ORGANISATIONAL BEHAVIOUR

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ASSIGNMENT ON:
ORGANISATIONAL CLIMATE

By:
Roll no: 1601-18-672-041
MBA (Sec-A) 1st Year, Sem-2
 Concept of Organizational Climate

Before defining Organization Climate, it would be pertinent to first define the

term climate. Climate, in its natural sense, is meant as the average conditions of
weather prevalent in a place or a region over a period of time.

There has been a debate among the organizational thinkers on whether

organizational climate and organizational culture are synonymous or not. While
some consider the two terms as synonymous and use these interchangeably,
others consider the two terms conveying two different meanings. Many authors
including Schein, have drawn sharp line of demarcation between the constructs of
organizational climate and culture. Rousseau differentiated between these two
constructs on the basis of climate being the descriptive beliefs and perceptions
individuals hold of the organization, whereas culture is the shared values, beliefs
and expectations that develop from social interactions within the organization.
The boundaries between organization climate and culture appear to be artificial,
arbitrary and even largely unnecessary.

Why organizational climate ?

There’s no gain saying that good or healthy climate, in its natural sense,
facilitates performance whatsoever it may be. Similarly there is research evidence
to believe that sound or healthy organizational climate contribute to improve
organizations performance in different ways. Research on motivation over the
past 40 years has shown that the climate in the work place has a significant
impact on the employee behavior and organizations performance. Organizational
climate that energizes workers to produce their best can improve profit as much
as 30 percent by increasing revenues, lowering costs and improving customer
loyalty. And these positive effects of organizational climate have been proven
time to time.
Following are the four major ways by which organizational climate affects
organizations performance:

1. Organizational Climate serves as a facilitator to organizational performance

The organizational properties govern employee behavior by prescribing what

types of behavior will be rewarded and what will be punished. Thus, an
organization can influence and motivate people to behave an desired manners
that suite to the organization.

2. Organizational variables enable people to evaluate self and others to

improve their behavior.

The evaluation mechanism involves both physiological and psychological variables

that help improve the employee behavior and in turn performance.

3. Variables included in organizational climate serves as stimuli to the

employee’s activities

As stimuli, organizational variables arouse employees level of activation in their

works. This, in turn, improves employee’s performance.

4. Organizational factors shape and improve employee’s perception towards

organization and their jobs.

Perception affects attitude, satisfaction and performance in a lock step manner=.

Better the perception, better the performance and vice versa.
George H. Litwin and R. Stringer conducted yet another laboratory experiment to
differences in impact of different organizational climates. Salient findings of the
experiment were reported as follows:

1. Experiment found broadly three types of organizational climates:

authoritarian- structured, democratic friendly and achieving business.

2. Employees in authoritarian- structured organization produced goods of highest

quality because of rigid specifications.

3. Employees in democratic friendly organizational climate expressed maximum

satisfaction with their jobs.

4. Employees produced most in terms of money volume, number of products and

cost- saving innovations in an achieving organizational climate.

Determinants of Organizational Climate :

Organizational climate usually refers the internal properties of an organization,

there are also host of internal and external factors that determine the nature of
organizations climate. The major internal determinants of organizational climate
are:

1. Economic health

2. Organizational policies and procedures

3. Organizational size

4. Organizational structure

5. Leadership Styles

6. Managerial values and Ethos

Economic Health:

Economic health or soundness of an organization influences the type of

organizational that will be prepared. The various dimensions of organizational
climate such as reward, control, risk taking, progress and development etc. are
going to be influenced by the economic conditions or health of the organization.

Organizational Policies and procedures

More often than not, organizations formulate certain policies and procedures that
regulate and monitor their activities and in turn facilitate their performance.
There is evidence to believe that such policies and procedures do also influence
certain dimensions of organizations climate.

Organizational Size

Research evidence is available to believe that the size of the organization

influences, among other things, climate of an organization. As regards effects of
size of organization on dimensions of organizational climate, a smaller- sized
organization fosters climate of creativity/ innovation and it also suits to
participative style of management and leadership which encourages vertical type
of delegation of authority.