2011
UPPSALA UNIVERSITY
Department of Business Studies
Master thesis 20110527
[ORGANIZATIONAL VALUES AT SWEDBANK]- A
COMPARATIVE STUDY OF THE CENTRAL REGION
Author: Sabrina Choudhury Tutor: Per Forsberg
2
ABSTRACT
In this thesis, the author strives to examine commitment to organizational values at Swedbank – the Central region through a longitudinal study at three different organizational levels (regional management team, branch manager and assistant branch manager) and this by a broader perspective. In order to gain a better understanding of the chosen subject the study proceeds with a theoretical framework that is concentrated to commitment to organizational values and three factors that might affect this commitment, namely; education, employment time and organizational function. Furthermore, a qualititative approach was used to collect the empirical data consisting of interviews.
The purpose of this thesis is to closely examine how three managers at different organizational functions have worked with the organizational values and their employees’
commitment to the values during the last year by studying the three variables; education, employment time and organizational function. The conclusions highlights education and organizational function as two factors that have gained more focus in the managers work with committing their employees to the values. Education plays a crucial role since the manager’s uses similar approaches to some extent but also other methods. The regional management team stands out due to the group reflections. The branch manager is also using a somewhat more unique approach, monthly dialogues. Since the three organizational values; open, simple and caring are not explicitly defined, and are more generally stated there is room for interpretation and education is argued to be the solution for this issue. The importance of organizational function is highlighted in different aspects- balancing hard and soft goals and also the importance of leaders - delegation of responsibility. Regarding the factor employment time, the three interviews were united in this question. No employee has yet displayed a lack of commitment. However, those who have incorporated the values in a good way have done this in a personal way.
Key words: bank, organizational values, commitment, education, employment time, organizational function
3
TABLE OF CONTENTS
1. INTRODUCTION ... 4
2.1 Organizational values ... 6
2.3 Organizational commitment ... 7
2.4 Lack of commitment to organizational values ... 8
2.5 Factors that affects employees’ commitment to organizational values ... 9
2.5.1 Education ... 9
2.5.2 Employment time ... 9
2.5.3 Organizational function ... 10
3. METHOD ... 11
3.2. Respondents and the chosen organization ... 12
3.3 Operationalization ... 13
3.4 Data collection ... 14
3.4.1 The interviews ... 14
3.5 Limitations ... 15
4. EMPIRICAL FINDINGS ... 16
4.1 Swedbank in brief ... 16
4.2 Education ... 16
4.2 Employment time ... 18
4.3 Organizational function ... 19
5. ANALYSIS ... 21
5.1 Education – learning in other forms is essential ... 21
5.2 Employment time ... 23
5.3 Organizational function ... 24
6. CONCLUSIONS ... 25
6.1 FUTURE STUDIES ... 26
REFERENCES ... 27
APPENDIX 1 ... 31
APPENDIX 2 ... 32
4
1. INTRODUCTION
Organizations in today’s competitive business landscape have constant pressure to produce good financial results and at the same time differentiate themselves against competition. The financial industry, more specifically banks faces competition constantly from other banks and niche actors, which creates a difficulty to stay attractive to customers. In order to be competitive, an internal focus of a good organizational culture is increasing in importance.
Consequently, commitment to organizational values is essential to motivate and guide employees in their daily work, but also to gain trust from customers, especially after the financial crisis. When employees experience commitment to organizational values several benefits can be gained for the customer as well as for the organization. Commitment can for example play a part of increased efficiency in the organization. The mentioned efficiency can be a result of enhanced and improved relationships between employees and a strengthened purpose to work (Ferguson & Milliman, 2008). If an organization is able to enhance commitment to its organizational values, it will be expected to increase the welfare of the organization but also motivate the employees.
In order to understand the phenomenon of commitment to organizational values it is valuable and helpful to examine factors that affect employees’ commitment. Mottaz & Clifford (1988) state that a review of the literature on organizational commitment reveals that much of the research on this topic has identified the antecedents or what determines attitudes. These determinants can be divided into two categories, individual characteristics and organizational characteristics. Individual characteristics consists for example of age, tenure, education and personality factors (work values, expectations etc). Organizational characteristics relate to social involvement, position at work and promotional opportunities etc. (Mottaz & Clifford, 1988). Furthermore, for many decades the academic literature has put attention to values at workplaces and the relationship between financial performance and organizational values.
Previous studies have focused on HR practices, such as empowerment, training and competence development. Other researchers have tried to define and measure organizational commitment, resulting in ambiguous results. However, these previous studies have not been found to directly examine the mediating role of factors that do not concern financial performance or HR practices, in other words, they have not compared other factors to a great extent (Fenton & Inglis, 2007).
To understand what affects commitment, research as well as organizations should be aware of different factors at that affect commitment to organizational values. This study will examine both individual (education, employment time) and organizational (organizational function)
5 factors. An analysis of the following factors will yield an insight as regards to what areas that an organization should put more effort on. This thesis will be based on a case study of Swedbank, the Central region. The topic of commitment is of interest because academia has provided and demonstrated empirical failure of misfit between organizational values and its members (Scott, 2002). Swedbank has recently (last year) presented three new values, open, simple and caring and extensive work with workshops and discussions have been put on place. Swedbank implemented a new business model in 2010, thus with a clearer focus on services. Swedbank believes that this model will make decision-making authority closer to transactions, namely, decentralization with clear descriptions and delegations where the organizational values have been an important aspect of this strategic work (Swedbank, 2011- 05-20). The study will be concentrated to how three different managers at different organizational levels (henceforth organizational functions) have worked with the organizational values. Through the case study, I try to explain and elaborate on factors that affect commitment.
The purpose of this thesis is to closely examine how three managers at different organizational functions have worked with the organizational values and their employees’
commitment to the values during the last year by studying the three variables; education, employment time and organizational function.
