Journal of Global Entrepreneurship Research (2022) 12:357–369

[Link]

RESEARCH

Organizational climate–institutional environment nexus: why context

matters
Adeleke Oladapo Banwo1,2 · Uchechi Onokala2 · Bola Momoh3

Received: 21 April 2022 / Accepted: 11 September 2022 / Published online: 7 October 2022
© The Author(s), under exclusive licence to Faculty of Entrepreneurship, University of Tehran 2022

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, environ-
mental 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.

Keywords Organizational climate · Institutional environment · Group dynamics · Context · Employee perception

Introduction Organizational psychology and behaviour literature on

organizational climate and culture construct have shown
Human behaviour dynamics and decisions remain pivotal their intertwined nature in the workplace using qualitative
in shaping the organizational climate (OC) contexts. Inter- and quantitative methods. The holistic construct comprises
nal and external stakeholders communicate and react to the several facets, sub-climates and types depending on the psy-
prevailing organizational climate through diverse verbal and chological perspective of the study (Schneider et al., 2017;
non-verbal cues and actions. Thus, OC is a function of many Lavanya et al., 2020).
factors such as communication styles, culture, industry con- As a result, scholars have investigated the safety climate
text, organizational structure, group dynamics, leadership (Zohar, 2010), psychological climate (James & Sells, 1981),
style and intervening variables in the business environment service climate (Kang et al., 2018), ethical climate (Enwere-
(Schneider & Bowen, 1993; Rožman & Štrukelj, 2021). This uzor et al., 2020) and leadership climate (Fleishman, 1953)
has sustained the growing interest of researchers, practition- in different contexts.
ers and social psychologists in different contexts. Recent studies highlight the need to adopt a holistic and
systematic analysis of human resources, interpersonal rela-
* Adeleke Oladapo Banwo tionship dynamics, nature of coordination, environmental
lekebanwo@[Link] nexus, exploration and service framework in understanding
OC dimensions (Pomirleanu et al., 2022).
1
School of Business, Uganda Christian University, Mukono, Pathak et al.'s (2022) qualitative study in a developing
Uganda
country reiterated the importance of context and how entre-
2
Department of Business Adminstration, University of Lagos, preneurship planning was affected during the pandemic
Akoka, Lagos, Nigeria
context.
3
College of Public Administrations, Zhejiang University,
Hangzhou, China

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358 Journal of Global Entrepreneurship Research (2022) 12:357–369

There is a dearth of knowledge on OC dynamics in a

volatile business environment from the perspective of insti- Perceived by
tutional and organizational contexts. This study advances members of
the
that studies on OC in developing countries should recognize organizaon Acts as a
the centrality of understanding the diverse impact of human source of
Influenced by Top
behaviours, actions and perceptions at different levels of the pressure for
Management
direcng
organizations and situate this within the multilevel institu- acvity
tional business environment. The institutional and contex-
tual (situational) environments influence OC in developing
countries. This paper aims to fill this vacuum using institu- Organizaon
Behavior and Climate
tional and situational nexus to justify why OC studies should policies of
Basis for
interpreng
adopt holistic investigations of the direct and remote causes members of
the situaon
organizaons
rather than relying on unitary predictors, antecedents and
moderators.
Disnguishing it Organizaon's
The organization climate nexus from other Internal
organizaons environment
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 Fig. 1  Organization climate illustration
definition can be generalized in other contexts or used as a
template in OC studies without some modification. Which-
ever perspective is chosen, it is necessary to connect the
past studies with recent studies given the global changes in While the environment is the framework of OC, the
economies, the evolution of new disruptive technologies, behavioural dynamics of individuals and organizational
the interplay of institutions and developments in human structures invariably influence OC over a period. Behav-
psychology. ioural outcomes and perceptions are influenced by subjec-
Recent definitions operationalize OC as shared percep- tive and objective schemas that vary across demography,
tions, meanings individuals attach to the series of experi- personalities and information channels (James et al., 2008).
ences that occur in the work and construed as the social Deconstructing motives and influences of human behav-
fabric of organizational and prevailing process climates daily iour and decisions in organizations requires understanding
(Schneider et al., 2013; Kim & Park, 2020). Pritchard and and investigating latent variables such as culture, attitude,
Karasick (1973) adopted the past to present review approach group dynamics and other intangibles prevalent at different
and stated that “organizational climate is a relatively endur- strata of the organization. In this paper, the construct OC
ing quality of an organization’s internal environment dis- refers to organizational climates (OCs) due to the individual
tinguishing it from other organizations; (a) which results perception effect. In any group or organization, different sub-
from the behaviour and policies of members of the organiza- layers of climates can exist with the general dominant OCs
tion, especially top management; (b) which is perceived by (Bergmann et al., 2018).
members of the organization; (c) which serves as a basis for In most developing countries, OCs in most enterprises
interpreting the situation; and (d) acts as a source of pressure and workplaces comprise sub-climates depending on the
for directing activity”. organizational size. For instance, the OCs in small and micro
Their stratified definition reinforces critical aspects of the businesses may be uniform due to the lean or non-existent
OC construct such as the internal environment and interplay structures and business model. Whereas medium and large
of forces in the external environment (see Fig. 1). An organi- organizations with or without branches might have different
zation’s internal environment climate may have immense sub-climates and the dominant OC. Contextual influences in
effects on the internal and external stakeholders. It is impera- the local and international institutional environment continu-
tive to take cognizance of how the different dimensions of its ally exert pressures that may positively or negatively affect
employee’s perception, influences and decisions of top man- OC depending on the boundary spanning and environmental
agement, organizational behaviour, organizational policies scanning behaviours of the organization. It is important to
shape and distinguished them from other organizations and state that the nature of OCs in fragile and developing coun-
enterprises. The perceptual nature of the internal and exter- tries is subject to the vagaries of the business environment
nal context is a basis for interpreting the resultant actions, and the frequency of changes in government policies (Sib-
interactions and productivity of employees. indi & Samuel, 2019). The caveat to researchers is not to

