A Study On The Organizational Climate Project

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CHAPTER I
INTRODUCTION AND METHODOLOGY
INTRODUCTION
Organization climate is comprised of mixture of norms, values, expectations, policies and
procedures that influence work motivation, commitment and ultimately, individual and work-
unit performance. Positive climate encourages, while negative climate inhibits discretionary
effort. ‘Organization climate’ refers to the quality of working environment. If people feel
that they are valued and respected within the organization, they are more likely to contribute
positively to the achievement of business outcomes. Creating a healthy organizational climate
requires attention to the factors, which influence employee’s perceptions, including the
quality of leadership, the way in which decisions are made and whether the efforts of
employees are recognized. “Climate may be thought as the perception of the
characteristics of an organization.”
Climate for an organization is like the personality for a person. As every individual has a
personality that makes each person unique, each organization has an organization climate that
clearly distinguishes its personality from other organizations. Organizational climate is one of
the most important concepts to enter into the theory of organizational climate as a mature
concept in management. The concept has also proved useful in predicting and explaining a
variety of job-related behavior, attitudes and performance and organizational performance.
Organizational climate by virtue of being a more salient cultural phenomenon lent by itself to
direct observation and measurement and thus has had a longer research tradition. But climate
is only a surface manifestation of culture and thus research on climate has not enabled us to
involve into the deeper aspects of the functions of the organization.

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“Organizational climate is less encompassing than the concept of organizational culture
and is more readily measured. Organization climate is how organization members
perceive the culture that has been created and perpetuated in their unit or
organization”
Many people think that organizing is about spending all your time keeping your home
perfectly neat and tidy. Or about buying lots of expensive containers. Perhaps when you think
of an organized Mom you think of someone like Bree on Desperate Housewives who lives to
be organized instead of organizing to live.
Some people figure that if they aren't obsessed with organizing, they won't really become
organized so why bother organizing at all? The truth is that just being reasonably organized
enhances your whole life. It improves your self-confidence, self-respect, and overall well-
being.
It lowers stress and helps you find more time and energy to do the things in life that matter
most to you, like spending time with family, pursuing creative hobbies, eating healthy, and
exercising.
Organizations with same resources, employees of the same caliber and in the same territory
may yield different results. It is the upbringing of employees in the organization that makes
the difference. Employee’s commitment, satisfaction and consequently the effectiveness of
the organization are influenced by overall atmosphere of the organization.
Climate is the atmosphere that employees perceive and it is created in their organization by
practices procedure and rewards this perception is developed on a day-to-day basis.
Organization become dynamic and growth
Oriented in their people are dynamic and proactive every organization can do a lot to make
their people become dynamic and proactive through proper selection of such people and by
nurturing their dynamism and other competences organization can not survive beyond a point
unless they are continuously alert to the changing environment and continuously prepare their
employees to meet the challenges and have an impact on the environment. As the human
resource department ism an essential process for organizational survival and grow than
optimum level of development climate is essential for facilitating human resource
department. In an industrial organization the individuals who are working in different
functions and roles are engaged in the pursuit of some over all goals or set of goals. Every

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organization operates in terms of a set of polices norms, which are sometime clearly laid
down, while at other times are in the form of rations and conventions to plan, organize,
coordinate and control its various activities. An organizational requires managers who in their
day-to-day interactions reflect a variety of leadership styles and skills in dealing with their
subordinates. The sum total these and many other such activities create an internal
environment, with in each organization, which accounts. For its uniqueness and identity
member of an organizational work with in and are consciously influenced by this internal
environment which is also called organizational culture and climate.
Common elements of organizational climate
 Organizational climate is a molar concept.
 Though subject to change organizational climate is enduring over time.
 Despite differences individual perceptions there can b e broad overall agreement in
describing organizational climate.
 Organizational climate influences the behaviors of members of the organization
DEFINITIONS ON ORGANISATIONAL CLIMATE
HELLRIGED AND SLOCUM define organizational climate as a set of attributes which can
be perceived about a particular organizational and or its subsystem and which may be
induced from the way that organization deals with its members several theme are implicit in
this definition of organizational climate.
TAGUIUM AND LITWIN define organizational climate as a relatively enduring quality of
the internal environment that is experienced by its members influence s their behaviors and
can be described interims of the values of particular set of characteristics of the organization.
JEWELL AND SIEGALL (1990) emphasized that organizational climate is descriptive
concept based on individual perceptions of the social environment of an organization.
Employees observe what happens to them and around them, and then draw conclusions about
their organizations priorities. They then set their own priorities accordingly. Thus; these

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perceptions provide employees with direction and orientation about where they should focus
their energies and
Organizational Climate Assessment is a powerful instrument, especially when provided
organization-wide with specific departmental demographic separation and analysis. Each
category has been designed to assess one of the key categories, which affect employee
performance. This assessment should be administered anonymously company wide, broken
out by departments of 6 or more people to protect the identities of respondents. Every
precaution should be taken to insure confidentiality in order that respondents will feel
comfortable sharing their true opinions and perspectives.
The objective of performing an employee climate assessment is to identify the key areas
which are hindering production, reducing effectiveness and which might generate unexpected
costs in the near future. The idea and approach is for the organization not to simply perform
an academic exercise, simply because they ‘do it at this time every year’, but to critically
examine themselves to see where the company and it’s employees might be finely tuned to
generate higher levels of performance. Once identified, opportunities to strengthen existing
approaches, which are working well, as well as select appropriate interventions for addressing
the weakest areas, should be aggressively pursued for the maximum benefit of every
employee
Organizations are successful because of the quality of work employees perform. When
employees are cared for, and the right environment is created where there are no barriers to
performance, their true value to the organization can be fully realized Humans have
fundamental needs for safety and security, affiliation and acceptance, involvement as well as
self-actualization. The extent to which these and other human needs are fulfilled lead to
higher levels of commitment, initiative and performance. Organizations, which include an
emphasis on fulfilling the needs of their employees to some extent, will enjoy a more
productive and stable workforce.This assessment is designed with the following assumptions
in mind:
Fundamental care of the employee as an asset
performance, their true value to the organization can be fully realized.

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Respect for the dignity of the employee and the sensitivities of human beings
Humans have fundamental needs for safety and security, affiliation and acceptance,
involvement as well as self-actualization. The extent to which these and other human needs
are fulfilled lead to higher levels of commitment, initiative and performance Organizations,
who include an emphasis on fulfilling the needs of their employees to some extent, will enjoy
a more productive and stable workforce.
Full understanding of the realities of business
This assessment is written with full realization of the realities of business, and not an
unrealistic utopian view of an idealized work environment. The factors emphasized and
measured in this assessment are the important levers to optimizing employee workplace
performance, not just creating an environment where everyone feels better.
Embracing optimization and improvement
An irrefutable trend in business today, continuous improvement and increasing levels of
efficiency are a way of life, and these factors are given appropriate emphasis in this
assessment because they represent an ever present dynamic with which every employee must
deal.
Keys to motivation and commitment
Rather than only identifying potential problem areas to be avoided, this assessment focuses
on areas where human behavior can be leveraged more positively to create employees with
higher levels of motivation and commitment.
SCHNEIDER AND RENTSCH (1988) consider climate to be the message that
organizational members receive from organizational routines (policies, expectations,
procedure, etc.) And the reward system (supports, expectations and various kinds of reward).
They define culture as the values and norms underlying such organizational routines and
rewards, in addition to the shared assumptions about organizational life reflected in these
norms and values. In other words, climate is the manifestation or communicated form of
culture. The organizational routines (the what) measured in climate research are interpreted
and given meaning (the why) by organizational members, as assessed in culture research.

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Being organized is about:
 Being in control of your space, your possessions and your time.
 Being proactive and not just reactive to all the stuff and noise out there competing
for your attention and your money.
 Being able to find what you need, when you need it.
 Being able to get where you want to be on time.
 Being able to pay your bills on time.
 Having a home for everything so that putting things away - and finding them
again - is just as easy as dropping them on a table.
performance, their true value to the organization can be fully realized.
Humans have fundamental needs for safety and security, affiliation and acceptance,
involvement as well as self-actualization. The extent to which these and other human needs
are fulfilled lead to higher levels of commitment, initiative and performance. Organizations,
who include an emphasis on fulfilling the needs of their employees to some extent, will enjoy
a more productive and stable workforce.
WORK CLIMATE AND EMPLOYEES PERFORMANCE
Work climate is the “weather of the workplace.” Just as the weather can affect daily activities,
the work climate influences employee behavior. Every organization has a work climate. Within
an organization, the climate of an individual work group may differ from the prevailing
organizational climate. High-performing work groups can operate well even in organizations
that are troubled by declining funding, weak senior leadership, or similar problems.