6
2. THEORY
The theory section is divided into two parts; the first describes the concept of organizational values and organizational commitment. In this part, I make the effort to evaluate what commitment is and how it is identified in the literature. The second part emphasizes what factors that affect employees’ commitment to organizational values. Three factors were chosen; 1) education, 2) employment time and 3) organizational function. The first factor, education, stresses the importance of educating employees of organizational values and organizational culture. The second factor, employment time, deals with differences of commitment to organizational values regarding employment time. The third factor deals with organizational function and discusses different goals that are set up for different levels and also the importance of leaders. The different factors are a part of the conceptual framework for the analysis and discussion.
2.1 Organizational values
Organizational values are described as embedded principles that are static, guiding a company’s actions, but they also function as cultural foundation. By looking at values in organizations one can examine why people behave in a certain way in their jobs.
Organizations can have values that form a specific base of behavior (Chatterjee & Pearson, 2000; Lencioni, 2002). For example, the organizational values can steer output and how work is performed by employees. With organizational values organizations can shape practices, mission and goals, thus creating a functional meaning of the values (Kabanoff et al, 1995).
The significance of studying organizational values can be explained by the important effects on individuals regarding behavior and organizational outcomes (Scott, 2002). The impact of organizational values is argued to create efficiency for employees. Researchers have acknowledged this, more specifically the different impacts of organizational values;
motivating and inspiring people, and experiencing a connection to the values and the purpose of the organization, guiding decision making and providing moral guidance (Ferguson &
Milliman, 2008). This is further confirmed by Scott (2002) who argues that commitment to organizational values is likely result in higher productivity, job satisfaction and commitment.
The actual and positive outcomes will be a result of a fit between organizational values and individual values.
However, despite the mentioned positive outcomes of commitment to organizational values, academia has provided and demonstrated empirical failure of misfit between organizational
7 values and its members. This effect existed because the organizational values did not balance and complement each other and also because the organizational values were established by a minority of the organization, excluding participation of the other members, hence resulting in a lower organizational commitment among employees. However, regarding the character of organizational values, it is important to bear in mind that organizational values often are generally stated. The positive side of this is that there is room for interpretation, but guidelines and education in terms of socialization (learning by doing) is needed to create a better understanding of the values among employees. This regards interpreting the values in daily work and in decision making. (Scott, 2002).
2.3 Organizational commitment
Abbot et al (2005) define organizational commitment as a psychological link between employees and the organization and as something that makes it less likely for an employee to leave an organization. Furthermore, they also argue that it predicts behavior in organizations.
Brooke & Russell (1988) define organizational commitment as an employee’s identification with and involvement in a particular organization (Khandelwal & Mohendra, 2010). Shared and understood values are argued to create commitment, where shared values strengthen a higher purpose to work. Employees who are committed to an organization want to help an organization to realize its goals and to be a part of a mission by contributions of their individual tasks (Ferguson & Milliman, 2008). Finally, employees also feel committed when their values are congruent with the values of their supervisors (Judge & Bretz, 1992). A fit between personal work values and organizational work values is argued to enhance organizational commitment (Mayer & Schhorman, 1992).
The concept of organizational commitment has previously been measured by Porter et al (1974) (Bar- Hayim & Berman, 1992), where they examined one commitment type, namely affective commitment. Affective commitment occurs when individuals identify themselves with the organization, is committed to the organization and has a desire to pursue its goals (Hackett et al, 1994). This commitment type is of interest in the current discourse.
Mottaz & Clifford (1988) state that a review of the literature on organizational commitment reveals that much of the research on this topic has identified the antecedents or what determines attitudes. These factors can be divided into two categories, individual characteristics and organizational characteristics. Individual characteristics consists of age, tenure, education and personality factors (work values, expectations etc). Organizational
8 characteristics relate to social involvement, position at work and promotional opportunities etc. (Mottaz & Clifford, 1988). Organizational commitment has not been linked to a theoretically-grounded framework from which researchers can predict variables that affects organizational commitment. Another explanation of the difficulty of measuring organizational commitment is that several definitions and measures of the concept have been used (Morris, 1981). Various authors provides different views about organizational commitment but the majority of them agree that there is no specific definition of organizational commitment since there are numerous components of organizational commitment. Organizational commitment in theory cannot be justifiably generalized from one single study (Abbott et al, 2005).
2.4 Lack of commitment to organizational values
Individuals, who experience a distance to organizational values, do not feel a commitment to the organizational values. Other may express a cynical attitude, because they do not see any rationality and consistency with the values. If values are not clear and carried by actions, negativity and cynicism will be created. This lack of authenticity is the result of a failed value program held by leaders. Another explanation of this failure is the view of values. If they are looked upon as a “technique”, they will not be embraced and the employees will miss the
“boat” totally. When not supported by action, empty rhetoric fosters negativity and skepticism will be created. When employees feel that values are real, inspiration will be experienced and when they are “decorations” they will most likely be ignored and disrespected. Also, when individual’s values are different from the values in his or her social environment (organization), it might influence what the individual says, but maybe not what the individual does. (Ferguson & Milliman, 2008; Ravlin & Meglino, 1989). Another factor explaining a lack of commitment is the time aspect. Changes that transpire too quickly often create a disorder among individuals. Other obstacles such as resistance to change status quo, daily pressure of different tasks and financial success can possibly make values look less important and turn them to a question that is not prioritized, thus not enhancing the development of a value-based strategy. Despite of all these factors that are mentioned, the root of these dilemmas is that lack of commitment stems from a failure of communication and education about the values, creating a lack of insights and a misunderstanding of values. Helpful and successful value programs highlight the importance of values as being the center of every decision and activity. With value programs it is crucial that routines and practices are updated and reflected in accordance with the organizational values. (Ferguson & Milliman, 2008).