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Journal of Global Entrepreneurship Research (2022) 12:357–369 359

generalize the OCs in developing countries as unstable and macro and micro levels compared to their counterparts in
weak due to contextual differences. Though some companies developed countries. Schein’s (1996) emphasis on time hori-
have exited Nigeria to neighbouring West-African countries zons in OC studies reinforces the importance of understand-
perhaps due to influences of the institutional environment, ing how the organizational life cycle influences and shapes
the OCs in organizations remain adaptive and resilient due prevailing organizational climates and resultant behaviour
to the emergence of new fintech companies and local con- dynamics.
textual factors. This paper uses a multi-level perspective of OCs due to
It is plausible for two employees with the same level of contextual variations in human behaviour, communication
productivity to experience different levels of OC due to and workplace dynamics. These complexities also manifest
the organizational process, in–out group dynamics, access in the subjective interpretation of OCs due to their depend-
and sources of information. Scholars have affirmed that ency on individual cognition and perceptions at the micro
the meanings and perceptions vary among employees and and macro levels (Patterson et al., 2004).
these influence their level of productivity, job satisfaction James & Jones’ (1974) situational domains of OCs to
and turnover intentions. When the phrases “meaning and developing contexts were adapted with introduction of the
perceptions’’ are analysed, it is evident that scholars agree institutional domains as a contextual framework for organi-
that communication is closely related to OCs. The domain of zational climate studies (see Fig. 2).
information processes, channels, language, timing and mode
of communication by employees, informal groups, managers Institutional environment framework
and key decision-makers spread through the organization in
different forms, which can affect the filtering and decoding Institutions exist in every society and social group; they
process or lead to cognitive dissonance issues. Studying the provide frameworks and constraints to guide the acceptable
effect of communication on OCs requires a comprehensive norms, behaviours and attitudes of people in the environ-
analysis of this construct and an investigation of the for- ment. For example, traditional institutions use tangible and
mal, informal and non-verbal communication (Crampton intangible mechanisms to diffuse cultural values.
et al., 1998; Neill et al., 2019). The institutional environment, economic history, the
The business environment in developing countries is prevailing level of social-economic development, living
dependent on the institutional frameworks, government poli- standards, location and level of infrastructural develop-
cies, competing business objectives and a myriad of local ment constitute soft and hard factors in OC (Scott, 2005). In
and external intervening factors that exert influences on the developing countries, the dimensions of these institutional
prevailing OCs and culture (Mohammad & Husted, 2019). frameworks are a function of time, human behaviours and
Using a system perspective, workplaces, enterprises and technological advancements.
organizations in these contexts exhibit different subsets of Swaminathan & Wade’s (2016) definition of the institu-
the national organizational climate and culture. These con- tional environment “is composed of regulations, customs
texts are subjected to volatile business environments at the and taken-for-granted norms prevalent in states, societies,

Fig. 2  Author’s conceptual

framework Perception
Institutional Environment Organizational process

Environmental Stressors Workplace Hazard

Technology and Organizational Structure

Innovation
Organizational Climates
Physical Conditions

Organizational Change Communication

And Life-Cycle

Ownership, Goals and

Corporate Governance

Context

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360 Journal of Global Entrepreneurship Research (2022) 12:357–369

