ORGANIZATIONAL CULTURE: MODULE 3 LESSON 2

Leadership and
Organizational Culture
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Leaders not only formulate the strategy and set goals and directions leaders in the higher echelons, serve as an example for the rest of the
for the organization; they also have a tremendous impact on the organization. As such, leaders provide essential normative information
organization’s culture. Due to their salience, responsibility, author- for the rest of the organization:
ity, and presumed status, senior leaders, especially CEOs, are a
• By the way they behave and get things done.
significant cultural influence in organizations. Interestingly, they
may fail to see or acknowledge this, resulting in organizational cul- • By what they pay attention to, measure, and control regularly.
ture either being left unmanaged or delegated to HR. While delegat-
• By how they allocate resources.
ing organizational culture to HR trumps leaving it unmanaged, it is
• By how they react to critical incidents and organizational crises.
important for the leadership to understand that their role in shaping
or changing the culture cannot be substituted. The important role • By what, when, and how they communicate, and even by how
that HR can play in this regard is facilitating the link between lead- they dress.
ership and organizational culture.
In other words, employees view leaders as role models and therefore
Therefore, in this lesson, you will learn about different ways to help pay extra attention to the leaders’ behaviors and actions in their organi-
align your organization’s leadership with the current or aspired organi- zation. They see their leaders’ behaviors as the way they should behave
zational culture. You will first learn how and why leaders impact orga- and will therefore copy their behaviors, resulting in an organizational
nizational culture. Next, you will learn more about the link between culture that resembles the leadership.
leaders’ personalities on the one hand and values and organizational
cultures on the other hand. This will help you understand which leaders For instance, if C-level leaders behave very amicably and non-hierarchi-
will suit or naturally nurture which types of cultures. Last, you will learn cally towards employees, give their direct reports a lot of freedom, com-
about the different HR tools that you can use to create synergy between municate in very informal manners, and regularly show their faces on
the leadership and the culture of your organization. the work floor, this sets the tone for the rest of the organization. In these
situations, lower-level leaders are also likely to behave in an egalitarian
way and give their direct reports a lot of autonomy. Employees will be
HOW AND WHY LEADERS IMPACT AN ORGANIZATIONAL CULTURE
open and informal to each other as well. This is likely to result in a very
collaborative, people-focused, clan-like culture. However, when C-level
How do leaders shape organizational culture? Leaders, and especially
leaders behave oppositely, when they act distant and hierarchically
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towards employees, are very controlling towards their direct reports, module, you can find a management self-assessment tool based on the
address the organization formally, and mostly remain in their offices on cultural values framework.
the top floor, lower-level leaders will tend to show the same controlling
leadership style. Consequently, employees are likely to be less open
LEADERS’ PERSONALITIES AND ORGANIZATIONAL CULTURE
and more formal to their superiors and peers. This should then lead to a
more competitive, results-oriented, hierarchical culture.
Leaders may try to adjust their behaviors, for instance, with a coach’s
help, when they realize that their behaviors are not in line with their
The culture of an organization is thus impacted by how the leadership
organization’s values. However, this may be a very difficult endeavor, as
behaves, but it is also impacted by the decisions that leaders make
our personality strongly influences many of our preferences and behav-
about the design and structure of the organization; which organizational
ioral tendencies.
systems and procedures are in place; which rites and rituals are intro-
duced; how the physical spaces, facades, and buildings of the organiza-
Our personality is something we cannot change, as it is in a large part
tion are designed; which stories about important events and people are
determined by our genetic makeup. Understanding someone’s per-
told; and which formal statements of organizational philosophy, creeds,
sonality will allow you to predict how they will behave in a situation.
and charters are made.
Therefore, knowing your leader’s personality will allow you to indicate
whether they will fit and/or foster a specific organizational culture.
While leaders may be aware that their decisions on these matters
impact their organization’s culture, they are often less aware of how
You will now learn the basics of the most well-established personality
strongly their everyday behaviors affect their organization’s culture.
taxonomy, named the big five, which consists of five personality trait
This may especially lead to issues when their own behaviors are not in
dimensions and explains how a leader’s position on these dimensions
line with the espoused values. This will deflect the influence of these
is related to different types of organizational cultures:
values on the organizational culture. Making the leadership aware of
their behavior and how this impacts the culture is an important step in • The first dimension is agreeableness, which characterizes you in
aligning the leadership with the espoused organizational culture. For terms of how good-natured, cooperative, and trusting you are.
this, you may, for instance, let them do a management skills self-as-
• The second dimension is openness to experience, which character-
sessment in line with your culture. In the reading material for this
izes you in terms of how imaginative, curious, and sensitive you are.
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• The third dimension is emotional stability, which describes you Your position on each of these overarching dimensions combined forms
in terms of how calm, self-confident, and secure you are. your personality and will guide your preferences and behavior. For
instance, if you score high on agreeableness, you find it very important
• The fourth dimension is conscientiousness, which characterizes
to be liked, and therefore you tend to be very friendly, try to help oth-
you in terms of how responsible, dependable, persistent, and
ers, and make sure you stick to your word. If you score low on agree-
organized you are.
ableness, on the other hand, you act more competitively, bluntly, and
• The last dimension is extraversion, which represents you in
sarcastically.
terms of how sociable, gregarious, and assertive you are.

