Organizational Culture Management as an Element of Innovative and Sustainable Development of Enterprises

Abstract

The paper is aimed at determining the relationship between personal and organizational values in an innovative company, and the compliance of the basic elements of the organizational culture of an enterprise to the requirements of its innovative development. The main goal of the study is to determine how to improve personnel activity by changing the organizational culture. To achieve the goal of this study, a survey of employees of an innovative Russian company is conducted in order to determine the compliance of the organizational culture as a whole, as well as its main elements (personal and organizational values), to modern business conditions. The main research methods employed are a questionnaire survey, bibliographic analysis, and content analysis. Barrett’s Cultural Values Assessment methodology is selected and adapted to the conditions of active innovative organizations and enterprises in Russia. Based on the application of Barrett’s Cultural Values Assessment methodology, adapted to the specifics of the given company, an assessment of the existing organizational culture is obtained, inconsistencies between the current and desired organizational culture are identified, and recommendations for changing the organizational culture of the company are formulated. It is concluded that organizational culture is an active resource when managing sustainable development, and is part of organizational innovation. A well-grounded and adequate choice of directions and methods for organizational changes is an important factor in achieving business sustainability. The results of the analysis imply the necessity of changing the existing organizational culture of the given company.

1. Introduction

The innovation activity of enterprises, when their sustainable development is maintained, involves not only the release of new products or services, but also constant changes within the organization. This has become an important requirement in the sustainable functioning of enterprises in the context of digitization and Industry 4.0 (I4.0). The digital transformation, known as Industry 4.0, has introduced new streams of data to enterprises [1] that must be incorporated into the management system and methods. At the same time, Industry 4.0 is a part of a larger megatrend of digital transformation affecting several industries [2].

Managers, directors, and leaders of companies recognize the increasing importance of organizational culture (OC) to the key indicators of their activities (profitability, competitiveness, innovation, business sustainability, etc.). It was revealed that 78% of Fortune 1000 CEOs and CFOs see organizational culture as one of the main factors affecting their value [3]. Barrett cites a report from Ernst and Young, which states that 55% of Financial Times Stock Exchange Index (FTSE) 350 companies saw a 10% increase in operating profit due to investments in organizational culture, and 92% of the board members of these companies believe that paying attention to organizational culture improves their financial performance [4]. According to Deloitte, organizational culture was one of the most important business topics of 2016, and 82% of Deloitte respondents said that organizational culture is a potential source of competitive advantages [5]. According to PwC, 84% of executives believe that organizational culture is critical to the success of a company, while 60% say that culture is more important than the strategy or the operating model [4].

The practical tools for managing organizational culture are under active development, and include the assessment of the basic values of employees and their impacts on the productivity of the firm. However, “the link between cultural context and values on one hand, and various aspects of employees’ behavior and actions on the other hand, is frequently examined in the literature, whereas the emphasis is often on the samples from well-developed western economies. Fewer studies have examined this link with an explicit focus on former transitions or catching up in Central and East European countries and other transformational societies, such as societies from Asia and Latin America. The study of cultural context is often based on Hofstede’s cultural dimensions and values based on Schwartz value survey, where values are most frequently considered as single personal values on a personal level. There is also a significant lack of studies addressing the role of values and culture in various types of organizations, such as non-profit organizations” [6] (p. xvii).

On the other hand, interest in organizational culture has sharply increased in the related areas of scientific research, and in the humanities and socio-economic disciplines (economics, economic theory, management, innovation, sociology). However, here, too, the issues of the organizational culture’s influence on the main indicators and types of activities of companies are developed within the framework of narrow scientific theories and approaches. At the same time, in recent years, there has been a sharp increase in the need to deepen and expand theoretical and empirical research on the management of the organizational culture of companies, especially for high-tech and innovative companies. This need was formed as a result of a sharp increase in the influence of, and essential changes within, the influence factors of the external environment on the implementation of the main business processes of companies. This has introduced concerns related to ensuring their innovation activity (as the main competitive advantage) and the stability of the business as a whole.

Thus, the importance of organizational culture is increasing in the context of globalization, digitization, and digitalization in all processes, as well as the expansion of contacts and the growth of remote information exchange. New approaches to the organization of work (especially in the management of innovative activities) have a strong impact on the mentality of employees, changing their attitudes to the values of working in a team, and affecting their perceptions and assessments of innovations’ importance for the enterprise. This is reflected in the change in approaches to managing organizational culture, and the renewed awareness of the need for transformation and the expansion of its use as a tool for broader organizational change. The problem of managing personal and organizational values is one of the most serious in the context of managing organizational culture in innovative companies.

Currently, researchers are studying the influence of the organizational culture on the main elements of enterprise management, in the context of Industry 4.0 and the digitalization of production. Additionally, new, more effective methods and tools are needed to reliably assess the impact of organizational culture on the sustainable and innovative development of companies, especially high-tech industries and sectors of the economy facing increasing risks and uncertainty in their activities [7,8]. In general, the problem of resistance to innovation becomes more acute as the mutual influence of organizational culture and the implementation of innovations in high-tech and IT companies increases [9].

Although many studies question the importance and value of organizational culture to the successful operation of companies, only a few have studied how organizational values affect the organizational culture itself. There are practically no works showing how organizational culture is influenced by the personal values of the company’s employees.

This article is devoted to assessing the existing organizational culture of an innovative company, establishing a link between personal and organizational values as part of the organizational culture, and identifying areas requiring transformation. To achieve the purpose of this study, a number of conceptual, methodological, and practical tasks were carried out, as reflected in the construction of the article.

The specific research question underlying the paper regards the assessment of the current state of the organizational culture of a company, and the compliance with this current state of such key elements as the ratio of personal and organizational values, the identification of cultural empathy, and the possible transformations of the organizational culture of the company in order to improve it.

Thus, the general formulation and solution of the research question can be presented as shown in Figure 1.

The algorithm of the formulation and solution of the research question presented in Figure 1 has been implemented throughout the research, as reflected in the logic of the research and the construction of the article.

