Perceptions of Leadership Change in an Entrepreneurial Organization

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Short Description

A case study was conducted at an organization where the founder replaced himself with a new CEO to achieve strategic goals. Perceptions of the change were analyzed through document analysis and interviews. Two leadership models were utilized. As a result of the change, there was a shift in organizational culture.

Detailed Abstract

A case study at a medium sized, California-based corporation was conducted with the main aim to understand the perceptions of entrepreneurial leadership change that occurred at the organization six months prior to data collection. The corporation was founded over twenty-five years ago, and is still owned by its original founders. In-person interviews were conducted with four employees from various departments (human resources, accounting, public relations, and administration), plus the incoming Chief Executive Officer (CEO) and outgoing founder who was previously the CEO. The researcher sought to understand when an entrepreneurial CEO decides to replace himself with a new CEO, what impact the change has on the employees, organizational procedures, and organizational culture.

First document analysis was conducted to gain a greater understanding of the past history of the organization, entrepreneurial leader, and sources of previous success. Next the six interviews were conducted to gain data about the perceptions of the leadership change that occurred. It was discovered that the founder was hoping to find someone different from him, who could make more rational decisions with the input of the entire organization. It was also discovered that the organization’s previous growth was due to the founder’s tenacity. The element of family ownership created loyalty to the organization’s vision and purpose. Additionally, the entrepreneur’s leadership style contributed to the previous organizational culture. Based on Darling and Leffel’s (2010) model the entrepreneur acted primarily as a Director. Directors are typically independent, candid, decisive, and efficient. The entrepreneur also enacted three of Kouzes and Posner’s (2010) Five Practices of Exemplary Leadership. The successor exhibited all five of Kouzes and Posner’s (2010) practices and primarily acted from Darling and Leffel’s (2010) Analyzer and Connector leadership styles. Analyzers are precise and systematic, whereas Connectors are supportive and easygoing. It was hypothesized that there would be a difference in the two CEOs leadership styles since the founder exhibited self-awareness and felt that in order for his organization to achieve its strategic goals a different type of leadership would be required for the new CEO.

Limitations of this study include the recentness of the change. Additional research is suggested in two to five years to show the development of the organization’s strategic goals and leadership perceptions. Also, generalizability is somewhat limited since this is a case study and findings can only be generalized to the organization. Future studies may also want to include a larger sampling of the organization in the form of an online survey. Implications of the results show which leadership values the employees at this organization appreciate most, and current perceptions of leaders. Interestingly, there is an organizational culture shift occurring based on the leadership change. The entrepreneur who founded the organization was highly individualist and made most of the decisions himself. Whereas, now with the new CEO more decisions are made with the input of others and the culture is shifting to be less individualist and more collectivist when utilizing Hofstede’s (1991) model for comparison. Employees interviewed in this study also noted that they were starting to make decisions based on what was best for their group or the organization instead of what was best for them as individuals.

Participant

• Stephanie A. Van Dellen, University of San Diego