Question: How do you think your CEO scores on each of the dimensions
of the big five?

Research by O’Reilly and colleagues shows that the personality of the

CEO predicts the culture of an organization1. CEOs that score high on
agreeableness have been found to foster cultures that are character-
ized by collaboration, trust, and support, while CEOs that score low on
agreeableness encourage competitive and performance-oriented cul-
tures. CEOs that are open to experience also tend to stimulate cultures
that are adaptable, innovative, and risk-taking, while CEOs that are not
so open to experience stimulate cultures that are more stable, hierar-
chical, and controlled. CEOs that are emotionally stable were linked to
cultures that are internally focused, such as clan cultures, while CEOs
that are less emotionally stable, also known as neurotic, were linked
to more externally focused cultures, such as adhocracy and market

1
O’Reilly III, C. A., Caldwell, D. F., Chatman, J. A., and Doerr, B. (2014). The promise and problems of organizational culture: CEO personality, culture, and firm performance. Group and Organization
Management, 39(6), 595–625.
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cultures. An explanation could be that CEOs who have higher levels of leaders have also been found to leave their mark on the organizational
anxiety channel that anxiety into their organization’s culture by creating culture. Personal values are people’s basic convictions that a specific
pressure for change and innovation to ensure a competitive position in mode of conduct or end state of existence is preferable to an opposite
the marketplace. And last, CEOs that are conscientious stimulate cul- or converse mode of conduct or end state of existence. For instance,
tures that are detail oriented, precise, and quality focused. you may believe honesty is better than dishonesty, equality is better
than inequality, or cooperation is better than competition. These con-
Given the impact that high-level leaders’ personalities can have on victions also tend to be difficult to change and have a huge impact on
organizational culture, it may be something you want to pay attention to our motivation, decisions, and behaviors.
and measure, for instance, with the long big five inventory (BFI-44) or
the short big five inventory (BF-10), when selecting or promoting lead- Berson and colleagues examined the relationship between the values
ers in your organization. As mentioned, personality is not something of CEOs, organizational culture, and organizational performance in 26
you can change therefore, when you select or advance a leader with a Israeli companies2.
personality that does not match your current culture, the chances are
that either your current culture will change, or your leader will not be
able to perform to the best of their ability, thereby negatively impact-
ing the business. If you are in the process of changing your organiza-
tional culture, putting leaders in place with personalities that match
the aspired culture can really give the cultural transformation a push,
while putting leaders in place with personalities that do not match the
aspired culture may really frustrate the transformation.

LEADERS’ PERSONAL VALUES AND ORGANIZATIONAL CULTURE

In addition to their personality, the personal values of high-ranking

2
Berson, Y., Oreg, S., & Dvir, T. (2008). CEO values, organizational culture and firm outcomes. Journal of Organizational Behavior: the International Journal of Industrial, Occupational and Organizational
Psychology and Behavior, 29(5), 615-633.
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They found that organizations that had a CEO which valued self-direc- And organizations that had a CEO that valued benevolence tended to
tion tended to have innovative cultures, which involved an enterprising have supportive cultures, which involved work environments that are
and opportunity-seeking environment, that in turn was associated with characterized by trust, safety, and an encouraging and collaborative
sales growth. atmosphere, resulting in high employee satisfaction.

