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Organizational climate: Relationship to organizational structure, process and performance
ORGANIZATIONAL BEHAVIOR AND HU1ViAN PERFORI~cIANCE
il, 139-155 (1974)
Organizational Climate: Relationship to Organizational Structure, Process and Performance 1 EDWARD E. LAWLER I I F
University o/ Michigan DOUGLAS T. HALL Michigan State University GREG R. OLDHAM University o/Illinois The present study was designed to test the view that organization structure and process are related to organizational climate which in turn is related to organization performance and employee job satisfaction. Questionnaires were completed by the directors of 117 research and development organizations and by 291 scientists in a subsample of 21 of these organizations. Results showed that several organizational process variables (but no structural variables) were significantly related to the climate of the organization as perceived by scientists. Perceived climate in turn was shown to be significantly related to measures of organizational performance and to job satisfaction. A considerable amount of the recent organizational behavior literature has been concerned with the topic of organizational climate (Frederikson, 1966; Friedlander & Margulies, 1969; Litwin & Stringer, 1968; Schneider, 1971; Schneider & Bartlett, 1968, 1970; Tagiuri & Litwin, 1968). M a n y of the studies of organizational climate have used different definitions and measures of climate. However, most studies do seem to agree that organizational climate can be considered an employee's subjective impressions or perceptions of his erganization. According to Schneider and Hall (1972), climate perceptions emerge as a result of the person's numerous activities, interactions, feelings, and other daily This research was sponsored by a grant (No. RSA-67-6) from the Connecticut Research Commission. The assistance of Dr. John Burlew, Director of the Commission, and Dr. George Royer, member of the Commission, throughout the study was extremely helpful. Work on the project was completed while E. Lawler was a Visiting Fellow at the Battelle Seattle Research Center, Seattle, Washington. 139 Copyright © 1974 by Academic Press, Inc. All rights of reproduction in any form reserved.
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experiences in his organization. They further suggest that perceived climate may be related to a number of outcome variables such as individual job satisfaction, involvement, and performance. In this view, climate is an intervening variable, caused by independent variables such as job activities and organizational structure, and in turn influencing a variety of output variables which are important to the organization as a system as well as to the individual employee. Much of the research on climate has conceptualized it as an independent rather than as an intervening or dependent variable and has focused primarily on the relationships between climate and such variables as job satisfaction and performance. For .example, in a study of a research and development organization, Friedlander and Margulies (1969) found that climate had a significant relationship to satisfaction with interpersonal relationships and opportunities for advancement. In a longitudinal study of insurance agencies, Schneider (1971) found that organizational climate was a valid predictor of agency (but not individual) success. Similar results have also been reported by Pritchard and Harasick (1973). In a different vein, Scheflen'~ analyzed the net income and turnover data from seventeen major operating divisions of a large organization. Utilizing climate measures similar to the semantic differential climate measures used in the present study, he found strong relationships between organizational climate and both organizational income and turnover rates. Finally, Litwin and Stringer (1968) studied three simulated business organizations. Each organization had a climate which aroused individual's need for either power, affiliation, or achievement. The results showed that the organization with the "achievement climate" was significantly more productive and innovative than the organizations with the "power" and "affiliation" climates. Given the apparent significance of organizational climate with respect to job satisfaction and performance, it would seem to be important to identify the determinants of organizational climate. Only if these determinants are known will it be feasible to initiate changes within organizations which will result in a more productive and satisfying climate. The research on attitude formation suggests that people's perceptions of an organization's climate should be related to the psychologically important characteristics of the obiective environment which exists in the organization. Research has also shown that the important aspects of the work environment include the interlcersonal style of the leaders, the nature of the interpersonal relationships among peers, the nature of iob, the structure of the organization, and the reward systems (Vroom, 1964). 3Personal communication, 1971.
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Several studies have taken steps toward identifying the specific factors in the work environment which seem to influence climate. For example, the previously mentioned studies by Litwin and Stringer (1968) and Schneider and Bartlett (1968) considered climate to be primarity affected by the leadership style used in an organization. Friedlander and Margulies (1969), on the other hand, considered climate to be influenced by both leadership and co-worker behavior. Schneider and Hall (1972) found relationships between specific work activities and climate, while Pritchard and Korasuk (1973) have shown local office conditions influence climate, although they do not specify what the important conditions are. Unfortunately, no studies have explored the effects that other variables might have on organizational climate. For instance, the structural design of an organization and the administrative procedures and processes that are in effect would seem to be likely influences on perceived organization climate. Organization structure and such process variables as how pay is administered directly affect such important parts of the objective environment as the rewards people receive, the kind of communication patterns that develop, and the amount of autonomy employees experience. Organization structure has been studied mainly as it relates to job attitudes and behavior, rather than to climate (e.g., Oarzo & Yanouzas, 1969; Meltzer & Salter, 1962; Porter & Lawler, 1964, 1965). In an earlier review of these studies, Porter and Lawler (1965) pointed to five structural variables that generally had significant relationships with attitudes and behavior. These are: organizational level, line/staff position, subunit size, total organization size, and tall/flat shape. Only two properties (organizational level and subunit size) had consistently strong relationships with attitudes and performance. Climate has never been studied as a possible intervening variable in these relationships. There is a limited amou.nt of evidence available to support the notion that organizational process factors are viable correlates of job satisfaction and performance. The research which does exist suggests that among the more important organizational process variables are: bureaucratic procedures such as assignment generality or specificity, budget allocations, the association between performance reviews and compensation programs, and colleague collaboration. A number of studies have examined such variables in relation to organizational performance (e.g., Farris, 1969; Lawler, 1971; Pelz & Andrews, 1966). For example, Farris (1969) measured the associations between six organizational process variables (involvement in technical work, influence on work goals, extent of contact with colleagues, diversity .of work activities, salary, and number of subordinates) and four performance measures for a number of
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scientists and engineers. In general, the results showed that all six process variables were positively related to at least one performance measure. Pelz and Andrews (1966) gathered data from a larger number of scientists and engineers which tended to support these results. In none of these studies was climate examined as an intervening variable in these relationships. The present research uses the same approach to climate taken by Schneider and Hall (1972) ; it views climate as a generalized perception of the organization which the person forms as a result of numerous experiences in the organization. Two important influences upon the kind of experiences the person has and thus the climate perceptions he develops are hypothesized to be the formal structure and the administrative process of the organization. It is further hypothesized that these climate perceptions will in turn be related to the individual's performante and satisfaction. Figure 1 shows a set of hypothesized relationships between organizational climate,and the other factors discussed thus far. It shows climate as an intervening variable in the relationships between structure and process, on ~he one hand, and performance and satisfaction, on the other. If these relationships exist as specified, structure and process variables should be strongly related to organizational climate; and climate, in turn, should be strongly related to job performance and satisfaction measures. Structure and process should be less strongly related to performante and satisfaction than is organizational climate because climate is a variable which moderates the relationship between the organizational environment and outcome variables. To provide a first test of this line of reasoning, evidence is needed on: (1) the relationship between structural and process variables and the climate of the organization as perceived by the employee, and (2) the relationship between perceived climate and job satisfaction and organizational performance. The present study is designed to provide data on these two issues. Such data cannot prove causality but they can determine whether the causal relationships implied in the figure are worth testing further.
ORGANIZATION } PERFORMANCE JOB ] SATISFACTION FIG. 1. The proposedmode].
