Organizational Climate and Culture
- Mark G. EhrhartMark G. EhrhartAssociate Professor, Department of Psychology, San Diego State University
- and Benjamin SchneiderBenjamin SchneiderBen Schneider Consulting
Research on the internal psychosocial environment of work organizations has largely been captured through the study of two constructs: organizational climate and organizational culture. Despite the inherent similarities between the two constructs, they have largely been studied in separate literatures, by different sets of researchers, and more often than not with different methodologies. For instance, research in organizational climate tends to have a relatively narrow focus on the shared perceptions of employees, and contemporary climate research in particular tends to have a focus on specific strategic goals (such as climates for service or safety) or internal processes (such as climates for fairness or ethics). Organizational culture is broader than organizational climate, starting with deep-level assumptions and values and becoming manifest in almost all aspects of organizational life. A review of both literatures and the suggested integration of them leads to a rich understanding of how employees experience their work organizations and the consequences of organizational behavior for what happens in organizations for people and organizational effectiveness.
Insights from the literatures on both organizational climate and organizational culture are needed to gain a full understanding of how organizational environments come to be, how they influence important organizational outcomes, and how they can be changed. An introduction to organizational climate and organizational culture is provided along with an overview of their similarities, differences, and ways the two can be profitably integrated in future research and practice.
Organizational climate has been defined as “the shared meaning organizational members attach to the events, policies, practices, and procedures they experience and the behaviors they see being rewarded, supported, and expected” (Ehrhart, Schneider, & Macey, 2014, p. 69). Although the concept was discussed and at times studied in various ways prior to the late 1960s, empirical research on organizational climate began in earnest at that time. The 1970s was a time of clarification for research in this area, as critics questioned the utility of the construct and supporters clarified its definition and measurement. For instance, critics questioned whether it was distinct from individual-level attitudes (e.g., Guion, 1973), whether it was different from other unit-level constructs (e.g., James & Jones, 1974), whether it should be measured as a perception (e.g., Payne & Pugh, 1976), and why its relationship with outcomes was not more consistent (e.g., Hellriegel & Slocum, 1974). The resolution of these issues set the foundation for climate research for the decades to follow. One central clarification came from James and Jones (1974), who distinguished between psychological climate (climate at the individual level of analysis) and organizational climate (climate at the organizational or subunit level of analysis). Most contemporary climate research addresses organizational climate, viewing climate as a property of the unit that is clearly distinct from individual perceptions. Another important clarification that emerged was Schneider’s (1975) differentiation of molar climate, or the generic environment in the organization, and focused climate, or those facets of the environment that are most relevant for a specific criterion of interest. Research on molar climate tends to address a broad number of dimensions intended to capture the many ways that employees might experience their work environments. In contrast, Schneider (1975) emphasized the value of a focused approach, arguing that if researchers focused on the most relevant aspects of the environment for a particular outcome, then the predictive validity of those climate measures should be stronger. Subsequent research on service climate (e.g., Schneider, Parkington, & Buxton, 1980) and safety climate (e.g., Zohar, 1980) supported this assertion. In fact, the idea of focused climates has been widely adopted such that researchers have distinguished types of focused climates, with some focused on the organization’s strategic goals (e.g., safety, service) and others focused on internal processes (e.g., fairness, innovation; Ehrhart et al., 2014).
Another important issue that emerged from the critiques of climate in the 1970s was how to properly measure climate at the organization or subunit level. If organizational climate is grounded in shared perceptions, then it is necessary to demonstrate that individuals agree sufficiently in their perceptions such that the mean of their ratings is a valid representation of the unit’s climate. Addressing these issues positioned climate research and researchers as a major influence on multilevel research design, measurement, and analysis (Klein & Kozlowski, 2000). From a measurement perspective, the wording of survey items became an important issue; if the goal is to have employees describe the organizational environment, then the items must be asked in a way to encourage description (instead of evaluation) and to have respondents report on what happens in the overall unit of interest (rather than their personal perspective or opinion). This approach is consistent with the “referent-shift” aspect of the referent-shift consensus model described by Chan (1998). The consensus or agreement part of that model reflects one of the other key issues addressed in climate research: how to demonstrate that there is consensus among raters within the unit of interest. Beginning with the work of James and his colleagues (James, 1982; James, Demaree, & Wolf, 1984), researchers have made significant advances on the topics of aggregate interrater agreement and reliability (Bliese, 2000; LeBreton & Senter, 2008). An in-depth discussion of these issues is beyond the scope here. However, the important takeaway is that researchers now have the tools to demonstrate that there is adequate agreement among respondents and that the relative proportion of between unit variance to within unit variance is high enough to support the aggregation of individual climate perceptions to the unit level. An important implication of these measurement and design issues is that climate can be studied both between organizations and at multiple levels within an organizational hierarchy (Powell & Butterfield, 1978; Schneider, 1975) as long as the researcher provides theoretical and analytical support for the level of interest and documents sufficient consensus at the level of analysis of interest.
