The presented industrial report examines the espoused organizational values of some of the most successful software organizations (according to PricewaterhouseCoopers’s Global Software Leaders). Its main purpose is to provide useful insights which could be used by other companies (1) for benchmarking and identifying possible improvements in business performance; and (2) strengthening organization’s positioning and/or gaining competitive advantages (by focusing on values which are often overlooked by the software industry).
Organizational values are long-lasting constructs which have emerged from the collective beliefs, experience and vision of a group or all members of an organization on what it should holds of intrinsic worth and which influence (explicitly or implicitly) the decision making and evaluation of individuals and organizations in terms of their modes, actions and end states. Organizational values have become extremely popular in the last decade. Among the reasons for that are: the emergence of international business ethics in the late 1990s; the numerous corporate scandals in the earlier 2000s (e.g. Enron, WorldCom, Tyco, etc.); the increased public awareness on the side effects of organizations on environment and society; and most importantly the numerous empirical studies supporting their positive effect on various work outcomes. The latter includes organizational commitment and organizational citizenship behavior, employees’ motivation, satisfaction and well-being, recruitment and retention, ethical attitudes and behavior, employee performance and many more. Taking into consideration their great importance to modern business, the presented industrial report examines the espoused values of some of the most successful software organizations. Its main purpose is to provide useful insights which could be used by other companies (1) for benchmarking and identifying possible improvements in business performance; and (2) strengthening organization’s positioning and/or gaining competitive advantages (by focusing on values which are often overlooked by the software industry).
Global software leaders
PricewaterhouseCoopers’s Global Software Leaders lists one hundred of the most successful software organizations in terms of annual revenues. On the top of the list are corporate giants as Microsoft, IBM, Oracle, SAP and Ericsson. Their geographical distribution is given below. It shows that the majority of the examined global software leaders are based in the United States. Their espoused values were manually extracted from their corporate websites and then translated into a common terminology using the taxonomy of organizational values proposed by the author in “What do we know about organizational values? – A systematic review”.
Espoused values are the explicitly stated organizational values of the organization (e.g. as part of its corporate website, code of conduct, etc.). They might be different from the values actually in-use (aka its core values) or the ones highly accepted by organizational stakeholders (aka its shared values). Some of the key characteristics of the values stated by the examined global software leaders are given below. They suggest that espousing organizational values is a common best practice among the top successful software organizations.
The espoused values of the examined global software leaders are grouped into seven categories, depending on the organizational stakeholders they are associated with and whether they describe desired characteristics of organizational processes, products and services. The distribution of these value categories is presented below. It shows that almost all of the examined global software leaders state values associated with employees. This makes employee values the leading value category and suggests that successful software organizations tend to highly appreciate their human capital and acknowledge its great importance to organization’s survival and prosperity. The values associated with processes take a second place, followed by customer and product values. Much less favorable are partners and shareholders values. The values associated with society are on the bottom of the list.
Employee values are the organizational values associated with all stakeholders who are contributing labor and expertise to the organization (whether these are top or middle level executives, operational managers or functional staff). Their distribution is given below. It shows that discipline (or employee’s ethical attitudes and behavior) is the most prominent value among the examined global software leaders. This is not a surprise as all these organizations are highly recognizable by the general public and their organizational reputation is quite sensitive to corporate scandals, fraud trials, etc. An interesting observation is that employee’s creativity and competency are not top values. One could expect the opposite as software development is very knowledge-intensive, technology- and innovation-driven in its nature. Another surprising observation is that employee’s adaptability is the least preferred value. Having that modern software organizations are expected to operate in highly dynamic and competitive business environments, the capability and willingness of their employees to change decisions and actions might have a significant impact on their organizational flexibility and agility.
Process values are the organizational values which describe desired characteristics of all sets of interrelated activities and tasks that transform organizational resources (inputs) into concrete products and services (outputs). The distribution of these values among the examined global software leaders is presented below. It shows that continuous improvement is the most favorable one followed by productivity (or resource utilization and efficiency), flexibility and communication. An interesting observation is that performance is the least preferred value. This could be explained by the maturity life cycle phase of the majority of the examined global software leaders (which have dozens of products and services being in a market leadership status) as well as the diseconomy of scale which portends that organization’s performance decreases with the increase of its size and complexity.
Customer values are the organizational values associated with all stakeholders who are recipients of the products, services, etc. delivered by the organization (e.g. its users and consumers, business organizations, governments or public sector organizations, etc.). Their distribution is given below. It shows that improving customer’s financial and marketing positioning is the greatest concern of the examined global software leaders. Customer’s satisfaction, trust and loyalty, although important, are much less favorable. This could be explained with the specifics of the software industry where speed and cost are often crucial for customer’s success despite that it might result in compromising the quality of delivered products and service (and thus the overall customer’s satisfaction) and/or customer relationships (incl. customer’s trust and loyalty).
Product values are the organizational values which describe desired characteristics of delivered products and services. The distribution of these values among the examined global software leaders is presented below. Undoubtedly innovation is the top value in this category. This is not a surprise as global software leaders have to continuously deliver new and valuable products and services and to further improve existing ones in order to sustain leadership status. Quality seems to be of much less importance to the top business. This suggests that investments in various quality management initiatives (incl. quality planning, control, assurance, etc.) might not pay off in the long term (at least as innovations do) or might be insufficient for sustaining global leadership. This is even more valid for complexity and functionality (or having the required competency and expertise to deliver diverse and multi-functional products and services).
Partner values are the organizational values associated with suppliers (vendors, distributors and all other stakeholders on whom the “raw” input of the organization relies on), contractors (responsible for an outsourced component, product, service, etc.), business alliances or associations, creditors and competitors. Their distribution is presented below. Trust and equity are among the top favorable values by the examined global software leaders. This is expectable as their operation might heavily rely (and even depend) on many suppliers, contractors, etc. and the overall success of the business is determined by the fair play of all competitors. Moreover some of the examined global software leaders are concerns with the performance of their partners (or the improvement of their financial and marketing positioning) as well as their commitment (or their attachment and loyalty to the organization).
Shareholder values are the organizational values associated with all stakeholders who legally own part of the organizational share (e.g. owners, stockholders, investors, etc.). Their distribution among the global software leaders is shown below. The leading value in this category is the wealth of the shareholders. This is quite expected as the ultimate goal (although not very convenient) of any for-profit organization is to improve their financial well-being. However some of the examined global software leaders are also concerned with the reputation of their shareholders and the corporate image of the organization (incl. its impact on society, its compliance to laws, regulations and standards, business and professional codes of ethics, etc.).
Society values are the organizational values associated with the environment and communities in a given region, country or worldwide. Their distribution is presented below. An interesting observation is that the examined global software leaders tend to pay much more attention to organization’s impact on communities rather than on environment. This might be explained with the society being more sensitive to social injustice, human rights violations and work incidents (e.g. through trade/labor unions, syndicates, etc.). However having society values being the least preferred organizational values among the examined software organizations raises some serious concerns. They are all global software leaders which have huge influence on the software industry and might greatly impact our environment and society. Therefore one would expect them to be much more engaged with ecological and social sustainability and serve as a role model in this regard.
Given below are the 5 most favorable organizational values among the examined organizations. They suggest that global software leaders tend to be employee-centric and compete through continuous innovation and constant delivery of value to their customers.
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