Sales Coaching Blog

Corporate Culture PART 3: The 5 Determinates of Corporate Climate

Posted by Kristi Shoemaker

December 21, 2011

This is part 3 of a 4 part blog series, written by our friends at Brookeside Group, which outlines a four-step approach to measuring and managing this corporate culture:
Step 1: Recognize What It Is
Step 2: Measure Organizational Climate
Step 3: Understand Determinates of Climate
Step 4: Focus on Leadership Practices

Understanding the Determinates of Corporate Climate

Once it is measured and a benchmark is established, the next question to be addressed is how to change the climate and change the culture. To answer this question, you need to know what causes climate.


Leadership Practices:

Most studies have shown that the single most important determinant of
an organization’s climate is the day-to-day behavior of the leaders of the organization. The
manager of a work group has a powerful influence on the expectations of its members. Often,
the quickest way to change the culture and climate of the organization is to change the way the managers are managing. To the extent that a hierarchical chain of managers can synchronize their practices, climate change can be accelerated because the climate of every work group is somewhat influenced by the leadership practices of the boss’s boss, and so on. However, it is possible for an individual manager to modify his or her own work unit’s Organizational Climate even if that manager’s boss makes no changes.


Organizational Arrangements:

The second most powerful determinant of climate is what we
call organizational arrangements: the formal organizational structure (including the design of
tasks and jobs), the reward systems, the policies and procedures, the physical location of the
people in the organization, and the selection and staffing process. All of these factors influence the tone of the workplace and create strong barriers or incentives to employee behavior. For example, organizational arrangements usually determine the flow of information and perceptions of opportunities for advancement, two factors that affect climate and, ultimately, corporate culture.


External Environment:

The external environment in which an organization competes often
plays an important role in determining the organization’s climate. Factors such as government
regulation, economic conditions, competitive industry forces, and technology create pressure on organizations and their managers. All of these external forces have profound effects on the
values and beliefs that develop within an organization. These forces manifest themselves in
measurably different climate profiles. For example, the culture and climate that characterizes a team of engineers working in a fiercely competitive high-technology industry will be markedly
different from the culture and climate of a similar team of engineers working in a conservative,
semi-monopolistic public utility where technology is not changing.


Strategy:

When it is properly communicated, an organization’s overall strategy can have a
profound impact on its culture and climate and, over time, can influence the development of
values and beliefs in the organization. If a corporation has chosen an aggressive, growthoriented strategy, for example, and has successfully aligned its goals, priorities, and resource allocations with this strategy, the organizational climate will, over time, begin to reflect the strategic priorities (in this case, the climate dimensions of Standards and Responsibility would rise). Unfortunately, there is no guarantee that this will take place, which is why we recommend that explicit attention be paid to matching strategy and culture. The absence of a clearly articulated strategy also has implications for the organization’s climate. Often, low levels of Structure and Commitment are the measurable indicators of unclear strategic guidance from management.

Historical Forces:

An organization’s history has a strong impact on the culture that develops
over time and on the organization’s climate profile. The circumstances surrounding the
founding of the organization, the manner in which crises have been faced and resolved, and the organization’s role models all can affect its values and norms – and its climate profile. For
example, if an organization were founded by highly innovative engineers to provide leading-edge technology to the marketplace, these circumstances of the organization’s birth may continue to influence the cultural values of the organization, probably resulting in a climate characterized by
a high level of Responsibility.

Watch for Part Four of this series on Corporate Culture!

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Brookeside strives to be the acknowledged leader and strategic, preferred partner in helping clients create and maintain great relationships.

The Brookeside Group, Inc.
524 Main St
Acton, MA 01720 USA

O 978.266.9876
F  978.266.1555  
E  info@brookeside.com

Topics: company culture

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