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Journal of the Indian Academy of Applied Psychology

January 2010, Vol.36, No.1, 97-105.

Examining the Relationship between Organisational Culture and

Leadership Styles

Sanjeev K. Sharma and Aditi Sharma

Panjab University, Chandigarh. Chandigarh Business School, Mohali, Punjab.

Culture is the medium by which organization expresses itself to its employees or

members. The core of the culture is formed by the values which are not visible but
are shared by people even when membership in group changes. Shared values
and norms focus employees attention on organizational priorities and guide their
behavior and decision making. In the present study organizational culture has been
conceptualized along eight cultural values and beliefs: openness, confrontation,
trust, authenticity, proaction, autonomy, collaboration, and experimentation.
Leadership styles have been determined in terms of initiation, consideration and
charismatic variables. To achieve competitive advantage the industry needs visionary
leadership to drive change and performance. Results of the study on textile industry
in North India show a positive association between cultural values and charismatic
leadership styles. Organizational culture exhibiting characteristics of accountability,
collaboration, decentralized leadership, alignment and adaptability hold the key to
successful survival.

Keywords: OCTAPACE, Leadership styles, Initiation, Consideration, Organisational

A leader needs to have a thorough approximately 20 percent of the countrys total
understanding of organizational culture, its industrial production, and contributes
nature and impact, so that they can approximately 4 percent to the GDP. The
communicate new vision and ensure followers industry being highly labor intensive provides
commitment to that vision (Schein, 1992). direct employment to nearly three million
Leaders play a significant role in shaping and people and is the second highest employer in
maintenance of the culture in an organization. the country. India has several advantages in
It is in the leadership process that the effect the textile sector including abundant
of culture becomes most perceptible (Komin, availability of raw material and cheap labor.
2000). If it is the leadership that mobilizes The factors like lower raw material costs,
attention towards a new vision, it is the lesser wastage costs, flexibility in production
corporate culture that confers legitimacy on due to fragmented industry structure and
that vision (Fombrun, Tichi & Devanna, 1984). availability of low cost skilled labor, provide a
Thus it can be said that leadership and comparative advantage to Indian textile
organizational culture are strongly intertwined industry. However problems like low
and share a symbiotic relationship. productivity levels, gap between need and
supply of skilled labor and management offset
Textile industry in India has two main such advantages. Clark (1987) opined that the
constituents- organized mill sector and the lower level of efficiency in the Indian textile
unorganised sectors of powerloom, handloom industry was because of the cultural norms of
and hosiery. The industry accounts for Indian society. In order to examine the impact
98 Organisational Culture and Leadership Styles

that the organizational culture has on may be attracted to organizations they

leadership styles, present study was perceive as having values akin to their own.
conceptualized. The successful organizations consider the
Each society is characterized and defined ideal employees as those who have
by a distinctive culture. Organizations possess internalized the organizations culture into their
the paradoxical quality of being both part of cognitive and affective make-up (Peters &
and apart from society. They are embedded Waterman Jr., 1982).
in a wider social context, but are communities Leadership is both dynamic competence
in their own right with distinctive rules and and a relational process, which require specific
values and can thought of as culture skills and capabilities for envisioning, setting
producing phenomenon (Simirich, 1983). aspirations, and for motivating others. Bass
Organizational culture reflects the (1985) viewed transformational leadership
underlying belief and value structure of an from the perspective of leaders influence on
organization. Members of an organization in their subordinates. Subordinates satisfaction
a given cultural environment share a common with their superiors was significantly
set of assumptions, beliefs and values which associated to supervisors manifesting
originate from the local environment. These transformational leadership (Hater & Bass,
cultural values from the environment have a 1988). Higher levels of transformational
very strong impact on the behavior of the leadership were positively associated with
persons within the organization. subordinates organizational commitment
(Howell & Avolio, 1993). Subordinates,
Employees and their organizations have influenced by transformational leaders, felt
a culture that dictates what to value and what motivated to do more than what they were
priority to establish. Researchers have originally expected to do (Yukl, 2000).
emphasized collectively shared, historically
based, symbolic and inherently fuzzy Theories suggesting charisma as an
characteristics of culture (Beyer & Trice, 1993). extension of transformational leadership
Companys culture is manifested in the values pointed out that effective leadership relied on
and business principles that management personal charisma, skills or traits in the leader
preaches and practices, in employees including moral vision, coupled with sensitivity
attitudes and behavior, in the legends people to the demands of the context (Bass &
repeat about happenings in the organization. Steidlmeir, 1999). The charismatic leaders
The more managers understand this cultural influence their followers due to certain
environment, the more effective they can be personal characteristics like high self-
in changing it as per the requirements. confidence, empathy, and use interpersonal
skills to give followers a sense of competency
The core of culture is formed by values and empowerment.
which are not visible but shared by people
even when membership in group changes. It has been suggested that leadership
Culture appears to be transmitted among style must be adjusted according to the
employees through behavioral expectations situation to ensure organizational
and normative beliefs than through deeper effectiveness. Transformational leaders help
values and assumptions (Ashkanasy, in the shaping and maintaining of desired
Broabfoot & Falkus, 2000). Shared values and organizational culture which may have a
norms focus employees attention on certain link to organizational effectiveness.
organizational priorities and guide their Researches indicate that transformational
behavior and decision making. Individuals leadership and organizational culture contain
Sanjeev K Sharma and Aditi Sharma 99

