Organizational culture is one of the most important elements in the functioning of modern businesses, directly influencing employee effectiveness, engagement, and competitive advantage. Research clearly shows that leaders play a key role in shaping this culture. Leaders not only define values and norms but also give organizational culture a tangible dimension through their behavior, decisions, and management style. This article explains how leaders influence organizational culture, based on the latest scientific research and practical examples.
The Importance of Leadership in Shaping Organizational Culture
Gallup research clearly shows that organizations where leaders are actively engaged in culture and its values are 9.8 times more likely to have employees rate their organizational culture as “excellent.” It is the leaders who give culture a tangible dimension, translating the company’s values and mission into concrete actions that define the everyday experiences of employees.
Organizational culture cannot exist only in declarations—it requires consistent action and authenticity from leaders. A lasting transformation of culture is a long-term process that should involve management at every level of the organization. As researchers note, organizational culture affects key elements of a company’s operations, such as employee engagement, talent retention, and customer relationships.
MIT Sloan Management Review emphasizes that organizational culture can become a priceless differentiator that competitors will not be able to replicate, unlike products or services, which can be copied even when innovative. This example shows that well-managed organizational culture provides a unique competitive advantage.
The Impact of Leadership Style on Organizational Culture
Leadership style plays a significant role in shaping organizational culture. Research highlights several main leadership styles that influence culture in different ways:
Autocratic Leadership Style
This style is characterized by centralized power and decision-making solely by the leader. Such a style may lead to quick decision-making but often at the cost of employee motivation and engagement. In organizations with an autocratic leadership style, organizational culture often features high levels of formalization, clearly defined hierarchy, and low employee autonomy.
Practical Example: In manufacturing companies with traditional management models, the autocratic leadership style is often seen, where decisions are made top-down, and employees have strictly defined tasks and procedures. This culture can be effective in situations that require quick decisions, but it limits creativity and employee initiative.
Democratic Leadership Style
This style promotes collaboration and team involvement in the decision-making process. Such a style can lead to higher employee satisfaction and a better work atmosphere, although it may also lengthen the decision-making process. Organizational culture shaped by a democratic leadership style is characterized by greater openness to ideas, a stronger sense of community, and higher levels of engagement.
Practical Example: Many tech companies, such as Polish IT startups, practice the democratic management style, where teams have a significant influence on decisions. Employees regularly participate in strategic meetings, and their opinions are considered when planning the company’s development directions.
Transformational Leadership Style
This style focuses on inspiring and motivating employees to achieve higher goals. Transformational leaders often act as mentors and guides, leading to high motivation and employee loyalty. This leadership style fosters the development of an organizational culture based on continuous growth, innovation, and engagement.
Research shows that transformational leadership is associated with better mental and physical health for employees. A leader who allows autonomy, delegates authority, motivates, sets goals, and treats employees individually increases their sense of purpose at work, which translates into well-being.
Practical Example: Bob Stiller, founder of Green Mountain Coffee Roasters, applied the “appreciative inquiry” method, focusing on strengthening the positive aspects of the organization. Under his leadership, the company became the largest fair trade coffee supplier, and the “Business Ethics” magazine twice recognized it as the best corporate citizen.
Mechanisms of Leaders’ Influence on Organizational Culture
Leaders as Role Models
One of the strongest mechanisms for leaders’ influence on organizational culture is role modeling behavior. Leaders, through their actions, set examples that become models for employees to follow. Managers’ behaviors, attitudes, preferences, and leadership styles are usually closely observed by employees and strengthen the development of specific cultural patterns.
Researchers emphasize that to build a coherent and strong culture, leaders should think about what organizational culture is, its importance, its current state, and its desired direction, as well as how they will measure its development.
Practical Example: The CEO of Vivus Finance, Ewa Wernerowicz, inspired by Zappos leader Tony Hsieh, built a unique atmosphere and relationships between employees, which translated into higher employee and customer satisfaction. Her personal engagement and modeling of desired behaviors were key to the company’s success.