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Work-group climate in
 A positive work climate leads to and sustains employee motivation, high
performance, and better results in health care.
 Good leadership and management practices contribute to a positive work climate
Influences results. A positive work group climate motivates employees to improve
their performance by going above and beyond job expectations. Better performing
work groups contribute to better organizational performance, which in turn leads to
better results. In the health sector a good work-group climate leads to improved
service delivery and thus to better health outcomes
Good Leadership and Management
How managers perform is crucial to organizational out comes. Work-group climate itself is
an intermediate outcome of effective leadership and work-group climate can be attributed to
differences in day-to-day practices of the people who manage the work group. Organizational
practices that managers can influence, such as the design of tasks and jobs, reward systems,
policies and procedures, and strategy, can also have a large impact. To influence a work
group’s climate, managers need to:
 Understand the three key dimensions of work climate;
 Assess the climate of their work group; and
Take action to improve their work group’s climate
Three Key Dimensions of Work Climate
Clarity. An environment provides clarity when the group knows its roles and responsibilities
within the overall organization.

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Support. In a supportive environment, staff members feel that they have the resources and
backing they need to achieve the work group’s goals.
Challenge. An environment of challenge offers group member’s opportunities to stretch their
abilities, take reasonable risks in solving problems, and discover new ways of working to
become more effective.
GOALS AND ORGANIZATION
When individuals establish agreements among them selves to achieve a common goal, an
association is born. One or several groups of individuals is then vested with the
responsibility for implementing the agreements. These groups are the executive bodies of
the found.
While the term "association" is linked to the desire of a group of individuals to act in
common, the term institution originates generally from the desire of the government to
achieve a certain goal. In many instances the government delegates authority to a group
of individuals with the responsibility of achieving this goal. The way in which this group
of individuals organize themselves to pursue the goal constitutes the new institute.
Though the above illustrates some distinctions between the terms "institution" and
"association", the difference is far from clear. Some authors, such as Hutchins (1952),
use the term "institution" for any kind of social organization. However, in the present
paper the term "institution" is used mainly in relation to government concerns, and
"association" in connection with farmers' groups.

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The term organization is perhaps the most complex of all and is used with a variety of
meanings. It is used here in a generic sense as the design of any kind of social arrangements
between individuals - regardless of whether they are farmers or government officials - to
achieve a goal or set of goals. Therefore the term is used recurrently in this text to define any
kind of association, institution or possible combination of these.
Lit win and Stringer (1968) measured climate by asking organization members to respond
to questionnaire items pertaining to nine categories. Perceptions and feelings are obviously
interrelated, perceptions give rise to feelings and feelings affect perceptions. The nine
categories are
Structure:
The feeling that employees have about the constraints in he group, how many rules,
regulations, procedures there are, is there an emphasis on red tape and going through
channels, or is there a loose and informal atmosphere?
Responsibility:
The feeling of being your own boss, not having to double-check all the decisions, when you
have a job to do, knowing that it is your job.
Reward:
The feeling of being rewarded for a job done, emphasizing rewards rather than punishments,
the perceived fairness of the pay and promotion policies.
Risk:
The sense of riskiness and challenge in the job and in the organization is there an emphasis
on taking calculated risks or it safe is the best way to operate.
Warmth:
The feeling of general good fellowship that prevails in the work group atmosphere, the
emphasis on being well liked, the prevalence of friendly and informal social groups.

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Support: The perceived helpfulness of the mangers and other employees in the group,
emphasis on mutual support from above and below.
Standards:
The perceived importance of implicit and explicit goals and performance standards, the
emphasis on doing a good job, the challenge represented.
Conflict:
The feeling that managers and other workers want to hear different opinions, the emphasis
placed on getting problems out in the open, rather than smoothing them over or ignoring
them.
Identity:
The feeling that you belong to a company and you are a valuable member of a working team,
the importance placed on this kind of spirit
How Can One Assess an Organization’s Climate?
It is generally agreed that assessment of an organization’s climate is a relatively
straightforward process, especially when compared to the methodologies needed to assess the
organization’s culture. As climate is defined as individuals’ perceptions, quantitative survey
instruments have become the most widely accepted means of gathering and analyzing
organizational climate.
It is at this stage that organizational climate, and specifically motivation, may assume a
significant role. If the climate is healthy and positive in relation to the change(s),
implementation is facilitated. If the climate is dysfunctional or negative regarding the
change(s), motivation must be improved before it is likely that implementation and
institutionalization will be successful.

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COMMUNICATION
Communication fosters motivation by clarifying to employees what is to be done how well
they are doing, and what can be done to improve performance if its subpar. We saw this
operating in our review of goal setting and reinforcement .the information of specific goals
feed back on progress toward the goals and reinforcement of desired behavior all stimulate
motivation and require communication.
The finial function that communication performs relates to its facilitating decision-making. It
provides the information that individual and groups need to make decisions by transmitting
the data to identify and evaluate alternative choices.
Professional Interaction refers to acceptance and support from others, with involvement,
sharing, good communication and help when needed.
Work groups that demonstrated a high rating for professional interaction reported a range of
the following behaviors.
Formal and informal systems are in place to enhance communication between units. Rotate
responsibility for staff to sit in on the team meetings of other workgroups to provide
information to them about the work of their group. Report back at team meetings on the
activities of the other groups
Opportunities are provided for all team members Participating in a project to see the finished
products Work based personal development activities are included as part of professional
growth and development activities the focus is on team performance, not on individual
competitiveness the work group task and relational problems are collectively solved
DECESION MAKING

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Participative Decision Making refers to the perception that staff are asked to participate in
decisions and given opportunities to express their views.
Work groups that demonstrated a high rating on Participative Decision Making reported a
range of the following behaviors. Staff understand the strategic context in which their work
group and department operate so that they can make congruent decisions access to relevant
information needed to make decisions is readily available
Staff have a say over who comes into the team by involving them in the selection process and
allowing them to take turns on selection panels opportunities for staff to work in cross-
functional teams are promoted staff are involved in decisions which affect them so that they
have ownership of decisions. This does not mean endless consultation but rather working to
an agreed decision making framework staff can make and are supported in decisions relevant
to their responsibilities.
They have job related responsibilities and should be given accountability for these a means
for staff to access information or attend other forums is provided staff are kept up to date on
changes to policy and practices decisions are really participative and not made by only a few
of the same people in the work group staff suggestions are acknowledged and they are
thanked for their input the reasons for important decisions in which they have not been
involved are explained to them there are formal review processes for projects, procedures
and decisions so that the work group can discuss what worked and what they would do
differently next time a bias for action is promoted and decisions relevant to getting their job
done are made in a timely way a positive work environment is promoted where people are
genuinely encouraged to make decisions and ask questions to get information necessary to
making a decision.
GOALS

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Goal Congruence refers to the perception that personal goals are in agreement with
workplace goals that are clearly stated and understood.
Work groups that demonstrated a high rating on Goal Congruence reported a range of the
following behaviours staff know the values of the organisation and see these modelled in the
behaviours of the management team business planning processes are transparent and
participative and align with departmental objectives the business planning process clearly
articulates how the work group will contribute to departmental goals and values information
about key decisions is shared team based performance plans are linked to unit and
department plans use of information services such as the departmental intranet is
encouraged.
LEADERSHIP
The ability to influence a group toward the achievement of goals.
Leader behavior can be categorize into four viz:
1. Supportive leadership behavior gives consideration to the needs of subordinate’s
shows a concern for their well-being and creates a pleasant organizational climate. It
has the greatest impact on subordinates performance when they frustrated and
dissatisfied.
2. Participative leadership allows subordinates to influence the decisions of their
superiors and can result in increased motivation.
3. Instrumental leadership gives subordinates rather specific guidance and clarifies what
is expected of them.

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4. Achievement oriented leadership involves setting challenging goals, seeking
improvement of performance, and having confidence that subordinates will achieve
high goals.
OBJECTIVES OF THE STUDY
 To study the social profile of the employees at ARS Metals Pvt. Limited.
 To study crucial factors such as communication, leadership, motivation, decision
making &goals accomplishments at ARS Metals Pvt. Limited.
 To study the satisfaction level of the welfare measures at ARS Metals Pvt. Limited.
 To suggest the measures to improve organization climate at ARS Metals Pvt. Limited.

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Methodology
Pilot Study
The researcher at the initial phase of the study conducted a pilot study ARS Metals Pvt
Limited, whereby he was able to glean knowledge about the chosen area of study. The pilot
study was very instrumental in obliging the researcher with a very clear understanding of the
field.
Research Design
The Researcher will adopt exploratory research design; the purpose being a more precise
investigation and to develop a working hypothesis from an operational point of view and also
to explore possible new avenues in the chosen area of study.
Sampling Method
The Researcher will adopt snow ball sampling technique. The snow ball sampling technique
relates the set of procedures by the initial respondents who are selected by probability method
and there in after additional respondents are obtained on the basis of information provided by
them. This technique is used to identify elements of rare population by referrals.

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The main reason behind the researcher choosing this design is that most of the respondents
are in different places. With the help of referral researcher can identify the respondents and
collect data with considerable ease.
SNOW BALL SAMPLING is a technique for developing research sample where existing
study subjects recruit subjects from among their acquaintances. Thus the sampling group
appears to grow like a rolling snow ball. This sampling technique is often used in hidden
populations which are difficult for the researcher to access, because sample members are not
selected from a sampling frame, snow ball samples are subject to numerous biases. For
insistence people who have many friends are more likely to be recruited into the sample.
Tool of Data Collection
A questionnaire facilitates easy response when the sample size is huge. It also facilitates in
collection of data in a short span of time. Moreover, the respondents may not be in a position
to reveal the subject with ease in an interview schedule; therefore, a questionnaire was used
as a tool to collect the data. The questions were in the form of statements.
Sources of Data Collection
Primary Source of Data
The primary sources of data are that, which are collected afresh for the first time and thus
happens to be original in character. The primary source of data collection were, information
obtained from respondents through a structured questionnaire.
Secondary Sources of Data
The Secondary sources of data collection were information obtained from books, journals,
articles, magazines, websites and contacts with resource persons.

