Organizational Culture – Factors affecting Organizational Culture

What are the various factors affecting organizational culture?

Organizational Culture – Factors affecting Organizational Culture
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The word culture comes from the Latin word ‘cultus’, which means 'care'. It implies the shared beliefs, values, customs, practices and social behavior of people or a group. Being attached with the adjective form of the word organization forming the compound word as organizational culture, it indicates the behavior of people within an organization including organization’s vision, values, norms systems, symbols, language, assumptions, beliefs and habits.

It’s a key factor of an organizational growth, development, performance and sustainable success. In fact, there are several factors that affect the organizational culture. Let’s take a look at a few of the factors affecting the organizational culture in a bit of depth.

Before all else, it is important to mention that both internal and external factors play an important role in affecting the organizational culture. Internal factors are those that exist within the organization, such as, organization’s values, leadership style and structure. The external factors that impact organizational culture include: legal, economic, social and technological.

One of the most important internal factors that affect the organizational culture is the way the employees think and perceive the things. In this way, their attitudes, mindset, point of view, temperament and characteristics, in short, the whole personality of people has a lot to do with the organizational culture.

It must be noted that no two people can ever have the same experience of life and the same perspective about it. That which is in nature is manifested in different ways of thinking, feeling and acting, so it does lead to influence the organizational culture as a whole.

Next in importance comes the way a business is done and treats its people including its policies, procedures and practices. It must also be observed as to how the information flows across its hierarchy and determining the extent at which the people are allowed in decision making process. Besides, the employee and management reward structure, such as, salary increments, bonus, incentives etc. needs to be considered, as the organizational culture is directly affected by these factors.

Apart from these, it’s also important to take into account of leadership and management style that is demonstrated in the organization. Since the leadership style has a lot to do with both innovation and creativity, it must be considered duly. The authoritarian or autocratic leadership style may create the climate of fear, anxiety or distress among the team members, whereas the participative leadership style, enhancing the work culture and developing the shared vision, can lead to attain the business objective and goals successfully.

Not only the organizational culture is subjective by the aforementioned factors, but it’s also by several other factors such as external factors which include legal, economic, social and technological. Hence, understanding the market a business operates in as well as those external factors is very important in order to bring change and development in the organizational culture. In this way, taking into consideration, the paradigm, what the organization is about, what it does, its mission and its values and observing the external factors, a business management should come forward with constructive approach to build the organization culture in a way it is desired.


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