Although much progress was made in clarifying the concept of climate throughout the 1970s and into the 1980s, research in the area waned, perhaps because of the rise in interest in the related concept of organizational culture. Nevertheless, a resurgence of research on climate occurred beginning in the late 1990s (Kuenzi & Schminke, 2009), and the popularity of the construct continues to be strong. Most of the contemporary literature on climate can be categorized as focused climate research at the unit or organizational level, and the foundation of this literature is the continued strength of the findings for climate’s relationship with outcomes across levels of analysis. For instance, service climate has been shown to be related to a variety of service-related outcomes across levels of analysis, including customer satisfaction, financial outcomes, service behavior, and customer loyalty (e.g., Hong, Liao, Hu, & Jiang, 2013; Liao & Chuang, 2004; Schneider, Ehrhart, Mayer, Saltz, & Niles-Jolly, 2005; Schneider, Macey, Lee, & Young, 2009; Schneider, White, & Paul, 1998; Way, Sturman, & Raab, 2010). Safety climate has been shown to be associated with safety behavior, accidents, and injuries (Beus, Payne, Bergman, & Arthur, 2010; Christian, Bradley, Wallace, & Burke, 2009; Hofmann & Stetzer, 1996; Zohar, 1980, 2000). Justice climate has been shown to be related to team performance, turnover, absenteeism, citizenship behavior, and job attitudes (Colquitt, Noe, & Jackson, 2002; Ehrhart, 2004; Liao & Rupp, 2005; Naumann & Bennett, 2000; Simons & Roberson, 2003; Whitman, Caleo, Carpenter, Horner, & Bernerth, 2012). And as a final example, ethical climate has been associated with fewer unethical behaviors (such as lying or organizational deviance; Martin & Cullen, 2006; Peterson, 2002), more ethical behaviors (such as ethical management and whistle-blowing; Deshpande, George, & Joseph, 2000; Rothwell & Baldwin, 2007), and more positive employee attitudes (such as satisfaction and commitment; Martin & Cullen, 2006; Treviño, Butterfield, & McCabe, 1998). This list is merely a sampling; the focused climate construct has been applied to many more organizational processes and strategic outcomes with consistently strong findings for its predictive validity (see Ehrhart et al., 2014; Kuenzi & Schminke, 2009, for detailed reviews). Just as the number of focused climates that researchers have studied is substantial, so also is the number of focused climates that could potentially be created in organizations. The climate literature has not directly addressed the choices that organizations or leaders make in the climates they establish, and thus precisely how to choose the “best” set of focused climates on which to focus has not received attention to our knowledge. However, the Gestalt psychology tradition behind much climate research (Schneider, 1975) suggests that every possible facet of climate need not be assessed. So, we can state that if companies simultaneously address a set of process issues (e.g., fairness, ethics, inclusion) that collectively such emphases will send a message to employees that the organization cares about people. In addition, if a company simultaneously emphasized a climate for service and a climate for innovation, these would not necessarily send conflicting messages about where the company believes important effort and attention is required. The issue of multiple focused climates provides an interesting area for future research as well as a basis for an integration of research on climate and strategy.
As support has grown for the relationship between focused climates and outcomes, researchers have integrated more nuance and complexity into their research designs. One area that has received growing interest is the topic of climate strength. Although researchers typically must demonstrate that there is adequate agreement within groups to justify aggregation, research on climate strength addresses the extent to which there is agreement as a variable in and of itself. The typical approach to studying climate strength is to treat it as a moderator of the relationship between climate and outcomes. The theory behind this approach is that relatively greater consensus in climate reports provides a more reliable indicator and will thus be more strongly related to outcomes of interest. Research findings on this proposed moderated relationship have been mixed, with some studies finding support (e.g., Colquitt et al., 2002; Drach-Zahavy & Somech, 2013; González-Romá, Peiró, & Tordera, 2002; Schneider, Salvaggio, & Subirats, 2002) and others not (e.g., Dawson, González-Romá, Davis, & West, 2008; Lindell & Brandt, 2000; Rafferty & Jimmieson, 2010; Sowinski, Fortmann, & Lezotte, 2008). Even when climate strength has not had moderating effects, however, it has still shown some direct positive effects on outcomes like store profitability, turnover, team-level stress, and well-being (Rafferty & Jimmieson, 2010; Sowinski et al., 2008). Additional research on climate strength has provided some insight into why some climates may be stronger or weaker than others. Factors such as leadership, social interaction, group cohesiveness, group size, average tenure, and team diversity have all been identified as antecedents of climate strength (Beus, Bergman, & Payne, 2010; Colquitt et al., 2002; González-Romá et al., 2002; Luria, 2008; Naumann & Bennett, 2000; Roberson, 2006; Zohar & Luria, 2004).