professions, and organizations, which impinge upon and understood at different levels and in developing countries;
shape organizational behaviour and outcomes” resonates some of these norms are resident in informal structures and
with developing countries’ context. Their definition attempts institutions that are not clear but could be sources of power
to provide a comprehensive framework relevant to OC stud- and prevalent due to business traditions, culture and local
ies. As noted, above managers and organizational leaders social system. It is imperative to state that in developing
need to be conversant with the multiple regulations and countries, some of these taken-for-granted norms are con-
customs that reside in their formal and informal business textual, unclear and key determinants of the type of OCs.
environment. For example, the regulations and customs in Importantly, the different labour forces available within
Nigeria vary across context; the business climate of a com- different contexts, nature of employment, work-life balance,
pany in Lagos State differs largely from a similar organiza- salaries and levels of poverty shape the OCs at different lev-
tion situated in Ogun State or Kano State. els of the organization. The resultant behaviour outcomes
Organizations continuously learn to navigate and manage and group dynamics are strengthened or weakened by the
complex regulations at the national, state and local govern- effectiveness of the institutional systems. For example, cas-
ment level and informal environmental regulations (Aliev ual workers and contract workers have become common-
& Sigov, 2017). Having met the formal regulations does not place in most banks and manufacturing companies.
exclude organizations from the informal regulations in their The organization-environment dichotomy and relation-
business environment. Many successful organizations rec- ship is a topical area of research. Researchers have conceptu-
ognize the importance of the informal regulations, culture alized the fuzzy nature of these constructs from the sociolog-
and customs peculiar to their environment and how this can ical, psychological, environmental and institutional points
affect OCs. Failure to recognize some of the conventional, of view (Aldrich & Pfeffer, 1976; Xu et al., 2021). Yet, it is
unconventional regulations and customs led to business evident that the complexity and scope of the environment of
disruptions, fines and penalties and loss of market share. organizations are dynamic, evolutionary and subject to the
Recent examples include the Mobile Telecommunications diverse push and pull factors in the macro and microenvi-
Network’s (MTN) fine in Nigeria, community-induced dis- ronments. This is due to evolution timelines, technological
ruption of the business of oil companies and the Taxify/ innovations and the impact international and domestic insti-
Bolt Ride-sharing app (Analytica, 2015). When the effects tutional environments have on OCs. Organizations that have
are investigated at the micro-level, employees suffer from the capacity are witnessing increased boundary-spanning
the resultant OCs that arise from the decisions and policies activities and transforming into learning organizations to
at the macro level. sustain a positive OC climate and mitigate negative exter-
Contextualizing customs should encompass the broad nalities (Schotter et al., 2017).
spheres of religion, culture, traditions, public holidays, dress However using the resource dependency model, it is noted
mode and acceptable language and medium of communica- that developing countries in Africa experience diverse forms
tion. It is instructive to note that different facets of religion of environmental constraints and contingencies. institutional
and customs in developing countries have direct and indirect system weaknesses and unstable macroeconomic policies
effects on the prevailing OCs. For example, while Sunday (Hillman et al., 2009). The impact of these limitations and
is a non-working day in most companies in most African institutional voids in developing countries and emerging
Countries, fixing a crucial meeting or organizational activ- markets has an indirect effect on their OCs when compared
ity on Fridays may be considered as insensitivity due to the with western contexts. Surviving and maintaining a healthy
prevailing customs of Friday Jumat Prayers. OCs requires a dynamic management style that might defy
Regardless of the approaches adopted, scholars have rational economic logic but rather be more dependent on
agreed that norms are prevalent in all contexts and recog- situational analysis, positioning, resources, corporate cul-
nize how personal norms, societal norms and organizational ture, power and political alliances.
norms shape behaviours and organizational climate (Borry, Moreover, Swaminathan & Wade (2016) affirms that
2017; Legros & Cislaghi, 2020). A typical global example organizations exert pressure on their institutional environ-
is the disruptive changes occasioned by the outbreak of ment and sometimes succeed in influencing policy changes
COVID-19 in 2020. This led to the re-emergence and popu- to favour their market position. Since there can be no void in
larization of the ‘New Normal’ which continually reshapes nature, institutional voids present opportunities and limita-
and redefines prevailing norms at all levels of society (Ahl- tions which are exploited by different formal and informal
strom et al., 2020). This disruptive change affected the entire stakeholders and economic agents (Doh et al., 2017). The
institutional framework globally and affects OCs in diverse decision of Twitter Inc. to locate its first African office in
ways depending on the countries. Ghana reinforces how the institutional void hindered the
Greenwood et al. (2014) posited that “taken for choice of choosing Nigeria despite its economic position
granted norms” in the institutional environment should be in Africa.

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Journal of Global Entrepreneurship Research (2022) 12:357–369 361

