Culture, Leadership, and Innovation in Organizations

Abstract

The purpose of this literature review and case study is to examine the effects of specific cultural aspects and leadership styles (primarily destructive leadership) on the performance of innovations in one of the leading food & beverage companies in the Arabian Gulf Region. The study is based on multiple peer-reviewed sources regarding the topic of leadership, organizational culture, and innovation. Moreover, it applies the gathered knowledge while assessing the current situation of Company X and suggesting recommendations that would lead to improvement on cultural and innovative levels. Subsequently, the recommendations are given after an accurate diagnostics of the current state of the company. While culture and leadership have been intensively researched by multiple experts, the side effects of destructive leadership and the interference of national culture are presented less often in scientific journals. The findings include a strong correlation between organizational culture, ineffective leadership, and lack of innovation that subsequently leads to negative business outcomes as suggested by the situation examined in Company X. Certain improvements and policies can diminish the stagnation on the OC and leadership levels which will allow future innovation.

Keywords: national culture, organizational culture, leadership styles, destructive leadership, espoused values, enacted values, innovation management, performance, food & beverage, Middle East, GCC.

Introduction

The primary purpose of any organization is to maximize the effectiveness of the policies, processes, and systems that it relies on. However, there are many aspects that can have both negative and positive implications on the overall outcomes. The outcomes include HR productivity, positive relationships among colleagues, effective leadership, monetary profit, customer satisfaction, and valuable innovations on every organizational level. If a particular organization meets difficulties in any of these subjects, further improvement ought to be done in order to minimize the issues. Moreover, the cultural aspect is also an important part that plays a crucial role in further innovations and upgrades. Proper cultural objectives and adequate leadership are interconnected with innovation, which suggests the importance of developing specific strategies and management plans to overcome the problems and fulfill the aim of improving.

Literature Review

The notions of national/organizational culture, leadership, and innovation in corporate settings have been reviewed, scrutinized, and assessed by multiple researchers in the field of business administration, economy, and management. Organizational innovation is a major driving force that stakeholders are willing to improve and examine based on peer-reviewed expertise. Bendak et al. point out that innovation is vital when it comes to longevity and prosperity for any organization (2020). According to Aboramadan et al., marketing innovation is linked to positive benefits in the performance field (2019). Kahn illustrated three different types of innovation (2018). Those can be innovation in outcomes (depending on the desired output), in the process (organizational), and in mindset (referring to individual people in an organization). The aspect of innovation is not only beneficial on marketing and structural levels but is also linked to higher creativity among employees (Al Harbi et al., 2019). Lam et al. also support the idea that people who work in an innovative environment tend to show better work performances (2021). However, there are aspects that create unfavorable conditions for development. An example would be the level of national innovation (Handoyo, 2018). A country that does not create favorable conditions for businesses to flourish usually tends to compromise the level of innovation for all organizations. Moreover, a lack of proper managerial strategies may also have adverse outcomes for innovation (Fallahi, 2018). These, however, are not the only connections to the subject discussed prior.

Another notion that correlates with adequate development is proper leadership. According to Mahmood et al., beneficial leadership is linked to favorable outcomes for organizations (2019). It also correlates with favorable cultural aspects of organizations (Lee et al., 2018). Afsar & Umrani mention that good leadership promotes motivation and eagerness to improve among workers (2019). There are, however, different styles of leadership that have opposite outcomes. As suggested by researchers, the styles illustrate the manners in which employers motivate people to fulfill tasks and achieve goals (Al Khajeh, 2018). For example, the transformational leadership style is a common trigger for innovation (Li et al., 2017). Madi Odeh et al. also mention the link between transformational leadership and fast recovery from economic difficulties (2021). Other researchers found a pattern between this type of leader and the management of change (Putri et al., 2020). Another style of leadership is the democratic one, which is proven to be favorable for strengthening organizational potential (Fiaz et al., 2017). Nevertheless, certain leadership styles have been illustrated as leading to adverse effects for companies, employees, and even profit. According to Fors Brandebo, the level of job satisfaction among teams decreases in a company where destructive leadership is present (2020). Moreover, Schmid et al. mention three different types of destructive organizational behavior (2018). It can be directed to the follower (abuse from individuals with higher positions), to the company (stealing), and to self-interest (using others to achieve personal goals). Although leadership is one of the crucial factors that may lead to innovation, certain circumstances have to be considered. It does not occur in a void but is rather tightly related to the individual personality of the person in charge (Oc, 2018). Generational differences also play an important role in the leadership of a company (Rudolph et al., 2018). Moreover, according to Aldulaimi, certain countries have different cultural connotations (2019). This is why companies in the Arabian Gulf Region differ in terms of leadership styles in comparison to other western practices.