Researchers have also shown interest in other possible boundary conditions of the relationships between climate and outcomes. The goal of much of this research is to uncover the factors that strengthen or weaken the effects of climate. In the service climate literature, for example, a series of studies has shown that its effects are stronger when the level of customer contact is high, when the product is less tangible, when service employees are more interdependent, and when the internal service levels (the service provided to front-line workers from other units within the organization) are high (Dietz, Pugh, & Wiley, 2004; Ehrhart, Witt, Schneider, & Perry, 2011; Mayer, Ehrhart, & Schneider, 2009). Another example of research on climate’s boundary condition is in the safety literature, where higher levels of a safety climate are associated with fewer back injuries and medication errors for nurses, but only when patient complexity is high (Hofmann & Mark, 2006). From the justice literature, there is some evidence to suggest that the effects of justice climate on individual-level outcomes are stronger when group power distance is low or when the individual’s justice orientation is high (Liao & Rupp, 2005; Yang, Mossholder, & Peng, 2007). In addition, recent research suggests that one climate may influence the outcomes of another climate. For instance, diversity climate has the strongest relationships with customer satisfaction when service climate and minority representation are both high (McKay, Avery, Liao, & Morris, 2011), and high levels of procedural justice climate can buffer the negative effects of a low distributive justice climate (Spell & Arnold, 2007).
Additional research on moderation effects has focused on climate as the moderator. For individual-level relationships, the thinking is that the environment (as indicated by the climate) plays a role in the extent to which individual differences manifest themselves behaviorally. Along these lines, research has shown that customer orientation is more strongly related to service behavior when service climate levels are high, the idea being that there are more opportunities for individuals with a high customer orientation to provide high-quality customer service when they are in a climate that supports such high-quality customer service (Grizzle, Zablah, Brown, Mowen, & Lee, 2009). Another way of thinking about climate as a moderator is that it can compensate for low levels of important individual differences in employee behavior. For instance, research has shown that individual-level customer orientation and job autonomy are important predictors of customer-focused voice behaviors when service climate levels are low, but when service climate levels are high, employees tend to perform such voice behaviors no matter their customer orientation or autonomy (Lam & Mayer, 2014). Climate is also studied as a moderator of the effects of unit-level constructs. In some of this research, the idea is that the environment must be right for certain variables to be maximally effective. So, for instance, process innovation will result in improved firm performance, but only when the climate for initiative and the climate for psychological safety are high (Baer & Frese, 2003). Along the same lines, safety training will have a greater impact on reducing accidents when safety climate levels are high (Burke, Chan-Serafin, Salvador, Smith, & Sarpy, 2008). The diversity climate literature has shown that the presence of a positive diversity climate can result in a positive relationship between racial or ethnic heterogeneity and unit performance versus a negative relationship when diversity climate levels are low (Gonzalez & DeNisi, 2009), and it can reduce or eliminate racial differences in sales performance (McKay, Avery, & Morris, 2008). Thus, research indicates that focused climates can play a particularly critical role in establishing the context for the effectiveness of organizational processes and functioning.
