Organizational climate–institutional environment nexus: why context matters

Abstract

This conceptual paper investigates organizational climates through multiple lenses to highlight the complex web of forces and dynamics that influences the varied perceptions and experiences of organizational climates in any organization. The multi-faceted nature of employee perceptions of organization climates presents complex problems in human resource management and organizational well-being. Using a literature review and institutional environment framework, diverse perspectives and discourse are drawn on how an array of intertwined factors such as context, technology and innovation, ownership, goals and objectives, corporate governance, organizational change and life-cycle, physical conditions, workplace hazards, environmental stressors, organizational process, communication and organization structure can influence and shape organizational climate and resultant group dynamics.

Moreover, several empirical results confirm the role institutional environments play in the organizational climate ecosystem. Our finding reveals that organizations could have several layers and types of organizational climates dependent on intervening soft and hard factors. Therefore, studies relating to organizational climates should adopt a holistic and systematic approach to understand the multi-layered dynamics in their context.

Introduction

Human behaviour dynamics and decisions remain pivotal in shaping the organizational climate (OC) contexts. Internal and external stakeholders communicate and react to the prevailing organizational climate through diverse verbal and non-verbal cues and actions. Thus, OC is a function of many factors such as communication styles, culture, industry context, organizational structure, group dynamics, leadership style and intervening variables in the business environment (Schneider & Bowen, 1993; Rožman & Štrukelj, 2021). This has sustained the growing interest of researchers, practitioners and social psychologists in different contexts.

Organizational psychology and behaviour literature on organizational climate and culture construct have shown their intertwined nature in the workplace using qualitative and quantitative methods. The holistic construct comprises several facets, sub-climates and types depending on the psychological perspective of the study (Schneider et al., 2017; Lavanya et al., 2020).

As a result, scholars have investigated the safety climate (Zohar, 2010), psychological climate (James & Sells, 1981), service climate (Kang et al., 2018), ethical climate (Enwereuzor et al., 2020) and leadership climate (Fleishman, 1953) in different contexts.

Recent studies highlight the need to adopt a holistic and systematic analysis of human resources, interpersonal relationship dynamics, nature of coordination, environmental nexus, exploration and service framework in understanding OC dimensions (Pomirleanu et al., 2022).

Pathak et al.'s (2022) qualitative study in a developing country reiterated the importance of context and how entrepreneurship planning was affected during the pandemic context.

There is a dearth of knowledge on OC dynamics in a volatile business environment from the perspective of institutional and organizational contexts. This study advances that studies on OC in developing countries should recognize the centrality of understanding the diverse impact of human behaviours, actions and perceptions at different levels of the organizations and situate this within the multilevel institutional business environment. The institutional and contextual (situational) environments influence OC in developing countries. This paper aims to fill this vacuum using institutional and situational nexus to justify why OC studies should adopt holistic investigations of the direct and remote causes rather than relying on unitary predictors, antecedents and moderators.

The organization climate nexus

The definitions of organizational climate (OC) reveal the dimensions it embodies and the variables that influence its outcomes. This raises several questions on if a chosen definition can be generalized in other contexts or used as a template in OC studies without some modification. Whichever perspective is chosen, it is necessary to connect the past studies with recent studies given the global changes in economies, the evolution of new disruptive technologies, the interplay of institutions and developments in human psychology.

Recent definitions operationalize OC as shared perceptions, meanings individuals attach to the series of experiences that occur in the work and construed as the social fabric of organizational and prevailing process climates daily (Schneider et al., 2013; Kim & Park, 2020). Pritchard and Karasick (1973) adopted the past to present review approach and stated that “organizational climate is a relatively enduring quality of an organization’s internal environment distinguishing it from other organizations; (a) which results from the behaviour and policies of members of the organization, especially top management; (b) which is perceived by members of the organization; (c) which serves as a basis for interpreting the situation; and (d) acts as a source of pressure for directing activity”.

Their stratified definition reinforces critical aspects of the OC construct such as the internal environment and interplay of forces in the external environment (see Fig. 1). An organization’s internal environment climate may have immense effects on the internal and external stakeholders. It is imperative to take cognizance of how the different dimensions of its employee’s perception, influences and decisions of top management, organizational behaviour, organizational policies shape and distinguished them from other organizations and enterprises. The perceptual nature of the internal and external context is a basis for interpreting the resultant actions, interactions and productivity of employees.

Fig. 1.

Organization climate illustration

While the environment is the framework of OC, the behavioural dynamics of individuals and organizational structures invariably influence OC over a period. Behavioural outcomes and perceptions are influenced by subjective and objective schemas that vary across demography, personalities and information channels (James et al., 2008).