Culture is another major factor that influences the potential for innovation. Researchers point out that culture is the driving force for development (Yun et al., 2020). Warrick highlights the importance for leaders to align the company’s premises and goals with cultural ideals (2017) Groysberg et al. mention the link between culture and fulfilled organizational goals (2018). Corporate culture is also related to job satisfaction and monetary profit (Jung & Yoon, 2016). Obeidat et al. highlight that reward systems implemented through cultural means enhance the human capital and employees’ will to be prolific during work (2018). In fact, it has been suggested that all stakeholders would benefit from their company improving on a cultural level (Pietersen, 2017). While organizational culture is an important part of any business or institution, it is a complex subject that differs based on certain aspects. Maximini mentions four different models of such culture (2018). Those consist of orientation based on role, achievements, power, and person. The cultural implication of an organisation also correlates with national specifics (Peretz et al., 2017). Nazarian et al., make a connection between the employees’ national culture and the company where they work as a whole (2017). Watson et al., on the other hand, argue that national context is also crucial when it comes to entrepreneurial potential (2017). It is essential to point out that culture is an aspect that is specific depending on the country (Facchini et al., 2020). Bogatyreva et al. also imply that national culture is strongly related to certain actions that are influenced by intentions (2019). For example, examining the national aspect of Arab states is beneficial for understanding the exact way in which the customer’s demand and organizational goals differ from foreign businesses (Almutairi et al., 2020). As a reference, Forster argues that certain cultural aspects prevented women from taking on leading roles in organizations (2017). Another evidence for particular national specifics is the fact that the majority of companies rely on multiple expatriates among the staff (Haak-Saheem & Festing, 2018). This proves that organizational and national culture is not only important for balanced workflow but also for the domain of innovation.

Culture

Culture generally refers to specific points of view, experiences, and actions that differentiate one person or group from another one. As mentioned before, organizational culture and national culture are two different notions that still align in terms of connotation. Corporate culture refers to the values, prospects, and goals of an organization that has certain ideas and guidelines. On the other hand, national culture relates to the specifics of an entire country or multiple countries that share similar values and backgrounds. It is hard to measure or determine the specific organizational culture because companies consist of numerous different employees, leaders, and departments. Since every individual has personal views on certain things, their opinions do not necessarily align with those of their coworkers. There are, however, ways to scrutinize specific cultural aspects using different methodologies.

Theories of The Nature of Organizational Culture

Multiple theories have been implemented regarding specific levels, models, and categories within the organizational culture. Schein’s Three Levels of Culture are designed to divide the cultural aspect into subjects that subsequently define cultural alliances (conscious and subconscious).

The three levels consist of artifacts, espoused values, and basic underlying assumptions. All the levels are connected and depend on each other. Artifacts (Figure 1.) are the clues that are easily noticeable and allow individuals to assess the cultural background based on superficial things such as clothes. Artifacts are not hidden but rather highlight one’s cultural ideals based on details that are easily noticed. Espoused values (Figure 1.) refer to specific mindsets, points of view, opinions, and philosophies that create a cultural understanding. These are all conscious thoughts and spiritual guidelines that a person can explain, express, and assess. Basic underlying assumptions (Figure 1.), however, are subconscious values and ideas that contribute to the essence of one’s personality. While they can not be easily verbalized or objectified, basic underlying assumptions are vital aspects of one’s cultural perception. While this method allows culture to be scrutinized and analyzed from different perspectives, it does not necessarily illustrate the underlying connection between culture, leadership, and innovation.

