Leadership Role in Shaping Organizational Culture

Words: 2279
Topic: Business & Economics


The culture of an organization can determine the positive or negative development in the organization. Leadership promotes ethics and determines how culture is formed and maintained in an organization. Personal characteristics of leaders also play a significant role in organizational culture. Good leaders ought to have flexibility and adaptability traits to facilitate change in the organization. In addition, the type of leadership style affects the organizational culture. Examples of leadership styles include autocratic, democratic and laissez-faire. Certain mechanisms affect the manner in which organizational culture is embedded. This paper outlines each of these mechanisms in detail as well as what leaders can do to promote ethics and a good organizational culture in an organization.


The culture of an organization can form a basis of competitive advantage. It can also be a barrier against attaining the organization’s goals. Leadership largely determines how culture is formed and maintained within an organization and ensures the promotion of ethics. Kane-Urrabazo (2006) challenges the popular belief that organizational culture is preset. She further asserts that managers have a critical role in determining the culture of organizations (Kane-Urrabazo 2006). Leaders in all levels of the organization have a crucial role to create and maintain the right organizational culture. Therefore, leaders must be extra vigilant in decision making and should guarantee endorsement of proper ethical standards at all times.

The organizational culture is the framework through which expected behavior in an organization is learnt (Schein, 2013; Tsai, 2011). It is passed on from one member to another within the organization. Cameron and Quinn describe organizational culture as the way things are done in a given place (2006). The basic values of a corporation are initiated by its leaders and eventually become the organization’s leadership style. Ultimately, the culture of an organization comes about by the development of shared behavior, beliefs and values (Tsai, 2011).

How Leadership Characteristics Impact on Organizational Culture

Personal characteristics of leaders strongly impact the kind of culture that the organization develops (Packard, 2009). The trait theory approach in leadership proposes that effective leaders have some traits that make them successful. A trait such as assertiveness, for instance, helps shape the culture of the organization. Assertiveness is frankness in communicating personal demands, viewpoints and individual attitudes. Assertive leaders execute various tasks effectively. In addition, they confront other team members on the mistakes made and demand high standards of output (DuBrin, 2013). A culture that regards fairness and value for individual contribution is thus bred in such an environment.

Good leaders should have flexibility and adaptability traits. Leaders facilitate change in the organization hence they should be at the forefront of adapting and coping with change (DuBrin, 2013). Leaders who can easily adapt to different situations are able to handle stressful situations competently without putting the company at risk. According to Packard (2004), corporations that have adaptive cultures are rated more superior in terms of performance than corporations with less adaptive cultures. A culture that is adaptive transforms the corporation into a successful organization. Flexible leaders can adapt to a range of new situations including those initiated by customers. Such leaders often initiate change when it is needed.

Leaders with an internal locus of control have an inbuilt capacity to take charge and are likely to be more confident. Therefore, they command more attention from the staff members (Yukl, 2006). When such confidence is exuded it creates an organization with a deep sense of direction and clear objectives.

A creative leader is an asset to the company because he has the ability to come up with solutions to difficult problems (DuBrin, 2013). The leader creates an environment in which the staff members gain an ability to compete favorably in the trade and in the creation of an innovative consumer service. Therefore, creativity in leadership is highly encouraged for a healthy business environment.

However, there are cultural mechanisms regarded as managerial traits. They include employee mentorship, staff empowerment and consistency (DuBrin, 2013; Packard, 2009). These traits appear together very often regardless of the organizational culture. Leaders have an obligation to sustain approaches that give employees room for self-improvement.

Leadership Styles and Organizational Culture

The type of leadership style mainly affects the organizational culture since workers often emulate their leaders. It goes without saying that leadership can either aid or cripple the organization’s operations depending on the efficiency and effectiveness of their leadership. There are various leadership styles that affect the kind of culture developed in an organization. These include the autocratic leadership, democratic leadership and the laissez-faire leadership styles.

Authoritarian Leadership

Authoritarian or autocratic leadership style is the kind of leadership where the leaders impose decisions on their subordinates without involving them (Bititci, 2006). Autocratic leadership is not the best leadership style, but is necessary when fast decisions need to be made especially in a crisis situation. When such leadership is exercised, staff members often feel left out in the company’s operations.

Democratic Leadership

Democratic leadership is an inclusive leadership where the employees are involved in decision making (Bititci, 2006). The style draws attention to the point that input from staff members is crucial in the decision making procedure. The managers give direction to the staff members, but preserve the duty to have the final say in the decisions. This approach is regarded as the best choice for most corporations. Nevertheless, leaders still appreciate feedback and further input from the staff members, which improve the decisions they make. This kind of inclusive leadership makes the employees content hence increases their effectiveness.

Laissez-Faire Leadership

The laissez-faire leadership style is a lax kind of leadership and is rated as the least effective leadership style. Laissez-faire leaders seldom decide on company matters. Workers are left to make their own decisions in the company. Laissez-faire leaders may at times delegate decision making to reliable team members. In such instances, confusion usually arises whether to obey the leader’s authority or the authority of the selected team members. Duties are not clear-cut hence team members have low motivation on the job (Bititci, 2006).

How Leaders Develop the Culture of an Organization

Leaders develop the culture of an organization through various ways. Schein (2010) gives six mechanisms through which organizational culture is embedded. The mechanisms include what leaders focus most of their attention on, the leaders’ reactions to crises, rules on hiring and firing employees, and the leaders’ behavior in the organization as the role models (Schein, 2010). In addition, the reward schemes put in place by the company also play a significant role in developing the organization’s culture.