9
2.5 Factors that affects employees’ commitment to organizational values
2.5.1 Education
Open dialogues, communication and education are crucial for creating sustainable organizational values. This by practical adaption processes, namely learning by doing and means for getting to the bottom of conflicts and finally give employees time to adapt to the new values. In their research of organizational commitment, Morris & Sherman (1981) found that older employees, less educated employees and employees with high competence- stemmed from increased competence by practice, had a high level of commitment (Glisson, 1988). Programs that are not academic, rather more practical to their nature will be easier for employees to understand and also to make drafts of action plans of how everyone should deliver according to the plan. In this sense, education is necessary for the employees, in order to bring changes in an effective way. With training and education programs, a better understanding is evolved (Prokesch, 2009). Relatively few studies have examined what organizations can do to enhance commitment. What these few studies have suggested is that newly recruited employees can be taught more about the organization’s values and how work is conducted (socialization). With specific socialization practices, commitment can be affected by involving managers to foster better employee understanding of the organizational values, norms and objectives. It is crucial to make a division of the content of socialization, namely what is taught and how it is taught to newly recruited employees (Caldwell &
Chatman, 1990).
2.5.2 Employment time
Historically, studies have focused on worker characteristics as predictors of organizational commitment. Employment time in the organization and the extent of which the individuals’
egos was involved was related to commitment. The number of years in the same position was negatively associated to commitment (Glisson, 1988). At the same time, Wim et al (1998) argue that the longer people stay in an organization, the better they embrace organizational values and they will mirror this in their actions as well. A risk with employees who have been in an organization for some years is that they with time will distinguish nuances in the organizational values and will combine other values that might be of a conflicting character towards the organizational values (Canella & Hambrick, 1993; Buchholtz et al, 2003).
Furthermore, previous studies have focused on personal characteristics such as age and level of education. It is proposed that younger people are more committed than elder people, due to their motivation to start a new career but also because of their willingness to manage changes.
10 When new employees enter the organization, they have to be screened before they start. This concerns their personal values but also if they match and believe in the organizational values and are able to commit to them. Individuals who feel that they do not “hit off” with the values will most likely leave quickly. However, it is argued that those who decide to stay will feel satisfied with the work environment. These people will also play a crucial role for new entrants, because they will be able to teach and train new employees to the culture (Hill 2007, p.389).
2.5.3 Organizational function
Organizational values that are changed may possibly stimulate conflicts in different organizational functions, due to different interpretations among individuals of how values should be decoded to actions. Different organizational goals are another explanation for conflict arousal between different ranks. Top executives that strive for certain goals, might not have references that are in accordance with goals of middle management or other employees at lower organizational ranks. Therefore leaders play a crucial role, who in a determinant way can emphasize organizational values, with a sustained personal commitment, more precisely by actions and words (Khandelwal & Mohendra, 2010). Also, efficiency is created because team discussions and training provides managers and employees to reach consensus on how to break barriers. Participants will be involved by discussing hard barriers (resources, organizational structure and also capabilities) and soft barriers (how individuals spend their time in the organization). As soon as the organizational values are related to the different goals, it will be difficult to change them (Anderson, 1997).
11
3. METHOD
3.1 Research method
Before the arguments for the chosen methods are presented, is it crucial to highlight that this paper is not an assigned study it is rather an objective study. The idea of the chosen subject arose from the time when the author did an internship at Swedbank (the Central region) during fall of 2010. During this internship, some of the empirical data was collected through informal interviews but information was also given to the author, thus making this study somewhat of a participative study. After the internship, empirical data was supplemented through interviews (will be explained below).
A qualitative approach was chosen in terms of interviews in this study. According to Merriam (1994, p.25), a qualitative method was suitable since the reality is intended to be investigated in this survey rather than measuring it. Furthermore, this method is useful since a better understanding of the phenomenon of commitment to organizational values regards a limited region in this study. In order to examine commitment towards the organizational values, three different managers were interviewed in different organizational ranks in order to see differences in how they work with the values and how their employees has incorporate them.
The characteristics of the interviews questions were open, in order to give the interviewees the possibility to explain and extend their answers. Also, the interviewees could highlight what they thought was essential.
This thesis is based on a case study and this strategy was chosen as it permits an understanding of how the employees/managers work with the values. Also, with a case study questions such as how, why and how can be answered. With an in-depth analysis, more information can be presented in comparison to an overall study, because a situation, a group or a specific time can be better understood. However, an awareness of generalizations is still current (Saunders et al, 2009; p. 146). The objective of this study is not to generalize; it is rather about emphasizing certain factors. Preconceived ideas of the researcher have been one type of criticism against case studies, since it can possibly affect the analysis. In order to avoid this, an approach of reviewing the theory and the empirical research was constantly resumed.
Throughout the search of appropriate literature, different factors were found that can affect organizational commitment, for instance financial performance, incentives and language skills. The factors that are included and treated in this study are; education, organizational function and employment time on the ground of being related to the individual and because
12 they are organizational specific. The reason for this choice can be explained by the fact that many other studies has focused on financial performance and HR practices, but not with this combination of factors affecting commitment to organizational values. After the theory was chosen, the following step was choosing a representative sample of respondents; this will be further explained under the section of respondents.
3.2. Respondents and the chosen organization
The financial industry, namely banks has been affected by external challenges, which demands new internal requirements in order to meet these challenges. Since Swedbank was negatively affected by the latest financial crisis, this organization was of interest. During the financial crisis, a focus on sustainability and customer perception was increased at Swedbank, but the vision to be a good representative bank had to start internally and with the employees, therefore new values were put on place. What is interesting is to examine how the work with the values looks like at different organizational functions; (regional management team, branch manager and assistant branch manager). Since the author has worked in Swedbank - the Central region, it was easy to gather the information to conduct interviews. The study is limited to only one organization in order to minimize the risk of irrelevant and hard to analyze material.
According to Swedbank’s annual report (2010), the organizational values have been presented during the year of 2010 and have been discussed in workshops. What the annual report does not state, is how the different regions have been working with the values in the daily work – if there is a common way of working and conducting them or if different managers have the authority to decide what type of education that should be used. Therefore, it is interesting to examine how the work with the organizational values is conducted at different levels.
