roles of organisational leaders in developing a strong organisational culture
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Abstract
This report examines the impact of culture in a prominent role by specifically investigating the interactions between leadership and corporate culture. To further understand how leaders may influence the creation of an inclusive business culture, this research also looks at organisational citizenship behaviours and cultural diversity. Included as well are analyses of the correlation between leadership style and business performance and evaluations of how effective leaders oversee high-performing teams. Improving productivity by managing organisational cultures is the focus of one section. By encouraging a positive work environment where everyone understands their part and is able to communicate clearly, leaders may raise their teams' productivity. An efficiently operating corporation is the outcome of a robust corporate culture that provides employees with prospects for professional development while also granting them autonomy in selecting their work schedules.
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Table of Contents
1. Introduction
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2. Cultural implications of managing today’s organizations and the employees' relationship
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2.1 Leadership and company culture
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2.2 Strong organisational culture leadership styles
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Figure 1 Leadership Styles Source: (Alblooshi et al., 2021)
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2.3 Leadership in building a strong organisational culture that values cultural diversity and citizenship
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2.4 Leadership and organisational culture theories
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2.4.1 Transformational/ charismatic leadership
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Figure 2 Transformational leadership source
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2.4.2 Leader-member exchange (LMX) leadership theory
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2.5 Theoretical framework
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3. Analysis/Evaluation
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3.1 Critically assessing leadership style and organisational performance
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3.2 Leaders' talent management responsibilities for high performance
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3.3 Leadership shaping company culture to boost performance
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4. Conclusion
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5. References
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1. Introduction
Taking into consideration the aims of the organisation and the guidance of coworkers is an important part of business leadership, which is the skill of inspiring a group to work together towards a single target. Executives use people management to keep an eye on productivity and morale in the workplace. Training and motivating workers to reach their full professional and occupational potential is what it entails (Yukl, 2012). This approach to leadership development may provide light on human nature and the rise of openness in corporate practices. This study delves into the consequences of letting culture dictate the show, with a heavy emphasis on the connection between leadership and company culture. Additionally, this research delves at the ways in which top-level executives may foster a more welcoming work environment for all employees by placing an emphasis on cultural diversity and organisational citizenship practices. Assessments of effective team management and evaluations of leadership styles in relation to organisational performance are also part of the package. Also included is some advice on how to manage company cultures in a way that increases output.
2. Cultural implications of managing today’s organizations and the
employees' relationship
Norms, beliefs, and shared perspectives set by the company's management are what make up the company's "culture" when discussing businesses. A company's organisational culture is built upon the beliefs, values, and practices of its employees, who in turn reinforce these values and practices. The leader's communication style with workers is greatly influenced by the culture of the organisation. Warren East, CEO of Rolls Royce, said in an interview that an effective corporate culture fosters employee loyalty and motivation to accomplish the company's objectives (Gold and Smith, 2022). Cultural differences in Asian countries, particularly in grooming and communication practices between team leaders and workers, might potentially impact the company's relationship with its employees. The organisational culture dictates the degree to which it promotes a work-friendly environment. It is not uncommon for leaders to set the tone for a culture of reward and recognition. Employees, driven by the need for positive reinforcement from their superiors, push themselves to their limits in the workplace. Within the culture of an organisation, the duties of workers are
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regulated by the setting of work standards. Therefore, this guarantees that every single employee in the organisation is aware of what it is that they are accountable for and how to do tasks in a timely way. Rolls-Royce is a symbol of the set regulations that are in place inside the environment of the organisation, and it also acts as a reflection of the culture of the company (Sahu, 2020). As a result, it aids the company in creating an environment where workers feel more in charge and directed. Differentiating oneself from competitors is possible due to the fact that no two organisations may have the same culture. It is for this reason that the culture of a firm may contribute to the brand image and originality of the organisation. It is possible for leaders to optimise the performance of their staff by implementing a culture of performance reporting that promotes excellent work. This is an alternative to the practice of forcing individuals to work against their will. The culture of the organisation ensures that everyone is treated in an equitable manner (Roberson and Perry, 2022). As a consequence of this, the manager is able to monitor each and every employee in the workplace and ensure that nobody is falling behind.
