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Chapter 5
Organizational Climate
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Learning Objectives
• Understand the impact of organizational culture
• Describe an organizational climate that attracts and keeps
good people
• Describe the elements of true
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Introduction
Organizations resemble villages
• Certain pace and style of working
• Unspoken taboos
• Social structures, pecking orders, and patterns of behavior based on
community values
• Habits govern dress, language, food, and the like
• Norms of behavior govern the use of resources
Psychological Climate
Key element in the life of the organizational village
Important dimensions
• Reward system
• Organizational clarity
• Standards of performance
• Warmth and support
• Leadership practices
Organizational Climate, 1
• Psychologically healthy work environment brings out the best
in employee and organizational well-being
• Organizations are only as strong as the weakest link
• Influences the quality of work and the quality of the work life
of members
Organizational Climate, 2
Example: Exploitive or impoverished hospital
• The best workers leave
• People who stay spend more time complaining than working
• Result is unattended patients, poor housekeeping, and medical and
clerical errors
• Unnecessary mistakes are due to human factors: Untrained,
unqualified, and uncommitted workers
Organizational Climate, 3
Example: Enlightened and supportive hospital
• Standards of performance are high
• Leadership is effective
• Goals and responsibilities are clear
• Support prevails
• Reward system reinforces work
Enlightened and supportive organizations are good investments
because they:
• Attract excellent personnel
• Outperform counterparts
Organizational Climate, 4
Organizations are composed of interdependent groups
• Success depends on the conditions in each subgroup
• Every unit should develop an enlightened and supportive climate
Figure 5.1: Extent to Which Leaders and
Followers Agree on Organizational Conditions
Jump to Figure 5.1: Extent to Which Leaders and Followers Agree on Organizational Conditions, Appendix
Patterns of Leadership
Rensis Likert identified the four patterns that correspond to the
four types of organizational climate
• Exploitive
• Impoverished
• Supportive
• Enlightened
His conclusions were based on studies of leaders in different
organizations, inside and outside of the United States
Pattern 1 Leadership: Exploitive
Autocratic and hierarchical
• Members:
• Do not participate
• Are expected to comply
• Do not discuss problems with leaders
• Leaders:
• Make decisions
• Do not trust others
Pattern 1 organizations rarely survive
Pattern 2 Leadership: Impoverished
Not completely autocratic
• Power remains at the top
• Members sometimes participate in decision-making
Organizations fall into two categories
• Successful: Benevolent autocracies in which leaders show concern
for members
• Failing: Autocracies without benevolence that do not consider the
ideas of members
Pattern 3 Leadership: Supportive
Leaders:
• Show interest and confidence in members
• Have power
• Facilitate good communication throughout the organization
Members:
• Understand the goals and want to achieve them
• Discuss problems with leaders
Member participation and involvement in decision-making
activities are observed
Pattern 4 Leadership: Enlightened, 1
• Leaders delegate power to the logical focus of interest and
concern for a problem
• People have the freedom to initiate, coordinate, and execute,
to accomplish goals
• Communication is open, honest, and uncensored
• People are trusted
• Satisfaction and productivity are high
Pattern 4 Leadership: Enlightened, 2
Likert describes a Pattern 4 organization as work groups with a
high degree of loyalty and favorable attitudes
• Consideration for others and problem-solving skills
• Efficient and effective communication
Effective system for interaction, problem solving, and
organizational achievement
Technically competent and maintain high performance goals
Pattern 4 Principles
• View human resources as the organization’s greatest asset
• Treat every individual with understanding, dignity, warmth,
and support
• Tap the constructive power of groups through visioning and
team building
• Set high performance goals at every level of the organization
Benefits of Pattern 4 Leadership
• Performance effectiveness improves
• Costs decrease
• Satisfaction and health improve
• Applicable to all sizes and types of organizations
Stories
Can develop and reinforce a positive work climate
Prescribe the way things should or should not be done
Have great impact when describing real people and are known
by employees throughout the organization
Example: Malice in Dallas
• Southwest Airlines versus Stevens Aviation
• Dispute over the ad campaign “Just Plane Smart” led to an arm
wrestling match
• All Southwest employees know the story, which communicates the
values of the company
Building Community in the Workplace
Community is experienced in two ways
• A group of people
• Formed by bringing people together in place and time
• A way of being
• Created when barriers between people are let down
Creative cooperation when dealing with others involves:
• Valuing differences
• Building on strengths
• Transcending individual limitations
• Achieving the full potential of community
Conditions for True Community, 1
Shared vision
• Positive and future-focused image provides direction
Wholeness incorporating diversity
• Community must face and resolve differences
Shared culture
• Norms of behavior and core values that are shared are symbols of
group identity
Conditions for True Community, 2
Internal communications
• People communicate freely, which is uncensored and flows in all
directions
Consideration and trust
• People are respected, valued, and treated humanely
Maintenance and government
• Roles, responsibilities, and decision-making are conducive to
achieving tasks
Conditions for True Community, 3
Participation and shared leadership
• Involvement of all individuals and opportunity to influence events
and outcomes
Development of younger members
• Mature members help young members develop knowledge, skills,
and attitudes that reflect community values
Conditions for True Community, 4
Affirmation
• The community celebrates its beginnings, rewards its achievements,
and takes pride in its challenges
Links with outside groups
• Need to draw boundaries to accomplish tasks and community’s
need to have fruitful alliances with external groups
The Struggle to Stay Flat and Fresh
Key element of organizational culture and climate is structure
As organizations grow in size, there is a need for layers and
divisions of responsibility
Mid-level leaders are needed to guide work activities, coach
employees, and manage organizational growth
• Sufficient resources must be allocated to perform these functions
well
Too many layers of management correspond with reduction in
creativity and performance
Arguments for Being Organizationally Flat
• Tall organizational structures have higher overhead costs
• Layers of hierarchy tend to slow down the transmittal of
information and the speed of response
• Tall structures tend to undermine employee satisfaction and
organizational commitment
Merging Cultures
Culture is an important factor when organizations merge
• Organizations should consider the integration of cultures before the
deal
Ways to perform cultural due diligence for a successful merger
• Talking to past members of the organizations
• Interviewing common customers, suppliers, and industry analysts
• Ensuring compatibility in the dimensions of organizational climate
• Reward systems, standards of performance, leadership practices,
feedback and controls, and attitudes toward innovation