Looking at the hierarchical aspect, from the regional management team to assistant branch managers, different key persons were chosen for the interviews, this in order to create an understanding of the differences in their work with the values. The choice of respondents was based on 2 selection criteria’s:
1. The respondent had to work in the Central region. This due to the time constraints
2. Belong to one of the following organizational functions: regional management team, branch manager or an assistant branch manager. This to make sure that the collected data was connected to the theory- (the three chosen factors).
13 Following persons has been interviewed to collect the empirical data:
Elisabeth Mereborg, head of Marketing and communication (belongs to the regional management team)
Magnus Bigenius, HR manager of the Central region (counties of; Uppsala, Gävle, Västmanland and Dalarna)
Annika Hellström, Branch manager of Uppsala Ingela Bergh, Assistant bransch manager of Gävle 3.3 Operationalization
The theoretical framework is the base for the empirical data collection. The interview questions were not changed or customized towards the interviewees. The questions were designed after the theory which starts with organizational values. Then questions about factors that affect commitment were posed. The first factor was education where questions about learning in different forms were posed. The second factor concerned employment time and the third factor was organizational function, where questions about balancing different goals and leadership were posed. The necessity of doing an operationalization stems from providing the informants the possibility to grasp different theoretical concepts (Saunders et al, 2009: p.
597). The different theoretical concepts have been translated into research variables that are used in this study.
Well established theory has been chosen to this study in order to increase the reliability of this study but also to prove that elder theory is still applicable. The paper also contains theories of values, organizational values, commitment and factors that might influence commitment from articles and books. However, it is important to emphasize that these three factors were used as instruments to sustain the required data. Since studies of organizational commitment are a demanding a task of defining the concept thoroughly, one shall bear in mind that definition problems occur as well as measurement problems. To distinguish the manager’s perceptions of commitment regarding education, questions about workshops, learning by doing and socialization were asked. To learn more about employment time, questions about how recruitment occurs, employees who have incorporated the organizational values and lack of commitment were asked. Organizational function was researched by asking questions about balancing hard and soft goals and the importance of being a leader who emphasizes the
14 organizational values. The three different factors will ease the understanding of what affects commitment towards organizational values. To learn more about other non expected situations, questions about lack of commitment were asked. The mentioned areas were touched upon during interviews, where theory was selected from the authors of the articles which handled the different factors. For further information about how the factors were operationalized, see Appendix 1.
3.4 Data collection
The contact with the different key persons was already established during the time of the internship at the central region. The interviews were telephone interviews, where the interviewees had the possibility to decide what day and time that suited them. As a preparation of the interviews, the purpose of the study and the character of the three factors;
education, employment time and organizational function was presented. The preparing information was offered in order to gain trust from the interviewees.
The empirical data was directly summarized in a sheet in order to be able to directly ask the key persons if the perceptions of their answers were correct. Additionally, the interviewees also gained the possibility to fill in with additional information if the data was lacking in any aspect. The interviews lasted about 30-35 minutes, depending on how extensive some answers were. After the interviews, the collected data was transcribed and sent to one respondent. Two of the interviewees did not command to receive the transcribed document of their answers.
3.4.1 The interviews
Through interviews, the underlying causes for attitudes and opinions were gathered. With interviews, a direct contact with the interviewees is available and this enhanced the validity of the data collection, it can also be enhanced because the researcher can correct the data during the interviews. On the contrary, the validity can be controlled by the researcher by an awareness of the influence one has of the paper.
Preparation of questions and specific themes, more precisely, factors were determined and prepared in advance, therefore, the characteristic of the interviews can be described as semi- structured. Saunders et al (2009; p. 349) argues that telephone interviews is a good option when interviews are semi-structured, as in this case. The collected empirical data enabled comparisons between the different organizational functions. Open ended questions permitted flexibility for the interviewee, which meant that he or she could extend a discussion or provide information from different perspectives that was not directed by the researcher
15 (Saunders et al., 2009:321). When the interview began, general questions about the interviewees working position were posed. The interviews were divided into three parts, due to the three factors.
3.5 Limitations
Although the choice of conducting a longitudinal study can be useful for a study like this, one can still criticize the decision. Information was collected mainly through interviews and not collecting data through other sources such as external reports and this implies a risk of biased data.
The questions were formed with a theoretical point of view. The final question was an open question, providing the respondent a possibility to give other opinions and information. It would have been interesting to explore and investigate how the respondents defined and the perception of organizational commitment, and if they could differentiate between individual and collective commitment. The respondents might have overestimated or might have provided a somewhat different reality in their answers, this can be further explained by the fact that people may not behave as they have indicated in the interviews.
Other factors that might affect organizational commitment are gender, age and competencies.
Another demarcation of this study is that it will not consider cultural aspects such as nationality and customs, since this study aims to examine how managers have worked with enhancing their employees’ commitment to the organizational values and to what extent education, employment time and organizational functions affects commitment to the organizational values. Therefore, it is not possible to examine all critical factors that may possibly affect organizational commitment.
Finally, this study is focusing on a single organization and in Sweden, not in the other Baltic countries (Estonia, Lithuania and Latvia).
16
4. EMPIRICAL FINDINGS 4.1 Swedbank in brief
Swedbank can be divided into Retail, Large Corporates and Institutions and Baltic Banking.
In retail banking, Sweden is the largest market where the bank serves customers through 340 branches and teller services through a number of stores. The Internet and Telephone bank are other servicing channels where over 20 million visits a month. Large corporations and institutions are defined as those with annual sales over SEK 2 bn or with more complex needs.
This business area has a strong position in equities, fixed income and is a major provider of currencies. Baltic Banking includes Estonia, Latvia and Lithuania where offerings occur through an extensive retail network.
Swedbank implemented a new business model in 2010, thus with a clearer focus on services.