Deconstructing motives and influences of human behaviour and decisions in organizations requires understanding and investigating latent variables such as culture, attitude, group dynamics and other intangibles prevalent at different strata of the organization. In this paper, the construct OC refers to organizational climates (OCs) due to the individual perception effect. In any group or organization, different sub-layers of climates can exist with the general dominant OCs (Bergmann et al., 2018).

In most developing countries, OCs in most enterprises and workplaces comprise sub-climates depending on the organizational size. For instance, the OCs in small and micro businesses may be uniform due to the lean or non-existent structures and business model. Whereas medium and large organizations with or without branches might have different sub-climates and the dominant OC. Contextual influences in the local and international institutional environment continually exert pressures that may positively or negatively affect OC depending on the boundary spanning and environmental scanning behaviours of the organization. It is important to state that the nature of OCs in fragile and developing countries is subject to the vagaries of the business environment and the frequency of changes in government policies (Sibindi & Samuel, 2019). The caveat to researchers is not to generalize the OCs in developing countries as unstable and weak due to contextual differences. Though some companies have exited Nigeria to neighbouring West-African countries perhaps due to influences of the institutional environment, the OCs in organizations remain adaptive and resilient due to the emergence of new fintech companies and local contextual factors.

It is plausible for two employees with the same level of productivity to experience different levels of OC due to the organizational process, in–out group dynamics, access and sources of information. Scholars have affirmed that the meanings and perceptions vary among employees and these influence their level of productivity, job satisfaction and turnover intentions. When the phrases “meaning and perceptions’’ are analysed, it is evident that scholars agree that communication is closely related to OCs. The domain of information processes, channels, language, timing and mode of communication by employees, informal groups, managers and key decision-makers spread through the organization in different forms, which can affect the filtering and decoding process or lead to cognitive dissonance issues. Studying the effect of communication on OCs requires a comprehensive analysis of this construct and an investigation of the formal, informal and non-verbal communication (Crampton et al., 1998; Neill et al., 2019).

The business environment in developing countries is dependent on the institutional frameworks, government policies, competing business objectives and a myriad of local and external intervening factors that exert influences on the prevailing OCs and culture (Mohammad & Husted, 2019).

Using a system perspective, workplaces, enterprises and organizations in these contexts exhibit different subsets of the national organizational climate and culture. These contexts are subjected to volatile business environments at the macro and micro levels compared to their counterparts in developed countries. Schein’s (1996) emphasis on time horizons in OC studies reinforces the importance of understanding how the organizational life cycle influences and shapes prevailing organizational climates and resultant behaviour dynamics.

This paper uses a multi-level perspective of OCs due to contextual variations in human behaviour, communication and workplace dynamics. These complexities also manifest in the subjective interpretation of OCs due to their dependency on individual cognition and perceptions at the micro and macro levels (Patterson et al., 2004).

James & Jones’ (1974) situational domains of OCs to developing contexts were adapted with introduction of the institutional domains as a contextual framework for organizational climate studies (see Fig. 2).

Fig. 2.

Author’s conceptual framework

Institutional environment framework

Institutions exist in every society and social group; they provide frameworks and constraints to guide the acceptable norms, behaviours and attitudes of people in the environment. For example, traditional institutions use tangible and intangible mechanisms to diffuse cultural values.

The institutional environment, economic history, the prevailing level of social-economic development, living standards, location and level of infrastructural development constitute soft and hard factors in OC (Scott, 2005). In developing countries, the dimensions of these institutional frameworks are a function of time, human behaviours and technological advancements.

Swaminathan & Wade’s (2016) definition of the institutional environment “is composed of regulations, customs and taken-for-granted norms prevalent in states, societies, professions, and organizations, which impinge upon and shape organizational behaviour and outcomes” resonates with developing countries’ context. Their definition attempts to provide a comprehensive framework relevant to OC studies. As noted, above managers and organizational leaders need to be conversant with the multiple regulations and customs that reside in their formal and informal business environment. For example, the regulations and customs in Nigeria vary across context; the business climate of a company in Lagos State differs largely from a similar organization situated in Ogun State or Kano State.

Organizations continuously learn to navigate and manage complex regulations at the national, state and local government level and informal environmental regulations (Aliev & Sigov, 2017). Having met the formal regulations does not exclude organizations from the informal regulations in their business environment. Many successful organizations recognize the importance of the informal regulations, culture and customs peculiar to their environment and how this can affect OCs. Failure to recognize some of the conventional, unconventional regulations and customs led to business disruptions, fines and penalties and loss of market share. Recent examples include the Mobile Telecommunications Network’s (MTN) fine in Nigeria, community-induced disruption of the business of oil companies and the Taxify/Bolt Ride-sharing app (Analytica, 2015). When the effects are investigated at the micro-level, employees suffer from the resultant OCs that arise from the decisions and policies at the macro level.

