclination to quit, and
ac-nonroutine and unpredictable, and consequently less suscepti-tual turnover are derived from the fit between an individual’s
ble to such conventional control mechanisms as rules and values and those prevalent in his or her organization (Meglino,
procedures, behavioral control, output control, supervisory Ravlin, and Adkins, 1989; O’Reilly, Chatman and Caldwell,
surveillance, and formalized goal setting (O’Reilly, 1989). 1991; Schneider and Bowen, 1985). Considerable evidence
and theory also tie these outcomes to the direction of the
value system. Rousseau (1990b) found that such norms as
Methodology
achievement and self-expression correlated strongly andposi-tively with individual satisfaction and intention to remain in The primary concern of this research was with the relationship between organizational values and the productivity of service the organization, and Ouchi (1981) suggested that a Theory Z
workers. To study it, an empirical taxonomy of value systems culture increases the intrinsic reward orientation of employees
was developed based on the content focus of values, and and thus their propensity to do their jobs well. Others have
the resulting classifications were used to examine whether observed that an employee-friendly culture may lead to
en-different value system types were associated with en-different hanced affect among the work force (Isen and Baron, 1991).
productivity outcomes. Underlying this research was the as-There is also consensus that organizational value systems
sumption that, although values that are considered important have an impact on individual behavior (Beyer, 1981;
Hochs-may vary from one organization to the next, there is a tendency child, 1983; Kelley, 1992; Rousseau, 1990a; Sutton, 1991).
for them to group together in observable and recurring config-In this regard, it is believed that organizational values perform
urations (Cooke and Rousseau, 1988; Deal and Kennedy, dual duty as a unifying theme that provides meaning and
1982; McDonald and Gandz, 1992). In light of the literature direction for organizational members (James, James, and Ashe,
reviewed above, relationships between the resulting system 1990) and as a tool of social control that informally approves,
types and service worker productivity were expected, because constrains, or prohibits behaviors (O’Reilly, 1989). These
ef-value systems that vary in direction support different perceived fects are also known asinformationalandnormativeinfluences.
role behaviors, different levels of enthusiasm and willingness Capturing the essence of informational influence, Akin and
to invest effort in them, and different propensities for individ-Hopelain (1986, p. 20) described an organization’s culture as
ual attachment to the organization. “the insider’s view of the fundamental structures and processes
that constitute productivity in a particular setting.” In this
Sample
capacity, an organization’s value system is a sense-making
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J Busn Res D. Dobni et al. 2000:47:91–107Table 1. Characteristics of Sample Organizations
dom, the sample showed good variation in terms of firm size,
technology, and service category. Frequency
Data were collected using self-administered questionnaires.
Type of Organization
These were coded by organization and distributed as a package
Accounting firm 4
to the chief executive officer of each participating organization
Airline service 1
or a contact person otherwise designated. Accompanying in- Automobile sales and dealership 1
Automotive service, supplies, and repair 4
structions requested that the questionnaires be distributed to
Bank 6
respondents drawn randomly from all levels and positions in
Beauty salon 2
these organizations. Participation in the study was voluntary, Business machine sales and service 1
Car rental agency 1
and confidentiality was assured at all stages of the research.
Carpet/drapery cleaning and restoration 1
At the conclusion of the recruitment process, a total of 114
Communications and marketing agency 1
organizations had confirmed their agreement to participate in Community-based service agency 1
this research. A total of 931 questionnaires was distributed Computer software consultants 3
Computer hardware sales and service 2
to these organizations, and the data reported here reflect the
Courier service 1
responses from a total of 415 individuals who returned com- Data/information management consultants 1
pleted questionnaires. This represented a response rate of Dental office 1
Drapery manufacture and installation 1
44.57% by individual and 80.7% by organization.
Drug store 1
Drycleaner 1
Educational institution 1
Measurement
Employment referral agency 1
ORGANIZATIONAL VALUES. The list of 31 value statements Fabric store 1
described in Table 2 formed the basis for the taxonomic in- Fire department 1
Fitness center 1
quiry. Derived from a content analysis of academic and
prac-Furniture store 1
titioner-oriented writings on organizational values (cf. Bado- Hospital pharmacy department 1
vick and Beatty, 1987; Enz, 1986; O’Reilly, 1989; Peters and Hydraulic equipment sales and service 1
Industrial safety service 1
Waterman, 1982; Sashkin and Fulmer, 1985; Treacy and
Investment and stock brokers 3
Wiersema, 1993; Wiener, 1988), the development of this list Law firm 2
was guided by the need to tap a broad range of content so Life insurance agents and brokers 1
Management and marketing consultants 3
that the value systems could be characterized in detail, to
Menswear store 1
have a value inventory that was widely applicable across firms
Office equipment and supplies 4
but also capable of discriminating among individual organiza- Optical supplies and services 1
Paging service 1
tions, and to examine values that were identified as being
Paint sales and supplies 1
strongly related to organizational effectiveness.