As Ahlstrom et al. (2020) observed, organizational lead- this study suggest that the likelihood of nurses working long
ers and managers must shift their management ideologies hours and several shifts might be related to lack of availabil-
and decision-making spheres beyond local contexts to incor- ity of required labour and prevailing work climate. Similarly,
porate global institutional change frameworks, disruptive in the UK, it was established that that some of the underlying
technologies, global international politics and economies. causes of negative organization climate among nurses in dif-
The boundaries and effects of negative OCs in a related ferent hospitals is due to the fragmented team structure, poor
industry in a continent might also manifest in a related com- inter-departmental integration and weak climate, where each
pany in another continent, if the situation is not well man- unit and department seem to be more concerned about their
aged. Information and communication continue to spread own roles and unit rather than the organization (Dawson
at the speed of light through social media platforms, and et al., 2008).
these organizations can take steps to shape the institutional In other contexts, findings in Mohamed & Gaballah’s
environment in which they are embedded. (2018) study in Egyptian hospitals indicated that OC is a
function of individual nurses’ perception of the work cli-
Context mate, performance and competency levels. The study
stressed the need for hospital administrators to create a con-
Context represents the situational factor, which influences ducive work climate that values the nurses and fosters crea-
the interactions, intentions, actions and behaviours that tivity and collaborative teamwork. Empirical evidence from
manifest as soft and hard intervening variables in OCs in a comparative study in Egypt and Saudi Arabia asserted that
organizations. Osher et al. (2020) hypothesized how context there is no uniformity in organizational climate and work-life
shapes human behaviour and personalities in social contexts. quality outcomes due to variations in the culture, personality
Johns (2006) defines context as “situational opportunities types and work environments (Mohammed & Mohammed,
and constraints that affect the occurrence and meaning of 2021). The import of taking cognizance of the similarity in
organizational behaviour as well as functional relationships organizational culture instead of the national culture was
between variables”. When the studies on OCs are reviewed, established in the investigation of OC in joint ventures in
it is noted that researchers have examined this construct in Russia (Fey & Beamish, 2001). The study shows that as
specific contexts, industries and countries. For example, companies and organizations interact and engage in inter-
OC studies in western countries (Olsson et al., 2019), Asia national business, organizational climate similarities and
(Zhang & Liu, 2010) and Africa (Adeniji, 2011) show diver- dissimilarities are bound to have effects on work setting
gence of findings related to the context effect and methodol- dynamics and culture rather than the national cultures of
ogy of research. the different countries. Studies relating to OC should always
Evidence from extant literature in the contexts of devel- consider the managerial dynamics and role as direct and
oping and developed countries reveal diverse factors that indirect determinants of positive and negative outcomes
influence the dynamics, perception and outcomes of organi- (Obeng et al., 2021).
zational climate among employees. Moslehpour et al. (2018) Moreover, the specificity of sub-context manifests in
and Masanja and Mwasongwe’s (n.d.) studies in a public organizations in the same business area, industrial zones and
organization in two developing countries (Mongolia and country due to the differences in structure, culture, organi-
Tanzania) indicated that the nexus between leadership, zational goals and objectives, resources, technology level,
employee work styles and relationships are determinants of life cycle, age, activities and types of ownership. Martin &
nature of job satisfaction and resultant OC. Cullen’s (2006) meta-analysis of organizational context as
In similar studies among public sector in Kisii, Kenya, an antecedent of ethical climate in different settings con-
the findings show that the mission and organizational objec- firms the divergence in outcomes across different contexts.
tives, type of rewards and conflict management channels had The internal context of organizations influences the level of
significant relationship with job satisfaction (Gaunya, 2016). employee motivation, attitude, perception and work perfor-
The preponderance of studies related to nurses is common mance. It is important to consider contextual factors in cross-
in both developed and developing countries with different cultural studies and adapt questionnaires and survey items to
findings due to contextual dimensions and area of research. the context of usage. For example, scholars have adapted and
For instance, Gershon et al.’s (2007) systematic review of modified different versions of Litwin (1968) questionnaire
the effect of OC on nurses in the USA reiterates the impor- in conducting studies in different environments. Nwangwu
tance of the triadic effect of leadership styles, resources and et al. (2021) used a simplified model of the questionnaire
availability of required manpower on OC. Their findings among public university librarians in Nigeria. In addition,
reveal that nurses suffer from harmful health and occupa- the import of social contexts was investigated in the entre-
tional issues that cause burnout and musculoskeletal prob- preneurial climate of University Students in Germany (Berg-
lems depending on the perception of OC. Inferences from mann et al., 2018). Their findings suggest that personality

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362 Journal of Global Entrepreneurship Research (2022) 12:357–369

characteristics and contexts influence climate perceptions. flurry of disruptions in the aftermath of the outbreak of the
There is also evidence that context is better understood when global pandemic in 2020 (Zheng & Walsham, 2021).
the time element is considered and investigated due to organ- The global disruptive changes had different effects and
izational, social and environmental evolution that occurs as costs on organizations in different contexts due to social
a result of economic growth, development, innovations and distancing, health regulatory procedures, lock-downs and
behavioural changes. For example, the OCs of organizations fear that permeated most organizations (Kniffin et al., 2021).
in developing countries during colonization or early years of Nevertheless, a common thread in all contexts is the
independence evolved with growth. global reliance and usage of technology-based platforms in
Also, classical theories and studies on organizational conducting business. For example, thermal thermometers,
climate by researchers such as Schneider (1972) and Johns video-meeting applications and online learning platforms
(2018) have different contextual variations. They affirmed suddenly became the new normal in organizations. Work
that delineating the context of studies could reveal situa- from home models, virtual meetings and workspaces are
tional moderators that are novel, divergent and comprehend redefining the OCs of virtual teams and organizations. Con-
the practicality of the research. They proposed integrating textual opportunities and constraints served as enablers or
the contextual elements in OCs and organizational behav- inhibitors of innovative strategies in the pursuit of organi-
ioural studies is necessary to fully understand how context zational survival (Brem et al., 2021). However, reliance on
shapes research outcomes and behaviours. The system ele- technology could be a blessing in organizations, if it reduces
ments of context are infinite, and scholarly evidence attests the stress level and improves the productivity of employees
to the importance of considering context in research studies or a curse, if it leads to unfavourable outcomes and does not
(Baker & Welter, 2020; Banwo & Momoh, 2022; Welter & fit the local context.
Baker, 2021) (see Fig. 3). Johns (2018) noted that the technology context is multi-
faceted and requires context deployment. For example,
Technology and innovation organizations in developing countries might acquire machin-
ery; operating software and deploy automated processes to
There is growing evidence that the level of technology and improve service efficiency, brand image and resource maxi-
innovation used in an organization can enhance productivity, mization and still experience failures, occupational hazards
competitive advantage and organizational performance (Ols- and poor organizational climate. These may be due to many
son et al., 2019; Yunis et al., 2018). Organizations across the situational factors such as culture, adaptability of the tech-
globe have relied on technological platforms and adopted nology to the local context, competence level and employ-
technology-based innovations to manage the vicissitudes and ees’ 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
Situaonal need to match and adapt the technology to the local dimen-
factors,
sions supported by local technical capacity training and
Time. Influences
Constraints,
Outcomes and development (Chen et al., 2016). For example, the Chinese
Opportunies.
Percepons. high-speed railway coaches in most African countries take
cognizance of the local context, language and culture. Tech-
nology is still subject to human manipulations and errors
Context
Subject of
Broad
Changes, in judgment in different contexts. Using universities and
Narrow
Responds to
Smuli.
configuraons organizations in Africa as a reference point, adjusting to