As climate research has increased in its complexity, another direction it has taken is to clarify the mechanisms through which various constructs internal to the organization are related to organizational effectiveness. This category of research includes research on antecedents of climate, on climate as a mediator of the effects of other variables, and mediators of climate’s effects on organizational outcomes. All of this research provides insights into either climate as a mechanism for how other variables are related to effectiveness or the processes through which climate has its effects on outcomes. With regard to the latter, perhaps the most studied variable has been leadership, with roots going back to the earliest climate research by Lewin, Lippitt, and White (1939) on how the democratic versus autocratic style of the leader impacted the social climate of the group. Leadership is one of the primary antecedents of climate, and climate appears to be one of the main mechanisms through which leaders have an influence on the units they lead. Research on leadership and climate has examined leader individual differences such as goal orientation (Dragoni, 2005), core self-evaluations (Salvaggio et al., 2007), and personality (Mayer, Nishii, Schneider, & Goldstein, 2007), negative leader behaviors such as undermining (Frazier & Bowler, 2015), general leadership styles such as transformational leadership (Zohar, 2002; Zohar & Tenne-Gazit, 2008) and servant leadership (Ehrhart, 2004; Walumbwa, Hartnell, & Oke, 2010), and strategically focused leadership behaviors such as service leadership (Jiang, Chuang, & Chiao, 2015; Schneider et al., 2005) and safety leadership (Barling, Loughlin, & Kelloway, 2002). Beyond leadership, researchers have examined a number of “foundation issues” (Schneider et al., 1998) that are viewed as being necessary but not sufficient for the development of a focused climate. These foundation issues have included organizational resources (Salanova, Agut, & Peiró, 2005), organizational rewards (Wallace, Popp, & Mondore, 2006), human resource practices (Hong et al., 2013), high performance work systems (Jiang et al., 2015), and a general concern for employees (Towler, Lezotte, & Burke, 2011). These foundation issues would seem to create a generally positive work environment for employees, which is the primary focus of research on molar climate. Thus, the literatures on molar climates and focused climates can be integrated by viewing the molar climates, which might emerge from simultaneously focusing on multiple process climates, as supporting employee morale, and then a strategic climate as indicating the target for employees’ efforts toward specific strategic organizational goals. In other words, the positive molar climate makes employees more receptive to what the organization is attempting to accomplish through its strategic climate(s). The strategic focus of the climate then can increase employees’ motivation, effort, and engagement toward the accomplishment of the organization’s strategic goals, as well as increase employees’ strategically focused behaviors and performance (Abdelhadi & Drach-Zahavy, 2012; Greenslade & Jimmieson, 2011; Jiang et al., 2015; Neal & Griffin, 2006; Schneider et al., 2005). It is employees acting in ways consistent with the climate in their unit that ultimately produces the outcomes of interest, such as customer satisfaction, reduced accident rates, and financial performance (as in models presented by Ehrhart & Raver, 2014; Ostroff, Kinicki, & Muhammad, 2012).
Finally, there are a few trends in recent climate research that are likely to persist in the future. One is the study of how multiple climates operate simultaneously in work units. Recent research has explored how both diversity climate and service climate interact in predicting customer satisfaction (McKay et al., 2011) and how safety climate, service climate, and productivity climate simultaneously influence the relationship between safety versus production conflict and safety behavior (Jiang & Probst, 2015). Related to this research is how climate operates simultaneously at multiple levels of the organization, and how the alignment across levels is critical for organizational effectiveness (Zohar & Luria, 2005). Another trend is to examine configurations or profiles of climate dimensions (Schulte, Ostroff, Shmulyian, & Kinicki, 2009), an idea that has also been applied to climate strength by examining patterns of (dis)agreement in work units (González-Romá & Hernández, 2014). A final trend is the development of interventions specifically to improve the climate of work units. This trend has been particularly prevalent in the safety literature (Kines et al., 2010; Naveh & Katz-Navon, 2015; Zohar & Polachek, 2014), although interventions have been developed in other areas as well, including how leaders can develop a climate for the implementation of evidence-based practices in mental health organizations (Aarons, Ehrhart, Farahnak, & Hurlburt, 2015). The focus on leadership in these interventions highlights the critical role leaders seem to play in developing and changing organizational climate, and the inclusion of leadership at multiple levels in some of them (e.g., Aarons et al., 2015; Naveh & Katz-Navon, 2015) again highlights the importance of the alignment of leadership across levels to develop positive, strong molar, process, and strategic climates. Nevertheless, more research is needed on how climates emerge and are created, and specifically on the role of leadership and culture in their creation.