Of these culture examples, one is not better than the other. They just
stimulate different performance aspects and may therefore be more
suitable in certain industries and contexts. For instance, financial ser-
vices are becoming more and more like bureaucracies, focusing on
careful work and risk management because of the increasingly complex
regulations in response to the financial crisis.

As the personal values of especially high-ranking leaders may influence

the organization’s culture and, consequently, organizational perfor-
Organizations that had a CEO that valued security tended to have mance, it is wise also to assess whether a candidate’s personal values
bureaucratic cultures, which involved a lack of flexibility and an empha- match the current or aspired organizational culture when selecting or
sis on formalization and centralization along with efficient performance. promoting leaders in your organization. For this, you can, for example,
use the organizational culture profile measure. In this measure, respon-
dents are asked for each of the 54 value statements belonging to the
six culture dimensions, “How important is it for this characteristic to
be a part of the organization you work for?” You can then compare the
scores of the job applicant on the six culture dimensions with the gen-
eral scores of your organization. You can find this measure in the final
assignment of this course.
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HR TOOLS FOR THE ALIGNMENT BETWEEN LEADERSHIP AND could feed this session with 360-degree feedback on this topic. If their
ORGANIZATIONAL CULTURE behaviors and/or decisions show misalignment with the culture, rather
than you offering them a solution, they themselves need to come up
As an HR professional, there are a few tools that you can utilize to try
with an action plan to create more alignment between them and the
to create alignment between the leadership and the culture of your
culture, as this will make them more intrinsically motivated to change.
organization. First, you may want to create awareness in the leader-
Of course, you may want to support them by offering development and
ship of how influential their behavior is for the culture and how the
training activities that can help them alter their behaviors. For instance,
culture impacts the business. To support your argument, you can refer
they may want to take on an executive coach that could help them to
to ample research that shows how important culture is for employee
reflect on their behaviors continuously and change them if needed. You
morale and organizational outcomes. Sharing Harvard Business Review
may also help them by incorporating the behaviors that are aligned with
articles could be a starting point. However, it is maybe more powerful if
your culture into the evaluation system. For instance, you may want to
you show data from your own organization. For instance, you could try
put these behaviors into 360-degree feedback, so the leadership will
to show the relationship between organizational culture and employee
have an extra incentive to show these behaviors.
engagement by including the perception of your organization’s culture
in your engagement survey and demonstrating a positive relationship
However, given the difficulty in changing people’s behavior, the best
between the two. You could also try to relate your culture to retention
way to align the leadership with the culture is to select and promote
rate by relating engagement scores to retention and attrition. In addi-
the right leaders. When in the process of filling leadership positions, do
tion, you may want to include qualitative data from exit interviews that
assess not only the capabilities of candidates but also their personality
signal the link between your organization’s culture and employees’
and personal values to see whether they are a good fit with the culture.
decisions to leave.
Keep in mind that a good fit does benefit not only the culture of the
organization but also the performance of the leader.
When you have convinced your leadership of the importance of orga-
nizational culture, you could organize a team session in which they,
But what do you do when you are currently dealing with leaders that
together with a facilitator, do an assessment of their own behaviors
are misfits in the current or aspired culture? This can be very problem-
and the decisions that they make that influence the organizational cul-
atic because such misfits tend to intoxicate your culture. In these situa-
ture, such as how they have structured the organization and whether
tions, it can help to start a conversation with them about their interests
this is in line with the espoused values and organizational culture. You
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and explain to them that it is neither good for their performance as well
as their well-being to stay in a culture that does not fit them. However,
if they are unwilling to see the problem, you will have to make difficult
decisions.

TO SUMMARIZE

That wraps up this lesson, in which you learned that the leadership of
an organization plays an important role in shaping the culture. Leaders
function as role models and, therefore, their behaviors provide behav-
ioral norms for the rest of the organization. As our behavior is mostly
the result of our personality and our personal values, it is important
that the personality and personal values of the higher leadership fit the
current or aspired organizational culture. When you are not in the posi-
tion to select or promote leaders, you may want to create awareness in
the current leadership on how their behaviors impact the culture and, if
needed, provide them with aid to change their behaviors.