What Are the Factors Affecting the Organizational Culture?

Introduction

Organizational culture is a collective term used to refer to the assumptions and values shared by members of a corporation. It may also refer to the workplace environment created by employee interactions. It is the result of how members of an organization interrelate. Just like families, academic institutions, villages and other unions, organizations rest on relationships of social interaction (Brown 1995).

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Organizational culture is composed of different observable forms, which include verbal communication, use of symbols, rituals, traditions, techniques of problem solving, and the use of machines. It is thus an element of what members of an organization generate through social relations and what they use to deal with the social environment.

Though the phenomenon of organizational culture may be inherent in the collective minds of every member in an organization, it is often manifested in their behaviors while carrying out their duties in the organization. In the contemporary society, culture has become influential especially in protecting organizations against dissolution, decentralization, de-layering, downscaling, and other negative pressures. It is divided into three levels, which include behavior, values, and beliefs (Hatch 1993).

Traditional techniques for integration hierarchies and management systems in organizations have currently become expensive and inefficient leaving culture as the only effective tool left in bolstering an organization’s identity. Without culture, an organization lacks beliefs, focus, and principles. The culture of an organization grows to assist it in dealing with its environment. Corporate leaders must know how to evaluate their own cultures in terms of their relevance in a competitive market. They should always take into account the best techniques for transforming the cultures present in their organizations (Kramer 1998).

Organizational leaders, however, are facing issues when trying to achieve organizational success in different cultural environments. The success of an organization’s leader depends on how he understands the company’s culture (Schein 1996). This paper will discuss the factors affecting the culture of organizations as well as the extent to which leaders create, develop, influence and change organizational cultures in their work places.

Discussion

Culture and Organizational Performance

For an organization’s culture to offer sustained competitive advantage and provide high level financial performance, three conditions are required. First, the organizational culture must be valuable. This means that the culture should allow the organization to operate in such a way that the end result entails high sales, minimal production costs and high profit margins. For culture to be of high financial value to an organization, then it must have good economic consequences (Barney 1986).

The second condition required for an organization’s culture to offer sustained competitive advantage and provide high level financial performance is that the adopted culture should be rare. This means that it should have qualities that are extraordinary when compared to the cultures of other organizations (Barney 1986).

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Lastly, an organization’s culture should be imperfectly imitable. This means that organizations lacking these cultures are not in a position to involve themselves in activities that have an effect on their cultures. If these organizations try to emulate the cultures of other companies, then they will be disadvantaged if compared to the organizations they are trying to emulate (Ramirez1999).

Factors affecting the culture of organizations

Various factors influence an organization’s culture though the people present in the organization mostly develop the organization’s culture. The major factor influencing organizational culture is the leader of the organization. Due to strong relationships between staff members and administrators, the people who have a large effect on an organization’s culture are those with power, who in most cases, are involved in guiding an organization. It is important to respect and understand the behavior of organizational leaders in order to assess the culture of an organization (Yukl 1989).

Leaders need to be instrumental when creating the primary mechanisms to be used in cultural embedding and reinforcement. This embedding and reinforcement is what gives rise to cultural norms and changes occur from what leaders to pay attention to, how they react to crises, the criteria they use in rewarding and recruiting, as well as their role modeling. Looking at this perspective, explicit leadership is instrumental and influences the culture in an organization (Beyer and Trice 1991).

The role of an organizational leader is to make certain that work is performed both successfully and proficiently. The techniques adopted by leaders in an organization should assist the employees to carry out their duties with no negative outcomes. To secure a constructive culture in the workplace, it is important for an organization to influence and develop its leaders to take on behaviors that convince the employees to carry out their duties in a positive and authoritative manner (Grint 1997).

The establishment of a constructive work place culture is a gradual and long process. Leaders should establish a good work place culture that is beneficial to customers, the employees, and the society in general. Leaders are usually equipped with adequate knowledge concerning the type of culture an organization needs if it is to compete effectively in a competitive market. This, however, differs in different organizations and different cultures can be successful in different companies. Certain cultural elements such as poor treatment of employees, absence of cooperation and poor time planning may be detrimental to an organization and this can only be solved by having a good leader in the organization (Beyer and Trice 1991).

Organizational cultures change with time and leaders have a crucial role in changing the existing culture in an organization. Research shows that there are certain approaches that leaders need to adopt when changing the culture of their organizations. Leaders should choose, promote, and encourage employees who exhibit new cultural values. They should redesign socialization procedures that match with the new cultures as well as change the remuneration system in such a way that it supports the new culture. Leaders should also substitute unwritten cultural norms with official rules. They should strongly impose regulations and abolish the existing cultures through transfers and dismissals. Finally, they should always carry out their managerial duties in an attempt to create consensus through worker participation (Zaleznik 1997).

