Organizational climate

Organizational climate (sometimes known as Corporate Climate) is the process of quantifying the “culture” of an organization; it precedes the notion of organizational culture.

It is a set of properties of the work environment, perceived directly or indirectly by the employees, that is assumed to be a major force in influencing employee behavior.

Climate and culture are both important aspects of the overall context, environment or situation.

Definition: Properties of the business environment in a workplace observed by staff that strongly influence their actions and job performance. For example, a perceptive business manager might take the trouble to survey employees about the organizational climate to identify and promote those aspects that are most conducive to achieving corporate objectives. Also called corporate climate.

Organizational climate, on the other hand, is often defined as the recurring patterns of behavior, attitudes and feelings that characterize life in the organization, while an organization culture tends to be deep and stable. Although culture and climate are related, climate often proves easier to assess and change. At an individual level of analysis the concept is called individual psychological climate. These individual perceptions are often aggregated or collected for analysis and understanding at the team or group level, or the divisional, functional, or overall organizational level.

Organizational Climate is the umbrella term to indicate the process of quantifying the organizational culture of an organization. It is a set of properties of the work environment, perceived directly or indirectly by the employees, that is assumed to be a major force in influencing employee behavior.

OCL can also be defined as the recurring patterns of behavior, attitudes and feelings that characterize life in the organization, while an organizational culture tends to be deep and stable and involve deeply held values, beliefs and assumptions, symbols, heroes, and rituals.

Climate refers to perceptions of organizational practices reported by people who work there (Rousseau 1988). Studies of climate include many of the most central concepts in organizational research.

Common features of climate include

- communication (as describable, say, by openness), - conflict (constructive or dysfunctional), - leadership (as it involves support or focus) and - reward emphasis (i.e., whether an organization is characterized by positive versus negative

feedback, or reward- or punishment-orientation).

When studied together, we observe that organizational features are highly interrelated (e.g., leadership and rewards).

Climate characterizes practices at several levels in organizations (e.g., work unit climate and organizational climate). Studies of climate vary in the activities they focus upon, for example, climates for safety or climates for service.

Climate is essentially a description of the work setting by those directly involved with it.

Organization’s climate features (particularly leadership, communication openness, participative management and conflict resolution) are associated with employee satisfaction and (inversely) stress levels (Schneider 1985).

Stressful organizational climates are characterized by limited participation in decisions, use of punishment and negative feedback (rather than rewards and positive feedback), conflict avoidance or confrontation (rather than problem solving), and non supportive group and leader relations.

Socially supportive climates benefit employee mental health, with lower rates of anxiety and depression in supportive settings.

When collective climates exist (where members who interact with each other share common perceptions of the organization) research observes that shared perceptions of undesirable organizational features are linked with low morale and instances of psychogenic illness.

When climate research adopts a specific focus, as in the study of climate for safety in an organization, evidence is provided that lack of openness in communication regarding safety issues, few rewards for reporting occupational hazards, and other negative climate features increase the incidence of work-related accidents and injury.

Since climates exist at many levels in organizations and can encompass a variety of practices, assessment of employee risk factors needs to systematically span the relationships (whether in the work unit, the department or the entire organization) and activities (e.g., safety, communication or rewards) in which employees are involved. Climate-based risk factors can differ from one part of the organization to another.

Organizational climate, while defined differently by many researchers and scholars, generally refers to the degree to which an organization focuses on and emphasizes:

Innovation Flexibility Appreciation and recognition Concern for employee well-being Learning and development Citizenship and ethics Quality performance Involvement and empowerment

Leadership

Organizational climate, manifested in a variety of human resource practices, is an important predictor of organizational success. Numerous studies have found positive relationships between positive organizational climates and various measures of organizational success, most notably for metrics such as sales, staff retention, productivity, customer satisfaction, and profitability:

Denison (1990) found that an organizational climate that encourages employee involvement and empowerment in decision-making predicts the financial success of the organization.

Schneider (1996) found that service and performance climates predict customer satisfaction. Patterson, Warr, & West (2004) found that manufacturing organizations that emphasized a

positive organizational climate, specifically concern for employee well-being, flexibility, learning, and performance, showed more productivity than those that emphasized these to a lesser degree.

Potosky and Ramakrishna (2001) found that an emphasis on learning and skill development was significantly related to organizational performance.

