A Study On Organizational Climate Business Essay
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Published: Mon, 5 Dec 2016
The purpose of the research is to find out the degree of employees perception on organizational climate in selected textile mills in Andhra Pradesh, and to analyze the factors which are significant in influencing the employees positively towards organizational climate. Organizational climate serves as a measure of individual perceptions or feelings about an organization. Organizational climate includes management or leadership styles, participation in decision making, provision of challenging jobs to employees, reduction of boredom and frustration, provision of benefits, personnel policies, and provision of good working conditions of the employees. A total of 125 questioners were distributed to the employees of selected textile mills. Finally, 110 questioners become validated and tested for further statistical analysis. Apart from demographic analysis, the reliability of sample was tested by using Cronbach’s Alpha for internal consistency of sampling adequacy. The multiple regression were conducted for testing the hypotheses, the interdependency of variables were given by using Pearson inter-correlation test, where the study tested, the influence of demographic variables on respondent’s opinion with one way analysis of variance. The results indicating that the employees are excessively concern with employee relations, compensation system in the organization, and for recognition of employee skills with a provision of employee participation in decision making. Finally, when the climate is, worker oriented the employees will direct their behavior to attaining organizational goals, and the paper contains relevant material to the textile industry, implications are discussed and recommendations are offered for improving the organizational climate in the Textiles companies.
Key words: employee relations, Leadership styles, organizational climate, reward system.
Organizations in the 21st century are facing more challenges than ever before. These challenges relate to restructures, mergers and acquisitions, technological trends, political and international trends, increased competition at the local and international level. These challenges are not unique to any specific organization or industry, but affect all organizations, regardless of their nature, structure or size. One of the challenges is the organizational climate itself.
Organizational climate is an internal environment of an organization within which its employees do their work. The earliest reference of organizational climate is found in the article of  Lewin, Lippitt and White, (2010) who emphasized the role of leaders in the creation of climate. The climate in organizations plays an integral role in how amenable (or hostile) organizations are to change, be it internal or external, and how easily the organization can adapt to these changes or developments  (Brown &Brooks 2011). Organizational climate can be seen as a descriptive concept that reflects the common view and agreement of all members regarding the various elements of the organization such as structure, systems and practices (McMurray, 2012).
LINKSBETWEEN ORGANIZATIONAL CLIMATE AND ORGANIZATIONAL PERFORMANCE:
The character of an organization’s work environment (particularly as perceived by a member) has long been recognized as a potent influence on employee cognitions, attitudes and behavior. Such environment influences job satisfaction, organization commitment, employee turnover, vocational adjustment and occupational stability  (Ostroff, 2011). Several studies have been conducted to examine the theoretical link between climate and performance. The results indicate that where perception of employees was positive in terms of increased participation in decision making, greater information sharing and management support, there was increased corporate effectiveness.
Researchers have agreed that positive climates do have a positive impact on work attitudes and behavior as well as on organizational performance. When employees perceive that their expectations about receiving support for their performance are being met, they feel ‘good’ about the organizational climate and perform their tasks effectively. When the climate is ‘worker oriented’, the employee will direct his or her behavior, to attain organizational goals. Positive work conditions are all conducive to enhanced work behavior.
ORGANIZATIONAL CLIMATE DIMENSIONS
 Litwin and Stringer (2010) at the beginning of the era defined nine dimensions (or variables) of organizational climate: Structure, Responsibility, Reward, Risk, Warmth, Support, Standards, Conflict and Identity.Jones and James (2011) used six dimensions: Leadership facilitation and support, Workgroup co-operation, friendliness and warmth, Conflict and ambiguity Assessing organizational climate, Professional and organizational esprit, Job challenge importance and variety and Mutual trust. From the above discussion, it is clear that various researchers use a wide variety of dimensions to assess organizational climate.
Austin, Charlene (2009) identified that vital friends have a positive influence on perception of job satisfaction, and vital friends influence career advancement. The data suggested that vital friendship is important, friendship matters in the workplace, and vital friends influence job satisfaction and career advancement.Bassous, Michael G (2010) revealed that positive significant correlation between workers’ motivation level and nonmonetary incentives, leadership style, and organizational culture, but no significant relationship between workers’ motivation level and monetary incentives. According toEdwards Buckingham, Cheryl Demetria (2010) the existence of workplace diversity, within an organization or workplace, indicates that the organization or workplace is heterogeneous in terms of gender, race, and ethnicity, in which employees possess distinct elements and qualities, differing from one another. The results indicated that a moderate relationship exists between diversity awareness and employee job satisfaction and that diversity characteristic (demographics) can potentially impact diversity awareness.
