Define Organizational Climate
Organizational climate (sometimes known as Corporate Climate) is the process of quantifying the “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. How your employees feel about their jobs, their supervisors, their peers, top management, and many other factors affects their individual productivity, and collectively the ability of the organization to achieve its objectives. Organizational climate is a relatively ending quality of the internal environment that is experienced by the members, influences their behavior and can described in terms of values of a particular set of characteristics of the organization.
Organizational climate is the set of characteristics that describe an organization and that
- distinguish one organization from other organizations;
- are relatively enduring over time and
- influence the behavior of the people in the organization.
Features of Organisational Climate
- General Perception: Organisation climate is a general express of what the organisation is. It represents the summary perception which people have about an organisation.
- Quantitative Concept: It is an abstract and intangible concept. It is difficult to explain the components of organisation climate in quantifiable units
- Distinct Identity: It reflects how an organisational is different from other organisations. It gives a distinct identity to the organisation.
- Enduring Quality: It is built up over a period of time. It represents a relatively enduring quality of the internal environment that is experienced by the organisational members.
- Multi-dimensional concept: There are several dimensions of the concept of organisational climate such as individual autonomy, authority structure, leadership style, pattern of communication, degree of conflicts and cooperation, etc.
Components of Organisational Climate
- Members’ Concern - The dominant orientation of an organisation is the main concern of its members, and this is an important determinant of climate. If the dominant orientation or concern is to adhere to established rules and regulations, the climate will be characterised by control; on the other hand, if the orientation is to produce excellence, the climate will be characterised by achievement.
- Interpersonal relationships - An organisation’s interpersonal-relations are reflected in the ways informal groups are formed, and operate to satisfy the social needs of members. If informal relations supplement the formal procedures, the organisation will be benefited. But if some powerful groups develop who acquire power in the organisation, they may displace the goals of the organisation. Conflicts in the organisation might also be common.
- Degree of Control - The control systems may be either rigid or flexible. If the control is rigidly followed, there will be impersonal or bureaucratic atmosphere in the organisation. The scope for self-regulation will be the minimum.
- Individual Freedom - If the individuals are given sufficient freedom or autonomy to work and exercise authority, there will be efficiency in operations. Self-control will lighten the burden of the higher-level executives.
- Type of Structure - It clarifies who is to direct whom and who is responsible to whom. It serves as the basis of inter-personal relations between superiors and subordinates. If the authority is centralised at the top level, the scope for participation in decision-making by the subordinates will be low. Where authority is delegated to the subordinates, there will be an atmosphere of participative decision-making.
- Management Orientation (Style) - The dominant style of managers and supervisors maybe task-oriented or relations oriented. If the task-orientation is predominant, the leadership style will be autocratic. The employees will have to increase their productivity or face punishment. Their morale will be low in the long-run.
- Reward System - The system of rewards and punishments is an important component of organisational climate. When the rewards are based on merit and productivity, there will be an atmosphere of competition among employees for higher performance. They will put more and more hard work to develop themselves and earn higher rewards such as increments and promotions.
- Risk-taking - How members respond to risks and whose help is sought in situations involving risk are important in any organisation. If individuals feel free to try out new ideas without any fear, they will not hesitate in taking risks. Such an atmosphere will be conducive to innovative ideas.
- Conflict Management - Differences among people and groups in organisations are not uncommon. If they are managed effectively, there will be an atmosphere of cooperation in the organisation. If they are suppressed or not handled properly, people will be unhappy and there will be an atmosphere of distrust and non-cooperation.
- Degree of Trust - The degree of trust or lack of trust among various members and groups in the organisation affects the climate. If there is Mutual trust between different individuals, groups and also between management and workers, there will be peace in the organisation. The members will cooperate with one another for the attainment of organisation objectives.
Factors Influencing Organisational Climate
- Organisational Context - This philosophy of management is expressed by policies, rules, regulations and, of course, by the actions of mangers. The reaction of the employees and the degree to which they agree within management’s philosophy is critical to the development of a favourable climate. If management is able to match employee’s goals to organisational goals, it is most likely to put a positive influence on climate.
- Organisation Structure - The organisation structure followed by management is critical organisational climate. If the top management feels the need of giving greater importance to the subordinates, it will follow a decentralised structure. There will be fewer layers in the organisational hierarchy and participative decision making will be encouraged. The organisational climate will be inducive to the development of the employees. But if the top management like to maintain a greater degree of consistency in decision-making, it would follow a centralized structure. This would enable greater control over decisions; and organisational climate will encourage centralised information management and decision-making.
- Relationship between superior and subordinates - The relationship between superior and subordinate is not only of an interpersonal nature, but it also represents the primary interface between the organisation and the employee. All mangers must therefore be aware of the possible influence on climate when deciding the type of leadership (autocratic or participative to be provided to the subordinates. The effectiveness of a leadership style is determined mainly by the particular situation. In other words, the leadership style must suit the situation faced by the manger. If it is not so, the motivation level of the workers will be low, they will feel frustrated and dissatisfied and productivity may also go down. If the workers are not satisfied with the type of leadership provided, effective communication will be hindered and their morale will also be low. Therefore, every manager must consider the likely impact of this style of functioning on the organisational climate.
- Physical environment - It has been observed that office decor, office size and the physical space allotted to a person at work (private office or general office) etc. have an important influence to the development of a favourable attitude towards the job. Noise has also been considered instrumental in influencing the climate of organisation. High level of noise may bring a bad feeling and lead to frustration, nervousness and aggression and thus have a negative effect upto organisational climate.
- Values and Norms - Organisation culture is a system of shared values (what is important) and the beliefs (how things work) that interact with a company’s people, organization structures, and control systems to produce behavioural norms (the way we do things).
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