Which factors determine leaders’ adherence to organisational values?

Abstract

Recent studies have underscored the crucial role of organisational values in managing complexity and defining the organisation’s mission. Scholars have established a positive correlation between organisational values and performance, recognising their importance in strategic organisational growth. This study, however, takes a step further by identifying the factors that determine leaders’ adherence to organisational values, thereby addressing a gap in the current literature on organisational culture. The thesis explores four key areas: culture type (clan, hierarchy, adhocracy, and market) based on the Competing Value Framework, leader profile (value congruence, education and experience) rooted in Upper Echelon Theory, governance factors (Code of Conduct) derived from Decoupling Theory, and organisational commitment to values and sense of belonging. A quantitative approach was used, with primary data collected through a survey of white-collar employees in multinational companies operating in Sri Lanka. The data was analysed using regression analysis and Structural Equation Modeling. The findings indicated that culture type, value congruence, a Code of Conduct, and organisational commitment to values and sense of belonging all positively impact leaders’ adherence to organisational values. Surprisingly, leaders’ experience and education level showed no significant influence. This study offers practical implications for organisational policy development to strengthen leaders’ adherence to organisational values. It also provides valuable insights for Human Resource Management in designing recruitment and training functions, fostering a value-driven culture and long-term organisational development.