Organizational culture has been defined as “a pattern of shared basic assumptions learned by [an organization] as it solved its problems of external adaptation and internal integration, which has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (Schein, 2010, p. 18). Organizational culture is closely aligned with the values and beliefs that manifest themselves in almost all aspects of organizational life, and which ultimately make the organization unique. Most scholars point to Pettigrew’s (1979) article analyzing the culture of a British private boarding school as the starting point of contemporary research on organizational culture. Although the concept of culture had been applied to organizations before that point, Pettigrew’s article legitimized academic research on the topic (Alvesson & Berg, 1992) and coincided with a rise in interest in organizational behavior by both academics and practitioners. In fact, it could be argued that practitioner interest in organizational culture is what pushed academics to explore the concept in more depth, as books on the topic gained strong popularity in the business world (e.g., Deal & Kennedy, 1982; Ouchi, 1981; Pascale & Athos, 1982; Peters & Waterman, 1982). Throughout the 1980s and 1990s, in particular, the concept of organizational culture and its emphasis on the expressive and symbolic aspects of organizational life received extensive attention, eventually becoming a cornerstone topic in the literature on organizational behavior and management (Alvesson, 2011).
With the popularity of organizational culture came a variety of perspectives on how it should be conceptualized and studied. Although there are many ways of categorizing and organizing these different approaches (which have been addressed in depth elsewhere; see Alvesson, 1993, 2002; Giorgi, Lockwood, & Glynn, 2015; Martin & Frost, 1996; Ott, 1989; Trice & Beyer, 1993), one broad but useful distinction is between cultures as something organizations have and something organizations are (Smircich, 1983). When culture is conceptualized as something organizations have, it is treated as an organizational variable to be studied side-by-side with other organizational variables, with the goal of understanding how it relates to organizational effectiveness, typically with a management audience in mind. When culture is conceptualized as something organizations are, it is viewed as a root metaphor with the goal of understanding the symbolic meaning behind the day-to-day experiences of organizational life, with a particular interest in understanding those experiences from the perspective of organizational members. These two perspectives for studying and understanding organizational culture tend to be related to the methods used for studying organizational culture. Because those who view organizations as having cultures tend to be interested in predicting organizational outcomes and making comparisons across organizations, the tendency is to use quantitative methods, particularly surveys, to measure culture. Because those who view culture as something organizations are tend to be interested in understanding the insider’s perspective and in the deeper layers of organizational culture that organizational members may not even be fully aware of, the propensity is to use qualitative methods that can provide rich, in-depth accounts of organizational life. Although this description is fairly broad and groups a wide variety of perspectives and methods into two general categories, overlooking a number of important distinctions in culture research, it is a useful starting point for understanding how culture is studied.
One area of commonality in these perspectives is that culture has deep elements that capture the core assumptions and basic values that are pervasive across the organization. These deeper elements are then manifested in outer, more observable elements, which constitute a variety of cultural forms such as language, stories, rituals, ceremonies, traditions, behavioral norms, dress, the physical arrangement of the space, and many more. These outer elements are more obvious and easier to access by outsiders; however, their meaning may not be as obvious without a full understanding of the deeper cultural layers. The most widely cited framework of the levels of culture comes from the work of Schein (2010). He labeled the deepest layers of culture as underlying assumptions, noting that they make up the essence of organizational culture, guiding how organizational members think and behave, even if they are outside of workers’ conscious experiences. The intermediate layer of culture identified by Schein was espoused values. Espoused values constitute what organizational members and particularly management say is most important to them; however, they may be more aspirational than reality, and potentially biased to give a positive impression to outsiders about the organization. Finally, Schein labeled the outermost layer of culture as the artifacts; as noted previously, these elements may provide a starting point for understanding culture, but more digging is needed to understand the “true” culture, especially because the same cultural artifacts can have very different meanings across organizations. Although other authors have included additional layers such as patterns of behavior and behavioral norms (Rousseau, 1990; Sathe, 1985), values-in-use (Ott, 1989), enacted content themes (Siehl & Martin, 1990), and strategic beliefs (Lundberg, 1990), the most important takeaway is that culture is deep and manifests itself throughout the organization in a variety of ways. Those manifestation processes are dynamic, and do not go only from the deeper to outer layers; changes in the outer layers may also influence the deeper levels (Hatch, 1993).