Hrobowski-Culbreath, Gladys (2010) examined the relationship between flexible work arrangement programs, job satisfaction, productivity and work-life balance and stated that Flexible work arrangements are tied to turnover, absenteeism, job satisfaction, productivity and work-life balance. Jagusztyn, Nicole Ellis (2010) stated that poorer environmental conditions related to increased perceived discrimination contributed to more negative workplace attitudes and health outcomes. Markham, Leann Mills (2009) determined that IT employees were most satisfied with the work itself, with their job in general, and the number of years of work experience did not make a significant difference in regards to overall job satisfaction.
 Michael W. Grojean, Christian J. Resick, Marcus W. Dickson, D. Brent Smith (2004) examines the critical role that organizational leaders play in establishing a values based climate. He discusses seven mechanisms by which leaders convey the importance of ethical values to members, and establish the expectations regarding ethical conduct that become engrained in the organization’s climate. He also suggests that leaders at different organizational levels rely on different mechanisms to transmit values and expectations. These mechanisms then influence members’ practices and expectations, further increase the salience of ethical values and result in the shared perceptions that form the organization’s climate. Parker Ayers, Jennifer (2010) revealed that there is a significant relationship between job satisfaction, job involvement, and organizational commitment among educators
Paul M. Muchinsky (1977) indicated that certain dimensions of organizational communication were highly related to both organizational climate and job satisfaction. When supervisors communicate with their employees, there is a mutual understanding of goals and the direction of the company, and those employees whose supervisors provide information are satisfied with their jobs than employees whose supervisors do not communicate with them  (Pincus, 1986). Russell E. Johannesson (2011) used 90 organizational climate items to measure organizational climate and stated that organizational climate can be measured by asking questions through questionnaire.
Soumendu Biswas (2010) presented that psychological climate is seen to have a positive influence on job satisfaction and job involvement, which in turn have a negative effect on turnover intention. Turnover intentions, in turn, have a negative consequence on organizational effectiveness.Scott, LaNettae (2010) finds that transfer of learning occurred when an organization’s culture and climate encouraged managers and supervisors to support learning, retention, and application. Schneider and Hall (2010) presented organizational climate as a set of global perceptions held by individuals about their organizational environment. The sets of perceptions are basically the result of interactions between personal and organizational characteristics.
Schnake, M. E. (2011) used a sample size of 269 employees of an information technology company and revealed that affective response affects the dimensionality of perceptual measures of organizational climate. Wietzel, Robert J. (2009) applied Pearson correlation, Chi-square testing, and multiple-regression analysis and indicated that federal employees believe that job satisfaction, education level, and management styles are related to improved performance and the organizational culture. Based on the study, federal employees believe that pay, employee development, feedback, and motivation from supervisor are key items that effect performance.
Cotton and textile industry was the second largest employment generating sector after agriculture in India. The country was the third largest producer of cotton in the world and export share of Indian cotton was to the tune of 25 per cent of the world trade. Among the Indian states the Andhra Pradesh ranked on top with regard to the total number of investments made in textile projects this year, a study conducted by confederation of Indian industry-southern region said that Tamilnadu ranked second and Karnataka, Kerala in 3rd and 4th respectively. Andhra Pradesh has an estimated investment if Rs 33.79 billion (The Hindu, 2006). In Andhra Pradesh the Guntur district is poised to become a hub of the textile industry and the state government encouraging setting up of new industries. According to A.P cotton millers association, with 50 mills existing and another 50 coming up in the district, among all the textile mills the researcher selected few mills for the study by using convenience sampling, accessibility and cost consideration to assess the organizational climate. They are Amravati textiles, Kallam spinning mills, Guntur Spinning mills, NSL textiles, Idupulapadu Textiles; the data was collected from employees by using convenience sampling method.
The success of an organization depends upon the quality of organizational climate. Since the quality of an organizational climate cannot be measured, it will be perceived by the employees in different dimensions. Employees’ perception about the climate influences the employees’ involvement and commitment to the organization. So the perception of the employees about the organizational climate helps the organization to achieve the goals of the organization. Therefore, the research question addressed in this study is: “How organizational climate influences the perception of employees and their involvement in an organization?” Most of the studies show that there is a relation between organizational climate and employees’ performance. So there is a need for the organization to provide conductive climate to the employees. Organizations find it difficult to understand what type of climate that the employees preferred because employees perceptions differ from time to time and from situation to situation.