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METHOD
Sample A questionnaire was administered to the Directors of Research in 117 research and development laboratories in the state of Connecticut. Data were also collected from 291 scientists in 21 of these research and development laboratories. The average age of the scientists was 37.9 years, and their average tenure in their organizations was 7.2 years. Most of the scientists had either master's or bachelor's degrees and were engaged in developing new marketable industrial and consumer products. Some of the scientists had administrative duties, but no full-time administrators or lab directors were included. The 117 organizations included in the study were relatively small, averaging less than a total of 100 employees. Most were captive labs in the sense that they provided services to large manufacturing companies. The 21 labs from which the sample of 291 scientists was drawn were similar to the other 96 labs on most characteristics (e.g., type of research, captive/noncaptive), but on the average they were larger in size. It was decided to collect data from individual researchers in only larger labs so that at least eight respondents would be obtained from each lab. This was felt to be the smallest number that would guarantee confidentiality and establish a stable mean response score when the individual responses were combined to produce attitude scores for each lab.
Procedure A questionnaire was mailed to the director of research in each of the 117 organizations. A .cover letter explained that the study was a Yale study and that feedback would be provided to respondents. After the questionnaire was completed, the researchers visited 21 of the larger labs to collect data from individual scientists. The investigators met with the scientists in small groups (size 4-9) and explained to them the purpose of the study. It was strongly emphasized that this was a Yale University study, not a company study, and that individual results would be kept confidential. Finally, it was pointed out that no one had to participate in the study and that the questionnaires could be anonymous if they wished. A short group interview was conducted (see Hall & Lawler, 1970) after which the researchers were asked to complete an attitude questionnaire.
Questionnaire Measures from Directors Structural variables. Data pertaining to the structure of the organization was obtained from organizational charts which each R & D lab-
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oratory director was asked to draw. Detailed instructions were included on each questionnaire to assist the director in elassifying and categorizing all subordinates and placing the R & D lab in its proper relationship to the larger organization of whi.ch it was a part. The instructions required the directors to give very detailed information about their organizations. In effect, the instructions asked them to draw an organization chart that could be assessed in terms of various measures of organizational structure. This was done because of the difficulty of coding the ambiguous and noncomparable charts that are usually maintained by organizations themselves. Many directors were unwilling or unable to give this information; thus, this part of the questionnaires contained eonsiderable missing data. Those directors who failed to provide structural data were eontaeted and an effort was made to secure this information, but frequently it was not obtained. From the charts that were secured, the following specific struetural properties were examined. 1. Span of control. The ratio of operating level employees to first line supervisors. 2. Size. Total size of the research and development laboratory. 3. Levels. The total number of levels in the researeh and development laboratory as measured by the longest chain in the hierarchy. 4. Tall/Flat. The ratio of research and development organization size to number of levels. 5. Levels from top. The number of levels the R & D director is removed fom the parent organization's top level (i.e., president; board of direetors).
Process Variables. To obtain a measure of the degree to which certain policies were in existence in the various research and development organization, each director was administered a questionnaire containing items often linked to tt & D processes. Specific items and methods of measurement are described below: 1. Performance reviews. Two items were included in the questionnaire to assess the director's perception of different aspects of the performance review process. These items are: (a) Frequency: "How frequently are performance reviews conducted of employees with more than one year of servi.ee? _ _ times per year ;" (b) relation to compensation program: "How closely are performance reviews related to administration of compensation programs?" Alternatives: Very closely (scored 2), only generally (scored 1); or not linked to .compensation program (scored 0). 2. Professional autonomy. This item assessed director's perceptions of scientist freedom and autonomy to engage in at-work projects. The
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actual item and method of scoring are as follows. "Who typically decides what projects a given scientist in your laboratory will work on? (Please rank in terms of how frequently these methods are used)." Alternatives: "The scientist is completely on his own; He chooses from among several projects suggested by management; He and his superior jointly decide on the projects; management assigns him to a given project. The variable was coded so that a high score means the scientist had a high degree of professional autonomy. 3. Assignment generality. This item assessed directors' perceptions of the frequency of general vs specific assignments for a given scientist. The item and method of scoring are as follows. "How often are scientists in your organization given general assignments and asked to develop relevant research projects?" A Likert-type scale ranging from "very often" (scored 5) was utilized. 4. Collaboration support. This item assessed directors' perception of the degree to which scientist collaboration is encouraged in laboratories. The item and method of measurement are as follows. "To what extent would you say collaboration among engineers and scientists is encouraged in your laboratory?" A Likert-type scale ranging from "very much" (scored 5) to "not at all" (scored 1) was utilized. 5. Informal budget account. Directors were asked to report the existence (or nonexistence) of an informal research budget for use by scientists. The item and method of measurement are as follows. "Is there a specific budget account item that scientists are allowed to use for time spent on informal research not authorized as a specfic project?" Directors were asked to respond either "Yes" (scored 1) or "No" (scored 0). Performance. Three measures of performance were employed in the study: rated technical performance, rated administrative performance, and objective overall performance. Technical and administrative performance were measured by the research director's rating of his organization on these two dimensions using six-point percentile scales. The ratings were obtained with the following question. "In comparison to the performance of R & D laboratories doing the same general kinds of work as yours, how do you rate the performance of the technical and administrative members of yolar organization?" Technical
Administrative In In In In In In
the the the the the the
top 50/o top 10% (but top 25% (but top 50% (but top 75% (but lower 25%
not not not not
upper upper upper upper
5%) 10%) 25%) 50%)
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Overall performance was measured by a composite of the following: (1) net change in research and development budget during the last year, (2) number of new outside contracts, (3) number of new internally funded projects, (4) percentage of projects meeting time schedule , (5) number of contracts renewed, and (6) percentage of projects meeting cost budget. Standard scores were first obtained for ea.ch variable; then for each organization, a total objective performance score was obtained by summing the standard scores on each of these six variables.
Questionnaire Measures from Scientists Organizational climate. The 291 scientists were asked to describe their organization's climate on a number of bipolar adjective scales. Individuals were asked to indicate where on the scales they would rate their organizations. The following are two examples of scales used. Friendly Active
:
•Unfriendly : Passive
Responses were assigned scores of 1 through 7 based on the location of the check mark. Measures were then subjected to factors analysis, using a Varimax rotation, from which five factors were obtained. For the purposes of the data analysis, factors scores were obtained by summing the responses to the items on each scale. These factors, the items composing each factor, and Spearman-Brown reliabilities based on correlations of company means for each item, are reported below. (The positive end of each scale is italicized. When necessary the items were reverse scored when factor scores were computed.) Factor 1: Competent~Potent (rsB = .89) Inhibited- Uninhibited Shallow-Deep Unscientific-Scientific I mper sonal-P ersonM Uncreative-Creative Factor 2: Responsible (rsB = .60) Irresponsible-Responsible Moral-Amoral Factor 3: Practical (rs~ = .52) Realistic-Idealistic Unconventional-Conventional Factor 4: Risk-Oriented (rsB = .87) Daring-Cautious
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A ggressive-Unaggressive Cold-Warm Weak-Strang Factor 5: Impulsive (rsB --- .75)
Active-Passive Objective-Su b j ective Need Satisfaction. Scientists were asked to describe their job satisiactions and dissatisfactions in each of six areas: security, social, esteem, autonomy, self-fulfillment, and pay. The items used to measure the scientists' satisfactions were similar to those originally developed by Porter (1962). For each item the scientists were asked to rate on a 1 (minimum) to 7 (maximum) scale how much of the factor mentioned in the item (i.e., autonomy, pay) was now associated with their position. Second, they were asked to rate on a similar scale how much of the factor should be associated with their job. Satisfaction was measured for each individual scientist by subtracting the second part (should be associated) from the first part (now associated), and the data were coded so that a high score indicated high satisfaction. Organization scores were obtained by averaging the individual scientists' scores in each laboratory. In summary, a questionnaire was administered to each of 117 directors of R & D laboratories to assess their perceptions of laboratory structural components, existing process variables, and the performance of technical and administrative members of the laboratory. Finally, questionnaires were administered to 291 scientists in 21 of these same laboratories to assess their perceptions of their organization's climate along with their job satisfaction. An overall performance measure was also computed for each of these 117 organizations based on a number of objective criteria. Because satisfaction and climate data were collected from only 21 organizations, those analyses which involved measures were done using a sample of 21 organizations. All o.ther analyses were done on the larger sample (n = 117) because of its more representative character. RESULTS Table 1 shows the relationship among the process and the structural variables. The process variables tend not to be related to each other, although some of the structural variables are highly related to each other. As would be expected, flat organizations tend to have wide spans of control, and large organizations tend to be flatter and have wider spans of control. Overall, the process and structural variables are rather weakly related, suggesting that they are, in effect, measuring different
.12 --. 02
.26** --. 05 .03 .05
.14 --. 15 --. 09 --. 07
.13 .71"** .89***
Tall/fiat (n = 70)
--. 01 --. 02
.07 .11 --. 07 .14
* p < .10, ** p < .05, *** p < .01.