System
the technology disruptive changes of Coronavirus Disease
of 2019 (COVID-19) has met with some level of resistance
Influence level
of Casuality , Resources mainly due to the high cost of data, the internet quality and
Antecedents, Organizaonal poor infrastructural support facilities.
Climate
Moderators
Cognive
Individual, Levels Ownership, goals and objectives, and corporate
Organizaonal
Level Behavors Nature of governance
Labor Supply

OCs do not exist in a vacuum, rather it is a function of

employees’ and clients’ perceptions of the corporate gov-
Fig. 3  Author’s context system ernance style and objectives over a period and at different

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Journal of Global Entrepreneurship Research (2022) 12:357–369 363

levels of management. It is possible that the prevailing OCs employees (Gilbert & Bower, 2002; Robertson et al., 1993).
will be different from the ideals in the vision and mission Global trends such as protectionism, exchange rate volatility,
statement and manifests in the effect of the decisions and pandemic, social uprising, the spate of technological innova-
actions of the management and key officers. In most devel- tion and rising unemployment levels call for a renewed focus
oping countries, ownership of enterprises is dependent on on the impact of external disruptive changes (Posel et al.,
an existing economic model, clusters, ease of entry and exit 2021). For instance, the effect of the global pandemic in
and government policies (Payne & Mansfield, 1973). This 2020 created an unexpected level of disruptions, uncertainty,
suggests that the OCs in a one-man business (sole propri- job losses and fears in most organizations.
etorship), informal and family-owned enterprises will differ Employees and organizations’ work climates are forced to
when compared to public limited liability organizations or adjust and adapt to the constant influences of the pandemic
government organizations. It is noted that the common fac- with the resultant emergence of new normal practices in
tor in the type of ownership domains is leadership behaviour organizations. The survival instincts of human beings are
and extant literature attests to its impact on the organization. shaping the dynamics of virtual OCs and norms in different
Maamari & Majdalani (2017) findings confirm that the environments (Rodríguez et al., 2018). It is logical to assert
leader’s emotional intelligence and style have a direct impact that organizations and employees are faced with challenges
on employees’ perceptions of OC. It is also important to in the survival of the fittest in their social contexts. Moreo-
understand the underlying factors inherent in the organi- ver, the dimensions and outcomes of the organizational life
zational pursuit of its goals and objectives and how these cycle are changing, and most studies have investigated the
influence leadership behaviour. Whichever dimensions and connection to organizational culture. Adizes (1979) asserted
models researchers use to operationalize the interplay of organizations’ behaviours are closely related to the stage of
leadership on OC, the contexts and outcomes would con- their life cycle. As reported by Gupta & Chin (1993), the
tinue to vary due to locus of control, the disparity in inten- organizational environment has a positive relationship with
tions and actions and the complex motives of stakeholders. the strategies organizations adopt in the life cycle.
Arslan & Alqatan (2020) and Child & Rodrigues (2003) Though scholars presumed that organizations at the initial
shed light on how corporate governance practices are shaped stage of the life cycle face immense pressures from their
by institutions and new organizational forms. For instance, environment, recent technological innovations and busi-
the reforms in the corporate governance regulations in Nige- ness models of start-ups have continued to attract funding
ria has a positive effect on public organizational survival and support from their external environment. The OCs in
and are designed to avoid corporate governance crises that these organizations are dynamic and constantly changing
were rampant in the banking industry and other industries. compared to traditional organizational models. For instance,
Despite the progress made in some of the sectors, Inyang the OC climate in fintech companies in Africa differs from
(2017) noted there are still challenges in the timing and employees’ perception of OCs in the traditional banking
implementation of ethical regulatory practices in some organization.
organizations. The actions and decisions of the board of
directors and management can either preserve the organiza- Physical conditions
tional values and culture or harm the OCs.
The importance of the physical workplace environment
Organizational change and life cycle impact on OCs has been studied extensively (Stone et al.,
2005). Organizations in developed and developing coun-
Research regarding organizational change has a long history tries operate in diverse work environments with physical
in industrial psychology and organizational studies (Bennis, structures that depend on the organization’s size, location,
1965; Kotter, 2012). The extant literature shows the com- type of employees, management orientation and resources.
plexity and non-uniformity in the organization change stages These variables are major determinants of work climates,
and models. For instance, the change models among others productivity, work satisfaction and employee performance.
advocate best-practice templates for implementing organi- It is pertinent to consider the type of physical conditions and
zational change. Regardless of the context and perspective, design when investigating the direct and remote causes of
it is evident that instinctive human behaviour outcomes such poor OC (Massoudi & Hamdi 2017). For example, lighting,
as resistance, fear and apathy manifest at the individual level workspace design, safety precautions, ventilation, aesthetics
of analysis and behaviour modification is sought through the and conduciveness of the environment influence the behav-
communication process, verbal and non-verbal cues of the ioural disposition of employees at different levels.
management and supervisors. Planned organizational change Organizations by default are responsible for adequa-
and disruptive organizational change are two broad domains cies and inadequacies in the physical environment and
that are likely to determine the psychological and OCs of the resultant perceptions that develop in their workforce.