Hofstede’s Cultural Dimensions theory takes into consideration aspects that have not been analyzed in the previous model. This method is designed with the purpose of examining cross-cultural aspects within organizations.

Theory Hofstede’s Cultural Dimensions Theory assesses the power distance index (PDI), individualism vs. collectivism (IDV), uncertainty avoidance index (UAI), masculinity vs. femininity (MAS), long-term orientation vs. short-term orientation (LTO), and indulgence vs. restraint (IND). PDI connects culture and leadership since the index examines relationships between individuals with less power and the leaders of the organization. This suggests a correlation that illustrates how organizational culture and leadership may depend on each other. IDV is the index that examines how individuals tend to integrate into groups. UAI suggests the level to which the organization or individual views ambiguity. According to Al Harbi et al., creativity is strongly connected to innovation (2019). This highlights that a company with a higher UAI index does not view creativity as an absolute virtue, suggesting a lower chance for innovation. The MAS index indicates whether the organization is focused on achieving goals and assertiveness or modesty and cooperation. Forster mentioned the lack of women who have leading positions in companies in the Arabian Gulf states (2017). This correlates with the notion that certain companies are still culturally defined by masculine values, which are considered more efficient. The LTO index directly indicates the balance or imbalance between tradition and innovation. If the LTO balance is low, this means that the environment is based on traditions rather than progress. Innovation leads to prosperity and development, according to Bendak (2020). A high LTO index makes innovation impossible due to the fact that the vital premise is honoring older beliefs and ideas. IND is the generalized term for the level of happiness and gratification. As mentioned earlier, employees who are satisfied with the work environment are more prone to having innovative ideas, which means that organizations where individuals feel comfortable are less likely to be inefficient. This method of assessing culture within an organization provides a broader range of aspects that should be analyzed in order for a conclusion to be formed.

Objective Diagnosis For The Company Under Study

Objective diagnosis is an essential step in assessing a company’s cultural characteristics, examining the leadership models, and improving innovations. In this case, the company is going through a crisis on internal and external levels. In order for adequate suggestions to be made, there is a crucial need for understanding the company as a cultural organization. It is also essential to discuss all the issues (both internal and external) and align them with specific culturally-based evidence. Moreover, examining the type of leadership present in the company will be beneficial for creating a link between the way leaders chose to run the corporation and the lack of proper innovation and development. Subsequently, the need for certain changes and improvements will be mentioned in order for the cultural aspect of the organization to correlate with prosperity and innovation rather than stagnation.

Company Overview

The particular corporation chosen for examination and assessment is one of the biggest companies in the field of food and beverages in the Arabian Gulf Region. Company X was established over four decades ago, which makes it a reliable supplier for the general population due to its history and longevity. The company is quite diverse in terms of associates. Individuals that are a part of the team come from different cultural backgrounds, cultures, and experience. The human resource consists of various specialists who differ based on professional experience, degrees, and field of work. The last ten years have been tumultuous in terms of executive management. There have been more than four different CEOs over the course of this time period. Each of the executive managers decided to apply a different management style, which may have been beneficial for the sake of experimentation yet confusing for the rest of the team. Moreover, more than one CEO was inclined to step into the new position and bring a team of senior specialists with them. They were individuals trusted by the CEO that became direct reports. The last three years have been challenging for the corporation on many levels. It has been reported that the company has been suffering from poor performance of product innovation. Multiple drawbacks have been observed when comparing the company’s accomplished goals with the general industry’s norms and competition performance. Such bad performances and frequent failures have had a negative impact on the external levels of the organization. The implications include loss of market share, negative consumer perception, loss in revenue, decreased profitability, and low productivity rate. There have also been negative aspects to the company’s internal and structural levels. The issues include the rise of blaming culture across the teams and an increase of disengagement on the employees’ side. Such internal organizational matters led to a high level of voluntary turnover among qualified staff that has been active and productive for multiple years.

