Organizational culture and leadership are elements in a company that work in conjunction with one another toward organizational success. Both culture and leadership influence how the company will function and what will be achieved. Either culture will determine how leadership functions, or leadership will transform the organizational culture so that the culture supports the organizational values.

Organizational Culture

Organizational culture is comprised of behaviors, values and beliefs. The behavior of employees is evident through observation. Factors such as work areas, tools that employees need to perform their job functions and tasks and responsibilities that supervisors assign to employees affect employee behavior. Many of these factors are more readily observed in small businesses, where the work teams tend to be smaller and the supervisors have fewer employees under their charge. Leaders observe employee behavior so they can understand the common attitudes, values and beliefs their workers display and what influences employee behavior.


Organizational subcultures exist when smaller groups with like ideas form inside the larger organizational culture. Even small businesses have subcultures, which may consist of employees outside the "inner circle," new employees or senior employees who have been with the company since its inception. Subcultures develop among individuals who identify with one another -- they might have the same customs, provide the same type of function in the workplace or speak the same language. These subcultures can be supportive of the primary organizational culture, or they can work against it. How these subcultures function is dependent on the leaders of the subculture and their attitudes toward the company.

Organizational Leaders

An organization's leaders also influence how people within it function and the course that the organization takes, now and in the future. Leaders can be managers, supervisors, appointed leaders or de facto leaders. Regardless of their official or unofficial capacity in an organization, they must understand the organizational culture in order to motivate others to function in the manner that they desire. In many small businesses, the hierarchy that exists in larger organizations isn't present or isn't always visible. That said, small businesses have leaders who may not have official titles, but who have command a certain level of respect from their co-workers.

Appointed vs. Natural Leaders

Each organization has individuals who are appointed as leaders. There also are those within the company who are natural leaders, who are sought out by workers for guidance and support. These natural leaders -- sometimes referred to as de facto leaders because they don't have an official title -- can exist at all levels of the organization. In addition, they might have great influence on the attitudes and values of other employees. Appointed leaders or managers must be capable of identifying the natural leaders of the organization and working with them to gain support so that organizational planning and functions will be successful.

Vision, Values and Purpose

The Clemmer Group suggests that leaders influence culture by taking action. Action results from leaders determining what they want to occur within the organization over time, or the principles and value they want the workers to share. In many businesses, leaders want employees to demonstrate by their own action the purpose of the organization. For example, a nonprofit group that focuses on child welfare wants its employees to demonstrate compassion and concern for youth. Leaders then must relay these goals -- what they want to occur within the organization -- while prompting workers to voluntarily share the beliefs of the organization.