The subsequent sections of the article are devoted to solving the following research problems. Section 2 provides a brief overview of the main directions and approaches employed to study the role of companies’ organizational culture in achieving key performance indicators and protecting their business processes (Section 2.1), as well as a review of the empirical estimation methods (Section 2.2.) and a list of basic terms and concepts used in our study (Section 2.3). Section 3 contains a detailed description of the procedure employed for adapting Barret’s basic Cultural Values Assessment (CVA) to our study, as well as the materials and data used in the study. Section 4 presents the main results of the study, and conclusions regarding the current state of the organizational culture at the companies in question. Section 5 presents the main conclusions and offers recommendations related to developing a program for changing the organizational culture to adapt it to the requirements of innovative development. The main results of the study are summarized, its limitations are indicated, and the tasks and directions suggested for future research on this topic are determined.

The result of the study is an assessment of how personal and organizational values correspond to the desired state of the company’s organizational culture, and the possibilities of its improvement.

To achieve the goal of the study and solve the research question, a number of conceptual, methodological, and practical tasks were completed.

2. Methodological Background

2.1. Literature Review

Here, we carry out a study of a wide range of scientific literature comprehensively addressing the place and role of organizational culture in the innovative development of companies, in achieving good financial results, and in the sustainability of companies’ functioning. This process has indicated the wide variety of approaches under different scientific theories and schools. At the same time, the analysis has shown that a number of approaches and definitions developed in the social, humanitarian, and economic sciences ostensibly do not coincide, and rather contradict each other. This makes it difficult to develop interdisciplinary approaches when analyzing such complex issues.

Here, we provide a review of the scientific research directly related to our topic.

An active study of the influence of organizational culture on the organization’s success, performance, identity, and reputation began in the 1980s [10,11,12,13]. In the 21st century, these studies were transformed into studies of the impact of organizational culture on effective organizational performance and business performance (resilience in business) [14,15,16,17,18,19,20,21,22]. To date, studies regarding the relationship between organizational culture and resilience in business have been carried out as part of the analysis of two independent elements of companies: “organizational reliability” and “employee strengths” [23]. It should be noted that both of these elements are traditional objects of research related to organizational theories.

A deeper analysis of the research questions related to “employee strengths” has shown the predominance of the following research areas:

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The presence of a relationship between the positive psychological climate within the team and its performance and satisfaction [24,25].

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The necessity of positive organizational behavior when performing various operations [26,27,28].

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The importance of positive organizational behavior to organizational change [29].

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General issues related to assessing the psychological aspects of organizational behavior [30,31].

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Educational, informational, and other tools related to the formation of positive psychological capital in companies [32,33].

These studies show relations (borderline) between the areas of psychology, industrial sociology, personnel management, theories of behavior, and the institutional theories of organizations. All of them are concerned with ensuring resilience in business. However, it should be noted that in recent years, there has been a transition from the concept of resilience in business to the concept of sustainable business, which considers three key dimensions: financial, social, and ecological [34]. These studies reveal the direct relationship between organizational culture and sustainable business [34,35,36,37]. In addition, they emphasize the social components of work collectives and organizational behavior, and address the mechanisms and tools for achieving higher productive and social responsibility.

Scientific works analyzing the role of the organizational culture in enhancing the innovation activity of companies in general, and the innovation activity of employees (personnel) in particular, have appeared as part of an independent area of research [38,39,40,41,42].

Various studies have shown that ensuring high corporate sustainability and vigorous innovation is impossible without adapting social dynamics [43,44,45], revising communication strategies and networking within organizations [46,47], and adapting value systems and knowledge [48,49,50,51]. At the same time, researchers have substantiated the positive impact of organizational culture, which stimulates innovation activity, on the company’s higher productivity [52].

Over the past few decades, corporate sustainability researchers have made significant contributions to the implementation of more sustainable business practices by taking into account the impact of organizational culture [53,54]. Research has been conducted on the impact of organizational learning culture, staff diversity, and knowledge management on innovation and organizational performance [55,56,57,58,59,60].

Some new studies have arisen devoted to the analysis of the influence of national characteristics of organizational culture on the implementation of innovations [61,62,63]. Research is also being conducted on the impact of organizational culture on the use and development of information technologies, the speed of their implementation, and the presence of resistance to innovation, informatization, and digitalization [64,65,66].

The assessment of the dependence of the success of organizational changes on organizational culture is an important direction of research related to the influence of organizational culture on success and performance [67,68,69]. Organizational culture has been proven by many authors to be a major obstacle to implementing organizational change initiatives [67,70,71,72]. At the same time, an important factor in the success or failure of organizational change is group and individual values, and their coordination [73,74,75]. Richard Barrett (the Chairman and Founder of Barrett Values Center, which was opened in 1997) found that “the agreement scores correlate significantly with performance ratings” [10] (p. 653).

Organizational culture can support or hinder planned organizational changes [76]. In a large number of cases, this depends on the coincidence or non-coincidence of the individual values of employees with organizational values. When employees see that the proposed changes coincide with their individual values, they start working with greater commitment and enthusiasm [77]. If such agreement is not established, then the implementation of changes will fail [41]. Therefore, both personal and organizational values must be managed in order for the planned changes to be successful.

Ensuring the initiators’ correct understanding of the concept of “value”, and the differences between the concepts of “personal values” and “organizational values”, is a significant difficulty in the establishment of agreement between personal and organizational values.

In line with the general conceptualizations, “value” regards the objects and phenomena surrounding reality that are significant to an individual. Most researchers in humanities, sociology, and psychology use the following definition of “value” taken from value-sensitive design: “what is important to people in their lives, with a focus on ethics and morality” [78]. However, it is more appropriate to use the organizational version of this concept within the framework of organizational theories. In the study of organizational culture, one need not consider the entire possible repertoire of a person’s social roles. In organizational theories, human behavior is studied in connection with an objectively given position within an organization, but behavior in the context of social or personal relations is not considered. Therefore, organizational researchers narrow the definition given by value-sensitive design to “their lives in the organization”, stating that “organizational values” refer to beliefs about socially or personally desirable end states or actions that are explicitly or implicitly shared by members of an organization [79,80].