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Pre testing
A pre test of the questionnaire was carried out among 10 staffs at ARS Metals Pvt. Limited.
The pre test helped the researcher gain more confidence and knowledge on the research
subject and enabled easy proceeding.
Limitations of the Study
The following are the limitations of the study.
1. The study is limited only to ARS Metals Pvt. Limited.
2. The results of the study cannot be generalized with any other organization.
Chapterisation
The whole study for analysis would be split into the following chapters:
Chapter 1
This chapter starts with a brief introduction of the topic then explains the statement of the
problem, need, importance, objectives and limitations. It also focuses on the methodology to
be adopted by the researcher for the study.
Chapter 2
This chapter contains various studies and articles done previously on the topic.
Chapter 3
This chapter would contain the analysis and interpretation of the data collected from the
respondents. The researcher would be using MS Office for analysis and would represent it
through various pictures, tables, graphs and charts.

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Chapter 4
This chapter would contain the main findings inferred from the data collected and also the
suggestions of the researcher based on the findings.
Chapter 5
This chapter would conclude the study with the researcher giving suitable inference from the
study.

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CHAPTER II
ORGANISATIONAL PROFILE
ARS Metals Pvt. Ltd manufactures 'ARS Power TMT' re-bars with international acceptance
in an integrated steel mill. The company is one of the largest and advanced integrated steels
mills in Southern India, with an annual production capacity of 128000 MTPA. The company
has good distribution network in South India.
The superior 'ARS Power TMT' re-bars are produced with TEMPCORE technology in a large
speed mill. The TMT re-bars are earthquake proof owing to shock absorbing properties,
corrosion resistant and superior weldability. The sophisticated infrastructure facilities for R &
D and quality control help the company to produce the best quality at low-cost. The quality is
certified by Indian Institute of Technology, Chennai.
The general particulars of the company are as follows:
Name ARS Metals Pvt Limited
Incorporation Date 19.09.1990
Constitution Private Limited Company
Registered Office D 109, 2nd Floor, L.B.R. Complex, Anna Nagar East, Chennai–600 102.
Steel Division B.1/S, SIPCOT Industrial Complex, Gummidipoondi–601 201.
Power Division Survey No.207 Equvarpalayam Village Gumminipoondi Chennai-601212.

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ARS Metals Pvt Ltd (formerly known as ARS Metals Limited) was originally incorporated
on 19th September 1990. Mr. Ashwani Kumar Bhatia and his son Mr. Rajesh Bhatia are the
Promoter Directors of the Company.
The Company entered into manufacturing of MS Ingots at Gummidipoondi, Tamilnadu in the
year 1992. In 2003, knowing the widespread acceptance from the steel bar manufactures
throughout south India, the company started its own automatic rolling mill. The forward
integration was done with a capacity of 108000 MTs of rolled products per annum with latest
technology and well equipped infrastructure. Subsequently the ingot casting capacity was
also expanded. The Company is functioning as an integrated steel mill.
The Company, in 2009, increased the capacity of Billets making by installing a new furnace
with a capacity of 100800 MTPA. The capacity of MS Ingots/Billets thus increased to
145800 MTPA. Also, Company has converted the Ingot Making facility into Billet making
with continuous casting machine. The capacity of finished goods has increased from 45000
MT to 57600 MTs per annum. Also it has increased the capacity of its Rolling Mill by 20000
MTs to 128000 MTs.
ARS Metals Pvt Ltd. is an ISO 9002 certified company, one of the largest single integrated
mill and quality conscious companies of Southern India.
The Company has already commenced the 60 MW Captive Power Plant since August 2013.
As part of future expansion, the Company plans to set up higher capacity Power Plant to be
part of building a nation with self sufficiency in power generation.

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The Credit facilities of the company have been rated by ICRA as on March, 2013. The
Company has been assigned BB (STABLE) for its long term facilities and A4 (STABLE) for
its short term facilities.

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CHAPTER III
REVIEW OF LITERATURE
Organisational climate is about the perceptions of the climate AND about absolute
measures. Climate, as a metaphor is helpful - e.g. temperature is a measurable element of
geographic climate, but it is not the absolute temperature that matters as much as human
perception of it (is it cold, hot, or comfortable?). It is only after knowing what temperature
means in terms of human comfort, that measurement of temperature becomes
useful. Complicating perception is the probability that what may be too cool for one person
may be too warm for another and just right for someone else. Similarly for organisations, the
‘climate’ may be regarded in absolute terms and measured by instruments, but is ‘felt’
differently by individuals. The absolute climate may suit one person and not another. “What
it’s like to work here” or ‘How I feel when I work here”.
Climate is worthwhile to understand and measure because there are organisational and human
benefits a ‘good’ climate, and powerful disadvantages of many kinds of bad climate

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‘Bad’ Climate has been linked
to:
• Turnover
• Stress
• Sickness
• Poor performance
• Error rate
• Wastage
• Accidents
and to bad behaviours such as:
• Sabotage
• Absenteeism
• Go-slow
• Bullying
‘Good’ Climate has been linked to
desirable outcomes such as:
• Job satisfaction
• Confidence in management
• Affective commitment
• Intention to quit
• Emotional Exhaustion
• Faith in Organisational
• Performance
and to desirable behaviours such as:
• risk-taking (strategic),
• departure from the status quo,
• open communication,
• trust,
• operational freedom, and
• employee development -

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A key point to make is that a ‘good’ climate is not just one that keeps people comfortable, but
one that is strategically advantageous to the organisation while simultaneously bringing out
the best in its members because they are in a motivational climate.
Bad - climate ‘of’
• fear,
• crisis,
• anxiety,
• workplace aggression,
• employee and executive burnout,
• employee turnover,
• politicking,
• decay,
• hopelessness,
• stagnation
Good - climate ‘of’
• respect,
• support.
• entrepreneurialism,
• innovation,
• cooperation,
• performance,
• profitable management practices,
• knowledge management,
• organisational learning
• employee readiness to change,
• collective learning,
• openness
Measuring climate
Measurement of climate seeks to identify the components of both bad and good climate, both
in absolute terms and perceptual terms. While there are commercial instruments that measure
climate, there are powerful arguments for having one tailor-made to the organisation, and that
changes as the organisation changes. Generally, the areas of interect to measure are:
• External environment - organisational interface with it
• Organisational leadership / mission

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• Organisational structure / systems
• Organisation and you
• Management practices
• Working - co-workers / teams / supervisor
• Self - at work - your role, development, opportunities, motivation, commitment, stress
Self - outside work - how work affects your life (good/bad) - vice-versa
Strategic Climate Planning & Alignment
Although organisational activities are theoretically conducted in an emotionless manner, and
strategic plans are highly mechanistic in nature, there are at least two occurrences of 'below
the line' interactions that need acknowledgement. Firstly, humans are doing the strategic
planning, so feelings and emotions are an unavoidable (even if denied) and integral part of all
group conversations . The climate that is 'felt' by participating executives will influence their
behaviour during that conversation. In other words, climate influences strategic conversation.
Secondly and conversely, the strategic decisions affect feelings and emotions of employees
impacted by the decisions and thus influence the perceptual climate. So strategic conversation
influences climate. Unfortunately, acknowledgement of that bi-directional interaction is
absent from literature on strategic planning. This is in spite of recognition that much of what
really goes on in an organisation takes place below the surface of daily behaviours, displayed
in the form of conflicts, defensive behaviour, tensions and anxiety .
Climate and strategic planning
Before organisation-wide strategic thinking and conversation can occur, employees must
'feel' they are in a safe climate that encourages their understanding of , and involvement in,
strategic conversation . It is even intuitively reasonable to expect a different climate report

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from within an organisation that merely 'permits' strategic thinking, to one that proactively
encourages it from within a climate of psychological safety. In support of this approach is
empirical evidence that climate and culture do indeed impact strategic thinking (Harris cited
in . This line of argument provides support for the possibility of using climate planning
intelligently - strategically - as a way to move strategic conversation throughout the
organisation. The same argument supports acknowledging human behaviour within the
resultant strategic plan - that is, the plan should acknowledge that it is dealing with humans.
In summary, the links between strategic plans and emotions can be demonstrated in three
ways. First there is the emotional involvement of participants to the process of developing
strategic plans . Secondly, every strategic plan impacts people, and therefore their climate.
The need to adjust plans to accommodate adverse impact on climate brings us to the need to
deliberately set out to influence climate. It is akin to a 'climate impact study' for strategic
plans. Finally, the previous two points prompt the suggestion that every strategic plan should
acknowledge and account for climatic impact, and prepare the climate as necessary. A
specific sub-strategy should conceivably be designed solely with emotional or climate goals.
The strategic value of having a particular type of climate for the organisation in question may
range from reducing turnover and absenteeism to enhancing organisational learning.
Strategic climate planning and alignment (the subject of current research & development
work by the author) therefore refers to an organisational system whereby the strategies that
result from scenario planning are considered in the light of ‘what kind of organisational
climate do we need?' for the various scenarios. The design of organisational climate should
address both external and internal environments. This question about climate then drives a
new round of discussions by a similar spread of stakeholders to plan the climate that should
suit the scenarios and resultant strategies. It’s about learning how to adapt organisation

