Riga Teacher Training and Educational Management Academy
Email: mvidnere@navigator.lv
Jānis Strautmanis
Banking Institution of Higher Education
Email: janis.strautmanis@ba.lv
Abstract
Corporate social responsibility is societal expectation of corporate behavior: behaviors that are felt by the stakeholders to be socially or morally required. Value orientation of the managers is extremely important in shaping their perception of the importance for the enterprise to focus attention and act according to its social responsibility. There is a further expression of social responsibility relating to the values that managers might observe. This area is normally known as business ethics, referred to as the role of the individual in the organization. Under the current economical and globalization conditions, companies in Latvia have to be aware of the importance of the enterprises’ social responsibility in the formation of a successful long term development, efficient working environment and company’s publicity. It is crucial for enterprises in Latvia to incorporate the principles of social responsibility in company mottos, in their values, organizational culture and planning. This study investigates the relationship between organizational values and sensitivity to corporate social responsibility among current employees and business students. Using a questionnaire on value orientation, survey data was collected from a sample of 618 employees in enterprises and banks, 100 clerks of public sector and 125 first year business students. The results of the study show some groups of employees that are remarkably different in relation to their social responsibility.
Informal education that is provided by employers is an important way and efficient means how to make the ideas of social responsibility understandable and acceptable among the employees. However, given the objective differences among the employees, usage of the same study methods and forms in all organizations is impossible. Therefore, in order to ensure the quality and efficiency of studies, it is necessary to learn the individual qualities and differences of the employees.
Keywords: values orientation, corporate social responsibility, honesty, business ethic
Introduction
Social responsibility of the company provides for long term economical benefit of enterprises. Therefore, instead of ensuring maximum profit to the company, social responsibility ensures optimum profit. (Post, Frederick, Lawrence, 1996, Siccone, 1998, Pearce, Robinson, 2000). Social responsibility of the company is a tool that is used to reach the goal – the company becomes a good and valuable member of the society and evidences partiality. (Robbins, 2000, Mullins, 2001, McIntosh, Thomas, Leipziger, Gill, 2003).
The working document of the European Commission Green Paper (“Promoting a European framework for corporate social responsibility – Green Paper”) says that implementation of the declared continuous European development strategy is impossible without facilitation of the social responsibility of the company. (Green Paper, 2001) Along with the responsibility for the economical development, protection of the environment and welfare of the society, the document highlights the responsibility of employers for the implementation of the principles of life long education. (Green Paper, 2001, p. 10)
The issue of the research includes the statement that social responsibility is an expression and part of the cultural organization. The orientation of the cultural organization is determined by the value orientation dominating in the organization. Orientation to human relationship, quality and personal development are especially crucial for the organization. The research resulted in elaboration of statistically grounded scales that show social responsibility and organizational culture describing value orientations. Differences in the orientation of the values in question are the indicator that allows conclusions about the level of social responsibility and enables analyses of the development.
The object – organizational culture – and subject – social responsibility of the research were defined in the course of preparing the research.
The goal of the research was to define the views of the employees and future managers working in enterprises, banks and state budget institutions on value orientations important in their companies.
The task of the research was to find answers to the following questions:
1. To find statistically important value orientations that determines organizational culture.
2. To find statistically important factors that determine differences among value orientations shaping organizational culture in different companies.
3. To find statistically important differences among different analytical groups in terms of the significance of value orientation.
Methodology
The basis of the research is employees of the small and medium size enterprises that represent the following activities: financial mediating; wholesale and retail; hotels and restaurants; real estate, lease and other kinds of commercial activities. The number of population in Latvia in 2004 was n=235,3 thousand people. (Labor force indicators in 2004, 2005)
Respondents to the survey (n=618) are different levels of managers, experts, employees, service and sales personnel. The research does not include unskilled workers and people holding low position.
In order to obtain data for comparison, additional survey was carried among :
- 100 employees from state budget institutions (state and municipality management, State Revenue Service, the Bank of Latvia, educational institutions)
- 125 first year bachelor degree students from Business College – future employees of enterprises.
The total of the respondents of the value orientation survey was 843.
Description of the method: to obtain data basis through survey over a definite period of time so that the data basis can be processed by statistic data processing and analyses software Statistic 6 Statsoft Co.
