Organizational Culture

and Organizational Climate

as a Determinant of Motivation
Prabhjot Kaur Mahal*

Organizational climate has a potentially rich, but largely unrealized role in the
development of an organization as well as to raise the motivation of employees.
Researchers perceive problems arising from significant culture and different
climate affecting the management and motivational level among the employees.
The study examines the influence of organizational culture and climate on the
motivation level among 100 adult employees working in Ranbaxy with the help
of various questionnaires. In particular, organizational climate factors include
environment, team work, management effectiveness, involvement, reward and
recognition, competency and commitment. These factors have been found to
influence the motivation and viewed as a multidimensional construct. The study
is based on the non-probabilistic cum convenience sampling techniques.
The results indicate that all eight variables are positively related to the motivation.
It also tries to explain that to improve the motivation level among employees
one must try to improve the organizational culture and climate.

Introduction
’ Till the time organizational culture is considered as varied, multilevel and ubiquitous,
without any knowledge, justification, explanation, is it has been considered as
vague, confused and mistrusted (Litwin and Stringer, 1968; Pettigrew, 1990;
Reichers and Schneider, 1990; Chatman, 1991; Frost, 1991; Trice and Beyer, 1992;
Alvesson, 1993; Hatch, 1993; and Schultz and Hatch, 1996). Organizational culture
and climate have been found to affect functioning and productivity within
organizations (Sheridan, 1992; Glisson and Hemmelgarn, 1998; Hemmelgarn
et al., 2001; and Glisson and James, 2002). Glisson and James (2002) demonstrated
that culture and climate are distinct, but interrelated and can play the role of
constructs. Although definitions of culture and climate vary from organization to
organization (Verbeke et al., 1998), it can be defined as the organizational norms
and expectations regarding how people behave and how things are done in an
organization (Glisson and James, 2002). In contrast, organizational climate reflects
workers’ perceptions of, and emotional responses to, the characteristics of their work
environment (James et al., 1978; James and Sells, 1981; and Glisson and James, 2002).
Thus, culture and climate are held to influence attitudes in the workplace.

* Research Scholar and Lecturer, Rayat Bahra Institute of Engineering and Biotechnology
(MBA), Sahauran, Khara, Mohali, Punjab, India. E-mail: prabhjotkaurmahal@gmail.com

3 8 2009 IUP. All Rights Reserved.

© The IUP Journal of Management Research, Vol. VIII, No. 10, 2009
 Constructive cultures are characterized by organizational norms of achievement
and motivation, individualism and self-actualization, and being humanistic and
supportive. It encourages interactions with people and approaches to tasks that
will enable staff to meet their higher-order satisfaction needs. Schein (1992) notes
that, indeed, a strong organizational culture has generally been viewed as
a Conservative force. In contrast, defensive cultures are characterized by seeking
approval and consensus, being conventional and conforming, and being dependent
and subservient. Defensive cultures encourage or implicitly require interaction with
people in ways that will not threaten personal security (Hellriegel et al., 1974; Meglino,
1976; Woodman and King, 1978; Koys and DeCotiis, 1991; Denison, 1996; and
Cooke and Szumal, 2000). The four attributes of an organization’s climate are:
(1) a Supportive climate, (2) a climate of risk taking, (3) a climate of cohesiveness,
and (4) a climate with the motivation to achieve (Denison, 1996). The four elements
described here have been thought to promote job satisfaction and increase motivation
at individual and organizational levels. Motivation is something (as a need or desire)
that causes a person to act (Merriam-Webster, 2004). An organization with a climate
that has the motivation to achieve means that the environment of the organization
is one in which there is a strong need or desire to achieve and this is demonstrated
in the collective behaviors of individuals.

Institutionalized learning occurs when processes, systems, structures and

routines are embedded within the organization.

Review of Literature
Organizational climate studies were prominent during the 1960s and 1970s
(Denison, 1990). The human relations perspective drew its inspiration from even
earlier anthropological and sociological work on culture associated with groups
and societies (Mead, 1934; Weber, 1947 and 1958; Durkheim, 1964; and Geertz,
1973). It is often assumed that organizational culture is a dominant factor
affecting organizational members’ job attitudes and productivity and that strong
organizational culture can promise high satisfaction, commitment and performance
among members. Even though substantial emphasis has been placed on study of
organizational culture, the conception of organizational culture is still vague and
controversial (Smircich, 1983; Ashforth, 1985; and Alvesson, 1987).

