The term ‘climate’ historically originates from organizational the- orists such as Lewin (leadership styles create social climates) and McGregor (theory X and theory Y), who used the term to refer to social climate and organizational climate respectively. The cli- mate of the organization is inferred by its members through the organization’s practices, procedures and rewards systems, and is indicative of the way the business runs itself on a routine basis.
In one sense it is the encapsulation of the organization’s real pri- orities and actions.
All people are observers of the environment in which they live.
They shape the environment and are shaped by the environment in which they exist. In interacting with their environment,
employees are able to infer organizational priorities. From this understanding they align themselves to achieve their own partic- ular ends. Sometimes these personal ends coincide with those of the organization and sometimes they conflict. Understanding and perceptions therefore act as guiding mechanisms. The practices and procedures that come to define these perceptions are often labelled ‘climate’. Schneider, Brief and Guzzo (1996) define four dimensions of climate:
1 Nature of interpersonal relationships (a) Is there trust or mistrust?
(b) Are relationships reciprocal and based on collaboration, or are they competitive?
(c) Does the organization socialize newcomers and support them to perform, or does it allow them to achieve and assimilate simply by independent effort?
(d) Do individuals feel valued by the company?
2 Nature of hierarchy
(a) Are decisions made centrally or through consensus and participation?
(b) Is there a spirit of teamwork or is work more or less indi- vidualistic?
(c) Are there any special privileges accorded to certain indi- viduals, such as management staff?
3 Nature of work
(a) Is work challenging or boring?
(b) Are jobs tightly defined and produce routines or do they provide flexibility?
(c) Are sufficient resources provided to undertake the tasks for which individuals are given responsibility?
4 Focus of support and rewards
(a) What aspects of performance are appraised and rewarded?
(b) What projects and actions/behaviours get supported?
(c) Is getting the work done (quantity) or getting the work right (quality) rewarded?
(d) On what basis are people hired?
The parameters listed above help to define climate. From these sources, employees draw their inferences about the organiza- tional environment in which they work and understand the pri- orities accorded to certain goals that the organization espouses.
Closely allied to the concept of climate is culture. Organiz- ational culture refers to deeply held beliefs and values. Culture is therefore, in a sense, a reflection of climate, but operates at a deeper level. Whereas climate is observable in the practices and
policies of the organization, the beliefs and values of culture are not visible at that level but exist as cognitive schema which gov- erns behaviour and actions to given environmental stimuli. To illustrate, 3M has the practice of setting aside a certain amount of time for employees to do creative work on their own initiative. To support this, specific seed funding is provided, and the individ- uals are encouraged to share and involve and become involved in each other’s projects. These practices and support (climate) make individuals believe that senior management values knowledge (culture). Culture thus appears to stem from the interpretations that employees give to their experience of organizational reality (why things are the way they are and the how and why of orga- nizational priorities).
If the notion of knowledge culture is to be useful it is important to be clear about what we mean by the term. Failure to specify terms often leads to confusion and misunderstanding. The ques- tion, ‘what is knowledge culture?’ is pertinent yet complex. The reason for this is partly to do with the way the concept has evolved and partly to do with the inherent complexity within the concept itself. It is perhaps important to remember that the con- cept of corporate culture has developed from anthropological attempts to understand whole societies. The term over time came to be used for other social groupings, ranging from whole nations, corporations, departments and even teams within businesses.
There is a multitude of definitions of culture but most suggest culture is the pattern of arrangement or behaviour adopted by a group (society, corporation or team) as the accepted way of solv- ing problems. As such, culture includes all the institutionalized ways and the implicit beliefs, norms, values and premises which underline and govern behaviour. Furthermore culture can be thought of as having two components – explicit or implicit.
● Explicitculture represents the typical patterns of behaviour by the people and the distinctive artefacts that they produce and live within.
● The implicit component of culture refers to values, beliefs, norms and premises which underline and determine, the observed patterns of behaviour (i.e. those expressed within explicit culture).
The distinction is important because it serves to highlight that it is easier to manipulate explicit aspects when trying to fashion organizational change. For example, in trying to make the com- pany knowledge orientated, it may be possible to elicit certain actions and behaviours from employees through relatively simple training in intranet tools and techniques but not necessarily effect
any change in implicit culture. A change in implicit culture would necessitate altering the value set of the individual mem- bers to the extent that sharing becomes an unconscious norm of action, rather than guided by procedural or other organizational control routines. The degree and extent to which this happens is dependent on the strength of the culture.
The strength of culture relies primarily on two things:
● the pervasiveness of the norms beliefs and behaviours in the explicit culture (the proportion of members holding strongly to specific beliefs and standards of behaviours)
● the match between the implicit and explicit aspects of culture.
Another way of looking at culture is in terms of cultural norms.
Creating culture through use of words is seldom enough. O’Reilly (1989) suggests norms vary along two dimensions:
● intensity – the amount of approval/disapproval attached to an expectation
● crystallization – the prevalence with which the norm is shared.
For instance, when analysing an organization’s culture it may be that certain values are held widely but with no intensity, i.e.
everyone may understand what top management wants but there is no strong approval/disapproval if demands are followed or not.
Additionally, it may be that a given norm such as knowledge sharing is positively valued in one group (e.g. marketing) and negatively valued by another (e.g. manufacturing). In this case, there is intensity but no crystallization. Existence of both inten- sity and consensus creates strong cultures. This is why it is diffi- cult to develop or change culture.
Strong cultures score highly on both intensity and crystalliza- tion attributes. Moreover, really strong cultures work at the implicit level and exert a greater degree of control over people’s behaviour and beliefs. Strong cultures can be beneficial as well as harmful depending on the circumstances that the organization finds itself. Strong cultures, by virtue of deeply held assumptions and beliefs, help the organization to facilitate behaviours in accordance with organizational principles. A company that can create a strong culture has employees who believe in its products, customers, systems and processes. By subscribing to its philoso- phy the organization becomes part of the employees’ own iden- tity.
Organizations need also to be wary of strong cultures since it can in some circumstances be a hindrance. To use culture over
the long-term, organizations need to posses certain values and assumptions about accepting change. These assumptions and values must be driven by the strategic direction in which the company is moving. Without this dynamic, a strong culture can act as a straitjacket and constrain the need for change. Supporting this apparently contradictory facet of culture, longitudinal stud- ies of culture have found evidence that suggests incoherent and weak cultures at one point in time were associated with greater organizational effectiveness in the future, and that some strong cultures eventually led to decline in corporate performance (Denison and Mishra, 1995). Clearly balance and understanding of context is important.
Generally, we can say that because culture can directly effect behaviour it can help a company to prosper. A sharing culture can make it easy for senior management to implement knowledge strategies and plans. The key benefit is that culture often can do things that simple use of formal systems, procedures or authority cannot. Moreover, given the nature of culture and climate, it is clear that senior managers play a critical role in shaping culture, since they are able to give priority to knowledge sharing, as well as take steps, in terms of rewards for instance, to guard against complacency. Employees take the priorities set by what manage- ment values, and use these to guide their actions. The challenge for management, then, is to make sure that the employees make the right type of attributions, since any mismatches or miscom- munication quite easily leads to confusion and chaos.