AQA Paper 1 25 Mark Example Answer - Leadership & Culture Change

Here is an example answer to a 25 mark question on leadership and culture change.

QUESTION:

A business wants to change its organisational culture because it needs to change strategic direction. To what extent do you think the business will also need to change its leadership in order to successfully change its culture?  (25 marks)

Although there are some situations where new leadership will not necessarily be needed to change a business culture, in most situations a change in leadership is likely to be an important factor where a business believes culture is a cause of the need for a new strategic direction. Let’s explore why this is likely to be the case.

New leadership is most likely to be needed to change culture in business situations where the existing culture is strong and existing leaders are likely to resist a new strategic direction. Culture is often deeply engrained in a business, particularly power cultures where decision-making is limited to a few managers in the centre. A consequence of a strong power culture is that existing managers are likely to resist changes to the culture (through self-interest) even if that culture is damaging the business (e.g. a cause of strategic drift through failing to innovate or respond to new competitors). In this situation a new leader, most likely from outside the business, has greater authority to challenge the "way things are done" and can communicate why a new culture is important to successful strategic direction. For example, a new leader might demand higher ethical standards or encourage more democratic decision-making. The change in strategic direction might require greater focus on innovation and risk-taking which existing leaders resist because it has not been part of the prevailing culture. In such situations, either through education & communication, negotiation or even coercion, new leaders are more likely to succeed in arguing the case for culture change. Whether a new leader would be successful in changing the culture does, of course, depend on recruiting a person with the right skills and experience. Culture change is complex, which makes it hard. New leaders are most likely to be successful if they have experience of leading similar culture change elsewhere or if they have particularly strong personal skills to persuade people in the organisation to buy-into the link between a new culture and a more appropriate strategic direction.

The main counter-argument to the need for new leadership when changing culture is recognising that culture change is difficult and there is no guarantee that a new leader will be more successful than the existing leaders of the business.  Whilst leadership and culture are often described as two sides of the same coin, in many situations a business culture will outlast any particular leader and prove resistant to change. For example, a business may have a culture is that is strongly influenced by the founder (like Ikea or the BBC) and has “ways of doing things” (such as decision-making and communication) that are understood and accepted by nearly everyone in the business. Whilst culture may be a cause of the need for a new strategy, that doesn’t make it any easier to change, particularly in the short-term. A new leader entering such a business will almost inevitably encounter resisting forces such as self-interest and a low tolerance for change. Existing middle-managers and employees may also have a very different assessment of the situation to the new leader and the Board (who have identified the need for change). Would it not be better for such a business to instead support the existing leader rather than recruiting someone new? After all, the existing leader is likely to know the business well and should have a good understanding of where resistance to change will arise and how it might be overcome. It might be argued that an existing leader can be turned from a resisting force to a driving force provided he/she is given appropriate incentives to lead the culture change! 

As I suggested in my introduction, in most situations where a business wants to change culture in order to change strategic direction, new leadership is likely to be needed. I justify this mainly because of the engrained nature of culture, which is usually difficult to change, even in a business that has lost its way and needs to change strategy. In my view existing leaders in such situations are less likely than new leaders to have the skills or the interest in making necessary changes to culture. Existing leaders are more likely to be restraining than driving forces, whereas new leadership brings fresh direction and energy to a business. New leaders are more likely to challenge the ways things are done, communicate the need for change in strategic direction and find ways of overcoming the inevitable resistance. Of course there is no guarantee that new leadership will be successful or more effective than existing leaders. As I argued, much will depend on the skills and experience of the new leadership and whether he or she can overcome the forces resisting change. It is also important for new leadership to have a suitable new strategy in order to persuade the business to support culture change. However, new leaders like Satya Nadella (Microsoft) and Moya Greene (Royal Mail) prove that it can be done and the introduction of new leadership in those situations was a key part of a successful change on both culture and strategic direction.