The concepts of organizational culture and organizational climate have been

used in a rather vague way and the definitions are almost as numerous as the
researchers. Precise definitions are rare and in many cases ‘organizational climate’,
‘organizational culture’, ‘managerial climate’, ‘organizational atmosphere’,
‘management culture’ are accepted as interchangeable terms (Davies, 1971; and
Owens, 1981).

The literature framework of organizational climate contained two main

contradictions, first, related to ontological issues, which include theories of
organizational climate (Ekvall et al., 1996; Guion, 1973; and Altman, 2000) and

Organizational Culture and Organizational Climate as a Determinant of Motivation 39

secondly, related to values, norms and belief system. Schein (1992) suggests that
organizational culture is even more important today than it was in the past.

It helps to increase competition, globalization, mergers, acquisitions, alliances,

and various workforce developments, improve efficiency, quality, and speed of
designing, manufacturing and delivering products and services.

Schein (1992) argues that leadership today is essentially the creation, the
management, and at times the destruction and reconstruction of culture. Leadership
in this context refers to the influential individuals, often the founders who have a
major impact on the creation of the organization’s early culture. It is described
that the founders of the organization create the organizational culture. Founders
must appoint and keep the skilled people in the organization, make them socialize;
encourage them for participation.

Organizational culture influences work attitudes (e.g., job satisfaction,

organizational commitment), service quality, and staff turnover (Glisson and James,
2002). Work attitudes also mediate the effects of climate on employee performance
and motivation (Parker et al., 2003)

There is evidence that organizational culture and climate are positively correlated
with organizational commitment—that is, a strong belief in and acceptance of the
organization’s goals and values; a willingness to exert considerable effort on behalf
of the organization; and a strong desire to maintain membership in the organization
(Mowday et al., 1979; and Guzley, 1992).

Pfiffner and Sherwood (1960) suggested that there is a positive relationship

between the culture and effectiveness of a firm. Wilderom et al., (2000) described
that there is a significant relationship between organizational culture and
effectiveness. Culture helps to reduce conflicts in the organization (Gale, 1992)
and make the organization more participative and zealous.

In a very comprehensive framework of organizational climate, six dimensions of

organizational climate have been discussed: structure, responsibility, reward, risk,
warmth, and support. Simultaneously, in another research, Litwin and Stringer
(1968) emphasized on the concept of climate and its influence on the McClelland’s
‘need factors’ of motivation i.e., power, achievement and affiliation. Attempts were
also made to establish the operationalization of climate through the assessment
of members’ perceptions. Climate has very strong influence on the individuals in
terms of job performance and work attitude (Joyce and Slocum, 1979 and 1984).
Organizational climate can therefore be described as the aggregate perceptions
of the characteristics of organizations.

The link between organizational culture and performance has a relatively long
tradition in the field of organizational studies (Wilderom et al., 2000). The concept
of culture seems to lend itself to very different uses such as collectively shared
forms of ideas and cognition; symbols and meanings; values and ideologies; rules
and norms; emotions and expressiveness; the collective unconscious; behavior
patterns; and structures and practices (Alvesson, 2002).

40 The IUP Journal of Management Research, Vol. VIII, No. 10, 2009
 In the view of above literature, the author proposes the following hypotheses:

H1: There is a relation between environment and organizational climate.

H2: There is a relation between team work and organizational climate.

H3: There is a relation between management effectiveness and organizational

climate.

H4: There is a relation between involvement and organizational climate.

H5: There is a relation between reward and recognition and organizational climate.

H6: There is a relation between competency, commitment and organizational

climate.

H7: Organizational culture is considered very important predictor of organizational

climate.

H8: There is a positive relationship between organizational culture, climate and

motivation.

Objectives
The paper has three main objectives, such as:

• To study the impact of organizational climate on the organization;

• To study the impact of organizational culture on the organization; and

• To study that whether organizational climate and organizational culture

impact on the employees motivation or not.

