The effects of organizational climate on managerial job performance and job satisfaction

ORGANIZATIONAL BEHAVIOR AND H U M A N PERFORIVIABICE 9,

126-146 (1973)

The EfFects of Organizational Climate on Managerial Job Performance and Job Satisfaction I~OBERT D.

A N D BERNARD W. Purdue University

PRITCHARD

I~ARASICK 1

The effects of organizafionM climate on job performance and satisfaction as well as the effects of interactions between climate and individual needs on performance and satisfaction were examined for 76 managers from two organizations. It was found that climate was influenced by both the overall organization and by subunits within the organization. Climate was fairly strongly related to subunit performance and to individual job satisfaction. There was some limited evidence for climate and individual needs interacting to influence performance and satisfaction,

The environment has long been recognized as a potent source of influence on human behavior. Until fairly recently, however, no concerted effort has been made to explore the influences of the organization's psychological environment on the behavior of people in the organization. This psychological atmosphere of an organization is generally referred to as organizational climate. If one were to synthesize the definitions of organizational climate offered by such authors as Gihner (1966), Taguri (1968), Meyer (1967), Georgopoulos (1965), Litwin and Stringer (1966), and Gellerman (1959), one might define organizational climate as a relatively enduring quality of an organization's internal environment distinguishing it from other organizations; (a) which results from the behavior and policies of members of the organization, especially top management; (b) which is perceived by members of the organization; (c) which serves as a basis for interpreting the situation; and (d) acts as a source of pressure for directing activity. Organizational climate is said to influence behavior in one or more of several different ways. Forehand and Gilmer (1969) discussed the mechanisms of definition of stimuli, constraints upon freedom, and determining rewards and punishments. Campbell et al. (1970) included the mechanism of need arousal. All of these proposed mechanisms, however, imply that climate operates as a unitary "main effect" on the behavior of people in the organization. While it is undoubtedly the case that, e.g., higher levels of autonomy could result in greater satisfaction, 1l~ow at the Internal Revenue Service, Washington, D. C. 126 CopyrightO 1973 by Academic Press, Inc. All rights of reproduction in any form reserved.

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considering climate in this fashion ignores certain types of individual differences. It is our assumption that organizational climate interacts with such individual differences variables as needs or values in influencing behavior. This is by no means a novel point of view. Forehand (1968), Sells (1963), Litwin and Stringer (1968), Pace and Stern (1958), Lawrence and Lorsch (1969), Vroom (1960), Andrews (1967), Frederiksen (1966), and Campbell et al. (1970) all considered this interaction notion. Thus, organizational climate is generally felt to influence behavior and to combine with individual differences in this influence. The purpose of this paper is to explore this influence of climate on behavior by exploring the construct validity of a measure of climate and presenting data on the relationship between climate and job performance and satisfaction as well as the effects of interactions between climate and individual differences in values on performance and satisfaction. Several attempts to measure organizational climate have tried to generate taxonomies of organizational climate, usually through factor analytic methods. Campbell et al. (1970) reviewed four investigations of the structure of managerial climate (Litwin & Stringer, 1966; Schneider & Bartlett, 1968; Taguri, 1966; Kahn et al., 1964) and found four dimensions common to these studies. These were Individual Autonomy, Degree of Structure Imposed on the Position, Reward Orientation, and Consideration, Warmth, and Support. While other dimensions were found in these studies, Campbell e~ al. were somewhat concerned about the relatively few dimensions uncovered. They stated, "Even though the sets required of the respondents were different, perhaps the content of the stimuli (items) was very similar across the four studies. Also, the relatively small number of factors which were found implies that a great deal of environmental variation remains to be uncovered" (p. 394). The instrument used in the present study was designed to avoid this problem by tapping as many different aspects of organizational climate as possible. In addition to developing empirical and a priori taxonomies of climate in industrial settings (Litwin & Stringer, 1966; Taguri, 1966; Schneider & Bartlett, 1968; Kahn et al., 1964; Porter & Lawler, 1965; Evan, 1963; Hall, Haas, & Johnson, 1967) and in other types of organizations (Indik, 1965; Austin & Holland, 1961; tIalpin & Croft, 1963; Pace & Stern, 1958; Findikyan & Sells, 1965), authors have also dealt with the question of the actual effects of climate on behavior. Frederiksen (1966) and Litwin and Stringer (1966) have carried out laboratory studies stimulating industrial firms, and using climate dimensions as independent variables. Frederiksen had 260 middle managers work through an In-Basket test. He employed four combinations designed to create different climates. The first treatment dichotomy at-

