A Critical examination of leaders create organizational culture

Introduction

In area of Management and leadership, one of the most crucial and effective factors that determine the performance and position of an organization in public sector is the organizational culture. Organizational culture has been studied extensively for the past 30 or more years (Schein E. H., 1985). Lots of books have been written and much research has been done about it, and also wide range of words applied to describe this notion. Although much different definitions have been presented on this keyword, most of them place their emphasis on common key aspects. Three comprehensive definitions have been gathered in table below:

Definitions of organizational culture

The pattern of shared beliefs and values that give members of an institution meaning and provide them with the rules for behaviour in their organizations. (Davis, 1984, p. 1).

The set of important understandings (often unstated) that members of a community share in common. (Sathe, 1985, p. 6)

A set of understandings or meanings shared by a group of people. The meanings are largely tacit among the members, are clearly relevant to a particular group and are distinctive to the group (Louis, 1985, p. 74)

According to these definitions, two features of organizational culture seem bolder; first shared meanings and values among organization members and second introducing clear rules and behaviours in organization.

Although, some argues that culture cannot be managed (Rabin, T & Wachhaus. A, 2008, p. 1) , a correlation between culture and leadership has been identified (Frontiera, 2010). Schein announced this fact in his famous book-Organizational culture and leadership (2004):

“Culture is a dynamic phenomenon that surrounds us at all times, being constantly enacted and created by our reactions with others and shaped by leadership behaviour.”

So, attentions have been paid to culture aiming to manage and improve it in order to achieve defined goals. Leaders as persons who have crucial role in improving performance found it vital in organizational discourse.

Schein introduced the mutual relation and effect between leadership and culture by the term “intertwined” (1992) .While culture can be affected by various factors, Senge pointed out that leaders have the most influence on organizational culture (2002, p. 24) :

“Building an organization’s culture and shaping its evolution is the unique and essential function of leadership”

In this paper the focus is on the influence of leadership on organizational culture to examine to what extent the view that leaders create organizational culture is true. The approach that has been applied in this paper is studying the ways and channels through which leader creates and affects the culture of organization. Four major states have been studied in this area; model leader, strategist leader, ruling leader, and performance changing.

Also, the other factors that create culture have been studied and the effect of culture on leadership has been analyzed. The conclusion shows the indirect role of leader in creating culture except through becoming model. In addition, other factors have decisive role in shaping culture.

Before the start of this study, clearing the concept of leadership is required.

What is leadership? Who is a leader?

The concept of leadership has been defined in various ways. Some stated it as a process, for instance Northouse believe that it is a process whereby an individual influences a group of individuals to achieve a common goal (2007, p. 3). Also, Stogdill analyzed it as influencing the activities of an organized group in its efforts toward goal setting and goal achievement (1974). By these two types of definitions, leader can be known as a person who makes decisions, sets directions, makes things happen and often He is recognisable at the top of organization. Leader carries out this process by applying their leadership knowledge and skills. (Jago, 1982)

Hence leader is placed at top of organization and clarifies strategies and directions, has most effects on the culture of organizations. In following next parts some ways by which leader affects culture have been examined.

Leader; as a model

In an organization the leadership and the behaviours of leader become an ideal pattern for followers, and a stream of organizational deportment would flow from top (leader) to down (followers). This case often happens in transformational type of leadership in which leader has charismatic features (Harms, p & Crede, M, 2010). Bass and Avolio described transformational leader as able to “motivate others to do more than they originally intended and often more than they thought possible” (1993). As the organizational culture is made of behaviours and manners, charismatic leader cultivates a particular method of comportment in climate.

Culture of an organization consists of different areas; competitiveness, social responsibility, innovation, stability, performance orientation, and supportiveness. So, the manner of leader affects every area of organizational culture and this top-down influence can lead to affirmative or mortal outcomes in performance (Sarros, J. Gray, J and Densten, I, 2002). By way of illustration, this can be studied in realm of Innovation and change; Fishman and Kavanaugh claimed that the culture of an organization and how people respond to change and innovation is shaped substantially by the behaviours of the leader (1989).

Smith revealed that leader’s behaviours can be followed by employees (2010);

“Leaders are the role models and when they walk the talk long enough, fairly soon these values become standard procedure.”

Leaders are lent very crucial and decisive position by which they influence the culture of organization through leading motivation, attendance and attitude of followers in organizational operation. This can be found in Amabile suggestion (1998):

“By influencing the nature of the work environment and organizational culture, leaders can affect organizational members’ attitude to work related change and motivation.”

Schein assumed culture begins from leaders who impose their own values and assumptions on a group (2004, p. 2).