Contextualizing customs should encompass the broad spheres of religion, culture, traditions, public holidays, dress mode and acceptable language and medium of communication. It is instructive to note that different facets of religion and customs in developing countries have direct and indirect effects on the prevailing OCs. For example, while Sunday is a non-working day in most companies in most African Countries, fixing a crucial meeting or organizational activity on Fridays may be considered as insensitivity due to the prevailing customs of Friday Jumat Prayers.

Regardless of the approaches adopted, scholars have agreed that norms are prevalent in all contexts and recognize how personal norms, societal norms and organizational norms shape behaviours and organizational climate (Borry, 2017; Legros & Cislaghi, 2020). A typical global example is the disruptive changes occasioned by the outbreak of COVID-19 in 2020. This led to the re-emergence and popularization of the ‘New Normal’ which continually reshapes and redefines prevailing norms at all levels of society (Ahlstrom et al., 2020). This disruptive change affected the entire institutional framework globally and affects OCs in diverse ways depending on the countries.

Greenwood et al. (2014) posited that “taken for granted norms” in the institutional environment should be understood at different levels and in developing countries; some of these norms are resident in informal structures and institutions that are not clear but could be sources of power and prevalent due to business traditions, culture and local social system. It is imperative to state that in developing countries, some of these taken-for-granted norms are contextual, unclear and key determinants of the type of OCs.

Importantly, the different labour forces available within different contexts, nature of employment, work-life balance, salaries and levels of poverty shape the OCs at different levels of the organization. The resultant behaviour outcomes and group dynamics are strengthened or weakened by the effectiveness of the institutional systems. For example, casual workers and contract workers have become commonplace in most banks and manufacturing companies.

The organization-environment dichotomy and relationship is a topical area of research. Researchers have conceptualized the fuzzy nature of these constructs from the sociological, psychological, environmental and institutional points of view (Aldrich & Pfeffer, 1976; Xu et al., 2021). Yet, it is evident that the complexity and scope of the environment of organizations are dynamic, evolutionary and subject to the diverse push and pull factors in the macro and microenvironments. This is due to evolution timelines, technological innovations and the impact international and domestic institutional environments have on OCs. Organizations that have the capacity are witnessing increased boundary-spanning activities and transforming into learning organizations to sustain a positive OC climate and mitigate negative externalities (Schotter et al., 2017).

However using the resource dependency model, it is noted that developing countries in Africa experience diverse forms of environmental constraints and contingencies. institutional system weaknesses and unstable macroeconomic policies (Hillman et al., 2009). The impact of these limitations and institutional voids in developing countries and emerging markets has an indirect effect on their OCs when compared with western contexts. Surviving and maintaining a healthy OCs requires a dynamic management style that might defy rational economic logic but rather be more dependent on situational analysis, positioning, resources, corporate culture, power and political alliances.

Moreover, Swaminathan & Wade (2016) affirms that organizations exert pressure on their institutional environment and sometimes succeed in influencing policy changes to favour their market position. Since there can be no void in nature, institutional voids present opportunities and limitations which are exploited by different formal and informal stakeholders and economic agents (Doh et al., 2017). The decision of Twitter Inc. to locate its first African office in Ghana reinforces how the institutional void hindered the choice of choosing Nigeria despite its economic position in Africa.

As Ahlstrom et al. (2020) observed, organizational leaders and managers must shift their management ideologies and decision-making spheres beyond local contexts to incorporate global institutional change frameworks, disruptive technologies, global international politics and economies. The boundaries and effects of negative OCs in a related industry in a continent might also manifest in a related company in another continent, if the situation is not well managed. Information and communication continue to spread at the speed of light through social media platforms, and these organizations can take steps to shape the institutional environment in which they are embedded.

Context

Context represents the situational factor, which influences the interactions, intentions, actions and behaviours that manifest as soft and hard intervening variables in OCs in organizations. Osher et al. (2020) hypothesized how context shapes human behaviour and personalities in social contexts. Johns (2006) defines context as “situational opportunities and constraints that affect the occurrence and meaning of organizational behaviour as well as functional relationships between variables”. When the studies on OCs are reviewed, it is noted that researchers have examined this construct in specific contexts, industries and countries. For example, OC studies in western countries (Olsson et al., 2019), Asia (Zhang & Liu, 2010) and Africa (Adeniji, 2011) show divergence of findings related to the context effect and methodology of research.

Evidence from extant literature in the contexts of developing and developed countries reveal diverse factors that influence the dynamics, perception and outcomes of organizational climate among employees. Moslehpour et al. (2018) and Masanja and Mwasongwe’s (n.d.) studies in a public organization in two developing countries (Mongolia and Tanzania) indicated that the nexus between leadership, employee work styles and relationships are determinants of nature of job satisfaction and resultant OC.

