How Do CEOs Shape Corporate Culture?

In some ways, corporate culture is the personality Meeting Board Roomof a company, and just like human personalities, corporate cultures can vary widely. Many factors impact a company’s culture, but perhaps the most significant determining factor of culture is the values and actions of an organization’s senior leaders. In their article, “The Promise and Problems of Organizational Culture: CEO Personality, Culture, and Firm Performance,” published in the December 2014 issue of Group & Organization Management, authors Charles A. O’Reilly III of Standford University, David F. Caldwell of Santa Clara University, Jennifer A. Chatman of UC Berkeley, and Bernadette Doerr of UC Berkeley delve into the topic of organizational culture. Their paper specifically discusses how much a CEO’s personality impacts organizational culture, and how culture can in turn impact organizational performance.

home_coverThe abstract:

Studies of organizational culture are almost always based on two assumptions: (a) Senior leaders are the prime determinant of the culture, and (b) culture is related to consequential organizational outcomes. Although intuitively reasonable and often accepted as fact, the empirical evidence for these is surprisingly thin, and the results are quite mixed. Almost no research has jointly investigated these assumptions and how they are linked. The purpose of this article is to empirically link CEO personality to culture and organizational culture to objective measures of firm performance. Using data from respondents in 32 high-technology companies, we show that CEO personality affects a firm’s culture and that culture is subsequently related to a broad set of organizational outcomes including a firm’s financial performance (revenue growth, Tobin’s Q), reputation, analysts’ stock recommendations, and employee attitudes. We discuss the implications of these findings for future research on organizational culture.

You can read “The Promise and Problems of Organizational Culture: CEO Personality, Culture, and Firm Performance” from Group & Organization Management free for the next two weeks by clicking here. Want to know about all the latest research from Group & Organization Management? Click here to sign up for e-alerts!

This entry was posted in Leadership, Organizational Research, Organizational Studies, Performance and tagged , , , , , , by Cynthia Nalevanko, Editor, Management INK. Bookmark the permalink.

About Cynthia Nalevanko, Editor, Management INK

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 900 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, and Washington DC, our publishing programme includes more than 560 journals and over 800 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s