PS64CH09-Schneider ARI 19 July 2012 16:51

V I E W
E Review in Advance first posted online
R

on July 30, 2012. (Changes may

S
still occur before final publication
online and in print.)
C E
I N

A
D V A

Organizational Climate
and Culture
Benjamin Schneider,1 Mark G. Ehrhart,2
and William H. Macey1
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

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]
by Fordham University on 12/04/12. For personal use only.

Annu. Rev. Psychol. 2013. 64:9.1–9.28 Keywords

The Annual Review of Psychology is online at organizational behavior, organizational effectiveness, data
psych.annualreviews.org
aggregation, linkage research, organizational values, levels of analysis
This article’s doi:
10.1146/annurev-psych-113011-143809 Abstract
Copyright  c 2013 by Annual Reviews. Organizational climate and organizational culture theory and research
All rights reserved
are reviewed. The article is first framed with definitions of the con-
0066-4308/13/0110-0001$20.00 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.

9.1

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 PS64CH09-Schneider ARI 19 July 2012 16:51

Organizational climate may be defined as

Contents the shared perceptions of and the meaning
attached to the policies, practices, and proce-
FRAMING THE REVIEW. . . . . . . . . . . 9.2
dures employees experience and the behaviors
ORGANIZATIONAL CLIMATE . . . . 9.3
they observe getting rewarded and that are
The Levels-of-Analysis Issue . . . . . . . 9.3
supported and expected (Ostroff et al. 2003,
The Focus for Organizational
Schneider & Reichers 1983, Schneider et al.
Climate Theory, Research, and
2011). On the other hand, organizational
Practice . . . . . . . . . . . . . . . . . . . . . . . . 9.5
culture may be defined as the shared basic as-
On Climate Strength . . . . . . . . . . . . . . . 9.7
sumptions, values, and beliefs that characterize
Climate Summary . . . . . . . . . . . . . . . . . . 9.8
a setting and are taught to newcomers as the
ORGANIZATIONAL CULTURE . . . 9.9
proper way to think and feel as communicated
A Brief Overview of the
by the myths and stories people tell about how
Organizational Culture
the organization came to be the way it is as it
Construct and Research
solved problems associated with external adap-
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

Methods. . . . . . . . . . . . . . . . . . . . . . . . 9.9
tation and internal integration (Schein 2010,
Recent Themes in Organizational
Trice & Beyer 1993, Zohar & Hofmann 2012).
by Fordham University on 12/04/12. For personal use only.

Culture Research . . . . . . . . . . . . . . . 9.11

Until the past two decades or so there have also
Culture Summary . . . . . . . . . . . . . . . . . . 9.16
been significant differences in the methods used
TOWARD INTEGRATING
to study climate and culture, with the former
CLIMATE AND
having been characterized by employee surveys
CULTURE—WITH PRACTICE
and the latter by qualitative case studies. A
IMPLICATIONS . . . . . . . . . . . . . . . . . 9.16
historical review of the climate and culture
Climate and Culture
literatures, however, reveals that culture re-
Rapprochement . . . . . . . . . . . . . . . . . 9.16
cently has been much more often studied using
Needed Further Integration . . . . . . . . 9.17
surveys, and the issues addressed can both
Practice Implications . . . . . . . . . . . . . . . 9.18
overlap and be considerably different from the
CONCLUSION . . . . . . . . . . . . . . . . . . . . . 9.20
issues addressed via climate surveys (Schneider
et al. 2011, Zohar & Hofmann 2012).
The relative research interest in the two
constructs has also varied over the decades.
FRAMING THE REVIEW The topic of organizational climate dominated
Organizational climate and organizational the early research on the human organizational
culture are two alternative constructs for environment in the 1960s and 1970s, but it
conceptualizing the way people experience and moved to the background as interest in orga-
describe their work settings (including not only nizational culture dominated the 1980s. How-
businesses but also schools and governments). ever, through the 1990s another transition took
These topics, representing a subset of research place, and interest in organizational climate ap-
in organizational behavior and organizational pears to have eclipsed the focus on organiza-
psychology, have never been reviewed in tional culture in more recent years. To illustrate
the Annual Review of Psychology, although this shift, we reviewed articles in three of the top
they received some mention as early as 1985 empirical journals in industrial/organizational
(Schneider 1985). Given this void, we provide psychology ( Journal of Applied Psychology,
a brief historical overview of thinking and Academy of Management Journal, and Personnel
research on each topic, update the central Psychology) since the turn of the century (2000–
issues identified as characterizing these liter- 2012). We counted articles that had as one of
atures, and provide preliminary thoughts on their primary variables organizational climate
integrating them. or organizational culture, focusing on those that

9.2 Schneider · Ehrhart · Macey

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 PS64CH09-Schneider ARI 19 July 2012 16:51

studied them as aggregate constructs (as op- it, almost no conceptual orientation to the early
posed to individual perceptions, preferences, or measures designed to assess it, and paradoxi-
beliefs). Our review revealed over 50 articles cally an almost complete ignoring of the term
that studied organizational climate and fewer “organizational.” Thus, early climate research
than 10 on organizational culture. Although our (say through the early 1980s) followed a more
review was limited to three journals and there traditional individual differences methodology
are certainly other outlets that do publish more that was characteristic of the industrial psychol-
on organizational culture, we think it is an accu- ogy of the time. As the field of organizational
rate conclusion that there is currently more of culture began to explode in the early 1980s
a focus on organizational climate than organi- (following Pettigrew’s introduction of it to
zational culture in the industrial/organizational organizational studies in 1979), organizational
psychology research literature. climate faded to the background (at least for a
In this review we describe climate and cul- time) as it struggled with the levels-of-analysis
ture theory and research with a primary focus issue. To some degree, the rise in interest in
on the recent literature, albeit framed within the organizational culture in the 1980s could be
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

historical developments of both fields. In addi- attributed to the fact that it seemed to capture
tion, we present ways in which organizational the richness of the organizational environment
by Fordham University on 12/04/12. For personal use only.

climate and culture complement each other and in ways that climate research had not. As
can be mutually useful in practice. The review Pettigrew (1990, p. 416) observed, “[There is]
unfolds as follows. We begin with some early the impression that climate studies have been
thinking and research on organizational cli- boxed in by the appearance in the nest of this
mate. Then we introduce the three major ac- rather overnourished, noisy, and enigmatic
complishments over the recent past for climate cuckoo called organizational culture. This pres-
research: (a) resolution of what has come to be sure from an interloper may, however, be en-
called the levels-of-analysis issue; (b) the cre- ergizing climate researchers to rethink the role
ation of various foci for climate research that of climate studies.” Pettigrew was prescient in
has yielded increased understanding for what his depiction of climate research, given that the
climate is, how to study it, and its potential prac- renewed interest in the topic yielded significant
tical usefulness; and (c) the recent research on progress in conceptual thinking and research
climate strength. In the second major section methodologies (Kuenzi & Schminke 2009).
of the review, we provide a brief overview of
the construct of organizational culture before
focusing on the four major themes we see in The Levels-of-Analysis Issue
recent organizational culture research: (a) lead- Although early organizational and management
ership, (b) national culture, (c) organizational writings about climate and climate-like con-
effectiveness, and (d ) organizational culture as structs (e.g., Argyris 1957, Lewin et al. 1939)
a moderator variable. In the final section, we ex- focused on aggregates and not individuals,
plore ways in which climate and culture think- the early quantitative research on climate that
ing and research can complement each other proliferated in the late 1960s and early 1970s
both conceptually and practically. was done by individual-differences-oriented
industrial psychologists (e.g., Schneider &
Bartlett 1968) and thus tended to focus on the
ORGANIZATIONAL CLIMATE individual level of analysis. Grappling with this
Serious quantitative research on organizational issue was a major focus of researchers through-
climate began around 1960 (see the historical out the 1970s, with some resolution emerging
overview in Schneider et al. 2011). Early in the 1980s. In brief, the issue was whether
research on organizational climate was charac- climate is an individual experience construct
terized by little agreement on the definition of and/or a unit/organizational attribute. In other

www.annualreviews.org • Organizational Climate and Culture 9.3

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 PS64CH09-Schneider ARI 19 July 2012 16:51

words, there was confusion between the level Interrater reliability addresses the extent
of the theory and the level of data and analysis. to which the rank ordering of the ratings is
Glick (1985) succinctly argued that unless consistent across people within units. Climate
(a) climate survey items assessed organizational researchers typically report ICC(1), a ratio of
functioning, (b) the data were aggregated to the between-unit variance to total variance (like
organizational level of analysis, and (c) the cli- analysis of variance, or ANOVA; Bliese 2000),
mate measurement was focused on important and as such technically a measure of both
organizational outcomes (more on this later), interrater reliability and interrater agreement
then climate research was not different from (LeBreton & Senter 2008). Although no firm
other individual-level attitudinal research. cutoffs exist for ICC(1), James (1982) reported
The clarification of climate as an attribute of a median value of 0.12 among the studies in his
the group or organization was an important early review, and LeBreton & Senter (2008)
step for climate research, although some suggested that values of 0.01, 0.10, and 0.25
researchers do continue to study climate at the might be considered small, medium, and large
individual level. However, such research on effects, respectively. It is also common for re-
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

psychological climate (e.g., James et al. 2008) searchers to report ICC(2) [sometimes also re-
is not relevant for the present review, which is ferred to as ICC(K); LeBreton & Senter 2008].
by Fordham University on 12/04/12. For personal use only.