Examining National Culture in The Case Study

National culture is an aspect that touches upon particular views and collective ideas that are common throughout the majority of a specific population. According to researchers, examining traits and suggestive characteristics regarding the national culture is detrimental when it comes to assessing the current situation and future outcomes (Nazarian et al., 2017). Company X operates within an Arabic nation. It is a fully local corporation that does not conduct business anywhere else in the world. Moreover, Company X does not have any kind of strategic affiliation with international partners. This suggests that the aspect of national cultural affiliation is a primary driving force within its policies and strategies. Evidence shows that Arabic countries have a different approach when it comes to customer service and goal fulfillment (Almutairi et al., 2020). Since Company X solely operates locally, it is evident that its national cultural approach has a significant impact on the policies and ideals. It is also linked to the masculine approach regarding the masculine vs. feminine index within Hofstede’s dimensional theory, which is present among multiple companies within Arabic nations. Aldulaimi mentioned the differences between the power structures among Arabic countries and Western ones (2019). The index for power distance is elevated within multiple different organizations, and the fact that Company X has been going through changes regarding executive managers suggests that it is a national cultural pattern.

Examining Organizational Culture in The Case Study

In order to analyze Company X’s organizational culture, it is necessary to point out specific facts that have been assessed prior. Moreover, the three levels of culture (Figure 1) ought to be specified while scrutinizing certain specifics regarding culture on the organizational level. Examining corporate culture correlates with improvements in the innovation sector (Yun et al., 2020). This is why it is essential to pay attention to the company’s ideals, structure, and goals in order to move forward with future implementations and improvements on many different organizational levels of the corporation.

Artifacts

Company X, as suggested before, has over four decades of experience on the market. While longevity is a beneficial aspect that refers to advantageous management to some degree, there are negative implications when it comes to some image-related issues. The company’s tangible and physical characteristics are considered average. Comparing the corporation with other rival organizations on the market that operate in the same industry, it is suggested that there are not many differences between them. The building is rather old-fashioned and does not illustrate a modern and innovative policy. The office designs are simple and also outdated due to the furniture and overall concept of the place that has not changed since the mid-1990s. Certain executives do renovations occasionally, but the cost is not withdrawn from the companies’ budget, which means that renovations are made with personal resources by employees who are willing to purchase materials and pay for the work.

Due to the cosmopolitan nature of the work environment, English is the primary language that is used for communication in the office. While foreign specialists are comfortable with this policy, there are some problems because of the business language that is universally used in the company. Some of the local staff members at different management levels have limited linguistic skills. Such issues create a barrier, which negatively impacts the workflow and relationships between colleagues. This is also a problem since one may not be able to express specific opinions and thoughts, furthermore leading to feelings of isolation, anxiety, and dissatisfaction among local managers.

Company X is a big corporation with over six thousand full-time employees working at multiple locations. There is a level of diversity in regards to human resources highlighted by the number of local and foreign individuals. Nearly half of the workforce consists of local citizens who did not have to assimilate or migrate to a new location. The other half, however, consists of expatriates. Over 50% of the workforce includes people from more than 15 countries. Multiple individuals working at Company X come from different backgrounds, professional degrees, experiences, and cultures.

Examining the high managerial positions is enough to assess that most of the senior leaders that have the most influence on the company are local male citizens. It has been observed that very few expatriates manage to get through to the higher positions in the company. Subsequently, females are mainly clustered within the middle management structure. All the female employees are local citizens. Furthermore, the senior positions are all represented by men. Females do not have a high executive position but are represented in the middle of the company’s hierarchy of managers and executives.

As mentioned before, the company has been going through a high rate of turnover among professionals. Usually, managers who are willing to voluntarily quit their job within the organization are part of low or middle management positions. The turnover is, most likely, caused by high competition in the food & beverages industry. It has also been observed that the high number of voluntary resigns results in conflicts between colleagues. Moreover, disagreements and hostile behavior are usually observed among older employees towards younger specialists who just started working for Company X. Besides differences in points of view and positions, other factors also drive the disagreements. Those include lack of solid and comprehensive systemic documentation, unsupervised work processes, and lack of implemented SOPs that would guide how the organization operates, its goals, and its achievements.