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tempted to create a climate which was either a highly innovative, "lowrules" climate or a climate which was highly structured and rules oriented. The second treatment dichotomy was concerned with closeness of supervision, one group having close supervision and the other an autonomous, democratic environment. Data were gathered on In-Basket performance (productivity) and various test scores and biographical predictors. The actual dependent variable under consideration was the predictability of In-Basket performance by the tests and biographical data. Four imporgant conclusions were reported. (i) Predictability was higher under the innovative climate. Thus, climate is seen as a moderator of the relationship between individual characteristics and behavior. (2) Performance was more predictable for subjects who worked in a consistent climate (innovation and loose supervision, or rules and close supervision) than for those who had to operate in an inconsistent climate (innovation and close supervision, or rules and loose supervision). (3) Inconsistent climates had a negative effect on productivity. (4) Subjects employed different work methods under different climate conditions. For example, under the climate conditions permitting more freedom, administrators dealt more directly with peers, whereas in the restrictive climates, they tended to work through more formal channels. Litwin and Stringer (1966) created three simulated firms that were asked to compete in a realistic, competitive industrial market under simulated business conditions. Three different climates were created: (1) an authoritarian-structured business, (2) a democratic-friendly business, and (3) an achieving business. The differing orientation of the "president" of each firm was the means by which the three climates were created. A significant feature of the study was the marked effect different leadership styles had in creating distinct organizational climates. The climates, once created, had significant effects on participants. Subjects in the achieving climate produced the most, but the democratic-friendly climate resulted in the highest level of work satisfaction. Other studies of industrial organizations (Vroom, 1960; Turner & Lawrence, 1965; Lawrence & Lorseh, 1969; Friedlander & Margulies, 1969; Andrews, 1967; Litwin & Stringer, 1968; Berlew & Hall, 1964, 1966; Peres, 1966; Kahn et al., 1964; Friedlander & Greenberg, 1969) have also found relationships between organizational climate and performance and satisfaction. Studies of organizational climate have also been conducted in seientitle and research organizations (e.g., Pelz & Andrews, 1966; Gordon & Marquis, 1966) as well as academic institutions (e.g., Pace & Stern, 1958; Pervin, 1967). Itere also, climate has been shown to be related to behavior.

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There are several problems with this body of climate literature, as the Campbell et al. (1970) review pointed out. The attempts to generate taxonomies of climate seem to have resulted in a fairly small number of dimensions of climate. A more vigorous attempt should be made to tap as many different dimensions of climate as possible. Common sense says that the psychological environment of an organization is tremendously complex. It is highly doubtful that six or seven dimensions can adequately tap this complexity. Thus, climate measures that. result in such a small number of dimensions must be seen as only partial measures of this psychological environment. The literature does indicate, however, that several dimensions of climate have been isolated. Yet when one examines the experimental literature on climate, one finds a less than perfect translation of these dimensions into the experimental treatments. For example, in the Litwin and Stringer (1966) study, it is unclear exactly which dimensions of climate are actually being manipulated. Finally, the choice of dependent variables also seems to vary a great deal. The Frederiksen (1966) study dealt primarily with predictability, while the Litwin and Stringer (1966) study dealt with performance and work satisfaction. The study of organizational climate has focused on a wide range of variables and conceptualizations of the linkage between individual, climate, and outcome variables. Climate factors are seen as both a direct cause of behavior and as moderating the relationships between individual and outcome variables. The above research suggests that both job satisfaction and performance are related to climate factors. In most studies, however, only one or the other was examined; thus, it is difficult to infer whether climate relates more highly to attitudes or to performance. An issue that has not been examined in the literature is the relative influence of the local and overall organizational environments on climate. The individual in the organization is a member of a work group and possibly other organizational units formed on a functional or geographical basis, as well as a member of the larger organization. Is the climate relevant to the individual influenced by local conditions (i.e., work group, regional office) or by the overall practices and policies of the organization? These issues relevant to climate have not been adequately investigated in the literature to date. The present study addressed itself to several of these issues.