Ekvall (1996) found a positive relationship between climates emphasizing creativity and innovation and their profits.

Hansen and Wernerfelt (1989) found that organizational climate factors explain about twice as much variance in profit rates as economic factors.

Thompson (1996) found that companies utilizing progressive human resource practices impacting climate such as customer commitment, communication, empowerment, innovation, rewards and recognition, community involvement/environmental responsibility, and teamwork outperformed organizations with less progressive practices.

Organizational climate clearly influences the success of an organization. Many organizations, however, struggle to cultivate the climate they need to succeed and retain their most highly effective employees. Hellriegel and Slocum (2006) explain that organizations can take steps to build a more positive and employee-centered climate through:

Communication – how often and the types of means by which information is communicated in the organization

Values – the guiding principles of the organization and whether or not they are modeled by all employees, including leaders

Expectations – types of expectations regarding how managers and behave and make decisions Norms – the normal, routine ways of behaving and treating one another in the organization Policies and rules - these convey the degree of flexibility and restriction in the organization Programs – programming and formal initiatives help support and emphasize a workplace climate Leadership – leaders that consistently support the climate desired

Making a climate change in your organization is one of the core fundamental steps to beginning to create a great place to work.

Organization climate, or organizational culture, sometimes also called organiztion ideology refers to a pervasive way of life and a set of norms.

In organizations there are deep-set beliefs about the way should be organized, the way authority should be exercised, how people should be rewarded, and how they should be controlled. The culture of an organization can sometimes be visible in its build ing and its offices. It can be manifest in the kinds of people it employs, the kind of career aspirations they hold, their status in society, their level of education and their degree of mobility.

A large research university will have a culture quite different from that of a manufacturing firm or a retail store. Different kinds of libraries have different cultures, reflecting the environment in which they are placed.

Even within an organization cultures will vary. The research department will have a different atmosphere than the administration, which will be different from that of the place where operational activities take place.

Four cultures identified by Roger Harrison and used as a basis for the organization climate self-test are: power, role, task and person.

The power culture is most often found in small entrepreneurial organizations. Its structure can be pictured as a web.

The power culture depends on a central power source with rays of power and influence spreading out from that central figure. The rays may be connected by functional or specialist strings but the power rings are the centers of power and influences.

This organization works on precedent and by anticipating the wishes and decisions of the central power sources. There are few rules and procedures and little bureaucracy. Control is exercised from the center. It is a political organization in that deci sions are taken larged based on the balance of influence rather than on logical or procedural grounds.

A power culture can move very quickly and react rapidly to threats or opportunities. These cultures put a lot of faith in the individual, little in committees. They judge by results and care very little about the means used to obtain results. Size is a problem for power cultures; when they get large or when they seek to take on too many activities, they can collapse.

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The role culture is called a bureaucracy. The structure for a role culture can be pictured as a Greek temple.

The role culture works by logic and rationality. Its strength in its its pillars or functional specialties, e.g. the finance department, the technical services department, the public services department. The work of the functional departments is contro lled by:

>Procedures for roles -- Job descriptions, authority definitions

Procedures for communications -- required sets of copies of memos

Rules for settlement of disputes -- appeal process.

The functional departments are controlled at the top by a small group of senior managers (the pediment of the temple). It is assumed that these folks are the only co-ordinators required if the separate departments do their job as laid down by the rules and procedures and the overall plan.

In the role culture, the job description is often more important than the individual who fills it. Individuals are selected for satisfactory performance of a role and the role is usually so described that a range of individuals can fill it. Performance above and beyond the role prescription is not required and can even be regarded as disruptive. Position power is the major power source; personal power is frowned upon and expert power limited to its proper place. The efficiency of this culture depends o n the rationality of the allocation of work and responsibility rather than on individuals.

The role organization will succeed very well in stable environments where little changes from year to year and predictions can be made far in advance. Where the organization can control its environment, where its markets are stable, predictable or controllable, the rules and procedures and the programmed approach to work will be successful.

Role cultures are slow to perceive the need for change and slow to change even when the need is seen. If the market, the product/service needs, or the environment changes, the role culture is likely to continue without change until it collapses or until the top management is replaced.

Role cultures offer security and predictability to the individual -- a steady rate of ascent up the career ladder. They offer the change to acquire specialist expertise without risk. They tend to reward those wanted to do their job to standard. A role culture is frustrating for the individual who is power-oriented or who wants control over his/her work. Those who are ambitious or more interested in results than method may be discontent, except in top management.