Survey contained:
1) value orientation survey, elaborated within the European partner states grant cooperation project WACRA, in English, adjusted in Latvian. (Garleja, Vidnere, 2001);
2) business ethics development test (Уткин, 1998), adjusted in Latvian.
The task of the respondent was, by using Likert scale method, to evaluate 91 statements –indicators given in the value orientation questionnaire that describe organizational phenomena, tendencies, principles and other criteria. Levels: 7 – extremely important; 6 –very important; 5, 4, 3 – important (by growing significance); 2 – of little importance; 1 – of very little importance.
In order to better explain the results, additional variables were invented:
- gender (1 – male; 2 – female);
- age (1 – under 30; 2 – 30 – 44 years of age; 3 – 45+years of age );
- type of the company (1 – enterprise; 2 – bank; 3 – state institution, 4 – business school student);
- education (1 – secondary; 2 – unaccomplished higher; 3 – higher);
- region (1 – capital city Riga,; 2 – elsewhere in Latvia).
Results
By means of cluster analyses, questions of the questionnaire were consolidated in nine groups/scales that conform to different value orientations that describe organizational cultures. The number of questions in each value orientation group varied from six to thirteen. Mutual conformity of the questions and correspondence to the respective group was tested by Cronbach α (alpha) test.
Nine value orientation scales have been discovered: (see Table 1):
1. orientation to organizational success and development.
2. orientation to internal communication /or/ organizational functionality.
3. orientation to employees’ involvement.
4. orientation to life long education or personal development.
5. orientation to decrease in personal integrity in favor of the staff.
6. orientation to professionalism.
7. orientation to quality.
8. orientation to democratic and friendly management.
9. orientation to human relationship.
“Analysis of variance” resulted in finding out significant organizational culture determining factors that facilitate the differences among value orientations: the gender and company type. (Table 1 and Table 2)
Feature gender is the most important one (F=5,805, p=0,0000). Its impact is statistically important in 7 out of 9 value orientation scales. Exception – orientation to group values and orientation to quality. The existence of the difference between the genders is a generally known phenomenon, and this research has given it one more empirical proof. According to the ideas expressed in Carol Gilligan’s Morality of Care and Responsibility, females are more care, assistance, social relations and responsibility oriented while justice and abstract principles grounded ethics is typical of males. Scale 4 presents the greatest value orientation importance evaluation difference between males and females – orientation to personal development, including availability of education; Scale 3 – orientation to the involvement of employees and horizontal organizational structure. Similar tendency was observed regarding the question about evaluation of the importance of justice as esthetical category. The research confirmed the statistical importance of the gender feature in the different evaluation: female respondents evaluated justice as esthetically important category by 9% higher than male respondents. (The theoretical thesis has been confirmed by well known in our society initiators of social responsibility programs in contemporary Latvia – B. Rubesa (Latvija Statoil Ltd.), L.Bemhena (Spilva Ltd.), A. Vīksna (Applied Information Service Ltd.), S. Ēlerte (newspaper Diena), I. Blūma (Hansabank)
To a lesser extent, however statistically significantly, value orientation differences in the research are determined by the factorial feature COMPANY TYPE (F=2,209, p=0,0003). That is, belonging of the respondent to an analytical group: enterprise, bank, state institution or business school student determines the differences in value orientations. COMPANY TYPE – statistically important differences were found in orientation to friendly management and human relationship (Scales 8 and 9).
When we compare the average indicators of the value orientation evaluation, we can conclude that friendly management has received the highest evaluation. This points out to the tendency of high evaluation to psychological comfort, non-exacting manager and pleasant working conditions. (Average score=6,26 points out of 7.)
The aforementioned management might be efficient in the case of high involvement of employees in decision making and if the organization has precise delegation of duties, rights and responsibilities.
In this respect, the research into value orientations presents a contradiction: low evaluation of orientation to organizational functionality and orientation to the involvement of employees. (Respectively, 3,4 and 3,24 points out of 7.)
Phenomena that contribute to the pride of belonging to the organization and employees’ loyalty – orientation to the type of organizational success that possesses a row of external features – facilities of the building and premises, presence of international contacts and export production – enjoy high evaluation. Employees in such kind of company are proud of their success, they have sense of commonality and security because the enterprise has precise distribution of work assignments and career opportunities.