For this purpose every organization has to monitor and evaluate employees’ perceptions, opinion and preferences towards organizational climate by way of conducting continuous surveys and studies. The academicians also have to contribute literature to the organization to bail out them from this problem. Though some researchers have already attempted to study about organizational climate perceptions, still there is a gap in the academic phenomenon in the field of employees’ perception towards organistional climate. To bridge the gap, the researcher has made an attempt in the study to provide information about the climate variables and employees’ perceptions towards such variables taking into account the selected textile companies in Andhra Pradesh.
OBJECTIVES OF THE STUDY
The present study mainly focuses on the employees’ perception towards organizational climate.
To examine the opinion of employees about organizational climate variables.
To explore the association and interdependence between the various organizational climate constraints.
To study the association between demographic variables of employees and their perception on organizational climate variables, and
To put forth certain conclusions and suggestions based on the findings that have been arrived.
NULL HYPOTHESIS: There is no significant association between employees’ demographic factors and their perception towards organizational climate variables.
METHODOLOGY OF THE STUDY
The study is carried out through primary and secondary data. The primary data are collected through survey method. Survey was conducted using self structured questionnaire. Totally 125 questionnaires are distributed among the total employees of selected textile companies. Out of the distributed questionnaires, 15 are not usable. Only 110 of them are found suitable for primary data analysis. Hence the exact sample size is 110. The simple random sampling method is applied to collect the primary data. The questionnaire comprises of both optional type and Statements in Likert’s 5 point scale, of one represents strongly dis-agree and five represents strongly agree. The Secondary data are collected from Journals, Magazines, Publications, Reports, Books, Dailies, Periodicals, Articles, Research Papers, Websites, Company Publications, Manuals and Booklets.
To attain the objectives of the study, the data was tabulated and made the following analysis, descriptive statistics with chi-square, ANOVA, Regression analysis and correlation analysis was conducted between the study variables. The results are reported in the following tables.
In this study the researchers test the internal consistency of the data before to proceed for further data analysis. The most commonly used statistic for testing the reliability is Cronbach’s coefficient alpha. From the table 1, The Reliability Statistics, is 0.870, which means that our measuring is very consistent
Table: 1 RELIABILITY STATISTICS
Source: Primary data
The data presented in the below table discloses the socio – economic profile of the respondents in the study area. It is observed that the majority of the respondents (64 per cent) are in the age group of 18 to 30 years; about 31 per cent are in the age of 31 to 40 years and the remaining small percentage
I.e. 5 per cent of respondents belong to age group of above 40 years. Regarding the educational qualifications about thirty eight per cent of the total respondents are completed tenth class, twenty six per cent are diploma holders and sixteen per cent are degree holders and remaining nineteen percent are post graduates.
The job experience of respondent’s reveals that out of the total respondents 56 per cent have above 5 years of experience, forty four per cent of respondents are having below five years of experience. The monthly earning of the respondents are concerned, eighty five per cent of the respondents are drawing the salary of below eight thousand rupees, The persons who are drawing above eight thousand are only fifteen percent. Where the majority of responds belong to male fifty seven per cent and forty three percent are female.
INFLUENCE OF PERSONNEL VARIABLES ON ORGANIZATIONAL CLIMATE:
One way Analysis of Variance (ANOVA), to ascertain the influence of the personal variables of the employees such as gender, age, education, total experience in textile industry, over their perception on organizational climate.
From above Table: 3 it is clear that, the major portion of the constraints of organizational climate with the dependent variable of experience is highly significant at 0.05 levels. Where the calculated value of “F”, is above the table value for the variables, welfare facilities to employees by the organization, relationship with others, Decision making process, Organization gives recognition to you, Friendly way with other departments, Knowledge and expertise are recognized and rewarded, Management gives due respect to the worker representatives in meeting, Reward systems to different types of work, Only one variable i.e. Working conditions in the organization is not significant (0.200>0.05) from the study.  Glisson & Durick (1988) stated that employees who were on the job longer and older tend to be more satisfied than less tenured and younger employees. Markham, Leann Mills (2009) revealed that IT employees were most satisfied with the work itself and highly satisfied with their job in general. The number of years of work experience did not make a significant difference in regards to overall job satisfaction. Finally it reveals that the experience of employees is one of the influencing factor. This analysis rejects the null hypothesis, that there is no influence of personnel variables on organizational climate variables. We may, therefore conclude that the difference in respondents’ duo to experience is significant.