the key to understanding organizational systematic research has been conducted to

effectiveness (Bass & Avolio, 1992). examine the specific nature of relationship
To achieve competitive advantage the between the two variables (Ogbonna & Harris,
industry needs visionary leadership to drive 2000; Beyer & Trice, 1993).
change and performance. Similarly the Objective:
relationship between organizational culture To examine the impact of organizational
and leadership behavior prove that they are culture on the leadership styles of the
crucial for improving organizational managers in select textile organizations.
effectiveness. As the technology used is
almost same it is the productivity through Hypotheses:
human element that could be used by the The present study was aimed at exploring
industry to gain competitive advantage. The the nature of association between
cultural assessment would enable the organizational culture and leadership styles in
companies to analyze the gap between the textile industry. Following hypotheses were
prevailing and desired culture. Identification formulated to achieve the desired research
of such gaps would help organizations in objective:
developing interventions to realign the existing H 01 :Organizational culture has no
culture with the desired one. significant influence on the leadership styles
The objective of the study was to find out of the managers of select textile organizations
the organizational culture and its impact on in North India.
leadership styles in the textile industry. The Ha1: Organizational culture has significant
study was designed to highlight the importance influence on the leadership styles of the
of culture in organizations and help managers of select textile organizations in
organisations realign their structures in North India.
congruence with a type of culture that is most
suited and appropriate for them. Knowledge Method
of their cultural variables can support the Sample:
management in accomplishing the goals of A sample of 300 employees working in
the organization in an effective manner. It different textile units of North India was
would also enable the management in personally contacted. Only the permanent
assessing the leadership styles appropriate employees working in the organizations were
for the adoption of desired cultural values. included in the survey. All the departments of
The present study focused on textile the organizations including human resource,
industry in the North Indian states of Himachal finance, accounts, sales, production, and
Pradesh and Punjab. Though a vast body of marketing were included. Selection of the
literature exists on leadership and employees was done through consultation
organizational culture as independent with the head of human resource department.
constructs, the relationship between the two Tools:
remains more of an implicit theory than an
empirical finding (Block, 2003). Pettigrew OCTAPACE, a forty item questionnaire
(1979) explicitly linked leadership and developed by Pareek (1989) that measures
organizational culture, pointing out that a the organizations ethos in eight values, viz,
leaders effectiveness is likely to be influenced openness, confrontation, trust, authenticity,
by the extent to which he can align his team proaction, autonomy, collaboration and
towards organizational culture. Very little experimentation. The questionnaire is divided
100 Organisational Culture and Leadership Styles

into two parts. In the first part, there are twenty reliability was 0.83.
four statements comprising three statements Leadership Behavior Description
of each of the eight values. The respondents Questionnaire (Halpin & Winer,1957) having
are required to check on a four point scale subscales measuring initiating structure and
how much each item is valued in the consideration was used. The established
organization. The second part contains sixteen Cronbachs alpha reliability of these two
statements on beliefs and contains two subscales was 0.81 and 0.84 respectively. The
statements on each of the eight values. The subscale for measuring Charisma was
respondents check on a four point scale how adapted from Basss scale of transformational
widely each of the value is shared in the leadership (1985), the Cronbachs alpha
organization. Cronbach alpha coefficient of reliability of which was 0.95.
Results and Discussion
Table 1: Correlation between dimensions of organization culture and initiating structure
leadership style (N=300)
Confrontation .772* .
Trust .422* .400* .
Authenticity .495* .549* .358* .
Proaction .742* .669* .540* .506* .
Autonomy .645* .551* .345* .454* .774* .
Collaboration .641* .734* .332* .387* .554* .367* .
Experimentation .732* .682* .499* .520* .704* .551* .683* .
Consideration .622* .572* .539* .536* .688* .592* .424* .565*