Espoused Values

As previously mentioned, the company comprises more than 50% of employees from more than 15 foreign countries. Such a significant percentage of individuals with other nationalities, cultural backgrounds, and experiences means that the espoused values differ depending on the employee. The company has publically stated that they do have a clear vision and set missions by publishing documents. The statements were available for workers to get familiar with by being displayed at multiple operational locations. Moreover, they were published in the organization’s internal portal and printed down in some of the corporation’s internal publications. However, those statements have not been updated or highlighted during the past three years. There is no current linkage or references to the company’s previous performance reporting, making the assessment of espoused values complicated to externalize for the managers as well as during examinations of structural and ideological values engrained in policies and strategies.

Enacted Values

Assessing the organization’s enacted values can be challenging due to the fact that they are deeply rooted in the subconscious. Enacted values can not be externalized. However, they play an essential role in the cultural organization of Company X since each employee is driven by deeply rooted opinions and ideals. A more detailed psychological examination would be required in order for all the data to be analyzed and observed to then conclude the most common internal beliefs. On few occasions, employees were asked to inform the executives about their personal values and points of view. While such practices have not been frequent, it has been observed that based on the team’s performance, individuals tend to base their actions and professional desires on their own enacted values rather than conforming to the company’s espoused values. The fact that Company X has no structured references regarding cultural ideas confuses the managers who chose to act based on personal views rather than corporate suggestions.

Examining Leadership in The Case Study

It is crucial to look at leadership within Company X in order to highlight the possible problems are issues that do not allow innovations to appear within the organization’s strategies, outcomes, and HR management. According to researchers, the topic of leadership is complex and depends on the company and the individual in power rather than on standard practices (Oc, 2018). Furthermore, it is vital to examine how the company’s leaders chose their managerial strategies for specific policies to be suggested for future development since leadership is strongly connected to positive innovation. The examination of Company X’s style of leadership is based on the relationship between managers and executives, job satisfaction, and employee turnover. It is certain that the current leadership is destructive in terms of relationships among superiors and employees, outcomes, and overall workflow that is not adequately structured and examined by the executive managers in charge.

Examining Leadership Style

Company X’s level of innovation correlates with the decisions of higher superiors. The organization’s centralized structure (power culture) is focused on the CEO’s visions and suggestions, as well as the implications of other selected senior management members and the board of directors. There has been a strong influence based on favoritism throughout the professional flow of the corporation. Executive managers choose their closest associates based on previous acquaintances and personal relationships with the individuals. Members outside of the amenity circles feel like they are undervalued since the CEOs always chose acquaintances based on personal preferences rather than the professional achievements of managers within the company. Moreover, individuals that are not acquainted with superiors on such familiar levels have less to say about possible improvements and strategies that would benefit the company. There is no suggestion of appreciation towards those managers, which subsequently leads to job dissatisfaction and poor performance. Not having a reward system that would highlight the employees’ efforts leaves them unmotivated to continue working on the company’s innovation and improvement, which has a bad outcome for the entire corporation. Moreover, leaders perform tasks and make decisions based on personal preferences rather than researching the market and assessing the risks prior to the decision-making process. The blind launches of new products or discontinuation of existing products lead to imbalance, uncertainty, and high stakes.

In Company X, the CEO mainly demonstrates systematic, frequent, and active destructive leadership. This has negative implications in terms of creativity, proficiency, job satisfaction among other managers, and professional relationships between colleagues. Fors Brandebo made a connection between destructive leadership and lack of innovation (2020). The lack of a fair, organized, and objective leader has a negative impact on the team and the company’s outcomes subsequently. Aspects of poor leadership are observed in the many cases of recklessness regarding decision-making and consideration of the team’s effort. The assessment is mainly driven by:

1. Denying the key staff members of making significant decisions regarding the company’s innovation while solely relying on selected individuals from the inner circle.
2. Lack of empathy and appreciation towards team members highlighted in multiple verbal and nonverbal gestures of shaming and undermining of people’s perspectives during the work process.
3. Lack of knowledge and experience in regards to having an executive function in this particular region of the world.
4. Limited knowledge regarding technical and operational processes within the company.
5. Lack of strategic approach, market research, and risk assessment while implementing new decisions, goals, and policies.

