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Organizational Climate and Culture Benjamin Schneider, 1 Mark G. Ehrhart, 2 and William H. Macey 1 1 CEB Valtera, Rolling Meadows, Illinois 60008, 2 Department of Psychology, San Diego State University, San Diego, California 92182; email: [email protected], [email protected], [email protected] Annu. Rev. Psychol. 2013. 64:361–88 First published online as a Review in Advance on July 30, 2012 The Annual Review of Psychology is online at psych.annualreviews.org This article’s doi: 10.1146/annurev-psych-113011-143809 Copyright c 2013 by Annual Reviews. All rights reserved Keywords organizational behavior, organizational effectiveness, data aggregation, linkage research, organizational values, levels of analysis Abstract Organizational climate and organizational culture theory and research are reviewed. The article is first framed with definitions of the con- structs, and preliminary thoughts on their interrelationships are noted. Organizational climate is briefly defined as the meanings people attach to interrelated bundles of experiences they have at work. Organizational culture is briefly defined as the basic assumptions about the world and the values that guide life in organizations. A brief history of climate re- search is presented, followed by the major accomplishments in research on the topic with regard to levels issues, the foci of climate research, and studies of climate strength. A brief overview of the more recent study of organizational culture is then introduced, followed by samples of important thinking and research on the roles of leadership and na- tional culture in understanding organizational culture and performance and culture as a moderator variable in research in organizational behav- ior. The final section of the article proposes an integration of climate and culture thinking and research and concludes with practical impli- cations for the management of effective contemporary organizations. Throughout, recommendations are made for additional thinking and research. 361 Annu. Rev. Psychol. 2013.64:361-388. Downloaded from www.annualreviews.org by ALI: Academic Libraries of Indiana on 07/31/14. For personal use only.

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  • PS64CH14-Schneider ARI 8 November 2012 10:21

    Organizational Climateand CultureBenjamin Schneider,1 Mark G. Ehrhart,2

    and William H. Macey11CEB Valtera, Rolling Meadows, Illinois 60008, 2Department of Psychology, San DiegoState University, San Diego, California 92182; email: [email protected],[email protected], [email protected]

    Annu. Rev. Psychol. 2013. 64:36188

    First published online as a Review in Advance onJuly 30, 2012

    The Annual Review of Psychology is online atpsych.annualreviews.org

    This articles doi:10.1146/annurev-psych-113011-143809

    Copyright c 2013 by Annual Reviews.All rights reserved

    Keywords

    organizational behavior, organizational effectiveness, dataaggregation, linkage research, organizational values, levels of analysis

    Abstract

    Organizational climate and organizational culture theory and researchare reviewed. The article is first framed with definitions of the con-structs, and preliminary thoughts on their interrelationships are noted.Organizational climate is briefly defined as the meanings people attachto interrelated bundles of experiences they have at work. Organizationalculture is briefly defined as the basic assumptions about the world andthe values that guide life in organizations. A brief history of climate re-search is presented, followed by the major accomplishments in researchon the topic with regard to levels issues, the foci of climate research,and studies of climate strength. A brief overview of the more recentstudy of organizational culture is then introduced, followed by samplesof important thinking and research on the roles of leadership and na-tional culture in understanding organizational culture and performanceand culture as a moderator variable in research in organizational behav-ior. The final section of the article proposes an integration of climateand culture thinking and research and concludes with practical impli-cations for the management of effective contemporary organizations.Throughout, recommendations are made for additional thinking andresearch.

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    Contents

    FRAMING THE REVIEW. . . . . . . . . . . 362ORGANIZATIONAL CLIMATE . . . . 363

    The Levels-of-Analysis Issue . . . . . . . 363The Focus of Organizational

    Climate Theory, Research, andPractice . . . . . . . . . . . . . . . . . . . . . . . . 365

    On Climate Strength . . . . . . . . . . . . . . . 367Climate Summary. . . . . . . . . . . . . . . . . . 368

    ORGANIZATIONAL CULTURE . . . 369A Brief Overview of the

    Organizational CultureConstruct and ResearchMethods. . . . . . . . . . . . . . . . . . . . . . . . 369

    Recent Themes in OrganizationalCulture Research . . . . . . . . . . . . . . . 371

    Culture Summary . . . . . . . . . . . . . . . . . . 376TOWARD INTEGRATING

    CLIMATE ANDCULTUREWITH PRACTICEIMPLICATIONS . . . . . . . . . . . . . . . . . 376Climate and Culture

    Rapprochement . . . . . . . . . . . . . . . . . 376Needed Further Integration . . . . . . . . 377Practice Implications . . . . . . . . . . . . . . . 378

    CONCLUSION . . . . . . . . . . . . . . . . . . . . . 380

    FRAMING THE REVIEW

    Organizational climate and organizationalculture are two alternative constructs forconceptualizing the way people experience anddescribe their work settings (including not onlybusinesses but also schools and governments).These topics, representing a subset of researchin organizational behavior and organizationalpsychology, have never been reviewed inthe Annual Review of Psychology, althoughthey received some mention as early as 1985(Schneider 1985). Given this void, we providea brief historical overview of thinking andresearch on each topic, update the centralissues identified as characterizing these liter-atures, and provide preliminary thoughts onintegrating them.

    Organizational climate may be defined asthe shared perceptions of and the meaningattached to the policies, practices, and proce-dures employees experience and the behaviorsthey observe getting rewarded and that aresupported and expected (Ostroff et al. 2003,Schneider & Reichers 1983, Schneider et al.2011). On the other hand, organizationalculture may be defined as the shared basic as-sumptions, values, and beliefs that characterizea setting and are taught to newcomers as theproper way to think and feel, communicated bythe myths and stories people tell about how theorganization came to be the way it is as it solvedproblems associated with external adaptationand internal integration (Schein 2010, Trice &Beyer 1993, Zohar & Hofmann 2012). Untilthe past two decades or so there have also beensignificant differences in the methods usedto study climate and culture, with the formerhaving been characterized by employee surveysand the latter by qualitative case studies. Ahistorical review of the climate and cultureliteratures, however, reveals that culture re-cently has been much more often studied usingsurveys, and the issues addressed can bothoverlap and be considerably different from theissues addressed via climate surveys (Schneideret al. 2011, Zohar & Hofmann 2012).

    The relative research interest in the twoconstructs has also varied over the decades.The topic of organizational climate dominatedthe early research on the human organizationalenvironment in the 1960s and 1970s, but itmoved to the background as interest in orga-nizational culture dominated the 1980s. How-ever, through the 1990s another transition tookplace, and interest in organizational climate ap-pears to have eclipsed the focus on organiza-tional culture in more recent years. To illustratethis shift, we reviewed articles in three of the topempirical journals in industrial/organizationalpsychology ( Journal of Applied Psychology,Academy of Management Journal, and PersonnelPsychology) since the turn of the century (20002012). We counted articles that had as one oftheir primary variables organizational climateor organizational culture, focusing on those that

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    studied them as aggregate constructs (as op-posed to individual perceptions, preferences, orbeliefs). Our review revealed over 50 articlesthat studied organizational climate and fewerthan 10 on organizational culture. Although ourreview was limited to three journals and thereare certainly other outlets that do publish moreon organizational culture, we think it is an accu-rate conclusion that there is currently more ofa focus on organizational climate than organi-zational culture in the industrial/organizationalpsychology research literature.

    In this review we describe climate and cul-ture theory and research with a primary focuson the recent literature, albeit framed within thehistorical developments of both fields. In addi-tion, we present ways in which organizationalclimate and culture complement each other andcan be mutually useful in practice. The reviewunfolds as follows. We begin with some earlythinking and research on organizational cli-mate. Then we introduce the three major ac-complishments over the recent past for climateresearch: (a) resolution of what has come to becalled the levels-of-analysis issue; (b) the cre-ation of various foci for climate research thathas yielded increased understanding for whatclimate is, how to study it, and its potential prac-tical usefulness; and (c) the recent research onclimate strength. In the second major sectionof the review, we provide a brief overview ofthe construct of organizational culture beforefocusing on the four major themes we see inrecent organizational culture research: (a) lead-ership, (b) national culture, (c) organizationaleffectiveness, and (d ) organizational culture asa moderator variable. In the final section, we ex-plore ways in which climate and culture think-ing and research can complement each otherboth conceptually and practically.

