Do Values Matter? The Impact of Organizationally Enacted Values on Business Performance in a Retail Store Context

This dissertation addresses the issue of whether or not espoused organizational values can influence objective business performance outcomes when perceived by employees to be enacted in the workplace. Very little research has been done which has looked at employee and managerial values and their relationship to objective measures of organizational performance, I hypothesize that employee perception of Values Enactment in the work environment is influenced by levels of leader-member exchange, organizational identification, and organizational virtuousness, which result in increased levels of organizational citizenship behaviors and business performance. Using two waves of store financial data, performance review data and survey data collected from 354 store managers and 13,256 store employees of a large national retail company, this research analyzed the correlations of various levels of perceived company-espoused Values Alignment and Values Enactment at the individual store level, with the store level financial performance of the firm. The results indicate that alignment between store managers and their district managers did not predict either store manager performance review results or store performance results. The results show no correlation between store employee perceptions of Values Enactment by store managers and store performance in each of the two years studied, 2007 and 2008 (T1 and T2). Cross-lagged regression analysis showed that where employee perceptions of Values Enactment increased between T1 and T2, measures of Sales Performance increased. Additional cross-lagged regression analyses showed no significant relationship between perceptions of increased enactment between T1 one and T2, and profit improvement. Turnover Intent among store associates at the store-level of analysis was found to moderate the relationship between perceived Values Enactment and store performance. Surprisingly, store manager perception of company Values Enactment was found to be strongly negatively correlated with employee Turnover Intent. The nature of the work itself may affect the impact of values enactment depending on whether the stores can be seen to operate as 'machine bureaucracies' or more like interdependent customer sales and service teams. Issues concerning the generalizability of the present findings as well as implications of these results for effectively managing the work environment and culture at the retail store are discussed.