LEADERSHIP AND CORPORATE CULTURE

By Anushree Priyadarshini, MSc, MBA, PhD; Examiner - Foundation Management

Fundamentals, December 2020.

“Defining the company’s purpose is a leader – and only a leader’s responsibility”

- Arkadi Kuhlmann, Former CEO ING Direct

Introduction
Leadership is the use of non-coercive influence to shape goals, motivate behavior towards
achievement of goals, and help define group or organizational culture. It promotes the
establishment of culture to enable employees to accomplish the company vision and
recognise how essential each of their inputs is to advance the organisational goals. This article
briefly discusses the nature of leadership and its importance in shaping an organisation’s
culture.

Leadership and Corporate Culture

Leadership is the influencing process of leaders and followers to achieve organizational

objectives through change. It is vital to recognise it as a process that involves influencing
others, that happens within a group context and is about attainment of a goal that is shared
by leaders and their followers (Silva, 2016). Mintzberg (2004), highlights that for attainment
of organisational goals, leaders need to simultaneously be managers and leaders as
managers stress calculation, while leaders stress commitment; managers view an
organization as components of a portfolio, while leaders view organizations with an
integrative perspective; managers operate with rationality, while leaders operate with integrity.
While the exploration of the concept of leadership has propagated through various schools of
thoughts (please see Table 1), it has universally been seen as the foundation of the
organisation’s culture.

Organizational culture can be defined as the shared values, beliefs, or perceptions held by
employees within an organization. (Robbins & Coulter, 2018). As organizational culture
develops and grows through a shared mindset, leaders are the ones that shape its
development and early direction. Defining the values of the organisation that get transmitted
and absorbed by the members of the organization, they lay the foundation of the ethics and
beliefs that will drive the organization. Once these core values are established, leaders ensure
these are enforced and practiced.

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Table 1. Development of Leadership Theory

Period Approach Core theme

Up to late 1940s Trait approach Leadership ability is innate
Late 1940s to late 1960s Style approach Leadership effectiveness is to
do
with how the leader behaves
Late 1960s to early Contingency approach It all depends; effective
1980s
leadership is affected by the
situation
Since early 1980s New Leadership Leaders transform the way
approach
people feel about themselves
Source: Bryman, A. 1992. Charisma and leadership in organisations. London: Sage. P.1.

How leadership affects organizational culture

Leaders define the direction of their organizations. Influencing organisational atmosphere
and employee engagement, leaders impact the confidence of the staff in taking mistakes as
learning opportunities or as failures and thus drive organisational performance. Leading by
their own actions, leaders demonstrate the behaviours that are accepted and encouraged.
Some of the ways through which leadership affects organizational culture include:
Leadership Sets the Vision
Leaders are responsible for setting the organization’s vision that not only defines the
organisation’s atmosphere but also informs its decisions. They set targets that connect back
to the vision and ensure that employees both appreciate it and adopt it.
Leaders Embody the Change they Want to See
Leaders through their behaviours, communication styles and how they handle success and
failures set examples in the organisation. Demonstrating the values they want embodied they
derive change.

Leadership Creates Policy

Leaders create organisational policies that support both the vision and the desired culture.
Policies that are connected to the mission and contribute towards a supportive organisational
atmosphere advance the credibility of leadership and have positive effects on employee
morale and commitment.

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Leader Drives a Thirst for Continuous Learning
Leaders can foster a desire to learn and grow in employees, sharing knowledge with team
members to build a career path. By ensuring employees feel safe to explore and learn leaders
build a culture of learning and growth where employees are inclined to work in partnerships
and learn from others.
Leadership Promotes a Culture of Recognition
Leaders can cultivate a culture of appreciation. By rewarding hard work and good behaviour
leaders support and value employee’s contributions. Additionally, by encouraging team
members to recognise each other’s valuable inputs leaders develop a culture of strong and
effective teams.
Leadership Ensures Accountability
By outlining the organisational targets and being transparent about expectations and
standards leaders can build a culture of accountability. Leaders when let employees have
clear, measurable steps to success ensure they are responsible and committed, thereby
create an organisational culture of accountability.
Thus, leaders develop and strengthen organizational belief system and values by helping their
employees grow and develop through shared vision, opportunities, and recognition.

References:
Mintzberg, H. (2004). Leadership and management development: An afterword. Academy of
Management Perspectives, 18(3), 140-142.

Silva, A. (2016). What is leadership? Journal of Business Studies Quarterly, 8(1),

1. Robbins, S. P., & Coulter, M. A. (2018). Management 14th ed.

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