LCBS5003 : LEADERSHIP AND CULTURE IN ORG CONTEXT

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TABLE OF CONTENTS

Introduction 2

Understanding Organisational Culture and Change 2

Case Study : General Motors 3

Organisational Change and Leadership 5

Role of Leadership 7

Summary 10

References 12

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Introduction

Organisational culture introduces the existing values and beliefs of an organisation

that influence the behaviour of employees and progress of the company. It becomes a

complex subject when the relationship between organisational culture and leadership

behaviour is considered. Every employee plays a role in changing organisational culture, but

it requires a remarkable leadership to manage and change organisational culture that impacts

performance of the company. For an effective leadership through change, a complete

understanding of values of the organisation and honest approach to transform the culture for

development of the company is necessary. This report discusses effective leadership through

change by using General Motors as a case study.

Understanding Organisational Culture and Change

Organisational culture is observed as the most significant element in efforts for an

organisational change. It could either encourage or act as an obstruction in establishing a new

strategy to achieve change. In the perspective of employees, culture is holistic and not

confined to an individual but affects a group of individuals of an organisation.(Alvesson and

Sveningsson, 2008) Culture based on values and beliefs stay with individuals or organisations

and are often difficult to change. According to Ogbonna and Harris (2002), culture exists on

various levels and changing culture depends on numerous factors that are internal and

external to the organisation. A dynamic business environment often forces organisation to

aim for change and introduce new culture and leadership style to enhance the performance.

The external factors that could force a change could be political, technological, cultural,

demographic, economic and market. (Alvesson and Sveningsson, 2008) The political factors

can be deregulations in international trade that could affect business. The introduction of

more sophisticated technology in the market could also trigger change and adapt new

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working practices. Demographic factors could affect the recruitment of the organisation and

competence of work force. Though these are external factors that force organisational change,

there are also internal factors that could trigger the same. The arrival of new individuals in

key positions, revision or review of tasks that were performed by the company earlier,

modifying administrative structure could be observed as internal factors that impact the

organisation for change.

The organisational culture is expressed through language, symbols, slogans, stories

and rituals and routines. In terms of language, an organisation’s principle and culture are

expressed through its vocabulary and slogans.(Alvesson and Sveningsson, 2008) A slogan

could describe what the company stands for. The nature of an organisation when viewed as

an iceberg, certain elements are visible, and others are not. The formal relationships of an

organisation such as objectives, strategies, policies, technology, organisational structure and

administrative procedures form the tip of the iceberg that could be visible to the outside

world. Though they form the tip of the iceberg, the informal relationships of organisation

such as attitude, values, perceptions, feelings, behaviour and communication that constitute

the organisational culture form the bottom of the iceberg. It could be argued that it is often

these less visible elements that form the culture of an organisation are catalysts for an

organisational change. These significant factors and theoretical aspects are further discussed

in the case studies mentioned below.

Case Study : General Motors

Company Background

General Motors was established in 1908. The company grew into a corporate giant in

a few decades. However, the emergence of Toyota declined the profit and growth of General

Motors in the market.(Khan, Raza and George, 2017) An external force such as the financial

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breakdown in 2008 contributed to bankruptcy that forced the company to implement a change

to survive and recapture the market. The company received loan from Canadian and

American government to maintain expenses. Furthermore, other internal factors also played a

major role in forcing a change. General Motors was paying higher wages of an average 74

dollars per hour when compared to an average 44 dollars per hours by its competitors which

forced the company to cut wages and costs.(Khan, Raza and George, 2017) In addition to

this, a reluctance in change and delay in decision making also caused the General Motors to

force a cultural change within the organisation.

Leadership

Later, one of longstanding employees of General Motors, Mary Barra was appointed

as CEO of the company in 2013 with an aim to establish an organisational change and

recapture the market. The greatest challenge was the crisis of ‘Switchgate’, a faulty ignition

issue that caused more than 100 deaths and forced the company to recall its cars from the

market.(Isidore, 2015) Mary Barra, as a leader, acknowledged the problem and conducted a

full investigation without a concern about the costs. The investigation revealed that the

company has pattern of neglect and incompetence which forced Mary Barra to redefine the

corporate culture of the company.(Rushe, 2014)

Organisational change

Mary Barra implemented a culture based on values focusing on customer service and

transparency. She encouraged integrity and participation from members in decision-making.