concerned with organizational climate. ICC(2) is an index of the reliability of group

Recent writings by Bliese (2000), Chan means and is related to ICC(1) as a function
(1998), Klein & Kozlowski (2000), and of group size (Bliese 2000), and ICC(2) values
LeBreton & Senter (2008) indicate that re- are commonly interpreted in line with other
search on climate is best characterized as a measures of reliability, with 0.70 or higher
referent-shift consensus model (Chan 1998). deemed adequate (Bliese 2000, LeBreton &
The referent-shift model uses survey items Senter 2008). Values that high are obviously
that refer to attributes of the unit/organization quite challenging to achieve with smaller group
rather than individuals’ own perspectives. sizes (e.g., 5–6 individuals per group).
Referent-shift consensus items are conceptually In sum, it is common practice for cli-
appropriate because they refer to the level to mate researchers to include a measure of
which individual responses will be aggregated, interrater agreement as well as both within-
and they tend to yield improved consensus and between-group interrater reliability to
when aggregated (LeBreton & Senter 2008). support aggregation of individual perceptions
Consensus implies that perceptions are to unit and/or organizational levels of analysis.
shared. Assessments of “sharedness” have Furthermore, we emphasize that a key to such
focused on interrater agreement and/or inter- agreement and reliability evidence is the ap-
rater reliability. Interrater agreement addresses propriate wording of climate survey items such
the extent to which raters provide similar that they represent the level of analysis to which
absolute ratings of climate such that their rat- individual perception data will be aggregated.
ings are interchangeable. The most common A very recent levels issue that has emerged
measure of this form of agreement in climate in climate research concerns the study of cli-
research is rWG( J) ( James et al. 1984), although mate across multiple levels of analysis. Over
other alternatives such as the average deviation the years, studies of “organizational” climate
index (Burke et al. 1999) and aWG (Brown have most frequently been studies of organi-
& Hauenstein 2005), have been proposed. zational subunits and rarely if ever of organiza-
Commonly accepted standards for legitimating tions themselves, much less of multiple levels of
aggregation based on agreement are typically analysis. In their recent research on safety cli-
0.70 or higher, although the usefulness of mate, Zohar & Luria (2005) demonstrated a sig-
a broadly applied cutoff has been recently nificant main effect on safety behavior both for
questioned (see LeBreton & Senter 2008). organizations and for subunits (groups) nested

9.4 Schneider · Ehrhart · Macey

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 PS64CH09-Schneider ARI 19 July 2012 16:51

within organizations. In addition, they showed the strategically focused version of the item:
that subunit safety climate mediated the effects “My supervisor says a good word whenever he
of organizational safety climate on employee sees a job well done” versus “My supervisor
safety behavior. As Zohar & Hofmann (2012) says a good word whenever he sees a job done
note, this means that employees in organiza- according to the safety rules” (Zohar 2000).
tions are able to distinguish what happens in The two most prevalent examples of re-
their subunits from the larger organizational search on climates with a specific strategic focus
focus on safety, but that subunits within a com- are in the literatures on climate for customer
pany have more agreement in their safety cli- service and climate for safety. One of the
mate perceptions than they have with people strongest tests of the outcomes of service cli-
in the subunits of other companies. In short, mate was conducted by Schneider et al. (2009),
levels issues are somewhat complex to concep- who used longitudinal data at the organization
tualize because they exist simultaneously within level of analysis to show that companies with
and between organizations, but it appears that higher levels of service climate had higher cus-
the main effects at both levels have meaning for tomer satisfaction and subsequently superior
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

the people in them and their behavior. financial performance. That study replicated
many similar studies on the relationship
by Fordham University on 12/04/12. For personal use only.

between service climate and customer satis-

The Focus for Organizational Climate faction. Indeed, the service climate literature
Theory, Research, and Practice now includes studies of both antecedents and
A second major accomplishment of research on consequences of it as well as studies of poten-
organizational climate is the development of re- tial moderators. For example, Schneider et al.
search on focused climates. By focus we mean (2005) found that unit-level customer-oriented
that early climate research might be character- citizenship behavior was a mediator of service
ized as having little focus on anything besides climate’s effects on department-level customer
what might be called a climate for well-being, satisfaction and sales. That study also showed
with a strong focus on leadership and supervi- that service leadership was an important an-
sory style (Schneider et al. 2011). Industrial psy- tecedent of service climate. Indeed, our review
chologists developed early measures of climate showed that leadership has become an impor-
that had between 6 and 10 dimensions, but the tant antecedent theme in the service climate lit-
dimensions chosen for study seemed to cover a erature. For instance, research reveals that both
variety of territories that emerged from a vari- transformational leadership (Liao & Chuang
ety of researchers. Given this molar conceptual 2007) and servant leadership (Walumbwa
and measurement approach to climate, validity et al. 2010) are significant predictors of service
studies using such measures produced highly climate. Other research has shown that the
variable results at best because the generic na- leader’s personal characteristics are also impor-
ture of the climate measured was not useful for tant to consider, such that a manager’s service
the prediction of specific outcomes. orientation was shown to fully mediate the re-
Schneider (1975) recognized this issue and lationship between their core-self-evaluations
proposed that the bandwidth and focus of and the service climate of their department
climate measures should match the bandwidth (Salvaggio et al. 2007). In addition to leader-
and focus of the outcome to be predicted. ship, other antecedents that have been shown to
Adopting the personnel selection tactic of predict service climate include organizational
first identifying the outcome of interest, he resources and unit-level engagement (Salanova
suggested that climate measures follow suit. To et al. 2005) as well as high performance work
clarify the distinction between molar climate practices (Chuang & Liao 2010). Finally, in
and focused climate, here is what might have terms of moderators of the climate-outcome
been a typical generic climate item followed by relationship, Dietz et al. (2004) showed that

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 PS64CH09-Schneider ARI 19 July 2012 16:51

service climate had stronger effects when interest rather than the strategic outcome of
customer contact was higher, and Mayer et al. interest. Some of the earliest work on process
(2009a) replicated that finding, also showing climates focused on procedural justice climate
that the effects of service climate were stronger (e.g., Naumann & Bennett 2000). Recent re-
when the product was more intangible and search in that area has demonstrated that proce-
when service employee interdependence was dural justice climate could be predicted by team
higher. size and team collectivism (Colquitt et al. 2002),
The literature on safety climate has touched servant leadership (Ehrhart 2004, Walumbwa
on many of the same general themes as the et al. 2010), and leader personality (Mayer
service climate literature, including consistent et al. 2007). In addition, procedural justice cli-
validation of the construct. Thus, meta-analytic mate is related to unit-level outcomes such as
evidence supports the consistent relationship turnover and customer satisfaction (Simons &
between safety climate and accidents (Christian Roberson 2003), team performance and absen-
et al. 2009, Clarke 2006), although Beus et al. teeism (Colquitt et al. 2002), and unit-level cit-
(2010b) suggested that there may be reciprocal izenship behavior (Ehrhart 2004), as well as
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

effects between safety climate and accidents, individual-level attitudes and citizenship behav-
such that increased levels of accidents influence ior (Liao & Rupp 2005, Naumann & Bennett
by Fordham University on 12/04/12. For personal use only.