Leader as a ruler

Leaders externalize their own assumptions and embed them into structures, mission, goals and working procedures gradually and consistently (Schein E. H., 2004, p. 406). In one hand, a leader make decisions and determine rules, and in the other hand organizational culture is described as a set of structures, routines, rules and norms that guide the constrain behaviour (Schein E. H., Organizational Culture and Leadership, 2004). So, leadership manipulates organizational culture through ruling in organization. Dull reflected this fact in the other way (2010):

“Public sector leaders attempt to cultivate organizational culture as a means of controlling administrative behaviour and building organizational competence, defined as the skill and capacity to accomplish necessary tasks”

Here the culture described as a tool for improving procedures to facilitate achieving goal. This case can be examined when leader feels sure about a needful innovation in organization. For promoting change, beside other necessities, leader has to provide a firm ground for implementing innovation; this ground is formal procedures and actions. As Armenakis et al. claimed leaders can modify formal structures, procedures, and human resource management practices (1999).

So, leader initiates change and clarifies orientation of organization; he arrives to alter proceeds for reaching ends. In reality, changing procedures interpreted as changing culture.

Leader as strategist

Stewart declared that the strategy of an organization gives it identity based on its functions, Also it clarifies what an organization is and what it is doing (2004).

Strategy forms culture of through highlighting tasks, directions, positions and behaviours . The change management strategy or approach selected by leaders will result in shifts in organizational culture. (Kavanagh, H & Ashkanasy, N, 2006)

By understanding the importance of strategy and its relation with culture, leader enters this relation and influence culture in two ways; first standing between strategy and culture, second use the strategy as a tool for modifying culture.

Fernandez and Rainey interpreted strategy as a course of action for implementing changes (2006). Despite strategy plays a crucial role in organization, this is the role of leader to translate it into a course of actions. Goldsmith explains to CEO (chief executive officer) how leaders are needed to communicate and execute an organization s strategy. (2009)

“When leaders and their executive teams take an active role in implementing strategies, this is a commitment to ensure the ideas or strategies become part of the organisation. Insightful leaders realise that for strategies to be successfully integrated into their organisations, they must align, measure, market and package the strategy to their business, customers and investment community as they would with any marketing campaign.”

While strategy introduces direction of an organization, it is just on the paper. The best-planned strategy is no more than wishful thinking if it cannot be translated from concept to reality (Hsieh, T and Yik, S, 2005) .Here it is leader who translates it from language of paper to a course of actions. Speculand has studied the decisive role of leadership and placed his special emphasis on leaders in success and failure of implementing strategies (2009).

So, leader as a median interprets strategy into organization procedure, role, and belief. This action forms the culture; in this area culture is set of behaviours and procedures that are defined by strategy. In this process leader injects strategy into the body of organization. In reality, leader makes strategy feasible, and at the same time forms culture.

But it is not whole the story about relation of strategy and culture. Leader alters climate of organization by applying strategy as a tool too. In other words, leader stands at the top and place strategy between him and culture; actually, leader applies strategy as a means to influence organizational culture. This is deducted from the role of leader in designing strategies, Where Abramson and Lawrence claimed (2001):

“Managerial leaders must develop a course of action or strategy for implementing change. Convincing the members of an organization of the need for change is obviously not enough to bring about actual change. The new idea or vision must be transformed into a course of action or strategy with goals and a plan for achieving it”

Changing performance

The performance of an organization is effective factor through which leader influence the culture. Wikipedia defined Performance defined as the activity of a unit (be it individual, team, department, or division) of an organization intended to accomplish some desired result (2011). This item is evaluated by measuring outputs and outcomes.

There is a multilateral and at the same time mutual relation among leadership, culture and performance. In other words, they are interdependent (i.e. leadership and climate are subject to affect by the status of performance of organization). To understand this linkage a circle of relation between leader, climate and performance should be studied. It can be understood from this circle that leader can affect culture through changing performance.

In this network of linkage leader affects culture and alter its elements through changing performance and informing employees about it. This influence occurs through the Feedback. Feedback typically consists of information provided to an individual for the purpose of an increase in performance (Kluger, A. N. & Denisi, A., 1996). There is variety of feedback forms, which are described by different aspects. One kind of feedback is outcome feedback in which information concerning performance outcomes. (Balcazar, F., Hopkins, B. L., & Suarez, Y, 1986)

It seems positive and constructive, to inform employees about high performance and improvement of outcomes. Geister et al. concluded in their case study that information and feedback about the team situation is crucial to improving the motivation, satisfaction, and performance of members in virtual teams. (2006)

Leader affects the culture of organization indirectly through improving performance and diffusing information about it, an action which leads to a healthy, motivate and more evolutionary climate.

If decisions and policies leader applied led to quality performance, it encourages atmosphere of hardworking, competition, integration and responsibility but in fragile situation and poor performance culture would collapse.