For instance, she revamped the 10-page dress code of the company to ‘dress appropriately’

which created a basic form of empowerment.(Mcllvaine, 2018) There were concerns among

managers that employees might show up for work in T-shirts. She approached decision-

making in a rational manner which made the manager who opposed the change to come up

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with a solution of having a locker for employees to keep clothes in case an official showed up

in a meeting. Mary Barra introduced a program named ‘Speak up for Safety’ where

employees are encouraged to raise their issues, ideas and opinions without being

punished.(Saporito, 2014) The program encourages a responsibility for safety in recognising

employees who contribute ideas. The program initiated by Mary Bara as response to the crisis

drive the cultural change in General Motors. The organisational change in General Motors

displayed excellence, encouraged accountability, highlighted transparency, improved

customer relationship and quality and implemented a two-way communication in the

hierarchy ladder. In addition to this, under the supervision of Mary Barra, General Motors

invested heavily on electric vehicles by removing outdated operations and prioritizing

innovation within organisation with an aim to keep the company a profitable business in the

market.(Ann, 2019) General Motors became a company that utilises its organisational culture

to enhance its performance in automotive industry. The cultural characteristics and leadership

of the company have significant impact on the success of the company.

Organisational Change and Leadership

Organisational change could be referred as the process by which leaders or

organisations respond to various external and internal factors that may have affected the

performance of the company. These organisational changes can arise due to the proactive

attitude of leaders or as a reaction to a crisis. For instance, Mary Barra’s response to the

‘Switchgate’ crisis by forcing a cultural change displays a proactive attitude of a leader. The

business environment of the company could also contribute to a corporate cultural change as

the technology, competition and customer demands in the market could influence the

behaviour of the work.(Majeed, Kamran, Bhatti, Nemati, Rehman, Rizwan, 2010)

Organisational changes are usually introduced in a company in an effort to optimise or

enhance the performance of the company in the business world. To trigger such a change, it is

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necessary to have a quality leadership with a skilful, proactive attitude and a decent

management team to achieve success. However, as mentioned earlier, a corporate cultural

change is often difficult to accomplish.(Alvesson and Sveningsson, 2008) A cultural change

requires consistency and must sustain for a longer span of time. The organisation must also

minimise the chances of a resistance and reassertion of previous corporate culture in order to

achieve success. Nevertheless, investing in corporate cultural change could have a significant

influence on the performance of the company. An adequate corporate culture can improve the

work culture, job satisfaction and productivity which in turn improve the performance of the

company.

Corporate changes can be planned or unplanned depending upon various internal and

external factors that could cause them. Planned change may perform either gradually or

rapidly.(Hirlak and Kara, 2018) A gradual change could observe the organisation adapting to

changing environment from time to time. For instance, regrouping of structure, activities and

introduction of new roles can be observed during a gradual cultural change. A radical change

demonstrates a change in the values, attitude and belief by redefining the culture of the

organisation. A planned change provides a roadmap for cultural change by consciously

attempting to minimise resistance in the organisation to enhance performance.(Hirlak and

Kara, 2018) Though a planned change approach could influence key stakeholders in major

cultural change, the complexity of the task and uncertainty can result in less productivity and

increase the burden on strategists. Another approach to implement organisational change is

through a direct change. According to Kerber and Buono (2005), a direct change ‘is driven

from top of the organisation’ and depends on individuals’ reaction to change. Moreover,

leaders must persuade the members of organisation to establish cultural change. A guided

change approach arises from within the organisation based on contributions by employees to

the organisation.(Kerber and Buono, 2005) Based on complete understanding, a guided

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approach reassesses and rebalance patterns by identifying and eliminating obstacles. Though

such corporate cultural change management approaches exist, it is necessary to completely

understand existing values of organisation to enhance performance. A complete

understanding of values helps to identify the cultural obstacles in implementing a successful

organisational change. For instance, in case of General Motors, it could be argued that Mary

Barra executed a combination of radical and guided change approach in implementing a

cultural change. She conducted a full investigation on the crisis that revealed the cultural

obstacles of a pattern of neglect and incompetency in the company. In addition to this, she

redefined the culture bringing transparency and integrity by acknowledging the fault and

encouraged employees to communicate which reduces resistance.

As corporate cultural change is difficult to accomplish, individuals or organisations

tend to stay with the existing corporate culture and leaders have a tedious task to unfreeze and

transform the existing culture and refreeze it with a new culture by ensuring that employees

are ready for a change. The leaders also must ensure that the implemented culture will

enhance performance, improve job satisfaction and will bring the desired outcome. Therefore,

the purpose of such radical changes is always to transform the organisation into a better one.

These changes could involve setting up new values, redefining existing beliefs and improve

communication by leaders.(Hirlak and Kara, 2018)

Furthermore, it is evident that leadership have an influence on the corporate cultural

change in an organisation. The extent to which it can influence the organisational change

measures the success of cultural change.