What binds all of Rolls Royce's workers together in terms of equality in the workplace, says the company's upper management, is the culture (Agnihotri et al., 2023). Even while the company strives for equality, there are instances when workers are treated differently according to their educational background rather than their actual job performance. Everyone, regardless of their position, is expected to be punctual in many contemporary workplaces. More than employees' personal backgrounds, beliefs, or perspectives, Employees feel more connected to one another as
a result of the company's culture. The onboarding process is made easier by the organization's culture. New hires usually bomb because they can't adjust to the norms and values of the company. New employee orientation strategies may, therefore, be influenced by an organization's culture.
2.1 Leadership and company culture
The overall success of the company is improved by the proper integration of leadership and organisational culture (Paais and Pattiruhu, 2020). Leadership and the leader's ability to shape the company's culture are common themes in discussions on organisational culture. Conversely, the company's culture often impacts leadership via long-standing traditions. This is why the upper echelons of management at Rolls-Royce are always injecting new ideas into the company's
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culture, drawing on their extensive understanding of the organization's traditions and principles, to make sure that everyone works together in accordance with the firm's principles and standards.
A company's culture is its guiding principles and the reality that its executives bring together to form a cohesive whole. An effective leader may steer all three groups in accordance with either the established norms and practices or the emerging ideals. The degree to which a company's workers value and uphold its culture is a good indicator of the leadership style prevalent in that organisation. The integration of strategic and tactical thinking is possible when the leadership and culture of an organisation are taken into account simultaneously. A company's vision has the power to shape its culture since it is deeply ingrained in that culture (Shaari, 2019). Effective leadership entails the imaginative leaps, dogged determination, and boundless energy needed to steer the organisation towards its mission. At the most fundamental level, Rolls Royce's upper management believes that workers are reliable and dedicated, and that they provide creative answers to problems. This is why effective leaders motivate their followers to take action by sharing their vision for the organization's future. Employees may be able to overcome cultural hurdles in this workplace if leaders put mechanisms in place to reinforce norms and behaviours and promote cultural progress. The way a leader influences and guides their followers to embrace an organization's culture is one way leadership is defined. Management at Rolls Royce is quite strict since the department head will not stand for employees deviating from SOPs in any
way (Warén, 2013). So, workers aren't able to use their imaginations to solve problems for the company. It is important for leaders to think about the company culture and the way workers and
customers see them while deciding how to punish subordinates or deal with emergencies. As a whole, culture and leadership have separate but complementary impacts. A lack of power grabs by middle management is possible in organisations where lower-level autonomy is robust and supported by strong principles, internal norms, and cultures. If leaders aren't careful to manage the organization's morals, ceremonies, and values, the group will be unable to adapt.
2.2 Strong organisational culture leadership styles
There is no generally applicable leadership style that is effective for every firm. Leaders must possess a comprehensive comprehension of many leadership frameworks and styles in order to effectively use the most suitable method in any given situation (Putri et al., 2020). Leaders that possess a comprehensive understanding of many leadership styles are more capable of evaluating
intricate circumstances inside their businesses.
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Figure 1 Leadership Styles Source: (Alblooshi et al., 2021)
Directive leaders have a higher chance of having their employees follow their standards. The organisations' hierarchical power structure is a direct outcome of their directed leadership (Saiti and Stefou, 2020). Management at Rolls Royce uses this tactic, which entails delegating responsibilities and directives to lower-level employees. Team leaders and workers are less successful as a result of this leadership style's tendency to postpone decision-making, which leaves them bewildered and dependent on upper management. On the other side, prescriptive leadership does not foster the cultural coalition that prioritises transparency and adaptability above creating class divisions based on organisational hierarchy (Salicru, 2023). Organisational culture is an area where transformational leadership seeks to improve conditions. Using this method, workers are able to pinpoint their aspirations and goals. In contrast, transformational leaders foster an environment where team members and leaders are always asking for and offering feedback to one another. Using transformational leadership, department heads at Rolls Royce are able to provide the organisation frank evaluations of how each person has contributed to its success. A competitive organisational culture is the ultimate aim of this management style, which aims to achieve this by promoting transformational tendencies among employees. Under servant leadership, everyone takes on a leadership role; under this style of management, top executives
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collaborate to establish long-term objectives and short-term strategies. A strong company culture
may be built upon using this leadership style's focus on building trust, pride, and enjoyment among employees. Due to the management's distribution of resources, workers may assist the organisation achieve its objectives by assuming a supportive role (Alsafadi and Altahat, 2021). On the other side, this style of leadership encourages a situation where only a select few have agency due to the extensive participation. Despite making the ultimate decision, leaders in this approach often reach middle ground and work with their teams to enlist their help.
