than to actual organizational processes, and many of these processes no longer foster collectivism in the workplace. Second, individuals often shape their own communities. An organization can therefore consist of many communities, resulting in a fragmented organizational identity. Thus some organizations function as a loosely coupled coalition created for a particular project while others are almost like a sect. Most tend to organize their activ- ities somewhere in the middle of this spectrum and are more like a clan (Schoemaker, 2003a).
The interplay and alignment between organizational processes and communities of work have become important factors in the success of the organization and the motivation of its employees. Organizations as commu- nities of work are to a large extent self-organizing entities held together by a common identity based on shared values. The community of work thus ought to be the fundament used for the information society. ‘Ought to be’
since management crises are evident in many organizations. What still needs to be established is a design for organizations as communities of work.
Managing contemporary organizations entails paying attention to the nature of the communities of work. In this regard it is assumed that, due to the ongoing development of the information society, the functional concept of an organization does not necessarily correspond to the community of work. People can organize the tasks at hand in the form of a community of work and the organization more or less becomes a facilitative institution.
This requires management to pay attention to the membership of commu- nities and to make values and norms explicit in order to create a specific organizational identity. The members need to be organized in a deliberate way through a process of socialization. True membership entails under- standing and learning to act according to agreed values and norms. The process of creating membership results in ‘intangible’ common grounds which create the basis for behaviour with common denominators (Schoemaker and Jonker, 2005). This dedicated management behaviour is essential in order to ground organizational processes on the core compe- tences of the organization. Market-driven performance and added value for customers from the perspective of core competences alone is not sufficient.
Value-based management to reinforce the communities of work and the organizational identity is the other side of the coin.
emphasis on the nature and quality of relations between people in the network, between employees and clients, between stakeholders and stockholders, and between what happens internally and externally. As Cohen and Prusak (2001, p. 4) put it, ‘Social capital consists of the stock of active connections among people: the trust, mutual understanding, and shared values and behaviour that bind the members of human networks and communities and make cooperative action possible.’ Central to the idea of social capital is the existence of a network of relations between (organized) individuals and their social and business environment. These relations are of fundamental importance if the organization is to work, and their durability depends on trust, mutual understanding and shared norms and values. The nature and content of networks are extremely important if all individuals are to carry out their jobs properly and thus benefit the organization as a whole.
By investing in networks, social capital is created and maintained.
Networks as structures and social networks operate according to distinctly different sets of values. We call these first- and second-order values. First- order values relate to the business. What makes the business run? What drives our business proposition? How are we being recognized in the market place? First-order values also determine the core competences of the organi- zation, ‘the smell of the place’ and its success. There are many well-known examples of first-order values; including ‘Connecting people’ (Nokia), ‘We produce anything as long as it sticks’ (3M) and ‘Sense and simplicity’
(Philips). The key factor here is translating first-order values into the core competences required for the business proposition. This means competence development and harnessing appropriate talents in order to maintain the necessary competences and skills for as long as they are needed. First-order values can be considered as core to the market paradigm and as driving the actions of all individuals in the organization. Such values are internalized and govern the behaviour of individual employees vis-à-viscustomers.
Second-order values support the first-order values. They are not necessar- ily linked to the business but relate to the desired behaviour of employees towards customers, colleagues and all other internal and external stakeholders.
First-order values differ among organizations as they depend on the business proposition, but second-order values are very much the same in all organi- zations. They apply to human resource management, corporate social responsibility, charity, community involvement and non-mandatory care for the environment, and therefore are separate from the business proposition.
Of course there are a few exceptions to the rule, including the emphasis on second-order values at EcoStyle, Kyjugie Jeans and Hagen Dazs, but these companies are niche players and do not operate in the mainstream.
Conflicting values
The paradigm underlying the management of organizational processes (based on core competences and delivering added value and performance for
customers) is a market paradigm and is dominant in most organizations.
However, the values and norms that hold the community of work together inside and outside the organization do not always correspond to the values and norms that underpin the market paradigm. In many organizations values such as human resource development and CSR are values of the communities of work and are not necessarily useful or applicable to the market. In other words, first-order values (grounded in the market paradigm) can conflict with second-order values (grounded in the values of the community of work). Some organizations use values such as human resource development and CSR as window dressing to show customers and employees that they really care.
But this care is only exhibited if it fits the values that dominate the market paradigm. In such circumstances there is no real link between the first- and second-order values. The question here is whether this kind of behaviour can continue in the long term. We think it cannot as it might lead to undesirable situations, given that recent developments are forcing organizations to change from a purely market value system to a hybrid one, thereby linking first- and second-order values into a system that combines the benefits of the market (doing business) with the social obligations of organizations. An important question in this respect is how can CSR be developed in such a way as to bridge the gap between these values? Exploring this question requires an investigation of organizational identity, which forms the basis of organizational values.
Organizational identity
The behaviour of individuals is anchored in specific values that may also govern the behaviour of a group. Individuals may wish to be a part of a group if their values are the same as those of the members of the group.
Membership of the group depends on the congruence of values and norms at the individual and group levels. The stronger this congruence the more likely it is that the group will behave according to a specific set of values (the reinforcement effect). These values also constitute the group’s organizational identity. The latter is (1) what the members view as central to the organiza- tion, (2) what makes the organization distinct from other organizations, and (3) what is perceived by the members as an enduring feature (Albert and Whetten, 1985). A clear identity gives the group a past, present and future and shapes the boundaries of the group. It also shapes the community of work and the borders of this community with its environment (Schoemaker, 2003b). Communities of work behave as clans, as flexible networks of people for whom organizational identity is the glue. Individuals identify themselves with the communities of work and in the process constantly face a double balancing act: balancing rights and duties (what does the community of work offer me, what does the group ask of me?), and balancing individuality and collectivism (how can I remain a unique individual while being part of
the collective community of work?). This balancing act is essential to self- identification and the creation of a community of work with specific values, norms and identity.
We assume that organizational identity, grounded in embedded values, determines everything that happens in a community of work. Therefore management practices in organizations that are value driven, including CSR, must be embedded in the community of work if they are to succeed. Is it possible to develop CSR as an organizational value, thereby linking the community of work to the market-driven organizational processes? Is it possible to bridge the gap between the market paradigm and the organizational identity of the community of work?