the shared perceptions of the unit’s (poor) 2000, Walumbwa et al. 2010). Moreover, the
climate for safety. A safety climate is not only cross-level effects of justice climate are mod-
related to accidents but also the reporting erated by both individual ( justice orientation;
of those accidents, such that underreporting Liao & Rupp 2005) and structural attributes
is significantly higher in organizations with (group power distance; Yang et al. 2007).
poor safety climates (Probst et al. 2008). The Interest has recently increased in another
antecedents of safety climate have included process climate: diversity climate. Several re-
general transformational leadership (Zohar & cent examples are notable. For instance, McKay
Tenne-Gazit 2008), safety-specific transfor- et al. (2008) showed that gaps in perfor-
mational leadership (Barling et al. 2002), the mance between racial/ethnic groups were sig-
safety climate of higher organizational levels nificantly smaller when the organization was
(Zohar & Luria 2005), and both management- more supportive of diversity. Pugh et al. (2008)
employee relations and organizational support found that workforce racial diversity was more
(Wallace et al. 2006). In terms of outcomes strongly related to diversity climate when the
of safety climate, recent research by Neal community in which the organizational unit is
& Griffin (2006) used longitudinal data to based is less diverse. McKay et al. (2009) found
demonstrate how safety climate influences that unit sales improvements were most positive
individual-level safety motivation and safety when managers and subordinates both reported
behavior, which in the aggregate predicts acci- that their organization had a supportive diver-
dent rates in the work unit. Finally, there is also sity climate. Finally, Gonzalez & DeNisi (2009)
evidence for moderators of the outcomes of showed that racial/ethnic diversity was pos-
safety climate. For instance, Hofmann & Mark itively related to organizational performance
(2006) showed in a sample of nurses that safety when diversity climate was positive.
climate had a stronger influence on decreasing Other examples of process climates that have
back injuries and medication errors when been the focus of recent research include eth-
complexity of the patient’s condition was high. ical climate (Martin & Cullen 2006, Mayer
In addition to studying specific focused cli- et al. 2009b, Schminke et al. 2005), empower-
mates for tangible outcomes, scholars have ment climate (Chen et al. 2007, Seibert et al.
studied climates for various organizational pro- 2004), voice climate (Morrison et al. 2011),
cesses. In this research, the measurement of and climate for initiative (Baer & Frese 2003,
climate targets the organizational process of Michaelis et al. 2010). Indeed, it is reasonable

9.6 Schneider · Ehrhart · Macey

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 PS64CH09-Schneider ARI 19 July 2012 16:51

to suggest that any and all organizational pro- relevant strategic outcomes (such as financial
cesses might be usefully studied and understood performance and customer satisfaction). Fur-
through a climate lens. For example, one might thermore, their results suggest that there may
conceptualize in climate terms such diverse or- be a threshold of climate for well-being that
ganizational processes as organizational change is needed to build a strategic climate and that
(Weick & Quinn 1999), performance appraisal a moderate climate for well-being may suffice.
(Rynes et al. 2005), work motivation (Latham Along similar lines, McKay et al. (2011) found
& Pinder 2005), and trust in organizations support in a sample of retail stores for a three-
(Kramer 1999). The study of these from a cli- way interaction between diversity climate, ser-
mate perspective could yield new insights into vice climate, and minority representation in
the sets of contextual process variables that are the stores to predict customer satisfaction; the
their correlates and perhaps their antecedents. graphs of this interaction indicated that cus-
In sum, the change to a strategic outcome tomer satisfaction was generally highest when
and process focus for climate research has sig- both diversity climate and service climate levels
nificantly improved not only the validity of cli- were high. More research along these lines that
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

mate research but also the understanding of the conceptually integrates focused climates and
contexts that likely yield these focused climates. molar climates and that simultaneously studies
by Fordham University on 12/04/12. For personal use only.

As such, the development of this more focused multiple focused climates is needed.
approach has resulted in the climate construct
being more available to practitioners because
it literally has focused on important organiza- On Climate Strength
tional processes and outcomes and has indicated In a prior section on levels issues we addressed
specific practices and behaviors that might serve the variety of techniques researchers employ to
as interventions in organizations to enhance defend aggregation of individual perceptions to
performance in those areas (Burke 2011). yield a score representative of the larger unit of
One topic that has yet to receive much re- analysis of interest. Researchers have more re-
search attention, however, is the issue of the cently raised the following interesting question:
link between process and outcome climates. What are the implications of observing vari-
Schneider et al. (2011) have proposed that pro- ability in consensus within the units or organi-
cess climates might be conceptualized as a foun- zations being studied? This is a question about
dation for outcome climates. That is, when the relative strength of the climate across set-
workers perceive that their organization is con- tings and the impact that differences in climate
cerned about their well-being through its em- strength may have. The fundamental idea be-
phasis on fairness, diversity, ethics, trust, and hind climate strength is not new, being related
so forth, they are more amenable to the ef- to the concept of situational strength (Mischel
forts of management to focus on strategic out- 1976), a construct that has received renewed
comes of value to the organization. Schneider interest in recent years by Meyer, Dalal, and
et al. (1998) and Wallace et al. (2006) have pro- colleagues (Meyer & Dalal 2009; Meyer et al.
vided empirical support for the idea that cli- 2009, 2010). As Zohar (2000; Zohar & Luria
mates focused on specific outcomes require that 2005) has noted, a weak climate can result when
the foundations on which they are built (foun- policies and procedures are inconsistent and/or
dational climates) be in place for the strate- when the practices that emerge from policies
gic climates to have an opportunity to emerge. and procedures reveal inconsistencies.
Recent research by Schulte et al. (2009) sup- Research on climate strength has focused on
ports this general premise by showing that it is molar/generic climate (e.g., González-Romá
the configuration of employee-supportive ele- et al. 2002, Lindell & Brandt 2000) as well as
ments and strategy-focused elements (in their a number of focused climates, including proce-
case, the focus on service) that matters most for dural justice climate (e.g., Colquitt et al. 2002),

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 PS64CH09-Schneider ARI 19 July 2012 16:51

service climate (e.g., Schneider et al. 2002), and ity in the level of agreement across units (e.g.,
safety climate (e.g., Zohar & Luria 2004, 2005). Dawson et al. 2008, Sowinski et al. 2008, Zohar
The usual model guiding such work is that cli- & Luria 2004). More research on the conditions
mate strength will moderate the relationship under which climate strength will function as
between the climate and outcomes of inter- hypothesized is clearly required, but there is be-
est such that the relationship will be stronger ginning to be some evidence on the conditions
when climate strength is high. On a conceptual most likely to elicit strong versus weak climates.
level, this interaction is expected because the For example, climates have been found to
more consistent the experiences of employees, be stronger when units are smaller and less
the more likely employees are to behave con- diverse (Colquitt et al. 2002), when within-
sistently as a collective such that there should unit social interaction is high (González-Romá
be more positive outcomes on the positive end et al. 2002), when the unit’s communication
and more negative outcomes on the low end. network is more dense (Zohar & Tenne-
On a measurement level, high consensus (low Gazit 2008), when units are more interde-
variability within units) provides for a more reli- pendent and have higher group identification
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

able mean, and with a more reliable mean there (Roberson 2006), when units are more cohe-
should be greater validity in conceptually rel- sive (Luria 2008), and when average unit tenure
by Fordham University on 12/04/12. For personal use only.

evant relationship with outcomes. Recent re- is higher (Beus et al. 2010a). The most com-
search has provided some promising evidence in monly studied antecedent of climate strength
support of the moderating effect of strength on has been leadership, with research showing
the relationship between climate level and out- that units have stronger climates when lead-
comes (Colquitt et al. 2002, González-Romá ers are described as providing more infor-
et al. 2002, Schneider et al. 2002). An interest- mation (González-Romá et al. 2002), being
ing corollary finding from the Schneider et al. more straightforward and having less vari-
(2002) article was that the less consensus there able behavior patterns (Zohar & Luria 2004),
was among employees in bank branches (the and being more transformational (Luria 2008,
weaker the service climate was), the higher was Zohar & Luria 2004, Zohar & Tenne-Gazit
the variance in branch customer perceptions of 2008). In sum, when work units interact more,
the service quality they received. communicate more, and are more interdepen-
But not all studies reveal a significant mod- dent, and when leaders communicate more and
erator effect for climate strength in predict- share a clear strategic vision for the work, then
ing outcomes (Dawson et al. 2008, Lindell the climate in those units will be stronger.
& Brandt 2000, Rafferty & Jimmieson 2010, Although progress has been made in re-
Schneider et al. 2002, Sowinski et al. 2008, search on climate strength, there are still ques-
Zohar & Luria 2004). We must be tentative in tions that need to be answered. Nevertheless,
offering an explanation for this inconsistency in from a practical vantage point, what we can con-
findings, but we propose that a likely crucial is- clude is that a positive and strong climate is usu-
sue presents an interesting paradox as follows: ally superior to a weak climate and for sure is
Climate researchers spent decades attempting superior to a negative climate, so the implica-
to write items for climate surveys such that the tions for practice are clear: In order to maximize
consensus indicators discussed earlier would be the likelihood of achieving the organization’s
high, legitimating aggregation. But in order to process and outcome performance goals, it is
have a moderator there must be significant vari- essential to consistently and forcefully promote
ability across units in consensus; if consensus a positive focused climate.
is uniformly high, then climate strength will
not serve as a moderator. Indeed, several of the Climate Summary
studies that did not find support for strength as a A half century of thinking and research has pro-
moderator seem to have had quite low variabil- duced a significant literature on organizational