Hypotheses The first hypothesis is of a rather general nature and deals with the construct validity of the climate measure. Two organizations were selected for the study on the basis of expert judgment about their relative stability and conservatism. Two judges, organizational consultants in-

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timately familiar with both organizations, characterized one organization (Company A) as dynamic, democratic, skilled in handling operating problems, aggressive, and highly achievement oriented. Company B was seen as centralized, static, conservative, and paternalistic in nature. These descriptions were then compared with the a priori dimensions of the climate instrument and it was hypothesized that (Hypothesis 1) the climate of Company A (achievement-oriented, dynamic) will differ significantly from the climate of Company B (conservative, static). Company A will be higher on the climate scales of "motivation to achieve," "flexibility and innovation," and "performance-reward dependency," and Company A's climate will be lower on "social relations," "decision centralization," "structure," and "status polarization." One would expect that an individual's climate should be affected by both the organization's overall climate and the climate of the specific subunit to which he belongs. Furthermore, while it is impossible to make specific predictions, aspects of climate which might be "determined" at a lower level in the organization should affect subunit climate more than aspects of climate determined at higher levels. For example, climate factors related ~o supervision might be more strongly affected by the subunit than more global aspects such as level of rewards. Five geographically separate regional offices of Company A were studied. It was expected that while there should be some aspects of climate which were the same for all five regions, other aspects of climate should differ from region to region. This finding would offer support for Hypothesis 2: Organizational climate is influenced by both the local environment and by overall organizational practices and policies. The assumption underlying this research was that climate affects both individual and organization performance. It was predicted, therefore, that high and low performing subunits will be characterized by different organizational climates thus (Hypothesis 3): Highly effective subunits of an organization will have different organizational climates than subunits low in effectiveness. Hypothesis 4: Organizational climate will relate more highly to managerial satisfaction than to managerial performance. This hypothesis is based on the rationale that climate has a fairly direct effect on iob satisfaction. However, climate has a more indirect effect on performance in that climate is a set of organizational expectations which may or may not be followed and may or may not lead to high performance. The following six hypotheses deal with the interaction between individual differences and climate as they affect iob performance and satisfaction. These six hypotheses are based upon a need-congruity notion of the relationship between individual, climate, and outcome

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variables. Generally, it would be expected that the closer a person's needs fit the climate in which he finds himself, the more satisfied he will be. If it can be assumed that behavior that satisfies a dominant need will lead to satisfaction, then one would expect that, where the climate's values coincide with those of the individual, the individual will likely be rewarded for behavior that is consistent with his own needs. Performance should also be higher where there is congruence between individual and climate values since the behavior that is most effective in the organization (as the organization defines it) is also likely to be consistent with the individual's needs. The hypotheses based upon this notion are as follows. Hypothesis 5a: Performance and satisfaction will be greater for managers with high achievement needs if they perceive their climates to be high in achievement motivation. Hypothesis 5b: Satisfaction will be higher for managers high in need for affiliation if they perceive their climates to be high in concern for social relations. Hypothesis 5c: Performance and satisfaction will be higher for managers high in need for autonomy if they perceive their climates to be high in autonomy. Hypothesis 5d: Performance and satisfaction will be higher for managers high in need for order if they perceive their climates to be high in structure. Hypothesis 5e: Performance and satisfaction will be higher for managers with a high need for dominance if they perceive their climates to be high in status polarization. Hypothesis 5f: Performance and satisfaction will be higher for managers high in need for autonomy if they perceive their climates to be low in decision centralization. METHOD

Selection of Firms It was planned that the construct validity of the organization climate measure be explored by comparing the climates of two firms providing a elearcut difference in value orientations. Two organizations having widely divergent value orientations would be expected to have markedly different organizational climates, particularly with respect to those dimensions related to the divergent value orientations. The first step was t,o select two firms that would provide this clearcut contrast. I~ was intended to find one firm highly achievement oriented, expansion minded, and aggressive, and the second to be low in achieve-

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ment orientation, more conservative, and less dynamic. The selection of firms was made by two industrial psychological consultants from among their client organizations. The consultants were given detailed descriptions of the types of organizations characterized above and were asked to match them as closely as possible. Although the judgments were subjective and informal, they were based on intimate and long-standing contacts with each of the firms by both consultants. The two criterion firms were only selected after close agreement was reached by the consultants as to their suitability for the study.

Subjects The subjects were managers from two industrial organizations, one a national franchising chain (Company A) and the other a manufacturing company (Company B). One hundred managers were asked to participate; however, 76 (76%) subjects were included in the study, 18 having failed to return completed questionnaires, and 6 having completed them incorrectly. Forty-six managers were from the franchising firm and 30 from the manufacturing organization. The 46 managers from the franchising firm were employed in one of five regional offices located around the country. Subiects represented different vertical levels and functional areas in the managerial force and were considered to be representative of the managers of each company.

