The culture and structure of an organisation develop over time and in response to a complex set of factors. We can, however, identify a number of key influences that are likely to play an important role in the development of any corporate culture. These include: history; primary function and technology; goals and objectives; size; location; management and staffing; and the environment.
- History: The reason, and manner in which, the organisation was originally formed, its age, and the philosophy and values of its owners and first senior managers will affect culture. A key event in the organisation’s history such as a merger or major reorganisation, or a new generation of top management, may bring about a change in culture. Corporate history can be an effective induction tool to assist a growth programme, and to help integrate acquisitions and new employees infusion with the organisation’s culture and identity.
- Primary function and technology: The nature of the organisation’s ‘business’ and its primary function have an important influence on its culture. This includes the range and quality of products and services provided the importance of reputation and the type of customers. The primary function of the organisation will determine the nature of the technological processes and methods of undertaking work, which in turn also affect structure and culture.
- Goals and objectives: Although a business organisation may pursue profitability, this is not itself very clear or a sufficient criterion for its effective management. For example, to what extent is emphasis placed on long-term survival or growth and development? How much attention is given to avoiding risks and uncertainties? Or how much concern is shown for broader social responsibilities? The organisation must give attention to objectives in all key areas of its operations. The combination of objectives and resultant strategies will influence culture, and may itself be influenced changes in culture.
- Size: Usually larger organisations have more formalized structures and cultures. Increased size is likely to result in separate departments and possibly split-site operations. This may cause difficulties in communication and inter-departmental rivalries with the need for effective co-ordination. A rapid expansion, or decline, in size and rate of growth, and resultant changes in staffing will influence structure and culture.
- Location: Geographical location and the physical characteristics can have a major influence on culture – for example, whether an organisation is located in a quiet rural location or a busy city centre. This can influence the types of customers and the staff employed. It can also affect the nature of services provided, the sense of ‘boundary’ and distinctive identity, and opportunities for development.
- Management and staffing: Top executives can have considerable influence on the nature of corporate culture.However, all members of staff help to shape the dominant culture of an organisation, irrespective of what senior management feel it should be. Culture is also determined the nature of staff employed and the extent to which they accept management philosophy and policies or pay only ‘lip service’. Another important influence is the match between corporate culture and employees’ perception of the psychological contract.
- The environment: In order to be effective, the organisation must be responsive to external environmental influences. For example, if the organisation operates within a dynamic environment it requires a structure and culture that are sensitive and readily adaptable to change. An organic structure is more likely to respond effectively to new opportunities and challenges, and risks and limitations presented the external environment.