At Ideal Outcomes, we’re often asked to explain the difference between a company’s organizational culture and its climate. These two terms are often confused or used interchangeably, but there are notable differences between the two.
So, in this article, we’ll explore these two concepts in more detail and clarify the meaning and significance of each.
What Is Organizational Culture?
Modern human resources professionals generally agree that there are four main types of company culture:
- Clan Culture: People interact in a relaxed, friendly, and positive manner and often have much in common beyond just their jobs – shared interests, personal values, and hobbies, for example.
- Adhocracy Culture: Innovation and winning in the marketplace are top priorities, and life in these companies is fast-paced.
- Market Culture: There’s a relentless focus on the customer, becoming the most successful player in the marketplace, and consistently achieving strong revenues and performance.
- Hierarchy Culture: The emphasis is on structure, control, making rules, and setting boundaries.
What Is Organizational Climate?
So, in simple terms, it’s a gauge of “how people feel about coming to work here.”
The nature of a company’s climate will impact people’s levels of productivity and overall job satisfaction.
Aspects that are involved in shaping this climate include:
- People’s motivation levels
- Leadership styles
- Performance review processes and procedures
- How duties and responsibilities are delegated
- People’s attitudes towards their jobs and the company as a whole
- People-oriented: Concern and care for employees is the organizational priority.
- Rule-oriented: Onus is placed on the importance of establishing and following set guidelines.
- Innovation-oriented: There’s an allowance for and an expectation that people try new things and share creative ideas.
- Result-oriented: Outcomes and success in the marketplace are the key driving forces and areas of focus.
What’s the Difference Between Organizational Culture and Organizational Climate?
A business’s climate is focused more narrowly. It’s more about perceptions and how people experience their workplace; this includes policies, procedures, benefits, and reward systems.
Here are a few of the most significant differences between these two concepts and how they interrelate:
- One aspect of climate will be people’s feelings and views about the characteristics and strength of the company’s culture.
- Organizational culture is the fundamental “image” of a business. Organizational climate, however, is a reflection of people’s perceptions about their place of work.
- A company’s climate might change quite frequently because it’s fundamentally influenced by the leadership in place at any given time. Organizational culture is a more enduring concept.