It may be argued that the CEO’s leadership style and certain national cultural effects that impacted the work environment led to few but reliable positive outcomes in the domain of innovation management, specifically new product introduction. The results included a quick and successful adjustment to new national regulations and outpacing competitors by launching new products faster than other companies on the market. While specific favorable outcomes have been noticed, one may argue that such improvements were singular and momentary. The benefits are not sustainable and can not be relied upon when it comes to further success in the realm of innovations.

The observation suggests a conclusion that the leadership in Company X is destructive, and if no new guidelines and implementations are followed, the innovation sector will remain stagnant. The way the company’s leaders treat employees by not allowing them to have active input towards change and decision-making leads to poor performances and inefficiency in the HR domain. Employees are dissatisfied with their current situations because executive leaders do not have a correct reward system that would allow them to receive recognition for active implication in the corporation’s present and future implementations. This minimizes the level of innovation and growth and encourages an ineffective system that is based on personal goals rather than company ideals.

Examining Innovation in The Case Study

Based on the observations examined above, organizational cultural issues and destructive leadership styles are present within Company X. Both culture and leadership directly influence innovation. Since the company has been stagnant and inefficient for the last three years, this highlights the seriousness of the issue. Innovation has a distinct lifecycle that consists of multiple stages.

The lifecycle of innovation includes investigation, evaluation, building/designing/experimenting, test launch, and full launch. Lack of proper organizational culture and centralized leadership based on senior managers only led to improper implementation of innovation. New decisions are only taken by executive leaders, who do not prioritize planning, testing, and experimenting. Instead of an entire lifecycle (Figure 3), the leaders jump from design to full launch and skip the other vital parts of the process. The fact that there is no investigation of the market, evaluation of possible new products, and test launches minimizes efficient innovations and leads to bad outcomes for the company.

Theoretical Recommendations

Specific improvements ought to be implemented in order for the innovation sector to be more efficient. Without reforms and new policies in organizational culture and leadership styles, the poor outcomes will stay the same, and Company X will not become prosperous in the future. It is important to examine many different domains of the organizational structure in order for significant positive changes to appear. This is why considering all the aspects discussed prior is vital in the upcoming development of the corporation. In order for innovations to become more frequent and advantageous, culture and leadership have to be altered since they directly affect growth.

Organizational Culture. Recommendations

As mentioned before, organizational culture is not yet a significant concept within the company’s policy and ideals. There are not set documents or recommendations that would guide the employees towards a more collective view of the tasks and goals of Company X. Each individual bases their assessments on personal beliefs rather than collective benefits, which is a significant problem.

There are steps that will improve organizational culture and lead to an adequate work environment with set goals and ideals. These include communication, orientation, engagements, and team building (Figure 4). Communication suggests the process of interaction between leaders and subordinates. Senior executives can communicate the values that the company is based on, letting the employees know about the guidelines they have to consider within the work process. Orientation illustrates the guidance that managers can receive in order for the company’s ideals to be verbalized and examined. Engagement is the next step, and it highlights the importance of engagement of the entire team in decision-making processes, brainstorming activities, and company-related discussions. Last but not least, team building will allow the employees to view themselves as a part of a more extensive structure rather than singular individuals. All the aspects mentioned (Figure 4) will lead to a more appropriate and potent corporate culture that will have a positive influence within the workforce.

Leadership. Recommendations

Based on the examinations of Company X, the destructive leadership style is one of the most significant issues in the organization that directly correlated with insufficient innovation. Specific improvements have to be implemented in other for the CEO and senior managers to be more prolific and efficient while being in charge of the team, products, and customer satisfaction. Having efficient leaders who are able to create a prosperous work environment is the key to better outcomes, high rates of job satisfaction among other managers, and innovations that will lead to profit and development of the corporation.

The company leaders have to take four things into consideration that will allow them to be more efficient. This includes listening, rewarding, delegating, and planning (Figure 5). Lack of feedback from managers is a big problem in Company X. At the moment, the CEO relying on personal views and senior managers when making decisions. Adding more voices to the conversation, listening to the ideas and feedback of all the managers, and having an open-minded approach towards the team’s implication is the best strategy when it comes to innovation. Rewarding hardworking employees is another essential suggestion. Now that senior managers are chosen based on their relationship with the CEO rather than professional achievements, other employees are not willing to put in extra work to prove they are capable of having a higher position. Rewarding them with raises, promotions, and complimentary words will motivate managers to continue being proficient for the company’s sake. It is also important to delegate certain tasks to other people. The CEO has to implement practices such as marketing research, risk assessment, and launch testing. These tasks can be delegated to any capable employees who will minimize the risks of having inefficient innovations. Planning is also an essential step towards effective leadership. A leader who can plan the company’s future goals will ensure a bright future for the employees and the corporation itself.