The second factor affecting the culture of an organization is the nature of employees working in that particular organization. While managerial leaders are important in defining an organization’s culture, all members of the workforce play a part in the organization’s culture. Employees’ capacity to work in a productive and effective manner thus depends on organizational culture. Organizational culture is characterized by real life experiences, potencies, faults, academic background, and upbringing of the employees. Their attitudes, ways of thinking, sensitivity and even their mentalities influence the culture of an organization.

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For instance, organizations, which employ persons from the military background, tend to adhere to an authoritative culture where all members of the workforce are required to abide by set principles. Employees in such organizations report to work in time and it is their attitudes that determine the culture of the organization. Another example of how employees affect the culture of an organization is seen in the fact that companies with many youngsters promote a strong competition at the place of work since the youngsters are always working hard to perform better than their older colleagues do (Hofstede 1998).

Employee sex is another factor that has an influence on organizational culture. Research shows that male and female employees differ in conduct, styles, and beliefs. Feminine features include being self-sacrificing, caring, nurturing, obedient and passive while characters such as being violent, competitive and self-sufficient are inherent in male employees. Female employees pay attention to issues concerning their colleagues while their male counterparts are only concerned with their duties in the organization. As a result, gender traits of employees would affect organizational culture.

Organizations with a large number of males have the females adopting a culture where lateness especially on their side is normal. The males in such organizations are more hostile compared to the female counterparts who appear humble and softhearted. Female employees pay less attention to the accomplishments of an organization while placing more emphasis on their duties. They encourage mutual relationships with their colleagues and prefer task oriented forms of leadership compared to their male counterparts.

This shows how sex influences the culture of an organization since in organizations where most workers are females, the leaders of such organizations will be forced to adopt task oriented leadership techniques. However, in organizations dominated by men, the leaders are likely to adopt directive and controlling leadership techniques (Vaughan 1997).

The nature of an organization also influences its culture. Stock broking organizations, financial corporations and the banking sector are all reliant on factors such as demand and supply, market coverage, and earnings among others. When the market collapses, these organizations have no other alternative than to dismiss the workers and this eventually influences the culture of the organization. Members of the workforce in such organizations are uncertain about their jobs, leaders appear helpless, and this may end up interfering with the organizations culture.

The type of business performed by a company is critical in defining its cultures. This is especially true if the organization will be doing international trade. Research shows that international trade has a great impact on the culture of the organizations involved. This effect is evident on key business activities such as capital investments and employee performance. This is mostly caused by the different cultures in different nations of the world.

Research shows that the differences in cultural beliefs, aspects of work related concepts and consumption patterns among different nations is what influences the culture of businesses involved in international trade. If cultures of the different nations of the world were indeed similar, then cultural practices in international organizations would be similar. Principled and culture free business organizations would emerge and inadequacies and complications associated with different national beliefs and practices would vanish (Robbins 2000).

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Organizational culture is influenced or affected by the goals and objectives laid down by the managers and leaders. This is due to the fact that policies and procedures intended to achieve the objectives of an organization are very important in its culture. For instance, people working in government institutions stick to set principles but do not follow feedback procedures and this form their culture.

Industries dealing with fast pace activities such as advertising and managing programmes for events expect members of the work force to be attentive and this forms the culture of such organizations. With the fast changing business environment and the consistent insights on organizational efficiency, business organizations are critically rethinking on what they should do to best define and achieve their targets. Once organizational objectives are defined, it is essential to address the form of culture that is required to achieve these targets and ensure an effective implementation of the required changes (Schein 1985).

Customers also play a key role in an organizations culture. This is because each and every organization pays more attention to its customers and external parties. For instance, in pragmatic culture, employee satisfaction is the main driving force. Such businesses treat their customers as Gods without adhering to any set guidelines. Every organization thus works hard to meet the needs of its customers. A good example of an organization whose culture has been influenced by customers is the UK catering organization that has no alternative but to operate in shifts to match the customers’ timings and this has affected its culture (Seelos and Mair 2007).

The administrative board and its way of dealing with employees also influence organizational culture. Some organizations allow members of the workforce to make their own verdicts and this gives them a chance to take part in making strategies in the organization. In this type of culture, the employees are closely related to the management and yearn for a long-term relationship with the organization. The management must appreciate the employees to get rid of a culture where the workers just work for cash and nothing else (Thompson 2011).

Research shows that change to some extent has an effect on the culture of an organization. Changes in administration, business strategies, business practices and geographical location as well as employee changes all affect organizational culture (Pascale, Millemann and Gioja 1997).