The decision to include employees in the creation of items for Rolls Royce's younger clientele has benefited the head of the R&D department (Jankowska et al., 2021). Therefore, participatory leadership promotes candour in the workplace by empowering employees to speak their minds and take risks. In an authoritative leadership style, employees get a comprehensive understanding
of the organization's components and their interdependencies, and the leaders subsequently chart its future. It promotes uniformity among employees and makes it hard for them to develop professionally, socialise outside of their immediate team, or pursue other goals related to their personal lives. 2.3 Leadership in building a strong organisational culture that values cultural diversity and citizenship
A more competitive work environment, in which leaders show a willingness to learn new things in order to fully grasp the operations, may increase employee performance. Successful business executives know that a diverse staff is better able to achieve their objectives because of the unique insights and experiences that each member brings to the table. Leaders should set a good example by embracing diversity in the workplace; people look up to them and want to see more of the same. The leader of the Rolls-marketing Royce section assembles a broad staff so that they
may better comprehend the tastes and interests of customers from many walks of life. An uncomfortable work atmosphere is often the result of leaders' bias against workers' sex, religion, or race. Team members are reluctant to engage in a varied work environment due to language and social obstacles, as well as a lack of agreement. Executives may help create a welcoming workplace by treating all workers with respect and zeroing in on instances of bias or prejudice (Shore and Chung, 2022). Companies operated by leaders that fail to value diversity in thought and perspective are examples of leaders who fail to be inclusive. A multicultural workplace can
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only flourish when top-level executives actively seek out and value employees' diverse cultural backgrounds. A lot of times, bosses will tell their employees to be kind and helpful if they want the company to succeed and be more efficient.
In order to cultivate a culture of citizenship inside their organisation, managers should set a good
example for their staff to follow. This encompasses further behaviours that have the potential to harm the social structure of an organisation. Organisational leaders cultivate an atmosphere of organisational citizenship by encouraging cooperation as a manifestation of interpersonal bonds and friendships among workers. The CEO of Rolls Royce, Sir Richard Branson, extends his best wishes to team leaders in their pursuits and urges them to demonstrate proactivity and attentiveness as they guide their staff (Cox and Cox, 2020). In contrast, workers who demonstrate organisational citizenship habits are provided with nine chances to rectify their errors and function in a more consistent manner going forward. Leaders align the aims and objectives of the company with values such as kindness, sportsmanship, and compassion to emphasise the organizational-citizenship behaviours that reflect the organization's culture. Conversely, as part of the job, organisations often regulate organisational citizenship behaviour, which could have a negative impact on employee performance. For this reason, leaders seem to anticipate conformity rather than insist on it. In order to keep their staff in line with the company's policies and procedures, leaders use feedback techniques. They also use punishment as a tool to make sure people follow the rules and get rewards when they do. 2.4 Leadership and organisational culture theories
The parts that follow will analyse leader-member interaction (LMX), organisational culture, and transformational/chaotic leadership. Among the many famous theoretical frameworks for organisational leadership, two that centre on the leader's function within a certain context are LMX and transformational/charismatic theories (Insan and Masmarulan, 2021).
2.4.1 Transformational/ charismatic leadership
Both transformative and charismatic leadership, as well as organisational culture, have been the subject of much empirical study. When supervisors exhibited strong transformational leadership, employees had a more favourable perception of their company's inclusive and flexible culture (Caligiuri, and Tarique, 2012). When it came to incentive-focused cultures, the findings indicated that a combination of transformational and transactional leadership styles was the most
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effective predictor, while support-focused cultures were best predicted by transformational leadership alone. The possible relationship between leadership styles and corporate culture and organisational outcomes including performance, innovation, and commitment/identification has prompted a great deal of study on the topic. Leadership styles that emphasise success cultures, such as humanistic and transformational, improve performance, according to a study of 32 financial business units (Xenikou and Simosi, 2006). Put simply, the exceptional success of the business unit was the outcome of an organisational culture that encouraged participation and teamwork, and which was in turn supported by transformative leadership.