Measures The organizational climate measure. This measure was developed by John P. Campbell and the first author at the University of Minnesota. The first step in its development consisted of generating potential climate dimensions. This was accomplished by a careful review of the literature as well as by interviews with managers from several different organizations. Next, many existing questionnaires measuring climate, job sarisfaction, physical characteristics of organizations, etc., were examined, and items that appeared to be related to the psychological atmosphere of the organization were collected. These items were then sorted into the previously generated set of potential dimensions. This process suggested several additional dimensions as well as the elimination and combination of other dimensions. More items were written and rewritten and the dimensions were refined until the resultant questionnaire consisted of 22 a priori dimensions. Each of the dimensions was represented by five Likert-type items. The subject is required to rate his own organization on each item by responding to a six-point scale (1 = never true, 2 = almost never true, 3 = sometimes true, 4 -- frequently true, 5 = nearly always true, 6 -- always true).

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While the questionnaire measures 22 a priori dimensions, only 11 were used in this study because the limitations of sample size would undoubtedly restrict the meaningfulness of large numbers of dimensions and patterns of interactions. The 11 scales used were: (1) Autonomy: degree of freedom managers have in day-to-day operating decisions such as when to work, when not to work, and how to solve job problems. (2) Conflict vs cooperation: degree to which managers either compete with each other or work together in getting things done and in the allocation of scarce resources such as materials, clerical help, etc. (3) Social relations: degree to which the organization has a friendly and warm social atmosphere. (4) Structure: degree to which the organization specifies the methods and procedures used to accomplish tasks; the degree to which the organization likes to specify and codify, and write things down in a very explicit form. (5) Level of rewards: degree to which managers are well rewarded; this includes salary, fringe benefits, and other status symbols. (6) Performance-reward dependency: extent to which the reward system (salary, promotions, benefits, etc.) is fair and appropriate; degree to which these rewards are based on worth, ability, and past performance rather than factors such as luck, who you know, how well a manager can manipulate people, etc. (7) Motivation to achieve: degree to which the organization attempts to excel; the strength of its desire to be number one. A high rating reflects a lack of complacency even in the face of good profits, growth, etc. (8) Status polarization: degree to which there are definite physical distinctions (e.g., special parking places and office decorations) as welt as psychological distinctions (informal social boundaries, treatment of the subordinate as inferior, etc.) between managerial levels in the organization. (9) Flexibility and innovation: willingness to try new procedures and experiment with change which is not really necessary due to some potential crisis situation, but rather to improve a situation or process which may currently be working satisfactorily. (10) Decision centralization: extent to which the organization delegates the responsibility for making decisions either as widely as possible or centralizes it as much as possible. Decentralization includes the idea of shared authority in decision making. (11) Supportiveness: degree to which the organization is interested in and is willing to support its managers in both job- and non-job-related

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matters. The organization's degree of interest in the welfare of its managers. The selection of these dimensions was based on three criteria: (1) expected stability and clarity, (2) theoretical relevance, and (3) iraportance in light of past research. Edwards Personal Preference Schedule (Edwards, 1959). This instrument measures the strength of specific needs of individuals based upon Murray's manifest need system (1938). Five of Edward's scales were used in the study: (1) Achievement: to do one's best, to accomplish something very difficult or significant. (2) Affiliation: to be loyal, to participate in friendly groups, to share or do things with friends. (3) Autonomy: to be independent of others in making decisions, to avoid responsibilities and obligations. (4) Order: to have regular times and ways for doing things, to keep things neat and well organized. (5) Dominance: to persuade and influence others, to supervise others, to be regarded as a leader. These scales were selected a priori on the basis of their expected importance to managerial job behavior, and because of their particular relevance to certain climate scales. Minnesota Satisfaction Questionnaire (Weiss et al., 1967). This 20-item scale is a global index of job satisfaction; items include various aspects of the job such as security, working conditions, and advancement opportunities. Job performance ratings. Since no formal management appraisal system was in use in either company, a rating was given by a management consultant based upon his interviews with each manager's superior(s) and on the basis of performance data. Each man was rated from one to five, based upon overall job performance. A random sample of these ratings (N -- 19) was later reviewed with appropriate supervisory personne], and a high level of agreement (r = .72) between the consultant and the supervisors was demonstrated. Apparently, the rating represented reasonably accurately the general performance level of the employee. Regional effectiveness rankings. Each of the five regions of the franchising organization (Company A) is annually ranked on the basis of overall effectiveness (profit, volume, market share, etc.), the most effective being ranked "one," and the least effective being ranked "five." The