9.8 Schneider · Ehrhart · Macey

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 PS64CH09-Schneider ARI 19 July 2012 16:51

climate. Perhaps the major outcome of this simultaneous climates of both the process and
area of research for psychology has been the strategic outcome sort. Although this may be
acceptance of a level of theory and data other obvious, it is also true that there has been very
than the individual as relevant and important little theory and research on the issue of multi-
in organizational psychological research and ple climates (Zohar & Hofmann 2012). Theory
practice. Thus, the resolution of the level-of- and research on such possible additive and in-
analysis issue has been central to positioning teractive effects from multiple climates would
organizational climate as an integral and inte- be useful, especially when such multiple cli-
grating conceptual force in the larger world of mates include both process and outcome foci
organizational psychology and organizational for climate as well as molar climates.
behavior. Testament to this enlarged role
for the construct is The Oxford Handbook of
Organizational Climate and Culture (Schneider ORGANIZATIONAL CULTURE
& Barbera 2013), in which the research and The review of the organizational culture con-
practice related to the major topics in organiza- struct and research on it traces a different path
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

tional psychology are approached from climate from that for organizational climate. This is
(and culture) perspectives. More specifically, true basically because there were few level-of-
by Fordham University on 12/04/12. For personal use only.

the handbook chapters reveal ways in which analysis issues to deal with in the organizational
climate and culture are both influenced by and culture world. Emerging from a conceptual and
have influence on more fundamental orga- methodological base in anthropology, the col-
nizational psychology issues, from personnel lective was the natural unit of theory and anal-
selection to organizational change. ysis, with individual differences an irrelevant
Particularly for the world of practice, the idea. Instead, while the climate literature in the
emphasis on focused climates (e.g., climates for 1980s struggled with the levels issues, the cul-
service, safety, justice, ethics) that currently ex- ture literature of the same era somewhat para-
ists has revealed insight into organizational pro- doxically struggled with success in the world of
cesses and the various climates they produce management consulting. That is, culture very
for people as well as robust evidence for the quickly became the darling of the management
validity of climate perceptions for understand- consulting world, with books such as In Search of
ing and predicting important specific organiza- Excellence (Peters & Waterman 1982) and Cor-
tional outcomes such as accidents and customer porate Culture: The Rites and Rituals of Organi-
satisfaction. Although this specific focus for zational Life (Deal & Kennedy 1982) attracting
climate research has improved the prediction headlines. From an academic standpoint, this
and understanding of specific outcomes, issues presented some issues because academics were
about the variability in the prediction of more not quite sure about what culture was and what
global measures of organizational effectiveness it represented—and even whether it was appro-
based on climate measures have not received priate to try to link organizational culture with
much attention. In an exception, Kuenzi (2008) the financial success of corporations (Siehl &
showed that molar climate can in fact be use- Martin 1990).
ful in understanding global performance when
conceptualized and studied through the com-
peting values framework (Quinn & Rohrbaugh A Brief Overview of the
1983, Weick & Quinn 1999). More research Organizational Culture Construct
of this sort, utilizing a common framework and and Research Methods
measure across various global performance out- Although the construct of culture itself has a
comes, is needed. long history in anthropology, and the term had
We emphasize that organizations do not been used in earlier writings on organizations
have a singular climate but rather multiple (Alvesson & Berg 1992, Trice & Beyer 1993),

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 PS64CH09-Schneider ARI 19 July 2012 16:51

what Pettigrew (1979) did in introducing the and permit the identification of ambiguity in
topic to organizational studies was to legitimize “the” culture as an attribute of a setting.
the concept in all of its potential richness. He Simply stated, there is not agreement on
did this by showing how the concepts of beliefs, what culture is nor how it should be studied,
ideology, language, ritual, and myth could be but the issues have been somewhat clarified.
applied to the study of organizations (Alvesson For every definition of what culture is, there
& Berg 1992), as complex as that obviously is an important contrary view. For example, in
would be. This complexity scared neither most definitions of culture the idea that it is
culture scholars nor practitioners, the former shared is present. Yet one of the most widely
group feeling liberated by the ambiguity the influential perspectives on culture, by Martin
definition(s) presented, permitting them to ex- (1992, 2002), indicates that this integrationist
plore culture as they saw fit, and the latter group idea about culture is but one of three perspec-
identifying with the ambiguity as a realistic tives, the other two being a fragmented view
picture of the world in which they functioned. and a differentiated view. The integrationist
At a more macro conceptual level, the best view is that organizations are or have one
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

way to distinguish definitional (and method- culture shared by all; conflict and ambiguity
ological) approaches to culture is by a focus and differences are ignored and, if mentioned,
by Fordham University on 12/04/12. For personal use only.

on culture as something an organization has are seen as something to fix or an aberration.

versus something an organization is (Smircich The fragmented perspective focuses on am-
1983). From the “organizations have cultures” biguity; it forcefully denies the necessity for
perspective, researchers are concerned with sharedness, arguing that it is unlikely that
the ways in which organizations differ and are people in an organization at different levels
usually pragmatic in terms of their focus on and in different positions/occupations—and
organizational effectiveness and organizational with different personalities—would have the
change (Alvesson 2002, Weick & Quinn 1999). same experiences and attach the same meaning
The research approach from this perspective to the organization and what it values. The
is typically comparative—to explore those differentiation perspective is a compromise
attributes of organizations that differentiate position. It notes that people occupy sub-
the more effective from the less effective (e.g., cultures in organizations (by function, by
Sackmann 2011)—which explains why survey occupation, by gender, and so forth) and thus
approaches have dominated research on culture may have different experiences and may even
from this perspective. In contrast, from the attach different meaning to the same events.
“organizations are cultures” perspective, the Martin (2002) has recently advocated for a
researcher’s goal is description and understand- three-perspective theory of culture, in which all
ing, including how organizational members three perspectives are applied simultaneously.
develop meaning and come to share the very Building on our discussions of both climate
basic assumptions—the root metaphors (Smir- and culture thus far, it may be useful to think of
cich 1983)—that guide the way they as the the three perspectives as addressing the general
organization function. The research approach culture (integration), subcultures (differentia-
here tends to be inductive (Ashkanasy et al. tion), and culture strength (fragmentation) in
2000a), using a native-view paradigm (Gregory organizations at the same time. Along these
1983, Louis 1990) to report how insiders lines, Yammarino & Dansereau (2011) identify
experience their organizations (e.g., an emic a series of climate and culture studies in which
perspective). From a methodological stand- levels-of-analysis issues, especially multilevel
point, researchers from this perspective almost issues, are present and discuss the ways in which
exclusively use qualitative methods in their these issues may be simultaneously studied.
research, as those permit the identification of In organizational culture research, the issue
the unique manifestations of culture in settings of levels has typically concerned the extent to

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 PS64CH09-Schneider ARI 19 July 2012 16:51

which the facets of culture are more or less eas- uals, their subjective fit perceptions, or their
ily observable. These different levels have been preferences for an organization’s culture (for
conceptualized in a variety of similar ways, but a review, see Ostroff & Judge 2007). Given
the most commonly referred to framework on our focus on aggregate perceptions of organi-
the levels of culture is Schein’s (2010). He pro- zational culture, we do not review these studies
posed three levels of organizational culture: ar- (although we do note there are exceptions that
tifacts, espoused beliefs and values, and under- do include aggregate indicators of organization
lying assumptions. Artifacts represent the outer culture, such as recent research by Anderson
layer of culture and include rituals, language, et al. 2008).
myths, dress, and the organization of space.
They are the most readily accessible to out- Leadership and organizational culture. The
siders but also the most ambiguous in terms most commonly discussed source for the or-
of the underlying meaning they may represent. ganization’s assumptions and values is the
Thus, although many artifacts may look the founder of the organization and his/her leader-
same across organizations, the meaning(s) as- ship. Schein’s (2010, p. 236) culture-embedding
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

cribed to them may be quite different. Schein’s mechanisms describe what leaders do to articu-
next level of culture is espoused values, or the late their values (primary mechanisms) and re-
by Fordham University on 12/04/12. For personal use only.

values that are reported by management as core inforce them (secondary mechanisms).
to the organization but that may or may not re- Primary embedding mechanisms:
flect the reality in the organization for mem- What leaders pay attention to, measure,
bers. Schein’s third level concerns what he (and and control on a regular basis
others) term the underlying assumptions of or- How leaders react to critical incidents and
ganizational life. These indicate why organiza- organizational crises
tional members go about their day-to-day work How leaders allocate resources
lives as they do, and they are frequently so in- Deliberate role modeling, teaching, and
grained that they cannot necessarily be easily coaching
articulated, requiring in-depth interviewing to How leaders allocate rewards and status
illuminate them. How leaders recruit, select, promote, and
excommunicate
Secondary embedding mechanisms:
Recent Themes in Organizational
Organizational design and structure
Culture Research
Organizational systems and procedures
In this section, we attempt to summarize the re- Rites and rituals of the organization
cent empirical literature on organizational cul- Design of physical space, facades, and
ture. We do not provide an exhaustive review, buildings
but instead identify key themes and exemplars Stories about important events and
in the literature of each. The themes we fo- people
cus on are (a) leadership, (b) national culture, Formal statements of organizational phi-
(c) organizational effectiveness, and (d ) organi- losophy, creeds, and charters
zational culture as a moderator variable. Schein argues that these cultural embedding
One theme we do not include is research mechanisms have an impact on culture to the
on person-organization fit. The main idea of extent that they are found to be useful by the
person-organization fit involves the extent to organization in coping with the world in which
which there is an alignment between an in- it functions. In other words, what determines
dividual’s values and the values (or culture) whether certain behaviors and values espoused
of their current or potential organization. Al- by management ultimately become assump-
though culture is central to this literature, the tions is whether those behaviors and values
focus is on the consequences of fit for individ- lead to success.