The intention of this model is to have decision-making authority close to transactions, namely, decentralization with clear descriptions and delegations. The organizational values have been an important aspect of this strategic work. Swedbank launched and presented three new values during 2010; open, simple and caring. These values were initiated by the employees who shared opinions and ideas through internal surveys which ended up as the platform for the bank’s values, purpose and vision. The implementation began during the fall of 2010 with the help of ambassadors throughout the organization. (Swedbank annual report 2010, p.46).
4.2 Education
The initial start with the work of organizational value-workshops occurred in October 2010.
The first workshops occurred in November 2010 and were finished in February 2011 for all the branches in the four counties (Uppsala, Gävleborg, Västmanland and Dalarna). The overall responsibility of the introduction and implementation of workshops was delegated from a central level to a regional level, more specifically to the Head of Central region and also to head of Market and communication in the Central region. The selection of ambassadors occurred by the branch managers, a decision made by the two key persons mentioned above, but with one exception. The branch manager could not name him/herself to be an ambassador due to the need of attending the workshop. The branch manager chose possible candidates by asking assistant branch managers and other employees of volunteers.
They also had the possibility to nominate candidates that emanated great leadership potential, or select candidates that had incorporated the organizational values in an inspiring way.
(Elisabeth Mereborg, 2011-05-15).
17 The structure and content of the workshops were not differentiated for different organizational functions or for employees with different employment time. The central idea was to have the same structure, no matter which employee who attended the workshop. However, despite this initial thought, there is a difference in the way the regional management team works and how the branch managers and assistant branch managers work. The latter two works directly towards customers, while the regional management team works towards the branch managers and assistant branch managers, who are their “customers”. (Elisabeth Mereborg, 2011-05-15).
Workshops have been conducted once and the ambassador had the mission to do a follow-up of the workshops. It is crucial to clarify that the branch manager owns the question of taking the work of organizational values one step further. After the workshops, the branch manager was approached to compose an action plan for the future state of the values. The ambassadors report to the head of the central region and the head of marketing and communication- whether or not the action plans are realized. If the case is that they are not realized, a discussion of improvement will take place. The ambassadors have the function of assisting and helping the branch managers with their action plans. (Elisabeth Mereborg, 2011-05-15).
At the level of regional management team, an education with a focus on reflection s is put on place. The organizational values in separate events are discussed in large groups – a way to learn how to live the values. Before an employee starts at Swedbank, a clear picture of the organizational culture and its values is are presented in an introduction course. It is important that the person who is to be recruited has the right expectations while entering Swedbank. An important part of the recruitment is to talk about the values and to know how the employee views them. This occurs together with other managers and highly competent personnel. By doing this, an insight will be gained of whether or not a match is present.
The branch manager of Uppsala, Annika Hellström, mentions that different branches has conducted and participated in workshops with a focus on how employees act internally and how customers perceives the organization. While dealing with education, introduction courses are not the only learning tool. With monthly dialogues together with the employees, job performance is analyzed and most importantly quality in different aspects. What are central in the discussion are attitudes and how employees live and incorporate values - all employees must have the same idea about the values.
18 Annika also stresses the importance of open communication - open communication helps us to gain insights of what is important, we talk a lot about what is important for us and reflect why it is important. Reflection is a cornerstone in the dialogue and we discuss what we could have done differently. We discuss the customer meeting and different working tools that are being used in the meeting with the customer. If you understand why something is important, you will most certainly gain an insight, something that we work a lot with. If the expectations of work and living the values are not mutual, an action plan is set up. Furthermore, the organizational values are included in the business plans and if the values are not aligned with the activities, the activities are excluded. One goal is that employees have to act in accordance with the organizational values.
As an assistant branch manager, Ingela Bergh mentions that a workshop was conducted with an ambassador. Another event, with some reminding characteristics of a workshop occurred when the project of “Smart cash handling” started. The communication manager, Peter Borsos who works at a group level incorporated the organizational values to the project. This regarded the three organizational values, open, simple and caring.
The current situation can be described as stable for the regional management team, some branch- and assistant branch managers. The next step for the branch managers is to involve the local board of the branch in the work with organizational values. Nevertheless, the situation can be described as passive for others, because branch managers and assistant branch managers have understood the organizational values, but the difficulty lies in involving the values in the daily work.
4.2 Employment time
Magnus Bigenius, the HR manager of the Central region (part of the regional management team) stresses the importance of dealing with newly recruited employees. On the contrary, those who have worked in the organization for a longer time cannot expose more commitment to the values, due to the short time they have been put on place but employees can relate to them in their daily work and also to their individual values. Values are not something that is being implemented for a certain amount of time, it is something you have and share with others in the organization, says Magnus.
Regarding newly recruited employees, particularly those who have been recruited externally and have not worked in the organization, do introduction courses, meets employees and
19 managers in order to sense and learn the organizational values and the organizational culture, says Annika Hellström. Two employees are handpicked and are responsible for recruiting young people. Their mission is to explain and demonstrate what is crucial in work to the newly recruited people. Since the organizational values are so new in their character, a difference in commitment to the values between employees with different employment time is not vivid. Those who have incorporated the values to a large extent are not very similar in person, they are pretty much different. But one common feature is that they do this in a personal way, with a strong interest of the personal meeting and giving the customer a good experience with the bank. Additionally, they like to do that little extra. As individuals they are different, but they all are caring, which is their common feature, says Annika.
Ingela Bergh, an assistant branch manager mentions that the branches in the city of Gävle are currently not recruiting employees, since some branches are about to be closed. The employee’s who has a longer employment time in Swedbank has understood the essential part in the new values – that it is about relations. This is exemplified in the employees behavior when they ask the customer about his or her needs rather than focusing on numerical goals, due to the value caring. However, since the values are new, no one has clearly showed a lack of commitment towards them.