Role of Leadership

The role of a leadership is significant to the success of a corporate cultural change.

Leaders are often considered as sponsors of change. Considering the turbulent business

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environment, the power and capacity to lead organisational change is crucial to individuals

and organisations. Leadership is the capability to instil confidence and support to individuals

to achieve organisational goals. It is intertwined with organisational change as the process of

various corporate cultural changes demonstrate various leadership qualities. These leadership

qualities are achieved through various leadership approaches such as transformational,

transactional, charismatic leadership, etc which are displayed by leaders during change.

Transformational leadership demonstrates a transformation process between leaders and

individuals as rewards are offered to performances of individuals.(Hirlak and Kara, 2018)

Though transactional leadership also offer rewards, individuals face a punishment when goals

are not met.(Hirlak and Kara, 2018) Transformational leadership are often charismatic in

nature as they provide support in problem solving in a rational manner. Transformational

leaders are considered a source of vision as they apply change after developing a vision. For

instance, General Motors investment in electric vehicles and driver-less cars under the

supervision of Mary Barra demonstrate her long-term vision for the company. Barra

demonstrated traits of a transformational leadership through the ‘Speak up for Safety’

program that recognises employees who share an idea. These actions are significant in

achieving organisational change on larger scale. A charismatic leadership demonstrates

values that individuals cherish in leaders and not based on commanding of an office.

Charismatic leaders are observed during unprecedented crisis or a transition period of the

organisation.(Hirlak and Kara, 2018) For instance, Mary Barra create space for individuals

within the organisation to express their ideas and opinions by involving them in decision-

making process. It contributes to the empowerment of employees and displays traits of

charismatic leadership.

Organisational change in terms of leadership can be referred as conscious effort made

by leaders of an organisation to achieve organisational change and enhance performance. A

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leader could create and initiate cultural change to achieve objectives of the organisation. An

effective leadership through change could be observed when a leader attempt to identify and

shape the cultural issues and encourage the participation of members of the

organisation.(Hirlak and Kara, 2018) An effective leadership demonstrates the qualities of

cognitive competence, functional competence and social competence to achieve successful

change management. In case of General Motors, Mary Barra displayed her exceptional social

skills and vast knowledge on the work that she does. Her communication skills and

knowledge on the work demonstrate excellent social and functional competence of leaders in

an organisation.

However, an enforced change from top-down can create resistance among employees

against major corporate cultural change.(Kerber and Buono, 2005) A resistance to cultural

change can slow the process of organisational change, reduce productivity and could affect

the performance of the company. Nevertheless, the participation of members in decision-

making could help to reduce resistance for cultural change which makes leadership effective

through change. Culture do not change unless leaders change and without a visionary

leadership, no significant cultural change could occur.

According to Kell and Carrot (2005), the leadership styles of an employee could be

heavily influenced by organisational change. As the culture changes, it is necessary to have a

flexible leadership to establish a corporate cultural change and to motivate employees as

leadership style is always situationally contingent. According to Kerber and Buono (2005), an

effective leadership through change involves ‘leading change in ways that are suitable to the

situation’. To achieve such effective leadership, various leadership styles are followed to

implement corporate cultural change. A participative leadership style involves members of

the organisation actively participate in various decision-making process.( Majeed, Kamran,

Bhatti, Nemati, Rehman, Rizwan, 2010) This contributes to a two-way communication in the

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hierarchy ladder between leaders and individuals. It also encourages employees to achieve

active participation that could increase trust in leadership. Therefore, a participative

environment encourages a highly motivated management system as it allows employees to

influence in decision-making. For instance, it is evident in case of organisational change in

General Motors that Mary Barra, as a leader, demonstrated a participative leadership by

encouraging active participation of her employees in decision-making. A supportive

leadership demonstrate a feeling of trust and encourage a comfortable environment to interact

for individuals of the organisation.(Majeed, Kamran, Bhatti, Nemati, Rehman, Rizwan, 2010)

It could improve the levels of effort made by employees in terms of productivity and increase

motivation. For instance, the ‘Speak up for Safety’ program initiated by Mary Barra in

General Motors encourages employees to raise their issues. This contributes to a favourable

environment for individuals and provide support at the workplace. A directive leadership

demonstrate a top-down approach in terms of work-related behaviours involving planning,

organising, coordinating and maintaining control over work of employees.(Majeed, Kamran,

Bhatti, Nemati, Rehman, Rizwan, 2010) Leaders could contribute to organising a structured

system of tasks when individuals perform unstructured tasks in an organisation. This leads to

increase in productivity and enhancing performance of the organisation. Openness and

receptiveness to new ideas and thinking are also critical in developing an effective leadership

through organisational change.