The leader’s key focus is evident through communication of expectations and values to be maintained in the organization. These expectations are set through the specific flaws or strengths noticed by the employees. The comments made, and measures of control that are witnessed in the day-to-day operations of the employees also determine an organization’s expectations. This is a powerful form of wordless communication as the employees receive hints on how things are supposed to be done. Staff members can easily learn what is of great value to the organization through observing their leaders (Schein, 2010). Nevertheless, unpredictable leaders may send mixed signals leaving employees at a loss of what exactly is expected of them.

A time of crisis may be a reliable measure of an organization’s culture. During such times, members of an organization are likely to exhibit numerous sensitive emotions. An economic crisis, for instance, may determine the company’s value system. The choice to decrease costs by dismissing workers is a critical decision that a company may make in such an instance. However, such a decision lowers the morale of other workers. Therefore, a decision regarding the issue of staff dismissal enables members of the staff to analyze the values that the company leadership values. Consequently, a value such as the importance of employee morale may be observed depending on the organization’s choice to dismiss some of its workers.

The role of leaders as the right models in the organization is a pillar in the organizational culture. Employees habitually respect their leaders’ behavior hence emulate them. Most organizations prefer good team players to poor team players. The leaders are thus tasked with the role of leading by example. They have to practice team spirit through clear communication and performance of their roles as expected of them by the employees. This value, therefore, trickles down to employees who have an obligation to maintain high performance standards at all times.

The reward system of a company can be a bone of contention if not well patterned. The company leadership should be careful to reward only those behaviors that are consistent with the company’s positive values. The behaviors that form the organization’s culture are eventually reinforced in such situations. A poorly patterned reward system may easily de-motivate employees and cause confusion on the value systems of the organization.

Hiring and firing of staff members in the company also conveys a message on the company’s values. Leaders often look for people who have values related to those of the organization. The processes followed in the recruitment of new staff into the company subtly reinforce what the company values. Some companies base their hiring on recommendations from older employees. Older employees are likely to be aware of the organization’s expectations due to their work experience in the company. The reasons for firing certain employees also determine an organization’s culture. Employees who do not adhere to the organization’s values are often dismissed.

Use of Power to Promote Healthy Organizational Culture

Successful leaders have strong urges to control resources. Power is an essential resource that leaders use to control other employees (DuBrin, 2013). According to Sinha, “power is the capacity to influence” (2008, p. 216). Leaders’ powers originate from the authority given to them by virtue of their positions. Employees obey their leaders because they believe that it is the legitimate right of the leaders to exercise authority over them. Efficient leaders can use their power to delegate duties correctly, hire and fire workers accordingly and to enforce the companies’ rules (Sinha, 2008). Effective leaders use their authority to communicate their requests politely yet confidently.

Socialized power motive is more useful than individualized power motive. A leader with socialized power motive uses it to achieve organizational goals and perpetuate the interests of the organization. The employees in such a setting work to their maximum potential. The communication concerning company policies and rules from the leaders is usually clear. The leader thus has the authority to develop a healthy organizational culture that entails clear communication and the ability to make legitimate demands of his subordinates. A leader can also create an organizational culture with the use of reward power. The rewards can either be tangible for instance pay rises or intangible such as praises. Reward power can be used to increase organizational performance. The rewards are very strong motivators. Therefore, power wielders’ should be careful on how they handle them.

How a Leader can Promote Ethics in a Healthy Organization

Personal values are major aspects of leadership as they represent vital ideologies in individuals. Ethics incorporate guiding principles for the practical application of values and the leaders’ part in growing and promoting the utilization of common ideals in the organization (Packard, 2009). For effectiveness, companies’ ethical values should be assimilated into all policies in the organizations.

Corporate culture is an important channel that alters and establishes values of a corporation. Resolute leadership over a long period of time is necessary for the creation of a rich aspect of culture. As Packard quotes Manning, “culture is the ‘context for ethics’ in an organization and that leaders must develop an ‘ethical framework,’ which includes the agency’s mission, values statement, and ethical code to guide staff” (Packard, 2009, p. 161). Leaders are deemed the creators of company processes that endorse morality and ethics in the corporation. Ethical leadership hence puts in place values that give a framework for decision making and enhance professionalism (Packard, 2009).

Organizational values are embedded in activities such as recruiting and hiring new members. Board members should have integrity as a core value. Electing board members due to their influence as a sole value is a liability to the company as poor board leadership hurts the company’s operations (Packard, 2009).

According to Johnson “social learning theory is based on the premise that people learn by observing and then emulating the values, attitudes and behaviors of people they find legitimate, attractive and credible” (2012, p. 266). Such is the case in ethics where leaders act and the staff members repeat what they observe from their leaders (Johnson, 2012). Leaders are likely to be emulated because they have authority and a special status in the organization. Therefore, leaders ought to ensure that they deal with all employees fairly. Ethical leaders reinforce ethical standards by the regular communication of company’s values, mission statement and the need for ethical behavior.

The organization’s leadership ought to distinguish legal behavior from ethical behavior. The fact that an activity is legal does not mean it passes for an ethical activity. Organizational leadership ought to develop a culture that gives clear-cut solutions to such dilemmas should they arise (Johnson, 2012). There is also a need for the leadership to divulge information on risky activities. It should be made clear to members of staff that ignorance is not acceptable as an excuse for any shortcoming. Accountability should be encouraged, and any form of unethical behavior ought to be discouraged.


Leaders are tasked with expressing and endorsing corporations’ principals and ethical standards. A variety of leadership models such as the transformational leadership model and exemplary leadership can be adopted in creating and maintaining a healthy organizational culture.


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