In addition, it is assumed that managers, who have a greater influence on the decision-making process in a large power body, may have a different set of values (both current and desired) to the collective whole. This can significantly change the direction and nature of organizational change, and should be taken into account when developing an organizational change program. Thus, an important aspect of the success of changes is ensuring the coordination of the personal and organizational values of the members of the organization who are involved in the change process. This process requires appropriate management.

We analyzed the main theories and some of the literature related to the study of organizational culture’s influence on organizational changes within new operating conditions, as well as the influence of organizational culture on the innovative development of companies, and on the sustainability of their functioning. This analysis revealed various scientific approaches and concepts active in the social and humanitarian sciences. As a result of the diversity in the sciences, there are significant differences in understandings of the influence of organizational culture on certain aspects of organizations’ activities. Moreover, we might even infer a dichotomy in the interpretation and assessment of the impact of organizational culture on various aspects of organizations, including organizational change, innovation, and sustainable development.

Figure 2 shows the different understandings of the factors influencing the organizational cultures of companies, and the criteria for assessing their conditions. The differences in the interpretations and approaches are shown via an example of two key areas within which most of the research on organizational culture is carried out: management theories and organization theories.

Understanding and considering these differences in practice is important because, through the terms shown in Figure 1, the management of organizational culture comes to be considered as an element of the innovative and sustainable development of the company.

The main goals and objectives when managing the current and future state of the company are defined through such fundamental properties as “stability” (integrity), “adaptability” (flexibility), and development. The presence of these properties and their correspondence to the current conditions of the company’s functioning is assessed through a number of criteria within the framework of management theories, and a number of organizational elements within the framework of organization theories. Moreover, all these criteria and elements are embodied in the organizational culture. Additionally, Figure 1 shows the relationship between the selected concepts and the related ones from other scientific areas; in particular, the theories of innovation and business sustainability.

As such, the relationships between the following concepts are important for our research. From the point of view of ensuring the sustainability of the company, it must be understood that organizational culture is the basis of organizational structure, and is what ensures its internal resistance to external and internal changes. At the same time, organizational culture is the basis of organizational integrity, ensuring the relationship between different levels of values and, in combination with the organizational structure, the stability of the company. This is expressed by the terms “sustainability”, “efficiency”, and “performance”, related to the mechanisms for managing the sustainability of the company.

Adaptability to changes (flexibility of the organizational structure) is manifested through changes in organizational behavior and organizational values, as well as through the implementation of the organizational changes that are necessary under different conditions of market development and competitive situations. However, when the organizational changes are radical in nature, they necessarily become organizational innovations. Organizational innovation combined with organizational leadership determines company development.

Likewise, organizational values and organizational behavior form organizational leadership, which is also an important factor in development (corresponding to the indicator “reputation” in management terminology) [81].

At the same time, adaptability (flexibility) is, on the one hand, the basis for ensuring sustainability, and on the other hand, the basis for development. Thus, learning and managing the elements of organizational adaptability is essential to the survival and development of companies.

The dependencies and relationships between the elements in Figure 1 show that the key term for our study assessing organizational culture and the innovative development of a company is organizational values, along with the closely related terms of organizational behavior and organizational changes.

The study of the scientific literature has shown that the relationship between innovative success and organizational culture is still underestimated when addressing the mutual influence of the organizational changes, organizational culture, innovation, and sustainable development of enterprises and organizations [82]. Additionally, most literary sources still only partially address the influences of various types of values (both current and desired) on the success of organizational innovations, partially reflecting the interaction of organizational and personal values in the organizational culture of modern enterprises that adhere to Industry 4.0 and are concerned with the successful innovation activities of personnel. As a result, no effective recommendations have been suggested regarding the creation and implementation of methods for managing the organizational culture of companies that meet the requirements of Industry 4.0 in order to stimulate the innovation activity of the enterprise and its personnel.

The main purpose of our research is to determine the compliance of the main elements of the organizational culture of the enterprise with the requirements for its innovative and sustainable development.

2.2. Review of Empirical Assessment Methods

The multiplicity of concepts and approaches for addressing the influence of organizational culture on various aspects of enterprises’ and organizations’ activities has given rise to multiple research methods for assessing the level and condition of the organizational culture, and its impact on the innovative development of enterprises and their corporate sustainability.

Based on an analysis of the literature, many instruments for exploring and assessing organizational culture are available [83]. The most significant and frequently used analysis tools are:

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The Denison Organizational Culture Survey (DOCS).

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The Competing Values Framework (OCAI).

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The Cultural Values Assessment (CVA).

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The Organizational Culture Inventory (OCI).

Denison’s popular consulting tool has been used by more than 5000 organizations. The Denison Organizational Culture Survey (DOCS) addresses four key features of all organizations: (1) Mission, (2) Adaptability, (3) Involvement, and (4) Consistency [84]. Denison and colleagues note that the most effective organizations are characterized by a strong mission and high levels of employee involvement, as well as internal consistency and adaptability [16]. Jennifer Chatman and Charles A. O’Reilly criticized the DOCS, and noted that the four features encompass a too wide and diverse set of elements, representing a mixture of different psychological, sociological, and economic constructs. Furthermore, respondents can easily identify socially desirable answers, and common phrases are used that cannot be interpreted consistently between different organizations and national cultures [85].

The OCAI is a survey of six categories: Dominant Organizational Characteristics, Leadership Style, Management of Employees, Organizational Glue, Strategic Emphasis, and Criteria for Success. The OCAI is based on the Competing Values Framework (CVF), originally created by Robert Quinn and John Rohrbaugh to measure organizational performance [86].