Scope
The data have been collected from the employees working in Ranbaxy Laboratories
Limited, India’s largest pharmaceutical company. It is an integrated, research-based,
international pharmaceutical company, producing a wide range of quality, affordable
generic medicines, trusted by healthcare professionals and patients across
geographies. It was incorporated in 1961 and went public in 1973. Amongst the
pharmaceutical companies in India, it has the largest R&D budget with an R&D
spend of over $100 mn. It is driven by its vision to achieve significant business in
proprietary prescription products by 2012 with a strong presence in developed
markets. The company aspires to be amongst the Top 5 global generic players and
aims at achieving global sales of $5 bn by 2012. Ranbaxy is focused on increasing
the momentum in the generics business in its key markets through organic and
inorganic growth routes. The company continues to evaluate acquisition
opportunities in India, emerging and developed markets to strengthen its business
and competitiveness. Growth is well-spread across geographies with focus on
emerging markets. The company’s business philosophy based on delivering value
to its stakeholders constantly inspires its people to innovate, achieve excellence
and set new global benchmarks. Driven by the passion of its over 12,000 strong

Organizational Culture and Organizational Climate as a Determinant of Motivation 41

multicultural workforce comprising 50 nationalities, Ranbaxy continues to
aggressively pursue its mission to become a research-based international
pharmaceutical company and attain a true global leadership position.

Research Methodology
Data collection: To conduct this study, 150 questionnaires were distributed among
the employees working in the Ranbaxy of Mohali and Ropar. This study is conducted
during December 2008-March 2009. But after the completion of the survey, only
126 employees gave their responses, out of which only 120 questionnaires were
included in this study. So, the response rate was 80%. During this study, convenience
sampling techniques were used.

Instrument used: To conduct the study, primary source is used, and

a questionnaire is also used to collect the first hand information. This questionnaire is
prepared with the help of literature and face-to-face interaction with the employees
working in Ranbaxy. The questionnaire consists of four main categories. The first
category includes the geographical description of employees working in Ranbaxy, which
includes gender, marital status, experience, education, salary and the nature of job.
The second category includes organizational culture questionnaire, which was
measured through the scale,  = 0.91, containing 4-items scale (ranging from almost
agree to almost never). In this, the respondents who choose ‘almost agree’ are given
‘4’ score and those almost never are given ‘1’ score. A few changes have been made
after conducting a pilot study. The earlier questionnaire contained 20 items, but to
increase its authenticity, 5 items were removed. The third category includes the
organizational climate questionnaire, which contains seven categories, such as
environment, team work, management effectiveness, involvement, rewards and
recognition, competency and commitment. Each category includes 5-items, containing
items scale (ranging from strongly agree to strongly disagree). The respondents who
choose strongly agree are given ‘5’ score and those strongly disagree are given ‘1’
score. Cronbach’s coefficient alpha () was used to measure reliability level of the
scale, which was  = 0.78. The fourth category includes a motivation questionnaire.

Statistical Techniques: Several statistical techniques are used in this study. Firstly,
geographical profiles of employees are given in a tabular form. Secondly, descriptive
techniques are computed and then analyzed. Thirdly, Pearson’s Correlation
coefficient was worked out to find the relationship between variables. Lastly,
chi-square test and Z-test are used for hypothesis.

Results
Geographical Profile
Table 1 shows that in the survey, 69% of the total population were male and
31% were female, i.e., the percentage of the male during the study was more
than double the ratio of females. The more respondent during the study was

