SUMMARY
Recent popular literature has spawned an ever increasing amount of leadership and management advice on how to manage, lead, and institute organizational change. While some of this advice may be effective, the literature has shown that the majority of organizational change initiatives fail. Most current leadership and management practices prescribe organizational treatment without understanding the nature and underlying cause of organizational illness. In the case of organizational culture, failure to properly institute change can have long-term repercussions. This paper proposes that the social transaction theory of social ontology can be used to explain not only how organizational culture is formed, but also how it responds to attempts to change it. Thus, by understanding the underlying mechanisms of culture formation and transformation, effective approaches can be developed to demonstrate how lasting change can be instituted.