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CEO and corporate culture should be different in successful company

Staff Writer | July 28, 2016
Chief executive officers should have a different leadership style from an organization's culture in order to improve a firm's performance.
Interesting findings   Based on data from 119 organizations
This is according to researchers at Georgia State University, Arizona State University, the University of South Australia and Auckland University of Technology.

Based on data collected from 119 CEOs and 337 top management team members in 119 organizations in the U.S. software and hardware industries, the researchers found CEOs who adopt a leadership style similar to that of the organization's culture have a negative impact on firm performance.

Instead, firms are most effective when CEO leadership style and organizational culture are different, a discovery that contradicts widely accepted beliefs. The findings are published in The Journal of Applied Psychology.

"Consistencies between CEO leadership and culture create redundancies," said Chad Hartnell, assistant professor in the J. Mack Robinson College of Business at Georgia State.

"Leaders who are culture conformists are thus ineffective. CEOs who lead in a manner different from the culture benefit companies because they provide resources to the organization that the culture does not."

Organizational culture refers to shared values and norms, usually either task-oriented or relationship-oriented, that inform employee behavior.

In a task-oriented culture, employees are asked to focus externally on problems such as anticipating customers' needs and preferences and monitoring competitors' behaviors.

In a relationship-oriented culture, employees are encouraged to focus internally on issues such as coordination, participation and communication.

"Similarities between leadership and culture can produce a myopic focus on things that have worked in the past while precluding employees from acquiring other resources or processes that could enhance success," Hartnell said.

"CEOs should be mindful about focusing employees on important outcomes and processes that cultural signals may overlook."

Not all differences between leadership and culture are positive, Hartnell said. If a leader's approach is oppositional or confrontational, he or she will likely be met with resistance and resentment.

A leader who challenges or discards every assumption about what has worked in the past creates uncertainty, ambiguity and skepticism among the organization's employees.