42 The IUP Journal of Management Research, Vol. VIII, No. 10, 2009
 Table 1: Geographical Profile between 20-25 years. It shows that the
of the Employees ratio of young generation during the
study period was high as compared to
Particulars % of Employees others. The respondents below 20 years
Gender of age were very few. The educational
Male 69 qualification of most respondents was
Female 31 graduation, i.e., 40% and on the other
Age hand, the 5% respondents were above
Below 20 years 5 postgraduaes. The study showed that
20-25 years 30 mostly the number of respondents were
25-30 years 25 taking salary of above Rs. 30,000 during
30-35 years 28 the study. Most of the respondents
Above 35 years 22 und e r s t ud y had the e x p e r i e nc e of
Education below 5 years. During this study, 69%
Below graduation 30 employees were temporary.
Graduation 40
Post graduation 25 Descriptive Analyses
Above post graduation 5 The standard deviations of the main study
Salary variables ranged from 1.845 to 3.622,
Below Rs. 10,000 19 suggesting that none of the measures were
Rs. 10,000-20,000 21 marked by excessive restrictions in range.
Rs. 20,000-30,000 20 The mean of the main study variables lies
Above Rs. 30,000 40 between 27.06 to 47.84. Organizational
Experience culture has a mean score of 47.84, whereas
Below 5 years 48 commitment has 37.21; reward and
5-10 years 20 recognition and competency have almost
10-15 years 15 same mean score, i.e., 35.07 and 35.97;
15-20 years 10 managerial effectiveness and motivation have
Above 20 years 7 almost similar mean, i.e., 34.15 and 34.20;
Nature of job the mean value of team work is 33.42 and
Permanent 31 environment is 31.64; and lastly, the mean
Temporary 69
value of involvement is 27.06 (Table 2).

Table 2: Descriptive Analyses

Particulars Mean SD
Environment 31.64 3.258
Team work 33.42 3.039
Management effectiveness 34.15 2.808
Involvement 27.06 3.408
Reward and Recognition 35.07 3.105
Competency 35.97 1.845
Commitment 37.21 1.903
Organizational Culture 47.84 3.622
Motivation 34.20 3.007

Organizational Culture and Organizational Climate as a Determinant of Motivation 43

 Pearson Correlation

1.000
Commit. Organisational Moti.
Coefficient

–
–
–
–
–
–
–
–
The correlation matrix presented
in Table 3 reveals that all eight
Culture
independent variables have

1.000
0.002
significant positive correlations
–
–
–
–
–
–
–
with employee motivation.
Pearson-correlation method has
been used in this paper to

0.325**
**
1.000

0.291
describe the relation among the
–
–
–
–
–
–
organizational culture and
employee’s motivation. Much
0.479**
0.360**
interest has not been evidenced
Com

1.000

0.109
here in interpreting any specific
–
–
–
–
–

results other than understanding

Table 3: Pearson Correlation Coefficient

0.491**
Rew.Rec.

the overall pattern of results in

0.256*
1.000

0.127
0.044

organizational culture and

–
–
–
–

climate and employee's

motivation.
0.386**
0.314**

**
0.252*
Invol.

1.000

0.126
0.351

The hypothesis shows that

–
–
–

there is a positive relationship

between organizational culture
and climate and employee
0.479**
0.394**
0.475**
0.395**
0.258**
Mgt. Eff.

1.000

0.095

motivation. The closer proximal

–
–

relationships revealed that

employee motivation was
strongly and significantly related
0.576**

0.377**
0.390**
0.563**
0.347**
Work
Team

0.213*

–0.133

to organizational culture, team

1
–

work (r =0.462), management

effectiveness (r = 0.586, 0.576),
0.462**
0.586**
0.395**
0.377**

0.441**

involvement (r = 0.395, 0.213,

0.136

0.083
0.156
Env.

0.479), reward and recognition

1

(r = 0.377, 0.377, 0.394, 0.252),

Significant at 0.01 level.
Significant at 0.05 level.

competency (r = 0.390, 0.475,

Management effectiveness

0.386, 0.256), commitment

Reward and Recognition

(r= .441, .563, 0.395, 0.314,

Organizational Culture

0.491, 0.479), organizational

culture (r = 0.347, 0.258, 0.360,
0.325), and motivation
Commitment
Environment

Involvement

Competency

(r = 0.351, 0.291). The results

Team work
Variables

Motivation

of the study show that there is

**

a positive relation between

Note:

organizational culture and

employee motivation.

44 The IUP Journal of Management Research, Vol. VIII, No. 10, 2009
Chi-Square Test and Z-Test
The values of chi-square test and Z-Test are presented in Table 4.

