The effect of work environment on organizational climate in a large financial institution

Abstract

This research investigated the extent to which factors in the work environment of a large financial institution account for variance in individual behavior of employees. Employee perceptions of the organization and their opportunities and constraints within it, represented by a set of organizational climate dimensions, were the dependent variables. The major research goal was to measure significant aspects of the work environment and to assess their relations to independently obtained attitude measures of organizational climate. Four major components of Sells' social system model were used as a framework for the conceptualization of environmental variables. These are: personnel composition, organization, technology (task content), and physical environment. A total of 57 specific measures was reduced to five environmental dimensions, entitled Department Status (predominant rank and prestige of members), Maleness (predominance of male employees), Work Area Restrictions (predominance of confined, restricted work spaces), Department Tenure (length of employment), and Public Banking (work with customers in public banking areas). On the basis of cluster analysis of environmental score profiles, a typology was developed, with 13 work environments each represented by different numbers of employees. Group organizational climate profiles on 12 climate clusters were computed for each of the 13 discrete work environment groups and the resulting profiles were compared. A number of systematic and apparently substantial differences between profiles of particular pairs of groups were observed, and similar comparisons, for subsamples of comparable employees, revealed further instances in which environment and personnel factors appeared to be of major importance. The interactions of environmental settings, personnel characteristics of the individuals assigned to these settings, and the resulting organizational climate profiles provide empirical support for the concept that individual commitment to and involvement in the organization are functions of the positions occupied and the status, power, and reward derived in relation to them. The rationality of industrial organization accounts for convergences, for the most part, but also requires or is unable to prevent deviation from the pattern in some cases. It is believed that the results have important implications for organizational development and other aspects of organizational study. Limitations of the present study were noted and lines for further research were pointed out.