*p<.01 the extent of 29.1%, indicating that the trust in

The correlation between OCTAPACE the organizations under study is significantly
cultural values and initiating structure associated to the initiating structure leadership
leadership styles was significant at style. The correlation of 0.53 between
p=0.01(table 1). The correlation (r=0.62) authenticity and initiating structure indicates
between openness and initiating structure that the two variables would explain the
indicates that the two variables would explain variance in one another to the extent of 28.7%
the variance in one another to the extent of revealing a moderate relationship. The
38.4%, showing a significant positive correlation of 0.68 between proaction and
association. Similarly, the correlation (r=0.57) initiating structure indicates that the two
between confrontation and initiating structure variables would explain the variance in one
explained the variance in one another to the another to the extent of 47.3% revealing a
extent of 32.5% indicating confrontation in strong association between proaction and the
these organizations is perceived to be initiating structure leadership styles. The
associated to the initiating structure leadership correlation of 0.59 between autonomy and
style. The correlation (r=0.53) between the initiating structure indicates that the two
cultural value of trust and initiating structure variables would explain the variance in one
leadership style reveals that the two variables another to the extent of 34.8%., a moderately
would explain the variance in one another to high correlation. Thus the cultural value of
Sanjeev K Sharma and Aditi Sharma 101

autonomy in the organizations under study explain the variance in one another to the
supports the emergence of the task oriented extent of 31.3%, thus revealing a moderate
leaders. The correlation of 0.42 between relationship between them.
collaboration and initiating structure indicates The highest correlation between cultural
that the two variables would explain the values and initiating structure may be because
variance in one another to the extent of 17.6% the organizations under study are
reflecting a weak relationship between manufacturing units where the primary
collaboration and the initiating structure objective of the management is to achieve
leadership styles. The correlation of 0.56 production targets. Thus, the managers in
between experimentation and initiating such units tend to be high on task orientation.
structure indicates that the two variables would
Table 2: Correlation between dimensions of organization culture and consideration
leadership style (N=300)
Openness .
Confrontation .772* .
Trust .422* .400* .
Authenticity .495* .549* .358* .
Proaction .742* .669* .540* .506* .
Autonomy .645* .551* .345* .454* .774* .
Collaboration .641* .734* .332* .387* .554* .367* .
Experimentation .732* .682* .499* .520* .704* .551* .683* .
Consideration .555* .522* .414* .460* .622* .491* .498* .672*
Table 2 reveals that the correlation the variance in one another to the extent of
between OCTAPACE cultural values and 21.1%, also a weak association. The
consideration leadership styles is significant correlation of 0.62 between proaction and
at p=0.01. The correlation of 0.55 between consideration indicates that the two variables
openness and consideration indicates that the would explain the variance in one another to
two variables would explain the variance in the extent of 38.4%, a moderately strong
one another to the extent of 30.3%. Hence, it relationship. The correlation of 0.49 between
can be inferred that openness and autonomy and consideration and a variance
consideration share a significant and positive of 24.8% show a weak relationship. The
association. Similarly, the correlation of 0.52 correlation of 0.49 between collaboration and
between confrontation and consideration consideration indicates that the two variables
shows that the two variables would explain would explain the variance in one another to
the variance in one another to the extent of the extent of 24.1%, hence a weak
27%. indicating a moderate association. The relationship. The correlation of 0.67 between
correlation of 0.41 between the cultural value experimentation and consideration and a
of trust and consideration leadership style variance of 44.9%. reveals a strong
reveals that the two variables would explain relationship between the cultural value of
the variance in one another to the extent of experimentation and consideration leadership
16.9%, a weak relationship. The correlation style.
of 0.46 between authenticity and consideration The positive association between all the
indicates that the two variables would explain eight cultural values viz. openness,
102 Organisational Culture and Leadership Styles