Strategic Leadership and Decision Making: To what extent can leaders create, develop, or change culture?

One of the functions of a leader is to maintain and help improve the organizational characteristics that are going to help encourage productivity and efficiency (Fréry 2006). One way that leaders will make an organization more productive and efficient is by creating, developing, and changing organization culture (Thompson 2011). This section of the paper will discuss the extent to which leaders can create, develop, or and change culture in an organization.

Leadership and leaders: Definitions

According to Yukl (1989), “there are almost as many definitions of leadership as there are persons who have attempted to define the concept.” Leadership can be defined based on individual traits, leader behavior, interaction patterns, role relationships, follower perceptions, influence over followers and influence on task goals, and influence on organizational culture (Yukl 1989; Goleman 1998).

According to Yukl, there is one major controversy on how people view leadership as a distinctive phenomenon. Some researchers believe that leadership is a collective process shared among members of a group and thus no single person can take credit for leading the group (Beyer 1981). Researchers with opposing views say that in every group, there is specialization and in thus there is a specialized leadership role.

Those who lead the leadership role are the leaders and leadership role cannot be shared because this would jeopardize the work and successes realized by the group. Some theorist take the view that leadership should be viewed from the perspective of how a leader will influence how enthusiastic others in the group will be as opposed to them following the leader through compliance or reluctant obedience. Those who support this proposal argue that a person who will apply authority and control by using punishment and or rewards to manipulate or coerce others in the group does not really “lead” them.

There is also controversy over the difference of a manger and a leader. A person can be a leader without necessarily being a manager and a person can be a leader without being a leader (Yukl 1989). Bennis and Nanus argue that “managers are people who do things right and leaders are people who do the right thing.” Zaleznik in his 1997 research paper argued that “managers are concerned about how things get done and leaders are concerned with what things mean to people. The essential distinction appears to be that leaders influence commitment, whereas managers merely carry out position responsibilities and exercise authority” (Zaleznik 1997).

Yukl makes this argument concerning the definition of a leader and leadership; he says that, “Function of a leader will include influencing task objectives and strategies, influencing commitment and compliance in task behavior to achieve these objectives, influencing group maintenance and identification, and influencing the culture of an organization” (Yukl 1989; Goffee and Jones, 1996)

Importance of organizational culture to a leader

As noted above, the role of an organizational leader is to make certain that work is performed both successfully and proficiently. The techniques adopted by leaders in an organization should assist the employees to carry out their duties with no negative outcomes. To secure a constructive culture in the workplace, it is important for an organization to influence and develop its leaders to take on behaviors that convince the employees to carry out their duties in a positive and authoritative manner (Grint 1997).

The establishment of a constructive work place culture is a gradual and long process. Leaders should establish a good work place culture that is beneficial to customers, the employees, and the society in general. Leaders are usually equipped with adequate knowledge concerning the type of culture an organization needs if it is to compete effectively in a competitive market (Grint 1997).

According to Edgar Schein, an organization culture is important to the organization in helping it cope with its environment. Presently leaders are faced with many challenges as they attempt to achieve the organization’s goals and objectives (Brown, 1995). A leader’s success will mainly depend on his or her understanding, creating, developing, and changing the organization culture (Yukl 1989; Goffee and Jones, 1996).

Schein continues to say that many times leaders will fail in their quests owing to their inability to appreciate the organization culture as well as failing to strategize, plan and implement ways of advancing the organization culture. Many leaders are going to fail because their vision and actions are inconsistent with what the organization holds as its organizational culture. CEO’s and other leaders will often experience opposition to changes they are trying to institute and therefore they need to have a strategy on how they are going to undertake this change lest they are bound to fail.

Leadership and Creating, developing and changing organizational culture

An organization culture is

  • “a pattern of basic assumptions—invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration—that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (Schein, 1985 p. 9).

Leadership and culture are closely related and according to Schein “culture and leadership, when one examines them closely, are two sides of the same coin, and neither can really be understood by itself. In fact, there is a possibility… that the only thing of real importance that leaders do is to create and manage culture and that the unique talent of leaders is their ability to work with culture” (Schein, 1985 p. 2).

Founders of organizations establish a culture using a preconceived “cultural paradigm.” Culture then forms by cognitive processes that are shaped by actions that leaders will undertake. Once the leaders implement the culture, they may be constrained by the cultural norms and assumptions that are going to ensure that there is constant interplay and interaction that will happen between leadership and culture.