    ORGANIZATIONAL CLIMATE

    Serious quantitative research on organizationalclimate began around 1970 (see the historicaloverview in Schneider et al. 2011). Earlyresearch on organizational climate was charac-terized by little agreement on the definition of

    it, almost no conceptual orientation to the earlymeasures designed to assess it, and paradoxi-cally an almost complete ignoring of the termorganizational. Thus, early climate research(say through the early 1980s) followed a moretraditional individual differences methodologythat was characteristic of the industrial psychol-ogy of the time. As the field of organizationalculture began to explode in the early 1980s(following Pettigrews introduction of it toorganizational studies in 1979), organizationalclimate faded to the background (at least for atime) as it struggled with the levels-of-analysisissue. To some degree, the rise in interest inorganizational culture in the 1980s could beattributed to the fact that it seemed to capturethe richness of the organizational environmentin ways that climate research had not. AsPettigrew (1990, p. 416) observed, [There is]the impression that climate studies have beenboxed in by the appearance in the nest of thisrather overnourished, noisy, and enigmaticcuckoo called organizational culture. This pres-sure from an interloper may, however, be en-ergizing climate researchers to rethink the roleof climate studies. Pettigrew was prescient inhis depiction of climate research, given that therenewed interest in the topic yielded significantprogress in conceptual thinking and researchmethodologies (Kuenzi & Schminke 2009).

    The Levels-of-Analysis Issue

    Although early organizational and managementwritings about climate and climate-like con-structs (e.g., Argyris 1957, Lewin et al. 1939)focused on aggregates and not individuals,the early quantitative research on climate thatproliferated in the late 1960s and early 1970swas done by individual-differences-orientedindustrial psychologists (e.g., Schneider &Bartlett 1968) and thus tended to focus on theindividual level of analysis. Grappling with thisissue was a major focus of researchers through-out the 1970s, with some resolution emergingin the 1980s. In brief, the issue was whetherclimate is an individual experience constructand/or a unit/organizational attribute. In other

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    words, there was confusion between the levelof the theory and the level of data and analysis.Glick (1985) succinctly argued that unless(a) climate survey items assessed organizationalfunctioning, (b) the data were aggregated to theorganizational level of analysis, and (c) the cli-mate measurement was focused on importantorganizational outcomes (more on this later),then climate research was not different fromother individual-level attitudinal research.The clarification of climate as an attribute ofthe group or organization was an importantstep for climate research, although someresearchers do continue to study climate at theindividual level. However, such research onpsychological climate (e.g., James et al. 2008)is not relevant for the present review, which isconcerned with organizational climate.

    Recent writings by Bliese (2000), Chan(1998), Klein & Kozlowski (2000), andLeBreton & Senter (2008) indicate that re-search on climate is best characterized as areferent-shift consensus model (Chan 1998).The referent-shift model uses survey itemsthat refer to attributes of the unit/organizationrather than individuals own perspectives.Referent-shift consensus items are conceptuallyappropriate because they refer to the level towhich individual responses will be aggregated,and they tend to yield improved consensuswhen aggregated (LeBreton & Senter 2008).

    Consensus implies that perceptions areshared. Assessments of sharedness havefocused on interrater agreement and/or inter-rater reliability. Interrater agreement addressesthe extent to which raters provide similarabsolute ratings of climate such that their rat-ings are interchangeable. The most commonmeasure of this form of agreement in climateresearch is rWG( J) ( James et al. 1984), althoughother alternatives such as the average deviationindex (Burke et al. 1999) and aWG (Brown& Hauenstein 2005), have been proposed.Commonly accepted standards for legitimizingaggregation based on agreement are typically0.70 or higher, although the usefulness ofa broadly applied cutoff has been recentlyquestioned (see LeBreton & Senter 2008).

    Interrater reliability addresses the extentto which the rank ordering of the ratings isconsistent across people within units. Climateresearchers typically report ICC(1), a ratio ofbetween-unit variance to total variance (likeanalysis of variance, or ANOVA; Bliese 2000),and as such technically a measure of bothinterrater reliability and interrater agreement(LeBreton & Senter 2008). Although no firmcutoffs exist for ICC(1), James (1982) reporteda median value of 0.12 among the studies in hisearly review, and LeBreton & Senter (2008)suggested that values of 0.01, 0.10, and 0.25might be considered small, medium, and largeeffects, respectively. It is also common for re-searchers to report ICC(2) [sometimes also re-ferred to as ICC(K); LeBreton & Senter 2008].ICC(2) is an index of the reliability of groupmeans and is related to ICC(1) as a functionof group size (Bliese 2000), and ICC(2) valuesare commonly interpreted in line with othermeasures of reliability, with 0.70 or higherdeemed adequate (Bliese 2000, LeBreton &Senter 2008). Values that high are obviouslyquite challenging to achieve with smaller groupsizes (e.g., 56 individuals per group).

    In sum, it is common practice for cli-mate researchers to include a measure ofinterrater agreement as well as both within-and between-group interrater reliability tosupport aggregation of individual perceptionsto unit and/or organizational levels of analysis.Furthermore, we emphasize that a key to suchagreement and reliability evidence is the ap-propriate wording of climate survey items suchthat they represent the level of analysis to whichindividual perception data will be aggregated.

    A very recent levels issue that has emergedin climate research concerns the study of cli-mate across multiple levels of analysis. Overthe years, studies of organizational climatehave most frequently been studies of organi-zational subunits and rarely if ever of organiza-tions themselves, much less of multiple levels ofanalysis. In their recent research on safety cli-mate, Zohar & Luria (2005) demonstrated a sig-nificant main effect on safety behavior both fororganizations and for subunits (groups) nested

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    within organizations. In addition, they showedthat subunit safety climate mediated the effectsof organizational safety climate on employeesafety behavior. As Zohar & Hofmann (2012)note, this means that employees in organiza-tions are able to distinguish what happens intheir subunits from the larger organizationalfocus on safety, but that subunits within a com-pany have more agreement in their safety cli-mate perceptions than they have with peoplein the subunits of other companies. In short,levels issues are somewhat complex to concep-tualize because they exist simultaneously withinand between organizations, but it appears thatthe main effects at both levels have meaning forthe people in them and their behavior.

    The Focus of Organizational ClimateTheory, Research, and Practice

    A second major accomplishment of research onorganizational climate is the development of re-search on focused climates. By focus we meanthat early climate research might be character-ized as having little focus on anything besideswhat might be called a climate for well-being,with a strong focus on leadership and supervi-sory style (Schneider et al. 2011). Industrial psy-chologists developed early measures of climatethat had between 6 and 10 dimensions, but thedimensions chosen for study seemed to cover avariety of territories that emerged from a vari-ety of researchers. Given this molar conceptualand measurement approach to climate, validitystudies using such measures produced highlyvariable results at best because the generic na-ture of the climate measured was not useful forthe prediction of specific outcomes.

    Schneider (1975) recognized this issue andproposed that the bandwidth and focus ofclimate measures should match the bandwidthand focus of the outcome to be predicted.Adopting the personnel selection tactic offirst identifying the outcome of interest, hesuggested that climate measures follow suit. Toclarify the distinction between molar climateand focused climate, here is what might havebeen a typical generic climate item followed by

    the strategically focused version of the item:My supervisor says a good word whenever hesees a job well done versus My supervisorsays a good word whenever he sees a job doneaccording to the safety rules (Zohar 2000).

    The two most prevalent examples of re-search on climates with a specific strategic focusare in the literatures on climate for customerservice and climate for safety. One of thestrongest tests of the outcomes of service cli-mate was conducted by Schneider et al. (2009),who used longitudinal data at the organizationlevel of analysis to show that companies withhigher levels of service climate had higher cus-tomer satisfaction and subsequently superiorfinancial performance. That study replicatedmany similar studies on the relationshipbetween service climate and customer satis-faction. Indeed, the service climate literaturenow includes studies of both antecedents andconsequences of it as well as studies of poten-tial moderators. For example, Schneider et al.(2005) found that unit-level customer-orientedcitizenship behavior was a mediator of serviceclimates effects on department-level customersatisfaction and sales. That study also showedthat service leadership was an important an-tecedent of service climate. Indeed, our reviewshowed that leadership has become an impor-tant antecedent theme in the service climate lit-erature. For instance, research reveals that bothtransformational leadership (Liao & Chuang2007) and servant leadership (Walumbwaet al. 2010) are significant predictors of serviceclimate. Other research has shown that theleaders personal characteristics are also impor-tant to consider, such that a managers serviceorientation was shown to fully mediate the re-lationship between their core-self-evaluationsand the service climate of their department(Salvaggio et al. 2007). In addition to leader-ship, other antecedents that have been shown topredict service climate include organizationalresources and unit-level engagement (Salanovaet al. 2005) as well as high performance workpractices (Chuang & Liao 2010). Finally, interms of moderators of the climate-outcomerelationship, Dietz et al. (2004) showed that

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    service climate had stronger effects whencustomer contact was higher, and Mayer et al.(2009a) replicated that finding, also showingthat the effects of service climate were strongerwhen the product was more intangible andwhen service employee interdependence washigher.