Figure 2 Transformational leadership (Bukusi, 2020)
2.4.2 Leader-member exchange (LMX) leadership theory
The leader-member exchange (LMX) model of leadership and organisational culture has also been used in this area of study. The LMX theory explores the dynamics of subordinate-
supervisor interactions and suggests that effective leaders build various relationships and display diverse behaviours when interacting with their subordinates. A leader's in-group and out-group subordinates are the two types of subordinates that get along famously. Organisational culture, job and career happiness, and views of distributive and interactional justice are among the many
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work outcomes studied in connection to LMX. Research concludes that organisations that promote learning and mutual encouragement have leaders and subordinates who are more inclined to engage in productive interactions (Hasib et al., 2020). Cultures that prioritise people's welfare are more likely to have high levels of loyalty and commitment (LMX) when members believe in both procedural and distributive justice; cultures that prioritise competition over people's welfare are more likely to have high levels of LMX when members believe in distributive justice.
2.5 Theoretical framework
3. Analysis/Evaluation
3.1 Critically assessing leadership style and organisational performance
Executives in charge of the organisation make sure that assets are being purchased, developed, and distributed in a way that boosts the performance of the business (Piwowar-Sulej and Iqbal, 2023). Staff morale and productivity go up when upper management shows interest in and supports workers' professional development. By attending to their employees' psychological requirements, transformational leaders create a more conducive work environment that promotes growth in all areas. Productivity and quality are both enhanced by the head of Rolls Royce's logistics and production team's emphasis on team members' personal growth (Tambare et al., 2021). Executives create an organization's strategy and vision, and workers are responsible for making the plan a reality.
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How leaders approach strategic decision-making and long-term achievement is a major factor in organisational effectiveness. Even if workers are happy in their positions, the team might be missing a future leader if its members are too dependent on charismatic bosses to step up and take charge. Organisational leaders often adopt democratic leadership styles to boost corporate success. Management in this manner encourages workers to have a hand in coming up with ideas, carrying them out, and ultimately making decisions. Employees will feel more invested in the company's success as a result of this approach. Employees gain confidence in making decisions at lower levels of the organisation, which boosts team output. Salary increases and new
duties are two examples of the incentive mechanisms used by leaders to motivate their followers to carry out their orders. Employees may feel pressured to live up to management's expectations, even if transactional leadership has certain advantages. This kind of management is great for increasing productivity at all levels of an organisation since it provides employees with opportunities to get both monetary and non-monetary benefits for their hard work. Managers put tight regulations on the businesses they control so that workers may give their all.
Customer satisfaction is the leader's first priority, thus the Rolls Royce service team follows departmental requirements to the letter (Saputra, 2021). The capacity of management to exercise control over their authority often hinders employees' capacity to come up with innovative ideas. Personnel and organisational performance are negatively impacted by this approach since it concentrates power in the organisation. In order to get the most out of their employees, leaders that use a bureaucratic style of management establish rules and regulations. Leadership styles that fail to take human capital into account while formulating policy have minimal impact on an organization's performance. Bureaucratic leadership is useful for long-term undertakings since policies are created efficiently.
3.2 Leaders' talent management responsibilities for high performance
The responsibility of leadership is to ensure the recruitment and retention of high-caliber individuals by equipping them with the necessary resources for achieving success. To effectively
manage a talent-deprived firm, a CEO must be aware of their staff' career goals and strengths. Consequently, managers often reassign high achievers to other teams in an effort to make greater
use of their varied skill sets. Employees at Rolls Royce become specialists in a wide range of fields, and the company often transfers its top-performing marketers to the R&D department.