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climate to suit the current business climate. More importantly though, it is about learning how
to create an organisational system that manages organisational climate - so that organisational
climate can easily, quickly and painlessly align with the next business climate.
Climate and strategy
Some people describe organisations in terms of warfare (objectives, goals), and
organisational processes in warlike terminology (strategic planning, tactics). Others, who
don't like the idea of having to go to war every day, prefer other more familial or paternal
analogies.
However, there is no avoiding the existence of competition between and within organisations,
and that humans love competition - judging by the strong support for sporting
activities. Humans also love challenge, judging by the recreational activities we
choose. Interestingly, sporting groups also use the same war-like terminology - strategies and
tactics.
Perhaps, then, we can learn something by looking at military cases. For example, if a group
of men is sent into the bush, what will happen?
Did you just make an assumption? In your mind's eye were they fully trained military
combat personnel on a mission.
In fact, based on information you were given (a group of men is sent into the bush), not much
of any value will happen. Outcomes might improve if they have goals - at least they will
know why they are going. If they also have a plan, then it is more likely that the desired
outcome will be delivered. It is even better if it is a strategic plan, with matching tactics and
appropriate skills and abilities.

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• Stratagem: artifice, trick(ery), device(s) for deceiving enemy.
• Strategic: Of, dictated by, serving the ends of, strategy; designed to disorganise the
enemy's internal economy & to destroy morale.
• Strategy: Generalship, the art of war; management of an army in a campaign, art of so
moving or disposing of troops, ships or aircraft as to impose upon the enemy the place
& time & conditions for fighting preferred by oneself.
• Tactical: adroitly planning or planned in support of strategic operations.
• Tactics: art if disposing forces in actual contact with enemy, procedure calculated to
gain some end, skilful device(s).
Let's examine this more closely. Consider two combat groups about to be sent into an
aggressively hostile zone. One group is poorly trained, poorly prepared, and has vague
goals. The other fully trained elite group has goals, objectives, strategies, contingencies and
tactics all worked out.
• What will the climate be like within each group?
• Which group would you rather belong to?
• How does fear influence motivation?
• What about skills, and the clarity of how skills (group capability) match task (required
capability)?
One can understand fear in a military engagement.
• What has been learned here about climate?
• What could the army do to create the most beneficial group climate?
If climate is about my perception - the way I feel about being here, what is felt at the
indicidual level? To help explore this, consider two individuals in three situations. First they

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are combatants in national championships for martial arts, with high chance of pain or injury,
but each looking forward to the experience - nervous, some fear, but wouldn't miss it. Now
they're together and facing a mountain. Person A sees all the places you can fall from. Person
B sees all the handholds and footholds and assesses the various tracks for reaching the
top. Now, put them on the beach looking at white-caps and rough water with high
wind. Person A grins while preparing the windsurfer, and B can't imagine anything more
frightening. The different approaches to situations may be due to skills and abilities, and also
due in some way to a personal characteristic to see the challenge and excitement rather than
the danger and fear. Increasing stimulus increases excitement - to a point - then it becomes
increasing stress. A little bit of fear can be exhilarating. But there is a point beyond which the
challenge is terrifying, and that point varies between individuals, and between situations. The
fact that someone may have a low fear threshold for X does not mean a low threshold for Y.
However, you can hardly have a one-person climate. But imagine a group of A's versus a
group of B's at the mountain - then you have group climates. It also suggests how any one
person contributes to group climate. The B people do not want any A's spoiling their group
atmosphere, and vice versa. In other words, climate is of interest at personal, group, and
organisational levels-
So climate is personal, and personal behaviours influence it, just as climate influences
personal behaviour. It's a strong two-way relationship. So let's apply this to organisations and
continue with the component - fear.
We don't often think about fear as an issue in organisations, yet climate instruments
consistently detect fear, or variables related to fear, among respondents. There are many
things to fear in an organisation. Ask.

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• Assuming there is fear, what does that do for the climate?
• How does that climate impact motivation?
• What will that do to efforts by members to deliver high performance aimed at
corporate goals and strategies?
We have already suggested the importance to climate of having clear strategies, so are there
clear goals and strategies in your organisation?
By contrast, what chance for success is there for the organisation with opaque goals and a
climate of fear or uncertainty?
So let's assume that your organisation has clear goals and strategies. What happens now?
If the organisation just rambles on as always, reactive and putting out fires while responding
to ideas and whims, then having goals and strategies means nothing, and the climate will be
one of confusion and lack of commitment. How can any member commit to an organisation
that either doesn't know where it is going, or doesn’t follow its own map?
In having goals and strategies, it is as important to stop doing non-strategic acts as it is to
start doing strategic ones. Too often, organisations spend resources on a project that was
someone's idea, but it was never properly assessed for its strategic relevance, risks, or
opportunity costs of time consumed. The people on that project know they are working on
something that is merely a pet issue, and not really important in the scheme of things. How
do they feel? What are they learning about the organisation? How important a contribution do
they feel they make? Do they feel good at the end of the day? What sort of climate are they
‘feeling’?

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Ideally, the organisation has a hierarchy of projects, all properly assessed for strategic
importance and proportional resource demand. Assuming the organisation can do only so
much, what are the criteria for starting or stopping a project? What provisions are there for
compensating the greater psychological difficulty we have to exit a project than to start
one? How does the organisation deal with the many vested but unimportant interests – when
egos become more important than the organisation's goals? From those questions:
• How can an organisation protect people from feeling devalued - because they know
they are wasting time on an unimportant project?
• How can an organisation stop a project, while protecting the ego of those whose
future ideas may be withheld if they are psychologically hurt as ideas fail to perform
well enough or lose relevancy?
These are climate issues because they impact climate.
• What is the policy for outsourcing, and what internal resources are needed to
administer any outsourced activity? This is another climate issue.
Clear procedures help clarify climate variables. Unclear procedures introduce climate 'noise' -
climate movements with unclear origins, and variations between silos that interpret policies
differently.
In other words - strategy and climate interconnect strongly.
CLIMATE DIMENSIONS OF A MANUFACTURING COMPANY-A CASE STUDY
Universiti Kebangsaan Malaysia RAJA AZIMAH RAJA OMAR AINUDDIN, JUNE POON
MEAW LING

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ABSTRACT
The objective of this study was to determine the variables that constitute the organizational
climate construct of a large manufacturing company in ShahAlam. Data were obtained from a
pilot study on organizational climate, motivation, job performance, and job satisfaction.
Using the facto analysis procedure, nine climate dimensions were obtained namely, risk and
conflict, reward, autonomy, identity, cooperation, support, rules orientation, clarity of
structure, and performance standards.Identification of these climate dimension will enable
further studies on the relationships between organizational climate and motivation, job
performance, and job satisfaction.
INTRODUCTION
Organizational climate is a concept in organizational behavior that has generated much
interest
as well as controversy among researchers. Despite the controversy, there is a widespread
agreement that organizations should strive hard to establish the right climate to achieve
organizational effectiveness. Toward that end, organizations must first determine what are
the variables that constitute the climate construct. It is therefore the purpose of this study to
identify the climate dimensions of a large manufacturing company in Malaysia. Further
research related to the climate of manufacturing companies car utilize these dimensions to
determine the type of climate: either authoritarian, affiliative, achievement-oriented or
employee-centered. Relationships between climate and organizational effectiveness can also
be examined to determine whether the existing climate is conducive to jot performance, job

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satisfaction, and employee motivation. Studies by Litwin and Stringer (1968), Pritchard and
Karasick (1973), Lawler, Hall and Oldham (1974), Downey, Hellriegel and Slocum (1975),
and Muchinsky
(1977) clearly indicate that organizational climate is related to measures of organizational
effectiveness such as job performance and satisfaction.
LITERATURE REVIEW
The term organizational climate has been defined in many ways. Forehand and Gilmer (1964)
refer climate as a set of characteristics that (i) describe and distinguish an organization from
other organizations, (ii) are relatively enduring over time, and (iii) influence the behavior of
people in the organization. Litwin and Stringer (1968), on the other hand, view climate as a
set of measurable properties of the work environment perceived by the people in it, and is
therefore assumed to influence behavior.
In a synthesis of various definitions, Pritchard and Karasick (1973) define climate as (i) a
relatively enduring quality of an organization's internal environment which distinguishes it
from other organizations, (ii) which results from the behavior and policies of members of the
organization, (iii) is perceived by members of the organization, and (iv) acts as a source of
pressure for directing activity. Steers (1977), in his study on organizational effectiveness,
refers organizational climate as the perceived properties or characteristics found in the work
environment that result largely from actions taken consciously or unconsciously by an
organization and that presumably affect subsequent behavior. Since organizational climate
deals with inter-perceptions of employees toward their own organization, different
organizations with different practices and procedures will therefore have different climate
construct.