In similar studies among public sector in Kisii, Kenya, the findings show that the mission and organizational objectives, type of rewards and conflict management channels had significant relationship with job satisfaction (Gaunya, 2016). The preponderance of studies related to nurses is common in both developed and developing countries with different findings due to contextual dimensions and area of research. For instance, Gershon et al.’s (2007) systematic review of the effect of OC on nurses in the USA reiterates the importance of the triadic effect of leadership styles, resources and availability of required manpower on OC. Their findings reveal that nurses suffer from harmful health and occupational issues that cause burnout and musculoskeletal problems depending on the perception of OC. Inferences from this study suggest that the likelihood of nurses working long hours and several shifts might be related to lack of availability of required labour and prevailing work climate. Similarly, in the UK, it was established that that some of the underlying causes of negative organization climate among nurses in different hospitals is due to the fragmented team structure, poor inter-departmental integration and weak climate, where each unit and department seem to be more concerned about their own roles and unit rather than the organization (Dawson et al., 2008).

In other contexts, findings in Mohamed & Gaballah’s (2018) study in Egyptian hospitals indicated that OC is a function of individual nurses’ perception of the work climate, performance and competency levels. The study stressed the need for hospital administrators to create a conducive work climate that values the nurses and fosters creativity and collaborative teamwork. Empirical evidence from a comparative study in Egypt and Saudi Arabia asserted that there is no uniformity in organizational climate and work-life quality outcomes due to variations in the culture, personality types and work environments (Mohammed & Mohammed, 2021). The import of taking cognizance of the similarity in organizational culture instead of the national culture was established in the investigation of OC in joint ventures in Russia (Fey & Beamish, 2001). The study shows that as companies and organizations interact and engage in international business, organizational climate similarities and dissimilarities are bound to have effects on work setting dynamics and culture rather than the national cultures of the different countries. Studies relating to OC should always consider the managerial dynamics and role as direct and indirect determinants of positive and negative outcomes (Obeng et al., 2021).

Moreover, the specificity of sub-context manifests in organizations in the same business area, industrial zones and country due to the differences in structure, culture, organizational goals and objectives, resources, technology level, life cycle, age, activities and types of ownership. Martin & Cullen’s (2006) meta-analysis of organizational context as an antecedent of ethical climate in different settings confirms the divergence in outcomes across different contexts. The internal context of organizations influences the level of employee motivation, attitude, perception and work performance. It is important to consider contextual factors in cross-cultural studies and adapt questionnaires and survey items to the context of usage. For example, scholars have adapted and modified different versions of Litwin (1968) questionnaire in conducting studies in different environments. Nwangwu et al. (2021) used a simplified model of the questionnaire among public university librarians in Nigeria. In addition, the import of social contexts was investigated in the entrepreneurial climate of University Students in Germany (Bergmann et al., 2018). Their findings suggest that personality characteristics and contexts influence climate perceptions. There is also evidence that context is better understood when the time element is considered and investigated due to organizational, social and environmental evolution that occurs as a result of economic growth, development, innovations and behavioural changes. For example, the OCs of organizations in developing countries during colonization or early years of independence evolved with growth.

Also, classical theories and studies on organizational climate by researchers such as Schneider (1972) and Johns (2018) have different contextual variations. They affirmed that delineating the context of studies could reveal situational moderators that are novel, divergent and comprehend the practicality of the research. They proposed integrating the contextual elements in OCs and organizational behavioural studies is necessary to fully understand how context shapes research outcomes and behaviours. The system elements of context are infinite, and scholarly evidence attests to the importance of considering context in research studies (Baker & Welter, 2020; Banwo & Momoh, 2022; Welter & Baker, 2021) (see Fig. 3).

Fig. 3.

Author’s context system

Technology and innovation

There is growing evidence that the level of technology and innovation used in an organization can enhance productivity, competitive advantage and organizational performance (Olsson et al., 2019; Yunis et al., 2018). Organizations across the globe have relied on technological platforms and adopted technology-based innovations to manage the vicissitudes and flurry of disruptions in the aftermath of the outbreak of the global pandemic in 2020 (Zheng & Walsham, 2021).

The global disruptive changes had different effects and costs on organizations in different contexts due to social distancing, health regulatory procedures, lock-downs and fear that permeated most organizations (Kniffin et al., 2021).

Nevertheless, a common thread in all contexts is the global reliance and usage of technology-based platforms in conducting business. For example, thermal thermometers, video-meeting applications and online learning platforms suddenly became the new normal in organizations. Work from home models, virtual meetings and workspaces are redefining the OCs of virtual teams and organizations. Contextual opportunities and constraints served as enablers or inhibitors of innovative strategies in the pursuit of organizational survival (Brem et al., 2021). However, reliance on technology could be a blessing in organizations, if it reduces the stress level and improves the productivity of employees or a curse, if it leads to unfavourable outcomes and does not fit the local context.

