This study provides empirical evidence that organisational climate is an under-utilised hotel management tool in the understanding of the relationship between employees' perceptions and hotel performance. Organisational climate dimensions derived from a factor analysis are shown to relate to two previous studies. Importantly, it has been demonstrated that a correlation exists between organisational climate, customer satisfaction and hotel performance.
Keywords: Organisational Climate, Hotels, Customer Satisfaction
Many organisational climate surveys have been conducted across a range of industries. However, no specific academic study of organisational climate in the hospitality industry has been undertaken to ascertain what effect this construct has on performance.
Organisational climate surveys are an excellent tool to supply information about employee perceptions and have been successfully used in a range of organisational settings. In the hotel industry, organisational climate research is confined to a small number of companies. Only one major international hotel chain regularly uses this research method, using the information gained as a management tool for improving its management and operational systems. This company, Mamott Hotels, was the only hotel company to be named in the Fortune Magazine's top 100 American companies (Branch 1999). Many individual enterprises within the tourism industry carry out individual employee surveys but they are seen as `one off -- identify a problem, fix it and carry on!' strategies. Many companies have achieved success and an international reputation but if they had been more cognisant of their employees' perceptions how much greater might have been their success?
The geographical area that has been used for this study includes the Gold Coast, Brisbane, Sunshine Coast and Wide Bay area of Queensland, Australia. This area accounted for 6 017 000 (77.7%) of the total Queensland visitors and 25 239 000 (62.3%) of total Queensland visitor nights in 1997 (QTTC June 1998). The survey included fourteen, four and five star hotels. This study reports on the dimensions of organisational climate and its linkages to both customer satisfaction and hotel performance.
Not only is it important to clarify the construct of organisational climate but it is also important to understand its usefulness for the service industries as a possible tool in seeking to improve the effectiveness and quality of their service provision. The importance of climate in the hospitality industry has been highlighted by a number of theorists including, Francese (1993), who examined the effect of climate in service responsiveness; Meudell and Gadd (1994) who studied climate and culture in short life organisations; and Vallen (1993) who was concerned about organisational climate and service staff burnout.
Organisational climate has much to offer in terms of its ability to explain the behaviour of people in the workplace. Ashforth put forward the view that `climate has the potential to facilitate a truly integrative science of organisational behaviour' (1985, p.838). Schneider, Gunnarson and Niles-Jolly later discussed climate in terms of:
`the atmosphere that employees perceive is created in their organisations by practices, procedures and rewards. Employees observe what happens to them (and around them) and then draw conclusions about the organisation priorities. They then set their own priorities accordingly.' (Schneider et al., 1994, p. 18)
Schneider, Brief and Guzzo (1996, p.9) argue that `sustainable organisational change is most assured when both the climate -- what the organisation's members experience -- and the culture -- what the organisation's members believe are the organisation values -- change'. Trice and Beyer (1993) define culture in terms of what it is not. It is not climate, which is measured with researcher-based data, whereas culture is measured by intense data collection of an emic (contrastive) nature.
Denison (1996) took what he considered to be a more controversial view in arguing that it is not clear that culture and climate are examining distinct organisational phenomena. However the literature refers to culture as being deeply rooted in the structure of an organisation and based upon values, beliefs and assumptions held by the members. Climate, on the other hand, tends to present social environments and measured by a broad set of dimensions and can be considered as temporary and subject to a range of controls.
The definitions and theoretical positions on climate have varied considerably between the individual theorists. This has also been the case for the dimensions of climate and its measurement. Denison (1996) argues that developing a universal set of dimensions was often the central issue of the climate researchers so that comparative studies could be made possible in different organisational settings. He compared this approach to that of the culture research that used a post-modern perspective, which examined the qualitative aspects of individual social contexts, where each culture that was examined was seen as unique and was not expected to have generalisable qualities, which had become central to the climate research.
Many of the difficulties that seem to have plagued researchers into the phenomenon of organisational climate can be traced to this desire to find generalisable factors that are applicable to all environments, to the extent that a multiplicity of dimensions, climate instruments and underlying theoretical assumptions have been produced by various researchers.
James and Jones (1976) developed the items for their climate survey instrument after an extensive review of the literature. They identified thirty-five concepts related to organisational climate. Eleven concepts related to job and role characteristics, eight related to leadership characteristics, four to work-group characteristics and twelve comprised subsystem and organisational level characteristics. Many of these had been shown to be internally consistent, psychologically meaningful measures of the work environment. For each of these concepts, between two and seven items were generated. This procedure produced a 145-item questionnaire.
Jones and James (1979) initially administered their 145-item instrument to a sample of 4 315 US Navy personnel. An exploratory Principal Components Analysis (PCA) produced a six factor (eigen values greater than unity) solution. Jones and James labelled their factors as follows:
1 Conflict and ambiguity.
2 Job challenge, importance and variety.
3 Leader facilitation and support.
4 Workgroup cooperation, friendliness, and warmth.
5 Professional and organisational esprit.
6 Job standards.
Jones and James applied their instrument to two other samples of health managers and firemen. PCA analysis in both of these cases extracted six factors with eigen values greater than unity. Analysis of the items on each factor, however, revealed only …