    The literature on safety climate has touchedon many of the same general themes as theservice climate literature, including consistentvalidation of the construct. Thus, meta-analyticevidence supports the consistent relationshipbetween safety climate and accidents (Christianet al. 2009, Clarke 2006), although Beus et al.(2010b) suggested that there may be reciprocaleffects between safety climate and accidents,such that increased levels of accidents influencethe shared perceptions of the units (poor)climate for safety. A safety climate is not onlyrelated to accidents but also the reportingof those accidents, such that underreportingis significantly higher in organizations withpoor safety climates (Probst et al. 2008). Theantecedents of safety climate have includedgeneral transformational leadership (Zohar &Tenne-Gazit 2008), safety-specific transfor-mational leadership (Barling et al. 2002), thesafety climate of higher organizational levels(Zohar & Luria 2005), and both management-employee relations and organizational support(Wallace et al. 2006). In terms of outcomesof safety climate, recent research by Neal& Griffin (2006) used longitudinal data todemonstrate how safety climate influencesindividual-level safety motivation and safetybehavior, which in the aggregate predicts acci-dent rates in the work unit. Finally, there is alsoevidence for moderators of the outcomes ofsafety climate. For instance, Hofmann & Mark(2006) showed in a sample of nurses that safetyclimate had a stronger influence on decreasingback injuries and medication errors whencomplexity of the patients condition was high.

    In addition to studying specific focused cli-mates for tangible outcomes, scholars havestudied climates for various organizational pro-cesses. In this research, the measurement ofclimate targets the organizational process of

    interest rather than the strategic outcome ofinterest. Some of the earliest work on processclimates focused on procedural justice climate(e.g., Naumann & Bennett 2000). Recent re-search in that area has demonstrated that proce-dural justice climate could be predicted by teamsize and team collectivism (Colquitt et al. 2002),servant leadership (Ehrhart 2004, Walumbwaet al. 2010), and leader personality (Mayeret al. 2007). In addition, procedural justice cli-mate is related to unit-level outcomes such asturnover and customer satisfaction (Simons &Roberson 2003), team performance and absen-teeism (Colquitt et al. 2002), and unit-level cit-izenship behavior (Ehrhart 2004), as well asindividual-level attitudes and citizenship behav-ior (Liao & Rupp 2005, Naumann & Bennett2000, Walumbwa et al. 2010). Moreover, thecross-level effects of justice climate are mod-erated by both individual ( justice orientation;Liao & Rupp 2005) and structural attributes(group power distance; Yang et al. 2007).

    Interest has recently increased in anotherprocess climate: diversity climate. Several re-cent examples are notable. For instance, McKayet al. (2008) showed that gaps in perfor-mance between racial/ethnic groups were sig-nificantly smaller when the organization wasmore supportive of diversity. Pugh et al. (2008)found that workforce racial diversity was morestrongly related to diversity climate when thecommunity in which the organizational unit isbased is less diverse. McKay et al. (2009) foundthat unit sales improvements were most positivewhen managers and subordinates both reportedthat their organization had a supportive diver-sity climate. Finally, Gonzalez & DeNisi (2009)showed that racial/ethnic diversity was pos-itively related to organizational performancewhen diversity climate was positive.

    Other examples of process climates that havebeen the focus of recent research include eth-ical climate (Martin & Cullen 2006, Mayeret al. 2009b, Schminke et al. 2005), empower-ment climate (Chen et al. 2007, Seibert et al.2004), voice climate (Morrison et al. 2011),and climate for initiative (Baer & Frese 2003,Michaelis et al. 2010). Indeed, it is reasonable

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    to suggest that any and all organizational pro-cesses might be usefully studied and understoodthrough a climate lens. For example, one mightconceptualize in climate terms such diverse or-ganizational processes as organizational change(Weick & Quinn 1999), performance appraisal(Rynes et al. 2005), work motivation (Latham& Pinder 2005), and trust in organizations(Kramer 1999). The study of these from a cli-mate perspective could yield new insights intothe sets of contextual process variables that aretheir correlates and perhaps their antecedents.

    In sum, the change to a strategic outcomeand process focus for climate research has sig-nificantly improved not only the validity of cli-mate research but also the understanding of thecontexts that likely yield these focused climates.As such, the development of this more focusedapproach has resulted in the climate constructbeing more available to practitioners becauseit literally has focused on important organiza-tional processes and outcomes and has indicatedspecific practices and behaviors that might serveas interventions in organizations to enhanceperformance in those areas (Burke 2011).

    One topic that has yet to receive much re-search attention, however, is the issue of thelink between process and outcome climates.Schneider et al. (2011) have proposed that pro-cess climates might be conceptualized as a foun-dation for outcome climates. That is, whenworkers perceive that their organization is con-cerned about their well-being through its em-phasis on fairness, diversity, ethics, trust, andso forth, they are more amenable to the ef-forts of management to focus on strategic out-comes of value to the organization. Schneideret al. (1998) and Wallace et al. (2006) have pro-vided empirical support for the idea that cli-mates focused on specific outcomes require thatthe foundations on which they are built (foun-dational climates) be in place for the strate-gic climates to have an opportunity to emerge.Recent research by Schulte et al. (2009) sup-ports this general premise by showing that it isthe configuration of employee-supportive ele-ments and strategy-focused elements (in theircase, the focus on service) that matters most for

    relevant strategic outcomes (such as financialperformance and customer satisfaction). Fur-thermore, their results suggest that there maybe a threshold of climate for well-being thatis needed to build a strategic climate and thata moderate climate for well-being may suffice.Along similar lines, McKay et al. (2011) foundsupport in a sample of retail stores for a three-way interaction between diversity climate, ser-vice climate, and minority representation inthe stores to predict customer satisfaction; thegraphs of this interaction indicated that cus-tomer satisfaction was generally highest whenboth diversity climate and service climate levelswere high. More research along these lines thatconceptually integrates focused climates andmolar climates and that simultaneously studiesmultiple focused climates is needed.

    On Climate Strength

    In a prior section on levels issues we addressedthe variety of techniques researchers employ todefend aggregation of individual perceptions toyield a score representative of the larger unit ofanalysis of interest. Researchers have more re-cently raised the following interesting question:What are the implications of observing vari-ability in consensus within the units or organi-zations being studied? This is a question aboutthe relative strength of the climate across set-tings and the impact that differences in climatestrength may have. The fundamental idea be-hind climate strength is not new, being relatedto the concept of situational strength (Mischel1976), a construct that has received renewedinterest in recent years by Meyer, Dalal, andcolleagues (Meyer & Dalal 2009; Meyer et al.2009, 2010). As Zohar (2000; Zohar & Luria2005) has noted, a weak climate can result whenpolicies and procedures are inconsistent and/orwhen the practices that emerge from policiesand procedures reveal inconsistencies.