From above Table: 4 it is clear that, the major portion of the constraints of organizational climate with the dependent variable of education is highly significant at 0.05 per cent levels. Where the calculated value of “F”, is above the table value for the variables, welfare facilities to employees by the organization, relationship with others, Decision making process, Organization gives recognition to you, Friendly way with other departments, Knowledge and expertise are recognized and rewarded, Management gives due respect to the worker representatives in meeting, Reward systems to different types of work,
Only one variable i.e. Working conditions in the organization is not significant (0.401>0.05) from the study. Zulfqar Ahmad, et al., (2010) reveals significant difference in perceptions of middle managers in respect of political climate, professional development opportunities and regard for personal concerns when local and multinational organization are compared. Finally it reveals that the education of employees is an influencing factor. Finally it reveals that the education of employees is influencing factor. This analysis rejects the null hypothesis, of that there is no influence of personnel variables on organizational climate variables. We may, therefore conclude that the difference in respondents’ duo to education is significant.
DEGREE OF INTERDEPENDENCE:
To ascertain the interdependencies of the variables and to exactly estimate the variability and strength of relationship between organizational climate variables, the researcher made an analysis with Karl Pearson’s Co-efficient of Correlation.
The below table 5 clearly indicates that the following variables have a strong correlation and have the ability to create a greater impact on the organizational climate experienced by the employees in their Organization.
Decision making process and Relationship with others (0.945)
Knowledge and expertise are recognized and rewarded and Reward systems to different types of work (0.942).
Reward systems to different types of work and Management gives due respect to the worker representatives in meeting (0.929).
From the characteristics of the data, it is observed that decision making process and Relationship with others have highest inter correlation (r=0.945) it implies that these two variables dominate the respondents opinion on the organizational climate, having these two i.e. the employees participation in organizational decision making gives motivation to the employees to get desired results, and the relationship with others positively influence the employee relations for optimization of organizational performance. Tengku Marini (2007) identified that male staff perceived organizational climate more favorable as compared to females. Meanwhile the friendly, precise and attentive style was found to be the predominant communication styles among the staff and the predominant organizational climate was achievement oriented climate.
Where Reward systems to different types of work and Knowledge and expertise are recognized and rewarded is having second highest correlation among study variables (r=0.942). Bassous, Michael G (2010) revealed that positive significant correlation between workers’ motivation level and nonmonetary incentives, leadership style, and organizational culture, but no significant relationship between workers’ motivation level and monetary incentives. It should be understood as the Reward system of the organization has impact on organizational climate, so there must be recognition of employee skill and his expertise in the organization, and it would be possible with very good infrastructure of performance appraisal system, and also the assessment should dine without partiality. The organizational climate will be influenced by, the Reward systems of the organization and the workers representatives in decision meeting (r=0.929). The employees were influenced by the participation, in decision making process of the organization, the management has to provide a peaceful environment, in the work place and employ various schemes i.e. joint management councils, works committee, plant councils.
DEGREE OF RELATIONSHIP:
The model summary of Table: 6 notices that how much of the variance in the dependent variable (Experience) is explained by the model (which includes the variables: Working conditions in the organization, welfare facilities to employees by the organization, Relationship with others, Decision making process, Organization gives recognition to you, Friendly way with other departments, Reward systems to different types of work, Management gives due respect to the worker representatives in meeting, Knowledge and expertise are recognized and rewarded). In this research, the value is .898. Expressed as a percentage, this means this model explains 89.8 per cent of the variance in experience. However, to assess the statistical significance of the result, it is necessary to look at the ANOVA Table 7. This tests the null hypothesis that multiple R in the population equals 0. The model in this research reaches statistical significance (sig. = .000; this really means p<.0005).
From the coefficients matrix Table 8, the Standardized Beta coefficients give a measure to the contribution of each variable in the model. A large value indicates that a unit change in this predictor variable has large effect on the criterion variable. The “t” and Sig (p) value give a rough indication of the impact of each predictor variable, t value and small p value suggests that a predictor variable is having a large impact on the
Criterion variable. If the correlation with other variables is high, suggesting the possibility of multicollinearity. Ignoring any negative signs out the front in the data analysis found that the largest Bata coefficient is0.071, which is Reward systems to different types of work. This means that this variable makes the significant or unique contribution to explaining the dependent variable, when the variance explained by all other variables in the model is controlled for. The Beta values for Working conditions in the organization (.603), Decision making process (0589), Knowledge and expertise are recognized and rewarded (0540), These variables also somewhat significant contribution in explaining the degree of variance. And all other variables made less contribution.
The mean scores computed in Table 9 are based on weighted average method. The mean values represent somewhat positive level of organizational climate in the organization. Among all the factors the Working conditions in the organization has got highest mean value of 3.87. This means respondents are highly satisfied with the working conditions in the organization. The notable point is that despite the higher mean value, working conditions in the organization std. deviation is highly accurate, the above table also provides the X2 analysis of all the corresponding variables, by analyzing the mean scores, it is observed that the variables all are significant at the 0.001 per cent .the variables are have positive relationship with organizational climate.