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 PS64CH09-Schneider ARI 19 July 2012 16:51

Although the theoretical literature on orga- National culture and organizational cul-
nizational culture is replete with discussions of ture. Multiple recent studies focus on the re-
the influence the founder and upper manage- lationship between organizational culture and
ment have on an organization’s culture, empir- organizational effectiveness in different coun-
ical studies of that relationship are hard to find. tries (e.g., Fey & Denison 2003, Lee & Yu
Nevertheless, we highlight three recent studies 2004, Xenikou & Simosi 2006) or the mea-
here that provide some insight into the role of surement of organizational culture in countries
leaders in organizational culture. Berson et al. outside the United States (e.g., Lamond 2003,
(2008) examined the relationship between CEO Tsui et al. 2006a), but the primary theoretical
values, organizational culture, and firm perfor- issue of interest when it comes to national cul-
mance in a sample of 26 Israeli companies. Sup- ture is the extent to which it shapes the cul-
porting their three primary hypotheses, they tures of the organizations within it. This issue
found that the CEO value of self-direction was has been of interest to researchers since the in-
positively associated with an innovative culture, fluential work of Hofstede (1980). In general,
security value was positively related to a bureau- the results show that when national culture is
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

cratic culture, and benevolence value was pos- correlated with the organizational culture of
itively associated with a supportive culture. In companies within them, a significant main ef-
by Fordham University on 12/04/12. For personal use only.

addition, these culture dimensions were subse- fect invariably is found (Gelfand et al. 2007).
quently related to several indices of organiza- The most thorough test of this relationship in
tional performance (including sales growth and recent years has been provided by the Global
efficiency). Leadership and Organizational Behavior Effec-
The other two studies we highlight fo- tiveness (GLOBE) project (House et al. 2004),
cused on leader behavior (not leader values). which collected data on societal culture, or-
Ogbonna & Harris (2000) examined the extent ganizational culture, and leadership from over
to which the effects of three styles of leadership 17,000 people representing 62 societal cultures
(supportive, participative, and instrumental) and 951 organizations. Brodbeck et al. (2004)
on organizational performance were mediated used a subsample of that database with ade-
by organizational culture. They found partial quate representation within organization and
support for culture as a mediator, with some across countries and industries and showed that
leader behaviors having direct effects on per- culture explained between 21% and 47% of
formance. Finally, Tsui et al. (2006b) focused the variance (with an average of 32.7%) across
on the extent to which strength (consistency) of their nine organizational culture practice di-
leadership was associated with the strength of mensions. In addition, they found that societal
the culture. Although they generally found that culture had much stronger effects than either
strength of leadership and strength of culture industry or the society-by-industry interaction.
were related, they also identified exceptions Two important points should be made
to that relationship and clarified the reasons in the light of this finding. First, national
for the exceptions in follow-up interviews. culture has an impact on organizational cul-
Those interviews revealed that some leaders ture. Second, the impact leaves considerable
are able to build a strong culture through variability in the organizational culture profiles
institution-building behaviors (working in the possible; national culture is influential but not
background to build strong organizational determinant. Indeed, Sagiv et al. (2011) report
systems) rather than performance-building that within organizations and nations there is
behaviors (showing energy and articulating a also significant variability in individual values.
vision). More research clarifying how leaders From this review, it is possible to provide some
influence culture is needed, especially research potential resolution of the theoretical issue
focusing on the effects of Schein’s (2010) with regard to the integrationist versus the dif-
culture-embedding behaviors. ferentiated culture, and it is in agreement with

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Martin’s (2002, p. 151) proposal that these can Lee & Yu 2004), customer satisfaction (e.g.,
exist simultaneously as a function of the lens Gillespie et al. 2008), goal achievement (e.g.,
through which culture is viewed. Thus, through Xenikou & Simosi 2006), and top management
a macro lens, one might reveal whole nations as reports (e.g., Chan et al. 2004, Glisson et al.
distinctive cultures but also differences between 2008). Other less traditional indices of effec-
nations; a macromicro lens would reveal dis- tiveness were also studied, for example, the
tinctive cultures for organizations as well as dif- percentage of women in management (Bajdo
ferences between organizations within a nation; & Dickson 2001) or the odds of children re-
a micro lens would reveal within-organization ceiving mental health care (Glisson & Green
subcultures; and yet an even more refined view 2006). Some studies included mediators of
would reveal within-organization individual the culture-performance relationship (e.g., atti-
differences. More such multilevel research on tudes in Gregory et al. 2009), whereas others in-
organizational culture is obviously needed. cluded interactive effects among dimensions of
culture (Kotrba et al. 2012) with organizational
Culture and organizational performance. practices (Chan et al. 2004) or with industry
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

The idea that organizations have cultures characteristics (Sørensen 2002). Researchers
yields a focus on the relationship between also used a variety of measures of culture:
by Fordham University on 12/04/12. For personal use only.

organizational culture and organizational The Organizational Culture Inventory (Cooke

effectiveness. A recent review of the work & Lafferty 1989), the Denison Organizational
on this possible relationship makes it clear Culture Survey (Denison 1990), and the Orga-
that such research will necessarily be based nizational Culture Profile (OCP; O’Reilly et al.
on survey measures of organizational culture 1991) seemed particularly common.
(Sackmann 2011). Sackmann notes that such Using the competing values framework
research is fraught with difficulties with regard (CVF; Quinn & Rohrbaugh 1983) as a foun-
to (a) what levels of culture should be the focus dation, Hartnell et al. (2011) provided perhaps
of assessments (e.g., myths, stories, values, the most comprehensive test of the relationship
behavior), (b) the unit of analysis for assessment between organizational culture and organiza-
(subcultures within organizations versus whole tional performance. The CVF is characterized
organizations), and (c) the content dimensions by two sets of competing values with bipolar
along which assessments might best be made dimensions defining four cells. The bipolar
(e.g., employee experiences, socialization dimensions are flexibility versus stability in
tactics, leadership actions). Because of these structure and an internal versus an external
difficulties, a relationship with organizational focus. Although more complex than we can re-
performance outcomes has been difficult to port in detail here, the 2 × 2 framework yields
consistently establish (Wilderom et al. 2000). four cells with conceptually competing values
Nevertheless, a comparison of the Wilderom about what is important in organizations, the
et al. (2000) review with the Sackmann (2011) ways those values are manifest in organiza-
review indicates that not only is there much tions, and the likelihood of success in different
interest in this relationship, but also that domains of organizational performance. The
support for that relationship is growing. four cells are named Clan (high internal and
Our review of recent (2000–2012) studies stable with a focus on people), Adhocracy (high
examining the relationship between organiza- external and flexibility with a focus on growth),
tional culture and performance revealed a va- Market (high external and flexible with a focus
riety of approaches to the issue, with consis- on competition), and Hierarchy (high internal
tent significant findings. Studies relied on a and stable with a focus on organizational struc-
variety of fairly traditional outcomes, includ- ture). Table 1 shows in detail the ways the four
ing objective financial measures of performance organizational culture cells hypothetically get
(e.g., Gregory et al. 2009, Kotrba et al. 2012, played out with regard to basic assumptions,

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 PS64CH09-Schneider ARI 19 July 2012 16:51