CVF-based research has been carried out in more than 10,000 organizations around the world [85]. The CVF is based on two orthogonal dimensions: (1) flexibility versus control, and (2) internal focus and integration versus external focus and differentiation. These four quadrants give rise to four types of OC: clan, adhocracy, market, and hierarchy. Critics of the CVF theory point out that the culture types in opposite quadrants of the CVF are not actually competing [17], and that competing values are actually complementary and can exist simultaneously [87]. According to Charles A. O’Reilly and Jennifer Chatman, it is unclear whether each of the six categories contains each of the four elements, and whether specific elements fall into each category [85].

The Cultural Values Assessment (CVA) has been used by over 6000 organizations. The CVA examines the “seven levels of consciousness” of an organization, where the hierarchy of the levels of organizational consciousness is harmonized with the levels of personal consciousness. The first level of organizational consciousness regards organizational values that determine the financial condition of the organization. They are the most basic, but not the only, values determining its competitiveness. For the success of the organization, it is necessary to establish fruitful relations with consumers and other interested parties (second level), as well as build an effective structure of processes and systems (third level). The fourth level of transformation and improvement facilitates the adaptation of the organization to the constantly changing circumstances within a dynamic external environment. The sustainability and future prospects of the organization depend on the highest-level values, such as common values of the employees of the organization (at the fifth level), cooperation (at the sixth level), and long-term viability (at the seventh level) [88,89].

The Organizational Culture Inventory (OCI) is based on the 12 “thinking styles” established by John D. Lafferty: humanistic–helpful, affiliative, approval, conventional, dependent, avoidant, oppositional, power, competitive, perfectionistic, and self-actualizing. Robert A. Cooke and Denise M. Rousseau substantiated each of the 12 styles and their arrangement according to three types, or clusters, of organizational culture, defined as Constructive, Passive/Defensive, and Aggressive/Defensive. The OCI concerns human psychology at the individual level, not the level of social systems or organizations. More than two million respondents have participated in the OCI [90]. Critics of the OCI point to difficulties in the unambiguous understanding of the issues, a high probability of socially desirable answers, and confusion in assessing the strengths of norms of behavior. Additionally, many researchers have drawn attention to the inability to prioritize a set of norms, and culture involves the prevalence of some behavioral norms over others [87].

Graves’ ECLET is based on eight value systems, and argues that changes and developments of culture in organizations occur according to a certain hierarchy of levels. Each new level leads to a change in organizational culture in connection with the advent of a new set of values. If the existing system of values is ineffective in overcoming changes in the external environment, then a new system of values arises to cope with them. This leads to the development of a new organizational culture and concomitant changes in behavior. Graves’ ECLET was developed in the context of Spiral Dynamics, established by Don Edward Beck and Christopher Cowan [91]. Graves’ ECLET is similar to Barrett’s CVA, as both Richard Barrett and Clare W. Graves worked on Abraham Maslow’s hierarchy of needs. However, Graves’ ECLET does not offer a practical toolkit that could be used to research and manage organizational culture in a company, in contrast to the developments of Richard Barrett. Barrett’s CVA offers a clear algorithm addressing how to achieve these goals and, therefore, is a more user-friendly management tool than Graves’ ECLET. Barrett’s CVA allows one to:

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Form an idea of the personal consciousness of the organization’s employees, and of the organizational consciousness as the very essence of the organization.

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Distribute values by level of consciousness and identify gaps between individual values and levels.

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Find a balance of values.

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Work with potentially limiting values and cultural entropy.

Barrett’s CVA was used in this study due to its purpose, its formulated hypothesis, and its limitations, as well as the methodological features and the possibilities of applying various methods to the available empirical material.

2.3. Terms and Concepts

In this article, we used the definition of organizational culture (OC) provided by Edgar Schein: “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” [92] (p. 9). We agree that OC is not a static but a dynamic concept, as “culture is a journey, not a destination” [93] (p. 3).

Under our approach, the management of organizational culture is interpreted as a tool for broader organizational change (organizational innovation) and, accordingly, an element of the company’s innovative development. Organizational values are the foundation of organizational culture. We rely on an understanding of the roles of values and the need for their consistency, as discussed earlier in the works of Karsten Mueller, Tammo Straatmann, and Shalom H. Schwartz [79,80]. By “organizational values”, we mean beliefs about socially or personally desirable end states or actions that are explicitly or implicitly shared by members of an organization.

An innovative firm was taken as the object of our research, on the basis of which an analysis of organizational culture was carried out. According to clause 3.78 of the Oslo Manual 2018, “The innovative status of a firm is determined on the basis of its participation in innovation and the implementation of one or more innovations during the observation period of data collection” [94] (p. 80). Following the Oslo Guidelines 2018 methodology, an innovative firm is defined as a firm that, during the observation period, reports one or more innovations (paragraph 3.81. “This applies equally to a firm that is individually or jointly responsible for an innovation” [94] (p. 81)).

With regard to business sustainability, this study used a broader definition, which includes three key dimensions: financial, social, and ecological. Our study focuses on the social component in the form of organizational culture, and organizational and personal values.

3. Materials and Methods

3.1. Research Methods

3.1.1. Organizational Culture Assessment Method

As a method of this study, Barrett’s CVA model was selected and adapted for Russian conditions [10].

The value determination was made with an emphasis on instrumental values, since it is important to use the results of organizational culture diagnostics to determine the direction of managerial decisions and reduce resistance to organizational changes, therefore enhancing innovation in general. Based on the selected values, a strategy and the goals of the units have been formed, and the selection and motivation of employees has been carried out, ensuring the unity and coordination of actions, and the integration of personnel in the innovative development of the enterprise [28].

We adapted a list of templates to be filled out by respondents (employees of the organization) to the peculiarities of the organizational culture of Russian companies:

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Template of personal values (does not include organizational values).

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Template of current organizational values.

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Template of desired organizational values.

A preliminary selection of relevant values was performed to form the templates and create a questionnaire for this study, together with a group of specialists from the employees of the organization. Each template contains 36 values. These 36 values are distributed over 7 levels (6 values from the first to the fourth level, 4 values from the fifth to the seventh levels). The questionnaire that was developed on the basis of these values is provided in Appendix A.