TEST OF HYPOTHESES:
The results lead us to a conclusion that the employee demographic factors are associated with organizational climate variable. The employee experience and education are influencing factors according to table 3 and 4, where the calculated value of “F”, is above the table value for all variables. And there exists strong interdependencies between organizational climate variables it shows in table 5. To test the Null Hypotheses researcher conducted the chi-square analysis of the variables it shows that all the variables are significant at 0.05 per cent level. And the regression analysis in tables 8 shows that there exists a relationship between demographic variables with organizational variables, the significant level is .05 per cent. By the analysis the researcher rejected the null hypotheses (There is no significant association between employees’ demographic factors and their perception towards organizational climate variables), and accepting that here is significant relationship between employees’ demographic factors and their perception towards organizational climate variables.
FINDINGS AND CONCLUSION:
An analysis of the study carried out to examine the degree of employees’ perception on organizational climate variables, to study the relationship among organizational climate variables such as working conditions, welfare facilities, employee skills, employee participation in decision making, recognition of employees, cordial employee relations. It is identified that, 79 per cent of respondents satisfied with the working conditions in the organization, and the employees are dis-satisfied with the welfare measures about forty five per cent, there is a need for improvement of employee welfare in the organization. The relationship between employees are very good, thirty six per cent of employees are strongly agreed with organizational facilities to improve the relationship of employees. The management or supervisors are giving importance to the opinions of employees in the policy making. Where thirty nine per cent agreed that the organization recognizes the skills of employees, and there exists co-comparativeness and friendly environment between departments. About 43 per cent of employees are dis agree with compensation plan of the organization, so there must be a revision in the compensation plan, and they must adopt collective bargaining process by giving duo respect to the members of the employees, and recognize the special skills of the workers.  Joseph Wallace: James Hunt; and Christopher Richards (1999) stated that a strong link between specific organizational climate items and a number of managerial values dimensions and also found that additional relationships between particular dimensions of culture, climate and managerial values are reported. It is observed that the key factor which strongly influence are conducive work environment, optimistic recognition, organizational relationship, and effective supervision and core values are indispensable to motivate the employees in textile industry. Where this organizational climate leans upon job satisfaction, continuous motivation and training and leadership qualities of employees
When the climate is, worker oriented the employees will direct their behavior to attaining organizational goals, that the employees in different departments (accounting, service, underwriting) described their climate differently. This study indicates that the employee’s experience within his/ her functional work group had a strong influence on his/ her descriptions of the organization’s climate and affective reactions to the work situation therefore Communication must be transparent and sufficient for smooth performance of employees. When supervisors communicate with their employees, there is a mutual understanding of goals and the direction of the company, and those employees whose supervisors provide information are more satisfied with their jobs. Newman (2010), Positive working conditions such as proper motivation, warm environment, a differential reward system, orientation for new workers, co-operation among co-workers, job variety , opportunity for growth and development, supportive monitoring and belonging to a team influence the employees perceptions. The organization should take special measures to support the work groups and encourage the team spirit among employees. This may increase job satisfaction and commitment to the organization. Therefore, measures to initiate such a climate are justified. Management must encourage the employees to participate in decision making which brings good communication between subordinates and superior and to achieve organizational goals and objectives, the top level management is suggested to improve the motivational factors such as core values and supervisor’s efficiency. This would enable the less motivated employees to acquire the momentum of participation and involvement in the work,  Pathak R. D: Dhamani A.N: Pestonjee D. M (1993) studied the relationship of managerial effectiveness with motivational climate and leadership effectiveness and found that an effective manager is likely to be an effective leader but an effective leader may not be an effective manager. Glisson, Charles; Durick, Mark (1988) showed that skill variety and role ambiguity are the best predictors of satisfaction, while leadership and the organization’s age are the best predictors of commitment.
LIMITATIONS AND FUTURE SCOPE OF RESEARCH:
Further research should be considered to gather more information regarding the organizational climate in the textile industry. There are certain limitations of the study that must be acknowledged. First the sample selected for the study involves only the employees and there is no involvement of management representatives. Where the sample size 110 is very low, for further research, the researchers need to increase the number of respondents involved in the research study. The data collected from the respondents is through convenient sampling which restricts the generalization of findings to other groups, it is because difficulty in approaching wide variety of textile companies in Guntur district Andhra Pradesh, this is due to cost and time limitation.
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