Values, Organizational Culture & Organizational Effectiveness in India.

AuthorSingh, Reetesh K.


Globalized business environments and increased labor mobility have added to the diversity of organizations. Business leaders recognize diversity which goes beyond employees' demographic or physical characteristics to include organizational culture, intellectual capability, skills, behavior and personality (O'Reilly et al., 1991) as a source of competitive advantage for organizations. Past research also focuses on the impact of attributes (Robbins & Judge, 2013) like values, personality, skills, inner being, beliefs etc., but mostly at the individual level. Research on the impact of both employee values and organizational culture on organizational effectiveness in a single study has largely remained unexplored. Since employee values and organizational culture are intricately linked, and can potentially impact each other, the dearth of research of the impact of these diversity factors on organizational effectiveness in a single study is a crucial research gap. This paper contributes to the existing pool of knowledge on the relationship of employee values, and organizational culture with organizational effectiveness in the Indian context. Different dimensions of values, culture, and organizational effectiveness have been tested to provide a granular and deeper understanding of this relationship. Fig. 1 represents the proposed conceptual model of the relationship between Employees' Values and Organizational Culture, with Organizational Effectiveness.

Objective of the Study

The objective of this study is to examine the direct effects of diversity factors like values and organizational culture on organizational effectiveness in the Indian context.

Importance of Values

Values are described as beliefs that a person holds desirable or undesirable. Values may vary from person to person, but hold special importance in every individual's life (Aman & Ahiauzu, 2014), and ultimately determine our behaviors (Gregory et al., 2009; White, 2005).

Very few countries in the world are as diverse as India is (Buddhapriya 2013). Migration of youth and educated people to other parts of the country in search of better job opportunities has led to greater diversity within geographies and a diverse value grid within organizations. The Indian context therefore makes for an interesting case study for research on values. Past research, however, has focused mostly on employee attitude and personality; literature on studies of values is scant (Connor & Becker, 1975).

In this paper, we have studied four types of values--self-realization values, status enhancement values, sulphitic values, and socio-economic values (Sinha, 1990). The first type, self-realization values, comprises values like ability utilization, achievement, advancement, and peace. The second type, status enhancement values, comprises those like authority, altruism, prestige and physical activities. The third type, sulphitic values, includes autonomy, creativity, lifestyle, risk-taking, and variety. The fourth type, socio-economic values comprises social relationships, interactions, working conditions, comforts, and dependency. These values, though reviewed intensively, have not been taken up extensively for empirical studies. In the Indian context, of the four types of values, employees consider self-realization values to be more important than the others (Sinha, 1990).

Definition & Importance of Organizational Culture

Organizational culture consists of core values, rules, and norms to govern and manage the business (Barney, 1986). It is structured by its employees (Hofstede et al., 1990)--emerging from their beliefs, values, norms and social relations (Schein, 2004). Culture ultimately determines the complete personality of the organization (Nazir & Lone, 2008).

Various aspects of culture have been researched in the past. These include dimensions, types as well as determinants of culture. Organizational culture has been instrumental in differentiating successful firms from unsuccessful ones, hence a source of competitive advantage (Cox &Blake, 1991), and a management tool for steering organizations to success (Denison & Mishra, 1995).

This paper studies those cultural dimensions --humanistic, value-oriented, conservative, and innovative--which, though observed globally, have not received much attention vis-a-vis organizational effectiveness in the Indian context. Unlike other instruments which relate to external dimensions of culture, these relate to the internal functioning of the organization. In humanistic culture, the focus is on competency, hierarchical relationships and interrelationships. In value-oriented culture, importance is given to compassion, caring, and others like concern for employees and their well-being. In conservative culture, work responsibility --focused on role clarity and ambiguity tolerance--takes precedence over demands of the family. In innovative culture, employees are provided challenging work, and encouraged to present their viewpoints, make creative decisions, and seek enjoyment through work (Pareek, 2006).

Organizational Effectiveness

Organizational effectiveness has been severally defined as the extent to which multiple goals of the organization are achieved simultaneously (Price, 1972), long-term ability of the organization to achieve its goals consistently (Kataria et al., 2013), and achievement of the organization's purpose and objective while providing maximum return to the society (Ghorpade, 1970). Different measures of organizational effectiveness have been used, viz. profitability, market share, leadership, goal attainment, productivity etc. (Richard & Johnson 200l). In this study, we have focused on dimensions like goal integration, group functioning, and job satisfaction. Goal integration indicates the level to which organization is able to integrate its goals with the employee's abilities and desires. Group functioning encourages group achievement and assesses the sense of ownership of group members for collective tasks by exhibiting coordination, problem solving, decision making, and goal achievements in groups. Job satisfaction refers to satisfaction derived by an employee from the job, boss and overall job structure through achievements within the organization. Most studies have measured satisfaction at the individual and job level; satisfaction at the whole organizational level being less researched (Chatman, 1989). This paper addresses such past gaps.

Employee Values & Organizational Effectiveness

Due to globalization, employees from different cultures, lifestyles, family background, traditions, and values have become a part of the workforce (White, 2005). Understanding these diverse employees has become a challenge for managers. When an organization is cognizant of employee needs and values, it motivates them to work to their maximum potential to achieve the desired organizational goals (Silverthorne, 2004). Performance of an employee is greatly shaped by his value grid, which ultimately impacts the effectiveness of the organization (Connor & Becker 1975).

Organizational Culture & Organizational Effectiveness

Organizational culture is the essence of any organization that guides the overall behavior of the organization, impacting organizational effectiveness (Giberson et al. 2009). It has been observed that when organizational culture is aligned to the diverse needs and values of employees, individuals work at their maximum capacity (iron et al., 2004).

Different types of culture are known to impact organizational effectiveness differently (Amsa, 1986); not all types of cultures do (Wilkins & Ouchi, 1983). In the absence of extensive empirical research in India to support the proposition that organizational culture is a predictor of effectiveness (Hartnell et al., 2011), this paper aims to bridge the gap by attempting to measure the relationship of organizational culture with the broader concept of effectiveness such as goal integration, group functioning and satisfaction.


Based on the above relationships, the following hypotheses have been formulated with values and organizational culture as the exogenous variables and organizational effectiveness as the endogenous variable:

Hypothesis 1: Employees' sulphitic values are positively associated with goal integration, group functioning, and satisfaction.

Hypothesis 2: Employees' self-realization values are positively associated with goal...

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