Factors Affecting Organizational Culture [9 Top Factors]

There are so many ways of examining cultural differences and their impact on international management. Culture can affect technology transfer, managerial attitudes, managerial ideology, and even business-government relations.

In overall terms, the cultural impact on international management is reflected by these basic beliefs and behaviors. Here are some specific examples where the culture of a society can directly affect management approaches.

Centralized vs. Decentralized Decision Making

In some societies, top managers make all-important organizational decisions.

In others, these decisions are defused throughout the enterprise; middle and lower-level managers actively participate and make decisions.

Safety vs. Risk

In some societies, organizational decision-makers are risk-averse and have great difficulty with conditions of uncertainty. In others, risk-taking is encouraged, and decision-making under uncertainty is common.

Individual vs. Group Rewards

In some countries, personnel who do outstanding work are given individual rewards in bonuses and commissions. In others, cultural norms require group rewards, and individual rewards are frowned upon.

Informal vs. Formal Procedures

In some societies, much is accomplished through informal means. In others, formal procedures are set forth and followed rigidly.

Cooperation vs. Competition

Some societies encourage cooperation between their people. Others encourage competition between their people.

High Vs. Low Organizational Loyalty

In some societies, people identify very strongly with their organization or employer. In others, people identify with their occupational groups, such as an engineer or mechanics.

Short-term vs. Long-term Horizons

Some cultures focus most heavily on short-term horizons, such as short-range goals of profit and efficiency. Others are more interested in long-range goals, such as market share and technological development.

Stability vs. Innovation

The culture of some countries encourages stability and resistance to change. The culture of others puts a high value on innovation and change.

Goals and Objectives

The culture of the organization is also affected by its goals and objectives. The strategies and procedures designed to achieve this organization’s goals and objectives also contribute to its culture.

Others factors affecting culture are;

• Language and dialect
• Religion
• Wealth
• Climate and weather
• Dress sense and clothes-fashion
• Level of education and literacy
• General living standards
• Employment regulations

These cultural differences influence the way that comparative management should be conducted.

Sometimes these factors affect international business because some international managers are unknown and unfamiliar with these factors and day-to-day business protocol.