Report
21
Number
Jan 01 1996

How Organizational Values Affect Credit Union Performance

This monograph presents the results of research on the organizational values of credit unions. It shows which values credit unions rank highly and which receive little emphasis. In addition, the research investigates the degree to which values were shared among leaders within credit unions. This is an important issue because values heavily influence the organizational culture of credit unions. Although competitors can readily imitate strategies, practices, and technologies, values and the culture in which they are embedded are stable, rich, and difficult to imitate. Therefore, values and culture represent a critical source of enduring differentiation and competitive advantage for credit unions.

In addition to the importance of the values themselves, the degree to which these values are shared within the organization determines how strong the organizational culture is. The findings indicate a strong degree of shared values across credit unions and among directors, CEOs, and top managers at credit unions. The research also uses statistical methods to develop “categories” of values, which encompass related individual values. The study examines how values varied with credit union size and financial performance and with the employment background of respondents and length of employment with the credit union. It determines the degree to which leaders within a credit union perceive their values as similar as well as the degree to which they were in fact similar. In addition, the study investigates how the degree of shared values within a credit union influence commitment to the organization, intent to leave, and how they influence the relative influence that leaders within the organization have over one another, as well as how well the directors work together as a team and the degree to which they break up into coalitions.

The study also explains how an individual credit union can assess the values of its leaders and line staff, how their results compare to credit unions generally, and how these values are likely to influence the behavior of the organization and its success in meeting its goals.

Report Number 21