One major question that has been addressed in the organizational culture literature is its source. Perhaps the most cited source is the founder. As Schein (1983, 2010) has discussed in depth, the founder’s ideas and decisions when first establishing the organization are infused with his or her values, assumptions, and beliefs. One of the ways the founder has a major influence on the culture that develops is through the people he or she brings into the organization. As outlined in Schneider’s (1987) attraction-selection-attrition (ASA) model, the individuals the founder hires to work with him or her and who are retained over time will tend to be those who share the personality, values, and beliefs of the founder. Furthermore, new workers who are attracted to the organization will tend to also have commonalities with those currently in the organization. As the ASA cycle continues over time, the organization’s culture will tend to be consistent with the original founder’s values, perpetuating his or her influence over time. The founder is not the only influence on an organization’s culture, however. Schein (2010) also discussed the role of the collective learning of the organization’s members; the organization’s success acts as a reinforcement and the members of the organization will tend to continue those behaviors that have been successful in the past, sometimes even after the environment has changed and those behaviors no longer result in the same success. The organization is also a product of its environment. For instance, organizations within the same industry tend to mimic each other and work within the same sets of constraints and with the same external parties (e.g., government bodies, customers, etc.; Ott, 1989). Certain industries tend to also be made up of workers from certain professions, and professions tend to have their own cultures that can influence the organization’s culture (Holland, 1997; Louis, 1985; Trice & Beyer, 1993; Van Maanen & Barley, 1984). The organization’s culture is also embedded in a national culture, and although there is variability within any national culture in the nature of organizations and their cultures, research indicates that between 21% and 47% of the variance in organizational culture may be due to national culture (Brodbeck, Hanges, Dickson, Gupta, & Dorfman, 2004).
How organizational culture is perpetuated over time is the focus of the literature on socialization. Socialization is a critical variable in the organizational culture literature, so much so that Schein (2010) included how culture is taught to new members in the very definition of culture. It is critical because organizational culture must be passed on to new members to be perpetuated over time, and if it is not perpetuated, then its effects will be minimized. Thus, the literature on socialization is quite developed and has addressed a number of facets of the socialization process. One of the types of information that new employees learn during socialization involves the larger organization within which they will function (Ostroff & Kozlowski, 1992), including such cultural information as the language and terminology employees use, the internal politics of the organization, the organization’s goals and values, and the history of how the organization was founded and how it developed over time (Chao, O’Leary-Kelly, Wolf, Klein, & Gardner, 1994). Newcomers learn this information from a variety of sources, including organizational literature, formal socialization programs, mentors, supervisors, and coworkers, ordered here from those over which the organization has the most control to those over which it has the least (Cooper-Thomas & Anderson, 2006). Along this continuum, the cultural information becomes richer, and there are more opportunities for employees to learn where the espoused values of the organization may contradict employees’ actual experiences. How organizations use formal approaches to socialization has been another focus of research, with two broad categories of socialization tactics (Jones, 1986): those that are less formal and that are customized to the individual (individualized tactics) and those that are more formal and structured for groups of employees (institutionalized tactics). Although the more individualized tactics may be more flexible and may promote more innovation (Jones, 1986), institutionalized tactics tend to produce more positive outcomes for employees (Bauer, Bodner, Erdogan, Truxillo, & Tucker, 2007). Finally, as employees are formally or informally socialized, they go through a number of phases in the process of becoming full members of the organization, along the lines of the literature on rites of passage (Trice & Beyer, 1993). One socialization model includes four stages of socialization (Ashforth, Sluss, & Harrison, 2007): anticipation (including the information new employees learn and the expectations they form before entry), encounter (new employees’ entry into the organization and the comparison between the actual experiences and their expectations), adjustment (when new employees learn more about the organization and figure out how things work), and stabilization (when employees have made the transition from an outside to an insider).
Especially for practitioners and researchers viewing culture as something an organization has, the importance of the concept of organizational culture rests in its relationship with organizational effectiveness. There are multiple reasons for expecting a link between organizational culture and effectiveness, including the tendency for a strong culture to align employees around the organization’s goals and values, culture’s informal influence and control of employees that reinforce the performance of desired behaviors, and the humanistic orientation of most of the culture literature emphasizing employee participation and well-being, which increases employee commitment and motivation (Denison & Mishra, 1995; Kotter & Heskett, 1992). Sackmann’s (2011) review of the relationship between culture and performance found general support for the existence of this relationship. Hartnell, Ou, and Kinicki’s (2011) meta-analysis of 94 independent samples was also supportive of culture dimensions predicting a variety of organizational outcomes, including employee attitudes, operational performance, and financial performance. Moreover, recent research on the causal sequence of culture and performance found consistent support for culture predicting performance rather than the other way around (Boyce, Nieminen, Gillespie, Ryan, & Denison, 2015). Although there is evidence for the culture-performance relationship, there are also those that question whether the search for a direct link between culture and performance makes sense in light of the complexity of the organizational culture construct, including its many forms and multiple layers (Alvesson, 2002; Saffold, 1988; Siehl & Martin, 1990). Others have pointed out the need to take into account the situation and how the link between cultural components and effectiveness is likely to vary depending on the organization’s external environment (Kotter & Heskett, 1992; Sørensen, 2002). Despite these criticisms and the general lack of theory guiding research in this area (Wilderom, Glunk, & Maslowski, 2000), most culture researchers agree that the construct has important implications for organizational effectiveness, whatever form the exact relationships may take.
