Chapter Two
Organizational Climate - Definition
Organizational
climate has many definitions that have evolved over time. What truly makes up the climate within an
organization? Many of these definitions
come from the worldview of the researcher. Depending on what definition we
accept and what worldview we espouse the direction (bias) a researcher brings
to the research will be influenced (Puusa, 2006). So what is organizational climate?
“Organizational climate, defined as the way in which organizational members
perceive and characterize their environment in an attitudinal and value-based
manner (Denison, 1996; Moran and Volkwein, 1992; Verbeke, Volgering, and
Hessels, 1998), has been asserted as an important and influential aspect of
satisfaction and retention, as well as institutional effectiveness” (Thompson,
nd). Calahane and Sites (2008)
paraphrasing James & James, 1989; James, James & Ashe, 1990; James
& Jones 1974 and James & Sells, 1981 stated: “Organizational climate is
a collective perception of the work environment by the individuals within a
common system.” “Climate, as such, is a stable organizational characteristic
that is maintained overtime and which gains considerable inertia as generations
of workers come and go (Wiener, 1988)” (Calahane, et al, 2008). “Organizational climate is a relatively
ending quality of the internal environment that is experienced by the members,
influences their behavior and can described in terms of values of a particular
set of characteristics of the organization (Renato Tagiuri, 1968)” (Wordpress,
2008). “Organizational climate is the
set of characteristics that describe an organization and that (a) distinguish
one organization from other organizations; (b) are relatively enduring over
time and (c) influence the behavior of the people in the organization (Forehand
& Gilmer, 1964)” (Wordpress, 2008).
Patterson, Warr & West (2004) quoting Denison 1996 described climate
as “those aspects of the social environment that are consciously perceived by
organizational members” (pg 193).
A very close
cousin to organizational climate is organizational culture. I believe that Deshpande and Webster (1989)
provide a clear distinction between culture and climate in quoting Schnieder
and Rentsch (1987)…
“climate refers to the ways
organizations operationalize the themes that pervade everyday behaviors that
get rewarded, supported and expected by organizations (the ‘what happens around
here’). Culture refers to the history
and norms and values that members believe underlie climate (the ‘why do things
happen the way they do’) and the meanings organizational members share about
the organization’s imperative” (pg 5)
Another way to
look at climate and culture is demonstrated in the following diagram. The observable culture could also be the
organizational climate. This is what
people (internal and external) see and thus perceive how the organization
functions.
Schneider &
Snyder (1975) provide an excellent definition of organizational climate and one
that aligns itself with the worldview of this researcher:
“Organizational climate is most adequately conceptualized
as a summary perception which people
have of (or about) an organization. It
is, then, a global impression of what
the organization is. Many different classes of events or organizational
practices and procedures may contribute to the global or summary perception people have of their organization” (pp 318-319, italics
mine).
Organizational Climate - Studies
There are many
studies about the impact of organizational climate on organizations. Of the studies reviewed for this research
project, there are three types of organizations studied: manufacturing, retail
sales and child welfare agencies. These
studies also featured topics such as productivity, effectiveness, customer perception,
employee involvement and retention. We
will begin this section with a description of these studies
Manufacturing
Johannsen, Johnson
& Stinson (1976) investigated relationships between organizational climate,
productivity and satisfaction among coal miners. Kangis, Gordon & Williams (2000) looked
at the electronic manufacturing sector and the knitwear and hosiery
manufacturing companies. Companies
performing above or below an average will also show different climate
measurements. Corporate effectiveness
was observed when the perception of employees’ of involvement in decision
making, information sharing and management support was greater.
Elankumaran (2004)
studied the relationship between personality, organizational climate and job
involvement with 300 workers at the floor level in two identical textile mills
in India that were a part of the National Textile Corporation owned by the
Government. 90 respondents were selected
to receive the Organizational Climate questionnaire as the final phase of the
study. The results of this study found
no significant relationship between organizational climate and job involvement
or organizational climate and personality.
To increase job involvement and enhance organizational effectiveness one
must have a realistic view of personality and organizational climate.