Ingela also makes a comparison between the new and old organizational values. The three new organizational values are different in comparison to the old ones – which were more than three values. Previously, employees did mix them. Today, with the new values, even employees with a longer employment time can connect to them, because they are more personal and connected to the daily work. Younger, employees with a shorter employment time has shown to be more personally engaged to the values. This is the biggest difference between employees with longer and shorter employment time. However, a common feature with these two groups is that everyone has an interest of the values.
4.3 Organizational function
Magnus Bigenius mentions leaders as crucial people of living and talking about values. By living and talking values, they can be related to every day events and discussion is put on place. Reflection of the event and if the taken action were in accordance with the values are the goals that should be strived for. Different employee surveys and indexes are used as measurement and increased motivation and participation are the topic of group discussions. In the performance development dialogues values are discussed where an evaluation of the past
20 and plan for the future is created – this in order to know how the individual should develop in his or her work.
Balancing hard and soft goals are necessary for the organization, since the stakeholders expect delivery, says Annika Hellström the branch manager of Uppsala. Therefore, the organization has to operate in a way that is cost efficient but at the same time be able to generate profit. As a leader, Annika believes in the sense of belongingness and it is important for the employees.
Despite organizational rank, people can do a good job on their own, but the bank is a common unit for us. It is important that I do what is expected of me but also that I can dare to make the right changes in order to enhance the work of the different units/branches, says Annika.
Ingela Bergh, an assistant branch manager mentions that other goals, in terms of financial targets and key performance indicators do not disturb the balance of living the organizational values. What is crucial is to find a clear connection to sales and the values otherwise, employees will not understand the meaning of their work and the value of their daily work.
This is in line with one of our values – caring, a value we have to incorporate more into the daily work. As a leader of her employees, Ingela emphasizes being present and delegating responsibility. By delegation to a large extent, especially to younger and new employees an increased motivation and commitment will occur.
21
5. ANALYSIS
The empirical evidence that has been presented above indicates that the different organizational functions have somewhat similar features. The biggest differences are vivid in the first and third factor, education and organizational commitment. The table below demonstrates a brief summary of the empirical findings.
Variable Reg.man.team Branch managers Ass. Branch man.
Education Workshops.
Reflection in groups.
Introduction courses to newly recruited
Workshop.
Introduction courses.
Monthly dialogues.
Discussion.
Workshop.
Discussion.
Employment time
No vivid difference.
Currently no recruiting.
Employees with a longer employment time: about relations.
Shorter employment time: more personally engaged.
Org.
function
Leaders are crucial.
Employee surveys and indexes.
Performance development discussion.
Leaders are crucial.
Importance of balancing hard and soft goals for the stakeholders.
Important to find a clear connection to sales and the values.
Delegation responsibility.
5.1 Education – learning in other forms is essential
The information above shows that the different organizational functions have a similar strategy regarding education. The big difference is the time span between the different discussions/ dialogues. The branch manager has more frequent dialogues, which are monthly, with her employees. Additionally, if the understanding of the values is not mutual, an action plan is set up. This is in line with Prokesch (2009) argument, that programs that are not academic, rather more practical to their nature will be easier for employees to understand and also to make drafts of action plans of how everyone should deliver according to the plan.
22 The empirical findings indicate that by focusing on different types of education, branch manager’s employees of the regional management team are the ones who manage education to a larger extent than assistant branch managers because they use several education types.
One explanation for this is that the subordinates of branch managers meet the external customers in their daily work and therefore, the customer perceptions of the organization and how employees meet them is of importance. The organizational values have to be mirrored in the meetings and the customer experience should be distinguished by the values. With the same idea of the workshops and the introduction courses, that every employee should know and understand the values in their daily work, one can question whether or not the education should be more customized towards different organizational levels and functions due to the customers that the employees work to meaning that each organizational function has different goals, different challenges in work. Yet in practice, one can see that the regional management team and branch manager focus more on education, but it is difficult to see if this has resulted in greater commitment towards the organizational values.
The empirical data stresses the importance of discussion and getting to know the organizational culture. The organizational values of Swedbank open, simple and caring are characterized as objective with moral beliefs. Since they are not explicitly defined, and are more generally stated there is room for interpretation and education is argued to be the solution for this issue (Chatterjee & Pearson, 2000; Lencioni, 2002) because it can create a better understanding of the values among employees.
There is no ready recipe for success; this regards the theoretical part as well. Relatively few studies have examined what organizations can do to enhance commitment. What these few studies have suggested is that newly recruited employees can be taught more about the organization’s values and how work is conducted (socialization). It is crucial to make a division of the content of socialization, namely what is taught and how it is taught to newly recruited employees (Caldwell & Chatman, 1990). However, this only occurs when the right match has been made during the recruitment and when the newly recruited employee has the right expectations, which was stated at the level of regional management team. However, at the branch manager level, another step has been taken - quality in different aspect is highly important, where monthly dialogues are being used as an analysis of the work and how the employee lives the organizational values.
23
5.2 Employment time
When it comes to employment time, a common finding is that no employee has displayed lack of commitment. Due to the short time that the values have been present (one year), all the three respondents agreed that it is hard to separate committed and not committed employees at this stage. This finding is not confirming Ferguson & Milliman’s (2008) statement. They argue that lack of commitment occurs due to a time aspect. Changes that transpire too quickly often create a disorder among individuals. Other obstacles such as resistance to change status quo, daily pressure of different tasks and financial success can possibly make values look less important and turn them to a question that is not prioritized, thus not enhancing the development of a value-based strategy. The authors also argue that lack of commitment can stem from a failure of communication about the values, where a lack of insights and a misunderstanding of the values is an explanation for such an outcome. But in practice, as in the case with the workshop and discussions, it seems like employees at the different levels are motivated and have translated the values in their daily work, otherwise the empirical findings would have been somewhat different. The assistant branch manager, Ingela Bergh states that younger employees and employees with a shorter employment time are more personally engaged to the organizational values. It is not certain that all young employees are more committed to the organizational values, but one explanation for their personal commitment is that younger employees are in most cases motivated to start a new career and have a willingness to manage changes (Hill, 2007; p. 389).