Performance review frequency Performance review relationship to compensation program Professional autonomy Assignment generality Collaboration support Informal budget account
Process variables
Levels Tall/fiat Levels from top Span of control Size
Structure
Levels (n = 70)
TABLE 1
--.16 .09 .11 .28**
--.03 --.09
.12 .15
Levels from top (n = 60)
Structure
.16 .17 --.04 .06
.12 --.20"
.79***
Span of control (n = 70)
.20** --.13 --.02 .06
.00 --.08
Size (n = 107)
--.01 --.13 --.06 --.01
.O1
--.14 .06 --.06 --.15
--.22 --.03 --.13
Performance review relationship to Performance compenProfcsreview sation sional frequency program autonomy ( n = 117) ( n = 117) ( n = 117)
R E L A T I O N S H I P A M O N G S T R U C T U R A L AND P R O C E S S V A R I A B L E S
--.01 --.33***
Assigmnent generality (n = 117)
Process
-.04
Collaboration support (n = 117)
Informal budget account ( n = t17)
0
eg
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v a r i a b l e s . ~ One e x p e c t a t i o n here is t h e finding t h a t flat o r g a n i z a t i o n s t e n d to h a v e s c i e n t i s t s w i t h m o r e a u t o n o m y , as do l a r g e o r g a n i z a t i o n s . T h u s , it is i m p o r t a n t to l o o k a t t h e r e l a t i o n s h i p of b o t h sets of v a r i a b l e s to c l i m a t e a n d to .satisfaction a n d p e r f o r m a n c e . T a b l e 2 p r e s e n t s the r e l a t i o n s h i p s b e t w e e n s t r u c t u r a l v a r i a b l e s a n d o r g a n i z a t i o n a l c l i m a t e f a c t o r s for t h e 21 o r g a n i z a t i o n s in which c l i m a t e d a t a were o b t a i n e d . N o m e a n i n g f u l or s i g n i f i c a n t p a t t e r n s a r e a p p a r e n t . T h e o r g a n i z a t i o n ' s s t r u c t u r e a p p a r e n t l y h a s l i t t l e r e l a t i o n s h i p to t h e c l i m a t e of t h e o r g a n i z a t i o n as p e r c e i v e d b y scientists. R e s u l t s s h o w i n g t h e r e l a t i o n s h i p s b e t w e e n process v a r i a b l e s a n d o r g a n i z a t i o n a l c l i m a t e f a c t o r s a r e also shown in T a b l e 2. F i v e of t h e six process v a r i a b l e s c o r r e l a t e s i g n i f i c a n t l y w i t h one or m o r e of t h e o r g a n i z a t i o n c l i m a t e m e a s u r e s . T h e o r g a n i z a t i o n ' s c l i m a t e was g e n e r a l l y p e r eeived as m o r e c o m p e t e n t / p o t e n t , r e s p o n s i b l e , p r a c t i c a l , r i s k - o r i e n t e d , TABLE
2
RELATIONSHIPS BETWEEN STRUCTURAL AND PROCESS VARIABLES AND ORGANIZATIONAL CLIMATE
Climate Competence/ potence
ResponRisksible Practical oriented
Impulsive
Structural Variables
Span of Control (n = 13) Size (n = 21) Levels (n = 13) Tall/flat (n = 10) Levels from top (n = 14)
.01 -.04 .29 .03 .11
.54** .20 .31 .45* .20
- .04 -.12 .24 -.19 .17
.12 -.01 .15 .12 .40
.19 .12 .31 .27 -.20
--. 08 .45**
- . 38* .52***
--. 05 .43**
.33 .35 .10 .24
.44** .23 .31 .34
Process Variables (n = 21)
Performance review frequency - . 22 Performance review relation.47** ship to compensation program Professional autonomy .54*** Assignment generality .29 Collaboration support .35 Informal budget account .36*
--. 02 .07
.45** .40* .07 .40*
.42** .53*** .10 .24
* p < .10.
** p < .05. *** p < .01. 4Although it is not shown in Table 1, an analysis of the 21 organizations from which individual data were collected showed similar trends.
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and impulsive, the more closely performance reviews were tied to compensation programs, the greater autonomy scientists had with respect to projects, the more general assignments were given, and the more informal research budgets were available. Also, as the frequency of performance reviews, increased, the organization was perceived as less risk-oriented. The degree to which scientist collabora£ion was encouraged by the organization seemingly had little relationship to climate. The relationships between organizational climate factors and the performance and satisfaction measures are shown on T a b l e 3. Organizational climate factors were significantly related to two of the three performance measures: administrative and overall performance. Three of the five climate factors were significantly related to each of these performance indices; however, only the responsibility factor was consistently related to both. In general, the results show t h a t the more the climate was perceived as competent, responsible, practical, risk-oriented, and impulsive, the greater the objective performance of the organization and the more favorable the directors' ratings of the administrative performance of the organization. Table 3 also shows t h a t significant, positive associations occurred between each of the climate factors and at least two of the six satisfacTABLE 3 RELATIONSHIPS BETWEEN ORGANIZATIONAL CLIMATE FACTORS AND PERFORMANCE AND SATISFACTION MEASURES Climate Competence/ Responpotence sible Practical
Riskoriented
Impulsive
Performance measures (n = ~1)
Technical Administrative Objective
- . 12 .49** .34
- . 17 .40* .38*
- . 13 .03 .45*
.05 .43* .25
--.1O .25 .38*
Satisfaction measures
Security Social Esteem Autonomy Fulfillment Pay * p < .10.