Summary

The concept of organisational culture is crucial in understanding what the

organisation stands for. Corporate culture displays the behaviour of the workplace through

attitude, values and beliefs of the organisation. As discussed earlier, these cultures and values

are often expressed through language, slogans, stories and symbols of an organisation. The

current chaotic business environment suggests that an organisational change is inevitable for

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individuals and organisations to enhance performance. It is evident that culture is holistic and

is not restricted to an individual but exists on various levels when the subject of leadership

and change are considered. Corporate culture is difficult to change but with an effective

leadership it could be transformed into enhancing performance of the organisation.

Moreover, the case of General Motors demonstrate that an effective leadership is

necessary to achieve a successful organisational cultural change. General Motors was able to

make a swift comeback in the market through an effective leader like Marry Bara. The case

study of General Motors is an example of a successful organisational cultural change where

minimal resistance to change was observed. A major reason for increase in resistance in

organisation is that it exposes mistakes of the organisation and these mistakes are often

viewed as failures in the business environment. However, an effective leader transforms that

mistake into an opportunity to learn when the mistakes are accepted and acknowledged by the

company instead of hiding it. The General Motors and its leader Marry Bara have

acknowledged the mistake of faulty car ignition that contributed to a redefined cultural

change within the organisation. The case of General Motors suggests that to succeed in

today’s unprecedented business environment, it is necessary to have a flexible leadership

style that could adapt according to varying situations. A combination of planned and guided

change supported by a transformational and charismatic leadership at the top management is

necessary to achieve a successful organisational change. A complete understanding of values

of an organisation is necessary to for an effective leading through change.

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References

Alvesson Mats, Sveningsson Stefan (2008) Organizational Change. In: Alvesson Mats,
Sveningsson Stefan. Changing Organizational Culture Cultural Change work in progress.
New York : Routledge, pp 13-34.

Alvesson Mats, Sveningsson Stefan (2008) Organizational Culture and Change. In: Alvesson
Mats, Sveningsson Stefan. Changing Organizational Culture Cultural Change work in
progress. New York : Routledge, pp 35-50.

Ann Carrie (2019). Leadership Lessons from GM CEO – Mary Barra. Industry Leaders. 27th
July. Available at : https://www.industryleadersmagazine.com/leadership-lessons-from-gm-
ceo-mary-barra/ (Accessed on 12 June 2020)

Bengu Hirlak and Kara Ergun (2018) Organisational Change and Leadership. In : Ozer
Ozcelik et al, (eds.) Studies on Interdisciplinary Economics and Business – Volume I. Peter
Lang, pp 255-269.

Isidore Chris (2014). Death toll for GM ignition switch: 124. CNNBusiness, 10th Dec.
Available at : https://money.cnn.com/2015/12/10/news/companies/gm-recall-ignition-switch-
death-toll/index.html (Accessed on 14 June 2020)

Kell Thomas and Carrott T Gregory (2005). Culture Matters Most. Harvard Business School.
May. Available at : https://hbr.org/2005/05/culture-matters-most (Accessed on 12 June 2020)

Khan Sundus Tanweer, Raza Sarah Saleem and George Shaju (2017) Resistance to Change in
Organizations: A Case of General Motors and Nokia. International Journal of Research in
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Majeed, Kamran and Bhatti, Afkar and Nemati, Ali and Rehman, Ijaz and Rizwan,
Arshad (2010). Can Cultural Change with Different Leadership Styles enhance the
Organisational Performance. Research Journal of Inernational Studies. (17) pp 102-
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Mcllvaine R Andrew (2018). Changing a Culture Amid Constant Challenge. Human

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amid-constant-challenge/ (Accessed on 13 June 2020)

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Ogbonna Emmanuel and Harris C Lloyd (2002). Managing Organisational Culture: Insights
from the Hospitality Industry. Human Resource Management Journal. 12(1) pp 33-53.

Rushe Dominic (2014). GM chief Mary Barra: 'pattern of incompetence' caused fatal recall
delay. The Guardian, 5th Jun. Available at :
https://www.theguardian.com/business/2014/jun/05/gm-mary-barra-fatal-recall-
incompetence-neglect (Accessed on 14 June 2020)

Saporito Bill (2014). At GM, Safety Could Be Mary Barra's Silver Bullet. Time. 16th
April. Available at : https://time.com/64707/mary-barra-gm-safety/ (Accessed on 12
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