Table 1 The competing values framework

Artifacts Effectiveness
Culture type Assumptions Beliefs Values (behaviors) criteria
Clan Human affiliation People behave Attachment, Teamwork, Employee
appropriately when affiliation, participation, satisfaction and
they have trust in, collaboration, employee commitment
loyalty to, and trust, and support involvement, and
membership in the open
organization communication
Adhocracy Change People behave Growth, Risk taking, Innovation
appropriately when stimulation, creativity, and
they understand the variety, autonomy, adaptability
importance and impact and attention to
of the task detail
Market Achievement People behave Communication, Gathering customer Increased market
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

appropriately when competition, and competitor share profit,

they have clear competence, and information, goal product quality,
by Fordham University on 12/04/12. For personal use only.

objectives and are achievement setting, planning and productivity

rewarded based on their task focus,
achievements competitiveness,
and aggressiveness
Hierarchy Stability People behave Communication, Conformity and Efficiency,
appropriately when routinization, predictability timeliness, and
they have clear roles formalization smooth
and procedures are functioning
formally defined by
rules and regulations

From Hartnell CA, Ou AY, Kinicki A. 2011. Organizational culture and organizational effectiveness: a meta-analytic investigation of the competing values
framework. Journal of Applied Psychology 96:677–694, figure 2, p. 679. Copyright 
c 2011 by the American Psychological Association; reprinted with
permission.

beliefs, values, and behaviors (from Hartnell (employee attitudes, operational performance,
et al. 2011, p. 679, and based on Quinn & and financial performance). They found that for
Kimberly 1984). Thus, the CVF takes the the most part, the CVF behaved as predicted,
complex notion of different levels at which with organizations that were more Clan-like
culture exists in companies and with different having employees who were more satisfied and
foci and proposes that the different levels of committed, whereas those with a more market
cultural variables do not exist randomly but orientation had superior operational and finan-
tend to be associated with conceptually similar cial performance. Perhaps most interestingly,
variables and that the likelihood of success for the Hartnell et al. (2011) findings suggest that
an organization is a function of the focus (e.g., although some foci are superior for some cri-
employee well-being versus increased market teria (as just reviewed), organizations scoring
share) of the assumptions, beliefs, values, and higher on the four cells generated in the frame-
behavior that accrue in organizations. work also were more successful across all three
In their meta-analysis, Hartnell et al. (2011) effectiveness criteria. This finding is explained
explored the structure of the CVF as well as by Hartnell et al. (2011, p. 687) as follows:
the relationship between CVF dimensions and “. . .[T]he culture types in opposite quadrants
three indicators of organizational effectiveness are not competing or paradoxical. Instead they

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 PS64CH09-Schneider ARI 19 July 2012 16:51

coexist and work together. . . [C]ompeting val- between and among other constructs. Below,
ues may be more complementary than contra- we highlight three studies that take this ap-
dictory.” In short, organizations that do many proach.
things well are more generally more effective, Erdogan et al. (2006) investigated whether
and organizations that in addition have a focus specific dimensions of organizational culture
on different kinds of outcome criteria will be (as measured by the OCP) would weaken or
even more effective on those outcomes. strengthen the relationship between organi-
There are at least three avenues for future zational justice and leader-member exchange
research that would deepen our understanding (LMX). Their logic was that the culture of the
of the relationship between culture and per- organization influences aspects of social rela-
formance. One would be to more clearly ar- tionships more or less salient to organizational
ticulate (and measure) the role of the multi- members. In line with their hypotheses, they
ple levels of culture in this relationship. Thus, found that in cultures with high respect for peo-
what most quantitative measures of culture cap- ple, the relationship between interpersonal jus-
ture are the espoused values and/or behavioral tice and LMX was stronger, and in cultures high
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

norms in organizations and not the full rich- in aggressiveness, the relationship between dis-
ness of the construct—including myths, stories, tributive justice and LMX was stronger. In con-
by Fordham University on 12/04/12. For personal use only.

and socialization tactics. Such a narrow view of trast, in cultures high in team orientation, the
culture is one reason why researchers from the relationships between both types of justice and
“organizations are culture” tradition strongly LMX were weaker, mainly because employees
discourage quantitative culture measures. Sec- in those cultures tended to have higher-quality
ond, most research on culture focuses on the LMX relationships across the board.
direct relationship between culture and perfor- Another example of the “culture as modera-
mance, but almost all theory related to how tor” approach comes from Chatman & Spataro
culture impacts performance would conceptu- (2005). Their focus was on the relationship be-
alize it in a more moderated/mediated fashion tween being demographically different and co-
(as we will shortly review). By this we mean it operative behavior. Based on social categoriza-
explores simultaneously the cultural levels and tion theory, they hypothesized that those who
the various foci with an addition of more spe- are demographically different will tend to show
cific process and content dimensions of behav- less cooperative behavior because they are more
ior a la the climate research we recommended likely to be categorized as part of the out-group.
earlier. More research capturing this complex- However, using sex, race, and nationality as
ity would be beneficial. Finally, there are many their demographics and the OCP as their mea-
contextual social, economic, and political rea- sure of culture, they were able to show that
sons why organizational culture will not have a collectivistic culture counteracted these ef-
an impact (or at least as much of an impact) on fects and resulted in significantly higher levels
organizational performance. More clarification of cooperation among those who were demo-
of how context (e.g., national culture, industry, graphically different. Thus, they concluded that
economic perturbations, product/service char- the work environment in terms of its culture
acteristics) moderates the culture-performance resulted in people looking beyond individual
relationship would help identify when culture demographic differences and focusing on the
has its strongest (and weakest) effects. group and the achievement of the group’s goals.
Finally, Bezrukova et al. (2012) studied cul-
Organizational culture as a moderator vari- ture as a moderator of the relationship between
able. The final theme we highlight in recent group fault lines and performance. Specifically,
literature on organizational culture is research they examined group fault lines from an in-
that focuses on organizational culture as a con- formational diversity perspective, including ed-
textual variable that moderates relationships ucational, tenure, and functional background,

www.annualreviews.org • Organizational Climate and Culture 9.15

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 PS64CH09-Schneider ARI 19 July 2012 16:51

and found that stronger fault lines were nega- be simultaneously relevant, but the explication
tively related to performance as measured by of each depends on the lens through which or-
group stock options and bonuses. However, ganizational culture is viewed.
they found that a results-focused culture mod- In particular, we spent considerable time
erated that relationship, but more importantly, outlining the CVF of Quinn & Rohrbaugh
that it was the alignment of the group’s results- (1983), especially via the recent meta-analysis of
focused culture and the department’s results- research within that framework (Hartnell et al.
focused culture that was critical. Thus, this re- 2011). CVF is an elegant way to summarize
search takes the relatively rare step of examining the wide range of issues that have been stud-
culture at multiple levels simultaneously, sim- ied under the culture rubric, revealing how they
ilar to Zohar & Luria’s (2005) approach with combine to produce particular foci for organi-
safety climate that we highlighted in the sec- zations on outcomes. The finding that the cells
tion on climate. in the framework are positively related suggests
that organizations that do some things appro-
priately also are likely doing many other things
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

Culture Summary appropriately. The challenge, of course, is to

Pettigrew (1979) added new dimensions to make that happen (Burke 2011, Weick & Quinn
by Fordham University on 12/04/12. For personal use only.

the study of organizational behavior when he 1999).

promoted a culture focus for organizational
research. His emphasis on the relevance of
myths, values, and history for understanding TOWARD INTEGRATING
what organizations are was instructive to both CLIMATE AND CULTURE—WITH
researchers and practitioners. Although there PRACTICE IMPLICATIONS
were debates for decades about how to study or- Molloy et al. (2011) have written convincingly
ganizational culture, including on what facets of about the difficulties in crossing levels of anal-
organizations one might focus and whether cul- ysis when more than one discipline is involved,
ture should be expected to be related to organi- and Reichers & Schneider (1990) decried the
zational performance, since the turn of the mil- fact that climate and culture research of that
lennium survey approaches have become more era was characterized by parallel but not over-
common, and increasingly there is an empha- lapping tracks of scholarship. Fortunately, both
sis on the organizational performance conse- within the study of climate and within the study
quences of organizational culture. of culture, progress has been made in overcom-
The work of Schein (1985, 2010) indicates ing the difficulties identified by Molloy et al.
that it is agreed by most that a major building and bridging the parallel tracks identified by
block for organizational culture is attributable Reichers and Schneider.
to the early decisions founders make about
structures and organizing principles and to
what ends valuable resources will be expended. Climate and Culture Rapprochement
In addition, based largely on Schein’s writings, For example, as reviewed above, psychologists
the idea that culture manifests itself at differ- have moved from a study of climate that was
ent levels (artifacts, values, assumptions) of or- at the individual level of analysis to a unit and
ganizations also has been accepted. Martin’s organizational focus, and culture researchers
(2002) conceptualization of cultures being si- (e.g., Martin 2002) have promoted the idea that
multaneously macro and micro in form also cultures can manifest themselves simultane-
seems to have been accepted but with less uni- ously such that there are common experiences,
versality. We have found Martin’s perspective clusters of people with different experiences,
useful here for understanding how national, or- and unique experiences as well. Climate
ganizational, and subcultural perspectives may researchers have realized that a focus for their