Although much of the literature discusses organizational culture as if it was uniform across the organization, that is not always the case; there can be (and perhaps typically are) subcultures that also exist throughout the organization, and some cultures are generally weaker or stronger than others. These differences are highlighted in Martin’s (1992, 2002) organizational culture framework that includes three perspectives on the uniformity of culture in organizations: (1) integration (a focus on cultural elements that are shared across the organization), (2) differentiation (the acknowledgement of subcultures within the organization that may be inconsistent with each other or in conflict), and (3) fragmentation (in which ambiguity, tension, and paradox are the primary focus). Most of the literature on organizational culture tends to take an integration perspective, but the other two perspectives shed light on important aspects of organizational culture as well. The differentiation perspective emphasizes subcultures, which can come in many shapes and forms, and exist for a variety of reasons. Subcultures can come to exist within divisions or departments, or be based on occupation or profession, skill requirements for jobs, management level, products sold, or union membership (Gregory, 1983; Hopkins, Hopkins, & Mallette, 2005; Martin & Siehl, 1983; Morgan & Ogbonna, 2008; Trice & Beyer, 1993; Van Maanen, 1991; Van Maanen & Barley, 1985). Martin and Siehl (1983) described three general types of subcultures: (1) enhancing subcultures in which a certain group within the organization identifies with and represents the culture to a stronger degree than is found elsewhere in the organization; (2) an orthogonal subculture that shared in the general organizational culture but also has a separate set of values that are not in conflict with the overall values in the culture; and (3) a countercultural subculture that is in direct opposition to the overall or dominant culture. Closely related to the fragmentation perspective is the idea of culture strength, in that the weaker the culture, the more it will be characterized by ambiguity. The strength of the culture has been discussed in a variety of ways, including the extent the cultural values are shared throughout the organization, how deeply members hold the values and beliefs of the culture, how long the culture has existed within the organization, the extent to which the deeper-level assumptions and values are manifested broadly across organizational artifacts, and the range of beliefs or behaviors that are targeted by the organization’s culture (Chatman, Caldwell, O’Reilly, & Doerr, 2014; Louis, 1985; Mannix, Thatcher, & Jehn, 2001; Payne, 2000, 2001; Saffold, 1988). There is evidence to suggest that a strong culture is associated with higher organizational effectiveness (Denison, 1990; Gordon & DiTomaso, 1992; Kotter & Heskett, 1992), although others have found such effects can vary depending on environmental factors (Lee & Yu, 2004; Sørensen, 2002). Still others have suggested that a strong culture will have consistent relationships with effectiveness when the content of the culture emphasizes flexibility and adaptability (Chatman et al., 2014; Flynn & Chatman, 2001; Kotter & Heskett, 1992). The common theme across these perspectives is that there is not always agreement about organizational culture, and it is important to account for potential subcultures or the possibility of weak cultures.
Finally, the issue of change is prevalent throughout the culture literature, whether it be in terms of how to change a culture or the implications of culture for other types of change. The topic of organizational change has received extensive attention (Burke, 2011; Cummings & Worley, 2014; Kotter, 2012), so the focus here will be on those issues most commonly discussed in the organizational culture literature. Cultures exist to provide order and to remove ambiguity and uncertainty; as a result, they are very resistant to change (Deal & Kennedy, 1982; Ogbonna & Harris, 2014; Ott, 1989; Schein, 2010; Trice & Beyer, 1993). In fact, one of the major critiques of the early practitioner literature on culture was that it characterized culture change as overly simple and straightforward (Martin, 1985). This is not to say that cultures do not change; the issue is more whether organizational leaders and consultants can plan for and initiate that change, or whether it is caused by a variety of uncontrollable forces and is, thus, unpredictable (Alvesson & Sveningsson, 2008). It may be the case that culture can be changed at some times more easily than others; for instance, leaders may be more able to change culture at certain points in the organization’s life cycle or when the organization is experiencing a crisis (Louis, 1985; Lundberg, 1985; Schein, 2010; Siehl, 1985). It may be more useful to think about how cultural elements can be leveraged to bring about positive change in an organization, and to avoid attempting to change less desirable aspects of the culture unless they are in direct opposition to necessary changes to be made (Schein, 2010). Even then, it would probably be most effective to focus culture change efforts as narrowly as possible, always remembering that cultures exist for reasons of history and prior success so they will be durable over time and be difficult to change.