Pest control 1
Respondents were asked to indicate on an eight-point re- Photography studio 1
Plumbing and heating sales and service 2
sponse scale the degree to which they believed each of these
Precision instrument sales and service 1
values was a priority to the people in their organizations. In
Printing and reproduction services 3
labeling the response categories the intent was to measure Property management firm 3
Real estate appraisal and evaluation 1
the extent to which organizational values were implemented
Restaurants, takeout, and nightclubs 3
rather than simply espoused. Respondents were instructed
Screen printing service 1
to “distance” themselves when answering, stressing that the Special care home 1
question did not measure anything about them personally, Television station 1
Temporary help, office services 1
but rather, about the people in their organization in general.
Trade show and convention marketing 1
In doing this, the intent was to obtain a co-orientation assess- Transportation and freight service 2
ment of value consensus rather than the aggregation of value Travel agency 2
Truck leasing, sales, and service 1
preferences and priorities of individual organizational
mem-Trust company 1
bers (Scheff, 1967). Utilities (telephone, electric) 3
Wholesale industrial distributors 3
SERVICE PRODUCTIVITY. Adapting the approach advanced by
Number of Employees
Kopelman, Brief, and Guzzo (1990), service productivity was 1–10 21
operationalized by three variables assessing perceived role 11–25 26
26–50 22
behaviors, organizational commitment, and employee affect.
51–100 7
101–1,000 10
(1) Perceived Role Behaviors. To measure perceived role
behav-More than 1,000 6
innova-95
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Table 2. Value Genres
Scale Name Factor Alpha Interitem
Itemc Loading Eigenvalues Coefficient Correlation
Employee mutualism: 8.53726 0.9100 0.5210
Respect for employees: valuing employees as human beings, not just as cogs in a machine
or hired help 0.82537
Employee satisfaction: improving employee motivation, job satisfaction and morale 0.77800
Supporting failures: creating an atmosphere in which people can explore and experiment
without feeling they will be punished if they fail 0.77679
Openness: ensuring that it is easy to give and get information in the organization; encouraging employees at all levels to voice their ideas and opinions about the way
things are done 0.77610
Equality: removing status distinctions and treating all employees at all levels as equals 0.74326
Enjoyment: having fun at work 0.74228
Employee responsibility: giving employees the authority to use their own judgment in
dealing with customer concerns or acting on work-related problems 0.70636
Employee development: expanding the skills and abilities of employees 0.60228
Innovation: seeking innovative new ways of doing things; constantly searching for new
and distinctive goods, services, and productsa 0.41889
Competitive consciousness: 3.2212 0.8060 0.3725
Industry leadership: being at the forefront of industry developments 0.76678
Aggressiveness: being considered a bold, enterprising company; actively hustling in the
marketplace 0.77202
Outperforming competitors: meeting competitive threats or beating the competition 0.66041
Growth: increasing sales and/or market share 0.57964
Company identity: having a unique identity as a company; being seen as different from
the competition 0.57457
Adaptability: responding quickly to changes in the outside environment 0.49342
Risk taking: taking risks to get ahead 0.42347
Customer intimacy: 1.94889 0.8083 0.5132
Customer satisfaction: bending over backward to satisfy each and every customer 0.73180
Customer relationships: winning the loyalty of customers, building long-term relationships
with them 0.68003
Quality: providing products and services of the very highest quality 0.66557
Zero customer defections: keeping each and every customer that the organization can
profitably serve 0.64184
Operational efficiency: 1.56769 0.6186 0.3588
Efficiency: providing the organization’s goods and services with minimal effort, waste,
and expense 0.72176
Perfectionism: doing things perfectly, avoiding mistakes 0.60371
High productivity: increasing the output of employees 0.58302
Cost reduction: cutting costsa 0.52238
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Table 2. continued
Scale Name Factor Alpha Interitem
Itemc Loading Eigenvalues Coefficient Correlation
Organizational preservation: 1.41940 0.5453 0.2856
Short-term focus: focusing on the maximization of current profits and earnings more so
than on growth and profitability over the coming 5–10 years 0.76269
Profit maximization: making as much money as a company can 0.58921
Survival: staying in business 0.54552
Change aversion: 1.07730 0.5298 0.3604
Stability: maintaining the organization and its operations as is 0.78726
Caution: being cautious and conservative; playing it slow, safe, and sure 0.69753
Social responsibility: 0.97950b 0.5490 0.3784
Service to community: having concern for and being actively involved in the community 0.79567
Concern for the environment: protecting and caring for the natural environment on which
the organization has an impact 0.51188
aIndicates items that were eliminated to improve the internal consistency of the scales.
