Interaction of Rationality of Economic Behavior and Ethnic Preferences in the of Latvia

I. THE RELEVANCE OF RESEARCH ON THE ORGANIZATIONAL CULTURE OF ENTERPRISES AND ORGANIZATIONS.

Organizational culture is a social phenomenon that characterizes the system of formation, operation and development of all enterprises and organizations. Each enterprise is characterized by individual features of organizational culture. At the same time, organizational culture has typical values, characteristic of the characteristics of the economic life of nations and historical and cultural regions of the world (Mouls 2003, p. 83–94). The organizational culture of enterprises is created to strengthen common values and norms in the behavior of economic actors (employees, managers, entrepreneurs) performing various professional functions and occupying various social positions in the enterprise and organization. Thus, the economic sphere of society performs the most important role of social integration (Weber 1976, p. 133 – 155).

The need to study the processes of social integration and solidarity taking place in economic life is determined by the peculiarities of ethnic diversity in Latvia. In 2025, ethnic Latvians will make up 1,182,008 (63.7% of the country's total population), Russians - 434,243 (23.4%), Belarusians 53,207 (2.9%), Ukrainians 52,266 (2.8%), Poles 35,140 (1.9%), Lithuanians - 19,809 (1.1%), other ethnic groups - 4.2% (Atsevišku tautību... 2025). Within this ethnic diversity, there are two ethnic poles - ethnic Latvians and Russians - whose share is 87.1% of the total population of Latvia. The features of this ethnic diversity raise the issue of the real possibilities of the formation of social solidarity of representatives of different ethnic groups in economic life, which should be reflected in their organizational culture. In Latvian sociology and political science, the role of the ethnic factor in the life of Latvian society is examined mainly in order to gain a deeper understanding of political processes in the country, the peculiarities of national and political identification, geopolitical sympathies, the nature of public communication and historical memory. However, interethnic interaction, mainly between ethnic Latvians and Russians, at the individual level in the public space is most intensively and almost daily implemented in the economic space. The contradictory nature of the interaction of economic and ethnic factors has already been revealed in the studies of Latvian sociologists. On the one hand, the significant role of the economy in the integration of Latvian society has been noted. On the other hand, studies indicate a significant division of the business environment along ethnic lines (Mouls 2003; Zepa et al. 2004, p. 8–11, 13–14, 18–28; Zepa et al. 2005, p. 11–15). Sociologists demonstrate the positive role of the Latvian economic system in promoting people's social and professional mobility, focusing on the values of individual self-realization regardless of their ethnic affiliation, which certainly promotes the economic solidarity of society (Koroleva et al. 2014; Žabko 2023). The economic interaction of people with different ethnic identities is the sphere in which the process of competition between individuals and groups and the everyday cohesion of people in the implementation of joint economic and social activities takes place (Volkov 2023, p. 100 – 103). Not only sociologists, but also economists draw attention to the need to study the role of the ethnic factor in the economic life of Latvia, the ethnic peculiarities of the social division of labor, the income level of Latvians and ethnic minorities (Hazans 2010, p. 125–128, 143). Some studies on the quality of the workforce in Latvia record the need to take into account not only economic factors in the formation of organizational culture, but also consider it important to pay special attention to the ethnocultural identity of employees (Cilvēkkapitāla... 2025, p. 18 – 19; Latvijas aktivās... 2019, p.140 – 194; Latvija 2030 2009, p. 7–11, 24 – 26).

Taking into account the interest of scientists from various social science disciplines in the role of organizational culture and the entire economic sphere in the integration of Latvia's society, the author of the article set himself the goal of showing how the organizational culture that has developed in enterprises and organizations in Latvia contributes to the spread of typical norms and values of economic behavior among ethnic Latvians and ethnic minorities. As the data of this study show (Volkov 2023; Volkov et al. 2024), as well as the data of previous studies by the author of this article, the role of the ethnic factor in the formation and implementation of organizational culture in Latvia as a country with pronounced ethnic diversity is not a constant, independent value for all situations and contexts of interethnic interaction of people with different ethnic identities in a multiethnic economic space. Summarizing the research data, two contexts of interethnic interaction were identified, which to varying degrees influenced the actualization of the ethnic factor in organizational culture:

Firstly, it is a complex of interethnic interactions, the task of which is to achieve goals determined by the nature of the economic and production tasks of the enterprise and organization;

Secondly, it is a complex of situations that arise to one degree or another in economic activity, when the values of an individual's identity, understanding of life goals and strategies that go beyond narrowly understood production and economic tasks are actualized.

The proposed analytical division of interethnic interaction complexes to one degree or another corresponds to the ideas already conceptualized in management theory and sociology. These are the theories of George Elton Mayo and Mary Parker Follett, who, during the Hawthorne effect, conducted in the United States in the 1920s and 1930s, revealed the importance of employees recognizing their individual value in solving the production tasks of enterprises (Mayo 2007). The analytical division of social activity into success-oriented and agreement-oriented forms the basis of Jürgen Habermas's communication theory (Habermas 1992).