** p < .05. *** p < .01.
.28 .49** .67*** .56*** .73*** .42*
.44* - . 24 .34 .02 .37* .20
.09 .59*** .47* .58*** .49** .31
.37* .28 .62*** .44* .66*** .45*
.47* .50** .57*** .54*** .67*** .34
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151
tion measures. As with performance, the results suggest that the more competent, responsible, practical, risk-oriented and impulsive the organization's climate was perceived to be by the scientists, the more satisfied was the scientist on the job. Interestingly, the responsibility factor seemed to have the lowest relationship to satisfaction. There are few significant relationships between the structural and process variables and the measures of organizational performance2 The clearest finding here was a significant tendency for those laboratories that encourage collaboration among researchers to be rated more highly in terms of both technical and administrative performance (p < .01 for both). Overall, however, the correlations are small and not easily interpretable. The relationships between the structural and process variables and the satisfaction measures also showed few significant correlations, although there is a general tendency for high satisfaction to be associated with scientist independence and autonomy (median r = .38). DISCUSSION The results are summarized in Figure 2, with the numbers representing the median correlations between the various sets of variables. The results offer some support for the view that organizational processes are related to climate, which in turn is linked to satisfaction and performance. The highly significant, positive relationshps between organizational climate factors and performance and job satisfaction provide strong support for the last part of the argument. Two sets of relationships are especially noteworthy. The first of these are the highly significant relationships between organizational climate factors and the higher-order need satisfaction items (i.e., esteem, autonomy, and self-fulfillment). Climate is strongly related to scientists' feeling about the quality of their work experiences. The correlations between these variables are undoubtedly .i5 I"ORGANIZATION! / IORGANIZATION I I STRUCTUREI'~ ' ~IPERFORMANCEI " " '~ /I IORGANIZATION 1$ 1'09 CLIMATE I .; ?
I ORGAN,ZAT,ON I [PROCESS I
"
"
.o9
AT,OcT,ON1
FIG. 2. Summary of results. (Note: Numl~ers are median correlations between the indicated measures.)
5An analysis of the 21 organizations from which individual data were collected showed similar treads.
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LAWLER I I I , HALL AND OLDHA1VI
somewhat elevated because they all were measured by self-reports from the same individuals; ,still, they are sufficiently high so that they seem to be reflecting a real relationship. A second set of interesting and significant relationships are those between climate factors and overall performance indices (i.e., new outside contracts, percentage of contracts meeting cost budget, number of renewed contracts, etc.). These climate-performance relationships are especially interesting due to the objective manner in which overall performance was measured. These results lend additional support to previous studies (e.g., Friedlander & Margulies, 1969; Litwin & Stringer, 1968) which have found organizational climate to be a correlate of performance and job satisfaction. The present study also found that certain process variables (e.g., the granting of scientist autonomy, and tying performance reviews directly to compensation programs) are related to perceived climate. This is supportive of the view presented in Figure 1, since it argues that process determines climate. Surprisingly, the results suggest that structure simply does not play a noticeable role in determining an organization's climate. Climate does seem to be influenced by factors which more directly affect a person's daily work experiences. For example, previous studies (e.g., Friedlander & NIargulies, 1969; Litwin & Stringer, 1968; and Schneider & Hall, 1972) have shown tha5 factors such as leadership, co-worker behavior, and tasks which have an immediate, meaningful effect on an individual's organizational life, have an impact on an organization's climate. The process variables that the present study found to be related to climate were all things that seem to have a direct and immediate influence on the individual's organizational life. Generally low relationships were found between the structural and process variables and the outcome variables of satisfaction and performance. This is what would be expected if structure and process influence satisfaction and performance through their impact on climate. Still, based on some of the past research that has been done, it is :surprising that somewhat stronger relationships were not found. Other studies (see Porter & Lawler, 1965) have found such structural varia,bles as size and tall/flat shape to be directly related to satisfaction. In the present study, size and shape are both related to degree of professional autonomy, which in turn is related to satisfaction; bpt size and shape are no~ strongly related to satisfaction. There are three possible explanations for lower relationships found in the present study. First, it may be because of the nature of the organi-
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zations studied; few of the previous studies have been concerned with R & D labs and organizational processes may be far more important in relation to structure for seientists and engineers than it is for most employees. Second, it may be due to the low varianee that was present on many of the structural measures. Because of the homogeneity of the sample, there was less variance in such things as size and number of levels than one would find in a study of different types of organizations. Finally, it eould be due partially to poor structural data. As has been found in other studies and as is indicated by the amount of missing data, it is ditfieul~ to obtain good data on organizational structure. The present study tried to deal with this pro,blem by having special organization charts drawn and by only using data that could be clearly coded. This resulted in a great deal of missing data and the results give no assuranee that it produced better structural data. Although the relationships between process variables and climate are informative, still relatively little is known about the determinants of organizational climate. Further research is needed to identify other potential determinants of organizational climate. Based on the results of prior research, as well as the present study, it would seem most fruitful to examine variables which directly influence the organizational life of the employee (versus less direct variables such as organization structure, geographical location, or appearance of the organization). Among such variables might be the characteristics of the job for which the employee is responsible. More specifieally, eharaeteristics such as the degree of variety, feedback, and task identity (Hackman & Lawler, 1971) available on the job would seem to have a direct impact upon the individual and finally the climate of the organization. Personal characteristics such as the personalities and values of both supervisors and co-workers within the organization may also play an important part in determining the organization's climate. Some evidence for Che impact of job activities and personal values on climate already exists (Schneider & Hall, 1972). Finally, the eommunieation pattern(s) used by the organization has an immediate impact upon the individual's life within that same organization and may be a vital, yet currently unexplored, aspect of organizational climate. Research is also needed to determine the causal basis for the relationships which have been found between climate and performance and between various process variables and climate. This study of climate, like the previous ones, was a correlational study. The time is rapidly approaching when enough will .be known about the correlates of climate that it will be practical to begin testing for causal relationships.