bIt will be noted that the seventh factor resulted in an eigenvalue of marginally less than 1.0. The seven-factor solution was nonetheless favored over the six-factor solution, because it produced components that were more
intellectually consonant and that resulted in scales with higher interitem correlations and internal reliability consistencies.
cRespondents were asked to indicate the degree to which they believed each of these items was a priority to the people in their organizations, using the following response categories:
0 1 2 3 4 5 6 7
It is not a People say it is a It is a moderately It is an obsession;
priority at all. priority, but it is important priority; it dictates almost
not given much it is reinforced by the every step taken by
support in actions of many people people in this
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tive,be concerned with qualityversusbe concerned with quantity,
Data Analysis
andbe good team playersversusperform well individually. Re- The data analysis consisted of four distinct stages: data reduc-spondents were asked to indicate the point on each scale tion, data aggregation, cluster analysis, and multivariate analy-that best described their perceptions of how employees must sis of variance.
behave in order to “fit in” and meet expectations in their
respective work environments. This emphasis on role percep- DATA REDUCTION. Principal components analysis and vari-tions is prevalent in the role theory literature, primarily be- max rotation were used to transform the 31 value statements cause the perceived role is thought to be the most immediate into a reduced number of components, hereafter calledvalue
antecedent of behavior (Naylor, Pritchard, and Ilgen, 1980). genres. The seven-factor solution shown in Table 2 was ac-The descriptive anchors for these scales were constructed cepted as the most interpretable, and it accounted for slightly by the researchers on the basis of findings and theories in the more than 60% of the total variation in the data. Value genre literature concerning behaviors that were presumed to be scores were calculated by taking the mean of items with high instrumental to organizational effectiveness in a wide range loadings on the respective seven factors. The internal consis-of service situations, that have been postulated to vary as a tency reliability of each value genre was then estimated by function of an organization’s cultural or value system make- computing its coefficient alpha. Items that exhibited low in-up and that collectively gave a detailed and rich description teritem correlations were eliminated to improve the internal of potential behavioral styles within service organizations (cf. consistency of the scales. The final value genres, number of Drucker, 1991; Gro¨nroos, 1990; Kelley, 1992; Kopelman, items comprising each scale, and associated internal consis-Brief, and Guzzo, 1990; Reichheld and Sasser, 1990; Rous- tency reliabilities are:
seau, 1990b; Schneider and Bowen, 1985; Schuler and
Jack-1. Employee Mutualism (8 items,a 50.9100): the extent son, 1987). These scales are reproduced in Figure 1.
to which organizations provide opportunities for
em-(2) Organizational Commitment. Commitment was measured ployees to grow and develop within the company and using Mowday, Steers, and Porter’s (1979) 15-item summated in turn expect their employees to support their activities scale. This scale assesses an individual’s identification with with evidence of progress;
and involvement in an organization by tapping three related 2. Competitive Consciousness (7 items,a 50.8060): the factors: a strong belief in and acceptance of its goals and extent to which an organization is aggressive in the values, a willingness to exert considerable effort on its behalf, marketplace and constantly seeks to exploit the dynam-and a strong desire to maintain membership in it. Respondents ics of its macroenvironment and task environments; were asked to indicate the extent of agreement or disagreement 3. Customer Intimacy (4 items,a 50.8083): the extent to that each item was descriptive of their feelings toward their which organizations strive to engender customer loyalty organizations. Typical scale items areI am willing to put a great and continually tailor and shape products and services
deal of effort beyond that normally required in order to help this to fit an increasingly fine definition of the customer;
organization be successful and I really care about the future of 4. Operational Efficiency (3 items,a 50.6186): the extent
this organization. After eliminating one item that exhibited a to which companies concentrate on minimizing over-low interitem correlation, a Cronbach’s alpha reliability coeffi- head costs and making their operations lean and effi-cient of 0.9163 was recorded for this scale, indicating that it cient;
can be regarded as highly reliable. 5. Organizational Preservation (3 items,a 50.5453): the
extent to which an organization is preoccupied with
(3) Employee Affect. To measure affect, the Positive and
Nega-the maintenance and survival of its business;
tive Affect Schedule (PANAS) developed by Watson, Clark, 6. Change Aversion (2 items,a 50.5298): the extent to and Tellegen (1988) was used. This instrument consists of
which an organization is averse to change and taking two 10-item scales that measure the two primary dimensions
risks; and of mood. Positive affect is a state of high energy, full
concentra-7. Social Responsibility (2 items,a 50.5490): the extent tion, and pleasurable engagement, and is tapped by such
to which an organization is concerned with being a descriptors asattentive, interested, alert, excited, andenthusias- “good citizen” in the community.