    Research on climate strength has focused onmolar/generic climate (e.g., Gonzalez-Romaet al. 2002, Lindell & Brandt 2000) as well asa number of focused climates, including proce-dural justice climate (e.g., Colquitt et al. 2002),service climate (e.g., Schneider et al. 2002), and

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    safety climate (e.g., Zohar & Luria 2004, 2005).The usual model guiding such work is that cli-mate strength will moderate the relationshipbetween the climate and outcomes of inter-est such that the relationship will be strongerwhen climate strength is high. On a conceptuallevel, this interaction is expected because themore consistent the experiences of employees,the more likely employees are to behave con-sistently as a collective such that there shouldbe more positive outcomes on the positive endand more negative outcomes on the low end.On a measurement level, high consensus (lowvariability within units) provides for a more reli-able mean, and with a more reliable mean thereshould be greater validity in conceptually rel-evant relationship with outcomes. Recent re-search has provided some promising evidence insupport of the moderating effect of strength onthe relationship between climate level and out-comes (Colquitt et al. 2002, Gonzalez-Romaet al. 2002, Schneider et al. 2002). An interest-ing corollary finding from the Schneider et al.(2002) article was that the less consensus therewas among employees in bank branches (theweaker the service climate was), the higher wasthe variance in branch customer perceptions ofthe service quality they received.

    But not all studies reveal a significant mod-erator effect for climate strength in predict-ing outcomes (Dawson et al. 2008, Lindell& Brandt 2000, Rafferty & Jimmieson 2010,Schneider et al. 2002, Sowinski et al. 2008,Zohar & Luria 2004). We must be tentative inoffering an explanation for this inconsistency infindings, but we propose that a likely crucial is-sue presents an interesting paradox as follows:Climate researchers spent decades attemptingto write items for climate surveys such that theconsensus indicators discussed earlier would behigh, legitimating aggregation. But in order tohave a moderator there must be significant vari-ability across units in consensus; if consensusis uniformly high, then climate strength willnot serve as a moderator. Indeed, several of thestudies that did not find support for strength as amoderator seem to have had quite low variabil-ity in the level of agreement across units (e.g.,

    Dawson et al. 2008, Sowinski et al. 2008, Zohar& Luria 2004).

    More research on the conditions underwhich climate strength will function as hypoth-esized is clearly required, but there is beginningto be some evidence on the conditions mostlikely to elicit strong versus weak climates.

    For example, climates have been found tobe stronger when units are smaller and lessdiverse (Colquitt et al. 2002), when within-unit social interaction is high (Gonzalez-Romaet al. 2002), when the units communicationnetwork is more dense (Zohar & Tenne-Gazit 2008), when units are more interde-pendent and have higher group identification(Roberson 2006), when units are more cohe-sive (Luria 2008), and when average unit tenureis higher (Beus et al. 2010a). The most com-monly studied antecedent of climate strengthhas been leadership, with research showingthat units have stronger climates when lead-ers are described as providing more infor-mation (Gonzalez-Roma et al. 2002), beingmore straightforward and having less vari-able behavior patterns (Zohar & Luria 2004),and being more transformational (Luria 2008,Zohar & Luria 2004, Zohar & Tenne-Gazit2008). In sum, when work units interact more,communicate more, and are more interdepen-dent, and when leaders communicate more andshare a clear strategic vision for the work, thenthe climate in those units will be stronger.

    Although progress has been made in re-search on climate strength, there are still ques-tions that need to be answered. Nevertheless,from a practical vantage point, what we can con-clude is that a positive and strong climate is usu-ally superior to a weak climate and for sure issuperior to a negative climate, so the implica-tions for practice are clear: In order to maximizethe likelihood of achieving the organizationsprocess and outcome performance goals, it isessential to consistently and forcefully promotea positive focused climate.

    Climate Summary

    A half century of thinking and research has pro-duced a significant literature on organizational

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    climate. Perhaps the major outcome of thisarea of research for psychology has been theacceptance of a level of theory and data otherthan the individual as relevant and importantin organizational psychological research andpractice. Thus, the resolution of the level-of-analysis issue has been central to positioningorganizational climate as an integral and inte-grating conceptual force in the larger world oforganizational psychology and organizationalbehavior. Testament to this enlarged rolefor the construct is The Oxford Handbook ofOrganizational Climate and Culture (Schneider& Barbera 2013), in which the research andpractice related to the major topics in organiza-tional psychology are approached from climate(and culture) perspectives. More specifically,the handbook chapters reveal ways in whichclimate and culture are both influenced by andhave influence on more fundamental orga-nizational psychology issues, from personnelselection to organizational change.

    Particularly for the world of practice, theemphasis on focused climates (e.g., climates forservice, safety, justice, ethics) that currently ex-ists has revealed insight into organizational pro-cesses and the various climates they producefor people as well as robust evidence for thevalidity of climate perceptions for understand-ing and predicting important specific organiza-tional outcomes such as accidents and customersatisfaction. Although this specific focus forclimate research has improved the predictionand understanding of specific outcomes, issuesabout the variability in the prediction of moreglobal measures of organizational effectivenessbased on climate measures have not receivedmuch attention. In an exception, Kuenzi (2008)showed that molar climate can in fact be use-ful in understanding global performance whenconceptualized and studied through the com-peting values framework (Quinn & Rohrbaugh1983, Weick & Quinn 1999). More researchof this sort, utilizing a common framework andmeasure across various global performance out-comes, is needed.

    We emphasize that organizations do nothave a singular climate but rather multiple

    simultaneous climates of both the process andstrategic outcome sort. Although this may beobvious, it is also true that there has been verylittle theory and research on the issue of multi-ple climates (Zohar & Hofmann 2012). Theoryand research on such possible additive and in-teractive effects from multiple climates wouldbe useful, especially when such multiple cli-mates include both process and outcome focifor climate as well as molar climates.

    ORGANIZATIONAL CULTURE

    The review of the organizational culture con-struct and research on it traces a different pathfrom that for organizational climate. This istrue basically because there were few level-of-analysis issues to deal with in the organizationalculture world. Emerging from a conceptual andmethodological base in anthropology, the col-lective was the natural unit of theory and anal-ysis, with individual differences an irrelevantidea. Instead, while the climate literature in the1980s struggled with the levels issues, the cul-ture literature of the same era somewhat para-doxically struggled with success in the world ofmanagement consulting. That is, culture veryquickly became the darling of the managementconsulting world, with books such as In Search ofExcellence (Peters & Waterman 1982) and Cor-porate Culture: The Rites and Rituals of Organi-zational Life (Deal & Kennedy 1982) attractingheadlines. From an academic standpoint, thispresented some issues because academics werenot quite sure about what culture was and whatit representedand even whether it was appro-priate to try to link organizational culture withthe financial success of corporations (Siehl &Martin 1990).

    A Brief Overview of theOrganizational Culture Constructand Research Methods

    Although the construct of culture itself has along history in anthropology, and the term hadbeen used in earlier writings on organizations(Alvesson & Berg 1992, Trice & Beyer 1993),

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    what Pettigrew (1979) did in introducing thetopic to organizational studies was to legitimizethe concept in all of its potential richness. Hedid this by showing how the concepts of beliefs,ideology, language, ritual, and myth could beapplied to the study of organizations (Alvesson& Berg 1992), as complex as that obviouslywould be. This complexity scared neitherculture scholars nor practitioners, the formergroup feeling liberated by the ambiguity thedefinition(s) presented, permitting them to ex-plore culture as they saw fit, and the latter groupidentifying with the ambiguity as a realisticpicture of the world in which they functioned.

    At a more macro conceptual level, the bestway to distinguish definitional (and method-ological) approaches to culture is by a focuson culture as something an organization hasversus something an organization is (Smircich1983). From the organizations have culturesperspective, researchers are concerned withthe ways in which organizations differ and areusually pragmatic in terms of their focus onorganizational effectiveness and organizationalchange (Alvesson 2002, Weick & Quinn 1999).The research approach from this perspectiveis typically comparativeto explore thoseattributes of organizations that differentiatethe more effective from the less effective (e.g.,Sackmann 2011)which explains why surveyapproaches have dominated research on culturefrom this perspective. In contrast, from theorganizations are cultures perspective, theresearchers goal is description and understand-ing, including how organizational membersdevelop meaning and come to share the verybasic assumptionsthe root metaphors (Smir-cich 1983)that guide the way they as theorganization function. The research approachhere tends to be inductive (Ashkanasy et al.2000a), using a native-view paradigm (Gregory1983, Louis 1990) to report how insidersexperience their organizations (e.g., an emicperspective). From a methodological stand-point, researchers from this perspective almostexclusively use qualitative methods in theirresearch, as those permit the identification ofthe unique manifestations of culture in settings

    and permit the identification of ambiguity inthe culture as an attribute of a setting.