Practical Recommendations

After discussing changes that can be made within the company, it is crucial to highlight practical recommendations. In terms of organizational culture, Hofstede’s Cultural Dimensions Theory (Figure 2) mentions the index of individualism vs. collectivism. In order for employees to feel more like a team rather than singular units, certain training and team building exercises can be applied. An example would be weekly sessions where all the managers gather and discuss the achievements and tasks accomplished within the last week. It is also vital to create a more friendly environment by encouraging corporate activities. An example would be celebrating holidays in the office and organizing courses that all the managers can attend. Schein’s three levels of culture mention espoused values. In Company X, employees rarely discuss their personal views and goals in terms of professional experience. Implementing a more open-minded environment would be beneficial for individuals who feel intimidating to speak out. An example would be applying physiological evaluations that would determine one’s cultural ideal. Managers can be given phycological tests that will be anonymous. Based on all the data, it would be easier to evaluate the direct cultural implications of the majority of the workforce.

Leaders, on the other hand, have to implement guidelines and a reward system. The CEO has to have a weekly meeting with the managers where each individual will have the opportunity to speak their mind. The CEO has to listen and assess all proposed activities and reward the most proficient manager with a monetary addition to the set salary. Senior leaders can motivate their employees by having the title “employee of the month”. Managers who will show themselves as efficient and hardworking will receive a monthly bonus. It is also essential to implement an exact strategy for the company’s next steps. The CEO has to delegate marketing research to one of the managers and allow others to investigate customer desire. Instead of blindly introducing and discontinuing products, a structured scheme of the workflow can be applied in order for the risks and negative outcomes to be minimal.

Conclusion

Culture and leadership are the key points that have a direct correlation with the company’s outcomes and innovation. While organizational culture and national culture are two different notions, there is a correlation between the two. However, while national culture is a broad set of ideas and goals, organizational culture can be altered and improved if there are issues regarding this topic. The theories that help assess OC are Schein’s Thee level of Culture and Hofstede’s Cultural Dimensions Theory. OC is highly dependent on leadership in some cases, which can be both beneficial and harmful for the organization. Destructive leadership is a crucial factor that minimized the chance for innovation. Under destructive leadership, employees are dissatisfied with their jobs and are not motivated to contribute to the corporation’s innovative aspect.

Company X is in a problematic situation for three years in a row, and after examining the issues, it has been concluded that the problems are related to lack of innovation due to poor leadership and weak organizational culture. Employees rely on personal opinions rather than thinking as a team, creating a dispersed environment where corporate culture is not a primary leading force. Leaders are also reluctant to pay attention to OC since there are no present guidelines and documentation that would mention the company’s ideals and values. This is not the only issue with the executive manager and senior leaders. The CEO does not listen to employees, promotes people based on personal relationships rather than professional achievements, and takes decisions solely based on personal opinions without examining and structuring the new implementations.

In order for the corporation to see benefits regarding the innovation domain, organizational culture and leadership have to go through drastic changes. Having a general culture within the company can be achieved by focusing on collective rather than personal goals. Courses, team-building exercises, physiological assessments, and effective communication among employees will maximize the effects of organizational culture. Leadership can improve if the CEO and senior managers start listening to managers in regards to new ideas and reward them for doing a good job. Implementing a reward system, having frequent conversations, and allowing managers to participate in the decision-making process will completely change the leadership from destructive to constructive. These changes will subsequently lead to innovation on all internal and external aspects of Company X. Based on the literature and the example drawn from the case study, organizations that do not have a distinct culture and constructive leaders who can objectively assess situations and guide employees are not prone to practical innovation. This illustrates that it is crucial to make organizational and executive changes in order for the corporation to evolve and develop new innovations and favorable outcomes.

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