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Organizational culture is influenced by the environment, including external factors like government policies and internal factors like unions. Companies may need to adapt their culture to fit new environments, such as when a US-based company operates in Arab countries.
Organizational culture and environment are related in that the environment almost always affects the structure of an organization’s culture. The environment plays such an important role in organizational culture that an international company with an established organizational culture may have to restructure or modify its culture in accordance with the dictates of its environment. For example, a US-based company may find that the type of corporate culture that works in the US will not work in some Arab countries. This is simply the influence of environmental forces on corporate culture. If such a company wants to do business in foreign locations, it would have to adapt its organizational culture to suit that of its new environment.
Organizational culture refers to how a company has established its methods of expected actions in any given situation. This can include factors such as dress, manner of interaction between employees and management, and the type of expectations the company has of its employees. The organizational environment is a reference to the type of environment in which a company operates. This can include both the external environment and the internal environment.
Current government policy is an external environmental factor that can influence corporate structure. For example, some countries have policies that bar women from certain types of activities in the workplace. Such policies may even prescribe how women should dress and how they should interact with other employees. A company with a corporate culture that encourages equality in the workplace may have to curb these practices to blend in with the environment. This is just one example of how organizational culture and environment are related.
Unions constitute another factor included in the organizational culture and environment. If the workforce is particularly strong and frequently involves the company in various methods of arm-twisting that include frequent strikes or strike threats, the relationship between company management and employees belonging to the various unions can be strained. As the corporate culture is defined by the activities of the human elements of the corporation, this tension will carry over into the day-to-day activities of the corporation’s business. This can affect the corporate culture to the extent that there is a sense of mutual distrust and lack of warmth between management and the general staff. This factor stems from an internal clash between organizational culture and environment.
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