Patterson, et al
(2004) studied organizational climate and company productivity: the role of
employee affect and employee level at 42 manufacturing companies in the UK with
employees ranging from 70 – 1150.
Organizational climate was described with five aspects that were found
to correlate significantly with productivity: “concern for employee welfare,
skill development, reflexivity, innovation and flexibility and performance
feedback” (pg 206). Employees that
perceived their organization placing more emphasis on these aspects were more
productive than others.
Neal, West,
Patterson (2005) studied whether effective human resource management (HRM)
practices are contingent on organizational climate and competitive strategy
among 92 UK manufacturing firms ranging from 60 – 1769 employees. Organizational climate was measured to assess
the perceptions of employees and their work environment. Their results revealed when there is a poor
organizational climate there is more correlation between HRM and
productivity. This is because favorable
organizational climates had less room to show improvement since they were
already functioning in a productive manner.
These studies
demonstrate the strong relationship between organizational climate and productivity
and effectiveness. They also demonstrate
that organizational climate is a perceptional construct. The results of Johannsen, et al, (1976)
indicated that organizational climate is positively related to productivity (pg
68). “Climate is much more in the
foreground of organizational members’ perception” (Kangis, et al, 2000, pg
533). Kangis, et al (2000) identified a
significant relationship between organizational climate variables and
performance variables. Job involvement
influenced by personality and organizational climate is an important construct
maximizing organizational effectiveness (Elankumaran, 2004). Employees who allocate discretionary effort
to their work rate the organizational climate as positive (Neal, et al,
2005). Employee perception of the
organization meeting their expectations were more productive than others
(Patterson, et al, 2004).
Retail Sales
Rogg, Schmidt,
Shull & Schmitt (2001) studied HR practices within organizations and
relating those practices to measures of organizational effectiveness mediated
by organizational climate.
Organizational climate then influences the attitudes and behaviors of
employees and ultimately effectiveness.
This study featured 385 franchise automotive dealerships.
Cooil, Aksoy,
Keiningham & Maryott (2009) studied perceptions of organizational climate
and business-unit outcomes. They felt
measuring organizational climate was critical because of the link to
organizational success. The study was
with 107 superstores of a multinational retail grocer in continental Western
Europe.
In discussing
organizational climate and organizational performance “employee evaluations of
organizational climate have been related to the perceptions of the customers
who purchased the organization’s services or products” (Rogg, et al., 2001, pg
435). The perception of organizational
climate of the organizational member influences the perception of
organizational climate of the customer.
Relationships between organizational climate and customer service are
statistically significant. Variables
involving customer orientation and employee commitment dimensions were
significant as well. Organizational
climate and customer satisfaction are correlated (Rogg, et al., 2001). Cooil, et al. (2009) found that a positive
organizational climate is necessary for financial success but not the cause of
such success.
Child Welfare Agencies
Glisson &
Hemmelgarn (1998) conducted the first study stating organizational climate is a
major predictor of the quality and outcomes of children’s services (pg
402). “The research suggests that
attitudes shared by employees about their work environment are important
determinant’s of the organization’s effectiveness (pg 404). This study focused on the service quality
received by children placed in state custody and have been in custody for at
least one year. “Organizational climate
had a positive effect on both process and results” (pg 417). Bednar (2003) found similar results. “Apparently employee’s perceptions of the
workplace and their roles in that workplace can have an influence on client’s
perceptions of services” (p 10).
Glisson (2007)
cited a number of studies done by his organization that linked culture and
climate to service quality, service outcomes, worker morale, staff turnover,
the adoption of innovations and organizational effectiveness. Data was collected from 97 child welfare
agencies nationwide with 88 agencies meeting the study criteria. The results of this study of child welfare
systems found that those agencies with significantly better outcomes had
significantly better climates.