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REFERENCES
CAazo, R., JR., & YANOUZAS, J. N. Effects of tall and flat organization structure. Administrative science quarterly, 1969, 14, 178-191. FAaRIS, G. F. Organizational factors and individual performance: a longitudinal study. Journal o] applied psychology, 1969, 53, 87-92. FREDER~KSO~, N. Some effects of organizational climates on administrative performance. Research Memorandum RM-68-~I, Educational Testing Service, 1966. FRIEDLANDER,F., & MARGULIES,•. Multiple impacts of organizational climate and individual value system upon job satisfaction. Personnel psychology, 1969, 22, 171-183. HACKMAN, J. R., & LAWLER,E. E., III. Employee reactions to job characteristics. Journal o] applied psychology monograph, 1971 55, 259-286. HALL, D. T., & LAWLER, E. E., I!I. Job characteristics and pressures and the organizational integration of professionals. Administrative science quarterly, 1970, 15, 271-281. HALL, D. W., • MANSFIELD, 1:~. Organizational and individual response to external stress. Administrative science quarterly, 1971, 16, 533-545. HALL, D. T., & SCHNEmER, B. Organizational climates and careers. New York: Seminar Press, 1972. LAWLER, E. E., III. Pay and organizational e]]ectiveness: a psychological view. New York: McGraw-Hill, 1971. LITWIN, C. H., ~5 STRINGER, R. A., JR. Motivation and organizational climate. Boston: Division of Research, Graduate School of Business Administration. Harvard University, 1968. MELTZER, L., & SALTF~, J. Organizational structure and the performance and jol: satisfaction of physiologists. American sociological review, 1962, 27, 351-362 PBLZ, D. C., & ANDREWS,F. M. Scientists in organization. New York: John Wiley & Sons, Inc., 1966. PORTER, L. W. Job attitudes in management: I. Perceived deficiencies in neec fulfillment as a function of job level. Journal o] applied psychology, 1962, 46 375-384. PORTER, L. W., & LAWLER, E. E., III. The effects of tall vs. flat organizatioi structures on managerial lob satisfaction. Personnel psychology, 1964, 17, 135-148 PORT~R, L. W., & LAWLER,E. E., III. Properties of organization structure in relatiol to job attitudes and iob behavior. Psychological bulletin, 1965, 64, 23--51. PRITCH^RU, R. D., & KARASICX, B. W. The effect of organizational climate o2 managerial job performance and satisfaction. Organizational behavior an( human per]ormance, 1973, 9~ 126-146. SCHNEIDER, B. Organizational climate and personnel selection. Paper presented a a symposium on "Organizational Climate," American Psychological Associa tion, Washington, D. C., September, 1971. SCHNEIDER, B., & BARTLETT, C. J. Individual differences and organizational climat~ I. The research plan and questionnaire development. Personnel psycholog~ 1968, 21, 323-334. SCHNEmEU, B., & B.AR~m~r, C. J. Individual differences and organizational climat( II. Measurement of organizational climate by the multitrait, multi-rater matri'~ Personnel psychology, 1970, 23, 493-512. SCHNEmER,B., ~; HALL,D. Toward specifying the concept of work climate: a stud
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of Roman Catholic diocisan priests. JouTnal o] applied psychology, 1972, 56, 447-455. TAGIUaI, R., & LITWI•, G. H. Organizational climate. Boston: Division of Research, Graduate School of Business Administration, Harvard University. 1968. VROO~, V. It. Work and motivation. New York: Wiley, 1964. ZANDER, A., FORWARD,J., • ALBERT, R. Adaptation of board members to repeated failure or success by their organization. Organizational behavior and human per]ormanee, 1969, 4, 56-76. RECEIVED: J a n u a r y
18, 1973
il, 139-155 (1974)
Organizational Climate: Relationship to Organizational Structure, Process and Performance 1 EDWARD E. LAWLER I I F
University o/ Michigan DOUGLAS T. HALL Michigan State University GREG R. OLDHAM University o/Illinois The present study was designed to test the view that organization structure and process are related to organizational climate which in turn is related to organization performance and employee job satisfaction. Questionnaires were completed by the directors of 117 research and development organizations and by 291 scientists in a subsample of 21 of these organizations. Results showed that several organizational process variables (but no structural variables) were significantly related to the climate of the organization as perceived by scientists. Perceived climate in turn was shown to be significantly related to measures of organizational performance and to job satisfaction. A considerable amount of the recent organizational behavior literature has been concerned with the topic of organizational climate (Frederikson, 1966; Friedlander & Margulies, 1969; Litwin & Stringer, 1968; Schneider, 1971; Schneider & Bartlett, 1968, 1970; Tagiuri & Litwin, 1968). M a n y of the studies of organizational climate have used different definitions and measures of climate. However, most studies do seem to agree that organizational climate can be considered an employee's subjective impressions or perceptions of his erganization. According to Schneider and Hall (1972), climate perceptions emerge as a result of the person's numerous activities, interactions, feelings, and other daily This research was sponsored by a grant (No. RSA-67-6) from the Connecticut Research Commission. The assistance of Dr. John Burlew, Director of the Commission, and Dr. George Royer, member of the Commission, throughout the study was extremely helpful. Work on the project was completed while E. Lawler was a Visiting Fellow at the Battelle Seattle Research Center, Seattle, Washington. 139 Copyright © 1974 by Academic Press, Inc. All rights of reproduction in any form reserved.
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experiences in his organization. They further suggest that perceived climate may be related to a number of outcome variables such as individual job satisfaction, involvement, and performance. In this view, climate is an intervening variable, caused by independent variables such as job activities and organizational structure, and in turn influencing a variety of output variables which are important to the organization as a system as well as to the individual employee. Much of the research on climate has conceptualized it as an independent rather than as an intervening or dependent variable and has focused primarily on the relationships between climate and such variables as job satisfaction and performance. For .example, in a study of a research and development organization, Friedlander and Margulies (1969) found that climate had a significant relationship to satisfaction with interpersonal relationships and opportunities for advancement. In a longitudinal study of insurance agencies, Schneider (1971) found that organizational climate was a valid predictor of agency (but not individual) success. Similar results have also been reported by Pritchard and Harasick (1973). In a different vein, Scheflen'~ analyzed the net income and turnover data from seventeen major operating divisions of a large organization. Utilizing climate measures similar to the semantic differential climate measures used in the present study, he found strong relationships between organizational climate and both organizational income and turnover rates. Finally, Litwin and Stringer (1968) studied three simulated business organizations. Each organization had a climate which aroused individual's need for either power, affiliation, or achievement. The results showed that the organization with the "achievement climate" was significantly more productive and innovative than the organizations with the "power" and "affiliation" climates. Given the apparent significance of organizational climate with respect to job satisfaction and performance, it would seem to be important to identify the determinants of organizational climate. Only if these determinants are known will it be feasible to initiate changes within organizations which will result in a more productive and satisfying climate. The research on attitude formation suggests that people's perceptions of an organization's climate should be related to the psychologically important characteristics of the obiective environment which exists in the organization. Research has also shown that the important aspects of the work environment include the interlcersonal style of the leaders, the nature of the interpersonal relationships among peers, the nature of iob, the structure of the organization, and the reward systems (Vroom, 1964). 3Personal communication, 1971.
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Several studies have taken steps toward identifying the specific factors in the work environment which seem to influence climate. For example, the previously mentioned studies by Litwin and Stringer (1968) and Schneider and Bartlett (1968) considered climate to be primarity affected by the leadership style used in an organization. Friedlander and Margulies (1969), on the other hand, considered climate to be influenced by both leadership and co-worker behavior. Schneider and Hall (1972) found relationships between specific work activities and climate, while Pritchard and Korasuk (1973) have shown local office conditions influence climate, although they do not specify what the important conditions are. Unfortunately, no studies have explored the effects that other variables might have on organizational climate. For instance, the structural design of an organization and the administrative procedures and processes that are in effect would seem to be likely influences on perceived organization climate. Organization structure and such process variables as how pay is administered directly affect such important parts of the objective environment as the rewards people receive, the kind of communication patterns that develop, and the amount of autonomy employees experience. Organization structure has been studied mainly as it relates to job attitudes and behavior, rather than to climate (e.g., Oarzo & Yanouzas, 1969; Meltzer & Salter, 1962; Porter & Lawler, 1964, 1965). In an earlier review of these studies, Porter and Lawler (1965) pointed to five structural variables that generally had significant relationships with attitudes and behavior. These are: organizational level, line/staff position, subunit size, total organization size, and tall/flat shape. Only two properties (organizational level and subunit size) had consistently strong relationships with attitudes and performance. Climate has never been studied as a possible intervening variable in these relationships. There is a limited amou.nt of evidence available to support the notion that organizational process factors are viable correlates of job satisfaction and performance. The research which does exist suggests that among the more important organizational process variables are: bureaucratic procedures such as assignment generality or specificity, budget allocations, the association between performance reviews and compensation programs, and colleague collaboration. A number of studies have examined such variables in relation to organizational performance (e.g., Farris, 1969; Lawler, 1971; Pelz & Andrews, 1966). For example, Farris (1969) measured the associations between six organizational process variables (involvement in technical work, influence on work goals, extent of contact with colleagues, diversity .of work activities, salary, and number of subordinates) and four performance measures for a number of
14~
LAWLER III, HALL AND OLDHAM
scientists and engineers. In general, the results showed that all six process variables were positively related to at least one performance measure. Pelz and Andrews (1966) gathered data from a larger number of scientists and engineers which tended to support these results. In none of these studies was climate examined as an intervening variable in these relationships. The present research uses the same approach to climate taken by Schneider and Hall (1972) ; it views climate as a generalized perception of the organization which the person forms as a result of numerous experiences in the organization. Two important influences upon the kind of experiences the person has and thus the climate perceptions he develops are hypothesized to be the formal structure and the administrative process of the organization. It is further hypothesized that these climate perceptions will in turn be related to the individual's performante and satisfaction. Figure 1 shows a set of hypothesized relationships between organizational climate,and the other factors discussed thus far. It shows climate as an intervening variable in the relationships between structure and process, on ~he one hand, and performance and satisfaction, on the other. If these relationships exist as specified, structure and process variables should be strongly related to organizational climate; and climate, in turn, should be strongly related to job performance and satisfaction measures. Structure and process should be less strongly related to performante and satisfaction than is organizational climate because climate is a variable which moderates the relationship between the organizational environment and outcome variables. To provide a first test of this line of reasoning, evidence is needed on: (1) the relationship between structural and process variables and the climate of the organization as perceived by the employee, and (2) the relationship between perceived climate and job satisfaction and organizational performance. The present study is designed to provide data on these two issues. Such data cannot prove causality but they can determine whether the causal relationships implied in the figure are worth testing further.
