The culture of an organization refers to its beliefs, value systems and ideals that have existed within, as well as that of the individual staff, employees and more that make up that organization. Organizational culture “reflects the values, beliefs and behavioural norms that are used… to give meaning to situations that they encounter” (Scott-Findlay & Estabrooks 2006), and because of its omnipresence within a culture, it influences the behavior of the people that work within. The effectiveness of an organization is dependent, albeit not entirely, on organizational culture, but also on the leadership of that organization.

Leaders are to whom all others in the organization look for guidance and a reminder of the values, beliefs and overall culture set for the business. Leadership of an organization is responsible for communication and promotion of ideals, goals, objectives and a mission to the employees of an organization, which influences behavior and attitudes—for better or worse. A positive, healthy organizational culture is positively correlated with leadership behavior itself; leadership behavior is correlated with job satisfaction in employees, demonstrating the cyclical relationship of each of these important factors. A proposed model for understanding the greatest variables of organizational effectiveness must take into account job satisfaction, the type of leader and his or her leadership, and employee commitment.

The factors of leadership and organizational culture are considered to be two of the most crucial in order for firms to be and compete successfully and sustain a competitive advantage. Research has found a strong relationship between the two operational factors. Antonio D. Kargas and Dimitrios Varoutas (2015) used the Organization Culture Assessment Instrument (OCAI) created by Cameron and Quinn in 1999 as a method for its empirical study of organizations, namely within the Greek telecommunication, along with questionnaires, interviews and direct mail correspondences. Despite its specificity, Kargas and Varoutas collected data and analysed the responses on each questionnaire, from both employees and managers, to get a statistically significant view for each firm interviewed and to have a proper sample representative of the population.

The variance in leadership styles, including transformational leadership, inspirational leadership, transactional leadership, etc., all create different individual effects on organizations and contribute to other factors such as job satisfaction, motivation and innovation in employees and the business. In Kargas and Varoutas’s study, they also accounted for other factors such as firm size, market competition, and the age of the firm. Several of their hypothesis accounted for the varying factors, i.e., market competition being negatively correlated with a hierarchical culture, and firm age and size negatively correlated with more rigid and adhocratic cultural types. Supportive leaders who do not abuse their power, provide opportunities for open dialogue and share and encourage positive beliefs among the organization are looked on as valuable and thus, have a measurable effect on job satisfaction, moral and commitment amongst employees.

The Competing Values Framework is a frame of reference that is meant to measure and analyse the effectiveness of an organization. Developed by Quinn & Rohrbaugh, the CVF consists of two dimensions of effectiveness: external focus and the contrast between stability, control, flexibility and change (“Organizational Communication | Competing Values Framework”). The framework consists of four quadrants: clan oriented, adhocracy oriented, market oriented, and hierarchically oriented, each of which fall along the spectrum of flexibility and direction, stability and control, internal focus and integration, and external focus and differentiation. Kargas and Varoutas’s study mentions the adhocracy-oriented nature of organizations in created a hypothesis on the connected relationships between leadership style and a firm’s age and size.

In this case, the Competing Values Framework (CVF) measure each identifiable factor of an organization’s culture by measuring it according to its clan and hierarchy standards, both of which deal with what an organization does internally and how it impacts the organization. The Competing Value Framework demonstrates these four organizational culture types as a way to identify and evaluate leadership styles and competencies as well. The assessment of organizational culture is performed quickly and reliably with the Competing Values Framework, in conjunction with the OCAI. Of the leadership types listed in the OCAI, each bullet represents each of the four types of cultures in the CVF. Results oriented and efficiency oriented leaders align with market and hierarchy cultures, respectively, while mentoring and innovative ones align with clan and adhocracy cultures, also respectively.

The variables that affect an organization’s effectiveness can be seen best through organizational culture and how a leader creates and reinforces that culture with his or her leadership style, how they manage employees, how the organization is bonded together, and more. The criteria for success of an organization boils down to the people within it and how well each of their roles serve the goals and objectives of that business. Without a thriving corporate culture that is poised for growth and that includes positive co-working relationships between employees, managers and both groups, there is little chance for success. The Competing Value Framework is a tool that also measures the strategic standpoint of an organization and how organizational culture helps or hinders the organization from achieving its goals.

Organizational culture is a reflection of the organization, its leadership and the employees within. Organizational culture and leadership style are inextricably linked and provide guidelines and motivation for employees to achieve an organization’s goals, objectives and mission. A healthy, friendly, collaborative environment is reinforced by the actions and leadership styles of the leader in question, since they are to whom those below them in the organization look to set the guidelines and norms for the workplace. An effective leader is one who motivates, inspires and calls his or her employees to action and in the process, creates an organizational environment that encourages those things to flourish. To create a culture that allows and encourages this is to create one that can succeed and have a sustainable competitive advantage in its respective industry.