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For instance, it is commonplace to see toilets, canteens, Environmental stressors

staff clubs and extra-curricular structures strictly divided
between senior and junior staff in some companies in Employees face multiple forms of stressors from the internal
developing countries. The resultant perceptions of these and external environments of their workplaces. In a rapidly
basic physical spaces condition the behaviour outcomes changing world, employees at all levels and organizations
of employees, attitude, interpersonal communication and both contend with the dysfunctional effect of these stress-
level of trust in management. Studies by Vithayathaworn- ors on their health, performance, behaviours and emotions.
wong et al. (2003) indicated that creativity is enhanced by Identifying the multiple sources of environmental stressors
the existing physical work environment. requires broad insight into the impact of the social, psy-
chological, occupational and person-fit dyads that constitute
stressors (Ilies et al., 2016).
Workplace hazards Important consideration should be given to the level of
contextual stressors that are peculiar in an environment and
Recent studies on safety climates in different organizations how this affects and influences work-life habits and cultures.
have drawn the attention of organizational psychologists, For example, organizations and employees in urban cities in
policymakers, human resources managers and decision- Shanghai, New York, Accra, Lagos and other places expe-
makers on how these dimensions interface with employ- rience peculiar environmental stressors arising from their
ees’ motivation and productivity (Zohar, 2010). mode of transportation, living facilities, cost of living, level
The findings of Luo (2020) on how managerial attitude, of pollution and population density. These extraneous fac-
supervision, the standard of safety production infrastruc- tors affect the resultant OCs that arise from the interactions,
ture, level and frequency of safety training and knowl- transferred aggression, daily experiences and perceptions
edge determine the safety climate provide insights into of climates in the workplace. For example, the mental and
understanding emerging trends in this domain. However, health effects of traffic congestion during rush hours in urban
in developing countries, it is imperative to consider the cities are likely to harm productivity and disposition.
level of access to the judiciary, level of protection and Organizations in developing countries can take a cue
knowledge of human labour laws. Many organizations and from the flexible work-from-home practices and high level
employees need to be aware of the provisions in the labour of compliance with lunch and work breaks existing in Asian
laws and refrain from providing poor working conditions and Western cultures. Drawing on the effects of the disrup-
for casual and junior workers. For example, fire outbreaks, tive changes of COVID-19, organizations have embraced
work-related accidents and health issues are prevalent in work-from-home practices and a virtual work environment
developing countries due to unemployment rates. The provided by technological platforms to reduce environmental
works of scholars in different countries confirm the high stressors. Nevertheless, the dark sides of these convenience
prevalence of work hazards see (Walton & Rogers, 2017). initiatives are likely to lead to increases in health hazards
Despite the extant research on workplace hazards, there arising from sedentary lifestyles, long sitting hours, loneli-
is still a disconnect between the research findings, level of ness and a decrease in interpersonal communications and
employee knowledge and rights and organizational com- relationships.
mitment to reduce workplace hazards in some organiza- The diversity of perspectives on environmental stress-
tions due to declining resources and profit maximization ors reveals the existence of negative outcomes such as high
objectives. Many studies confirm that workplace hazards employee turnover, absenteeism, burnout, high rate of sick
exist in both developing and developed countries due to leaves, lower productivity, poor social life, high blood pres-
the existence of informal jobs, survival jobs, migration sure and related diseases (Kurniawaty et al., 2019).
status and work permits (Alhassan & Poku, 2018; Carey
et al., 2021). For example, migrants, immigrants and
ethnicity influence the level of disparities and exposure Organizational process
to workplace hazards. It is more worrisome to note that
multinational corporations and foreign-owned organiza- Organizations are systems designed for specific purposes
tions are culpable of exposing employees in developing with multiple processes essential for their survival and
countries to poor work hazards and risks compared to the functioning. These processes comprise organizational arte-
work standards in their countries (Baram, 2009). Employ- facts, ethos, norms, workplace dynamics, structures and
ees in some of these foreign companies’ perception of the relationships that shape the decision-making process, com-
privilege and social status attached to working in these munication channels, reward system, leadership, formal
companies endure all forms of OCs and risks that arise. and informal groups, rate of changes, authority, power and
locus of control. Lawler III et al. (1974) results confirmed