Leaders will very instrumental in creating the primary mechanisms that are going to be used in cultural embedding and reinforcement. This embedding and reinforcement will give rise to cultural norms and changes will occur from what leaders will pay attention to, how they will react to crises, criteria they are going to use in rewarding and recruiting, as well as their role modeling. Looking at this perspective, explicit leadership will be very instrumental in teaching culture in an organization (Ibarra and Hunter 2007).

The extent to which leaders create, develop and change organization culture

Mostly when researchers talk of leadership, they tend to focus on the instrumental consequences resulting from the actions of a leader. That is, how leaders will influence how an organization will accomplish its goals and objectives (Ibarra and Hunter 2007). However, a cultural approach to leaders and leadership can show the other side of leadership, that is, how leaders will influence perceptions and understandings of others in the organization.

Cases of leadership can be analyzed by looking at the instrumental and cultural consequence that leaders will causes (Beyer and Trice, 1991). Researchers believe that through social interaction and behavior, individuals will develop shared understandings regarding how to cope, and mange uncertainties they are going to face. Most of these understandings are validated by experience (Schein 1985; Seelos and Mair 2007).

Cultures in organizations will never resolve the uncertainties that workers and leaders face, but can reduce these uncertainties to levels that can be tolerated and the people involved can face the future hoping that they will be able to avoid the uncertainties in future (Katzenbach and Smith 1992). People need leaders that are going to motivate them to continue working towards achieving the organization’s goals.

To make organizational cultures concrete and keep them relevant to the goals set, leaders need to continually communicate, develop, and improve the cultures (Grint 1997). Researchers agree that leadership is crucial to the continuity, development, influence, and change of organization culture. Leaders will produce culture as well as social change, but the change will not endure if successors do not maintain and further the visions of the founders (Schein 1985; Seelos and Mair 2007).

Organization culture of an organization does not only involve actions of a leader who forges and implements the culture or changes the existing ones, but also leaders who are going to come and carry out other cultural innovations. In some instances, leaders will change the organizational culture through new networks that they are going to base on their radical ideas (Grint 1997). Their leadership styles influence rationales and understandings that are embedded within the organizational culture.

Leaders and managers need to build good working relationships with their coworkers and people who can help them in achieving the organization’s goals. This is where organizational culture comes into play, where it will help the leader and the workers carryout their work effectively and efficiently. Leaders will use organization culture to instill their followers with certain emotionally charged ideas (Grint 1997).

How leaders affect Culture of an organization through cultural leadership.

Consequences for Culture
Elements of Cultural Leadership Innovation Maintenance
  1. Personal Qualities
Self-confidence
Dominant
Strong convictions
Evangelist
Dramatic/expressive
Confidence in group
Facilitator
Strong convictions
Catalyst
  1. Perceived Situation
Crisis Persuasive
No crisis, or a
manageable one
  1. Vision and Mission
Radical ideology Conservative ideology
  1. Follower Attributions
That leader has
extraordinary
qualities needed
to deal with crisis
That leader
represents existing
values that were
successful in past
  1. Leader Behaviors
Effective role model
Creates impression
of success and
competence
Articulates ideology
Communicates high
expectations,
confidence in
followers
Motivates
Effective role model
Creates impression
of success and
competence
Articulates ideology
Communicates high
expectations,
confidence in
followers
Motivates
  1. Performance
Repeated success
in managing crisis
Continuation of
Success
  1. Administrative Actions
New structures and
strategies; or
innovative changes
in structure and
strategies
Refurbish and
strengthen
existing structures
and strategies;
incremental changes
in structure and
strategies
  1. Use of Cultural Forms
Communicates new
cultural
ideologies and
values
Affirms and
celebrates
existing cultural
ideologies and
values
9. Use of Tradition Establishes new
Traditions
Continues existing
Traditions

It is hard to change culture, but leaders manage and or influence the organization culture. This will take time, but in the end, the leader will be able to have an influence on the organizational culture. According to Schein, leaders will employ several steps to influence the cultural organization.

Measure and Control that leaders will pay attention

Schein says that some simple things that leaders will emphasize on such as overtime, can severely affect the organizational culture. He says that when leaders seem to concentrate on only perception, that is form perception, people within the organization may start believing that the process and requirements for recommendation is less important than it actually is (Hales 1986; Hatch1993).

He continues to say that people will recall when there is more attention paid to the formats used during presentations than what is actually said. This he calls it “eye wash” (Schein 1985).