Another interesting finding in this factor is the characteristics of the employees who have incorporated the values. Two of the managers do not separate employees with a short or long employment time. What these employees, who are committed, have in common is that they have incorporated the values in a personal way. Annika Hellström, the branch manager of Uppsala, exemplifies this with the organizational value, caring. In the meeting with the customers, Annika’s employees have related the value to their work, where they put the customers first. The manager who distinguished a difference regarding employment time was the assistant branch manager, Ingela Bergh. She stated that employees with a longer employment time have understood that the values are related to relations. More specifically, the essence of the values stems from relations with the customer, and not putting financial goals first.
24
5.3 Organizational function
Anderson (1997) argues that efficiency and consensus can be reached through discussions.
This by discussing how to break hard barriers (resources, organizational structure and also capabilities) and soft barriers (how individuals spend their time in the organization). At a branch manager level, this is relevant through another perspective – the stakeholders.
Balancing hard and soft goals is crucial since the stakeholders expect delivery, says Annika Hellström. At the assistant branch manager level, Ingela Bergh mentions that finding a clear connection between the values and sales is crucial; otherwise employees will not understand the meaning of their daily work. As soon as the organizational values are related to the different goals, it will be difficult to change them, which is in line with Anderson’s (1997) argument.
Khandelwal & Mohendra (2010) mean that leaders can emphasize organizational values with a sustained personal commitment, more precisely by actions and words. Ingela emphasizes her role as a leader; by being present and delegating responsibility to employees are two crucial aspects in leadership that enhances commitment through action as well as words.
Delegation enhances younger and newly recruited employee’s commitment to work but also to the organizational values. These actions illustrate the importance of leaders.
25
6. CONCLUSIONS
This thesis attempts to examine commitment to organizational values at Swedbank - the Central region by a longitudinal study with three managers at three different levels. With a broader perspective, the theoretical framework consists of factors that are related to the individual as well as to an organization. These factors were investigated with the purpose to see if they affected commitment to the organizational values. In order to narrow down the thesis, three specific factors were chosen that will come under the realm of the discussion;
education, employment time and organizational function.
This study reveals two factors as being incorporated in the manager’s work with committing their employees to the values; education and organizational function. Education plays a crucial role since the manager’s uses similar approaches to some extent but also other methods. The regional management team stands out due to the group reflections. The branch manager is also using a somewhat more unique approach, monthly dialogues. Since the three organizational values; open, simple and caring are not explicitly defined, and are more generally stated there is room for interpretation and education is argued to be the solution for this issue (Chatterjee & Pearson, 2000; Lencioni, 2002) The importance of organizational function is highlighted in different aspects. For the assistant branch manager, delegation and finding a clear connection to the daily work – sales was important, otherwise the employees would not understand the purpose and value of their work. The branch manager emphasized balancing hard and soft goals in order to live up and deliver good results to the stakeholders.
Also, the importance of being a leader was highlighted where delegation of responsibility to younger and newly recruited employees was one approach to motivate and enhance commitment among employees.
Regarding employment time, the three interviews were united in this question. No employee has yet displayed a lack of commitment. However, those who have incorporated the values in a good way have done this in a personal way. This finding goes against the theory, which states that lack of commitment occurs due to a time aspect. Furthermore, they also state that changes that transpire too quickly often create a disorder among individuals (Ferguson &
Milliman, 2008). Another interesting finding in this factor is that the two of the interviewees did not separate employees with a short or long employment time. What the employees who have incorporated the values in a good way have in common, is that they have incorporated the values in a personal way – by understanding that it is about relationships and putting the customers first. But the interviewee who mentioned a difference was Ingela Bergh. She stated
26 that employees with a longer employment time have understood that the values are related to relations. More specifically, the essence of the values stems from relations with the customer, and not putting financial goals first.
6.1 FUTURE STUDIES
The ambition with this study was to provide an increased understanding of organizational commitment examining three different factors (education, employment time and organizational function). The results can provide managers some insights to what the actual situation looks like regarding managing employee’s commitment and working with enhancing commitment to organizational values. It can also function as a tool to enhance commitment to organizational values at another organizational function, namely assistant branch managers.
Having employees who are not committed is costly for such an organization and with the right type of education and support this situation can be eliminated. The next step in the development is to find out if gender, age and specific competencies affect the employees’
commitment.
The study is limited to examine commitment in only one region. If another region was chosen, other factors could have been included such as management practices and geographical business- related factors. This is of interest not solely due to the amount of regions, but to the different geographical conditions (markets) and also due to the regional management team’s empowered role of leading the different organizational functions. Put differently, the organizational structure of decentralization would be of interest, something that is worth investigating further in future.
27
REFERENCES
Abbott, G. N, White, F. A, Charles, M.A, (2005), Linking values and organizational commitment: A correlational and experimental investigation in two organizations, Journal of Occupational & Organizational Psychology, Vol. 78 Issue 4, p531-551
Anderson, C (1997). “Values-Based Management, Academy of Management Executive, 11, 4, 1997, pp.25-46.
Argandoña, A. (2003).” Fostering Values in Organizations”. Journal of Business Ethics, Part 2, Vol. 45 Issue 1/2, p15-28
Bar-Hayim, Aviad; Berman, Gerald S. (1992). “The dimensions of organizational commitment.” Journal of Organizational Behavior, Vol. 13 Issue 4, p379-387.
Brooke Jr., Paul P.; Russell, Daniel W.; Price, James L. (1988). “Discriminant Validation of Measures of Job Satisfaction, Job Involvement, and Organizational Commitment”, Journal of Applied Psychology, May88, Vol. 73 Issue 2, p139-145,
Buchholtz, A. K, Ribbens, B. A., Houle, I. T. (2003). “The Role of Human Capital in Post acquisition CEO Departure” Academy of Management Journal, 46(4), 506-514.