Personal values differ from organizational values. The current and desired organizational values coincide and are related to instrumental values. In the survey, emphasis was placed on instrumental values, since here it was important to use the results of organizational culture diagnostics to determine the direction of managerial influences on the development of organizational culture as a tool for organizational change regarding innovation and sustainable development. Each value could be assigned a specific number from 1 to 10, where the more relevant the selected value is (or the more it is desired), the greater its value. When conducting the survey, it was important to identify the attitudes of respondents to each of the organizational values, in terms of both their real presence in the organization (current values) and their potential achievement in the process of organizational changes (desired values).

The grouped values were divided into seven levels of personal and organizational consciousness, identified in accordance with “The Seven Levels of Consciousness Model” by Richard Barrett [95]. Figure 3 shows the structure and distribution of the value patterns by level of personal and organizational consciousness and by type of value. The color scheme for each level was taken from Barrett’s approach [10] (p. 6).

3.1.2. The Method of Expert Diagnostics of Organizational Culture

Diagnostics of the current state of the company’s organizational culture was carried out by experts, including the authors of this article, as well as leading specialists and company managers who are responsible for innovation and for adapting the company to the requirements of the external environment. During the research period, the group of experts did not change. The experts performed a qualitative assessment of the current state of the company’s organizational culture, and formulated directions for its transformation.

The methodology for examining organizational culture is based on the value templates, and involves obtaining answers to a number of questions, assessing these answers, and interpreting the results. During the survey, the respondents were supposed to answer the following questions:

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What values prevail (most often chosen by respondents) in each of the templates?

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How do personal values correspond to organizational values?

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What level (from 1 to 7) are the prevailing values within each of the templates?

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What share in the total structure of values is occupied by potential values that restrict development and activity?

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What is the level of cultural entropy in the organization (level of uncertainty)?

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How relevant are current organizational values to the desired organizational values?

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What values are marked as current but not desired values?

The answers to these questions and their interpretation provided an exhaustive characterization of organizational culture, enabling us to determine the directions of development and its compliance with the requirements related to strengthening innovation activities of the enterprise. The answers to the above questions were to be provided by the experts processing the results of the questionnaire.

Processing the research results involved analyzing the completed templates, including considering the ratios of respondents’ choices within each of the templates. The research results have specific practical applications and can provide a basis for managerial decisions in the field of organizational culture. The need to obtain practical guidance on organizational culture management explains the formulation of such research questions as, “What proportion are potentially limiting values among the overall value structure?” and “What is the level of cultural entropy of the organization (level of uncertainty)?”

For example, the “Availability of regulations” potentially limits the values “Readiness for change” and “Teamwork”, while the value of “Power distance” potentially limits the values of “Democracy” and “Openness”. An expert assessment of the weights of the current potentially limiting values, their share among all values, as well as the weights of the desired organizational values makes it possible to identify the presence or absence of conflict within the company’s team, and the presence of resistance to innovation. Expert assessment of the weights of potentially limiting values allows one to determine the possibility of developing the desired organizational values and of achieving the desired level of organizational consciousness. It also helps to identify the danger of potentially limiting values blocking the process of organizational culture transformation.

Potentially limiting values hinder the development and consolidation of higher-level values. Barrett introduced the concept of “cultural entropy” to denote organizational energy generated by ineffective work. Barrett writes: “When the degree of dysfunction or disorder in an organization is high, due to factors such as excessive control, caution, confusion, bureaucracy, hierarchy, internal competition, blame, silo mentality, etc., the amount of energy employees have to expend in getting their jobs done increases. This additional energy is called ‘cultural entropy’ because it is caused by factors that are endemic to the culture of the organization” [96] (p. 2).

The study of the influence of cultural entropy on the state of organizational culture and on the development opportunities of companies has been carried out in several recent studies [97,98,99]. At the same time, it has been proven that the higher the entropy, the less flexible the system, and vice versa. Cultural entropy manifests in a gap in the levels of organizational values, and in a mismatch between values. Organizational culture transformation involves the harmonization of personal and current organizational values. The lack of alignment between personal and current organizational values is a bad sign, meaning people are not satisfied with the organization.

3.2. Materials and Data

As empirical data for the assessment, we used the results of surveys of employees of a high-tech Russian company that carries out innovative activities. The survey was conducted from December 2020–January 2021.

In 2020, 70 employees of an industrial design company took part in the survey. This company is an innovation-oriented business, and must constantly respond quickly to both market demands and scientific advances in technology production.

In 2021, an additional survey of 65 employees from 4 independent divisions of the same high-tech production company of the Perm Territory was conducted. All interviewed employees were engaged in innovative activities. The characteristics of the respondents are presented in

Table 1. The characteristics of the respondents.

Characteristics of the Respondents	Number of Respondents
	In 2020	In 2021	Total
Total	70	65	135
Gender of respondents
Male	52	45	97
Female	18	20	38
Working position	70	65	135
Leaders	5	3	8
Specialists, including	23	62	85
constructors	3	50	53
technologists	16	0	16
Pilot production workers	42	0	42
Age, years	70	65	135
20–35	18	7	25
36–45	21	26	47
46–56	17	15	32
over 56	14	17	31
Education	70	65	135
specialized secondary	36	0	36
higher professional	26	51	77
PhD	8	14	22
Average work experience at the enterprise, years	18,8	23,6	21,9
Leaders	17	11	14,7
Specialists	27	23	24
Pilot production workers	19	-	19

Source: compiled by the authors (2022).

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The experts conducted a preliminary discussion of the content of the values indicated in the questionnaire with all respondents before conducting the survey. Such preliminary discussion is very important for achieving a consistent understanding among all respondents of the specific values, and to avoiding the occurrence of different understandings in employees and top managers of the values and their roles in the organizational culture. In recent studies, it was revealed that a group of managers with a significantly greater influence on the decision-making process (with a high level of power distance) may hold a set of values (both current and desired) that are different from those of the collective [100]. In addition, different understandings of values can significantly change the assessment of the current state of the organizational culture of the company. This will change the direction and content of organizational change.