    Simply stated, there is not agreement onwhat culture is nor how it should be studied,but the issues have been somewhat clarified.For every definition of what culture is, thereis an important contrary view. For example, inmost definitions of culture the idea that it isshared is present. Yet one of the most widelyinfluential perspectives on culture, by Martin(1992, 2002), indicates that this integrationistidea about culture is but one of three perspec-tives, the other two being a fragmented viewand a differentiated view. The integrationistview is that organizations are or have oneculture shared by all; conflict and ambiguityand differences are ignored and, if mentioned,are seen as something to fix or an aberration.The fragmented perspective focuses on am-biguity; it forcefully denies the necessity forsharedness, arguing that it is unlikely thatpeople in an organization at different levelsand in different positions/occupationsandwith different personalitieswould have thesame experiences and attach the same meaningto the organization and what it values. Thedifferentiation perspective is a compromiseposition. It notes that people occupy sub-cultures in organizations (by function, byoccupation, by gender, and so forth) and thusmay have different experiences and may evenattach different meaning to the same events.Martin (2002) has recently advocated for athree-perspective theory of culture, in which allthree perspectives are applied simultaneously.Building on our discussions of both climateand culture thus far, it may be useful to think ofthe three perspectives as addressing the generalculture (integration), subcultures (differentia-tion), and culture strength (fragmentation) inorganizations at the same time. Along theselines, Yammarino & Dansereau (2011) identifya series of climate and culture studies in whichlevels-of-analysis issues, especially multilevelissues, are present and discuss the ways in whichthese issues may be simultaneously studied.

    In organizational culture research, the issueof levels has typically concerned the extent to

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    which the facets of culture are more or less eas-ily observable. These different levels have beenconceptualized in a variety of similar ways, butthe most commonly referred to framework onthe levels of culture is Scheins (2010). He pro-posed three levels of organizational culture: ar-tifacts, espoused beliefs and values, and under-lying assumptions. Artifacts represent the outerlayer of culture and include rituals, language,myths, dress, and the organization of space.They are the most readily accessible to out-siders but also the most ambiguous in termsof the underlying meaning they may represent.Thus, although many artifacts may look thesame across organizations, the meaning(s) as-cribed to them may be quite different. Scheinsnext level of culture is espoused values, or thevalues that are reported by management as coreto the organization but that may or may not re-flect the reality in the organization for mem-bers. Scheins third level concerns what he (andothers) term the underlying assumptions of or-ganizational life. These indicate why organiza-tional members go about their day-to-day worklives as they do, and they are frequently so in-grained that they cannot necessarily be easilyarticulated, requiring in-depth interviewing toilluminate them.

    Recent Themes in OrganizationalCulture Research

    In this section, we attempt to summarize the re-cent empirical literature on organizational cul-ture. We do not provide an exhaustive review,but instead identify key themes and exemplarsin the literature of each. The themes we fo-cus on are (a) leadership, (b) national culture,(c) organizational effectiveness, and (d ) organi-zational culture as a moderator variable.

    One theme we do not include is researchon person-organization fit. The main idea ofperson-organization fit involves the extent towhich there is an alignment between an in-dividuals values and the values (or culture)of their current or potential organization. Al-though culture is central to this literature, thefocus is on the consequences of fit for individ-

    uals, their subjective fit perceptions, or theirpreferences for an organizations culture (fora review, see Ostroff & Judge 2007). Givenour focus on aggregate perceptions of organi-zational culture, we do not review these studies(although we do note there are exceptions thatdo include aggregate indicators of organizationculture, such as recent research by Andersonet al. 2008).

    Leadership and organizational culture. Themost commonly discussed source for the or-ganizations assumptions and values is thefounder of the organization and his/her leader-ship. Scheins (2010, p. 236) culture-embeddingmechanisms describe what leaders do to articu-late their values (primary mechanisms) and re-inforce them (secondary mechanisms):

    Primary embedding mechanisms

    What leaders pay attention to, measure,and control on a regular basisHow leaders react to critical incidents andorganizational crisesHow leaders allocate resourcesDeliberate role modeling, teaching, andcoachingHow leaders allocate rewards and statusHow leaders recruit, select, promote, andexcommunicate

    Secondary embedding mechanisms

    Organizational design and structureOrganizational systems and proceduresRites and rituals of the organizationDesign of physical space, facades, andbuildingsStories about important events andpeopleFormal statements of organizational phi-losophy, creeds, and charters

    Schein argues that these cultural embeddingmechanisms have an impact on culture to theextent that they are found to be useful by theorganization in coping with the world in whichit functions. In other words, what determineswhether certain behaviors and values espousedby management ultimately become assump-tions is whether those behaviors and valueslead to success.

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    Although the theoretical literature on orga-nizational culture is replete with discussions ofthe influence the founder and upper manage-ment have on an organizations culture, empir-ical studies of that relationship are hard to find.Nevertheless, we highlight three recent studieshere that provide some insight into the role ofleaders in organizational culture. Berson et al.(2008) examined the relationship between CEOvalues, organizational culture, and firm perfor-mance in a sample of 26 Israeli companies. Sup-porting their three primary hypotheses, theyfound that the CEO value of self-direction waspositively associated with an innovative culture,security value was positively related to a bureau-cratic culture, and benevolence value was pos-itively associated with a supportive culture. Inaddition, these culture dimensions were subse-quently related to several indices of organiza-tional performance (including sales growth andefficiency).

    The other two studies we highlight fo-cused on leader behavior (not leader values).Ogbonna & Harris (2000) examined the extentto which the effects of three styles of leadership(supportive, participative, and instrumental)on organizational performance were mediatedby organizational culture. They found partialsupport for culture as a mediator, with someleader behaviors having direct effects on per-formance. Finally, Tsui et al. (2006b) focusedon the extent to which strength (consistency) ofleadership was associated with the strength ofthe culture. Although they generally found thatstrength of leadership and strength of culturewere related, they also identified exceptionsto that relationship and clarified the reasonsfor the exceptions in follow-up interviews.Those interviews revealed that some leadersare able to build a strong culture throughinstitution-building behaviors (working in thebackground to build strong organizationalsystems) rather than performance-buildingbehaviors (showing energy and articulating avision). More research clarifying how leadersinfluence culture is needed, especially researchfocusing on the effects of Scheins (2010)culture-embedding behaviors.

    National culture and organizational cul-ture. Multiple recent studies focus on the re-lationship between organizational culture andorganizational effectiveness in different coun-tries (e.g., Fey & Denison 2003, Lee & Yu2004, Xenikou & Simosi 2006) or the mea-surement of organizational culture in countriesoutside the United States (e.g., Lamond 2003,Tsui et al. 2006a), but the primary theoreticalissue of interest when it comes to national cul-ture is the extent to which it shapes the cul-tures of the organizations within it. This issuehas been of interest to researchers since the in-fluential work of Hofstede (1980). In general,the results show that when national culture iscorrelated with the organizational culture ofcompanies within them, a significant main ef-fect invariably is found (Gelfand et al. 2007).The most thorough test of this relationship inrecent years has been provided by the GlobalLeadership and Organizational Behavior Effec-tiveness (GLOBE) project (House et al. 2004),which collected data on societal culture, or-ganizational culture, and leadership from over17,000 people representing 62 societal culturesand 951 organizations. Brodbeck et al. (2004)used a subsample of that database with ade-quate representation within organizations andacross countries and industries and showed thatculture explained between 21% and 47% ofthe variance (with an average of 32.7%) acrosstheir nine organizational culture practice di-mensions. In addition, they found that societalculture had much stronger effects than eitherindustry or the society-by-industry interaction.

    Two important points should be madein the light of this finding. First, nationalculture has an impact on organizational cul-ture. Second, the impact leaves considerablevariability in the organizational culture profilespossible; national culture is influential but notdeterminant. Indeed, Sagiv et al. (2011) reportthat within organizations and nations there isalso significant variability in individual values.From this review, it is possible to provide somepotential resolution of the theoretical issuewith regard to the integrationist versus the dif-ferentiated culture, and it is in agreement with

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    Martins (2002, p. 151) proposal that these canexist simultaneously as a function of the lensthrough which culture is viewed. Thus, througha macro lens, one might reveal whole nations asdistinctive cultures but also differences betweennations; a macromicro lens would reveal dis-tinctive cultures for organizations as well as dif-ferences between organizations within a nation;a micro lens would reveal within-organizationsubcultures; and yet an even more refined viewwould reveal within-organization individualdifferences. More such multilevel research onorganizational culture is obviously needed.

