The Best Combination of Leadership and Organizational Culture

Topic(s):
Publication: Journal of Applied Psychology (2016)
Article: Do Similarities or Differences Between CEO Leadership and Organizational Culture Have a More Positive Effect on Firm Performance? A Test of Competing Predictions
Authors: C.A. Hartnell, A.J. Kinicki, L. Schurer Lambert, M. Fugate, P. Doyle Corner
Reviewed by: Ben Sher

Leadership and organizational culture are two very important parts of I-O Psychology. Yet, researchers are still discovering how the two concepts interact with each other to drive organizational performance. For example, are certain types of leaders more beneficial in certain organizational cultures? New research (Hartnell, Kinicki, Schurer Lambert, Fugate, & Doyle Corner, 2016) considers two different types of organizational culture and two different types of leadership behavior. The results show that CEO behavior can be more effective by tailoring it based on the type of organizational culture already in place.

TASK-ORIENTATION VERSUS RELATIONSHIP-ORIENTATION

To keep things clear and straightforward, the researchers considered two types of leadership behavior and two types of organizational culture. When CEOs lead, they tend to emphasize either task leadership or relational leadership. Task leadership promotes structure, goals, expectations, strategy, and getting work done. Relational leadership promotes motivation, training, and developing social relationships. Similarly, organizational culture can be task-oriented, putting an emphasis on getting work done, or relationship-oriented, putting an emphasis on interpersonal communication and teamwork.

So which combination of CEO and culture works best? On one hand, the authors reasoned that a similarity between the two styles would be ideal. For example, in an organization that preaches the importance of interpersonal relationships, wouldn’t it be best if the CEO practiced what he or she preaches and also promotes a relationship-oriented approach? On the other hand, note the authors, perhaps dissimilarity between CEO and culture has its advantages. If the culture already promotes relationships and teamwork, the CEO is not really needed to drive that. Instead the CEO may be able to add value by leading with a more task-oriented approach. When researchers think of two logical possibilities that are opposite of one another, they call it “competing hypotheses.” They then run a study and determine which hypothesis is correct. So which is better, similarity or dissimilarity?

THE STUDY RESULTS

The researchers surveyed 114 CEOs and 324 members of their top management teams. The first approach predicted that organizations would perform better when CEOs and organizational cultures were similar. This hypothesis was not supported, as similarity did not lead to better organizational performance. The second approach said that dissimilarity would lead to organizational success—for example, a CEO who emphasizes relationships in a culture that does not, or vice-versa. This hypothesis was supported, meaning that when the CEO and the culture put a different amount of emphasis on relationships, organizational performance improved. When the extent of emphasis on task-orientation was considered, these results were mostly the same, and dissimilarity between the CEO and the culture seemed to be advantageous.

PRACTICAL IMPLICATIONS

This study found that CEOs who differ from the organizational culture already in place may be benefitting the organization. When culture values relationships and teamwork, the CEO can add value by placing an emphasis on tasks and goals. Similarly, when the culture values tasks and goals, the CEO adds value by working on relationships and teamwork. When the CEO emphasizes the same aspect that the culture already values, it may be redundant and the CEO misses an opportunity to add value. In the situation where both emphasize tasks, the authors say that it may also seem overbearing to employees.

The authors note that optimal CEO behavior therefore changes over time. If a CEO is successful at implementing a very results-driven organization from the top down, teamwork and interpersonal communication may fall by the wayside. It is then up to the CEO to pick up the slack and address these components of success that the current culture does not.

Hartnell, C. A., Kinicki, A. J., Lambert, L. S., Fugate, M., & Corner, P. D. (2016). Do similarities or differences between CEO leadership and organizational culture have a more positive effect on firm performance? A test of competing predictions. Journal of Applied Psychology, 101(6), 846-861. doi:10.1037/apl0000083

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