Sunday, 22 January 2012

Main differences between organisational culture and organisational climate

Origin of organisational culture
Whilst business strategy is concerned with identifying in advance what an organisation wants to achieve in the long term and by which means, organisational culture is concerned with the process throughout which people working in the same environment develop the set of assumptions, shared values, beliefs and norms, that is to say the right and appropriate behaviour, necessary to achieve those objectives.

Pressure coming from the exogenous environment notwithstanding, culture basically and essentially stems and develops from within an organisation. Organisational culture essentially becomes “norm” in that the assumptions and the shared values and beliefs at its basis are broadly accepted and recognised by the group of individuals concerned.

The fact that all, or the great majority, of the people concerned behave respecting those norms helps in turn to further reinforce their general acceptance and validity.

Although the process throughout which culture unfolds within an organisation entails and involves the active participation of all of the employees working within it, insofar as it can be averred that each individual actually contributes to its creation, not all of the individuals working within the same organisation develop the same perception and feeling about the final outcome produced by that process.

Origin of organisational climate
The idea of organisational climate is basically concerned with the perception and feeling which each individual matures of the organisational environment as it is actually generated by the culture developmental process.

Although the first reference to organisational climate dates back to a study carried out in 1939 by Lewin, Lippitt and White, a first more comprehensive definition of organisational climate was later provided by Argyris (1958) in a study aiming at investigating group dynamics in a bank.

The concept was subsequently further developed by McGregor (1960), who more specifically referred to the idea of “managerial climate.” Stressing the importance of the role played by the relationship between managers and their reports over organisational climate, McGregor actually represents the first Author to directly linking organisational climate to organisational management and leadership style.

Over the years, have indeed been formulated a number of definitions of organisational climate. Amongst these, it is particularly significant that proposed by Ivanchevitch et al (2008), who underscore the circumstance that organisational climate is very much concerned with the influence exerted on individual behaviour by some elements, characteristics and qualities of the work environment. The effects produced by organisational climate on staff behaviour depend hence on the way each individual perceives, directly or indirectly, those qualities and characteristics.

Taking as axiomatic that organisational climate is concerned with individual perceptions and feelings, it could be worth trying to find out which is the impact produced by these perceptions and the extent of their practical implications.

Burton et al (1999) aver that climate can be considered as a “relatively enduring quality of the organisation which is experienced by its members.” Similarly, Field and Abelson (1982), Dailey (1988) and French et al (1985) define organisational climate as a (relatively) persistent and enduring quality. As a general rule, it can be argued that since organisational climate depends on organisational culture, individuals should not be likely to frequently change their interpretation of the work environment, unless some relevant changes occur in the organisation’s culture.

Climate is associated with individual perceptions and feelings, which sometimes could also be caused by misunderstanding, bias and misjudgement of some events occurred to these. Employees join organisations, but leave their managers (MacLeod and Clarke, 2009). More often than not, a “simple” change of Line Manager can strongly and abruptly contribute to change individual perception of the overall organisational environment and of its practices and policies. Albeit in general climate can be considered as a rather enduring and persistent quality, it is also important to consider that individual perceptions can at times be influenced and distorted by the behaviour of every single employee working within the organisation who, to some extent, prevents other individuals to really understand and appreciate organisational climate as they should. As stressed by Schneider (2008), organisational climate is indeed concerned with the employees’ perceptions about the formal and informal practices, procedures and policies executed within a business. It could be argued that it is actually up to the employers to do what it takes in order to aver such situations to practically occur, which is absolutely true but which actually represents another and different aspect of the matter. Such episodes would clearly result to be irrelevant and insignificant at organisational-culture level where all of the employees are concerned and a few “exceptions” (provided these really are a few) should not strongly affect and impact the business culture. Climate, nevertheless, is not concerned with staff and the workforce considered as a whole, but rather with each individual and his personal feelings, appreciation, understanding and perceptions.

Communications specialists use to maintain that when the recipient of a communication message has not understood the real content of the communication, the sender should ask himself whether the message was actually clear (and not immediately think that the recipient did not understand the message). It could be hence maintained that organisational climate is what individuals understand of the culture message. Whether sometimes the problem can actually lie in the way culture is understood, more often than not the problem can lie in the way the message has been communicated. Whatever the case, employers should try to do their utmost to ascertain that everybody, especially their managers, effectively and consistently participate to the process and that everybody is singing from the same hymn sheet.

Other two points which seem to gather a wide consent about organisational climate relate to the circumstance that a) climate can be measured and b) that it has a clear and relevant impact on the way people perform.
Concepts confusion
Although the concepts of organisational culture and organisational climate are quite different one another for a long period of time a certain degree of confusion has been dominating.

In a bid to avoid any possible type of mix-up, Denison (1996) suggested to refer to organisational culture as to the deep structure of an organisation, which is based on the assumptions, beliefs and values held by its staff, whereas to refer to organisational climate as to those elements of the internal environment as they are consciously perceived by each individual.

