Ideal Outcomes

Organizational Culture vs Organizational Climate: Know the Difference

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In one of our recent posts, we discussed the concept of organizational culture and why it matters.

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?

Organizational culture is a combination of values, expectations, and practices that work together to guide and inform the way an organization and its people act and behave. Increasing numbers of businesses recognize the pivotal role of a positive organizational culture in ensuring their long-term success and viability.

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.
For a more in-depth analysis of organizational culture, take a read through this article.

What Is Organizational Climate?

A company’s climate reflects the patterns that affect people’s behaviors in the workplace. It’s a direct reflection of employees’ perceptions and the “mood” of their work environment.

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
Broadly speaking, a company’s climate falls into one of four key categories:
  • 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?

Organizational culture is a less-tangible concept than organizational climate – it’s about the shared values, attitudes, and behaviors that define a company and its people.

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.
For more insights on building and enhancing your business’s climate and culture, visit Ideal Outcomes’ blog or contact us to learn how we can support you.