II. FEATURES OF ORGANIZATIONAL CULTURE

Edgar Schein's model is one of the most widely used in organizational culture research. The author of the article adheres to the understanding of organizational culture as "a pattern of shared basic assumptions adopted by a group in solving its problems through external adaptation and internal integration" (Schein 2010, p. 10). The culture of organizations in Latvia turns out to be the intersection of two important factors, which, as practice shows, are often contradictory in nature. On the one hand, the high degree of integration of the Latvian economy into the European and world division of labor, the liberal nature of the market economy and Latvian labor legislation requires workers, regardless of their ethnic origin, to follow uniform norms of organizational and professional culture for the successful implementation of the goals of companies and organizations. On the other hand, the different access opportunities for ethnic Latvians and ethnic minorities to prestigious areas of employment contribute to ethnic favoritism in economic life, which ultimately largely erodes the equal value of organizational culture in the minds of ethnic Latvians and ethnic minorities.

The interaction of employees in organizations and companies turns out to be primarily a form of intercultural communication, as shown in the studies of Geert Hofstede (Hofstede et al., 2010). An important feature of organizational culture that has become established in the economic life of a particular nation-state is the degree of its internal differentiation, which mainly depends on the ethnic diversity of society. The ethnic differentiation of Latvian society is the most important factor influencing the differentiation of organizational culture in commercial companies, state organizations depending on the proportion of certain ethnic groups employed in these enterprises. In addition, perceptions of ethnic groups as carriers of various types of organizational culture, business ethos, etc. are taking root in society.

The organizational culture of enterprises ensures the effectiveness of economic or management activities that implement certain rational behavioral strategies of economic actors, for example, activities for the production, provision, purchase or sale of goods or services (Krugman, Wells 2012, p. 2). Therefore, the most important feature of organizational culture is the rationality of its values and norms, which economic actors accept, approve and implement in their behavior in the company and organization (Ritzer 1975, p. 627). Thus, the level of internal social solidarity of these economic actors, who perform various functional duties in the enterprise and, consequently, occupy various social statuses, is determined by the rationality of their accepted values and organizational cultural norms.

An integral part of the research methodology of this article was the theory of rationality as a way of implementing effective social activity and a way of constructing social integration of communities that achieve economic and socio-cultural success by competing with other social participants. As the main theories for understanding such rationality, the authors of the article turned to

Max Weber's views on the nature and types of social activity (Weber 2004, p. 254–284), Talcott Parsons' views on social activity as one of the structuring elements of an integrated social system (Parsons 1949, p. 43–76.), Jürgen Habermas's theory of communicative action and moral discourse as ways of mutual equal recognition and coordination of the interests of social actors in the process of their rationalization (Habermas 1992, p. 116–194). The choice of this theory is explained by the understanding of organizational culture, in which the rationality of its basic values, rules and norms directly follows both from the rational nature of the economic and organizational activities of individual and collective actors, and from the advantages of rationally emphasizing the specific social and cultural interests of these actors in the situation of their interaction and arising from their collective identity. This idea of organizational culture is oriented towards a comprehensive understanding of rationality, characteristic of modern sociology (Bezes et. al. 2021, p. 11–38; Coutant 2021, p. 71–101).

III. SOCIOLOGICAL RESEARCH METHODOLOGY AND DATA.

Sociological research aimed to understand the extent to which the values and norms of the practiced organizational culture adopted at the enterprises/organizations of Latvia are shared by economic actors as rational ways of organizing the economic space, forming solidary relations within the teams of the enterprises, regardless of the ethnic origin and ethnocultural identity of these actors. It was necessary to understand whether there are limitations in the universality of these rational rules, which are somehow connected with the ethno-cultural identity of economic actors. This is important also because the author of the article in his previous sociological study established the fact of the presence of ethnic favoritism in the economic life of Latvia (Volkov 2023).

Table 1: Distribution of respondents by social characteristics

In order to assess the impact of organizational culture and team cohesion not only qualitatively, but also quantitatively, the author of the article has identified several economic, managerial and financial indicators. The complex of these factors reflects the rational nature of the behavior of economic actors, which is embodied in the nature of the organizational culture. These indicators allow us to conclude how effectively the culture supports employee cooperation, innovation and organizational sustainability. One of the main measures of the impact of culture is employee productivity, or the company's revenue or profit per employee. A culture that promotes learning, adaptation and cooperation directly affects the organization's ability to operate effectively and competitively (Schein 2010). Similarly, the amount of resources invested in employee development is used as an indirect indicator of the organization's long-term vision and value system (Ouchi 1981). Turklāt organizācijās, kur darbinieki tiek iesaistīti lēmumu pieņemšanā, kultūra tiek uztverta kā iekļaujošāka, kas veicina sadarbību un lojalitāti Furthermore, in organizations where employees are involved in decision-making, the culture is perceived as more inclusive, which fosters collaboration and loyalty (Hofstede et. al. 2020). From a financial perspective, organizational culture influences aspects such as profit profitability, customer retention levels, and cost efficiency (Schwartz, Davis 1981, p. 30 – 48). Additional indicators are ESG (environmental, social, governance) results, which are increasingly linked to the maturity of an organization's internal culture, social responsibility and employee well-being (Eccles, Ioannou, Serafeim 2014, p. 2835–2857).