Johns (2018) noted that the technology context is multi-faceted and requires context deployment. For example, organizations in developing countries might acquire machinery; operating software and deploy automated processes to improve service efficiency, brand image and resource maximization and still experience failures, occupational hazards and poor organizational climate. These may be due to many situational factors such as culture, adaptability of the technology to the local context, competence level and employees’ perception of the innovations and technology.

Employees’ perception of technology and innovations that are aimed to improve their productivity level may be construed to lead to job losses and threaten their careers (Rodriguez-Bustelo et al., 2020). Scholars also advocate the need to match and adapt the technology to the local dimensions supported by local technical capacity training and development (Chen et al., 2016). For example, the Chinese high-speed railway coaches in most African countries take cognizance of the local context, language and culture. Technology is still subject to human manipulations and errors in judgment in different contexts. Using universities and organizations in Africa as a reference point, adjusting to the technology disruptive changes of Coronavirus Disease of 2019 (COVID-19) has met with some level of resistance mainly due to the high cost of data, the internet quality and poor infrastructural support facilities.

Ownership, goals and objectives, and corporate governance

OCs do not exist in a vacuum, rather it is a function of employees’ and clients’ perceptions of the corporate governance style and objectives over a period and at different levels of management. It is possible that the prevailing OCs will be different from the ideals in the vision and mission statement and manifests in the effect of the decisions and actions of the management and key officers. In most developing countries, ownership of enterprises is dependent on an existing economic model, clusters, ease of entry and exit and government policies (Payne & Mansfield, 1973). This suggests that the OCs in a one-man business (sole proprietorship), informal and family-owned enterprises will differ when compared to public limited liability organizations or government organizations. It is noted that the common factor in the type of ownership domains is leadership behaviour and extant literature attests to its impact on the organization.

Maamari & Majdalani (2017) findings confirm that the leader’s emotional intelligence and style have a direct impact on employees’ perceptions of OC. It is also important to understand the underlying factors inherent in the organizational pursuit of its goals and objectives and how these influence leadership behaviour. Whichever dimensions and models researchers use to operationalize the interplay of leadership on OC, the contexts and outcomes would continue to vary due to locus of control, the disparity in intentions and actions and the complex motives of stakeholders.

Arslan & Alqatan (2020) and Child & Rodrigues (2003) shed light on how corporate governance practices are shaped by institutions and new organizational forms. For instance, the reforms in the corporate governance regulations in Nigeria has a positive effect on public organizational survival and are designed to avoid corporate governance crises that were rampant in the banking industry and other industries. Despite the progress made in some of the sectors, Inyang (2017) noted there are still challenges in the timing and implementation of ethical regulatory practices in some organizations. The actions and decisions of the board of directors and management can either preserve the organizational values and culture or harm the OCs.

Organizational change and life cycle

Research regarding organizational change has a long history in industrial psychology and organizational studies (Bennis, 1965; Kotter, 2012). The extant literature shows the complexity and non-uniformity in the organization change stages and models. For instance, the change models among others advocate best-practice templates for implementing organizational change. Regardless of the context and perspective, it is evident that instinctive human behaviour outcomes such as resistance, fear and apathy manifest at the individual level of analysis and behaviour modification is sought through the communication process, verbal and non-verbal cues of the management and supervisors. Planned organizational change and disruptive organizational change are two broad domains that are likely to determine the psychological and OCs of employees (Gilbert & Bower, 2002; Robertson et al., 1993). Global trends such as protectionism, exchange rate volatility, pandemic, social uprising, the spate of technological innovation and rising unemployment levels call for a renewed focus on the impact of external disruptive changes (Posel et al., 2021). For instance, the effect of the global pandemic in 2020 created an unexpected level of disruptions, uncertainty, job losses and fears in most organizations.

Employees and organizations’ work climates are forced to adjust and adapt to the constant influences of the pandemic with the resultant emergence of new normal practices in organizations. The survival instincts of human beings are shaping the dynamics of virtual OCs and norms in different environments (Rodríguez et al., 2018). It is logical to assert that organizations and employees are faced with challenges in the survival of the fittest in their social contexts. Moreover, the dimensions and outcomes of the organizational life cycle are changing, and most studies have investigated the connection to organizational culture. Adizes (1979) asserted organizations’ behaviours are closely related to the stage of their life cycle. As reported by Gupta & Chin (1993), the organizational environment has a positive relationship with the strategies organizations adopt in the life cycle.