    Culture and organizational performance.The idea that organizations have culturesyields a focus on the relationship betweenorganizational culture and organizationaleffectiveness. A recent review of the workon this possible relationship makes it clearthat such research will necessarily be basedon survey measures of organizational culture(Sackmann 2011). Sackmann notes that suchresearch is fraught with difficulties with regardto (a) what levels of culture should be the focusof assessments (e.g., myths, stories, values,behavior), (b) the unit of analysis for assessment(subcultures within organizations versus wholeorganizations), and (c) the content dimensionsalong which assessments might best be made(e.g., employee experiences, socializationtactics, leadership actions). Because of thesedifficulties, a relationship with organizationalperformance outcomes has been difficult toconsistently establish (Wilderom et al. 2000).Nevertheless, a comparison of the Wilderomet al. (2000) review with the Sackmann (2011)review indicates that not only is there muchinterest in this relationship, but also thatsupport for that relationship is growing.

    Our review of recent (20002012) studiesexamining the relationship between organiza-tional culture and performance revealed a va-riety of approaches to the issue, with consis-tent significant findings. Studies relied on avariety of fairly traditional outcomes, includ-ing objective financial measures of performance(e.g., Gregory et al. 2009, Kotrba et al. 2012,

    Lee & Yu 2004), customer satisfaction (e.g.,Gillespie et al. 2008), goal achievement (e.g.,Xenikou & Simosi 2006), and top managementreports (e.g., Chan et al. 2004, Glisson et al.2008). Other less traditional indices of effec-tiveness were also studied, for example, thepercentage of women in management (Bajdo& Dickson 2001) or the odds of children re-ceiving mental health care (Glisson & Green2006). Some studies included mediators ofthe culture-performance relationship (e.g., atti-tudes in Gregory et al. 2009), whereas others in-cluded interactive effects among dimensions ofculture (Kotrba et al. 2012), with organizationalpractices (Chan et al. 2004), or with industrycharacteristics (Srensen 2002). Researchersalso used a variety of measures of culture:The Organizational Culture Inventory (Cooke& Lafferty 1989), the Denison OrganizationalCulture Survey (Denison 1990), and the Orga-nizational Culture Profile (OCP; OReilly et al.1991) seemed particularly common.

    Using the competing values framework(CVF; Quinn & Rohrbaugh 1983) as a foun-dation, Hartnell et al. (2011) provided perhapsthe most comprehensive test of the relationshipbetween organizational culture and organiza-tional performance. The CVF is characterizedby two sets of competing values with bipolardimensions defining four cells. The bipolardimensions are flexibility versus stability instructure and an internal versus an externalfocus. Although more complex than we can re-port in detail here, the 2 2 framework yieldsfour cells with conceptually competing valuesabout what is important in organizations, theways those values are manifest in organiza-tions, and the likelihood of success in differentdomains of organizational performance. Thefour cells are named Clan (internal and flexiblewith a focus on people), Adhocracy (externaland flexible with a focus on growth), Market(external and stable with a focus on competi-tion), and Hierarchy (internal and stable witha focus on organizational structure). Table 1shows in detail the ways the four organizationalculture cells hypothetically get played out withregard to basic assumptions, beliefs, values, and

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    Table 1 The competing values framework

    Culture type Assumptions Beliefs ValuesArtifacts

    (behaviors)Effectiveness

    criteriaClan Human affiliation People behave

    appropriately whenthey have trust in,loyalty to, andmembership in theorganization

    Attachment,affiliation,collaboration,trust, and support

    Teamwork,participation,employeeinvolvement, andopencommunication

    Employeesatisfaction andcommitment

    Adhocracy Change People behaveappropriately whenthey understand theimportance and impactof the task

    Growth,stimulation,variety, autonomy,and attention todetail

    Risk taking,creativity, andadaptability

    Innovation

    Market Achievement People behaveappropriately whenthey have clearobjectives and arerewarded based on theirachievements

    Communication,competition,competence, andachievement

    Gathering customerand competitorinformation, goalsetting, planningtask focus,competitiveness,and aggressiveness

    Increased marketshare profit,product quality,and productivity

    Hierarchy Stability People behaveappropriately whenthey have clear rolesand procedures areformally defined byrules and regulations

    Communication,routinization,formalization

    Conformity andpredictability

    Efficiency,timeliness, andsmoothfunctioning

    From Hartnell CA, Ou AY, Kinicki A. 2011. Organizational culture and organizational effectiveness: a meta-analytic investigation of the competing valuesframework. Journal of Applied Psychology 96:677694, figure 2, p. 679. Copyright c 2011 by the American Psychological Association; reprinted withpermission.

    behaviors (from Hartnell et al. 2011, p. 679,and based on Quinn & Kimberly 1984). Thus,the CVF takes the complex notion of differentlevels at which culture exists in companiesand with different foci and proposes that thedifferent levels of cultural variables do notexist randomly but tend to be associated withconceptually similar variables and that thelikelihood of success for an organization is afunction of the focus (e.g., employee well-beingversus increased market share) of the assump-tions, beliefs, values, and behavior that accrue inorganizations.

    In their meta-analysis, Hartnell et al. (2011)explored the structure of the CVF as well asthe relationship between CVF dimensions andthree indicators of organizational effectiveness

    (employee attitudes, operational performance,and financial performance). They found that forthe most part, the CVF behaved as predicted,with organizations that were more Clan-likehaving employees who were more satisfied andcommitted, whereas those with a more marketorientation had superior operational and finan-cial performance. Perhaps most interestingly,the Hartnell et al. (2011) findings suggest thatalthough some foci are superior for some cri-teria (as just reviewed), organizations scoringhigher on the four cells generated in the frame-work also were more successful across all threeeffectiveness criteria. This finding is explainedby Hartnell et al. (2011, p. 687) as follows:. . .[T]he culture types in opposite quadrantsare not competing or paradoxical. Instead they

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    coexist and work together. . . [C]ompeting val-ues may be more complementary than contra-dictory. In short, organizations that do manythings well are more generally more effective,and organizations that in addition have a focuson different kinds of outcome criteria will beeven more effective on those outcomes.

    There are at least three avenues for futureresearch that would deepen our understandingof the relationship between culture and per-formance. One would be to more clearly ar-ticulate (and measure) the role of the multi-ple levels of culture in this relationship. Thus,what most quantitative measures of culture cap-ture are the espoused values and/or behavioralnorms in organizations and not the full rich-ness of the constructincluding myths, stories,and socialization tactics. Such a narrow view ofculture is one reason why researchers from theorganizations are culture tradition stronglydiscourage quantitative culture measures. Sec-ond, most research on culture focuses on thedirect relationship between culture and perfor-mance, but almost all theory related to howculture impacts performance would conceptu-alize it in a more moderated/mediated fashion(as we will shortly review). By this we mean itexplores simultaneously the cultural levels andthe various foci with an addition of more spe-cific process and content dimensions of behav-ior a la the climate research we recommendedearlier. More research capturing this complex-ity would be beneficial. Finally, there are manycontextual social, economic, and political rea-sons why organizational culture will not havean impact (or at least as much of an impact) onorganizational performance. More clarificationof how context (e.g., national culture, industry,economic perturbations, product/service char-acteristics) moderates the culture-performancerelationship would help identify when culturehas its strongest (and weakest) effects.

    Organizational culture as a moderator vari-able. The final theme we highlight in recentliterature on organizational culture is researchthat focuses on organizational culture as a con-textual variable that moderates relationships

    between and among other constructs. Below,we highlight three studies that take this ap-proach.

    Erdogan et al. (2006) investigated whetherspecific dimensions of organizational culture(as measured by the OCP) would weaken orstrengthen the relationship between organi-zational justice and leader-member exchange(LMX). Their logic was that the culture of theorganization influences aspects of social rela-tionships more or less salient to organizationalmembers. In line with their hypotheses, theyfound that in cultures with high respect for peo-ple, the relationship between interpersonal jus-tice and LMX was stronger, and in cultures highin aggressiveness, the relationship between dis-tributive justice and LMX was stronger. In con-trast, in cultures high in team orientation, therelationships between both types of justice andLMX were weaker, mainly because employeesin those cultures tended to have higher-qualityLMX relationships across the board.

