What Factors Predict the Values of an Organization and How?

The objective of the present paper is to outline the regularities in the formation of organizational values. New organizational values measurement tool – Organizational Values Questionnaire was developed by author of the paper. A study of organizational values in Estonian organizations took place in the period 2004–2008. Values were analyzed in terms of the Competing Values Framework, according to which organizational values could be qualified into four broad categories (Open System, Rational Goal, Internal Processes and Human Relations). A binary logit regression analysis was applied in order to test the impact of industry, organizational size and age on organizational values. The findings of the study demonstrate that both contextual and organizational determinants are significant predictors of organizational values; however, different factors do not have equal power in explaining organizational values. It became evident that the impact that industry had on organizational values was the greatest, but size of organization is also a significant predictor of values. Although arguments about organizational age as a determinant of organizational values have been given in the literature, our study * Anne Reino, Research Fellow, University of Tartu, Faculty of Economics and Business Administration Narva Rd. 4–219, Tartu, 51009, Estonia. E-mail: [email protected] Maaja Vadi, Professor, University of Tartu, Faculty of Economics and Business Administration Narva Rd. 4–224, Tartu, 51009, Estonia. E-mail: [email protected] The authors acknowledge financial support the Estonian Ministry of Education and Research target funding SF0180037s08 Anne Reino, Maaja Vadi 4 showed that organizational age does not predict organizational values in Estonia. This finding may be explained by the path dependency of the country because the processes that have taken place in a society certainly have an influence on organizations. The findings of the present study reveal some regularities about the influence of contextual and organizational factors on organizational values, but they also encourage organizations to discover the potential for shaping their values in order to ensure the survival of the organization in complicated times and its development in that particular environment. JEL Classification: M14