tic. Negative affect is a general dimension of subjective distress
Coefficient alpha is a reliability estimate that increases mono-and unpleasurable engagement that is measured by such items
tonically with the number of scale items. When this number asdistressed, upset, hostile, irritable, andscared. Respondents
is small, the mean interitem correlations are thought to be a were asked to respond to the PANAS scales on the basis of
better test of internal consistency (Joyce and Slocum, 1984). the way they “generally feel when they are at work.” All items
As reported in Table 2, all mean interitem correlations for in these scales exhibited high interitem correlations and the
these scales exceed 0.25, the minimum level recommended alpha reliabilities were also acceptably high, being 0.8950 for
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Table 3. Analysis of Variance for Value Genres by Organization First, theHIERARCHICAL CLUSTER procedure in SPSS for
Win-dows was used to establish the number of clusters that best
Value Genre Eta-Squared F p
portrayed the data and to profile cluster centroids. Hierarchical
Employee mutualism 0.4784 3.2103 0.000 clustering techniques begin by viewing each object as a
sepa-Market leadership 0.4620 2.9957 0.000 rate cluster and then aggregate them into successively smaller Customer intimacy 0.4841 3.2953 0.000 numbers of groups until the entire dataset is clustered into
Operational efficiency 0.3811 2.1758 0.000
one final group. Initial clusters were identified using both the
Organizational preservation 0.3504 1.8877 0.000
group-average linkage and Ward’s joining methods, two of
Change aversion 0.3645 2.0522 0.000
Social responsibility 0.4357 2.7113 0.000 the more popular hierarchical clustering algorithms. Because Ward’s method provided better insight into the data and per-formed much better in terms of the ratio of within-group distance to between-group distance, it was selected for the generation of the taxonomy. To decide how many clusters DATA AGGREGATION. Because of the essence of organiza- provided the most meaningful portrayal of the data, a proce-tional value systems, the organization was selected as the dure recommended by Hair, Anderson, Tatham, and Black primary unit of analysis for this portion of the study. To arrive (1992) was followed. Specifically, solutions were computed at organizational scores for the value genres, the responses of for several different numbers of clusters using Ward’s method, individual organizational members were transferred into an and the cluster centroids, variabilities, and sizes were exam-organization mean. In establishing exam-organization scores, all ined and compared to determine which solution performed respondents’ scores were included and equal weights were best in terms of manageability, communicability, and discrimi-given to all individual responses. natory ability. Based on this examination, it was decided that Two criteria were used to justify the use of aggregated data the four-cluster solution provided the upper limit on what as organizational variables: low within-group variation in the could be conveyed usefully and insightfully in this analysis. variables and significant between-group differences in the av- TheK-MEANS CLUSTERprocedure in SPSS for Windows was
eraged scores (Rousseau 1990b). Assessing the first criterion, then used to optimize the results from the four-cluster solu-analysis of variance (ANOVA) contrasted mean value genre tion. This is a nonhierarchical procedure based on nearest scores across organizations and, as reported in Table 3, indi- centroid sorting; a case is assigned to a cluster for which the cates significant differences. To test the second criterion, the distance between the case and the center of the cluster (the eta-squared statistic for each value genre was computed. It centroid) is the smallest. Each case was removed from its similarly indicates organizational consensus regarding the initial cluster and clustered with K-MEANS CLUSTERusing the
cluster centers from the hierarchical results as the initial seed value genres, with the observed level of agreement matching
points. If reallocation to an alternative cluster improved the or exceeding that found for perceptual measures of other
solution (by reducing the pooled within-group variance), the organizational characteristics (Cooke and Rousseau, 1988;
case was assigned to this subject, and the new cluster means Joyce and Slocum, 1984).
were computed. This procedure was repeated until cluster CLUSTER ANALYSIS. Cluster analysis was used to develop the assignments were stable, and subsequent iterations of the taxonomy of organizational value systems. Cluster analysis procedure failed to produce a decrease in pooled within-consists of a family of algorithms designed to identify similar cluster variance. The optimum solution was achieved on the objects and to classify them into groups. Four key method- sixth iteration.