    Another example of the culture as modera-tor approach comes from Chatman & Spataro(2005). Their focus was on the relationship be-tween being demographically different and co-operative behavior. Based on social categoriza-tion theory, they hypothesized that those whoare demographically different will tend to showless cooperative behavior because they are morelikely to be categorized as part of the out-group.However, using sex, race, and nationality astheir demographics and the OCP as their mea-sure of culture, they were able to show thata collectivistic culture counteracted these ef-fects and resulted in significantly higher levelsof cooperation among those who were demo-graphically different. Thus, they concluded thatthe work environment in terms of its cultureresulted in people looking beyond individualdemographic differences and focusing on thegroup and the achievement of the groups goals.

    Finally, Bezrukova et al. (2012) studied cul-ture as a moderator of the relationship betweengroup fault lines and performance. Specifically,they examined group fault lines from an in-formational diversity perspective, including ed-ucational, tenure, and functional background,

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    and found that stronger fault lines were nega-tively related to performance as measured bygroup stock options and bonuses. However,they found that a results-focused culture mod-erated that relationship, but more importantly,that it was the alignment of the groups results-focused culture and the departments results-focused culture that was critical. Thus, this re-search takes the relatively rare step of examiningculture at multiple levels simultaneously, sim-ilar to Zohar & Lurias (2005) approach withsafety climate that we highlighted in the sec-tion on climate.

    Culture Summary

    Pettigrew (1979) added new dimensions tothe study of organizational behavior when hepromoted a culture focus for organizationalresearch. His emphasis on the relevance ofmyths, values, and history for understandingwhat organizations are was instructive to bothresearchers and practitioners. Although therewere debates for decades about how to study or-ganizational culture, including on what facets oforganizations one might focus and whether cul-ture should be expected to be related to organi-zational performance, since the turn of the mil-lennium survey approaches have become morecommon, and increasingly there is an empha-sis on the organizational performance conse-quences of organizational culture.

    The work of Schein (1985, 2010) indicatesthat it is agreed by most that a major buildingblock for organizational culture is attributableto the early decisions founders make aboutstructures and organizing principles and towhat ends valuable resources will be expended.In addition, based largely on Scheins writings,the idea that culture manifests itself at differ-ent levels (artifacts, values, assumptions) of or-ganizations also has been accepted. Martins(2002) conceptualization of cultures being si-multaneously macro and micro in form alsoseems to have been accepted but with less uni-versality. We have found Martins perspectiveuseful here for understanding how national, or-ganizational, and subcultural perspectives may

    be simultaneously relevant, but the explicationof each depends on the lens through which or-ganizational culture is viewed.

    In particular, we spent considerable timeoutlining the CVF of Quinn & Rohrbaugh(1983), especially via the recent meta-analysis ofresearch within that framework (Hartnell et al.2011). CVF is an elegant way to summarizethe wide range of issues that have been stud-ied under the culture rubric, revealing how theycombine to produce particular foci for organi-zations on outcomes. The finding that the cellsin the framework are positively related suggeststhat organizations that do some things appro-priately also are likely doing many other thingsappropriately. The challenge, of course, is tomake that happen (Burke 2011, Weick & Quinn1999).

    TOWARD INTEGRATINGCLIMATE AND CULTUREWITHPRACTICE IMPLICATIONS

    Molloy et al. (2011) have written convincinglyabout the difficulties in crossing levels of anal-ysis when more than one discipline is involved,and Reichers & Schneider (1990) decried thefact that climate and culture research of thatera was characterized by parallel but not over-lapping tracks of scholarship. Fortunately, bothwithin the study of climate and within the studyof culture, progress has been made in overcom-ing the difficulties identified by Molloy et al.and bridging the parallel tracks identified byReichers and Schneider.

    Climate and Culture Rapprochement

    For example, as reviewed above, psychologistshave moved from a study of climate that wasat the individual level of analysis to a unit andorganizational focus, and culture researchers(e.g., Martin 2002) have promoted the idea thatcultures can manifest themselves simultane-ously such that there are common experiences,clusters of people with different experiences,and unique experiences as well. Climateresearchers have realized that a focus for their

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    efforts (e.g., service, safety) might yield supe-rior results in validity research against specificoutcomes, and the recent Hartnell et al. (2011)meta-analysis of the CVF reveals a similar re-sult for culture researchers: A focus on the Clanquadrant values and behavior yields superioremployee satisfaction, whereas a focus on theMarket quadrant values and behavior yields su-perior operational and financial performance.Perhaps most notably, Schein, who in theearlier editions of his book (1985, 1992) barelymentioned climate (simply lumping climate inwith artifacts), has more recently (2004, 2010)characterized climate as providing the behav-ioral evidence for the culture of a setting, suchthat those behaviors form the bases for employ-ees conclusions about the values and beliefsthat characterize their organization. In line withthis view, he stated in his introductory chapterto the 2000 Handbook of Culture and Climate thatto understand what goes on in organizationsand why it happens in the way it does, one needsseveral concepts. Climate and culture, if eachis carefully defined, then become two crucialbuilding blocks for organizational descriptionand analysis (Schein 2000, pp. xxivxxv; italicsin original). We agree with this interpretationof the relationship between climate and cultureand of their mutually reinforcing properties.

    The CVF (Hartnell et al. 2011, Quinn &Rohrbaugh 1983) as represented in Table 1provides a possible framework for more suchintegration across climate and culture per-spectives. Climate researchers have studiouslyavoided the assessment of values and basicassumptions, viewing them perhaps as softand therefore not immediately under manage-ment control. Certainly climate researcherscould assess, in addition to policies, practices,and procedures, the values these might implyto organizational membersvalues for cus-tomer satisfaction, for example. And cultureresearchers have avoided a focus on specificcriteria, whether it be strategic issues such ascustomer satisfaction on the one hand or pro-cess issues such as trust on the other hand. Oneexception can be found in recent work by Deni-son, who markets a well-researched culture

    inventory (http://www.denisonconsulting.com/advantage/researchModel/model.aspx)and who has developed a module focusingon trusthe could also of course have morefocused modules on other outcomes or pro-cesses as well, for example, on customersatisfaction.

    An especially attractive feature of Table 1is that it reveals the variety of values and be-haviors that might be appropriate to create aculture of well-being or a culture of innova-tion, and this notion of a culture for somethingmight help make the culture concept less com-plex both in research and practice. Recall thatin early climate research it seems that the focusfor such work was implicitly a climate for well-being. Recall also that in our review of climatewe suggested that this climate for well-beingmight serve as a foundation on which morespecifically focused climates might be built. TheCVF, following the work of Kuenzi (2008),indicates that such a focus on well-being (aClan culture) might serve as a foundation formore molar achievement, market, and opera-tional/technical foci, and that these, in turn,might serve as foundations for more specificallyfocused strategic climates.

    Needed Further Integration

    But while the CVF offers the potential forincreased integration of climate and cultureresearch and the two approaches have becomemore like each other, we believe there aremore ways in which they can learn fromeach otherand indeed from themselves.For example, in regard to the latter, a centralvariable in early writings on organizationalculturesocialization experiences (Louis1990, Trice & Beyer 1993)paradoxically hasgone missing in action. In the 2000 editionof the Handbook of Organizational Culture andClimate (Ashkanasy et al. 2000b), there wasa chapter by Major (2000) on socialization,but the word is not even indexed in the 2011edition. It is not that research on socializationhas not been occurring. The issue is thatthe research has focused primarily on the

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  • PS64CH14-Schneider ARI 8 November 2012 10:21

    tactics individuals report experiencing duringsocialization (see the meta-analysis by Baueret al. 2007) or perhaps the effects of individualsproactivity during socialization (for a review,see Bindl & Parker 2010), but less so the rolethe socialization plays in the perpetuationof organizational culture to new members.In short, both culture and climate measuresshould focus on the socialization experiences ofnewcomers to settings precisely because theyare newcomers, and everything that happens tothem is new and likely to enter awarenessandhave a long-term impact (Louis 1990, Scandura2002, Van Maanen 1975).