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rankings are considered by the organization to be an accurate reflection of the relative effectiveness of the five regions. RESULTS

Evaluating the Climate Questionnaire The initial evaluation of the climate measure consisted of exploring the internal consistency of the 11 a priori scales used, examining the relationships among the scales, and providing evidence for the construct validity of the questionnaire. Table 1 presents Spearman-Brown estimates of the internal consistency reliability of the 11 scales. These estimates ranged from .66 to .85. Table 2 presents the scale score intercorrelations. The scale score for a given subject was calculated by summing his responses to the several items on that scale. While most of the intercorrelations ranged from -.20 to +.20, there were a few that were quite large. Obviously, all the scales are not completely independent. Hypothesis 1 dealt with the construct validity of the climate measure. It stated that the climate of Company A (achievement oriented, dynamic) will differ significantly from the climate of Company B (conservative, static). Company A will be higher on the climate scales of "motivation to achieve," "flexibility and innovation," and "performance-reward dependency," while Company A's climate will be lower on "social relations," "decision centralization," "structure," and "status polarization." The data in Table 3, which presents results comparing the climates of Company A and Company B, tend to support the hypothesis. Of the seven directional predictions made, five were significant TABLE 1 INTERNAL CONSISTENCY RELIABILITY ESTIMATES OF THE ELEVEN CLIMATE SCALES

Scale 1 2 3 4 5 6 7 8 9 10 11

Autonomy Conflict vs cooperation Social relations Supportiveness Structure Level of rewards Performance-reward dependency Achievement Status polarization Flexibility and innovation Decision centralization

Internal consistency reliability estimates (Spearman-Brown) .68 .68 .68 .81 .73 .81 .77 .79 .66 .73 .72

1

- - . 05 .03 .05 - - . 10 --.01 - - . 02 .04 .02 .05 --.28

Scale

1 Autonomy 2 Conflict vs cooperation 3 Social relations 4 Supportiveness 5 Structure 6 Level of rewards 7 Performance-reward dependency 8. Achievement 9 S t a t u s polarization 10 Flexibility a n d i n n o v a t i o n 11 Decision centralization -.29 .31 .20 .36 .50 .44 - - . 29 . 44 --.09

2

-.24 ~15 .28 .17 .21 - . 06 .13 -.10

3

-.39 .70 .54 .41 - - . 02 .30 --.29

4

.25 .31 .15 .10 .16 .01

5

-.53 .51 --.12 .41 --.3O

6

TABLE 2 INTERCORRELATIONS BETWEEN CLIMATE SCALES

-.41 --.06 .43 --.10

7

--.13

.61

--.08

8

.00 .24

--

9

--.13

--

10

11

P~

>

c~

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TABLE 3 CLIMATE SCALE SCORES FOR COMPANY A v s COMPANY B

Scale

Mean--Company A N = 41

Mear/~Company B N = 27

t

Achievement Flexibility and innovation Performance-reward dependency Social relations Decision centralization Structure S tatus polarization

31.1 21.6 18.7 21.7 15.6 19.5 11.9

28.0 20.0 16.9 20.8 17.4 18.5 13.5

3.87 b 2.034 2.99 b 1.30 2.09 a .93 2.12 ~

a p < . 05, two-tailed test. bp < .01, two-tailed test. in the predicted directions. Company A, in comparison to Company B, was reflected by the climate questionnaire in much the same light as the consultants. Only on the Social Relations and Structure scales was the difference between the two firms not as predicted. Satisfaction scores for the two firms were also examined. Company A (X -~ 74.24, SD = 16.4) had a significantly higher level [t(67) = 2.57, p < .05, two-tailed] of manager satisfaction than Company B (X = 64.93, SD = 13.3). Hypothesis 2 stated that organizational climate is influenced by both the local environment and by overall organizational practices and policies. To test this hypothesis, the climates of the five regional offices of Company A were compared. If overall organizational practices and policies completely determine climate, there should be no difference in the climates of the five regions. If, on the other hand, the organizational subunit influences climate, differences should appear. A one-way analysis of variance was computed for each of the 11 scales, using the five regional offices as levels of the factor. On six of the dimensions no significant differences were found between subunits, indicating a strong influence from overall organizational policies and pracrices. However, the sample size was small (averaging about nine subjects per cell) and thus the conclusion of no differences must be made with caution. For five of the scales, significant differences (p < .05) between regional offices were observed. Three were directly related to snperior-subordinate relations (Structure, Status Polarization, and Decision Centralization); the other two were Level of Rewards and Flexibilityinnovation. Apparently both the local environment and overall organizational climate must be considered to affect the local climate. Hypothesis 3 stated t h a t highly effective subunits of an organization