Schein says that crises will help to bring out the organizational culture that is supported by the leaders. Crises play a major role in bringing out the core values that are held by the organization. Reactions to crises are important because they help bring people’s attention to the incidence or situation. if there are disconnects between what a person says and does, it will be evident during times of crises (Brown, 1995). This is because actions speak louder than words. Crises will bring the emotional side of people and this can show the organizational culture of the organization. Crises can be used to either help in forging a strong organizational culture, or lead to a change in the organizational culture (Schein 1985; Seelos and Mair 2007).

The deliberate role modeling those leaders will undertake as well as teaching and coaching

Schein starts by saying that there is nothing can replace the act of leaders walking their talk. When leaders use personal examples and actions, they are bound to send a stronger message to the rest of the team than when they simply tell them (Schein 1985; Seelos and Mair 2007). This can help in forging a strong and efficient organizational culture. When leaders reinforce what they say with what they do as well as teaching and coaching, they help others in the group to internalize the values that are stipulated in the organizational culture (Martin 2007; Schein 1985; Schein 1996).

The criteria that leaders will use for allocating rewards and status in the organization

Consequences if what behavior a leader will choose to award or punish will greatly influence the organizational culture. When leaders of an organization react to new ideas by laughing at them and those that come up with them, it will take a short time for people in the organization to start believing that new ideas are undesirable in the organization (Brown, 1995). Thus, it is important for leaders to know how to handle workers and other team members especially when one of the team members is trying to contribute, or disagree with certain things. Criteria that leaders will use during recruitment, promotion, recruitment and selection, can be a major source of strengthening or breaking the organizational culture. Leaders should be able to create adopt and influence organizational culture in ways that are going to positively affect the organization culture and enhance productivity (Schein 1985; Seelos and Mair 2007).

Some researchers are however skeptical of the view that managers and leaders are the primary source of organizational culture development, creation and change. They say that change in an organization’s culture can be managed separately away from influences of leaders and managers. They also criticize the assumption made that managers and leaders will rationally and effectively direct, and manage cultural change in an organization. Others believe that changes within the internal structure of the organization are going to activate changes in the organization culture, although this is criticized because it is based on the premises of stability of the organization.

Organizational culture change is seen, therefore, as an “ongoing improvisation” that is enacted by ‘ongoing improvisation enacted by organizational actors trying to make sense and act coherently in the world’ (Orlikowski 1996 p.65). Organizational culture change will result from organizational members’ actions of trying to improvise and adjust how they undertake their work because of continuing changes in the work place (Kramer 1998).

It is argued that an organizations culture can neither be predicted nor controlled by leaders and managers. Leaders and managers should therefore learn that the meanings that are attached to any change effort are going to be subject to interpretation and reinterpretation, and cannot be controlled by the leadership and management (Vaughan 1997; Orlikowski 1996 p.65).

Conclusion

Leaders should be equipped with adequate knowledge concerning the type of culture an organization needs if it is to compete effectively in a competitive market. Sustainable great performance of international organizations can be attributed to their cultures. The efforts of leaders in changing the culture of the organizations they manage leads to improved performance of the organizations. Leaders who are capable of changing the cultures of their organizations improve the economic performance of the firms and this creates high economic returns in the end (Powell 2006).

Organizational culture is important for a successful change in an organization. Since it increases the value of human resources, its management should be well done in an organization. The adoption of the best culture is a vital requirement and a sufficient condition for organizational success. Modern organizational leaders are facing a challenge in determining the most efficient culture for their business organization. They are also facing the challenge of determining the best time to change the culture of their organizations.

The vision, administration technique, personality, and values of leaders all affect organizational culture. This is because leaders act as role models for the employees and the combination of these aspects yields exceptional structures, procedures and culture in business organizations. Organizational culture is one of the key attributes that differentiates organizations from one another. The culture of an organization, however, may not be easy to describe due to the fact that the commonsense of leaders is often assumed when it comes to changing an organizations culture (Yukl 1989).

Leadership is crucial to the continuity, development, influence, and change of organization culture. Leaders are capable of producing culture as well as social change, but the change may endure if successors do not maintain and further the visions of the founders. Organizational culture does not only involve actions of a leader who forges and implements the culture or changes the existing ones, but entails leaders who carry out other cultural innovations (Morgan 1986).

Leaders can also change the organizational culture through new networks based on their radical ideas. Their leadership styles influence rationales and understandings that are embedded within the organizational culture. Leaders and managers need to build good working relationships with their coworkers and people who can help them in achieving the organization’s goals. They should use organization culture to instill their followers with certain emotionally charged ideas (Seelos and Mair 2007).

From the above, it should be noted that leaders play a major role in organizational culture. The employees, to increase the productivity of the organization, should respect the decisions made by organizational leaders. All the other factors that affect the culture of an organization such as customers and the company’s geographical location should also be considered before making decisions in the company.

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