    The mention of newcomers also raises theissue of the development of organizations overtime and the resultant changes in climate andculture that might be expected. Schein (1985,1992, 2004, 2010) has consistently explored theissue of organizational life cycle and the im-plications of such for (a) the leadership de-mands on managers and (b) the resultant cul-tures to be expected as organizations enter andpass through various stages of life. The issuesof development and organizational life cyclesare noticeably absent from the literature on or-ganizational climate. Perhaps this is because ofthe more quantitative orientation of climate re-searchers and the difficulty of accessing dataacross multiple time points over enough timeto meaningfully study such issues, particularlywhen the focus is on entire organizations andnot just subunits. Nevertheless, research alongthese lines is needed. Presumably, organiza-tions have a clearly identified and communi-cated strategy early in their life cycle (Flamholtz& Randle 2011), but as the organization growsin terms of numbers and sales, and perhapsspreads out geographically, it would be useful toknow how organizations continue to maintaina strong strategic climate. Another example ofpotentially beneficial research along these lineswould be on how major organizational changessuch as mergers, acquisitions, or restructuringaffect the climate of the organization and itsstrength.

    One useful lens for exploring the interre-lationships between organizational climate and

    culture is that of organizational change. Thequestion is this: If someone wanted to changean organization and improve its performance,should they change the culture? The climate?Both? If there are assumptions and values inthe organization that are preventing the orga-nization from achieving its potential, then thoseneed to be addressed. But just having the rightculture will be unlikely to result in high perfor-mance unless management has created a strate-gic climate that communicates exactly what thegoals of the organization are and that orga-nizes the various processes and procedures inthe organization around their achievement. Onthe flip side, managements efforts to build astrategic climate will struggle if they contra-dict deeply held assumptions in the organiza-tion (Schein 2000). Another way to think aboutthis issue and to demonstrate the linkages be-tween climate and culture would be to ask howchange is viewed by the executives who wouldbe responsible for making such change happen.We explore the issue from the executive vantagepoint next.

    Practice Implications

    Executives have little concern for the distinc-tions we have made between culture and cli-mate. Indeed, culture is their commonly usedterm. As an example, in the wake of the 2005 BPTexas City catastrophe, the independent panelwidely known as the Baker Committee con-ducted a review of BPs safety culture. Theensuing report (Baker et al. 2007) includes theitem content of a safety culture survey pre-pared by an independent consulting firm. Thissurvey is a clear example of a safety climatesurvey with its focus on policies, practices andprocedures, and behaviors that (fail to) get re-warded, supported, and expected. The panelcalls this a culture survey because they implicitlyunderstand that (a) executive interest in cor-porate culture is in creating processes that arereinforcing of the core values underlying ex-isting strategy, (b) a focused strategy requiresprocesses that are focused on valued outcomes(such as safety), and (c) only by the creation ofsuch processes do values actually get embedded

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    and become self-sustaining within the organi-zation to serve as guideposts for organizationmembers. Thus, contemporary popular busi-ness writers consider corporate culture to havethe potential to outlast any one charismaticleader (Heskett et al. 2008).

    In short, executives use corporate culture ina more expansive way than we have articulatedin terms of the scholarly views we presented.Conversationally, the extended corporate vo-cabulary embraced by the term culture includesa broad range of intangible assets (or liabilities)such as image, brand, and the like. Such id-iosyncratic frameworks may not have a founda-tion in scholarship, but they nonetheless serveas working frames of reference for culture asinterpreted by executives.

    Issues of importance to executives are(a) knowing the corporate culture, (b) chang-ing the corporate culture, and/or (c) leveragingthe corporate culture to create competitive ad-vantage. Questions of knowing are relevantbecause the value of culture, like all intangibleassets, is unknown. Both efforts to change andto leverage the culture are in fact dependent onthe understanding of what that culture is, andperhaps the direction in which it is moving, anobservation we return to shortly.

    Knowing the culture. Of course, executivesare agnostic with respect to how best to mea-sure culture. They do care about the ability tomake comparisons, though, leading to a naturalinclination to hire consultants who can providecomparisons to benchmarks (e.g., industrycomparisons, comparisons to the Best Compa-nies to Work For or Most Admired Companieslists) that most interest them. Essential hereis a quantitative measure that can be charac-terized by some finite number of (universal?)dimensions that are common across differentorganizations, with the measured constructsvarying considerably. It is interesting to spec-ulate that executives choose measures of theirculture most in keeping with the values theywish to endorse and their strategic outcomesof interest a la the Quinn & Rohrbaugh (1983)CVF, and that best fit a felt need for knowledge

    about a specific facet of culture/climate (such assafety or service). Executives who believe thatculture is important purchase such measuresand take action on results because of theirbeliefs in the importance of the intangible theyconfront in all of their activities.

    From a practical standpoint, as from anacademic standpoint, the emphasis on intangi-bles makes a complete reliance on quantitativeapproaches unsatisfactory to executives. Thisis true because the very vocabulary that isimposed by such measures on the descriptionof the culture may be quite different from thatused by those who experience it (Denison &Spreitzer 1991). Indeed, it seems reasonableto predict that the relatively near-term futureof culture measurement may drift toward thead hoc, textual-based reflections of verbal andwritten explanations captured through thenatural language-processing mechanics nowin vogue for measuring political and consumersentiment (e.g., Pang & Lee 2008).

    Changing the culture. Knowing the cultureis almost always considered in the context ofa felt need for cultural change or to ensurepreservation of what is held as core to how theorganization creates value. Indeed, interven-tions focused on cultural change often focus onclosing the gap between existing and desiredcultures, and these are typically captured inmeasures by asking respondents for both kindsof data. The underlying assumption (hope?) isthat, with knowledge, culture can be changedthrough the right action. Executives implicitlyunderstand that they have somewhat limiteddirect influence on effecting change because somany issues must be addressed simultaneouslythroughout the firm. Their job is to establishthe mission and support the interventionsnecessary to embed the processes necessaryto begin redirectionalways understandingthat larger social and economic forces play asignificant role in who they are and what theycan become (Burke 2011).

    By itself, change is elusive to measure, andas such, models of corporate culture includedimensions that reflect constructs such as

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    adaptability; indeed, Kotter & Heskett (1992)make adaptability a central feature of orga-nizational effectiveness, arguing that todayschange necessarily precedes the necessity tochange tomorrow. It is worth adding that thepractical interest is not just in the directionof change, but also in the pace of that change(Flamholtz & Randle 2011).

    Leveraging culture for competitive ad-vantage. The underlying theme of manyconversations about culture is how it can beleveraged as an asset. Culture is a focus forcompetitive advantage when it is different fromother cultures and the elements that constituteit are difficult to imitate (Ployhart 2012).The elements that constitute it are basedon the processes that get embedded throughknowledge and change with the resultantclimates they create for the behaviors requiredfor success. Culture, then, yields competitiveadvantage as the result of a cycle beginning withthe development of a unique mission statementenacted by support for the unique processesnecessary to embed the missions values andto create the focused strategic and processclimates that serve as guidelines for behavior.In short, doing better than what others aredoing is not the key to competitive advantage.

    In sum, the most successful executives im-plicitly understand how climate and cultureare necessarily linked and the complex stepsrequired for achieving competitive advantage.When the culture sought is unique, when theclimates created are unique in their complexsimultaneous focus on important internal or-ganizational processes (e.g., fairness, ethics, in-clusion) and strategic outcomes (e.g., service,safety, innovation), then competitive advantageis possible. A silver bullet still does not exist,and the best executives know and understandthis truth.

    CONCLUSION

    Organizational climate and culture offeroverlapping perspectives for understanding thekinds of integrative experiences people have

    in work settingsor in any organizationalsettings. The constructs address the meaningpeople attach to their experiences of how theorganization works (process climates), thestrategic foci the organization has (strategicclimates), and the values they attribute to thesetting (culture), all in attempts to make sense oftheir experiences (Weick & Quinn 1999). Theclimate literature has focused on what Schein(2010) calls the culture-embedding mecha-nisms of organizations, the tangibles enacted byleaders by which they express their values andbasic assumptions (Quinn & Rohrbaugh 1983)and by which they attempt to focus the energiesand competencies of the people in the setting.These processes and activities are designedto yield behaviors that pursue organizationalgoals and objectives, and it is these behaviorsthat come to characterize whole organizationsand subcultures within them (Martin 2002).

    Climate scholars have for the past 25 yearsbeen dealing with more tangible policies,practices, and procedures as the causes of theexp