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There is a general disagreement among researchers on what actually constitutes the climate
construct. Litwin and Stringer (1968) identified nine a priori climate dimensions (structure,
responsibility, reward, risk, warmth, support, standards, conflict, and identity). Using the
climate questionnaire developed by Litwin and Stringer based on these nine a priori scales,
LaFollete and Sims (1975) identified six factors or dimensions that constitute climate,
namely, affective tone toward people, affective tone toward management, policy and
promotion clarity, job pressure and standards, openness of upward communication, and risk
in decision making. Muchinsky (1976) who used a similar climate questionnaire also
identified six factors which he called interpersonal milieu, standards, general effective tone
toward management, organizational structure and procedure, responsibility, and
organizational identification. Other attempts to generate climate constructs including those of
Payne and Pheysey (1971), Pritchard and Karasick (1973), and Joyce and Slocum (1984)
yielded two, eleven and six climate factors respectively.
Although there was a diversity in the number of climate dimensions, Campbell, Dunnette,
Lawler and Weick (1970) identified four factors that appeared to be common to most climate
studies. The factors were individual autonomy, degree of structure imposed upon the
position, reward orientation, and consideration, warmth and support. While some factors
seem to be common across those climate studies, some factors appear to be specific to certain
studies only, and others tend to have fuzzy inter-study relationships (Muchinsky 1976).
It is also difficult to identify several core dimensions relevant to heterogeneous organization
because of the diversity of environments that have been studied (for example business
organizations R&D laboratories, elementary schools, and government agencies).

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Furthermore, as noted by Sims and LaFollette (1975) and concurred by Muchinsky (1976),
current climate questionnaires are a long way from manifesting consistent reliability and
validity as found in the Job Descriptive Index. In view of this, Muchinsky (1976) suggested
that factor analysis of a
climate questionnaire be routinely employed to determine the climate construct, particularly
for
organizations that have no been examined before. Using a modified version of the Litwin and
Stringer's climate questionnaire the present study attempts to establish the climate dimensions
of a manufacturing company.
METHOD
Sample
The respondents in this study were 74 employees of a large manufacturing company located
in Shah Alam. Seventy-six percent of the respondents were production operators while the
rest were assistant managers (12%), support personnel (8%), and team leaders (4%). All of
them had at least a secondary school education and 92% of them were between 20 to 30 years
of age. About 70% of them have been with the company for 2 to 3 years drawing a median
salary of $478 per month. The data collected in this study were actually part of a university
sponsored research project on organizational climate, motivation, job satisfaction, and job
performance.
Procedure

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The respondents were assembled in a training room made available by the organization. They
were informed of the nature and purpose of the study, the general background of the research,
and the confidentiality of their responses.
Each respondent was requested to complete a 247-item questionnaire, of which, 31 were
modified items of the Litwin and Stringer questionnaire (Form B) employed to measure
climate. Very slight modifications were made on the climate questions to fit the company's
environment. A 3-point Likert type scale ranging from "disagree" to "agree" was utilized. The
questionnaire required approximately an hour to complete.
Analysis
The subscription FACTOR from the Statistical Package for the Social Sciences (SPSS) (Nie,
Bent, and Hull 1970 was used to identify the factor structure which was most representative
of the data from the organizational climate questionnaire. Identical statistical analyses were
also employed by LaFollette and Sims (1975) and Muchinsky (1976). The 31 items that
measure climate were factor analysed via principal component analysis and only components
with eigenvalues 1.0 or greater were retained to be rotated by the varimax procedure.
Resultant factors with high loadings were then submitted to reliability examinations using the
SPSS subprogram
RELIABILITY. For items under each resultant factor category, a distribution of responses by
scale of agreement were also generated.
RESULTS AND DISCUSSION

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After examining the resultant factor structures, it was determined that the factors which best
represented the data from the questionnaire were that of the nine factor varimax rotation as
shown in Table 1. The nine climate factors together accounted for more than 74% of the total
variance. Items representing each factor was selected by retaining only those with a loading
of .40 or more on that particular factor and low loadings on all other factors. The resulting
climate factors from this study are:
Factor l: Risk and Conflict.
This factor refers to the employees' perceptions with regard to the company's emphasis on
risk-taking or risk avoidance, and the emphasis placed on encouraging differing opinions
from employees. It also indicates the employees' perceptions on management's outlook on
open arguments and disagreements.
Factor II: Reward.
This factor identifies the employees' feeling of being adequately and fairly rewarded. This
includes pay comparisons among peers and with employees of companies within the same
industry, employees' benefits, and recognition provided by the company.
Factor III: Autonomy.
This factor identifies the employees' feeling toward management's attitude related to
employees'
participation in making decisions pertaining to work objectives, procedures and standards.
Factor IV: Identity

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This is an indicator related to the employees' feeling of pride and loyalty toward the
company. It
includes their perceptions on the company's interest on employees' welfare.
Factor V: Cooperation.
This factor describes the feeling that organization members work together as a team.
Specifically, it refers to the extent of cooperation among employees and cooperation between
employees and their superiors.
Factor VI: Support.
This factor identifies the perceived degree of helpfulness of supervisors and peers in job-
related
matters. It also refers to the perceived level of performance standards set by the company.
Low
performance standards can be inferred as an indication of support and vice-versa. Factor Vll:
Rules Orientation.
This factor refers to the extent to which employees perceived the emphasis placed by
management on formal rules, regulations, and red tape.
Factor VIII: Clarity of Structure.
This factor identifies the degree to which employees perceive that company policies and
responsibilities are well-defined by management. It also indicates the employees'
understanding toward the formal structure of the company.
Factor IX: Performance Standards.
This factor refers to the perceived goal difficulty and pressure for performance, that is, the

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importance of doing a good job.
Table 2 gives the internal consistency reliabilities (Spearman-Brown estimates) of the climate
factors. The reliabilities, which range from 0.53 to 0.91, are considered sufficient for an
exploratory research of this nature (Guilford 1954).
Percentage distributions of responses by scale of agreement for items under each climate
factor are given in Table 3. The general perception of the employees on risk and conflict was
that management was seen to be a risk-taker and encouraged differing opinions from
employees. This was evidenced from the distribution of responses which indicated that more
than 50% of the employees perceived that open arguments and disagreements were
acceptable by management.
In relation to risk-taking and risk-avoidance, about 82% of the employees perceived that they
were given the full responsibility to do their work well and about 57% of them also perceived
that they were allowed to set their own standards of performance. About 63% of the
employees believed that the company was willing to take risks in order to be ahead of the
competition. However, more than 83% of them indicated that they were inclined to perceive
that management were rather cautious in making decisions.
On reward, it is apparent that the employees were not happy with the amount of pay they
received. Distribution of responses (refer Table 3) indicated that more than 50% of the
employees perceived that they were not fairly rewarded, not only when compared with
employees from other companies, but also among fellow-workers doing the same job. On the
contrary, more than 53% of the employees were inclined to perceive that employee benefits
provided by the company was good compared to other companies and more than 68% were

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inclined to believe that the company gave enough recognition to those who did their work
well.
Related to autonomy, Table 3 indicated that more than 50% of the employees perceived that
job
objectives and the various tasks associated in achieving the objectives were determined solely
by management. Apparently, the employees perceived that they do not have autonomy in
goal set ting and in determining the appropriate task. This could be because the production
process in the company under study was mostly automated. However, a total of 55% of the
employees were inclined to perceive that they could set their own production standards.
In relation to identity, the distribution of responses showed that the majority of the employees
were inclined toward associating themselves with the company, as shown in Table 3. They
indicated the feeling of loyalty and pride of belonging to the company. Only less than 21%
perceived otherwise. They also perceived that the company cared about the employees and
that they could seek assistance from their superiors when they were on a difficult task. Only
about 35% of them perceived that the company did not care about the employees and only
6.8% perceived that they could not get assistance from their superiors .
With regard to cooperation, a majority of the employees (refer Table 3) perceived that
cooperation prevailed in the company; there was cooperation among employees, and between
employees and their superiors. Only less than 12% of the responses indicated that such
cooperation did not exist. On the support factor, only less than 3% of the employees believed
that they could not seek assistance and support from co-workers when they were on a
difficult assignment (see Table 3). However, more than 80% of them were inclined to
believed that the performance standards set by the company were rather high. Although the

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employees might perceive that the company was not supportive, they believed that they could
always count on their co-workers for assistance and support to enable them to achieve the
high standards.
As shown in Table 3, the distribution of responses indicated that only 11% of the employees
perceived that management did not place heavy emphasis on formal rules and regulations. In
fact, a majority of the employees (about 73%) perceived that the company had too many rules
and regulations imposed on them. From the clarity of structure factor, it is quite, apparent that
the employees were not very clear on the formal authority of the company. As indicated in
Table 3, the distribution of responses revealed that more than 46% of the employees
perceived that they were clear on their company's policies while only 38% indicated that they
were clear on who had the formal authority in decision making.
Related to performance standards, the distribution of responses (refer Table 3) indicated that
more than 60% of the employees perceived that they were required to achieve goals set by the
company, which they considered realistic and achievable. However, they also felt that in
order to achieve the set goals, their maximum effort would be required.
CONCLUSION
This study has focused mainly upon the dimensions of organizational climate of a
manufacturing company whereby nine variables were identified to constitute the climate
construct. The variables were risk and conflict, reward, autonomy, identity, cooperation,
support, rules orientation, clarity of structure, and performance standards. Since the climate
dimensions of this study were obtained based on employees' perceptions in a particular
manufacturing company, generalizations of results of this study or other manufacturing
companies must be made with caution. Not only was the study based on employees'