Communication and Promoting Values
The role of leaders as “communicators of culture” involves translating the organization’s values and mission into actions that naturally align with the team’s daily work. It is their attitudes and decisions that show employees how organizational values can come alive in every interaction and task.
Practical Example: Bank Gospodarstwa Krajowego, by examining its organizational culture, decided to collaborate with members of its management team to prepare the “Leadership of the Future” program, which was introduced to managers at all levels of the organization. Three development tracks were created—for higher, middle, and lower levels—lasting from 1 to 1.5 years, covering areas such as leadership, matrix management with elements of agile methodology, feedback, empathy-based communication, and energy management.
Managing Cultural Change
Effective cultural transformation requires leaders to work based on a shared vision and agree on the organization’s goals and values. Without their involvement, any attempt at cultural change is likely to fail, as a lack of consistency at the leadership level leads to uncertainty among employees.
Research shows that charismatic managers are the most effective in shaping organizational cultures, especially in crisis situations, when there is a strong demand for charismatic leaders.
Practical Example: OVHcloud decided to implement training that shaped attitudes and behaviors based on the idea of well-being: positivity, meaningful work, personal energy management. The results of these actions can be seen in the reorientation of organizational culture towards a clan or adhocracy type—supportive leaders, through their behavior and leadership style, increase employees’ sense of influence, reduce distance, and lower stress levels.
Types of Organizational Cultures Shaped by Leaders
Adhocracy Culture
Adhocracy culture focuses on innovation and risk-taking. Leaders encourage employees to think boldly, experiment, and push boundaries without fear of failure. It can also be described as a “creation culture,” focused on building something meaningful and impactful.
Practical Example: Many tech startups and creative companies in Poland, such as CD Projekt and Allegro, operate based on an adhocracy culture, where employees have the freedom to explore new ideas, and leadership actively supports innovation. Leaders of these organizations often organize hackathons, brainstorming sessions, and allocate time for personal projects.
Clan Culture
In clan culture, the organization resembles a family, with leaders acting as mentors. There is an emphasis on collaboration, engagement, and mutual development. Research shows that a lower level of hierarchy in an organization leads to increased job satisfaction.
Practical Example: Family-owned businesses often develop a clan culture, where interpersonal relationships and family values are just as important as business results. The Polish natural cosmetics manufacturer Dr Irena Eris builds a culture based on close relationships, where employees feel part of a “family,” and the owners personally know most of the employees.
Practical Tips for Leaders Who Want to Shape Organizational Culture
- Authenticity – Leaders must practice what they preach. Studies show that organizations with leaders actively supporting organizational culture achieve higher engagement and retention rates.
- Clear Vision and Values – Effective leaders can precisely define the desired culture and values that should not only be declared but also actively practiced.
- Systematic Communication – Leaders should regularly communicate cultural values and expectations through various channels, from formal presentations to informal conversations.
- Development of Mid-Level Leaders – Research indicates that implementing leadership development programs for managers at all levels yields measurable results in shaping organizational culture.
- Monitoring and Adjustment – Using tools such as OCAI (Organizational Culture Assessment Instrument) to regularly assess the state of organizational culture and make necessary adjustments.
- Involving Employees – It is crucial to create a sense of influence among organizational participants in shaping organizational culture, which increases their engagement and identification with the company.
Summary
The role of leaders in shaping organizational culture is critical and multidimensional. Scientific research clearly confirms that leadership style, behaviors, decisions, and communication directly impact the culture of an organization. The organizational cultures of all major corporations were created by charismatic leaders, visionaries, and individuals with a sense of mission.
Leaders who successfully influence organizational culture are those who understand its strategic importance, can clearly define the desired values and behaviors, and consistently model these behaviors in daily work. As shown by examples from business practice, consciously shaping organizational culture by leaders leads to measurable business results, such as higher employee engagement, better talent retention, and higher customer satisfaction.
In a rapidly changing business environment, leaders’ ability to shape an adaptive, strong organizational culture becomes one of the most important leadership competencies of the 21st century.
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