ORGANIZATION } PERFORMANCE JOB ] SATISFACTION FIG. 1. The proposedmode].
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METHOD
Sample A questionnaire was administered to the Directors of Research in 117 research and development laboratories in the state of Connecticut. Data were also collected from 291 scientists in 21 of these research and development laboratories. The average age of the scientists was 37.9 years, and their average tenure in their organizations was 7.2 years. Most of the scientists had either master's or bachelor's degrees and were engaged in developing new marketable industrial and consumer products. Some of the scientists had administrative duties, but no full-time administrators or lab directors were included. The 117 organizations included in the study were relatively small, averaging less than a total of 100 employees. Most were captive labs in the sense that they provided services to large manufacturing companies. The 21 labs from which the sample of 291 scientists was drawn were similar to the other 96 labs on most characteristics (e.g., type of research, captive/noncaptive), but on the average they were larger in size. It was decided to collect data from individual researchers in only larger labs so that at least eight respondents would be obtained from each lab. This was felt to be the smallest number that would guarantee confidentiality and establish a stable mean response score when the individual responses were combined to produce attitude scores for each lab.
Procedure A questionnaire was mailed to the director of research in each of the 117 organizations. A .cover letter explained that the study was a Yale study and that feedback would be provided to respondents. After the questionnaire was completed, the researchers visited 21 of the larger labs to collect data from individual scientists. The investigators met with the scientists in small groups (size 4-9) and explained to them the purpose of the study. It was strongly emphasized that this was a Yale University study, not a company study, and that individual results would be kept confidential. Finally, it was pointed out that no one had to participate in the study and that the questionnaires could be anonymous if they wished. A short group interview was conducted (see Hall & Lawler, 1970) after which the researchers were asked to complete an attitude questionnaire.
Questionnaire Measures from Directors Structural variables. Data pertaining to the structure of the organization was obtained from organizational charts which each R & D lab-
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oratory director was asked to draw. Detailed instructions were included on each questionnaire to assist the director in elassifying and categorizing all subordinates and placing the R & D lab in its proper relationship to the larger organization of whi.ch it was a part. The instructions required the directors to give very detailed information about their organizations. In effect, the instructions asked them to draw an organization chart that could be assessed in terms of various measures of organizational structure. This was done because of the difficulty of coding the ambiguous and noncomparable charts that are usually maintained by organizations themselves. Many directors were unwilling or unable to give this information; thus, this part of the questionnaires contained eonsiderable missing data. Those directors who failed to provide structural data were eontaeted and an effort was made to secure this information, but frequently it was not obtained. From the charts that were secured, the following specific struetural properties were examined. 1. Span of control. The ratio of operating level employees to first line supervisors. 2. Size. Total size of the research and development laboratory. 3. Levels. The total number of levels in the researeh and development laboratory as measured by the longest chain in the hierarchy. 4. Tall/Flat. The ratio of research and development organization size to number of levels. 5. Levels from top. The number of levels the R & D director is removed fom the parent organization's top level (i.e., president; board of direetors).
Process Variables. To obtain a measure of the degree to which certain policies were in existence in the various research and development organization, each director was administered a questionnaire containing items often linked to tt & D processes. Specific items and methods of measurement are described below: 1. Performance reviews. Two items were included in the questionnaire to assess the director's perception of different aspects of the performance review process. These items are: (a) Frequency: "How frequently are performance reviews conducted of employees with more than one year of servi.ee? _ _ times per year ;" (b) relation to compensation program: "How closely are performance reviews related to administration of compensation programs?" Alternatives: Very closely (scored 2), only generally (scored 1); or not linked to .compensation program (scored 0). 2. Professional autonomy. This item assessed director's perceptions of scientist freedom and autonomy to engage in at-work projects. The
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actual item and method of scoring are as follows. "Who typically decides what projects a given scientist in your laboratory will work on? (Please rank in terms of how frequently these methods are used)." Alternatives: "The scientist is completely on his own; He chooses from among several projects suggested by management; He and his superior jointly decide on the projects; management assigns him to a given project. The variable was coded so that a high score means the scientist had a high degree of professional autonomy. 3. Assignment generality. This item assessed directors' perceptions of the frequency of general vs specific assignments for a given scientist. The item and method of scoring are as follows. "How often are scientists in your organization given general assignments and asked to develop relevant research projects?" A Likert-type scale ranging from "very often" (scored 5) was utilized. 4. Collaboration support. This item assessed directors' perception of the degree to which scientist collaboration is encouraged in laboratories. The item and method of measurement are as follows. "To what extent would you say collaboration among engineers and scientists is encouraged in your laboratory?" A Likert-type scale ranging from "very much" (scored 5) to "not at all" (scored 1) was utilized. 5. Informal budget account. Directors were asked to report the existence (or nonexistence) of an informal research budget for use by scientists. The item and method of measurement are as follows. "Is there a specific budget account item that scientists are allowed to use for time spent on informal research not authorized as a specfic project?" Directors were asked to respond either "Yes" (scored 1) or "No" (scored 0). Performance. Three measures of performance were employed in the study: rated technical performance, rated administrative performance, and objective overall performance. Technical and administrative performance were measured by the research director's rating of his organization on these two dimensions using six-point percentile scales. The ratings were obtained with the following question. "In comparison to the performance of R & D laboratories doing the same general kinds of work as yours, how do you rate the performance of the technical and administrative members of yolar organization?" Technical
Administrative In In In In In In
the the the the the the
top 50/o top 10% (but top 25% (but top 50% (but top 75% (but lower 25%
not not not not
upper upper upper upper
5%) 10%) 25%) 50%)
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Overall performance was measured by a composite of the following: (1) net change in research and development budget during the last year, (2) number of new outside contracts, (3) number of new internally funded projects, (4) percentage of projects meeting time schedule , (5) number of contracts renewed, and (6) percentage of projects meeting cost budget. Standard scores were first obtained for ea.ch variable; then for each organization, a total objective performance score was obtained by summing the standard scores on each of these six variables.