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will have different organizational climates than subunits low in effectiveness. To test this hypothesis, the subunits in Company A were examined. Since one would not expect the climate dimensions which showed no variability between regions to be related to region performance, only those scales which showed significant differences between regions were explored. Table 4 presents rank order correlations between these dimensions and ranked region effectiveness. Rank order correlations between mean region job satisfaction and effectiveness are also presented. As this table indicates, the more effective regions tended to be characterized by a low Structure, high Status Polarization, high Flexibility-innovation, and low Decision Centralization. The more satisfied offices were likely to have a high Structure. Also, subunit satisfaction tended to be positively related to Status Polarization and Decision Centralization, although correlations for these factors did not reach accepted levels of significance. It is particularly interesting to note that while low Structure and high Status Polarization characterized the more effective offices, high Structure and Status Polarization characterized the more satisfied offices. Appatently the environmental conditions that accompany effective performance and high satisfaction are not necessarily the same and may, in fact, be just the reverse of each other. Hypothesis 4 stated that climate factors will relate more highly to managerial satisfaction than to managerial performance. The hypothesis was strongly confirmed. The data are summarized in Table 5 and represent correlations between individuals' reported satisfaction and their perceptions of climate. Of the 11 dimensions investigated, 10 were significantly related (p ~ .01) to job satisfaction. Dimensions most highly related to satisfaction were Achievement (.65), Level of Rewards (.66), Social Relations (.51), Performance-Reward Dependency (.50), and Supportiveness (.52). TABLE"4 I:~ANK--ORDER CORRELATIONS BETWEEN CLIMATE S(,~ORES AND I~EGION EFFECTIVENESS AND SATISFACTION Scale

Effectiveness

Satisfaction

Structure Level of r e w a r d s S t a t u s polarization Flexibility-innovation Decision centralization

- . 70 ~ - . 30 .90 b 1.00 b - - . 70 a

.90 b .10 - . 50 - - . 10 .60

a p ~ .10. b p < .01.

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CORRELATIONS

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TABLE 5 BET~rEEN CLIMATE FACTORS AND SATISFACTION AND PERFORMANCE

Scale

Satisfaction

Autonomy Conflict vs cooperation Social relations Structure Level of rewards Performance-reward dependency Achievement Status polarization Flexibility and innovatioa Decision centralization Supportiveness

.11 .48 b .51 b .32 b .66 b .50 b .65 b - . 39 b .42 b --. 39 b .52 b

INDIVIDUAL

Performance .05 .16 -. 07 -. 07 .24 a .14 .25 ~ - . 14 .08 --. 04 -. 04

a p < .05. b p < .01.

There were small, positive correlations between two dimensions, Level of Rewards and Achievement, and ratings of individual job performance. Climate seemed to be strongly directly related to individual satisfaction, while being related to individual performance to a much lesser extent. Hypotheses 5a-f were concerned with the interaction between individual needs and climate factors. A three by three analysis of variance tested for these interactions with dependent variables being job satisfaction and ratings of performance. Subjects were trichotomized into High, Medium, and Low groups for individual need and climate scores. The groups were trichotomized so that curvilinear relationships, if present, could be detected. Due to sample size ]imitations, subjects from both Company A and Company B were analyzed together. Hypothesis 5a stated that performance and satisfaction will be greater for managers with high achievement needs if they perceive their climates to be high in achievement motivation. Table 6 shows the summary of the two-way analysis of variance. The hypothesis was not confirmed. The Climate × Individual interaction was significant for neither satisfaction nor performance. Although no significant interaction was observed, some support for an interactive relationship was observed by the extremely low mean satisfaction level of the High individual need for achievementLow climate achievement subjects. While the overall satisfaction mean was 71.2, the mean for this cell was 54.9. However, the appropriate contrast was not significant.

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PRITCI-IARD AND KARASICK TABLE 6

SUMMARY OF CLIMATE BY" NEED ~IYPoTtIESES FOR PEI~FORMANCE AND SATISFACTION

Performance Variables 5a Climate achievementneed achievement 5b Climate social relations . need affiliation 5c Climate autonomyneed autonomy 5d Climate structureneed order 5e Climate status polarization-need dominance 5f Climate decision centralization-need autonomy

.

