Business Corner
STRATEGIES & ANALYSIS
BY PHIL PHILLIPS, PHD
CONTRIBUTING EDITOR
PHILLIPS@CHEMARKCONSULTING.NET
Culture and strategic leadership
A look at
how and why
corporate
leaders often
determine the
successes and
failures of an
organization.
Organizational culture is created by the strategic leadership provided by an organizations founder or top
management. As I observed before, and
then reverified during my doctorate peer-reviewed literature research, an organization’s founder is particularly important in
determining culture because the founder
imprints values and management styles on
the organization that lasts for a long time.
This may be good for a certain period but it
can also be stifling over the long haul.
For example, Walt Disney’s conservative
influence on the company he established
continued until well after his death.
Managers were afraid to experiment with
new forms of entertainment because they
were afraid Walt wouldn’t like it. It took the
installation of new management under
Michael Eisner to turn around the company’s fortunes and allow it to deal with the
realities of the new entertainment industry
environment.
The leadership style established by the
founder—or top management—is transmitted to the company’s managers, and as the
company grows, it typically attracts new
managers and employees who share the
same values. Thus, a company’s culture
becomes more and more distinct as its members become more similar. The virtue of
these shared values and common culture is
that it increases integration and improves
coordination among organizational members. For example, the common language
that typically emerges in an organization
because people share the same beliefs and
values facilitates cooperation among managers. When organizational members buy
into cultural norms and values, this dynamic bonds them to the organization and
increases their commitment to find new
ways to help it succeed.
Strategic leadership affects organizational
culture as well, through the way managers
design organizational structure, that is, the
way they delegate authority and divide up
task relationships. Michael Dell, for exam-
ple, keeps his organization as flat as possible
and has decentralized authority to lower-
level managers and employees who are
charged with striving to get as close to the
customer as they can. The result has been to
create a cost-conscious customer service cul-
ture at Dell in which employees strive to
provide high-quality customer service.
Therefore, the way an organization designs
its structure reinforces (or not) the affect on
the created culture norms and values.