Culture creates leader, a challenge

While the impact of leader on culture is a considerable fact and has been studied and proved in many cases, some opinions challenged it. In an attempt to address this theoretical disagreement, Sarros et al. surveyed over 1,900 managers in Australia and found that leadership was a far more prominent predictor of culture than culture was of leadership. (2002)

As it has been mentioned there are an interdependent relations among leadership, culture and performance, so it is a noticeable reality that leader is affected by culture too. Hatch claimed that it is difficult for leaders to have any impact on culture, as culture has a larger influence on leaders. (1993)

Schein asserted that while leaders create culture in the early stages of an organization, culture creates leaders as an organization matures. He claimed that culture is deep, broad, and stable. It can be an unconscious determinant of who gets hired, who gets promoted and rewarded, and indeed, how the vision, mission, and strategy are lived. (2004)

Culture of organization is a very decisive factor, so leader has to apply appropriate way of leading which does work in that climate. Smith et al. have sought for a proper model of leadership in China by regarding effects of cultural backgrounds (1997), which reflect the crucial role of culture in determining leadership style.

It seems imperfect and naïf to study the relation of leader and climate unilaterally. The relation is mutual and should be studied in this way to achieve a perfect view.

Other factors as actors

While leadership plays a core role in creating organizational culture, other factors affect climate and even can take it out of control of leader. Culture can be affected by different internal and external factors.

As the culture has defined as meanings and behaviours of members, the organizational members are effective actors. Krizek views culture as patterns of meaning and interpretation-whether these patterns emerge among management or employees. So, before leader creates culture, it has been constituted by member’s beliefs and thoughts as internal actors (2005).

As another internal factor, type of function and business of organization conducts the elements of culture. (Schein E. H., Organizational Culture and Leadership, 1992) In other words the mission of organization is a set of beliefs about its core competences (Schein E. H., Organizational Culture and Leadership, 2004, p. 89).

External forces may or may not influence the communicative and cultural makeup of an organization. (Cheney, 2001) Examples of external forces include, but are not limited to, economics, education, family, law, media, politics, religion, and technology. External environment and constraints have a considerable role in determining climate of organizations. As, leader has to make situation and organization ready to cope with external environment, any change in environment leads to change policies, behaviours and routines and finally innovates the culture. Schein pointed out that if the environmental context is changing such conflict can be a potential source of adaption and new learning. (2004, p. 108)

Organizational culture is influenced by social and national culture of the area in which it is situated. National beliefs, stories, type of thinking and values affect the climate of organization.

So, leader is situated in a set of actors that shape culture and is not exclusive actor.

Conclusion

In this paper the view that leaders create organizational culture has been examined critically.

At the first the culture defined as a set of routines, behaviour, meanings and understandings that is shared among members of an organization. Leader defined as who make decision, determine directions and make things happen or not to happen. It has been proved that leaders have a noticeable role in creating organizational climate.

The first way through which culture forms by leader is by the stream of meaning, behaviour and beliefs as an ideal method or pattern from top (leader) to down (employees). In this statement employees are assumed as followers who are affected by the nature of leader. As a short explanation, Leadership consists of attributes and skills that determine not only the nature of enterprise, in all its manifestations, but the overall nature of society and the world (Sarros, J. Gray, J. & Densten, I, 2002). In this way leaders are charismatic persons by whom followers’ behaviours consciously or unconsciously are affected.

The second conduit for influencing culture is ruling. Leader is top ruler in organization who directs routines, structures and procedures. It has been assumed that by doing these affairs, leader is manipulating culture or changing its elements. In this statement changing culture described as changing procedures and formal administrative process.

In third way the focus has been put on strategy. Strategy is the manifestation of mission, directions, tasks and rules and has a strong correlation with culture. It has been expressed that leader affects culture through strategy in two ways. First way is attempt to codify and provide strategy. In this state leader as a strategist inject beliefs and preference into strategy and determine culture through it. The second channel is to standing between strategy and culture in order to interpret and implement it in preferred way.

The other area which has been studied is performance. It assumed that leader plays remarkable role in changing performance and the status of outcomes of organization affect the culture directly. The impact of high performance in healthy culture and poor one in weak climate mentioned in this paper.

These four ways illustrate the crucial role of leadership in creating culture. But in last two sections of paper this role has been challenged in two statements.

First is that while leader creates culture, culture creates leader too. As mentioned, culture is stable and has elements that determine which style of leadership is required and who can be the organizational leader. As, Schein assumes leadership and culture as two sides of one coin, cultural norms define how a given nation or organization will define leadership. (2004)

In addition, some factors like external environment, employees’ beliefs, business of organization, and national culture introduced as factors which affect organizational culture.

In conclusion, it should be claimed that the effects of leadership in shaping culture is noticeable and can be realized by studying it through different ways. But the more crucial point is that the effect is not directly except in first way in which leader becomes a pattern for followers. In all conditions leader can apply some policies by which affects culture. Employees play decisive role in changing climate, and leaders don’t change culture, they merely invite their people to change the culture (Hillis).

So, leader is not the exclusive actor in influencing culture. Other factors should be studied so that an effective innovation and successful change in culture can be achieved.