C~

N a

n.s.

n.s.

.

Satisfaction

C XN

~

n.s.

.

C

Ar

C×N

p < . 001 n.s.

n.s.

p < . 002 n.s.

n.s.

n.s.

n.s.

n.s.

n.s.

n.s.

n.s.

n.s.

n.s.

n.s.

n.s.

n.s.

n.s.

p < .05 n.s. p < .06 n.s.

n.s. p < . 05

p < .05

n.s. p < . 0 1

p < . 10 n.s.

n.s.

C = effect due to Climate; N = effect due to Need; C X N = Climate by Need interaction.

H y p o t h e s i s 5b stated t h a t satisfaction will be higher for m a n a g e r s high in need for affiliation if t h e y perceive their climates to be high in concern for social relations. N o t e t h a t no interaction was predicted for p e r f o r m a n c e ; it was felt t h a t a l t h o u g h this dimension (social relations) would bear strongly on individual satisfaction, it would n o t affect perf o r m a n c e either directly or as a moderator. T h e hypothesis was nob confirmed (see T a b l e 6). Generally, the more concern for Social R e l a tions in the organization, the greater was m a n a g e r i a l s a t i s f a c t i o n at all levels of need for affiliation. T h e climate m a i n effect [F(2,66) = 7.30]: was highly significant, b u t no significant interaction was observed. HypotheSis 5e was also not confirmed. T h e hypothesis stated t h a t p e r f o r m a n c e and satisfaction will be higher for m a n a g e r s high in need for a u t o n o m y if t h e y perceive their climates to be high in autonomy~ T a b l e 6 shows t h a t neither individual a u t o n o m y nor climate a u t o n o m y related to satisfaction or performance. T h e r e was no significant interaction. H y p o t h e s i s 5d stated t h a t p e r f o r m a n c e and satisfaction will be higher for m a n a g e r s high in need for order if t h e y perceive .their climates to be high in structure. A l t h o u g h T a b l e 6 shows a nonsignificant i n t e r a c t i o n between individual need for order and climate structure for performance, individuals high in need for order tended to p e r f o r m better in a climate

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characterized by high structure. People low in need for order tended to perform more effectively in a climate low in structure. A post hoe contrast of performance means of individuals high in need for order was made, comparing the average mean of individuals in low and medium climates against the mean of individuals high in climate structure. A significant difference was found [ F ( 1 , 3 2 ) = 3.47, p < .05], indicating that individuals with a high need for order performed more effectively in a high structure climate than did individuals in a low or medium structure climate. Thus, the interaction between individual need for order and climate structure appears to be a meaningful One. No significant interaction was observed for satisfaction scores. Hypothesis 5e stated that performance and satisfaction w~ll be higher for managers with a high need for dominance if they perceive their climates to be high in status polarization. Significant interactions were observed between individual dominance and climate status polarization both for satisfaction scores and performance. The nature o f the interactions was similar for satisfaction and performance; however, they are in the opposite direction from that predicted. For managers high in need for dominance, both performance and satisfaction were greater in a low status polarization climate. This reversal could be interpreted to be that since most of the participating managers were not high up in the managerial hierarchy, their relative power and opportunity for dominance woutd be greater in a climate where there was little differentiation between managerial levels. In other words, subjects may have been reacting to the climate above them and, therefore, high dominance mana g e r s would be happiest and perform best when they were not being .domineered from above. Hypothes~s 5f stated that performance and satisfaction will be higher for managers high in need for autonomy if t h e y perceive their climates to be low in decision centralization. This hypothesis was n o t confirmed; however, for Satisfaction scores the Individual X Climate interaction approached acceptable levels of significance IF = 2.13, p < .15] in the predicted direction. High autonomy managers were considerably more satisfied in a el]mate low in decision centralization than in a climate marked~.by medium or high decision centralization. The interaction observed for performance ratingsdid not conform to predictions. For subjects low in need for autonomy, the lower the decision centralization, the higher the performance. The opposite was true for subjects who had intermediate levels of need for autonomy in that the lower decision cen~rali~ation~ t h e lower ihe performance. However, subjects h!gh in need for autonomy performed best at intermediate levels of:decision centralization. No interpretation is offered for these findings.

