There has always been a struggle between leadership and management in the workforce. Both place a very strong emphasis on different areas of the workforce. Management emphasizes productivity whereas leadership focuses more on personal development and growth. No matter the case, both have a strong effect on the organizational culture that is cultivated within the workforce. They can affect the performance and overall growth of the company. However, despite the amount of research that show leadership has a far more exceeding proven effect, companies seem to still place a strong focus on management anyways. Leadership, however, has been proven to be more successful in meeting the needs of the company and sustaining a culture conducive for growth and personal development.
The problem addressed here is the effects of leadership on organizational culture and how culture affects employees’ overall performance. One aspect of the workforce that culture plays a major role in is job satisfaction (Pawirosumato, Purwanto & Gunawan, 2017). There must be a change in leadership and the way culture is cultivated in order for employees’ outlook on their job to change. Companies are experiencing an increase in employee turnover rates partly due to culture that leadership has created within. There must be a consistent positive and motivating culture that first starts with leadership and then will be emulated by the staff. Much of the behavior seen in staff can be attributed to what is seen or being exhibited by leadership or a lack thereof. In most companies, there is a strong obligation to keep numbers up and as a result employees are lost in the daily operations of the company. Indeed, there must be productivity but there also needs to be a focus on employee retention as well. This includes, creating a positive environment where staff can flourish. There are many factors that contribute to the kind of culture or environment that is created. For instance, trust, inclusivity, communication are just among the few factors that go into creating a company culture. These are ideals that hold true to both internal and external stakeholders. This also plays a part when it comes to the relationship between the company’s colleagues as well (Pawirosumato, Purwanto & Gunawan, 2017).
Culture is a an important aspect of any company. According to the competing values framework there are four specific types: clan, adhocracy, market and hierarchy (Golden & Shriner, 2019). Culture is not just developed in one singular way but rather there are many different methods to cultivate culture in the workforce. Some methods focus on empowering the employee that they would increase their commitment to the company and ultimately there would be greater productivity. Other methods focus on setting clear goals that will keep the company on track to meet specific overall objectives.
Transformational leadership is a framework where leaders push employees to create change within the organization and bring about new ideas and concepts. The core idea of this concept is that leaders will inevitably create other leaders empowering them to make decisions and discover new ways of doing things (Golden & Shriner, 2019). It is an idea that deviates from managing, in that, it isn’t focused on numbers or hitting certain benchmarks but the development of the staff. This style of leadership is about inclusivity ensuring that staff are involved in communication of the overall vision of the company. After all, buy-in from the employees may also mean a new level of commitment. This also includes ensuring there is a level of respect, honesty and trust between staff and leadership. The leadership utilizing this framework focuses less on self-promotion and more about promoting staff and putting them in positions to cause change to happen. This inevitably has a long-lasting effect on companies for years and has a way of increasing employee retention rates.
Understanding organizational development is no simple task as there is no simple or one way to define it (Rowlinson & Proctor, 1999). Most would define culture itself as a set of values or beliefs that a group of people are willing to stand on. However, bringing organization into it adds a whole other level complexity because not every organization is the same. Therefore, defining culture would then be sort of ambiguous or, at the least, have more than one definition. There are two questions that have to be asked when defining such a term: 1) what are the held beliefs in an organization?, and 2) how do the internal stakeholders see the organization? (Rowlinson & Proctor, 1999). Almost every organization has a set of values and beliefs that stand as the makeup for why they do what they do. Secondly, most employees have somewhat of an internal perspective of what they believe to be true about the organization. Together when these two ideas come together, it essentially makes up what is considered the company/organizational culture.
Starting back in the 1980’s to what some believe began in Japan, the success of their economy was believed to be, in part, due to the culture they had cultivated in its corporations (Rowlinson & Proctor, 1999). Companies back then were starting to understand the importance of culture and what role it had in their organizations. Some of the big companies like Kellogg’s knew the importance of not just creating another company but a human institution (Rowlinson & Proctor, 1999). Many of the heads of these organizations began to realize that culture started with their own actions. Eventually it would have a trickle affect and began to work itself through the rest of the members of the organization. Once this theory was adopted and more and more organizations began to look at its effect, it quickly affected other areas of daily operations.
Culture quickly began to shift the way people perceived the workforce and it affected areas such as performance, job satisfaction and even turnover and retention rates. Employees began to realize that culture affected the environment in which they had to work and this was directed related to the amount of stress they felt at work. This realization helped organizations to shape what that culture would look like for them as they began to see the type of culture cultivated increased commitment of the staff (Saad & Abbas, 2018). Employees were more apt to commit to a job where there was a culture of trust and growth. As a result of culture it increased employees’ job performance in many ways. Not only did they commit to the job but numbers showed they began to improve in their actions or behaviors (Saad & Abbas, 2018). The type of behaviors they noticed were the ability to generate new ideas and to solve problems creatively. This even empowered employees to make decisions independently. Employees want to feel like they are a part of the overall mission of the organization and not like they are pawns. A shift in the culture in business has definitely put the ball in the employees’ hand not just the leadership.