ological issues arose in the use of this technique: selecting the Multivariate analysis of variance (MANOVA) was used to clustering variables, choosing a clustering algorithm to classify test for differences among the final clusters’ profiles. Table 4 objects, selecting the number of clusters, and testing for differ- contains the mean scores on the value genres for each of the ences among clusters (Ketchen and Shook, 1996). four clusters, and the results of the significance tests used to The variables used as criteria for clustering were the seven determine if differences existed among them. As indicated, value genres identified in Table 2. Multicollinearity was exam- the multivariate tests showed significant main effects. Table ined by constructing a pair-wise correlation matrix including 4 also reports the results of univariate analyses of variance for all of these clustering variables. An inspection of the matrix each of the value genres and the Duncan multiple range test revealed that the majority of intercorrelations were of small for paired comparisons. The results indicate that each of the magnitude and that all were well within the limitations recom- four clusters was statistically different from each of the others mended by Tabachnick and Fidell (1989). It was, therefore, on at least one clustering criterion, and this was considered to concluded that relatively little multicollinearity existed. be good evidence that the four clusters were distinct. External To sort organizations into clusters based on similarities on validation was provided by comparing the clusters on the these value genres, a two-stage procedure combining hierar- measures of service productivity described earlier (Aldenderfer
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J Busn Res D. Dobni et al. 2000:47:91–107Table 4. Value Genres by Value System Type
Mean Score by Value System Type
(2)
(1) Performance- (3) (4)
Entrepreneurial Pressured Integrated Temperate Significant (p,0.05) Duncan
Value Genre (n530) (n515) (n532) (n515) F Statistic Paired Comparisons
Employee mutualism 4.2253 2.3852 4.7510 3.3247 43.0986* 1–2, 1–3, 1–4, 2–3, 2–4, 3–4
Competitive
consciousness 4.8465 4.1224 5.1308 3.4948 26.0558* 1–3, 1–4, 2–3, 2–4, 3–4
Customer intimacy 5.3613 4.0243 5.9357 4.5383 30.9463* 1–2, 1–3, 1–4, 2–3, 2–4, 3–4
Operational efficiency 4.6646 4.2770 5.2281 4.5667 7.2544* 1–3, 2–3, 3–4
Change aversion 2.6984 3.1140 3.9896 3.5389 11.7082* 1–3, 1–4, 2–3
Organizational
preservation 4.6184 5.4213 5.0210 4.0026 10.0869* 1–2, 1–3, 1–4, 2–4, 3–4
Social responsibility 2.8509 3.4406 4.3331 2.1833 27.820* 1–2, 1–3, 1–4, 2–3, 2–4, 3–4
Multivariate tests
Pillais 14.03794*
Hotellings 17.69813*
Wilks 16.10073*
*p,0.05.
someness, and pro-activity, and that is likely to be typical of
Interpretations of the Value
companies that not only respond rapidly to environmental
System Types
influences, but also work hard to influence the environmentto their advantage. This type tends to be one that is driven The clusters derived from this analysis appear to form four
by a philosophy of being “first in” in new product and market distinct types of organizational value systems, characterized
areas, and that places a high priority on distinguishing itself by their relative emphases on customers, internal operations,
from and staying out in front of the competition. human resources, and the macroenvironment. Table 5
pre-Organizations in this group score very low on the social sents the resulting taxonomy and identifies the key features of
responsibility discipline. This may be the result of an unrelent-each cluster. The clusters are also named: the entrepreneurial
ing focus on growth, which consumes much of the organiza-system, the performance-pressured organiza-system, the integrated
sys-tion’s energy and resources and may be single-mindedly pur-tem, and the temperate system. Each value system type is
sued with little regard for the greater societal good. described in more detail below, using the results presented
in Tables 4 and 5. This taxonomy confirms the arguments
Type 2—The Performance-Pressured
of previous authors that distinct, consistent, and recurring
patterns of organizational values exist, and bears a good resem-
Value System
blance to value system and cultural types classified by such The second type, the performance-pressured value system, is other researchers as Cooke and Rousseau (1988), Deal and one that puts organizational survival and operational efficiency Kennedy (1982), and McDonald and Gandz (1992). first and the people who deliver service to customers last. This system is probably best described as following an
indus-Type 1—The Entrepreneurial Value System
trial model, based largely on the principles of traditionalmass-production manufacturing, which emphasize hierarchical This system represents 32.6% of the sample and possesses
those traits typically associated with entrepreneurship. Morris control, quantity of output, and bottom-line results. It ac-counts for 16.3% of the total sample.
and Paul (1987) define an entrepreneurial orientation as one
in which a company has a propensity to take calculated risks, Organizations that exhibit this value profile are likely to be under strain caused by recession or unrelenting competi-to be innovative, and competi-to demonstrate pro-activeness. In
keep-ing with this description, this system type scores high on the tion, and as such are in a mode of survival and consolidation. They look at the world as a rough-and-tumble place where competitive consciousness genre and lowest over all on change
aversion. profit margins dominate decision making and correspondingly
place a high emphasis on maximizing current returns, grab-The keynotes of this configuration include an emphasis on
growth and market sensitivity, meeting competitive threats, bing more market share, working harder, or wringing more profits out of their businesses. Preoccupied with day-to-day and adapting to changing economic or social environments.
