Culture Beginnings Through Founder/Leader Actions

Cultures basically spring from three sources: (1) the beliefs, values, and assumptions of founders of organizations; (2) the learning experiences of group members as their organization evolves; and (3) new beliefs, values, and assumptions brought in by new members and new leaders.

Though each of these mechanisms plays a crucial role, by far the most important for cultural beginnings is the impact of founders. Founders not only choose the basic mission and the environmental context in which the new group will operate, but they choose the group members and thereby shape the kinds of responses that the group will make in its efforts to suc­ceed in its environment and to integrate itself.

Few organizations form accidentally or spontaneously. They are usually created by one or more individuals who perceive that the coordinated and concerted action of a number of people can accomplish something that individual action cannot. Social movements or new religions begin with prophets, messiahs, or other kinds of charismatic leaders. Political groups are initiated by leaders who sell new visions and new solutions to problems.

Firms are created by entrepreneurs who have a vision of how the concerted effort of the right group of people can create a new good or service in the marketplace.

Founders usually have a major impact on how the group initially defines and solves its external adaptation and internal integration prob­lems. Because they had the original idea, they will typically have their own notion, based on their own cultural history and personality, of how to ful­fill the idea. Founders not only have a high level of self-confidence and determination, but they typically have strong assumptions about the nature of the world, the role that organizations play in that world, the nature of human nature and relationships, how truth is arrived at, and how to man­age time and space (Schein, 1978, 1983, 2006). They will, therefore, be quite comfortable in imposing those views on their partners and employees as the fledgling organization fights for survival, and they will cling to them until such time as they become unworkable or the group fails and breaks up (Donaldson & Lorsch, 1983).

The examples we will look at here illustrate several different kinds of culture evolution. Steinbergs created a strong culture around external adaptation, but the founder’s own conflicts created internal turmoil that eventually undermined the company’s performance. Smithfield is an exam­ple of a serial entrepreneur who avoided imposing himself on his organi­zation and therefore let cultures develop as a function of various leaders below him. The DEC story built around Ken Olsen’s personality illustrates how to create a very strong culture that is suited to growth and innovation but becomes dysfunctional when their market matures, yet is so strong that it survives while the company as an economic entity does not. Though I have less personal experience with IBM, HP, and Apple, I will illustrate how thinking about cultural origins can illuminate some of the differences we see in these companies today.

Source: Schein Edgar H. (2010), Organizational Culture and Leadership, Jossey-Bass; 4th edition.

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