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Those people. In order to motivate their brilliant employees, leaders often delegate certain responsibilities to them. The top brass gets a boost to their confidence and output when authority is shifted to them. If leaders want to maximise the contributions of their best performers, they should provide them constructive criticism on a regular basis. Workers who feel their managers will reward them for their accomplishments are less likely to put in the necessary effort when they get an excessive amount of praise (Saputra, 2021). Therefore, leaders who want to manage their employees' talents should motivate their staff to do even better rather than always giving comments. Production and quality are both enhanced as a consequence of the CEO's encouragement of staff to give their all at Rolls Royce. Consequently, management has faith in employees' abilities to complete tasks, which allows for more leeway in their schedules. Managers and executives pay more attention to how they allocate tasks to their top performers. Leaders nowadays are less concerned with expanding their workforce and more concerned with enhancing the quality of their current position. In order to keep their staff from getting in the way, leaders craft group dynamics with great care. In a team of average performers, the top performers might be a source of envy and a drag on the rest of the team's performance. In order for the rest of the staff to learn from the best, Rolls Royce makes sure there's a good balance between competent and useless personnel (Nani and Safitri, 2021). However, the company has to deal with the possibility of losing talented individuals, as high-
performing workers might have a negative impact on less-skilled workers when they collaborate.
The company's top brass recognises the need of developing future leaders from within and provides leadership programmes to workers as a means to that end. Managers often provide incentives to employees who consistently perform at a high level so that they remain loyal to the firm.
3.3 Leadership shaping company culture to boost performance
The company's success may be traced back to the leaders' determination to foster a good culture inside the business. Productivity, profitability, and growth are the metrics used to describe results, which are then compared to the culturally-established aims and objectives of the organisation. The leaders of the company shape its culture in a way that gives employees a voice.
If a CEO wants to boost the company's performance, one strategy is to give their employees more responsibility and authority (Metwally et al., 2019). Everyone benefits when Rolls Royce's
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sales department establishes a culture that permits employees to uphold laws while simultaneously growing sales (Magnuson, 2019). Leadership that encourages a positive corporate culture increases the likelihood that employees will form deep ties with one another and the business overall. Executives control the culture of an organisation in a manner that encourages collaboration across departments. The marketing and product development departments of Rolls-Royce often collaborate to produce items that are ready for sale, which increases sales of the company's cars. The workflow is regularly interrupted when different departments in an organisation interact too often, which has a negative effect on staff productivity and the company's overall success. On the other side, leaders broaden the organization's consumer base by bringing in individuals from different backgrounds and perspectives, which enhances diversity in the workplace. A leader's ability to cultivate an environment where employees feel comfortable expressing their ideas and opinions has a direct correlation to the success of their organisation as a whole (Metwally et al., 2019). On
the other hand, bosses who foster an atmosphere where employees are unable to freely communicate with one another risk confusing their roles and lowering productivity. An organization's success is highly dependent on the degree to which its leadership can manage the efforts of its employees. To maintain their position at the top, leaders foster a competitive work environment that pushes their employees to perform at a higher level. By assigning grades according to sales performance, the Rolls Royce sales team leader fosters an environment of healthy competition inside the department (Magnuson, 2019). But if the business is more concerned with developing its competitive strategy than its people resources, then the company's individual development might take a hit. Another way of looking at it is that strategy isn't as important as an organization's culture when it comes to reaching its objectives. Companies are more likely to succeed when their leaders adhere to shaky strategy but are supported by a solid corporate culture. When there is a strong cultural backdrop, leadership and workers may work together to avoid errors.
4. Conclusion
A strong corporate ethos may be fostered when executives are firm in their enforcement of business rules and expectations. Leaders in organisations place a premium on diverse opinions and perspectives because diversity encourages creativity. Embracing and celebrating cultural
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diversity is a great way for leaders to create a more diverse workplace. Organisational leadership has the power to cultivate a corporate citizenship culture in the workplace. Effective leaders may enhance the performance of their workers in an organisation with a positive culture by ensuring that everyone understands their responsibilities and have strong communication skills. An influential corporate culture enhances company performance by providing workers with avenues for professional development and flexible work arrangements to optimise efficiency.
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5. References
Agnihotri, A., Bhattacharya, S., Yannopoulou, N. and Thrassou, A., 2023. Foreign market entry modes for servitization under diverse macroenvironmental conditions: taxonomy and propositions. International Marketing Review, 40(4), pp.561-584.
Alblooshi, M., Shamsuzzaman, M. and Haridy, S., 2021. The relationship between leadership styles and organisational innovation: A systematic literature review and narrative synthesis. European Journal of Innovation Management, 24(2), pp.338-370.