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efforts (e.g., service, safety) might yield supe- inventory (http://www.denisonconsulting.

rior results in validity research against specific com/advantage/researchModel/model.aspx)
outcomes, and the recent Hartnell et al. (2011) and who has developed a module focusing
meta-analysis of the CVF reveals a similar re- in on trust—he could also of course have
sult for culture researchers: A focus on the Clan more focused modules on other outcomes or
quadrant values and behavior yields superior processes as well, for example, on customer
employee satisfaction, whereas a focus on the satisfaction.
Market quadrant values and behavior yields su- An especially attractive feature of Table 1
perior operational and financial performance. is that it reveals the variety of values and be-
Perhaps most notably, Schein, who in the haviors that might be appropriate to create a
earlier editions of his book (1985, 1992) barely culture of well-being or a culture of innova-
mentioned climate (simply lumping climate in tion, and this notion of a culture for something
with “artifacts”), has more recently (2004, 2010) might help make the culture concept less com-
characterized climate as providing the behav- plex both in research and practice. Recall that
ioral evidence for the culture of a setting, such in early climate research it seems that the focus
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

that those behaviors form the bases for employ- for such work was implicitly a climate for well-
ees’ conclusions about the values and beliefs being. Recall also that in our review of climate
by Fordham University on 12/04/12. For personal use only.

that characterize their organization. In line with we suggested that this climate for well-being
this view, he stated in his introductory chapter might serve as a foundation on which more
to the 2000 Handbook of Culture and Climate that specifically focused climates might be built. The
“to understand what goes on in organizations CVF, following the work of Kuenzi (2008),
and why it happens in the way it does, one needs indicates that such a focus on well-being (a
several concepts. Climate and culture, if each Clan culture) might serve as a foundation for
is carefully defined, then become two crucial more molar achievement, market, and opera-
building blocks for organizational description tional/technical foci, and that these, in turn,
and analysis” (Schein 2000, pp. xxiv–xxv; italics might serve as foundations for more specifically
in original). We agree with this interpretation focused strategic climates.
of the relationship between climate and culture
and of their mutually reinforcing properties.
The CVF (Hartnell et al. 2011, Quinn & Needed Further Integration
Rohrbaugh 1983) as represented in Table 1 But while the CVF offers the potential for
provides a possible framework for more such increased integration of climate and culture
integration across climate and culture per- research and the two approaches have become
spectives. Climate researchers have studiously more like each other, we believe there are
avoided the assessment of values and basic more ways in which they can learn from
assumptions, viewing them perhaps as “soft” each other—and indeed from themselves.
and therefore not immediately under manage- For example, in regard to the latter, a central
ment control. Certainly climate researchers variable in early writings on organizational
could assess, in addition to policies, practices, culture—socialization experiences (Louis
and procedures, the values these might imply 1990, Trice & Beyer 1993)—paradoxically has
to organizational members—values for cus- gone missing in action. In the 2000 edition
tomer satisfaction, for example. And culture of the Handbook of Organizational Culture and
researchers have avoided a focus on specific Climate (Ashkanasy et al. 2000b), there was
criteria, whether it be strategic issues such as a chapter by Major (2000) on socialization,
customer satisfaction on the one hand or pro- but the word is not even indexed in the 2011
cess issues such as trust on the other hand. One edition. It is not that research on socialization
exception can be found in recent work by Deni- has not been occurring. The issue is that
son, who markets a well-researched culture the research has focused primarily on the

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tactics individuals report experiencing during question is this: If someone wanted to change
socialization (see the meta-analysis by Bauer an organization and improve its performance,
et al. 2007) or perhaps the effects of individuals’ should they change the culture? The climate?
proactivity during socialization (for a review, Both? If there are assumptions and values in
see Bindl & Parker 2010), but less so the role the organization that are preventing the orga-
the socialization plays in the perpetuation nization from achieving its potential, then those
of organizational culture to new members. need to be addressed. But just having the “right”
In short, both culture and climate measures culture will be unlikely to result in high perfor-
should focus on the socialization experiences of mance unless management has created a strate-
newcomers to settings precisely because they gic climate that communicates exactly what the
are newcomers, and everything that happens to goals of the organization are and that orga-
them is new and likely to enter awareness—and nizes the various processes and procedures in
have a long-term impact (Louis 1990, Scandura the organization around their achievement. On
2002, Van Maanen 1975). the flip side, management’s efforts to build a
The mention of newcomers also raises the strategic climate will struggle if they contra-
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

issue of the development of organizations over dict deeply held assumptions in the organiza-
time and the resultant changes in climate and tion (Schein 2000). Another way to think about
by Fordham University on 12/04/12. For personal use only.

culture that might be expected. Schein (1985, this issue and to demonstrate the linkages be-
1992, 2004, 2010) has consistently explored the tween climate and culture would be to ask how
issue of organizational life cycle and the im- change is viewed by the executives who would
plications of such for (a) the leadership de- be responsible for making such change happen.
mands on managers and (b) the resultant cul- We explore the issue from the executive vantage
tures to be expected as organizations enter and point next.
pass through various stages of life. The issues
of development and organizational life cycles
are noticeably absent from the literature on or- Practice Implications
ganizational climate. Perhaps this is because of Executives have little concern for the distinc-
the more quantitative orientation of climate re- tions we have made between culture and cli-
searchers and the difficulty of data across mul- mate. Indeed, culture is their commonly used
tiple time points over enough time to mean- term. As an example, in the wake of the 2005 BP
ingfully study such issues, particularly when the Texas City catastrophe, the independent panel
focus is on entire organizations and not just sub- widely known as the Baker Committee con-
units. Nevertheless, research along these lines ducted a review of BP’s “safety culture.” The
is needed. Presumably, organizations have a ensuing report (Baker et al. 2007) includes the
clearly identified and communicated strategy item content of a “safety culture survey” pre-
early in their life cycle (Flamholtz & Randle pared by an independent consulting firm. This
2011), but as the organization grows in terms survey is a clear example of a safety climate
of numbers and sales, and perhaps spreads out survey with its focus on policies, practices and
geographically, it would be useful to know how procedures, and behaviors that (fail to) get re-
organizations continue to maintain a strong warded, supported, and expected. The panel
strategic climate. Another example of poten- calls this a culture survey because they implicitly
tially beneficial research along these lines would understand that (a) executive interest in “cor-
be on how major organizational changes such porate culture” is in creating processes that are
as mergers, acquisitions, or restructuring affect reinforcing of the core values underlying ex-
the climate of the organization and its strength. isting strategy, (b) a focused strategy requires
One useful lens for exploring the interre- processes that are focused on valued outcomes
lationships between organizational climate and (such as safety), and (c) only by the creation of
culture is that of organizational change. The such processes do values actually get embedded

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 PS64CH09-Schneider ARI 19 July 2012 16:51

and become self-sustaining within the organi- about a specific facet of culture/climate (such as
zation to serve as guideposts for organization safety or service). Executives who believe that
members. Thus, contemporary popular busi- culture is important purchase such measures
ness writers consider corporate culture to have and take action on results because of their
the potential to “outlast any one charismatic beliefs in the importance of the intangible they
leader” (Heskett et al. 2008). confront in all of their activities.
In short, executives use corporate culture in From a practical standpoint, as from an
a more expansive way than we have articulated academic standpoint, the emphasis on intangi-
in terms of the scholarly views we presented. bles makes a complete reliance on quantitative
Conversationally, the extended corporate vo- approaches unsatisfactory to executives. This
cabulary embraced by the term culture includes is true because the very vocabulary that is
a broad range of intangible assets (or liabilities) imposed by such measures on the description
such as image, brand, and the like. Such id- of the culture may be quite different from that
iosyncratic frameworks may not have a founda- used by those who experience it (Denison &
tion in scholarship, but they nonetheless serve Spreitzer 1991). Indeed, it seems reasonable
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

as working frames of reference for culture as to predict that the relatively near-term future
interpreted by executives. of culture measurement may drift toward the
by Fordham University on 12/04/12. For personal use only.