All respondents answered the questionnaire compiled on the basis of Barrett’s CVA model, which is presented in Appendix A. The respondents provided their own assessments of the personal and organizational values on a 10-point scale. A total of 108 value estimates were obtained from each respondent (36 values for 3 templates).

Further, an expert assessment of the answers was carried out on the basis of the methodology presented in Section 3.1.2. The main results of the study are reflected in the next section of the paper. The questionnaires were processed manually, the estimates for each value were summed up and divided by the number of respondents, and the average value for each value and level was obtained.

The answers to the analytical questions posed in Section 3.1.2 were obtained during the expert processing of the questionnaires. The assessment was carried out on the basis of the distribution of values over seven levels. This was necessary to determine the current state of the corporate culture of the company, and to identify obstacles to its development. The survey made it possible to identify the key areas of organizational innovation in which staff support can be expected, as well as those elements against which resistance can be expected.

At the stage of developing the questionnaire and adapting the research method, a preliminary interview was held with enterprise managers. In recent foreign studies, differences in the influence of top managers on the opening up of organizational culture to innovation have been noted [72]. The presence and direction of such influence were tested and taken into account in this study. Here, it was revealed that a group of managers who have a significantly greater influence on the decision-making process, with a large power distance, may have a different set of values (both current and desired) from the collective. This significantly changes the direction and content of organizational change. To eliminate this deficiency, during the study, a group of respondents conducted a preliminary discussion of the content of the values indicated in the questionnaire.

The survey has made it possible to identify the key areas of organizational innovation for which staff support can be expected, as well as those elements against which resistance can be expected.

4. Results

As was mentioned above, the contents of the template of current organizational values and desired organizational values are the same. This enables a clear view of how much the current state of the organizational culture corresponds to the desirable state.

The score of each selected value allows us to analyze what levels of values prevail in the enterprise, and toward what levels of values the employees of the enterprise strive. The results of the organizational culture study using Barrett’s CVA are presented in

Table 2. This is a table. Tables should be placed in the main text near to the first time they are cited.

Personal Values Template	Rating	Organizational Values Template	Rating
			Current Values	Desired Values
1 Survival
Adaptability	5.1	Adaptability	3.0	7.9
Responsibility	7.0	Responsibility	7.9	5.9
Energy	6.8	Diligence	6.9	4.3
Recreation	7.1	Work intensity	4.1	1.6
Thoroughness	7.2	Savings	7.6	3.1
Reliability	7.1	Predictability	7.7	6.5
2 Relationship
Communicability	6.7	Communicability	8.5	5.9
Collectivism	8.7	Good relations in a team	8.8	6.9
Caring	6.5	Good vertical relationship	7.8	6.6
Sense of humor	2.9	Favorable climate	8.9	6.7
Goodwill	9.1	Customer satisfaction	8.9	6.7
Mutual assistance	8.1	Paternalism	5.5	4.8
3 Self-esteem
Initiative	5.1	Job satisfaction	8.3	8.1
Punctuality	3.2	Feeling “in place”	9.1	8.9
Enthusiasm	6.9	Quality	8.5	7.9
Stress resistance	6.7	Accuracy	7.8	5.1
Obligatory	6.8	Availability of regulations	1.9	1.7
Seriousness	4.1	Power distance	1.5	1.4
4 Transformation
Willingness to take risks	2.9	Feeling professional	8.4	8.0
Mobility	4.1	Desire for change	2.5	8.6
Volition	7.7	Readiness for change	3.2	8.9
Self-discipline	3.1	Change for the better	4.1	8.1
Self-development	5.9	Innovation	2.2	8.1
Self-improvement	5.6	Dynamism	2.4	7.7
5 Internal cohesion
Tenderness	7.7	Teamwork	7.7	7.8
Loyalty	4.0	Loyalty to the organization	5.5	6.1
Honesty	6.7	Solidarity	5.8	7.9
Sincerity	7.8	Democracy	6.8	6.6
6 Making a difference
Learnability	4.1	Mutual assistance	8.8	6.2
Openness	3.9	Openness	4.1	6.3
Intelligence	3.7	Proactivity	2.0	7.9
Erudition	3.8	Unity of purpose	6.2	7.8
7 Service
Altruism	3.3	Vision of your future in organization	5.1	7.2
Self-sacrifice	1.9	Long-term commitment	6.3	8.9
Humanism	7.0	Commitment to the organization	6.4	8.2
Magnanimity	4.9	The possibility of self-realization	7.7	7.5
Average over all values of the given template	5.64	Average over all values of the given template	6.05	6.6

Source: compiled by the authors (2022).

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Table 2 contains data that answer expert questions and indicate the level of compliance between the current organizational culture of the enterprise and the desired one. Comparing the data on the current organizational values with those on the desired organizational values provides the greatest information on the organizational culture’s characteristics, in relation to the needs and the attainability of organizational innovation. In addition, the analysis of these data helps to determine the level of cultural entropy in the organization.

In analyzing the relationship between the enterprise’s current organizational culture and the desired organizational culture, we will first provide an answer to the question “How relevant are current organizational values to the desired organizational values?” Table 2 shows that the mean value from the current organizational values template (6.05) was lower than the mean value from the desired organizational values template (6.6). This means that employees would like the selected values to be slightly more emphasized.

A more detailed description of the employees’ opinions of the ratio of current to desired organizational values was obtained via the question “What values are marked as current but not desired values?” All the current values (except for Adaptability) related to levels 1–3 exceeded the desired values. This shows that there is a basis for the transition to a more complex system of values, and to higher levels of organizational consciousness. The “Feeling professional” value (8.4 versus 8.0) related to four levels, “Democracy” (6.8 versus 6.6) related to five levels, “Mutual assistance” (8.8 versus 6.2) related to six levels, and “The possibility of self-realization” (7.7 versus 7.5) related to seven levels. The list of current values whose levels exceed the desired level shows that (a) the current values have been mastered in the previous system of dominant values, but that (b) there is a need to solve some new problems that the existing system cannot.