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subjective beliefs that may differ from objective reality but the analysis was made on a
limited sample of employees at the company.
In spite of these limitations, some noteworthy findings for further research, particularly on
organizational climate were obtained. Based on the climate dimensions identified in the
study, further analysis can be undertaken to determine the type of climate that prevails in the
company. The effect of the existing climate on organizational effectiveness such as job
performance, job satisfaction, and employee motivation can also be examined. Consequently,
appropriate measures can be undertaken to improve certain aspects of the climate dimensions
if the present climate is found to be not conducive to organizational effectiveness.
The present study also revealed that the employees perceived unfavorably the company's
reward system and rules orientation. Apparently, the employees perceived that they were not
adequately and fairly rewarded compared to employee's of other companies in the same
industry, that there was major emphasis on rules and regulations, and that there were too
many of such rules and regulations in the company. Perhaps the company could reflect on its
current rules orientation and reward system in order to detect any discrepancies that could
lead to employee dissatis
APPENDIX The 31-item Measure of Organizational Climate
Items Number Items
1. I am given full responsibility to do my work well
2. Management is always cautious in making any decision
3. Employees here are encouraged to speak their minds even if it means disagreeing with
their

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superiors
4. Management prefers to be cautious so as to be safe
5. This company is willing to take some risks to keep ahead of the competition
6. The best way to make a good impression around here is to steer clear of open arguments
and
disagreements
7.I am allowed to set my own performance standards
8. My boss lets me make my own decisions regarding my work
9. My pay is fair compared to fellow workers doing the same job
10. The pay here is higher than in other companies
11. My pay is fair compared to what other companies are paying for the same job
12. Compared to other companies, employee benefits here are good
13. This company gives enough recognition to those who do their work well
14. There is a lot of warmth in the relationship between management and workers
15. Our job objectives are set by management
16. All our tasks are set by management
17. Employees have set their own production standards
18. Employees here are loyal to the company
19. I am proud of belonging to this company
20. This company is really interested in the welfare of its employees
21. When I am on a difficult assignment I can usually count on getting assistance from my
boss
22. There is cooperation among employees here
23. There is cooperation between employees and their superiors
24. When I am on a difficult assignment I can usually count on getting assistance from my

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co-workers
25. This company sets high performance standards
26. Formal rules and regulations are given a lot of emphasis by top management
27. This company has too many rules and regulations that have to be followed
28. I am unclear as to who has the formal authority to make a decision
29. I am clear as to the policies of the company
30. The goals I am supposed to achieve are realistic and achievable
31. Employees here are required to put in their maximum effort.
Organizational Climate of Staff Working Conditions and Safety—An Integrative Model
Patricia W. Stone, Michael I. Harrison, Penny Feldman, Mark Linzer, Timothy Peng,
Douglas Roblin, Jill Scott-Cawiezell, Nicholas Warren, and Eric S. Williams.
Abstract

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Objectives: This project sought to compare measures of organizational climate in ongoing
patient safety studies, identify similarities and setting-specific dimensions, develop a model
of climate domains that are hypothesized to affect outcomes across settings, and test aspects
of the model. Methods: Investigators who had surveyed health care workers' perceptions of
organizational climate in six studies funded by the Agency for Healthcare Research and
Quality (AHRQ) were invited to participate. Survey items from each study were classified
using four climate domains found in a prior literature review. The authors discussed
subconstructs, proposed additional constructs, developed an integrative model, and
independently tested selected aspects of the model. Results: The investigators who
participated had studied acute care, home health care, long-term care, and multiple settings;
two investigators had studied primary care. More than 80,000 workers were surveyed. The
model's core climate domains included leadership (e.g., values) and organizational structural
characteristics (e.g., communication processes and information technology), the impact of
which was mediated by four process variables: supervision, group behavior (e.g.,
collaboration), quality emphasis (e.g., patient centeredness), and work design (e.g., staffing).
These factors affect health care worker outcomes (e.g., satisfaction and intention to leave)
and patient outcomes. Overall, the full model explained 24 to 65 percent of the variance in
employee satisfaction, but was not as effective at predicting intention to leave. Conclusions:
While some of these domains appeared in prior models, new domains—quality emphasis,
new subconstructs, information technology, and patient centeredness—are emerging. Our
model invites dialogue among researchers and informs agenda-setting for future research into
organizational climate and the safety of patients and health care employees. This integrative
model will facilitate cross-study quantification of associations among variables in these
important domains.
Introduction

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Three recent reports by the Institute of Medicine (IOM) identified major safety and quality
problems in American health care and drew attention to system-level sources of these
problems. 1 – 3 As the authors of Crossing the Quality Chasm stated, “Threats to patient
safety are the end result of complex causes ... The way to improve safety is to learn about
causes of error and use this knowledge to design systems of care so as to ... make errors less
common and less harmful when they do occur.” 2 As a result, researchers, policymakers, and
health care providers have intensified their efforts to understand and change organizational
conditions, components, and processes of health care systems as they relate to safety.
Research studies in health care, along with findings from other industries, point to a wide
range of organizational conditions and work processes that may shape the performance of
health care practitioners and provider organizations. 4 – 10 Despite the difficulty in
implementing far-reaching organizational change, some health providers have succeeded in
restructuring their organizations in ways that promote quality health care. 11 – 14 Within this
growing body of evidence, researchers have sought to understand the influence of
organizational culture and climate on health care quality.
Organizational climate refers to member perceptions of organizational features like
decisionmaking, leadership, and norms about work. Organizational culture refers more
broadly to the norms, values, beliefs, and assumptions shared by members of an organization
or a distinctive subculture within an organization. 15, 16 In the past two decades, many
studies of organizational culture have used standardized questionnaires and cultural
inventories, which rely on members' perceptions and reports of cultural features. 17 – 19
Some of these standardized culture inventories are quite close to the instruments originally
developed for climate studies. Moreover, researchers have sometimes used the terms
“culture” and “climate” interchangeably.

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Gradually, evidence is accumulating that links culture and climate to behavior, attitudes, and
motivations among clinicians. These behaviors and orientations can, in turn, affect quality
processes and outcomes. Many studies outside of health care settings and a growing number
of studies in health care, show that employees have more job satisfaction and experience less
stress and burnout when they work in cultures and climates that have supportive and
empowering leadership and organizational arrangements, along with positive group
environments (often reflecting elements of group support, collaboration, and consensus). 20 –
24 Furthermore, employee satisfaction and commitment have repeatedly been found to
reduce absenteeism and turnover intentions. 20, 24 – 26 These findings contain important
implications for health care management. For example, nursing staffs are more likely to be
satisfied, committed, and stable in health care organizations that support and empower
nurses. 1 A more satisfied and stable nursing staff may more readily contribute to patient
satisfaction, help reduce errors, and assist in the implementation of other steps toward
improving health care quality. 21, 27 Studies outside health care also link satisfaction and
commitment to individual performance and other forms of organizationally constructive
behavior. 23, 24
A smaller group of studies explores direct links between culture or climate and behaviors or
outcomes that are related to quality. The dependent variables in these studies include
employee absenteeism, implementation of evidence-based care management practices, patient
satisfaction, and performance. 28 – 31 However, solid evidence showing direct impacts of
organizational culture or climate on clinical and system outcomes is sparse. 33 Important
exceptions include findings of a positive association between a teamwork-oriented culture
and patient satisfaction in Veterans Health Administration hospitals. 30 Moreover, Clark et

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al, report that hospital nurses from units with low staffing and poor organizational climates
(in terms of resources and leadership) were twice as likely as nurses on well-staffed and
better-organized units to report risk factors, needlestick injuries, and near misses. 33 In
instances where culture and climate do not independently predict clinical and organizational
outcomes, they may still act as important mediating or contextual factors. 29, 34, 35 For
example, in Canadian long-term care facilities, a culture that supports organizational learning
and employee development was found to be a necessary condition for quality improvement
programs to achieve their organizational objectives. 27
Quantitative studies of organizational culture, such as those reported above, often have drawn
on either typological or dimensional models. 19 Typological models seek to classify entire
organizational cultures in terms of a dominant value or normative orientation. For example,
the competing values framework classifies organizations as predominantly oriented toward
internal cohesiveness and human relations development, creativity and innovation, order and
predictability, or competitiveness and goal attainment. 36 Shortell and his colleagues adopted
this model to the cultures of medical organizations by characterizing the respective cultural
types as group, hierarchical, developmental, or rational in their orientations. 29, 32
Typological models assume that entire cultures can be characterized in terms of an
overarching substantive theme. In contrast, dimensional models, including some derived from
the competing values framework, allow for the possibility of internal variations along
separate, conceptually defined orientations. 37 For example, Kralewski, Wingert and
Barbouche developed an instrument for assessing emphasis by members of medical group
practices on each of nine dimensions—innovativeness, group solidarity, cost-effectiveness
orientation, organizational formality, method of cost control, centralization of
decisionmaking, entrepreneurism, physician individuality, and visibility of costs. 38