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Journal of Global Entrepreneurship Research (2022) 12:357–369 365

the correlation between organizational processes and work Furthermore, studies on organizational processes require
climate, performance and job satisfaction. in-depth contextualization of formal and informal leader-
It is pertinent to consider the types of organizational ship at all levels of the organization. Scholars have evinced
processes in organizations to grasp a broad understanding the impact of leadership models on the different forms of
of how these processes, designs and soft factors influence OCs (Maamari & Majdalani, 2017; Teng et al., 2020). It
perceptions of work climate, attitude and behaviours. For is instructive to note that all forms of organizational pro-
instance, the bureaucratic process in most government agen- cesses are vested in the leadership for it to be operational
cies has positive and negative effects on the work process and elicit the desired behaviours and competencies needed
and perceptions of OC by the public and service providers. to achieve the multiple organizational goals and commit-
In addition, though the decision-making process is critical ment. The leadership spectrum is complex and consists on
to organizational success, it exists at different levels of the one hand of the powers and authority vested in line manag-
organization in the forms of centralization and decentraliza- ers, supervisors, unit heads and executives as contained in
tion authority vested in some positions. Popa et al. (2017) the organogram and informal leadership that is resident in
found that centralized decision-making harms the innova- peer influence, relationships and groups not specified in the
tion climate. Researchers should always consider interper- organization structure.
sonal relationships in the workplace, style of supervision,
decision-making and risk-reward as predictors of job per- Organization structure
formance and satisfaction in investigating prevailing OCs.
Organizations vary in size, purpose, design and structures,
Communication and these influence the resultant dynamics and outcomes.
The organization structure provides the basic framework
Communication in an organization is multidimensional and that guides the nature of relationships, formalization, pro-
should be considered a strategic tool that requires under- cedures and interactions with internal and external stake-
standing the dynamics needed for formal and informal chan- holders. Several recent studies on organizational structure
nels in organizations. It is essential to consider the impact have used diverse approaches to investigate its relations in
of cultural undertones, right language, context, mode and organizational studies. However, most studies confirm the
timing on the information disseminated. For instance, a influence and effect of organizational structures on organiza-
general letter to employees may be construed as appealing, tional design and performance (Vugec et al., 2020; Soomro
threatening, impolite and harsh depending on many social et al., 2020). New forms of organizations would continue
and personal factors of the employees. It remains a double- to reflect new and unique structures that would differ from
edged sword and continues to attract the attention of schol- conventional organizational structures and organograms.
ars across all disciplines; thus, resulting in diverse forms While the organizational chart may depict in a simplified
of organizational communication climates and behavioural form the levels of authority, hierarchy, power and levels of
outcomes among employees and other stakeholders. The communication, it represents a complex web of social influ-
communication climate scope of organizations is widening, ences which are based and intertwined in the soft and hard
as virtual teams and workplaces become the new normal and factors that impact employee’s perception of the different
shape the future of workplaces. types of climates.
Glikson & Erez (2020) stated that, in virtual teams, a Based on the premise that structure involves division of
psychologically safe communication climate fosters a free labour, it is logical to assert that the organizational struc-
flow of information and knowledge without fear of criticism ture strongly depends on people, perceptions, place and
and positive interpersonal relationship. purpose (4P). Burton and Obel (2018) noted that structure
However, findings in a large service organization showed also embodies tasks, resource allocations and organizational
that the tenure of employees affected their perceptions of units. Regardless of the structure, Schneider’s (1987) asser-
organizational and communication climate (Guzley, 1992). tion that the people make the place, and the importance of
The communication process in organizations cannot be fully the attraction-selection-attrition (ASA) framework is rel-
controlled by the leaders; however, they can influence the evant to decoding the climate and culture. It is imperative
emergent communication dynamics in formal and informal to look beyond the superficial positions and chain of com-
groups with increased transparency, positive behavioural mands and delve into the dynamics of the ASA framework to
psychology and interactions at all levels. Where informa- grasp the different typologies of climates that exist. Underly-
tion and communication are cantered and become the special ing any organizational structure is the employee’s perception
privilege of a few employees, it is likely to cause increased of the types of climates, nature of involvement in the social
reliance on informal channels and a rise in miscommunica- frameworks, and relationships that exist at different levels.
tion issues. For instance, junior employees may have varied perceptions

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366 Journal of Global Entrepreneurship Research (2022) 12:357–369

