CEO Personality: The Cornerstone of Organizational Culture?

Abstract

Organizational culture is widely seen as an important element in a firm’s success or failure. While there is almost universal agreement that leaders define and shape organizational culture, there is little research exploring how and why they do this. We propose that a leader’s personality and values are the cornerstone of organizational culture. Using a validated natural language processing instrument, we used earnings call data to collect data on the personalities of 460 CEOs in 309 firms and matched this to organizational culture ratings based on Glassdoor employee ratings for the period 2015–2019. Results show strong, interpretable associations between a CEO’s personality and the culture of the firm—and this association is strengthened the longer the CEO is in the role. Further, by examining 128 succession events during this period, we also show that, consistent with attraction-similarity-retention logic, there is some weak evidence that the existing culture of a firm can be related to the selection of a new CEO. We discuss the implications of these findings for future research on organizational culture.