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Unfortunately, lack of consensus on the key dimensions and subconstructs for assessing
culture and climate has slowed the accumulation of evidence about how norms, values, and
perceptions affect patient safety and other aspects of quality of care. Investigators in and out
of health care have used a very wide variety of definitions, concepts, measures, and methods
to study culture and climate. 17, 24, 31, 39 – 41 Although this broad mix of measures and
definitions reflects the complexity of the phenomena under study, lack of definitional and
methodological consistency makes it hard to generalize across studies and develop evidence-
based implications for practice.
This paper reports an effort to help bring order and consistency to this line of research. In it
we develop and test a model of organizational climate in health care across diverse delivery
settings. We focus on organizational climate for a number of reasons. First, organizational
climate features may be more amenable to change than deep-rooted cultural assumptions and
values. Second, the focus on organizational climate, rather than culture, may provide for a
better logical fit between concepts and questionnaire measures than sometimes occurs in
quantitative culture inventories; it seems quite logical that members of an organization will
be aware of their perceptions of organizational conditions (climate) and will be able to report
these perceptions accurately in closed-ended questions. In contrast, members are less likely to
be fully cognizant of shared norms, values, and basic assumptions, and may face difficulties
in characterizing such complex phenomena in their responses to fixed-choice questions. 42 –
44 Lastly, we focus on facets of organizational climate that are particularly relevant to care
providers, health managers, and decision makers.
This project resulted from an initiative by the Agency for Healthcare Research and Quality
(AHRQ) targeting the health care workforce and patient safety (RFA HS01-005). AHRQ
sponsored a number of working groups, one of which focused on working conditions and

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organizational climate. This working group held a number of conference calls over a 3-year
period to discuss issues developing at AHRQ, provide an open exchange of ideas regarding
the measurement of organizational climate across health care settings and its relationship to
patient safety, and develop synergy among grantees. Investigators involved in this forum
were invited to participate in this project if they were part of a study team that had surveyed
health care worker perceptions of organizational climate. Based on a prior literature review
and input from the various investigators, the group discussed conceptual domains and
subconstructs of organizational climate related to perceived working conditions and its
relationship to health care worker safety and patient safety. 18 An integrative conceptual
model of organizational climate was developed by seeking consensus among participants
about empirically and theoretically important constructs.
The integrative model
The integrative model is presented in Figure 1. The model's core climate domains include
leadership and organizational structural characteristics. Subconstructs of leadership include
organizational values, as well as style and strategies used by top management. The
subconstructs associated with organizational structural characteristics include formal
communication processes, governance structures, and information technology infrastructure.
The direct impact of these variables on patient and health care worker outcomes is mediated
by four process domains: (1) supervision, (2) group behavior, (3) quality emphasis, and (4)
work design. This model distinguishes between leadership and supervision. Supervision
refers to the direct managers' style or the recognition an employee receives on a daily basis.
Work design includes five subconstructs: (1) manageable workload, (2) resources and
training, (3) rewards (defined as monetary compensation such as salary and bonuses), (4)
autonomy, and (5) employee safety. Group behavior includes two subconstructs—

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collaboration and consensus (the latter including items such as “there is general agreement on
treatment methods”). Subconstructs associated with quality emphasis include patient
centeredness, patient safety, innovation, outcome measurement, and evidence-based practice.
The four process domains influence worker outcomes and patient outcomes. Finally, worker
outcomes are expected to impact upon patient outcomes.
Figure 1. An integrative model of health care working conditions on organizational climate
and safety.
An integrative model of health care working conditions on organizational climate and safety.
Methods of validating the model
Although each research team initially conceptualized key relationships among organizational
elements and performance differently, all participating investigative teams sought to
understand essential elements of climate. Therefore, each investigator provided the health
care worker survey items currently being used in their separate ongoing research projects. An
item-by-item analysis of all surveys was conducted by two of the authors (PS and MH). In
this process, the original climate scales were decomposed, and each item was theoretically
classified using the developed integrative model into the best-fitting domain and/or
subconstruct in the integrative model. For example, items classified as measuring supervision
style include “I feel that I am supervised more closely than is necessary,” and “a supervisory
staff that is supportive of nurses.” A copy of all final scales is available from the
corresponding author.
Reliability statistics (Cronbach's alpha) of scales were examined and items were dropped as
necessary to develop the most stable measures possible of the theoretical concepts. Scales
that were unstable were dropped from further model testing. All projects were tested for

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multicollinearity among scales using pairwise Pearson correlation between scales. Four of the
studies found no correlations that exceeded a cutoff limit of r ≥ 0.60. Two research teams
found a correlation over 0.60, and each eliminated one of the pair on this basis. Additionally,
one study examined the collinearity diagnostics included in Statistical Package for the Social
Sciences (SPSS) 11.5 and found levels of collinearity high enough to affect the models. One
scale, with the highest variance inflation factor (VIF), was eliminated before the final
modeling steps. Final models for all studies were thus free of collinearity levels that would
affect model stability.
Because the participating investigators were supplying data from ongoing, AHRQ-funded
patient safety projects, many of the investigators were still in the process of data collection.
Therefore, data on the primary outcome of patient safety were often not available. Instead,
the group members decided to validate the model using the most common health care worker
outcomes found across studies, which were employee satisfaction and intention to leave.
To test different aspects of the model, each investigative team conducted a series of similar
analyses. First, linear regressions were conducted to investigate the relationship among the
core climate subconstructs of leadership and organizational structural characteristics. Second,
to understand the relationship among the core climate domains and the four process domains
—supervision, group behavior, quality emphasis, and work design—linear regressions were
conducted using the core domains as the predictor variables and the process domains as the
dependent variables. Third, linear regressions were conducted using core domains as the
independent variables and health care worker outcome measures as the dependent variables.
Finally, investigators tested the independent effects of each process subconstruct on health
care worker outcomes, controlling for the core domains using multivariate stepwise
regressions. In these models, the core climate subconstructs associated with leadership and

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organizational structural characteristics were entered as the first block of independent
variables. Then, the subconstructs associated with the four process domains (supervision,
group behavior, quality emphasis, and work design) were entered as a second block of
independent variables. When investigators found that employee demographics predicted these
outcomes, the demographic variables were statistically controlled for. It was hypothesized
that the independent variables would be positively related to satisfaction and negatively
related to intention to leave.
There was slight necessary variation in the means used by the investigative teams to conduct
their regressions, due to the nature of secondary data analysis. Most investigative teams used
the subconstructs described as the independent variables. However, one investigative team
combined the subconstructs into overall organizational climate domains. In another study,
intention to leave was measured as a dichotomous variable, and therefore, a logistic
regression was conducted in a fashion similar to that of the linear regressions.
Results
Demographics of participating studies
The six participating investigative teams represent individual studies conducted across the
nation in the following health care settings: acute care (n = 1), home health care (n = 1), long-
term care (n = 1), primary care settings (n = 2), and multiple settings (n = 1). More than
80,000 health care workers were surveyed in these projects, and employee demographics
surveyed by each investigative team are described in Table 1. Diverse job categories ranging
from certified nursing assistants to hospital administrators and medical assistants to primary
care providers are represented, with the largest sample associated with a multisite study

124
conducted through the Veterans Health Administration. The surveys used by each
investigative team vary.
Description of samples and surveys from each independent project.
Results of empirical testing of the model
The number of applicable items per domain and the reliability of the newly developed scales
from each study are reported in Table 2. All investigative teams, except that involved with
Study 2, were able to develop relatively stable scales at the subconstruct level. All studies,
except that involved with Study 3, had some type of measure related to the core
organizational climate domains. The “information technology” subconstruct was not
represented by an independent measure in any investigation; however, related items were
found in Study 2's organizational structural characteristic scale. Processes related to direct
supervision were measured in four of the studies; however, Study 5 had only one item in this
category. All studies had some measure of work design, with resources and/or training being
the most commonly measured subconstruct. All studies had some measure of group behavior,
and most measured collaboration (five out of six studies). Study 5, which was conducted in a
long-term care setting, had four separate stable scales of collaboration. Most studies (four of
six) had stable measures of quality emphasis, while Study 5 had a single-item measure.
Employee satisfaction and intention to leave were commonly measured across studies. Study
6 had a single item related to satisfaction, while the other five studies had multi-item scales
available to measure employee satisfaction. Also in Study 6, the measure of intention to leave
was dichotomous, compared to the other four studies, which had one-item, continuous-level
variables.
Reliability of measures.

