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­­Models of social organization of Russian companies: economic and social performance

Priority areas of development: management
2017
Department: Centre for Social Organization Research of Labour and Business

Goal of research:

The aim of current research project is to identify main empirically-based types of social organization of work activity in Russian commercial organizations and examine social and economic performance of these types.

Social organization of work activity was defined as the entity of two interrelated components: 1) culture and labor values as mental basis of individual activity and 2) real practices that form the institutional foundation and organizational context of employee behavior.

Besides the elaboration of theoretical foundation of these types of social organization of work activity the tasks for the project also include to reveal regional and industry related determinants of each type, to describe organizational practices within the framework of three types of orientations (meritocratic criteria of personnel-related decision-making, democratic mode of power organization, level of exploitation of human resources), and to find out particular social and economic consequences of each types of social organization.

Methodology:

Theoretical model contains two main components of the social organization of work activity: mental basis of this activity and institutional forms and practices. This theoretical framework implies multi-level analysis while individual attitudes, values, day-to-day activities are given within organizational context which is presented by organizational practices of HRM, decision-making, external conditions of company functioning. Besides there was another aspect to consider as planned and purposeful actions of managers in organizations always have unintentional consequences and effects that also influence final performance. According to our previous studies that character of social organization of business should be taken into account to have full picture and reliable results. To do this the following methodology was elaborated to make quantitative research. We have two objects of research: line managers as representatives of human resources in the companies and organizations as the set of organization priorities and orientations.

There were two levels of research: individual and organizational, and three sources of information: survey of line managers, survey of internal experts and independent data base about economic performance. 

Line managers gave information about their perceptions and attitudes about organizational environment, their relations with subordinates, their day-to-day activities and practices and interactions with higher managers.

Experts were askes about company market orientation, current challenges and strategies their company faces, main ways to achieve the goals of the company. Moreover, full picture of HRM process was described by them to have image of institutional aspect of social organization.

Independent source about economic performance gave information about net profit, total revenue of the companies in the sample.

Scales and indicators that were included in the survey instruments were selected according confirmed validity, mostly basing on international experience and our own previous research projects.

Empirical base of research:

The sample for the survey was formed using regional and industry differentiation: 8 groups of different industries and 9 regions. This approach gives opportunity to reveal determinants taking into account different environment and professional peculiarities. The sample size for the organizations was 404 private companies with one internal expert for each of them (representative of top-management or Head of HRM department were invited). There also were two or three line managers for each company, the total number of responders to survey was 1116 persons. And for every company included in the sample the information from accounting and tax reports were collected to get objective independent information about economic performance (we have used SPARK Interfax database).  

Results of research:

Empirical results allowed to identify four main types of social organization of work activity. Two of them have positive humanistic view on human resources that implies recognition of value and long-term benefit from human capital. For these two types involvement and participation of all categories of personnel is one of the core approaches to get competitive advantage on the market. The second two types introduced exploitative view on human resources with long hours of working week, absence of appreciation of significance of human resources, relatively low remunerations.

Another axe for differentiation of types was conflict of meritocratic criteria of remunerations and promotions and those oriented on result and performance. These two alternatives are not opposite within the theoretical model but it was showed empirically that orientation on qualification and achievements are not correlated with short-term performance measures adopted in the companies. So, for Russian companies the choice is either to focus on human capital development and retention or to concentrate on actual benefits taken from employees. Only one type of companies has managed to find some balance between these alternatives.

Some differences were found relating regions and industries peculiarities, but the most significant result was about social and economic performance. The most successful was the type with humanistic orientation with balance of result-orientation combined with meritocratic criteria of personnel related decisions. The least efficient was exploitative one with absence of involvement.

Level of implementation, recommendations on implementation or outcomes of the implementation of the results

The results are useful for those who develop any program of changes in employment relations practices both on the level of a particular company or on the level of sate institutional changes. Besides these conclusions can help to forecast the social and economic consequences of organizational changes.