Table 4: Chi-Square Test and Z-Test

Particulars Chi-Square Test Z-Test
Environment 36.5**
0.476**
Team work 92.4** 0.4716**
Management effectiveness 67.0** 0.524**
Involvement 80.2** 0.480**
Reward and Recognition 64.2** 0.520**
Competency 87.8** 0.470**
Commitment 87.6** 0.470**
Organizational Culture 88.0** 0.462**
Motivation 127.9* 0.440**

Note: ** Significant at 0.01 level.

* Significant at 0.05 level.

Discussion
The results describe that an employee who feels that work place is good is more
productive. Work is more enjoyable when the area is pleasant, the people get
along with freely and where there is team work. In such settings, tardiness and
absenteeism will be less, while productivity goes up. A good work environment
can improve morale of employees and encourage them to cooperate to get the job
done. It helps them become a team, rather than just a group of people waiting for
a paycheck who do not care about their work, their fellow employees, the
organization, or themselves.

Team work refers to the work done by more than one employee in the
organization. The efficiency of any organization totally depends on the working
efficiency, dedication and honesty of the team members. If the members of the
team are efficient, then they will work with more enthusiasm. Then the organization
will be able to achieve its goals. Similarly, efficiency of the management and the
affirmative qualities of the manager also effect the employee’s motivation. If the
HR practices, organizational policies, organizational structure and organizational
strategies are good and reliable, the employees will feel more attached to the
organization.

According to Fisher (1990), there are essentially three levels of motivation:

intrinsic satisfaction (the employee’s natural interest), extrinsic motivation
(the future reward such as enhanced employment prospects) and the combination

Organizational Culture and Organizational Climate as a Determinant of Motivation 45

of satisfaction and reward (success in the task). It is the latter, in combining
satisfaction and reward, where true motivation is born. Without task-based
satisfaction, there would be no foundation to build intrinsic and extrinsic motivation.
The notion is that if employees do a task well, they will be praised. This is
motivational, and the best form of praise is rewarding them immediately with
participation points, and making the participation points an important part of the
motivational process. In order for the praise to be effective, it also needs to be
tangible, i.e., the more tangible it is, the more employees will be motivated.

Commitment plays a key role in motivation (Facteau et al., 1995; Noe and
Schmidt, 1986; Tannenbaum, Mathieu, Salas, and Cannon-Bowers, 1991). There
is a positive relation between employee commitment and the organizational
motivation. If employer is more committed to the organization, then there will be
high level of motivation among the employees. As a result, the productivity of the
organization will improve. Work commitment is a function of personal characteristics,
including dispositional qualities, and presents a facet design of work commitment
that includes work ethic, career commitment, organizational commitment (affective
and continuance), and job involvement.

Employees, who are competent and confident, are more likely to remain in their
profession (Knobloch, 2001). It has been found that those who exhibit more
enthusiasm, commitment and willingness to accept sacrifices do extra duties
compared to their average counterparts (Wang and Fwu, 2001).

During the study, organizational culture is found to be very important

determinant to raise the motivational level among the employees. Strong
organizational culture enables to improve employee’s motivation. As a result, it
leads to improve the employee performance. The results indicate that
organizational culture which is created by the leader will influence strategic
application and employee’s performance.

Employee must be given a chance of involvement in the organization. If he

participates in the functioning of the organization, he will feel himself as a part
of the organization. Decision relating to day-to-day functioning should be given
to the middle level employees, so that they can show their best participation to
the employees. The results reveal that employees of an organization need a
say in the organizational policies, so that they can learn more from the
organization.

Conclusion
Hence, it can be concluded that organizational culture and climate of the organization
are the crucial variables to raise the motivation among the employees. If we consider
the various researches, they indicate that if the traditions, ambiance, ethnicity and

46 The IUP Journal of Management Research, Vol. VIII, No. 10, 2009
custom of the organization are good, the employee will be more enthusiastic to
give the best output. The findings of the study have led the researcher to conclude
that the level of organizational climate in the organization is good, it helps to
increase the performance among the employees.

Based on this study, we can say that if the management wants to raise motivation
among its employees, it must conduct a several mentoring programs, workshops,
seminars in the organization, so that employees can discuss their problems relating
to organizational climate and culture. 

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