101
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Values
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Table 5. Key Features of the Value System Taxonomy
Value System Type Frequency Key Features Example Firms
1. Entrepreneurial system 30 • Concerned primarily with external factors Information management consultants, Automobile sales,
• Emphasis on action Travel agency, Advertising and marketing agency,
• Conducts active opportunity scans and responds rapidly to Computer software consultants, Property management
early signals firm, Plumbing and heating service, Drapery
• Takes calculated risks manufacture and installation, Bank
• Meets competitive threats and adapts to changing economic or social environments
• Is aggressive, bold, growth oriented, innovative, proactive
2. Performance-pressured 15 • Dominated by concerns of survival Automotive service and repair, Furniture and office
system • Driven by a short-term time horizon supplies, Pest control, Chartered accountants,
• Subjugates the importance of the organization’s human Investment and stock brokers, Airline service
resources to operational efficiency
• Responds with caution to developments in the marketplace • Tendency to minimize the impact of the customer
3. Integrated system 32 • Blends external and internal operational considerations Temporary help and office services, Men’s wear store,
• Seeks to maximize pure efficiency goals (e.g., low cost, Automotive service and repair, Carpet/drapery cleaning
routinized production) and to concurrently increase and restoration, Beauty salon, Car rental agency
effectiveness (e.g., increased customer responsiveness or improved quality)
• Places particular emphasis on customer consciousness, customization of service exchange, and service quality • Emphasizes the importance of the person and employee
empowerment
• Profit driven and financially disciplined
4. Temperate system 15 • Middle-of-the-road orientation that places a moderate Furniture and office supplies, Fabric store, Property
priority on all values rather than embracing any in the management firm, Dental office, Bank, Hospital
extreme pharmacy
• Not a particularly distinctive value system • May have a weak influence on organizational life
102
J Busn Res D. Dobni et al. 2000:47:91–107important than building long-term loyalty. Human relation- 16.3% of the sample, organizations falling into this type place a moderate importance on all value genres rather than indicating ships are given a last priority, and consequently, the
organiza-tion’s employees may feel that they are given little respect as clear preferences for specific means and ends. Consequently, they represent rather ambiguous work environments in which human beings and instead are simply treated as one more
factor of production. employees are probably never required to push the envelope.
Without highly understood goals and values, these organi-As if concerned that one false move could precipitate the
organization’s downfall, this system type scores relatively high zations might also be interpreted as being apathetic, confused, or unable to find a clear route to business success. If so, on the genre of change aversion. This means that there are
likely to be few rewards for innovation and risk-taking and employees may not understand the priorities in the corpora-tion, and, lacking a rudder, the organization is likely to be substantial punishments for failure in these organizations.
Understandably, timidity and maintenance of the status quo pushed by environmental pressures rather than charting its own course. Competitively speaking, the temperate system are strong temptations in a complex and competitive world.
On the downside, they can cause organizations to be func- represents a more reactive model, and organizations of this nature may be vulnerable to threats from those that demon-tional laggards and less aggressive than competitors in
pursu-ing new product and market opportunities. strate more distinct methods of operation at either end of the spectrum. With few basic or ordered assumptions guiding the behavior of organizational members, this system may also
Type 3—The Integrated Value System
have a weak influence on organizational life and perhaps The third type is labeled the integrated value system because
be more susceptible than others to the rise of competing of its emphasis on functional integration and its focus on the
countercultures. customer and external environments, while simultaneously
being internally oriented. This is a system in which the
com-mon goal is total quality, and in which it is apparently under-
Relationship With
stood that all parts of the organization are important to theService Productivity
achievement of that goal. It comprises 34.8% of the sample.
As shown in Tables 4 and 5, in this system roughly as The analysis to explore the relationships between value system much emphasis is placed on the growth, contribution, and types and the measures of service productivity was performed satisfaction of the employee as it is on the value of a smooth in two parts. First, profile analyses were performed on the 16 and efficient running plant. Members of the organization de- scales that comprised the role behavior measure to assess scribe a supportive organization characterized by teamwork, whether there were significant differences in the profiles of personal development, and high-performance goals. At the role behavior scores among the value system types. Then, same time, customer sovereignty is a central priority, and multivariate analysis of variance (MANOVA) was used to ex-members of the organization clearly understand the impor- amine the effect of value system membership on organizational tance placed on developing lifetime customers. It is clear, commitment and employee affect. All analyses in this portion therefore, that this system seeks a balance between an out- of the study were performed at the individual employee level of and-out aggressive environment and a human environment. analysis. A random sampling procedure was used to equalize Organizations in this group seem not to be intent merely on membership sizes across all four value system types to increase their own profits and growth, but also measure success based robustness to potential violations of the assumptions for MA-on the realizatiMA-on that they operate to benefit people— NOVA (Tabachnick and Fidell, 1989). This resulted in the customers, employees, and the members of the surrounding assignment of 59 cases to each cell, well in excess of the society. They are similarly aware of the need to care for integral minimum cell sizes required for MANOVA and profile analysis. publics and could be expected to be highly ethical, law
abid-ing, good community citizens, and to operate with great re-
Role Behaviors
spect for the natural environment. Profiles of mean scores on the role behavior scales for the
Comparatively speaking, this system scores high on both four value system types are presented in Figure 1. Using Wilks’ the genres of change aversion and competitive consciousness. criterion (F51.89,p50.001), these profiles were found to This suggests that, although these organizations exercise a deviate significantly from parallelism, indicating differences high level of adaptiveness and market aggressiveness, they do across the value system types. To test the specific nature of so with a high priority placed on well-conceived strategic the differences, confidence intervals were calculated around moves, steady, sure growth, and financial discipline. the mean of the profile for all clusters combined, and individ-ual clusters were evaluated in terms of whether they fell
out-Type 4—The Temperate Value System
side the confidence interval of the pooled profile (Tabachnick and Fidell, 1989). Alpha error for each confidence interval Whereas the previous three systems have clearly defined value103
Organizational Values J Busn Res 2000:47:91–107
profile. For several of the scales, one or more groups had means service infrastructure and in their face-to-face encounters with customers.