Though scholars presumed that organizations at the initial stage of the life cycle face immense pressures from their environment, recent technological innovations and business models of start-ups have continued to attract funding and support from their external environment. The OCs in these organizations are dynamic and constantly changing compared to traditional organizational models. For instance, the OC climate in fintech companies in Africa differs from employees’ perception of OCs in the traditional banking organization.

Physical conditions

The importance of the physical workplace environment impact on OCs has been studied extensively (Stone et al., 2005). Organizations in developed and developing countries operate in diverse work environments with physical structures that depend on the organization’s size, location, type of employees, management orientation and resources. These variables are major determinants of work climates, productivity, work satisfaction and employee performance. It is pertinent to consider the type of physical conditions and design when investigating the direct and remote causes of poor OC (Massoudi & Hamdi 2017). For example, lighting, workspace design, safety precautions, ventilation, aesthetics and conduciveness of the environment influence the behavioural disposition of employees at different levels.

Organizations by default are responsible for adequacies and inadequacies in the physical environment and the resultant perceptions that develop in their workforce. For instance, it is commonplace to see toilets, canteens, staff clubs and extra-curricular structures strictly divided between senior and junior staff in some companies in developing countries. The resultant perceptions of these basic physical spaces condition the behaviour outcomes of employees, attitude, interpersonal communication and level of trust in management. Studies by Vithayathawornwong et al. (2003) indicated that creativity is enhanced by the existing physical work environment.

Workplace hazards

Recent studies on safety climates in different organizations have drawn the attention of organizational psychologists, policymakers, human resources managers and decision-makers on how these dimensions interface with employees’ motivation and productivity (Zohar, 2010).

The findings of Luo (2020) on how managerial attitude, supervision, the standard of safety production infrastructure, level and frequency of safety training and knowledge determine the safety climate provide insights into understanding emerging trends in this domain. However, in developing countries, it is imperative to consider the level of access to the judiciary, level of protection and knowledge of human labour laws. Many organizations and employees need to be aware of the provisions in the labour laws and refrain from providing poor working conditions for casual and junior workers. For example, fire outbreaks, work-related accidents and health issues are prevalent in developing countries due to unemployment rates. The works of scholars in different countries confirm the high prevalence of work hazards see (Walton & Rogers, 2017).

Despite the extant research on workplace hazards, there is still a disconnect between the research findings, level of employee knowledge and rights and organizational commitment to reduce workplace hazards in some organizations due to declining resources and profit maximization objectives. Many studies confirm that workplace hazards exist in both developing and developed countries due to the existence of informal jobs, survival jobs, migration status and work permits (Alhassan & Poku, 2018; Carey et al., 2021). For example, migrants, immigrants and ethnicity influence the level of disparities and exposure to workplace hazards. It is more worrisome to note that multinational corporations and foreign-owned organizations are culpable of exposing employees in developing countries to poor work hazards and risks compared to the work standards in their countries (Baram, 2009). Employees in some of these foreign companies’ perception of the privilege and social status attached to working in these companies endure all forms of OCs and risks that arise.

Environmental stressors

Employees face multiple forms of stressors from the internal and external environments of their workplaces. In a rapidly changing world, employees at all levels and organizations both contend with the dysfunctional effect of these stressors on their health, performance, behaviours and emotions. Identifying the multiple sources of environmental stressors requires broad insight into the impact of the social, psychological, occupational and person-fit dyads that constitute stressors (Ilies et al., 2016).

Important consideration should be given to the level of contextual stressors that are peculiar in an environment and how this affects and influences work-life habits and cultures. For example, organizations and employees in urban cities in Shanghai, New York, Accra, Lagos and other places experience peculiar environmental stressors arising from their mode of transportation, living facilities, cost of living, level of pollution and population density. These extraneous factors affect the resultant OCs that arise from the interactions, transferred aggression, daily experiences and perceptions of climates in the workplace. For example, the mental and health effects of traffic congestion during rush hours in urban cities are likely to harm productivity and disposition.

Organizations in developing countries can take a cue from the flexible work-from-home practices and high level of compliance with lunch and work breaks existing in Asian and Western cultures. Drawing on the effects of the disruptive changes of COVID-19, organizations have embraced work-from-home practices and a virtual work environment provided by technological platforms to reduce environmental stressors. Nevertheless, the dark sides of these convenience initiatives are likely to lead to increases in health hazards arising from sedentary lifestyles, long sitting hours, loneliness and a decrease in interpersonal communications and relationships.

The diversity of perspectives on environmental stressors reveals the existence of negative outcomes such as high employee turnover, absenteeism, burnout, high rate of sick leaves, lower productivity, poor social life, high blood pressure and related diseases (Kurniawaty et al., 2019).