Caldwell, David F., Chatman, Jennifer A., O'Reilly, Charles A. (1990). “Building organizational commitment: A multifirm study”. Journal of Occupational Psychology, Sep90, Vol. 63 Issue 3, p245-261
Cannella, A. A Jr., Hambrick, D (1993). “Effects of Executive Departure on Performance of Acquired Firms,” Strategic Management Journal, 14(Special Issue), 137-152.
Chatterjee, S. R., Pearson, C. A. L (2000), “Indian Managers in Transition: Orientations, Work Goals, Values and Ethics.” Management International Review, 40, 81–95.
Connor. P. E., Becker. B. W. (1975). Values and the organization: Suggestions for research.
Academy of Management Journal. 18: 550-561
Fenton, N. E., Inglis, S (2007). Nonprofit Management & Leadership, Vol. 17 Issue 3, p335- 347
28 Ferguson, J., Milliman, J. (2008),” Creating Effective Core Organizational Values: A Spiritual Leadership Approach”. International Journal of Public Administration, Vol. 31 Issue 4, p. 439-459
Glisson, Charles; Durick, Mark. (1988). “Predictors of Job Satisfaction and Organizational Commitment in Human Service Organizations”. Administrative Science Quarterly, Mar1988, Vol. 33 Issue 1, p61-81
Hackett, Rick D.; Bycio, Peter; Hausdorf, Peter A. (1994). “Further Assessments of Meyer and Allen's (1991) Three-Component Model of Organizational Commitment”. Journal of Applied Psychology, Feb94, Vol. 79 Issue 1, p15-23
Hill, C. W. L., (2007) “International Business: Competing in the Global Marketplace”
6th.edition Boston: McGraw-Hill/Irwin
Johnson, R.E., Chang, C-H., Yang, L-Q (2010). “Commitment and motivation at work: the relevance of employee identity and regulatory focus” Academy of Management Review, Apr2010, Vol. 35 Issue 2, p226-245
Judge, T., Bretz, R (1992). “Effects of Work Values on Job Choice Decisions.” Journal of Applied Psychology, 77, 261–271.
Kabanoff, B., Waldersee, R., Cohen, M. (1995). “Espoused Values and Organizational Change Themes, Academy of Management Journal, 38, 4, pp. 1075-1104.
Khandelwal, K. A., Mohendra, N (2010) “Espoused Organizational Values, Vision, and Corporate Social Responsibility: Does it Matter to Organizational Members?”, The Journal for Decision Makers, Vol. 35 Issue 3, p. 19-35
Lencioni, P. M. (2002),” Make Your Values Mean Something” Harvard Business Review, Vol. 80 Issue 7, p113-117.
Martin, J. Organizational Culture: Mapping the Terrain. Thousand Oaks, Calif.: Sage, 2002
29 Mayer, R. C., Schoorman, F. D (1992). “Predicting participation and production outcomes through a two dimensional model of organizational commitment”. Academy of Management Journal, Vol 35, Issue 3, p. 671-684.
Mayfield, J., Mayfield, M (2002). “Leader Communication Strategies Critical Paths to Improving Employee Commitment”, American Business Review, Vol. 20 Issue 2
Meglino, B. M., Ravlin, E. C, (1998) “Individual Values in Organizations: Concepts, Controversies, and Research.” Journal of Management, 24, 351–389.
Merriam, S (1994). “Fallstudien som forskningsmetod”. Studentlitteratur: Lund.
Morris, James H.; Sherman, J. Daniel.(1981). “Generalizability of an Organizational
Commitment Model”. Academy of Management Journal, Sep81, Vol. 24 Issue 3, p512-526.
Mottaz, Clifford J. (1988). “Determinants of Organizational Commitment, Human Relations, Jun88, Vol. 41 Issue 6, p467-482.
Prokesch, S. (2009). “How GE Teaches Teams to Lead Change”. Harvard Business Review, Vol. 87 Issue 1, p99-106
Ravlin, E.C., Meglino, B.M. (1989). The transitivity of work values: Hierarchical preference ordering of socially desirable stimuli. Organizational Behavior and Human Decision Processes, 44, 494-508.
Saunders, M. P, Lewis, Tomhill, A. (2007). “Research Methods for Business Students”. 4th ed. England: Pearson Education Limited.
Scott, E. D. (2002). “Organizational moral values”. Business Ethics Quarterly, Vol. 12 Issue 1, p. 33-55.
Wim, J., de Jong, M. J., Beukhof, G. (1998). ”Employee commitment in changing organizations: An exploration”, Journal of European Industrial Training, 1998, Vol. 22 Issue 6/7.
30 Electronic sources
Codex: (2011-05-10) http://www.codex.vr.se/manniska2.shtml Swedbank: (2011-05-01) http://www.swedbank.se
31
APPENDIX 1
Interview questions (Elisabeth Mereborg)
1. När började den mellersta regionen med workshops?
2. Hur/vem valde ambassadörerna?
3. Var workshop upplägget olika för regionledning, kontorschefer och biträdande kontorschefer?
4. Genomfördes en uppföljning efter workshopen och vem rapporterade ambassadören till?
5. Vilka åtgärder har vidtagits i de fall då workshopen inte bidrog till en bra diskussion eller förståelse för de nya värderingarna?
6. Vad är nästa steg i arbetet med värderingarna?
32
APPENDIX 2
Interviews with the three managers
General questions
Can you give me an overview of your working position?
How do you perceive commitment among your employees?
How do you incorporate/live the following values: Open, simple and caring?
Education
Decentralization, how does this affect your work?
How do you work with education? Is it only workshops? Learning by doing?
Employment time
How do you deal with newly recruited employees?
How do you deal with employees who have a lack of commitment?
Those who have incorporated the organizational values, how do they work?
Organizational function
Does other goals that is set up disturb or complicate the way you live the values (for example financial goals)?
How can you as a leader of your employees enhance the commitment towards the organizational values?
Is sense of belongingness important?
Other
What is the next step in the work with the values?
