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Determinants of Organizational Culture

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Although organizational culture refers to the internal environment of an organization, the nature of OC is determined by a variety of internal and external factors. At this juncture, it is to be worth mentioned that determinants are the causes which create a consequence. Thus determinants of organizational culture are the causes or factors responsible for creating a particular culture in an organization. In this regard, a brief discussion is made hereunder.

Economic Condition

The economic condition of the organization determines the spending pattern and working style of the organization. For instance, in times of prosperity, the budgets will be liberal due to which organizations tend to be more adventuresome. On the other hand, a tight budget would lead to an air of caution and conservatism within the organizations. Economic conditions also determine the risk taking ability of the organization and will also set a culture accordingly.

Leadership Style

The leadership style prevailing in an organization has a profound influence in determining several dimensions of OC. For example, if an organization is characterized by authoritarian style with high power motivation, the leader exercises authority and control, criticizes poor performance, and emphasizes cost reduction. The resultant OC dimensions will be high position structure, low individual autonomy, low reward orientation, high control and low warmth and support. On the other hand, if an organization is characterized by democratic style with affiliation motivation, the resultant dimensions of OC will be high reward orientation, high warmth & support and low conflict. Further, if an organization is characterized by goal directed style with achievement motivation, the dimensions of OC will be high individual autonomy, high reward orientation, high warmth & support, high progressiveness and development but the position structure will be low.

Organizational Policies

Organizational policies can influence a specific dimension of OC to quite an extent. For example, if the company policy states that layoffs will be used only as a last resort to cope with business down turn, then it would foster an internal environment that is supportive and humanistic. Similarly, if a company announces that the first beneficiaries of increased profit would be employees and shareholders would get second priority, then the organizational culture will be characterized by high reward orientation and probably by high progressiveness and development.


This dimension refers to the degree to which control over the behavior of organizational members is formalized. In a highly bureaucratic organization, control systems are well defined while in a low-control organization, most of the controls are self-regulated. In other words, individuals monitor their own behavior.

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