that fell outside these limits, indicating that the role profiles
The temperate system had different means than those of differed considerably across the four value system types.
the pooled groups on five behaviors, all of which indicate a The entrepreneurial value system exhibited reliably
differ-“don’t rock the boat” orientation. This behavioral profile was ent means from the pooled group on five scales. Comparatively
distinguished by: (1) reliability and predictability; (2) caution speaking, its behavioral profile was characterized by: (1)
cre-in decision makcre-ing; (3) conformcre-ing behavior; (4) an emphasis ativity and innovativeness; (2) enjoyment of work; (3)
toler-on stability rather than unpredictability; and (5) close adher-ance for unpredictability; (4) the onus to initiate
improve-ence to formally laid down procedures. Cumulatively, there ments continually on the job; and (5) the requirement to be
is the sense that individual contributions by organizational supercapable technically. With the underlying emphasis on
members are neither valued nor encouraged, because employ-provocative thinking, employees are called upon to question
ees are discouraged from taking initiative in figuring out what the old ways of doing things, to tackle ill-structured tasks and
can be done to move the company ahead. The mentality engage in nonroutine problem solving, and to input new ideas
seems to be one that favors a stable, conservative, slow-moving and possibilities continuously. These characteristics call to
organization marked by impediments to action and that places mind an organization such as Microsoft, which has been
de-limitations on the ability of any individual to move the com-scribed as raw, predatory, confrontational, aggressive, fast,
pany off on a tangent. Employees are expected to do things creative, organized, and impatient. The “Microsoft way,” it
the way they have always done things and to do them within has been said, demands that you be on top of your material,
the confines of established rules and regulations. know your stuff, think through every angle, have a
change-the-world esprit, and enjoy the hard work, the excitement,
Commitment and Affect
the energy, and the growth that comes with being a
market-driving organization (Meyer, 1994). Multivariate analysis was used to determine whether the value The performance-pressured value system differed from the system types differed statistically on the measures of organiza-pooled means on six of the behavior scales. Primary among tional commitment and employee affect. The results of these these differences were: (1) a relatively high concern for quan- analyses are presented in Table 6. As indicated by the multivar-tity of output; (2) the requirement to take work very seriously; iate tests reported, omnibus MANOVA showed significant (3) an eagerness to get things done; (4) acceptance of things main effects of value system type. Table 6 also reports the the way they are at work; (5) a relatively high emphasis on results of the univariate analyses of variance for each of the the maximization of sales and profits; and (6) the need to measures and the Duncan multiple range test for paired com-have good people skills. Collectively, this is a code of behavior parisons. The results indicate the congruence between value based on increasing the output per person and a preoccupation system type and individual-level commitment and affect. with bottom-line results. Because there are indications of lim- The Duncan’s test of differences among pairs of means ited discretionary action for personnel, this is expected to be on the organizational commitment and positive affect scales accomplished not through working smarter or differently, but revealed a general hierarchical ordering. The mean scores on through pure hard work. Respondents from this system do these measures were greater for integrated systems than for not describe it as one that nurtures fun or any sense ofesprit entrepreneurial systems, for entrepreneurial systems than for
des corps. This may be because the working environment is performance-pressured systems, and for performance-pres-like a sweatshop, with the emphasis on relentlessly pushing sured systems than for temperate systems. These differences sales or maximizing financial indicators. The requirement to were not significant in every case, but the over-all pattern did “sell” may also account for the emphasis placed on having persist across all comparisons. Interestingly, the poor
perfor-strong people skills. mance of the temperate system indicates that employee
104
J Busn Res D. Dobni et al. 2000:47:91–107nizational members. Although these value system types approach their goals from different perspectives, conceivably they both subscribe to the “no-pain-no-gain” school of thought.