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As predicted, the regression analyses within the separate studies showed there was a strong
relationship among the core climate subconstructs of leadership and organizational structural
characteristics. This analysis was not applicable to Study 3, due to the lack of measurement
of core domains. In the other five studies, the leadership domain or one of its subconstructs
significantly (P ≤ 0.05) predicted measures of organizational structural characteristics; the
variance explained ranged from 24 to 54 percent. The two core domains also significantly
predicted to constructs within the four process domains. Although the number of process
variables varied among the studies, in nearly every case the core domains or their
subconstructs had statistically significant predictions of the process variables. The core
domains also had strong direct effects on the outcome variables. Twenty to 34 percent of the
variance in employee satisfaction and 8 to 10 percent of the variance in intention to leave was
explained by the core domains.
Five of the investigative teams were able to conduct the multivariate stepwise regressions
predicting satisfaction (Table 3). Many of the core organizational climate domains or
subconstructs (five of eight) continued to have statistically significant (P < 0.05) independent
effects on satisfaction. In addition, most of the process domains or subconstructs (25 of 30)
had significant independent effects on satisfaction. Overall, the full model explained 24 to 65
percent of the variance in employee satisfaction.
Results of multivariate regressions predicting employee satisfaction.
Results from the multivariate stepwise regressions predicting intention to leave are displayed
in Table 4. While the direction of the relationships were as predicted and negative
perceptions of organizational climate predicted intention to leave, only three of the six

124
leadership items had a statistically significant independent effect on intention to leave, and
none of the organizational structural characteristics (n = 5) was an independent significant
predictor. Of the process domains and subconstructs, supervision had the most consistent
independent significant effect on intention to leave. Overall, the model explained 8 to 23
percent of the variance in intention to leave.
Results of multivariate regressions with intention to leave as dependent variable.
Discussion
This paper presents a model of organizational climate, which encompasses variables and
concepts found in six independent studies. These studies were conducted across a broad range
of settings and surveyed a wide range of health care workers. We present a preliminary
empirical validation of the model by reporting conceptually plausible associations among the
model's domains and showing that variables from these domains predict employee
satisfaction and turnover intention in ways that are consistent with previous research. Across
studies, similar patterns of relationships were found. Moreover, the full model was a better
predictor of the outcome variables than were the elements within the model.
As might have been anticipated from the literature, the climate measures predicted
satisfaction more strongly and more consistently than they predicted turnover intention.
Turnover intentions are subject to many influences exogenous to the realm of climate, such as
labor market conditions, assessments of employability, family status, and career stage. 45
The most important contribution of this study is its climate domains and subconstructs, which
can provide the basis for future studies in health care settings. The use of this model in future

124
research will promote consistency across settings and studies, thereby facilitating an
accumulation of research findings and evidence-based recommendations. Further
development of operational definitions and generalizable measures applicable to the model is
warranted and invited.
An additional contribution of the model lies in its elaboration of subconstructs within the
domain of organizational structure; these are particularly important for research on patient
safety and health care quality. Information technology, for example, is an increasingly
prominent feature of organizational structure, which holds substantial promise for health
quality. 46 Perceptions of the uses of information technology in health care organizations
may affect the ways that clinicians respond to information technology innovations. 47 Hence,
technology perceptions are likely to mediate between the introduction of information
technologies and their outcomes. Because of its importance, we included the technology
climate in our model, even though it was not well represented in our original research studies.
Our model also calls attention to the importance of the climate for quality, which we labeled
“quality emphasis.” Our model specifies the climate for quality as including the degree to
which the delivery organization's climate is patient-centered, encourages safety awareness
and practices, fosters innovation, and sustains the use of evidence-based medicine. As other
researchers have suggested, there may be multiple climates within an organization in areas
such as safety, service, or innovation. 35 – 48 These substantive climates are likely to affect
closely related attitudes and behaviors even more powerfully than abstract climate features
such as cohesion or climate strength. 29 Only 2 of the 13 instruments for assessing culture
and climate cited in a recent review contain measures related to quality climate, and none
refers explicitly to an information technology climate. 19, 49

124
Due to divergent climate measures in the six studies reported here, the validity and
generalizability of our findings may be limited. Additionally, although this project is an
exemplar of collaboration and resulting synergy, the separate investigative teams were not yet
ready to pool the data into a single database that would be amenable to analysis through
structural equation modeling. Although we have explored linear relations between climate
and other variables, researchers would be well advised to look closely at nonlinear and
noncausal relations. For example, very negative climates might affect performance, while
other climates do not. In addition, climate may act as a contextual or mediating variable,
rather than a direct cause of important outcomes. Finally, two scales constructed in these
secondary analyses had lower Cronbach's alphas than often considered desirable.
Given the multileveled and multidimensional nature of organizational climate, the search for
a single instrument—or even a single methodology—is not always wise. 19, 44 If an
organization is considering the implementation of a new computerized order entry system, for
example, investigators may need to understand only the employees' perception of information
technology and innovation, not leadership values and styles of supervision. Nonetheless,
some of the measures within our core set of concepts of organizational climate in health care
settings are likely to be applicable to a range of health delivery settings. Moreover, they may
be shown to possess sufficient predictive validity to justify their routine inclusion in
investigations of the causes of outcomes like patient safety.
Implications for policy and practice
Development and validation of a core set of concepts and measures for studying climate in
health care will permit comparisons across delivery settings and facilitate development of

124
evidence-based recommendations about human resource management and organizational
design within health services settings. Databases containing climate measures are already in
use in some systems, like Kaiser Permanente. 50 Moreover, many acute care hospitals are
contributing data to the National Database of Nursing Quality Indicators (NDNQI), which
has adapted measures of nurse perceptions regarding work environment and job satisfaction.
51 Outside of health care, many government agencies use standardized climate assessments
for benchmarking purposes. 52 Adoption of standardized climate tools and the creation of
databases that support analyses at various organizational levels will help health care
managers to better track their organization's progress through time, assess impacts of
organizational and technological changes, and compare the climate in their unit or
organization with those in comparable organizational settings.
It is our hope that the model presented here will encourage researchers to further refine this
core set of concepts and develop standard measures for studying climate in health care as it
relates to safety. Standardization of climate measures will aid in the development of
evidence-based recommendations for health services organization and human resource
management within health delivery settings and perhaps facilitate the ultimate goal of turning
results into evidence-based management practices. The model needs further testing using
patient safety as the primary outcome to aid in this process.
2.1.1. ORGANISATIONAL CLIMATE:
Organisational climate has been defined in three different ways namely (1) as objective
phenomena (2) as a subjective phenomena and (3) as an outcome of person-environment
interaction. However, apart from such difference in definition many other conceptual issues

124
related to the different aspects of the climate concept such as the dimensions, the researchers
raised context, facets, contents and levels. (e.g., Chhokar and Sethumadhavan 1992:
Hellriegel and Slocum 1974: James and Jones 1974: Muchinsky 1976). Georgopovles (1960)
defines, “Organisational Climate as a normative structure of attitudes and behavioural
standards which provide a basis for interpreting the situations and act as a source of pressure
for directing activities”. Forehand and Gilmer (1964) define “Organisational Climate as a set
of characteristics that describe an organisation and that (a) 63 distinguish one from another
(b) are relatively enduring over a period of time and (c) influence the behaviour of people in
the organisation”.
Litwin and Stringer (1968) define “Organisational Climate as a relatively enduring quality of
the internal environment that is experimental by its members, influence their behaviour and
can be described in terms of the values of a particular set of characteristics of the
organisation”.
Taguiri and Litwin (1968) Organisational climate has been defined as the “relatively enduring
quality of the internal environment of an organisation that a) Experienced by its members, b)
influences their behavior, and c) can be described in terms of the values of a particular set of
characteristics (or attitudes) of the organisation.”
Friedlander and Margulies (1969) define Organisational Climate as a relatively stable or
ongoing property of the organisation which may release, channel, facilitate on constrain on
organisations technical as well as human resources.
Taylor and Bowers (1970) defines “Organisational climate as the perceived traits of
organisational stimuli which became a group property through interpersonal interactions and
which modify overt behaviour of people within the organisation”

124
Cambell (1970) defines “Organisational Climate as “A set of attributes specific to a particular
organisation that may be induced from the way that the organisation deals with its members
and its environment. For the individual members within the organisation, climate takes the
form of a set of attitudes and expectancies which describe the organisation in terms of both
static characteristics (such as degree of autonomy) and behaviour outcome and outcome –
outcome contingencies”.
Payne (1971) defines “Organisational Climate as a normal concept, reflecting the context and
strength of the prevalent values, norms, attitudes, behaviour and feelings of the members of a
sound system, which can be operationally measured through the perception of system
members or observational and other objective process”.
Pritchard and Karasick (1973) defines “Organisational Climate as a relatively enduring
quality of an organisation internal environment, distinguishing, it from other organisations
which (a) results form the behaviour and policies of members of the organisation, especially
in top management (b) is perceived by members of the organisation (c) serve as a basis for
interpreting the situation and (d) acts as a source of pressure for directing activity”.
Hellriegel and Slocum (1974) define “Organisational Climate as a set of attributes which can
be perceived about a particular organization and for its subsystems and which may be
induced from the way that organisation deals with its members. Several themes are implicit in
this definition of organisational climate. (a) Perpetual responses sought are primarily
descriptive rather than evaluation, (b) The level of inclusiveness of the items, scales and
contracts are macro rather than micro, (c) The unit of analysis tends to be attributes of the
organisation rather than individuals, (d) The perception of organisational climate have
potential behavioural consequences”.

A Study On The Organizational Climate Project

A Study On The Organizational Climate Project

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