Organizational process

Organizations are systems designed for specific purposes with multiple processes essential for their survival and functioning. These processes comprise organizational artefacts, ethos, norms, workplace dynamics, structures and relationships that shape the decision-making process, communication channels, reward system, leadership, formal and informal groups, rate of changes, authority, power and locus of control. Lawler III et al. (1974) results confirmed the correlation between organizational processes and work climate, performance and job satisfaction.

It is pertinent to consider the types of organizational processes in organizations to grasp a broad understanding of how these processes, designs and soft factors influence perceptions of work climate, attitude and behaviours. For instance, the bureaucratic process in most government agencies has positive and negative effects on the work process and perceptions of OC by the public and service providers. In addition, though the decision-making process is critical to organizational success, it exists at different levels of the organization in the forms of centralization and decentralization authority vested in some positions. Popa et al. (2017) found that centralized decision-making harms the innovation climate. Researchers should always consider interpersonal relationships in the workplace, style of supervision, decision-making and risk-reward as predictors of job performance and satisfaction in investigating prevailing OCs.

Communication

Communication in an organization is multidimensional and should be considered a strategic tool that requires understanding the dynamics needed for formal and informal channels in organizations. It is essential to consider the impact of cultural undertones, right language, context, mode and timing on the information disseminated. For instance, a general letter to employees may be construed as appealing, threatening, impolite and harsh depending on many social and personal factors of the employees. It remains a double-edged sword and continues to attract the attention of scholars across all disciplines; thus, resulting in diverse forms of organizational communication climates and behavioural outcomes among employees and other stakeholders. The communication climate scope of organizations is widening, as virtual teams and workplaces become the new normal and shape the future of workplaces.

Glikson & Erez (2020) stated that, in virtual teams, a psychologically safe communication climate fosters a free flow of information and knowledge without fear of criticism and positive interpersonal relationship.

However, findings in a large service organization showed that the tenure of employees affected their perceptions of organizational and communication climate (Guzley, 1992). The communication process in organizations cannot be fully controlled by the leaders; however, they can influence the emergent communication dynamics in formal and informal groups with increased transparency, positive behavioural psychology and interactions at all levels. Where information and communication are cantered and become the special privilege of a few employees, it is likely to cause increased reliance on informal channels and a rise in miscommunication issues.

Furthermore, studies on organizational processes require in-depth contextualization of formal and informal leadership at all levels of the organization. Scholars have evinced the impact of leadership models on the different forms of OCs (Maamari & Majdalani, 2017; Teng et al., 2020). It is instructive to note that all forms of organizational processes are vested in the leadership for it to be operational and elicit the desired behaviours and competencies needed to achieve the multiple organizational goals and commitment. The leadership spectrum is complex and consists on one hand of the powers and authority vested in line managers, supervisors, unit heads and executives as contained in the organogram and informal leadership that is resident in peer influence, relationships and groups not specified in the organization structure.

Organization structure

Organizations vary in size, purpose, design and structures, and these influence the resultant dynamics and outcomes. The organization structure provides the basic framework that guides the nature of relationships, formalization, procedures and interactions with internal and external stakeholders. Several recent studies on organizational structure have used diverse approaches to investigate its relations in organizational studies. However, most studies confirm the influence and effect of organizational structures on organizational design and performance (Vugec et al., 2020; Soomro et al., 2020). New forms of organizations would continue to reflect new and unique structures that would differ from conventional organizational structures and organograms. While the organizational chart may depict in a simplified form the levels of authority, hierarchy, power and levels of communication, it represents a complex web of social influences which are based and intertwined in the soft and hard factors that impact employee’s perception of the different types of climates.

Based on the premise that structure involves division of labour, it is logical to assert that the organizational structure strongly depends on people, perceptions, place and purpose (4P). Burton and Obel (2018) noted that structure also embodies tasks, resource allocations and organizational units. Regardless of the structure, Schneider’s (1987) assertion that the people make the place, and the importance of the attraction-selection-attrition (ASA) framework is relevant to decoding the climate and culture. It is imperative to look beyond the superficial positions and chain of commands and delve into the dynamics of the ASA framework to grasp the different typologies of climates that exist. Underlying any organizational structure is the employee’s perception of the types of climates, nature of involvement in the social frameworks, and relationships that exist at different levels. For instance, junior employees may have varied perceptions of the reward system applicable to their cadre when compared to that of senior employees in the same organization.

Practical implications

This conceptual study has relevant practical implications for researchers, practitioners, entrepreneurs, stakeholders and policymakers interested in understanding how contextual environments and relationship impacts on organizational climate, productivity, performance and perceptions. First, for entrepreneurs, this study shows that it is imperative to understand the dynamics of soft and hard factors that influence employee’s perception of organizational climate in their workplaces. The perceptual and context factor in organizational climate studies underscores why entrepreneurial and organizational activities and participants vary.