The culture that is created in the workforce has a big role to play in employees’ satisfaction of what they do. Again, some workforces tend to focus on management whereas others focus on leadership. This can affect the type of culture that gets cultivated. For example, a focus on management may mean pumping out numbers and there may be a lack of motivation there on behalf of the leadership toward the staff. On the flip, a focus on leadership is all about personal development and there maybe motivation and encouragement to grow. One of the biggest factors that contribute to employee’s being satisfied with their job is motivation (Rozika, Dharma & Sitorus, 2018). Motivation is big component to the business culture and can either push people out or up. As a result, most companies will face fluctuating retention and turnover rates. The reason for this varies from one organization to the next, however, there are some common themes in most of the research to show why this keeps happening. As already stated culture can be hard to define and how an organization determines its definition for them is different. A culture of distrust is not only an issue but a culture of danger or threat poses a problem as well. This doesn’t just have to come from leadership either but clients that employees have to interact with on a daily basis. Sometimes dealing with unruly customers and not having leadership to protect you is a culture of unloyalty that can then be breed as a result. Employees often leave because there is a level of stress on the job they face when interacting with the people on a daily basis (Rothausen, Henderson, Arnold & Malshe, 2017).
For the purposes of this quantitative research topic surveying will be the methodology used to study further. This is to understand the effect that leadership has on the culture that is cultivated within the organization and its lasting effects on employees. The survey will consist of surveying 100-150 employees of an organization. The questions will consist of 4 main areas: morale, job satisfaction, performance and future employment. Questions on morale will be based partly on whether or not they feel that their attitude or disposition has been positive or negative since having started the job and then what changes have been made to make them feel that way. Questions on job satisfaction will mainly look at their outlook or perspective on the job and what factors into that perspective. There will be a few options to give them some starting point. Then there will be a focus on performance. These questions will mainly focus on past performance reviews possibly and how they feel they have done performance related. Then there will be follow-up questions on why their performance has either increased or decreased and then what contributing factors play into that. Lastly, questions on future employment will strictly look at whether or not they see themselves employed with that particular company in the long run or if there are other prospects ahead. The follow-up questions will be focus on why they are leaving and then if there are other job prospects, what was the reason for choosing that specific company.
Two groups will be analyzed in this study; employees who work in healthcare and those who work in retail. Again, interviews will be conducted with at least 100-150 of the bottom line workers. These two industries are being looked at because these are the two the face the most turnover in the workforce overall. The retail industry alone has quite a bit of turnover rate due to the lack of leadership within the company. This is also an industry that has quite a bit of people employed in the field as a good 11% (15.8 million) represent the workforce (Tuckey, Boyd, Winefield, Bohm, Lindsay & Black, 2017). The healthcare industry is a bit different but there is still high turnover rates they face yearly because of the culture that has been cultivated by leadership. Mostly those affected by leadership are those are the bottom line staff. Typically, they also understand best what the culture is and what it’s like operating in the environment being created. These are employees who range in age and ethnicity as well. Most employees, in retail at least, are high school graduates and are either in college or may have graduated. However, in the healthcare field these are employees who range from high school graduates all the way up to individuals who hold masters degrees. Similarly, they also tend to vary in age and ethnicity. It also depends on the type of position as well. One other aspect to focus on are subsections within the retail industry itself as focusing on one might have screwed results in the end (Tuckey, Boyd, Winefield, Bohm, Lindsay & Black, 2017). Gathering data from as many people and as many different areas within the two industries will definitely prove to yield better research than one main focus.
In most research, there is always other pieces of information that is needed in order to get a full picture of the problem. For this particular study, more statistics on employees working in the retail and healthcare industry is needed. For example, what are the demographics and psychographics of these employees. In addition, the actual retention and turnover rates would be a major piece of information in this. Also, to be able to differentiate between employees who have been terminated or laid off and those who voluntarily quit, there would need to be more information presented. As it stands, not every employee quits but some are terminated and in high numbers each year. Information on statistics for the subsectors of these two industries would be necessary as well. It would be interesting to know which area of retail or the healthcare has the most turnover rate. This could lead to some other pertinent information along the way.
The ultimate goal of this study is to show that leadership has an effect on company culture and that by cultivating the right culture you can effectively retain staff and increase a positive working environment. In addition, the need to understand the type of culture that needs to be cultivated is very important as every company is different. This possibly means focusing on innovating systems or bringing inclusivity to the forefront of the company including staff in important decision making. The vision is to bring an awareness to companies globally of the value culture has in the workforce and the effects it could have on seeing a successful company or a company that was blown away in the wind. In order to do this effectively there needs to be a strong understanding of what leadership and culture is and then how to effectively implement these in an array of different companies.
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