Issues of importance to executives are ad hoc, textual-based reflections of verbal and

(a) knowing the corporate culture, (b) chang- written explanations captured through the
ing the corporate culture, and/or (c) leveraging natural language-processing mechanics now
the corporate culture to create competitive ad- in vogue for measuring political and consumer
vantage. Questions of “knowing” are relevant sentiment (e.g., Pang & Lee 2008).
because the value of culture, like all intangible
assets, is unknown. Both efforts to change and Changing the culture. Knowing the culture
to leverage the culture are in fact dependent on is almost always considered in the context of
the understanding of what that culture is, and a felt need for cultural change or to ensure
perhaps the direction in which it is moving, an preservation of what is held as core to how the
observation we return to shortly. organization creates value. Indeed, interven-
tions focused on cultural change often focus on
Knowing the culture. Of course, executives closing the gap between existing and desired
are agnostic with respect to how best to mea- cultures, and these are typically captured in
sure culture. They do care about the ability to measures by asking respondents for both kinds
make comparisons, though, leading to a natural of data. The underlying assumption (hope?) is
inclination to hire consultants who can provide that, with knowledge, culture can be changed
comparisons to benchmarks (e.g., industry through the right action. Executives implicitly
comparisons, comparisons to the Best Compa- understand that they have somewhat limited
nies to Work For or Most Admired Companies direct influence on effecting change because so
lists) that most interest them. Essential here many issues must be addressed simultaneously
is a quantitative measure that can be charac- throughout the firm. Their job is to establish
terized by some finite number of (universal?) the mission and support the interventions
dimensions that are common across different necessary to embed the processes necessary
organizations, with the measured constructs to begin redirection—always understanding
varying considerably. It is interesting to spec- that larger social and economic forces play a
ulate that executives choose measures of their significant role in who they are and what they
culture most in keeping with the values they can become (Burke 2011).
wish to endorse and their strategic outcomes By itself, change is elusive to measure, and
of interest a la the Quinn & Rohrbaugh (1983) as such, models of corporate culture include
CVF, and that best fit a felt need for knowledge dimensions that reflect constructs such as

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adaptability; indeed, Kotter & Heskett (1992) in work settings—or in any organizational
make adaptability a central feature of orga- settings. The constructs address the meaning
nizational effectiveness, arguing that today’s people attach to their experiences of how the
change necessarily precedes the necessity to organization works (process climates), the
change tomorrow. It is worth adding that the strategic foci the organization has (strategic
practical interest is not just in the direction climates), and the values they attribute to the
of change, but also in the pace of that change setting (culture), all in attempts to make sense of
(Flamholtz & Randle 2011). their experiences (Weick & Quinn 1999). The
climate literature has focused on what Schein
Leveraging culture for competitive ad- (2010) calls the culture-embedding mecha-
vantage. The underlying theme of many nisms of organizations, the tangibles enacted by
conversations about culture is how it can be leaders by which they express their values and
leveraged as an asset. Culture is a focus for basic assumptions (Quinn & Rohrbaugh 1983)
competitive advantage when it is different from and by which they attempt to focus the energies
other cultures and the elements that constitute and competencies of the people in the setting.
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

it are difficult to imitate (Ployhart 2012). These processes and activities are designed
“The elements that constitute it” are based to yield behaviors that pursue organizational
by Fordham University on 12/04/12. For personal use only.

on the processes that get embedded through goals and objectives, and it is these behaviors
knowledge and change with the resultant that come to characterize whole organizations
climates they create for the behaviors required and subcultures within them (Martin 2002).
for success. Culture, then, yields competitive Climate scholars have for the past 25 years
advantage as the result of a cycle beginning with been dealing with more tangible policies,
the development of a unique mission statement practices, and procedures as the causes of the
enacted by support for the unique processes experiences people have, focusing their efforts
necessary to embed the mission’s values and on understanding how workers experience
to create the focused strategic and process the strategic initiatives of management (e.g.,
climates that serve as guidelines for behavior. service, safety, innovation) and the internal
In short, doing better than what others are processes accompanying them (e.g., fairness,
doing is not the key to competitive advantage. ethics, inclusion). Progress has now been made
In sum, the most successful executives im- in understanding when people do not agree on
plicitly understand how climate and culture those climates (i.e., climate strength), but there
are necessarily linked and the complex steps is not much work at all on conceptualizing
required for achieving competitive advantage. and understanding how multiple climates in
When the culture sought is unique, when the organizations interact and/or even conflict
climates created are unique in their complex with each other (Kuenzi & Schminke 2009).
simultaneous focus on important internal or- Culture scholars have taken two directions
ganizational processes (e.g., fairness, ethics, in- in their efforts to conceptualize and understand
clusion) and strategic outcomes (e.g., service, organizational culture. When culture is studied
safety, innovation), then competitive advantage as something organizations are, the focus is
is possible. A silver bullet still does not exist, on their uniqueness and what the specific
and the best executives know and understand peculiarities of their “artifacts” (i.e., myths,
this truth. stories, and socialization tactics) tell us about
the values and basic assumptions of the people
there. Alternatively, when culture is studied
CONCLUSION as something organizations have, comparative
Organizational climate and culture offer organizational culture research yields quan-
overlapping perspectives for understanding the titative assessments of the ways organizations
kinds of integrative experiences people have display their values for and basic assumptions

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 PS64CH09-Schneider ARI 19 July 2012 16:51

about people, achievement, formalization, and they require for effectiveness, and culture of-
growth (a la the competing values framework fers the intangibles that likely accrue to produce
shown in Table 1). Surveys designed to assess the deeper psychology of people in a setting.
these inclinations share much in common with The psychology of how people experience their
climate surveys, with the CVF providing more work environment is difficult to assess but is
focus for such assessments than has been true likely what implicitly directs them in their daily
of culture research in the past. lives, so it is important to understand. When a
We obviously see these two perspectives as change in what directs people and their daily
being useful ways to conceptualize and under- lives is required, then a focus on tangibles is the
stand people’s experiences at work. Climate way to achieve it. As such, the conceptual con-
offers an approach to the tangibles on which nection between climate and culture is clear—
managers can focus to generate the behaviors and deserving of future research.
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

SUMMARY POINTS
by Fordham University on 12/04/12. For personal use only.

1. Organizational climate emerges in organizations through a social information process

that concerns the meaning employees attach to the policies, practices, and procedures
they experience and the behaviors they observe being rewarded, supported, and expected.
2. Organizational climate research that has a focus on a strategically relevant outcome
(safety, service) and/or process (fairness, ethics) is superior in understanding specific
relevant outcomes to research on climate that is generic with no specific focus.
3. The aggregation of individual perceptions of climate into higher levels of analysis is
accomplished both through the survey items that are written to capture climate (they
are written to describe the level to which the data will be aggregated) and through the
statistical procedures used to defend such aggregation.
4. Research on climate strength (the degree to which people in a unit agree in their per-
ceptions) reveals that strength frequently moderates the relationship between climate
aggregate means and outcomes of interest.
5. Organizational culture concerns the implicit values, beliefs, and assumptions that em-
ployees infer guide behavior, and they base these inferences on the stories, myths, and
socialization experiences they have and the behaviors they observe (especially on the part
of leaders) that prove to be useful and promote success.
6. Organizational culture may exist as an inclusive organizational construct for a whole
organization but also simultaneously in the form of subcultures (e.g., based on level in
the organization or occupation) and also in ways that suggest a lack of integration (the
culture is fragmented).
7. Early research on organizational culture was predominantly via the qualitative case-
method (emic), but more recently survey procedures have become predominant due to
the comparative opportunities they present as well as the potential they offer for links to
organizational performance outcomes across settings.
8. An integration of climate and culture theory and research has useful implications for
practice, especially vis-à-vis practice that yields data suggestive of organizational changes
that might yield improvements in organizational behavior and performance.

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FUTURE ISSUES
1. Research that simultaneously studies macro generic climate, multiple strategically fo-
cused outcome, and process climates to more fully capture the reality of organizational
life.
2. Research linking the fundamental beliefs, values, and assumptions that characterize cul-
ture research with the policies, practices, and procedures and accompanying behaviors
that are typical of climate research.
3. Research on boundary conditions surrounding the outcome and process-focused climate
studies in which links with important unit/organizational performance indicators are
studied.
4. Research on the contributions human resource management practices make to the emer-
gence and strength of climate and culture in organizations.
Annu. Rev. Psychol. 2013.64. Downloaded from www.annualreviews.org

5. Research on the contributions of operations management, finance, legal, marketing, and

other departments/functions to the experienced climate and couture of an organization.
by Fordham University on 12/04/12. For personal use only.

6. Longitudinal research on the likely feedback loops in climate and culture research, es-
pecially feedback loops between outcomes and climate/culture.
7. Research on climate and culture as brand image extending beyond the boundaries of the
organization with regard to image as a potential employer, service or product provider,
and object of investment.
8. Research on the life cycles of organizations and the ways in which climate and culture
change over time as a function of the stages of the life cycle.

DISCLOSURE STATEMENT
The authors are not aware of any affiliations, memberships, funding, or financial holdings that
might be perceived as affecting the objectivity of this review.

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