Integration and Conclusion
Although both organizational climate and organizational culture address the psychosocial organizational environment, the two constructs have existed on relatively parallel tracks for the last several decades, with little integration between the two. Building on earlier work by Denison (1996), Ehrhart, Schneider, and Macey (2014) highlighted a number of similarities and differences between the two constructs to emphasize what they have in common and to clarify their unique aspects. With regard to commonalities, both constructs provide a macro perspective of organizational context and both are primarily focused on the context rather than the idiosyncratic experiences of individuals. In addition, both place considerable emphasis on the shared experiences of employees, the role of meaning, the role of leadership, issues of strength or alignment, and the implications of the context for organizational effectiveness. Although they have many similarities, there are also some critical differences. For instance, they come from different theoretical and methodological traditions; the concept of culture is rooted in anthropology where qualitative methods have traditionally been favored over quantitative, whereas climate is rooted in psychology with an emphasis on surveys and quantitative analysis. Organizational culture is a broader construct that encompasses much of employees’ experiences at work, whereas climate is more narrowly defined in terms of employees’ shared perceptions of the organization’s policies, practices, procedures, and reward systems. The deeper layers of culture are potentially outside of the day-to-day awareness of employees, whereas climate is based on employees’ reports of what is happening around them at work. Although both culture and climate are difficult to change, the deepest assumptions and core values of culture are more difficult to change than climate. Finally, climate research has moved in the direction of being studied with a particular strategic or process focus, whereas culture research tends to take a broader perspective attempting to be more all-encompassing and less focused.
These differences in research on organizational climate and culture are important because they suggest the strengths of each literature and how integrative approaches that take advantage of this complementarity could provide additional insights beyond what can currently be found in either literature alone. Several recent efforts have attempted to demonstrate how the two constructs may work together to yield a better understanding of organizational environments and their outcomes. For instance, Schneider, Ehrhart, and Macey (2011) proposed the “climcult framework” in which positive, humanistic values create a culture of well-being, which forms a foundation for strategically oriented climates and the achievement of the organization’s strategic goals. At the same time, a positive culture for employees helps make the organization an attractive place to work, and attracting and retaining talent also contribute to organizational effectiveness. In another model, Ostroff, Kinicki, and Muhammad (2012) depicted organizational culture as influencing climate through the structures and processes that are put into place as organizations grow and develop. The alignment of culture, structure, practices, and climate shapes the collective attitudes and behavior of employees, which then lead to the attainment of important organizational outcomes. Finally, Zohar and Hofmann (2012) aligned organizational climate with the concept of enacted values. In their model, climate perceptions of strategic climates represent employee perceptions of what the actual values and priorities are in the organization. These can be contrasted with the espoused values, and gaps between the two provide insight into the core assumptions and values that make up the deep layers of culture.
The study of organizational climate and culture has provided deep insights into the role of the organizational environment for employees and organizational effectiveness. Although much has been learned, there is still work to be done. Learning from the culture literature, climate researchers can include a broader variety of variables in their research, focus more on issues of socialization and change, and add qualitative methods to complement their quantitative designs. Learning from the climate literature, culture researchers can develop more of a strategic focus in their conceptualization and study of culture, include more complex models with mediators and moderators of the relationship between culture and effectiveness, and focus more attention on how culture research is relevant for organizational leaders. Ultimately, the usefulness of the two constructs is derived from the insights they provide about how organizations come to be and how they can be changed. First founders and then leaders implement policies and procedures to meet their goals, thereby creating strategic climates within their organizations. Their actions reflect their own values, and those values become enacted in the behaviors displayed in the organization that literally operationalize the core values that are the organization’s culture. At the same time, the climates that are created reinforce behavior, and as certain behaviors become normative across organizational members, it becomes taken for granted that they represent the appropriate and proper way to behave. Insights from both literatures are needed to fully understand these processes, and thus, the integration of ideas and approaches from both lines of research will result in a richer, deeper understanding of the psychosocial organizational environment for leaders, practitioners, and researchers.
We greatly appreciate the feedback from Dan Denision on an earlier draft of this article. His comments were very helpful to us in framing the potential integration of climate and culture and their use.
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