Founder-Culture in Organizations - Its Impact on Organizational Growth, Dynamism and Innovativeness

Organizational culture has recently emerged as one of the prominent focuses of organization research. This is partly because of the disillusionment with the research on the more ‘objective’ phenomena such as structure and technology. Several researchers point out that culture could be the most important factor that ‘determines’ the other characteristics and performance of an organization. It may be naturally asked how an organization’s culture evolves. One of the hypotheses of this paper is that a major influence on the development of organization culture is the founder. A review of existing research shows that the founder’s influence is critical and is difficult to change except during a crisis created by changes in the environment. It is also proposed that the type of culture would vary with the type of founder. An external (or organization) oriented founder (as opposed to a self-oriented one) is likely to create a professional, dynamic and sometimes innovative organization. On the other hand, the organization created by the self-oriented founder would remain non-professional, and non-innovative, characterised by limited growth and dynamism except if it changes its culture in response to a change in the environment and a consequent crisis within the organization. The change, which may take place either through ‘heretics’ in an incremental fashion, or through new leaders in a discontinuous fashion, can turn these organizations around to make them adaptively or innovatively dynamic. The paper discusses these influences and changes through a model of founder’s influence on organizational culture along with eight other propositions.