Organizational culture is about the values and beliefs that the people in an organization have, how these are ‘taught’ to new members, and the stories that are told from generation to generation to pass the culture along

Organizational climate is related to more observable characteristics of the organization, such as practices, policies, and procedures.

Organizational culture is “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.”

Second, (organizational) culture is born out of trying to solve (organizational) problems. Adapting to the external environment and internal coordination are the primary problems of organizations and culture is the outcome of a shared history of finding solutions to these problems (Schein, 1992)

First, let us define what organizational climate is: “the shared perceptions of and the meaning attached to the policies, practices, and procedures employees experience and the behaviors they observe getting rewarded and that are supported and expected.” (Schneider et al., 2013).

The most important difference is that these concepts are concerned with properties of the environment that are more or less tangible. Organizational culture is about the (less) tangible, (more) symbolic properties of the environment within an organization including values and assumptions. Organizational climate is concerned with (more) observable properties of the environment, such as policies, practices and managerial decisions, and the way they are interpreted.

The origins of organizational culture research lie in anthropology and sociology. Culture research has generally taken a higher-level view and the collective organization is of interest (Martin, 1992). While interest in organizational culture was sparked in early 1980s, its managerial implications has made it a popular and vibrant research area. Fostering a strong organizational culture is an enthusiastically adopted aim of consulting firms (Schneider and Barbera, 2014).

According to Schein, organizational culture manifests at three different levels, going from the most visible, surface-level phenomena to the least tangible and unconscious understandings: 1) Artifacts 2) Espouses values 3) Basic underlying assumptions

Generally speaking, we can group artifacts into several categories:

1. Symbols

2. Language

3. Rituals and stories

The espoused values of an organization are those beliefs and values that members of an organization share because these beliefs and values have proven useful in the past. It is important to remember that organizational members should see that the benefits of a specific value repeatedly before it becomes part of the organizational culture.

Unlike espoused values, basic assumptions are unconscious; they are “taken-for-granted beliefs, habits of perception, thought, and feeling” (Schein, 1990). In organizations, they ensure that members pay attention to the same things in the same ways, interpret them in similar ways, and react similarly emotionally (Schein, 1992).

The discussion about ‘organization is’ versus ‘organization has’ is about whether culture can be studied objectively or if one must immerse herself in the culture she is studying. The first view is called the etic approach, while the second view is called the emic approach. When scientists espouse the ‘organization is’ approach, they immerse themselves in the culture of the organization and practice an emic methodology. When they espouse the ‘organization has’ approach, they stand back from the organization and try to observe and quantify the culture as neutrally as possible.

 Geertz argued that it was the anthropologist’s responsibility to undertake an interpretive approach to the study of culture in order to make sense of these “webs of significance.” (Geertz, 1973) In order to do so, Geertz advocated for ethnographic studies of culture that provide multi-dimensional descriptions; not only general and reductive information but also idiosyncratic details. Such ethnographies may start out from the most visible elements of culture but dig down into the underlying cultural relations and mechanisms so that we may get a rich understanding of the particulars of the culture in question.

Subculture refers to the culture shared by members of a group defined by their location, department, task responsibilities or another defining characteristic. Subcultures may vary slightly or significantly from the overall organizational culture. For example, if the group is substantially isolated from the rest of the organization, they may develop a culture that is wholly independent of the organizational culture.

Organizational climate is how employees collectively perceive the formal and informal ways and rules in an organization and what they see being rewarded and punished.

Service Climate is how employees collectively perceive the formal and informal ways and rules in terms of serving customers in an organization and what they see being rewarded and punished in terms of service behaviors.

Safety Climate is how employees collectively perceive the formal and informal ways and rules in terms of workplace health and safety in an organization and what they see being rewarded and punished in terms of workplace safety behaviors.

Ethical Climate is about how employees collectively perceive the formal and informal ways and rules in terms of ethics in an organization and what they see being rewarded and punished in terms of ethical behaviors.

There are three main reasons why founders have a central role in how organizational culture is created (Schein, 1992): 

1. An organization usually starts out small and the founder chooses people with similar values, beliefs, and vision to work with. 2. Even if founders hire people who do not share their values and beliefs (for example because they need someone with a specific expertise that is not widely found), they can eventually ‘socialize’ these employees to their system of values and ideas. 3. The way the founder behaves will influence the people they work with because founders can act as role models to their employees

Ethical Leadership is “the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decisionmaking.” (Brown et al., 2005, p.120)

Initially, Hofstede categorized the differences into four dimensions. Later work has increased the dimensions to six (Hofstede and Bond, 1988; Hofstede, Hofstede and Minkov, 2010) (the later additions are marked by *):

Uncertainty avoidance (UA)

Individualism-Collectivism (INDCOL)

Power distance (PDI)

Masculinity-femininity

Long-term orientation*

Indulgence*

Different types of climates have also been linked to more general individual-level outcomes such as job satisfaction, organizational commitment, and organizational citizenship behaviors. You should bear in mind that both personality and the overall context may influence the effect of climate at the individual level.

This brings us to our final point; the warning we mentioned at the beginning of this section. Most concepts in organizational behavior are desirable / positive or undesirable / negative. We want people to be satisfied with their jobs; organizational citizenship behaviors are beneficial; organizational commitment is generally a good outcome. In order to achieve these results, we investigate antecedents, such as work design, leadership, and personality. Culture and climate  differ from these two groups because there are no objective criteria for good or bad cultures or climates. Different stakeholders may prefer different types of climates depending on the outcomes they like. Shareholders, for example, may prefer a low safety climate because safety measures may lower profitability in the short-term. Employee representatives, on the other hand, will advocate a high safety climate for obvious reasons.