What Is the Relationship between Organizational Culture and Environment?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 10 October 2019
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Organizational culture and environment are related to the extent that the environment almost always affects the structure of an organization’s culture. The environment plays such an important role on the organizational culture that an international company with an established organizational culture might have to restructure or modify its culture according to the dictates of its environment. For instance, a company that is based in the United States may discover 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 wishes to carry out business in foreign places, it would have to tailor 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 situation. This may include factors like manner of dressing, 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 kind of environment within which a company operates. This may include both the external environment and the internal environment.


The government policy in place is an external environmental factor that could have a bearing on the corporate structure. For example, some countries have policies that preclude women from certain types of activity within the workplace. Such policies may even prescribe the manner in which women must dress and how they must interact with other employees. A company with a corporate culture that encourages equality in the workplace might have to curtail such practices in order to blend in with its environment. This is just one instance of how organizational culture and environment are related.

Labor unions make up another factor included in organizational culture and environment. If the labor is particularly strong and often engages the company in various arm-twisting methods that include frequent strikes or threats of strike, the relationship between the company management and the employees belonging to the various unions might be tense. Since the corporate culture is defined by the activities of the human elements of the corporation, this tenseness will be carried over to the daily activities in the affairs of the company. This might affect the corporate culture to the extent that there is a sense of mutual distrust and lack of cordiality between the management and the general staff. This factor stems from an internal clash between organizational culture and environment.


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Post 3

@fify-- I don't entirely agree with this. Not all organizations are businesses and there are many organizations that don't want to give up their organizational values because of the environment.

There are many non-governmental, not-for-profit organizations that will hold on to their organizational and cultural values regardless of where they are. Because the entire goal of these organizations is to accomplish their mandates in a way that suits their organizational identity. Many international organizations, like the UN and WHO, are the same way.

Post 2
@ysmina -- It's not wrong, it's necessary.

For example, gift giving or bribes, as we like to call it, is one issue that American businesses that work in other countries have to deal with. Gift giving to make deals or form alliances with other businesses is not a concept that we can find in most American organizational cultures. But in many countries, this is how things work.

If an American company doesn't play by these new rules at offshore locations, it won't be very successful. So new environments definitely require changes in organizational culture. There is nothing wrong about it. Business is about making profits, organizational culture is important too but not as important.

Post 1
But isn't it wrong for a company to change its culture -- its norms and values -- simply because it's in another country?

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