CHAPTER 5

ORGANIZATIONAL
CLIMATE
 LEARNING OBJECTIVES

• Understand the impact of organizational culture

• Describe an organizational climate that attracts and
keeps good people
• Describe the elements of true community

© McGraw-Hill Education
 INTRODUCTION

Organizations resemble villages

• Certain pace and style of working
• Unspoken taboos (spoken as well)
• 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 elements in the life of the

organizational village - Important
dimensions
• Reward system
• Organizational clarity
• Standards of performance
• Warmth and support
• Leadership practices
 ORGANIZATIONAL CLIMATE
• Psychologically healthy work
environment brings out the best in
employee and organizational well-
being
• Organizations are only as strong as
the weakest link
• Climate influences the quality of
work and the quality of the work life
of members
 ORGANIZATIONAL CLIMATE
Hospital - 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
Hospital - 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

Organizations are composed of

interdependent groups
• Success depends on the conditions
in each subgroup
• Every unit should develop an
enlightened and supportive climate
• Primary responsibility is with
Leadership
 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 the Pattern 4 organization as
work groups with a high degree of loyalty
and favorable attitudes such as:
• 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
 IMPORTANT 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
• All organizations should adopt Pattern 4
leadership principles
• Organizations in the United States are
between Pattern 2 and Pattern 3
• Shifting to Pattern 4 would improve
employee morale and productivity
 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

1. A group of people
• Formed by bringing people together in place
and time
2. 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
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
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
Participation and shared leadership
• Involvement of all individuals and opportunity to
influence events and outcomes
CONDITIONS FOR TRUE COMMUNITY
Development of younger members
• Mature members help young members develop
knowledge, skills, and attitudes that reflect
community values

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
 DAVE PACKARD AND BILL HEWETT
ORGANIZATIONAL POLICIES

• Creation of a company that would attract like-

minded people
• Greatest innovation was managerial
• Grant of bonuses to all employees when the
company improved its productivity
• Employees worked in open cubicles
• Egalitarian, (relating to or believing in the
principle that all people are equal and deserve
equal rights and opportunities)
• decentralized system that came to be known as
“the HP Way”
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)