The sociological research data showed that the greatest differences between respondents who positioned themselves as ethnic Latvians and Russians were manifested where the organizational culture to one degree or another affected the problem of ethnic identity. At the same time, factors related to the specifics of the implementation of production tasks did not create a large, statistically significant difference in the opinions of ethnic Latvians and Russians. Table 2 presents data on the respondents' views regarding the main organizational cultural norms and existing practices.

Table 2: Assessment of characteristics to call a team (a group of employees of a company, organization) socially cohesive,%.

Table 3 presents data on the impact of the respondent's team's internal solidarity on achieving the company's economic results. The data provided show that representatives of different ethnic groups have a typical understanding of the role of team (work collective) solidarity in ensuring the most important economic efficiency indicators of companies and organizations. Some significant differences were found only in the competency level assessment position/competence assessment organization.

Table 3: Cohesion of the team where the respondents work in achieving the economic results of the company (organization) (%).

As can be seen from the data provided, ethnic differences in Latvia have practically no impact on the attitude of respondents towards the prevailing norms and values of the organizational culture that has developed in the country. This indicates that these values serve as the most important basis for strengthening ethnic Latvians and ethnic minorities in economic life. However, the data of the sociological study revealed the fact that the level of education of respondents has a greater impact on the attitude towards these organizational culture norms than was typical for the influence of the ethnic factor. Table 4 compares the impact of the respondents' ethnic identity and their level of education on ten questions. Significant differences between ethnic groups were found only in two positions regarding their ethnopolitical and civic preferences in relation to the values practiced in the organizational culture (No. 3 and 6). However, differences in educational level are significant in all ten characteristics of organizational culture, which relate to both respondents' ethnopolitical preferences and the role of moral values (No. 1, 2), perceptions of loyalty to the social hierarchy (No. 4), the importance of the ethnic factor in company management, choice of profession (No. 5, 9, 10), and the role of respondents' individual competencies and interests as a subjective basis of organizational culture (No. 7, 8).

Table 4: Comparison of the role of ethnic and educational factors in respondents' perceptions of the importance of some organizational cultural values (according to Pearson Chi-Square Asymp. Sig.).

IV. CONCLUSIONS

The materials of the sociological study confirmed both the hypotheses put forward and the conclusions of the author of similar previous studies. Most of the organizational culture parameters of ethnic Latvians and ethnic minorities that concern them coincide, which indicates a high degree of integration of these population groups into common values and norms determined by the economic space in Latvia. The basis of such an attitude towards the existing organizational cultural values is the typification of rational economic behavioral practices, which is characteristic of Latvians and ethnic minorities in economic behavior. This applies to assessments of calling a team socially cohesive; to the role of team (collective) cohesion in achieving the economic results of an enterprise (organization); to the assessment of the influence of social and economic factors on social cohesion in an enterprise/organization; to perceptions of the conditions for achieving the desired or intended social position/status and the role of various factors in the respondents' choice of profession. In this sense, the logic of economic necessity turns out to be stronger than the need to emphasize the special ethnocultural preferences of representatives of ethnic groups in the economic space of Latvia.

However, the content of these organizational cultural features of Latvian residents is related to their attitude towards values that are oriented towards achieving goals, which are determined by the very nature of the economic and production tasks of the enterprise and the organization. Here, ethnic differences are insignificant. At the same time, in situations that actualize the values of their national and ethnic identity in the business and interpersonal communication of employees, ethnic differences arise in the understanding of the existing organizational cultural practices. This applies, for example, to perceptions of employee loyalty in relation to management decisions, views on the relationship of material remuneration with the level of active participation in the political life of Latvia, including employee participation in the celebration of national holidays in the enterprise and organization. Therefore, the logic of economic rationality in the behavior of representatives of ethnic groups, and thus in the established system of organizational culture in Latvia, is not absolute. There, in the economic space, where conditions exist for the actualization of the values of ethnocultural identity, these values are actualized. These are not situations that go beyond the scope of economic life and are associated with the socio-political context of interaction between ethnic Latvians and ethnic minorities, with ethnic stereotypes and preferences that dominate public consciousness, and with established practices of interpersonal relations between representatives of these ethnic groups. Therefore, the penetration of ethnic favoritism into the organizational culture of Latvian enterprises is a difficult to conceal phenomenon. But if by itself the ethnic factor does not distort the typification of the norms and values of the organizational culture practiced among ethnic Latvians and ethnic minorities, then its imposition on the different level of education of the respondents leads to the ethnocultural fragmentation of this culture (Volkov, 2023, p.104–108).