Questionnaire Measures from Scientists Organizational climate. The 291 scientists were asked to describe their organization's climate on a number of bipolar adjective scales. Individuals were asked to indicate where on the scales they would rate their organizations. The following are two examples of scales used. Friendly Active
:
•Unfriendly : Passive
Responses were assigned scores of 1 through 7 based on the location of the check mark. Measures were then subjected to factors analysis, using a Varimax rotation, from which five factors were obtained. For the purposes of the data analysis, factors scores were obtained by summing the responses to the items on each scale. These factors, the items composing each factor, and Spearman-Brown reliabilities based on correlations of company means for each item, are reported below. (The positive end of each scale is italicized. When necessary the items were reverse scored when factor scores were computed.) Factor 1: Competent~Potent (rsB = .89) Inhibited- Uninhibited Shallow-Deep Unscientific-Scientific I mper sonal-P ersonM Uncreative-Creative Factor 2: Responsible (rsB = .60) Irresponsible-Responsible Moral-Amoral Factor 3: Practical (rs~ = .52) Realistic-Idealistic Unconventional-Conventional Factor 4: Risk-Oriented (rsB = .87) Daring-Cautious
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147
A ggressive-Unaggressive Cold-Warm Weak-Strang Factor 5: Impulsive (rsB --- .75)
Active-Passive Objective-Su b j ective Need Satisfaction. Scientists were asked to describe their job satisiactions and dissatisfactions in each of six areas: security, social, esteem, autonomy, self-fulfillment, and pay. The items used to measure the scientists' satisfactions were similar to those originally developed by Porter (1962). For each item the scientists were asked to rate on a 1 (minimum) to 7 (maximum) scale how much of the factor mentioned in the item (i.e., autonomy, pay) was now associated with their position. Second, they were asked to rate on a similar scale how much of the factor should be associated with their job. Satisfaction was measured for each individual scientist by subtracting the second part (should be associated) from the first part (now associated), and the data were coded so that a high score indicated high satisfaction. Organization scores were obtained by averaging the individual scientists' scores in each laboratory. In summary, a questionnaire was administered to each of 117 directors of R & D laboratories to assess their perceptions of laboratory structural components, existing process variables, and the performance of technical and administrative members of the laboratory. Finally, questionnaires were administered to 291 scientists in 21 of these same laboratories to assess their perceptions of their organization's climate along with their job satisfaction. An overall performance measure was also computed for each of these 117 organizations based on a number of objective criteria. Because satisfaction and climate data were collected from only 21 organizations, those analyses which involved measures were done using a sample of 21 organizations. All o.ther analyses were done on the larger sample (n = 117) because of its more representative character. RESULTS Table 1 shows the relationship among the process and the structural variables. The process variables tend not to be related to each other, although some of the structural variables are highly related to each other. As would be expected, flat organizations tend to have wide spans of control, and large organizations tend to be flatter and have wider spans of control. Overall, the process and structural variables are rather weakly related, suggesting that they are, in effect, measuring different
.12 --. 02
.26** --. 05 .03 .05
.14 --. 15 --. 09 --. 07
.13 .71"** .89***
Tall/fiat (n = 70)
--. 01 --. 02
.07 .11 --. 07 .14
* p < .10, ** p < .05, *** p < .01.
Performance review frequency Performance review relationship to compensation program Professional autonomy Assignment generality Collaboration support Informal budget account
Process variables
Levels Tall/fiat Levels from top Span of control Size
Structure
Levels (n = 70)
TABLE 1
--.16 .09 .11 .28**
--.03 --.09
.12 .15
Levels from top (n = 60)
Structure
.16 .17 --.04 .06
.12 --.20"
.79***
Span of control (n = 70)
.20** --.13 --.02 .06
.00 --.08
Size (n = 107)
--.01 --.13 --.06 --.01
.O1
--.14 .06 --.06 --.15
--.22 --.03 --.13
Performance review relationship to Performance compenProfcsreview sation sional frequency program autonomy ( n = 117) ( n = 117) ( n = 117)
R E L A T I O N S H I P A M O N G S T R U C T U R A L AND P R O C E S S V A R I A B L E S
--.01 --.33***
Assigmnent generality (n = 117)
Process
-.04
Collaboration support (n = 117)
Informal budget account ( n = t17)
0
eg
ORGANIZATIONAL CLIMATE
149
v a r i a b l e s . ~ One e x p e c t a t i o n here is t h e finding t h a t flat o r g a n i z a t i o n s t e n d to h a v e s c i e n t i s t s w i t h m o r e a u t o n o m y , as do l a r g e o r g a n i z a t i o n s . T h u s , it is i m p o r t a n t to l o o k a t t h e r e l a t i o n s h i p of b o t h sets of v a r i a b l e s to c l i m a t e a n d to .satisfaction a n d p e r f o r m a n c e . T a b l e 2 p r e s e n t s the r e l a t i o n s h i p s b e t w e e n s t r u c t u r a l v a r i a b l e s a n d o r g a n i z a t i o n a l c l i m a t e f a c t o r s for t h e 21 o r g a n i z a t i o n s in which c l i m a t e d a t a were o b t a i n e d . N o m e a n i n g f u l or s i g n i f i c a n t p a t t e r n s a r e a p p a r e n t . T h e o r g a n i z a t i o n ' s s t r u c t u r e a p p a r e n t l y h a s l i t t l e r e l a t i o n s h i p to t h e c l i m a t e of t h e o r g a n i z a t i o n as p e r c e i v e d b y scientists. R e s u l t s s h o w i n g t h e r e l a t i o n s h i p s b e t w e e n process v a r i a b l e s a n d o r g a n i z a t i o n a l c l i m a t e f a c t o r s a r e also shown in T a b l e 2. F i v e of t h e six process v a r i a b l e s c o r r e l a t e s i g n i f i c a n t l y w i t h one or m o r e of t h e o r g a n i z a t i o n c l i m a t e m e a s u r e s . T h e o r g a n i z a t i o n ' s c l i m a t e was g e n e r a l l y p e r eeived as m o r e c o m p e t e n t / p o t e n t , r e s p o n s i b l e , p r a c t i c a l , r i s k - o r i e n t e d , TABLE
2
RELATIONSHIPS BETWEEN STRUCTURAL AND PROCESS VARIABLES AND ORGANIZATIONAL CLIMATE
Climate Competence/ potence
ResponRisksible Practical oriented
Impulsive
Structural Variables
Span of Control (n = 13) Size (n = 21) Levels (n = 13) Tall/flat (n = 10) Levels from top (n = 14)
.01 -.04 .29 .03 .11
.54** .20 .31 .45* .20
- .04 -.12 .24 -.19 .17
.12 -.01 .15 .12 .40
.19 .12 .31 .27 -.20
--. 08 .45**
- . 38* .52***
--. 05 .43**
.33 .35 .10 .24
.44** .23 .31 .34
Process Variables (n = 21)
Performance review frequency - . 22 Performance review relation.47** ship to compensation program Professional autonomy .54*** Assignment generality .29 Collaboration support .35 Informal budget account .36*
--. 02 .07
.45** .40* .07 .40*
.42** .53*** .10 .24
* p < .10.
** p < .05. *** p < .01. 4Although it is not shown in Table 1, an analysis of the 21 organizations from which individual data were collected showed similar trends.