Discussion and Implications
Whatever is said about productivity, Akin and Hopelain (1986) suggest that the meaning of the term finally comes down to what those who do work accomplish. In this research, we have focused on uncovering value systems as they are understood by organizational “insiders,” and on exploring the connections of these systems with service productivity. The results indicate the relevance of an organization’s mix of values to how and what work gets done, primarily by affecting levels of employee commitment and affect and influencing percep-tions about expected workplace behaviors.
Limitations
Further research is needed, in part because of the limitations of this study. First, the organizational values on which the taxonomy was based can be regarded as general ones, applica-ble to varying degrees across organizations. Although efforts were made to select a value inventory that was theoretically justified and would facilitate the detailed characterization of the value system types, future research might examine organi-zational value systems at a more microscopic level. The range of behavioral responses examined could likewise be enlarged, and efforts could be made to break down the relationship between specific values and specific behavioral and affective responses more precisely.
Second, although cluster analysis is a widely accepted clas-sification technique, it does have limitations. Apparent cluster structures depend upon the clustering algorithm and decision rules employed, and a heavy amount of managerial judgment is needed to interpret the cluster results. In this research, these concerns were mitigated by the validation procedures that were performed on the cluster solution and the ready interpretability of the resulting taxonomy and its consistency with classifications offered by other researchers.
Productivity is a complex, integrative concept that means different things to different people. Other researchers may, therefore, choose to examine its relationship with organiza-tional value systems using other measures, methods, and per-spectives (Guzzo, 1988) or to look more intimately at the ingredients of productivity examined in this investigation. For example, differing conceptualizations and types of organiza-tional commitment exist, and some researchers have found the organizational commitment instrument used in this re-search to have multiple factors rather than a unidimensional structure (Tetrick and Farkas, 1988). It would be useful to learn whether these different types and components of com-mitment have different productivity-relevant outcomes.
A fourth limitation of this study concerns the sample. A
Table
representa-105
Organizational Values J Busn Res 2000:47:91–107
tive of the population of all service organizations. This was structure, and its policies and processes around planning, staffing, appraising, compensating, training and development, compounded by the relatively small sample size and
geo-graphic concentration of sample members. Further research socialization practices, decision making, and communicating. Managers can indicate organizational values by what they is needed using a larger, random sample less constrained
by geography. Also, the size of the sample did not permit teach, reward, support, model, and so on, and it is important exploration within value system types to uncover value subsys- that they do these things in a way that communicates consis-tems or subcultures. This analysis would have generated too tent and appropriate messages.
many clusters with too few members. The likelihood is high, This study indicates that value systems that emphasize however, that most organizations have one or more value conventionality, risk aversion, or behavior inhibition may hurt subsystems that impact productivity. A larger sample might productivity, because they have a negative impact on attach-have permitted them to be identified and studied. ment and affect. To counteract these dysfunctional effects, Finally, this study relied on self-report questionnaires as managers may want to manage the attraction–selection– the sole means of data collection, indicating the possibility attrition cycle better to ensure that organization members of percept–percept inflation. Although a recent investigation understand and are willing to accept the organization’s values suggests this outcome is likely more the exception than the and do not have unrealistic expectations about what goes on rule where such “external referents” as organizational culture in it (Bowen and Schneider, 1988). It is also believed that are being measured (Crampton and Wagner, 1994), an appro- enhanced positive affect and employee commitment can be priate future research strategy would, nonetheless, be to collect induced by improving the physical work environment, isolat-multiple or more objective measures of the variables being ing and alleviating the negative aspects of the value system, studied. Organizational value systems might be measured by or shifting toward a more participative management style (Isen reputational methods or ethnographic studies, or employee and Baron, 1991; Schneider and Rentsch, 1988).
behaviors through such independent sources as customers, Because the value system is used as a sense-making device,
suppliers, or supervisors. managers should be obsessive about ensuring that it is
under-stood and accurately interpreted by employees. As Goldstein
Implications
(1986) observed, we often fail to learn how the context is perceived by the people working in it, and then we are sur-Despite these limitations, this study has important managerialprised when their behaviors and responses are different from implications. Among them, it provides insight into
productiv-those anticipated. We recommend that managers frequently ity as it relates to service work and suggests some approaches
collect information on employees’ perceptions of the value that organizations might take to improve it. As with others
system through such vehicles as surveys, personal interviews, who study this phenomenon, we believe that productivity
and roundtable discussions, and invest considerable time and occurs when workers focus on doing the right things right. At
energy in clarifying expectations and communicating and rein-a minimum, this merein-ans threin-at mrein-anrein-agers must trein-ake rein-a deliberrein-ate
forcing any modifications that may be required. Obviously, approach to job design, isolating the high-impact behaviors
we see this as a situation in which information and communi-in each job that defcommuni-ine productive performance. This entails
cation can be put to productive use. developing better models of performance for jobs and aligning
them specifically with organizational goals (Campbell and
Campbell, 1988).
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