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DISCUSSION Most of the results of this study are consistent with previous climate research, both with managerial and nonmanagerial samples. Several findings, however, are unique and particularly interesting. For example, the trend /or organizational climate to be more highly related to individual job satisfaction than to individual performance holds important significance. This study provided strong evidence that satisfaction relates positively to individuals' perceptions of the supportiveness and friendliness of the climate, how effectively it deals with its operating and competitive problems, how well the climate rewards its employees, and the degree of democratization achieved in the organization. If the climate possesses these characteristics, it is likely that job satisfaction will also be present. However, if the dominant values of the firm are not consistent with high performance, for example, an over emphasis on social relationships, one may not expect both performance and satisfaction to be present. Such a climate will reward behavior that is not necessarily related to effective performance. One interesting set of findings is the discrepancy in results between analyses made with individuals and analyses made with subunits. When all the subjects were combined, weak relationships between climate and performance resulted, but fairly high relationships emerged when groups of subjects (subunits in Company A) were examined. One explanation for these results may be that obtaining measures of climate from one individual may not be an accurate way to measure climate. An individual's perception of his climate may be directly related to his satisfaction but a single individual's perception of climate may be much less related to his performance. However, when one measures climate by a large sample of individuals' perceptions of their climate, this more reliable measure shows relationships with the group's performance3 While this study has by no means attempted to resolve the issue of the dimensions of organizational climate, climate does appear to consist of more than four or five dimensions. Analyses of the climate questionnaire testify to the multidimensionality of climate; a good number of the questionnaire's factors did relate to satisfaction and/or performance, and many of the scales did not relate highly to others. Larger samples of subiects and organizations will be needed to gain a clearer picture of this factor structure. The findings related to the locus of influence on climate are also signifiIt should be borne in mind, however, that the individual analyses included subleers from both organizations, while the group analyses were done only with subieets from Company A.

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cant. The obtained results suggest that organizational policies and practices cannot (or are not intended to) legislate complete influence over geographically distributed subunits. Local environmental influence seemed particularly strong in matters relating to superior-subordinate relations and responsibility distribution. This can have important implications for top management in their efforts to change aspects of the climate. Implementing change may have no, or possibly deleterious, effects if local environmental conditions and personnel are not considered and consulted. One of the most important set of findings from this study from a theoretical standpoint was that the relationship of climate to job behavior and attitudes is best described as a combination of predictor and moderator, depending on the climate factor one is examining. Certain climate characteristics directly predicted climate satisfaction. A highly supportive climate is likely to be associated with higher satisfaction for most managers, regardless of individual personality characteristics. Yet, a climate low in decision centralization affected managers differentially. Managers high in need for autonomy were more satisfied in such a climate than were managers low in autonomy needs. Managers high in need for order tended to perform better in a high structure climate. To the extent that the congruence between individual needs and organizational values is important in predicting behavior, three possible strategies are open to the organization to fully utilize this information. First, one could attempt to select those individuals whose needs are most congruent with those of the organization. A climate that values achievement and rewards such appropriate behavior should seek individuals with this dominant need. Second, organizational values can be changed to fully utilize the predispositions and potentialities of its personnel. Managers with high needs for autonomy may be given more decision-making influence and be rewarded for innovative and independent action. Third, through the manipulation of expectancies and incentives, levels of need arousal may be controlled and possibly changed to fit individual needs and task requirements. For example, a manager with high status needs operating in an achievement-oriented climate can be reinforced for achievement behavior through the mediation of status-related rewards. This study has examined some important questions relevant to organizational climate. While it is a truism to say that a great deal of further research is needed, several specific areas of research seem especially important. (1) Causal links between climate and outcome variables should be investigated. Although one can assume that climate causes iob satisfaction and performance, it is also tenable that an individual's performance or satisfaction can influence his perceptions of climate or even the climate

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itself. Two research strategies appear especially well suited to meet this objective: (a) the simulation of climates in which various aspects of the climate can be varied s y s t e m a t i c a l l y , and (b) longitudinal studies t h a t can examine~ over time, the effects of systematic efforts to change climates. "

(2) Climate dimensions must be further refined and operationalized so that some attempt at cross-study comparability can be achieved. When two researchers refer to the "Rewards" dimension, they should be talking about the same concept. (3) Increasing emphasis should be placed on the examination of patterns of climate factors and their effects on behavior. Such research might find significant interactions between factors (e.g., support a n d upward influence). ~: : (4) A research strategy employing the concepts of ideal and actual climates might bear fruitful results. Discrepancies between how individuals see their climate as it exists and as they would like it to be m a y provide valuable diagnostic and theoretical information. Such responses c a n be compared across vertical and functional areas o f an organization, as well as between effective and ineffective personnel. REFERENCES

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RECEIVED: October 7, 1971