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and impulsive, the more closely performance reviews were tied to compensation programs, the greater autonomy scientists had with respect to projects, the more general assignments were given, and the more informal research budgets were available. Also, as the frequency of performance reviews, increased, the organization was perceived as less risk-oriented. The degree to which scientist collabora£ion was encouraged by the organization seemingly had little relationship to climate. The relationships between organizational climate factors and the performance and satisfaction measures are shown on T a b l e 3. Organizational climate factors were significantly related to two of the three performance measures: administrative and overall performance. Three of the five climate factors were significantly related to each of these performance indices; however, only the responsibility factor was consistently related to both. In general, the results show t h a t the more the climate was perceived as competent, responsible, practical, risk-oriented, and impulsive, the greater the objective performance of the organization and the more favorable the directors' ratings of the administrative performance of the organization. Table 3 also shows t h a t significant, positive associations occurred between each of the climate factors and at least two of the six satisfacTABLE 3 RELATIONSHIPS BETWEEN ORGANIZATIONAL CLIMATE FACTORS AND PERFORMANCE AND SATISFACTION MEASURES Climate Competence/ Responpotence sible Practical
Riskoriented
Impulsive
Performance measures (n = ~1)
Technical Administrative Objective
- . 12 .49** .34
- . 17 .40* .38*
- . 13 .03 .45*
.05 .43* .25
--.1O .25 .38*
Satisfaction measures
Security Social Esteem Autonomy Fulfillment Pay * p < .10.
** p < .05. *** p < .01.
.28 .49** .67*** .56*** .73*** .42*
.44* - . 24 .34 .02 .37* .20
.09 .59*** .47* .58*** .49** .31
.37* .28 .62*** .44* .66*** .45*
.47* .50** .57*** .54*** .67*** .34
ORGANIZATIONALCLIMATE
151
tion measures. As with performance, the results suggest that the more competent, responsible, practical, risk-oriented and impulsive the organization's climate was perceived to be by the scientists, the more satisfied was the scientist on the job. Interestingly, the responsibility factor seemed to have the lowest relationship to satisfaction. There are few significant relationships between the structural and process variables and the measures of organizational performance2 The clearest finding here was a significant tendency for those laboratories that encourage collaboration among researchers to be rated more highly in terms of both technical and administrative performance (p < .01 for both). Overall, however, the correlations are small and not easily interpretable. The relationships between the structural and process variables and the satisfaction measures also showed few significant correlations, although there is a general tendency for high satisfaction to be associated with scientist independence and autonomy (median r = .38). DISCUSSION The results are summarized in Figure 2, with the numbers representing the median correlations between the various sets of variables. The results offer some support for the view that organizational processes are related to climate, which in turn is linked to satisfaction and performance. The highly significant, positive relationshps between organizational climate factors and performance and job satisfaction provide strong support for the last part of the argument. Two sets of relationships are especially noteworthy. The first of these are the highly significant relationships between organizational climate factors and the higher-order need satisfaction items (i.e., esteem, autonomy, and self-fulfillment). Climate is strongly related to scientists' feeling about the quality of their work experiences. The correlations between these variables are undoubtedly .i5 I"ORGANIZATION! / IORGANIZATION I I STRUCTUREI'~ ' ~IPERFORMANCEI " " '~ /I IORGANIZATION 1$ 1'09 CLIMATE I .; ?
I ORGAN,ZAT,ON I [PROCESS I
"
"
.o9
AT,OcT,ON1
FIG. 2. Summary of results. (Note: Numl~ers are median correlations between the indicated measures.)
5An analysis of the 21 organizations from which individual data were collected showed similar treads.
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somewhat elevated because they all were measured by self-reports from the same individuals; ,still, they are sufficiently high so that they seem to be reflecting a real relationship. A second set of interesting and significant relationships are those between climate factors and overall performance indices (i.e., new outside contracts, percentage of contracts meeting cost budget, number of renewed contracts, etc.). These climate-performance relationships are especially interesting due to the objective manner in which overall performance was measured. These results lend additional support to previous studies (e.g., Friedlander & Margulies, 1969; Litwin & Stringer, 1968) which have found organizational climate to be a correlate of performance and job satisfaction. The present study also found that certain process variables (e.g., the granting of scientist autonomy, and tying performance reviews directly to compensation programs) are related to perceived climate. This is supportive of the view presented in Figure 1, since it argues that process determines climate. Surprisingly, the results suggest that structure simply does not play a noticeable role in determining an organization's climate. Climate does seem to be influenced by factors which more directly affect a person's daily work experiences. For example, previous studies (e.g., Friedlander & NIargulies, 1969; Litwin & Stringer, 1968; and Schneider & Hall, 1972) have shown tha5 factors such as leadership, co-worker behavior, and tasks which have an immediate, meaningful effect on an individual's organizational life, have an impact on an organization's climate. The process variables that the present study found to be related to climate were all things that seem to have a direct and immediate influence on the individual's organizational life. Generally low relationships were found between the structural and process variables and the outcome variables of satisfaction and performance. This is what would be expected if structure and process influence satisfaction and performance through their impact on climate. Still, based on some of the past research that has been done, it is :surprising that somewhat stronger relationships were not found. Other studies (see Porter & Lawler, 1965) have found such structural varia,bles as size and tall/flat shape to be directly related to satisfaction. In the present study, size and shape are both related to degree of professional autonomy, which in turn is related to satisfaction; bpt size and shape are no~ strongly related to satisfaction. There are three possible explanations for lower relationships found in the present study. First, it may be because of the nature of the organi-
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zations studied; few of the previous studies have been concerned with R & D labs and organizational processes may be far more important in relation to structure for seientists and engineers than it is for most employees. Second, it may be due to the low varianee that was present on many of the structural measures. Because of the homogeneity of the sample, there was less variance in such things as size and number of levels than one would find in a study of different types of organizations. Finally, it eould be due partially to poor structural data. As has been found in other studies and as is indicated by the amount of missing data, it is ditfieul~ to obtain good data on organizational structure. The present study tried to deal with this pro,blem by having special organization charts drawn and by only using data that could be clearly coded. This resulted in a great deal of missing data and the results give no assuranee that it produced better structural data. Although the relationships between process variables and climate are informative, still relatively little is known about the determinants of organizational climate. Further research is needed to identify other potential determinants of organizational climate. Based on the results of prior research, as well as the present study, it would seem most fruitful to examine variables which directly influence the organizational life of the employee (versus less direct variables such as organization structure, geographical location, or appearance of the organization). Among such variables might be the characteristics of the job for which the employee is responsible. More specifieally, eharaeteristics such as the degree of variety, feedback, and task identity (Hackman & Lawler, 1971) available on the job would seem to have a direct impact upon the individual and finally the climate of the organization. Personal characteristics such as the personalities and values of both supervisors and co-workers within the organization may also play an important part in determining the organization's climate. Some evidence for Che impact of job activities and personal values on climate already exists (Schneider & Hall, 1972). Finally, the eommunieation pattern(s) used by the organization has an immediate impact upon the individual's life within that same organization and may be a vital, yet currently unexplored, aspect of organizational climate. Research is also needed to determine the causal basis for the relationships which have been found between climate and performance and between various process variables and climate. This study of climate, like the previous ones, was a correlational study. The time is rapidly approaching when enough will .be known about the correlates of climate that it will be practical to begin testing for causal relationships.
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LAWLER III~ HALL AND OLDHAM
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