Determinants of OC

Let us understand the difference between the determinants and dimensions of OC. Determinants are the causes, while dimensions are the components of OC. In other words, determinants influence and dimensions get influenced.

OC is, of course, the internal environment of an organization. It is however determined by both internal and external factors. Outside factors affect the events within the organization. After recognizing the duality of factors affecting OC, we shall consider the following internal factors determining OC.

  1. Organizational size
  2. Organizational structure
  3. Organizational policies
  4. Managerial values
  5. Characteristics of members
  6. Leadership style
  7. Economic condition

Organizational Size

Small is beautiful as far as climate for creativity and innovativeness is concerned. It also fosters a participative kind of management. The emphasis is on horizontal distribution of responsibilities. Larger organizations tend to be authoritative and emphasize vertical distribution of responsibilities.

Organisational Structure

The organization structure affects the OC’s perception. Rensis Likert puts organizations into four categories depending upon the organizational processes like goal setting, motivation, communication, control and decision-making:

  1. Exploitative Authoritative
  2. Benevolent Authoritative
  3. Consultative
  4. Participative

A bureaucratic structure may be benevolent authoritative or consultative, and its OC is much different from that of participative type of organization. 

Organizational Policies

Specific policies tend to affect specific dimensions of OC. Profit-sharing with employees may be a policy. The OC will be then characterized by High Reward Orientation and perhaps High Progressiveness and Development.

Managerial Values

The values held by managerial staff affect OC greatly because the decisions are value-driven. Values give us the perceptions of the organization such as friendly, formal, informal, paternalistic, hostile etc.

Characteristics of Members

Personality traits of organizational members also affect the OC. An organization where professional managers are all highly educated technologists with an MBA degree will have a very different OC from an organization that carries internally-promoted, senior employees with no higher academic qualifications. Professionals might contribute to a competitive, risk-taking, open environment. 

Leadership Style

The leadership style profoundly affects different dimensions of OC. Authoritarian style leads to low individual autonomy; low reward motivation, low warmth and support and high control and position structure. Democratic style leads to low conflicts, high reward orientation and high warmth and support. Goal-directed style with a need to achieve leads to low position structure, high individual autonomy, high reward orientation, high warmth and support, high progressiveness and development and high risk taking.

Economic Condition

Liberal budgets make organizations adventuresome. Stringent budgets make them conservative, with no inclination to initiative new programmes. The dimensions of OC such as risk-taking, control, progressiveness and development are directly influenced by economic condition.