A more straightforward approach to organisational climate is to consider it as the way individuals perceive, see and feel about organisational culture (Armstrong, 2009). Although we are looking at two different concepts and ideas, the link between culture and climate is evident in that climate is essentially identifiable with individuals’ perceptions about organisational culture’s quality and characteristics (French et al, 1985). French et al (1985) suggest that culture represents the actual situation, whereas climate expresses individuals’ perceptions, although it is quite difficult to identify the traits and features of the actual situation especially whether individual perceptions represent it differently from what it is supposed to be.

Organisational culture is concerned with the macro vision of an organisation life-style, meant as “the way we do things around here”, whereas organisational climate is very much concerned with the micro image each individual has formed of organisational culture and the way each single member of staff actually considers and appreciates organisational culture. As such, organisational climate becomes particularly important for employers in that it is just on the basis of, and according to, the feeling and perceptions which individuals generate that they will behave and develop their attitudes towards their work and their working environment.

As for the aspect related to the presence within an organisation of different cultures, Saffold (1988) concedes that although multiple subcultures coexist within an organisation as a matter of course, research shows that in firms where there is a strong culture the prevalence of a single, unitary culture emerges rather clearly. As suggested by Armstrong (2009), nonetheless, it clearly is possible that, though maintaining common values, beliefs and norms within the same organisation, the “outward-looking” culture developed within a marketing division might be sensibly different from that developed, for instance, within the “internally-focused” manufacturing department of the same organisation.

In the case of climate, the phenomenon may potentially be much more widespread and it is obviously much more likely, or rather certain, that individuals may develop different ideas of organisational climate even within the same function, department or division.

Some Authors have further investigated the meaning ascribed by individuals, according to their perceptions, to the work environment referring to a two-level scale based on a clear distinction between “psychological climate” and “organisational climate.” More in particular, psychological climate would be identified with individual-level perceptions, whereas organisational climate would be associated with the broader unit or organisational level perceptions. The latter case occurs when people within the same unit share the same perception and feeling about the work environment (Joyce and Slocum, 2004; Jones and James 2004).

Good or bad culture and climate
As for strategy, it cannot be maintained that an organisation’s culture is better than another (Armstrong, 2009) so that the comparison between different cultures of different businesses would represent a pointless exercise. Additionally, what can be considered good for an organisation cannot be necessarily considered as good for another. Yet, as suggested by Alvesson (2001), “Some things that may be seen as good may be less positive from another angle.”

As a general rule, good, valuable or strong cultures are those cultures which are seen as effective means to an end; not considering and assessing whether good is equal to usefulness and the likely multidimensional implication goodness might have (Alvesson, 2001).

As long as an organisation’s culture is based on, and practically fostering, fairness, consistency and integrity an organisation’s culture can definitely be considered adequate. Without a doubt, this is the case in which the best fit approach, rather than the best practice one applies.

Rather than referring to organisational culture in terms of how good or bad it is, it could possibly be much more appropriate considering how effective or ineffective organisational culture reveals to be on helping and supporting the business to practically attain its intended aim and objectives. As suggested by Armstrong (2009), organisational culture has to be “relevant to the needs and circumstances” of an organisation and its ultimate scope has to be the one of favouring good levels of performance, rather than hampering efficiency.

The quality of an organisation’s climate is clearly strictly dependent on the level of fairness, consistency and integrity an organisational culture is able to inspire and foster in each individual concerned. Differently from culture, individual perceptions are not immediately and directly influenced by the level of performance a business culture is able to foster within the organisation, but rather by some other aspects as fairness, equity, consistency and integrity.

Organisational climate, seen from the individual perspective, is subject therefore to be both negatively and positively perceived.
Influences on behaviour
The impact of culture and climate on individual behaviour can be considered unquestionable. Clearly, both culture and climate have a considerable importance on determining the way in which individuals behave and perform within an organisation. Nonetheless, since organisational climate is directly impacting each individual more than culture does, and since climate is exclusively and differently perceived by each employee in that it is associated with his/her subjective perceptions, it can be concluded that organisational climate definitely has a more direct and powerful influence on individual behaviour than organisational culture has.
Provided it could be assessed, in those occasions in which climate is perceived by individuals in a way which is consistent and coherent with organisational culture (or in the terms used by French et al, 1985, when individual perception coincide with the actual situation), it is possible to say that the behavioural effects produced by organisational culture are the same as those generated by organisational climate.
Since organisational climate is directly affected by, and dependent on, organisational culture, businesses should invariably pay extra care to climate measurements feedback and strive to constantly find and come up with new ways of changing or supporting organisational culture accordingly.

Influence on the psychological contract
As the content of the psychological contract, creeping up changes notwithstanding, is mainly associated with fairness, involvement, influence capability and opportunities for growth and development, it is very likely that both organisational culture and even more organisational climate have a strong impact on it.
Individuals’ perceptions and feelings of the work environment, practices, policies and procedures introduced by employers are clearly sorely influenced by their expectations.
Since the feeling of the breaching of the psychological contract by initiative of the employer produces remarkable negative effects on employee motivation and attitude towards their work and organisation, employers should pay extra care during the development and “execution” of their corporate culture. The risk being that employees will become more and more distant from their organisations both because they believe that their employer has breached their individual psychological contract and by reason of the overall business culture which they might consider as not (or no longer) being supportive of their aspirations and expectations.

Longo, R., (2012), Main differences between organisational culture and organisational climate; Milan: HR Professionals [online].