A Guide to Organizational Culture and Leadership

By Indeed Editorial Team

Updated September 3, 2021 | Published February 25, 2020

Updated September 3, 2021

Published February 25, 2020

The success of any business depends on its organizational culture. With the right leadership, a positive organizational culture can spread throughout the workplace. Leaders need to be able to encourage a positive organizational culture in order to keep employees motivated and engaged. In this article, we discuss the ways in which leadership influences organizational culture.

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Read more: What Is Organizational Culture?

What is organizational culture?

Organizational culture is a set of values that defines a company. It defines the behaviors and actions employees should take to create a positive environment while helping the business succeed. Organizational culture also guides a company's mission and objectives, making it important to clearly define.

Why is leadership important for organizational culture?

Leaders show employees how to embody values that contribute to organizational culture. It is the duty of a leader to communicate the company's mission, goals and core values. Leaders are responsible for defining, teaching, measuring and rewarding the culture they want to foster.

Ethical leadership helps businesses succeed and grow. Ethical leaders create a culture of honesty, integrity, trust and fairness. Employees are engaged and happier to work for leaders with firm ethical principles. Quality leadership builds a harmonious, collaborative and trustworthy work environment. By being ethical, leaders uphold the standards for a positive organizational culture.

How leadership affects organizational culture

Managers can teach organizational culture through social interactions. Through their own actions, leaders show employees what behavior is accepted and encouraged. Here are seven ways that leadership affects organizational culture. Leadership:

  • Defines and teaches core values

  • Fosters a desire to learn

  • Promotes a culture of recognition

  • Encourages a shared vision

  • Changes the culture

  • Improves job satisfaction

  • Ensures accountability

Defines and teaches core values

A strong culture is distinguished by firmly held core values that are organized, shared and transmitted by employees. Leaders need to be role models who demonstrate behaviors that reflect the company's core values. Effective leaders show their employees what actions they should take to fully embrace workplace values. It the duty of a leader to translate the mission of an organization into tangible results.

Fosters a desire to learn

A quality leader demonstrates a genuine interest in promoting the growth of their employees. For that reason, they freely share what they know with others. They help team members build a career path, then share the knowledge that the employee needs to follow it.

Leaders promote the idea that employees can learn from any opportunity. By encouraging employees to take risks in order to grow their knowledge base, effective leaders are able to foster a culture of learning and growth. Employees who feel safe to explore and learn may find their work more fulfilling and meaningful. They feel more inclined to collaborate and learn from others.

Promotes a culture of recognition

When leaders let employees know that their contributions are valuable, they foster a culture of recognition. The task of the leader is to reward and incentivize hard work and good behavior. When leaders give positive praise, they help employees feel fulfilled and confident.

Leadership fosters a culture of appreciation. Quality leaders encourage their employees to recognize other coworkers for their positive contributions. For instance, during a team meeting, a manager could ask coworkers to share specific instances of when a colleague excelled. A workplace culture where everyone celebrates success builds stronger teams.

Related: A Guide to Meaningful Employee Recognition

Encourages a shared vision

Effective leaders define a shared goal for everyone to strive for. They promote a vision of the future that is positive and value-based. By outlining detailed steps, they show team members how to successfully reach a goal. Employees receive a clear understanding of their role within any collective process and collaborate to achieve a shared vision of the future.

Being able to describe a realistic vision inspires employees to be more productive. When they accomplish goals, employees feel fulfilled and valued. Seeing results helps them understand how they contribute to the company.

Related: 14 Traits of Visionary Leaders

Changes the culture

Leaders need to understand that workplace culture continually grows and changes. Understanding the dynamic nature of the workplace helps them guide their team members through these changes.

When changes in company culture need to occur, leaders have a responsibility to communicate the information to employees effectively. Cultural changes require clear communication with every person in an organization. Leaders who value workplace culture understand that their duty is to keep actively creating a healthy organizational culture. They show their team members what behaviors align with the cultural changes and what behaviors need to be altered.

Improves job satisfaction

Job satisfaction is the feeling of how well the working environment meets the needs of employees. It is based on an employee's evaluation of the company values and how they agree with their core values. A variety of factors influence job satisfaction, including the quality of leadership. Leaders need to be mindful of how their leadership style affects employees.

Employees who are more satisfied with their work are more likely to have better job performance. Choosing a leadership style that benefits an organization and its employees is one of the most effective ways to improve job satisfaction. Many leadership styles exist, and it's common to use several types based on the situation. Some leaders use a combination of many styles to fit their needs.

Related: How To Improve Employee Morale and Job Satisfaction

Ensures accountability

Accountability is essential for leaders to shape organizational culture. Leaders hold people accountable to ensure that they remain responsible for completing their work. Leaders need to show employees that organizational culture exists to guide them to success.

Having a culture of accountability starts with comprehensive job descriptions that outline measures of success. A quality leader is transparent with their team members about the standards that they need to reach. During reviews, leaders need to further elaborate on expectations and standards. If they give employees clear, measurable steps to success, employees are more likely to be able to meet and exceed expectations.

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