confrontation, trust, authenticity, proaction, others. Kakar (1971) revealed that the
autonomy, collaboration, experimentation and paternalism and assertiveness among leaders
consideration leadership styles reflect that in an organization could be attributed to the
Indian managers are relationship-oriented cultural factors in the Indian tradition.
because Indian culture promotes concern for
Table. 3: Correlation between dimensions of organization culture and charismatic leadership
style (N = 300)
Openness .
Confrontation .772* .
Trust .422* .400* .
Authenticity .495* .549* .358* .
Proaction .742* .669* .540* .506* .
Autonomy .645* .551* .345* .454* .774* .
Collaboration .641* .734* .332* .387* .554* .367* .
Experimentation .732* .682* .499* .520* .704* .551* .683* .
Consideration .418* .340* .541* .342* .534* .547* .267* .506*
Correlation between OCTAPACE cultural the variance in one another to the extent of
values and charismatic leadership style is 29.9%, showing a moderately strong
significant at p=0.01 (table 3). The correlation relationship. The correlation of 0.26 between
0.41 of between openness and charisma collaboration and charisma indicates that the
indicates that the two variables would explain two variables would explain the variance in
the variance in one another to the extent of one another to the extent of 67.6%, revealing
16.8%. Thus, it can be inferred that openness a weak relation. The correlation of 0.50
and charisma share a significant positive between experimentation and charisma
association. Correlation of 0.34 between indicates that the two variables would explain
confrontation and charisma and a variance the variance in one another to the extent of
of 11.5% reveals a weak relationship between 25% exhibiting a moderately strong
them. The correlation of 0.54 between the relationship.
cultural value of trust and charisma leadership Thus, the results show that there is a
style reveals that the two variables would positive association between cultural values
explain the variance in one another to the viz. openness, confrontation, trust,
extent of 29.2% indicating a moderately strong authenticity, proaction, autonomy,
relationship. The correlation of 0.34 between collaboration, experimentation and
authenticity and charisma indicates that the charismatic leadership styles. The earlier
two variables would explain the variance in researchers who have explored the culture-
one another to the extent of 11.5% indicating leadership relationships concluded that
a weak association. The correlation of 0.53 organizational culture has a definite impact on
between proaction and charisma indicates that the emergence of specific leadership styles
the two variables would explain the variance (Pillai & Meindl, 1998).
in one another to the extent of 28% showing a
moderately strong relationship. The correlation
of 0.54 between autonomy and charisma Based on the observations of the study
indicates that the two variables would explain the following recommendations are proposed:
Sanjeev K Sharma and Aditi Sharma 103

a) Culture is a reflection of the norms, of communication between all levels will

values, shared behavioral expectations and ensure ownership and commitment to the
assumptions that guide the behavioral organizations goals. Employees need to be
patterns of members in a contrived inculcated a sense of faith and belief in the
organization. Thus development tools to organization and its leaders.
identify areas of skill and ability deficiency so f) Developing and building teams within
as to enhance the efficacy of the workforce organizations with the participants drawn from
will lead to harnessing of appropriate skills and different operational units and imparting skills
abilities which are key drivers of improving to enhance creativity, behavioural
organizational performance. modifications, communication and divergent
b) The organizations should aim at thinking skills will improve organizational
creating a culture of trust in organization as it productivity. Organizations should foster
is the harbinger of congenial working knowledge culture through the creation of
environment. In an organization that has knowledge environment.
interesting environment, members transmit g) Succession planning may require
more information with higher fidelity to a changes in the design of the organization and
superior or work partner whom they trust. Trust specific jobs along with changes in supporting
provides conditions under which cooperation, human resource systems, such as staffing,
higher performance and more positive career planning and information systems
attitudes are likely to occur.
h) There is a need for periodically
c) The recruitment and selection of the determining managers and employees
new employees should be done on the basis perceptions of key management processes
of the congruence between their values and and practices and the extent to which
those espoused by the organizations. This management goals are accurately translated
would enable the organizations to maintain a and implemented throughout the organization.
workforce that is committed to its core value
system. i) The organizations should promote
collaboration in an organization as it fosters
d) Employee evaluation systems need to efficiency and productivity of employees. The
be transparent, employee driven, corporately organizations should be proactive instead of
supported and monitored. It must also be being reactive as it helps in better problem
widely communicated and focused towards solving.
achieving corporate objectives. There is a
need to align and integrate it with achievement j) Work force of the organizations under
of enterprise goals. Organistions need to study was young and professionally well
monitor extent to which people are involved qualified. Respondents believed that
in their organizations stated mission and the organization culture is the most significant
execution thereof and the extent to which they input to encourage or impede learning.
have a sense of belonging to the organization k) Dynamic organizations are constantly
e) Open communication channels evolving, requiring transformations.
between managers and their subordinates Organisational culture needs to be developed
enhance employee satisfaction, commitment that is proactive, incremental and
and performance. Such communication collaborative. The change has to involve the
channels are paramount during the change entire organisation, should be multifaceted and
process to ensure participation and must continue over the long term. Facilitation
involvement. Establishing effective open lines and support during the implementation phase
104 Organisational Culture and Leadership Styles

of the any new system or processes ensures organizations. Englewood Cliffs, NJ: Prentice
smooth transition. Hall.
Conclusions Block, L. (2003). The leadership-culture
connection: an exploratory investigation.
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understanding of the business (Sharma & Journal of Economic History. 47, 43-148.
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Aditi Sharma, PhD, Lecturer, Chandigarh Business School, Mohali, Punjab.

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