This situation generally corresponds to the activities of an innovative company, in which the levels of the values “Feeling professional”, “Mutual assistance”, and “Democracy” are always higher than in traditional companies. The only sign of concern is the sharp drop in the current assessment of “Adaptability” compared to both desired and personal assessments. This drop has caused difficulties in the implementation of innovative change programs in the last two years.

The comparison of the relationship between current values and desired values at other levels of organizational culture (“What values prevail (most often chosen by respondents) in each of the templates?”) showed a significant mismatch between current and organizational needs at level 6 (learning–self-help) and level 7 (self-sacrifice is a long-term commitment). This was confirmed by the high estimates of entropy at these levels (−1.77 and −1.57). Thus, at higher levels of organizational consciousness, the assessments of desired organizational values were significantly higher than personal ones. This situation indicates the tendency of employees to transfer responsibility for desired changes to higher levels of management.

When assessing the current state of an enterprise’s organizational culture and developing a program for changing it, it is important to answer the question “What level (from 1 to 7) are the predominant values in each of the templates?” The most considerable values within all three patterns refer to the desired values pattern (rating 8.23) and correspond to level 4. The highest rating was assigned to the values of the second level (rating 8.07) in the template of current organizational values. The maximum assessment of personal values was assigned to the values of the first level (rating 6.72). Thus, the answer to the question “What level (from 1 to 7) are the prevailing values within each of the templates?” indicates the need to concentrate management efforts on changing the values of the fourth level.

As noted earlier, comparing the data of current organizational values with those of the desired organizational values allows one to determine the level of cultural entropy in an organization (expert question “What is the level of cultural entropy of the organization?”). The presence of cultural entropy is important to the activities of any organization, since it impairs an organization’s performance and precludes the necessary organizational innovations.

We have shown the presence of cultural entropy in the surveyed organization. Moreover, the strength of cultural entropy differed at different levels. The ratings of cultural entropy at all levels of consciousness are presented in

Table 3. The rating of cultural entropy.

Levels of Consciousness	Rating
1 Survival	1.32
2 Relationship	1.8
3 Self-esteem	0.66
4 Transformation	−4.43
5 Internal cohesion	−0.65
6 Making a difference	−1.77
7 Service	−1.57

Source: compiled by the authors (2022).

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As Table 3 shows, cultural entropy is absent at the first three levels of consciousness, and appears starting from the four highest level of organizational awareness (from 4 to 7). Moreover, its value was strongest at the fourth transitional level. Based on Figure 4 and Table 3, it can be concluded that there is currently insufficient attention being paid to tier 4 values. Moreover, the greatest gap between current values and desired values was at level 4. This means that the management of the enterprise did not create opportunities for the continuous self-development and self-improvement of both individual employees and teams of innovators.

The data within the personal values template show how personal values and belief systems relate to the current organizational culture and the planned directions of its change. That is, a comparison of the actual results obtained from the templates of personal values and current organizational values allows us to determine the main directions of organizational culture transformation. The evaluation of these values makes it possible to judge the readiness of the company’s personnel for organizational changes.

The general diagram of the relationship between patterns of personal values, current values, and desired values (planned directions of change) is shown in Figure 4.

The information in Table 2 and Figure 4 provides answers to the two remaining questions: “How do personal values correspond to organizational values?” and “What share in the total structure of values is occupied by potential values that restrict development and activity?”

The answer to the first of the two questions is that personal values are generally rated lower than both types of organizational values (see the group mean in Table 2). Additionally, the average assessment of personal values is lower for all levels except the first (see Figure 4).

In general, this indicates that, when making organizational changes, the company’s management will face resistance to change. This problem can be solved by the implementation of special programs with the involvement of third-party specialists, for example, change management consultants. Secondly, the desired organizational values fall in the zone closest to the development of employees. Therefore, serious work is needed to master the desired values within the emerging system, involving building a hierarchy of values. The hierarchy of values was shown earlier in Figure 3 and Table 2.

When answering the question “What share in the total structure of values is occupied by potential values that restrict development and activity?”, it was found that the values that can potentially restrict the development and activities of an enterprise do not hold much weight in the overall structure of its values.

Thus, the value of “Availability of regulations”, which can potentially limit the values of “Readiness for change” and “Teamwork”, received significantly lower scores than the values of “Readiness for change” and “Teamwork” (rating 1.9, 3.2, and 7.7, respectively). The value of “Power distance” (rating 1.5) was also significantly lower than the values of “Democracy” (rating 6.8) and “Openness” (rating 3.9). This implies that, at this stage, the presence of potentially limiting values is not of great importance for the transformation of organizational culture.

The general conclusion of the conducted research is that, at present, the management of the enterprise is more concerned with functional stability than with development. However, employees themselves understand that the company needs to develop. The respondents’ answers show the gap between current and desired values. The survey responses confirm the recognition of the importance of and need for organizational change. However, these organizational changes are viewed by both employees and managers as a purely managerial issue. Employees are assigned the role of followers.

Thus, the data of this study confirm the main conclusion that agreement between the personal and organizational values of the company’s employees ensures high-quality organizational culture that meets the requirements of Industry 4.0 and ensures the successful innovation activities of personnel [101,102,103]. Additionally, the company’s management must take into account the requirements of the digitalization of the economy and of production [104,105,106].

In addition, the answers to expert questions show that the most important transformation for ensuring sustainable innovative development is the coordination of personal and organizational values of employees at the 4th level of organizational culture.

5. Discussion

The assessment of differences in the patterns of desired and current values indicates the directions of pragmatic changes in organizational values (the assimilation of new ones, the strengthening the learned ones, and leveling out current values).

We have revealed that personal values within the enterprise are more pronounced at the three lower levels of personal consciousness (survival, attitude, self-esteem). Taken together, this characterizes a reactive rather than proactive attitude in the employees towards innovation. The most significant gap between current and desired organizational values emerged at the fourth level—transformation (continuous improvement). However, this level determines the innovative capabilities of the enterprise.