Decision-makers, business owners and participants can benefit from this intrinsic knowledge and adopt policies and working conditions that can enhance the nurturing of various forms of positive organizational climates. Furthermore, context matters to entrepreneurship and organizational environment, and evidence from the literature indicates that these findings vary due to contextual dynamics in the work environments.

This underscores the need to ensure that the working conditions, environments and policies are constantly reviewed for the benefit of all economic agents. Since the nature and forms of entrepreneurship and organizations vary across context, cultures, the resultant organizational behaviour and organizational dynamics might not be similar. For instance, the forms of organizational climates in start-up entrepreneurship in Asian countries might be different from similar enterprises in European and African countries.

Additional potential managerial implications suggest that they have a critical role to play in nurturing a strong work climate, and this can be achieved through leadership commitment, work design and reduction of any policies that might have a negative impact on performance. Insights from the empirical studies confirm that the structure and dynamics of relationship among work units; departments have implications on influencing the existence of healthy and hazardous work climates. The import of this study would stimulate further research and inquiry related to organizational climate among economic agents.

Conclusions

The study contributes to the existing literature on OCs through multiple perspectives using contextual inferences from developed and developing countries. Also, this conceptual study expounds on the importance of the institutional environment and contextual nexus of OC through the perceptual lens, potential effects and impacts on employees and organizations. Insights from the use of multiple perspectives and dimensions show that an array of intertwined factors such as context, technology and innovation, ownership, goals and objectives, corporate governance, organizational change and life cycle, physical conditions, workplace hazards, environmental stressors, organizational process, communication and organization structure can influence and shape OC and the resultant group dynamics.

The variation in the nature of these factors and the differences in perceptions in contexts are some of the reasons why OC study’s findings and impact vary among employees and organizations. Furthermore, inferences from the literature suggest that organizations have many sub-climates depending upon the organizational size, context, institutional and business environment. This is supported by the findings on the influence of business environment, institutional frameworks, government policies, competing business objectives and multiple local and external factors on OC (Haar et al., 2022; Mohammad & Husted, 2019). Similar studies confirm the centrality of perception and contexts in construing OCs, since it is predicated on the behavioural dynamics of the internal and external stakeholders in the organization (Hu et al., 2022; Shanker et al., 2017).

This study posits that the dynamics of institutional environment should be considered in OC studies and policy formulations in developing countries due to the volatile business and operational environment. It has been established that the peculiar nature of institutional environments in different contexts has diverse effects on employees, organizations, policy making, decision-making process, entrepreneurship and stakeholders. Construing the institutional environments in developing and developed countries requires diverse skillsets and contextual strategies to nurture positive OC.

Furthermore, this research provides new insights and perspectives on the need to understand the dynamics and nature of prevalent climates and how this can be modified to create a conducive work environment, foster positive OC perception and productivity. Since OC exists in every enterprise, organizations, entity and business ventures, it is imperative for decision-makers to use their cognition, instincts, experiences and exposure to identify subtle cues in the internal and external environments for the purpose of nurturing healthy work climates.

The research also provides several possible research directions that are multidisciplinary. As new forms of organizational dynamics continue to emerge, the domains of OCs would remain elastic. For instance the advent and aftermath of the COVID-19 pandemic have led to the adoption of virtual workgroups, new forms of work, new nature of employee problems and local contextual forces that are likely to reshape and influence OC outcomes. For instance, the communication climate and other areas of organizations are still battling with the effects of different waves of disruptive change, virtual teams and new normal that is reshaping workplaces. Future studies can address the communication climate from different perspectives and contexts.

Since context is critical to research studies, this study specifically developed about twenty factors that make up the context system in both developed and developing countries. These factors are inter-related, and thus future studies can investigate these relationships and effects on OC and employees. In addition, the comparison of the findings and literatures in developed and developing countries reveals that there are several types of OCs and employee perceptions dependent on soft and hard factors in the business and institutional environment. Therefore, studies relating to OC should adopt a holistic and systematic approach to understand the multi-layered dynamics in their context.

Abbreviations

OC(s)

Organization climate(s)

MTN

Mobile Telecommunication Network

COVID-19

Coronavirus Disease of 2019

ASA

Attraction-selection-attrition framework

4P

People, perceptions, place, and purpose

Author contribution

AB and UC conceptualized the need for the study and jointly drafted the manuscript. BM contributed to the contextual elements and proposed the need to include to visual representation through figures in the study. AB handled the formatting and submission based on final inputs from UC and BM.

Data availability

Not applicable.

Code availability

Not applicable.

Declarations

Competing interests

The authors declare no competing interests.