Alsafadi, Y. and Altahat, S., 2021. Human resource management practices and employee performance: the role of job satisfaction. The Journal of Asian Finance, Economics and Business, 8(1), pp.519-529.
Bukusi, A.D., 2020. What transformative leaders do: Emerging perspectives in the 21st century. International Journal of Sociology and Anthropology, 12(4), pp.85-93.
Caligiuri, P., and Tarique, I. 2012. Dynamic cross-cultural competencies and global leadership effectiveness. Journal of World Business, 47, 612-622
Cox, M. and Cox, M., 2020. Leadership in the Dock. The Business Case for Love: How Companies Get Bragged About Today, pp.9-15.
Gold, M. and Smith, C., 2022. Where's the ‘Human’in Human Resource Management?: Managing Work in the 21st Century. Policy Press.
Hasib, F.F., Eliyana, A., Arief, Z. and Pratiwi, A.A., 2020. The effect of transformational leadership on employee performance mediated by leader-member exchange (LMX). Systematic Reviews in Pharmacy, 11(11).
Insan, A. and Masmarulan, R., 2021. Effects of leader-member exchange and organizational culture on work engagement and employee performance. Management Science Letters, 11(3), pp.879-886.
Jankowska, B., Di Maria, E. and Cygler, J., 2021. Do clusters matter for foreign subsidiaries in the Era of industry 4.0? The case of the aviation valley in Poland. European research on management and business economics, 27(2), p.100150.
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Magnuson, S., 2019. Mobilizing ERP transformation in modern corporations.
Metwally, D., Ruiz-Palomino, P., Metwally, M. and Gartzia, L., 2019. How ethical leadership shapes employees’ readiness to change: The mediating role of an organizational culture of effectiveness. Frontiers in psychology, 10, p.2493.
Nani, D.A. and Safitri, V.A.D., 2021. Exploring the relationship between formal management control systems, organisational performance and innovation: The role of leadership characteristics. Asian Journal of Business and Accounting, 14(1), pp.207-224.
Paais, M. and Pattiruhu, J.R., 2020. Effect of motivation, leadership, and organizational culture on satisfaction and employee performance. The Journal of Asian Finance, Economics and
Business, 7(8), pp.577-588.
Piwowar-Sulej, K. and Iqbal, Q., 2023. Leadership styles and sustainable performance: A systematic literature review. Journal of Cleaner Production, 382, p.134600.
Putri, S.A., Mirzania, A. and Hartanto, D., 2020. The importance of a transformational leadership model in managing organizational culture.
Roberson, Q. and Perry, J.L., 2022. Inclusive leadership in thought and action: A thematic analysis. Group & Organization Management, 47(4), pp.755-778.
Sahu, R., 2020. A gap analysis of enforcing FCPA-compliant codes of conduct in low-and middle-income countries. Business Law Review, 41(6).
Saiti, A. and Stefou, T., 2020. Hierarchical organizational structure and leadership. In Oxford Research Encyclopedia of Education.
Salicru, S., 2023. Leadership, Group Leadership, Functional Leadership. In Handbook of Engineering Management (pp. 87-172). CRC Press.
Saputra, F., 2021. Leadership, Communication, And Work Motivation In Determining The Success Of Professional Organizations. Journal of Law, Politic and Humanities, 1(2), pp.59-70.
Shaari, N., 2019. Organization culture as the source of competitive advantage. Asian Journal of Research in Education and Social Sciences, 1(1), pp.26-38.
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Shore, L.M. and Chung, B.G., 2022. Inclusive leadership: How leaders sustain or discourage work group inclusion. Group & Organization Management, 47(4), pp.723-754. Tambare, P., Meshram, C., Lee, C.C., Ramteke, R.J. and Imoize, A.L., 2021. Performance measurement system and quality management in data-driven Industry 4.0: A review. Sensors, 22(1), p.224.
Warén, J., 2013. Lean daily management, visual management and continuous improvement.
Xenikou, A. and Simosi, M., 2006. Organizational culture and transformational leadership as predictors of business unit performance. Journal of managerial psychology, 21(6), pp.566-579.
Yukl, G. (2012) Leadership in Organizations (International Edition). 8th edition. NJ: Pearson/Prentice Hall
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