As it is noted earlier, the level of cultural entropy is an important element of the effective organizational culture management. Cultural entropy manifests itself as a gap between the levels of organizational values. Most important to effective organizational culture management is the transition between levels 4 and 5. As shown for this enterprise, the transition between levels 4 and 5 turned out to be the “weakest link”, and is the aspect on which the enterprise’s management need to focus maximum effort. The fifth level of values opens up new horizons for the organization, offering the opportunity to resolve the current problems and to allow employees to realize themselves.

The results indicate that there is a high level of entropy (uncertainty) at the surveyed enterprise, since employees assigned low scores to such values as dynamism and openness. This means that the employees are not very open to, and not sufficiently aware of what is happening within, the external environment. This is dangerous to the innovative and sustainable development of the enterprise.

In addition, it was concluded that it is necessary to strengthen the strategic aspects of the organizational culture so as to improve the innovation activity of the enterprise. The enterprise’s employees need to think strategically and work with a “long-term” orientation. Strategy must also be brought to the fore of the organizational culture of every innovation-driven enterprise.

We have identified key areas of organizational innovation in which support from staff can be expected, as well as elements against which resistance can be expected.

It is necessary to develop a mechanism for managing organizational culture, which will ensure the proactive orientation of employees towards innovation and strategic thinking.

The following organizational culture control algorithm is proposed, which includes a set of sequential actions (Figure 5).

At the initial stage, during the screening interviews with employees from departments wherein organizational innovations are planned, it is necessary to identify employees whose personality traits and belief systems largely correspond with the desired culture of the organization; that is, to identify the so-called cultural donors.

At the next stage, events should be organized that simulate collective interaction in the desired format, that is, which correspond to the desired pattern of values.

The stage of recommendation implementation should last the longest—its duration depends on the depth and magnitude of the changes proposed. The material elements of a culture change faster than its basis (meanings, values). Fundamental changes are slower, as it takes time to overcome psychological barriers and develop new behavioral norms.

The final step in helping employees master the entire system of organizational values is the internal recognition and promotion of those employees who serve as role models for other members of the organization.

The following should be noted as an additional comment to the presented algorithm for managing organizational culture. Changing organizational culture and organizational values is not easy. As Peter Schein noted, organizational values and culture “cannot be manipulated with quick decisions” [107].

Changing an established organizational culture is not easy. However, its transformation is possible if an adequate social base is created, with the necessary and sufficient influence on the successful implementation of changes. This base should include the section of staff who can adopt changes and spread them throughout the organization. The data from the personal values template show how personal values and belief systems correlate with the current organizational culture and the planned directions of change.

Regarding the importance of the impact of values on organizational change, Edgar Schein and Peter Schein advocate for integrating culture, change, and leadership into a single process, instead of treating them as three separate important themes [107]. In our research, we have highlighted the relationship between culture and change.

6. Conclusions

This study established a relationship between personal and organizational values within an innovative company that has high development potential, but that is not able to fully realize this potential with its existing organizational culture.

Based on the application of a methodology adapted to the specificities of the company (the method of “Seven Levels of Consciousness” created by Barret), an assessment of the existing organizational culture was obtained, discrepancies between the current and desired organizational culture were identified, and recommendations for changing the organizational culture were developed. During the study, problem areas in building the organizational culture of the company were identified, with the main one being the strong discrepancy between personal and organizational values during the transition from level 4 (Transformation) to level 5 (Internal cohesion). The limited possibility of this transition was identified as the “weakest link” in organizational adaptation, and as that on which the enterprise management needs to focus maximum effort in order to improve the efficiency of organizational culture management.

The panel survey included the development of a questionnaire, a preliminary discussion with the respondents about the contents of the values concerned, the interview itself, and processing of the results. The survey was conducted from 2020–2021 in two stages, and covered 135 employees of a Russian company engaged in innovative activities. The survey identified key areas of organizational innovation for which staff support can be expected, as well as those elements of the innovation program against which resistance can be expected.

Before the survey, a preliminary discussion of the contents of the values indicated in the questionnaire was held among the respondents. The need for this preliminary interview is related to the fact that different groups of people can, and usually do, hold sets of values (both current and desired) that differ from the values of other groups of people, and from the values of the collective. This significantly alters the required direction and content of the organizational change.

Via a methodology adapted to the requirements of innovative development, an assessment of the existing organizational culture was performed, discrepancies between the current and desired organizational culture were identified, and recommendations for changes to the organizational culture were developed.

The novelty of the results obtained lies in their offering of empirical data on the relationship between the personal and organizational values of employees of an innovation-oriented enterprise, and their compliance with the requirements of innovative development and sustainable development. These data offer a basis for the strategic planning of innovative enterprises’ organizational culture, not only in Russia, but also in other countries, since the main parameters of the innovation process are universal for specific activities and do not depend on nationality.

However, it should be noted that this study has several objective limitations that should be taken into account in future studies. All of them are associated with the use of a “closed” type of questionnaire, and are typical to this research method. First, the study of values using a “closed” questionnaire assumes that the respondents have a more or less closed understanding of values. In practice, this is not always the case. For example, a group of managers who have a significantly greater influence on the decision-making process, with a high power distance, may have a different set of values (both current and desired) than the team as a whole. Secondly, when using a closed-type questionnaire, the presence of both personal and organizational values that are significant for people of a particular enterprise but are not included in standard questionnaires cannot be taken into account. Thirdly, the diagnostics of discrepancies between the current and desired organizational culture within the team as a whole, without delineating groups of personnel on various grounds, may distort the survey results. This, in turn, can significantly alter the direction and content of organizational change. Therefore, for a more accurate and in-depth analysis of the situation, it is proposed in future to draw up a questionnaire in an open form based on the available data obtained from the first survey.

Another limitation of the study is the static nature of the data obtained. During the assessment of the current state of the organizational culture, assessments of the status quo of personal and organizational values at a certain point in time were obtained. However, the dynamics of changes in the organizational culture, and accordingly its impact on the main indicators of the company’s activities, were not assessed. This limitation will be eliminated in further studies based on the implementation of a measurement system for organizational culture development, as proposed to the management of the analyzed company.