The role culture is found where economies of scale are more important than flexibility and where technical expertise and depth of specialization are more important than product innovation or product cost.

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The task culture is job or product oriented or focused on service delivery. Its accompanying structure can be represented as a net.

Notice some of the strands of the net are thicker and stronger than the others. The power and influence in a task culture lies at the intersections. A matrix organization is one form of the task culture.

The task culture seeks to bring together the appropriate resources, the right people at the right level of the organization, and then to let them get on with it. Influence is based more on expert power than on position or personal power, although these power sources have an effect. Influence is more widely dispersed than in other cultures and each individual in the culture tends to think he/she has influence.

The task culture is a team culture where the outcome, the result, the product of the team's work tends to be the common goal overcoming individual objectives and most status and style differences. The task culture uses the unifying power of the group t o improve efficiency and to identify the individual with the objective of the organization.

The task culture is highly adaptable. Groups, project teams, or task forces are formed for a specific purpose and can be reformed, abandoned or continued. The net organization works quickly since each group ideally contains within it all the decision-m aking powers required. Individuals have a high degree of control over their work in this culture. Judgment is by results. There are generally easy working relationships within the group with mutual respect based upon capacity rather than age or status.

The task culture is appropriate where flexibility and sensitivity to the market or environment are important. The task culture fits where the market is competitive, where the product life is short, where speed of reaction is important.

The task culture finds it hard to produce economies of scale or great depth of expertise. Large scale systems are difficult to organize as flexible groups. The technical expert in a task culture will find him/herself working on various problems and in various groups and thus will be less specialized than his/her counterpart working in a role cultures.

Control in a task culture is difficult. Control is retained by top management through the allocation of projects, people and resources. But little day-to-day control can be exerted over the methods of working or the procedures without violating the nor ms of the culture. Task cultures flourish when the climate is agreeable, when the product is all-important, when the customer is always right, and when resources are available for all who can justify using them.

When resources of money and people have to be rationed, top management may wish to control methods as well as results. When this happens, team leaders begin to compete for resources using political influence. Morale will decline and the job become less satisfying as individuals begin to reveal

their individual objectives. When this happens the task culture tends to change to a role or power culture.

The task culture is usually the one preferred as a personal choice to work in by most managers especially those at junior and middle levels. It is the culture which most of the behavioral theories of organizations point towards with their emphasis on g roups, expert power, rewards for results, merging individual and group objectives. It is the culture most in tune withcurrent ideologies of change and adaptation, individual freedom and low status differentials.

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The person culture is an unusual one and won't be found in many organizations but many individuals cling to some of its values. In this culture the individual is the central point. If there is a structure or an organization it exists only to serve and assist the individuals within it. If a group of individuals decide that it is in their own interests to band together in order to do their own thing more successfully and that an office, a space, some equipment, some clerical support would help, then the resulting organization will have a person culture. Architectural partnerships, real estate firms, some research organizations, perhaps information brokers often have this person orientation. Its structure is minimal, a cluster or galaxy of individual stars may be the best picture.

As most organizations tend to have goals and objectives over and above the set of collective objectives of their members, there are few organizations with person cultures. Control mechanisms or even management hierarchies are imposssilbe in their cultures except by mutual consent. The organization is subordinate to the individual and depends on the individual for its existence. The individual can leave the organization but the organization seldom has the power to evict an individual. Influence is share and the power base is usually expert.

The kibbutz, the commune, the co-operative, are strive for the personal culture in organizational form. Rarely does it succeed beyond the original creators. Very quickly the organization achieves its own

identify and begins to impose it on its individuals. It becomes a task culture at best, but often a power or role culture.

Although there are few organizations with person cultures, many individuals with a personal preference for this type of culture operate in other kinds of organization. Specialists in organization often feel little allegiance to the organization but regard it rather as a place to do their thing with some benefit accruing to their employer. Individuals with this orientation are not easy to manage. As specialists employment elsewhere is often easy to obtain so resource power has less potency. They rarely acknowledge other people's expert power. Coercive power is not usually available which leaves only personal power and such individuals are not easily impressed by personality.

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Within an large organization different types of cultures may be found as shown in the diagram below:

The second diagram below points out some of the organization design policies variables that need to be considered when considering the nature of an organization and its fit with its environment.