Cahalane &
Sites (2008) discussed the climate of child welfare employee retention. Organizational factors are a major predictor
of turnover. Factors include quality of
supervision, intrinsic worker fulfillment, job satisfaction from appropriate
assignments, personnel policies and agency climate. This study was with graduates of a Title IV-E
program that had received funding for their education with the stipulation that
they maintain employment with a sponsoring child welfare agency. Individuals selected for the study were those
who had completed their obligation. “Employee’s interaction and experience within
the organization in which they work is replicated with those who receive their
services” (pg 96).
Child Welfare
agencies are a particular interest to this researcher. Glisson, et al. (1998) found that service
effectiveness had more relationship to organizational climate than to system
configurations. Previous studies seemed
to fail because they focused on the system configuration rather than on the
dimension of organizational climate and related attitudes of service
providers.
Organizational
climate was again shown to be a perceptional construct. Glisson (2007) states that climate is the
property of the individual and captures the way people perceive their work
environment. “Organizational climate is
created when the individuals in a work unit, team or organizational share the
same perceptions of how their environment affects them as individuals” (pg
739). Organizational climate was also
shown to impact turnover. The results
suggest that creating positive organizational climates lead to retention of
highly skilled and educated employees.
Personnel issues are a significant factor in child welfare agencies
(Cahalane, et al., 2008).
Fundraising
In reviewing
literature about fundraising, one finds much about how to have a successful
fundraising event, writing a winning direct mail piece, website enhancements,
telephone scripting, etc. Sargeant
(2001) is a proponent of relationship fundraising as first recognized by Burnett
(1992). Relationship fundraising is
about the donor (NPF) relationship with the donor-advancement team member
(NPA). How does the NPA facilitate the
NPF relationship after a donation is made?
This is a critical relationship but is not the focus of this
research.
“Donors exhibiting
a high level of loyalty may develop favorable perceptions as a consequence of
their relationship, or their favorable perceptions may predispose them to
continuing their association for a long period” (Sargeant, 2001, pg 188). Again, these donor perceptions are with the
donor-advancement team members (NPA) and not the organization (NPO) as a
whole. As in the model presented, there
is a two-way relationship between the NPA and NPF. This relationship does create successful
fundraising. The focus of this research
is that the overall organization’s climate (NPO) impacts this two-way
relationship in a negative manner.
Shapiro (2010)
asked the question, “does service matter?
The value of service quality and donor perceptions of service is
apparent within the non-profit sector” (pg 154). Shapiro continued to discuss the importance
of service quality and fundraising success particularly in college
athletics. The service quality is referring
to the donor-advancement team member’s (NPA) quality of service to the donor
(NPF). The quality of this service can
influence donor satisfaction and behavior.
A donor’s (NPF) perception of service quality (NPA) tends to lead to
staying active and becoming loyal contributors.
This perception is one reason that for this project the
donor-advancement team (NPA) is not considered a part of the nonprofit
organization (NPO).
Arthur Brooks
(2004) wrote about the effectiveness of nonprofit fundraising. Social welfare agencies receive 12% of all
individual charitable giving (pg 363).
Most donations to social welfare agencies are of the smaller on average
gift as compared to educational institutions.
Since social welfare agencies depend on these smaller gifts they need
more of them. Being effective in the
funding acquisition is important.
“Fundraising performance is an evaluation focus that governments and
other funders will almost certainly increasingly adopt in their contracting and
granting processes” (pg 364). How is
effectiveness measured? At some point,
when the last dollar spent to fundraise returns less than a dollar, is it
effective? Population, economics and
demographics of the area where a nonprofit provides its service(s) also impacts
what may be considered its effectiveness.
He discusses two ratios of fundraising: one that deals with what is left
over after fundraising and the other in an organization’s ability to retain and
target donors. Brooks then prefers to
use the Adjust Performance Measures (APM) because of its ability to account for
environmental influences that may make the raw data comparisons unfair and
unreliable.
Organizational Climate - Measured
In the studies
cited in this research there were several different instruments used to measure
organizational climate. Some were
created by the researchers. Others used
previous instruments that are proven.