High evaluation was also granted to orientation to quality, orientation to competitive production and services that can be implemented if the company possesses extensive knowledge about the market, it has sufficient resources, high motivation among the employees and high management requirements.
Orientation to quality claims responsibility of the employees for their clients, therefore it has to be viewed as one of the value orientations that facilitates social responsibility of the company.
It has to be concluded that participants to the research have given low evaluation to the importance of education in the context of personal development: orientation to extending knowledge as a condition for the development of professional competence and personal development has scored 3,71 points out of 7.
In order to find out different analytical groups, 3 factorial features were compared –GENDER, COMPANY TYPE and REGIONS. As shown by the results of the triple interfactorial interaction test (between categoral effects variance) in Table 4, the biggest number of differences appears in the group males who work in enterprises outside the capital city. This group shows differences in nearly two thirds of the scales.
During the course of comparing characteristics of the group males who work in enterprises outside the capital city with the other groups, it has to be concluded that the aforementioned group has insignificant age differences, however it differs greatly in terms of the level of education. 39% of the respondents have secondary education (including 125 first year students; apart from these – among the employees – 30% have secondary education). This indicator is significantly higher for the group males who work in enterprises outside the capital city – 68%.
Consequently, although disperse analysis evaluated the factorial feature EDUCATION as statistically insignificant – F=1,150, p=0,2969 (See. Table 2.15 on page 98), the determinator of the severe value orientation differences in the group males who work in enterprises outside the capital city is the lowest level of education.
Discussion
The result of the research is the tools developed for evaluating organizational culture describing value orientations – value orientation survey. The questionnaire was taken from WARCA (The World Association for Case Method Research and Application) research in English, and its Latvian version was included in the research. In the second section of the research – elaboration and testing of the tool – cluster analyses helped to develop appropriate organizational culture describing value orientation scales; they were updated, analyzed for the contents and tested by statistical methods. This resulted in elaboration and test of a value orientation analyses tool that will be possible to use in the future research.
Results of the research gave answers to all questions.
First, 9 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.
Second, 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.
Third, the research showed that in 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 life long education, and employers among them. Life long 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.
References
Garleja, R., Vidnere, M. Psiholoģijas un sociālās uzvedības aspekti ekonomikā. – Riga: RaKa, 2000. p. 264
Hughes, R., Ginnett, R., Curphy, G. Leadership: Enhancing the Lessons of Experience. – Singapore: McGraw-Hill Book Co, 1999, p.674
Knowles, R., McLean, G. (ed.) Psychological foundations of moral education and character development: an integrated theory of moral development. – Lanham: University Press of America, 1986. p. 364
McIntosh, M., Thomas, R., Leipziger, D., Gill, C. Living Corporate Citizenship: Strategic routes to socially responsible business. – Harlow: Prentice Hall Financial Times, 2003. p. 297
Mullins, L. Management and Organisational Behavior, 6th ed. – New York : Financial Times/Prentice Hall, 2001
Pearce, II J., Robinson, Jr. R. Strategic Management: Formulation, Implementation, and Control. – Singapore: Irwin McGraw-Hill, 2000. p. 468
Post J., Frederick W., Lawrence A. etc. Business and Society: Corporate Strategy, Public Policy, Ethics. (S.1.): McGraw-Hill, Inc, 1996, p. 708
Robbins, S. Managing today! 2nd ed. – Harlow: Prentice Hall, 2000, p. 651
Siccone, P. Corporate Social Responsibility// Corporate Communications for Executives/ed. M. Goodman. – Albany: State University of New York Press, 1998, p. 329
Уткин, Э. Этика бизнеса. – Москва: Зерцало, 1998, 254 с.
Biographical Notes
Dr. Habil. psych., Dr. oec., Professor Māra Vidnere
Riga Teacher Training and Educational Management Academy
Imantas 7. līnija 1, Riga (Latvia) LV-1083
Tel.: + 371 7808010, Fax: +371 7 808 034
Email: mvidnere@navigator.lv
Jānis Strautmanis, Lecturer
Banking Institution of Higher Education
K. Valdemāra 1b, Riga (Latvia) LV-1819
Tel.: +371 7322605, Fax: +371 7320620
Email: janis.strautmanis@ba.lv