Strategic Alignment
Every organisation should have a set of underpinning values, and this is especially true of non-profit organisations, which exist for reasons other than earning profit. The values are typically embedded not only in the strategic objectives that leadership sets for the organisation but also in the methods by which the organisation seeks to attain those objectives. The values set the cultural tone for the organisation, and the culture influences organisation actions and outcomes. The amount of study on this subject, however, has been minimal in management literature. This paper will examine the relationship between organisational culture, organisational values and organisational strategic objectives, with an emphasis on the non-profit sector. The values that underpin an organisation should be reflected both in the culture and the objectives, but the nature of this relationship remains relatively unexplored. This is the gap that the present paper will seek to fill.
Defining Values and Culture
Organisational values are defined as the shared values of the people within the organisation, while working in that organisation's specific context. In many organisations there are competing values, and the organisation must find ways to manage any dilemmas that arise from the multiple competing values that exist (Quinn & Rohrbaugh, 1983). An organisation will have values that govern its internal communications, its external communications, its strategic objectives and how it resolves conflicts (Neal, 2013). Value dimension affect a number of cultural characteristics such as risk-taking, communication style, adaptability, innovation, internal power dynamics and goal-setting (Colley, Lincolne & Neal, 2013).
It is also necessary to understand the difference between organisational culture and values. There is a difference between these concepts. The culture is basically the outward manifestation of values. Thus, culture can be found in the policies, procedures and other organisational practices. These will reflect the underlying values, but those values are often organisation-wide, rather than relating to individual employees. Individual employees may have values that differ from those of the organisation as a whole, but it is only the latter that affects the organisational culture (Hofstede, 1998). The strategic objectives that are set by the leadership of the organisation are another matter entirely.
While it is typically assumed that organisational culture affects outcomes, and that there is a relationship between values and outcomes, the nature of this relationship has not received much study and thus remains unclear. There is some support for the idea that organisational values should be congruent with the overall organisational culture, and that when they are this will have a positive moderating effect on organisational outcomes (Gregory et al., 2009). Thus, it is reasonable that an organisation should hire for value congruence, for example. At non-profits, some people are volunteers and self-select, which raises questions about staffing practices and how those can affect the values-culture-objectives relationship.
The Role of Leadership
Leadership is often a key driver of organisational values. The CEO has both formal and informal power within the organisation, and sets its strategy. The strategy will often reflect the values of the CEO (Berson, Oreg & Dvir, 2008), which raises the question as to whether the relationship between values in an organisation and its strategic objectives is bi-directional. CEO values will often have an influence over organisational culture, and there is a subsequent relationship between organisational culture and organisational outcomes. What this indicates is that organisational values are constantly-shifting. While they have an influence over organisational objectives, they are also subject to change. This implies that there may well be a relationship between changes to the organisational value systems, organisational culture and organisational objectives.
Relationship with Strategic Objectives
This paper aims to study what sort of relationship organisational values have with both culture and outcomes. Values in part determine the strategic objectives, but the ability of the organisation to execute on its strategy to reach its objectives is another matter altogether. One of the moderating factors that has been identified that governs the relationship between organisational values and outcomes is that of value congruence. Boxx, Odom and Dunn (1991) note that the people within the organisation perform better with respect to working towards the organisation's objectives when they have a high level of alignment with those objectives. This has some interesting implications for the not-for-profit sector because people working in such organisations should be expected to have a high level of value congruence. Certainly, they should...
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