Others used a mixture of these two approaches. The instruments varied from nine items to
more than 115 items. There is no
established instrument for measuring organizational climate. Glisson (2007) cited a literature review
performed by Verbeke, Volgering & Hessels (1998) where they identified more
than 30 definitions for organizational climate (pg 739). Patterson, et al. (2004) cited a 2000 study
by Wilderon, Glunk & Maslowski where they identified organizational climate
dimensions associated with organizational performance. The issue was different organizational
climate aspects emerged as important in each different study (p 194). A brief description follows of the difference
approaches taken.
Johannsen, et al.
(1976) used a nine item tool that included organization of work,
supportiveness, job satisfaction (6) and productivity. They computed correlations between the two
climate dimensions and both satisfaction and productivity. Glisson, et al. (1998) used the Psychological
Climate Questionnaire assembled by James and Sells (1981) to develop their own
Children’s Services Organizational Climate Survey. This questionnaire included versions of 10
scales used by numerous researchers over the past three decades (pg 411). Kangis, et al. (2000) used the Perceived Work
Environment (PWE) developed by Newman (1977) using 31 items in six climate
dimensions. Rogg, et al. (2001) used a
22 item survey on four aspects of organizational climate: employee commitment,
cooperation and coordination, customer orientation, management competence and
consistency. Elankumaran (2004) used a
questionnaire based on Likert’s Profile of Organizational Characteristics. This tool has 51 items that cover 8
dimensions of organizational climate: leadership process used, character of
motivational forces, character of the communication process, character of the
interaction-influence process, character of the decision-making process,
character of goal setting or ordering, character of control process and
performance goals and training (pg 121).
Patterson, et al.
(2004) created their own inventory based on 17 dimensions determined to be
important based on previous research and discussions with managers (pg
200). Glisson (2007) used their
Organizational Social Context (OSC) to measure organizational climate on three
second order factors: engagement, functionality and stress. Cahalane, et al. (2008) used the Children’s
Services Organizational Climate Survey developed by Glisson & Hemmelgarn
(1998). This instrument uses 115 items
that measure 14 domains of the work environment. Cahalane (2008) also added to the inventory
to collect demographic and other data not covered in the instrument. Cooil, et
al. (2009) created their own instrument based on interviews with the research
organization and employee perception questions developed by a firm specializing
in employee perceptions.
Literature Review Conclusion
Each of these
studies successfully related organizational climate to the outcome they were
looking for. Manufacturing companies
increased their productivity, retail sales organizations increased customer
satisfaction and child welfare agencies better served their clients and
impacted employee retention. There is no
argument that organizational climate impacts many aspects of an organization
whether they are a for-profit or non-profit organization.
Organizational
climate has a one way impact on particular aspects of an organization. Can organizational climate cause a specific
reaction in one aspect of an organization and cause another specific reaction
in another aspect? The goal of this
research is to study the impact of organizational climate and a nonprofit’s
ability to secure funding through its donor advancement team. The organizational climate of a nonprofit
organization (NPO) creates a specific reaction with the nonprofit funders (NPF)
that is different from the specific reaction between the nonprofit advancement
team (NPA) and the nonprofit funder (NPF).
Organizational
climate is about perception. “Climate is
often considered largely limited to those aspects of the social environment
that are consciously perceived by the organizational members” (Denison, 1996). “Climate is internal to the extent that it is
affected by individual perceptions” (Woodman & King, 1978). Successful fundraising is about
perception. Shapiro (2010) examined
studies on the nature of service and the impact of perceived service quality on
donor behavior (p. 154). “Donors who
scored high in perceptions of satisfaction were 1.8 times more likely to remain
active contributors” (Shapiro, 2010, p. 157).
Organizational
climate perception is more than that of the organizational members; it also
includes stakeholders and the community at large. This perceived organizational climate of the
stakeholders and community at large is the influence on successful
fundraising. If this organizational
climate perception is facilitated by the advancement team (NPA), then
successful fundraising will be the outcome.
If this organizational climate perception is facilitated by other
organizational members (NPO), then successful fundraising may not be the
outcome.
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