of the reward system applicable to their cadre when com- perceptual lens, potential effects and impacts on employees
pared to that of senior employees in the same organization. and organizations. Insights from the use of multiple perspec-
tives and dimensions show that an array of intertwined fac-
Practical implications tors such as context, technology and innovation, ownership,
goals and objectives, corporate governance, organizational
This conceptual study has relevant practical implications for change and life cycle, physical conditions, workplace haz-
researchers, practitioners, entrepreneurs, stakeholders and ards, environmental stressors, organizational process, com-
policymakers interested in understanding how contextual munication and organization structure can influence and
environments and relationship impacts on organizational shape OC and the resultant group dynamics.
climate, productivity, performance and perceptions. First, The variation in the nature of these factors and the differ-
for entrepreneurs, this study shows that it is imperative to ences in perceptions in contexts are some of the reasons why
understand the dynamics of soft and hard factors that influ- OC study’s findings and impact vary among employees and
ence employee’s perception of organizational climate in their organizations. Furthermore, inferences from the literature
workplaces. The perceptual and context factor in organiza- suggest that organizations have many sub-climates depend-
tional climate studies underscores why entrepreneurial and ing upon the organizational size, context, institutional and
organizational activities and participants vary. business environment. This is supported by the findings on
Decision-makers, business owners and participants can the influence of business environment, institutional frame-
benefit from this intrinsic knowledge and adopt policies works, government policies, competing business objectives
and working conditions that can enhance the nurturing of and multiple local and external factors on OC (Haar et al.,
various forms of positive organizational climates. Further- 2022; Mohammad & Husted, 2019). Similar studies confirm
more, context matters to entrepreneurship and organizational the centrality of perception and contexts in construing OCs,
environment, and evidence from the literature indicates that since it is predicated on the behavioural dynamics of the
these findings vary due to contextual dynamics in the work internal and external stakeholders in the organization (Hu
environments. et al., 2022; Shanker et al., 2017).
This underscores the need to ensure that the working con- This study posits that the dynamics of institutional envi-
ditions, environments and policies are constantly reviewed ronment should be considered in OC studies and policy
for the benefit of all economic agents. Since the nature and formulations in developing countries due to the volatile
forms of entrepreneurship and organizations vary across business and operational environment. It has been estab-
context, cultures, the resultant organizational behaviour and lished that the peculiar nature of institutional environments
organizational dynamics might not be similar. For instance, in different contexts has diverse effects on employees,
the forms of organizational climates in start-up entrepre- organizations, policy making, decision-making process,
neurship in Asian countries might be different from similar entrepreneurship and stakeholders. Construing the institu-
enterprises in European and African countries. tional environments in developing and developed countries
Additional potential managerial implications suggest requires diverse skillsets and contextual strategies to nurture
that they have a critical role to play in nurturing a strong positive OC.
work climate, and this can be achieved through leadership Furthermore, this research provides new insights and per-
commitment, work design and reduction of any policies spectives on the need to understand the dynamics and nature
that might have a negative impact on performance. Insights of prevalent climates and how this can be modified to create
from the empirical studies confirm that the structure and a conducive work environment, foster positive OC percep-
dynamics of relationship among work units; departments tion and productivity. Since OC exists in every enterprise,
have implications on influencing the existence of healthy and organizations, entity and business ventures, it is imperative
hazardous work climates. The import of this study would for decision-makers to use their cognition, instincts, experi-
stimulate further research and inquiry related to organiza- ences and exposure to identify subtle cues in the internal and
tional climate among economic agents. external environments for the purpose of nurturing healthy
work climates.
The research also provides several possible research
Conclusions directions that are multidisciplinary. As new forms of
organizational dynamics continue to emerge, the domains
The study contributes to the existing literature on OCs of OCs would remain elastic. For instance the advent and
through multiple perspectives using contextual inferences aftermath of the COVID-19 pandemic have led to the adop-
from developed and developing countries. Also, this con- tion of virtual workgroups, new forms of work, new nature
ceptual study expounds on the importance of the institu- of employee problems and local contextual forces that are
tional environment and contextual nexus of OC through the likely to reshape and influence OC outcomes. For instance,

13
Journal of Global Entrepreneurship Research (2022) 12:357–369 367

the communication climate and other areas of organizations Alhassan, R. K., & Poku, K. A. (2018). Experiences of frontline
are still battling with the effects of different waves of disrup- nursing staff on workplace safety and occupational health haz-
ards in two psychiatric hospitals in Ghana. BMC Public Health,
tive change, virtual teams and new normal that is reshaping 18(1), 1–12.
workplaces. Future studies can address the communication Aliev, I. M., & Sigov, V. I. (2017). Creating a learning organization
climate from different perspectives and contexts. as an increase in the adaptability of a company's human capital
Since context is critical to research studies, this study to the volatility of the external environment.
Arslan, M., & Alqatan, A. (2020). Role of institutions in shaping cor-
specifically developed about twenty factors that make up porate governance system: Evidence from emerging economy.
the context system in both developed and developing coun- Heliyon, 6(3), e03520.
tries. These factors are inter-related, and thus future studies Baker, T., & Welter, F. (2020). Contextualizing entrepreneurship
can investigate these relationships and effects on OC and theory (p. 188).
Banwo, A. O., & Momoh, B. (2022). The contextual dimensions of
employees. In addition, the comparison of the findings and informal economy and entrepreneurship. Management & Eco-
literatures in developed and developing countries reveals nomics Research Journal, 4(2), 63–82.
that there are several types of OCs and employee percep- Baram, M. (2009). Globalization and workplace hazards in develop-
tions dependent on soft and hard factors in the business and ing nations. Safety Science, 47(6), 756–766.
Bennis, W. G. (1965). Theory and method in applying behavioral sci-
institutional environment. Therefore, studies relating to OC ence to planned organizational change. The Journal of Applied
should adopt a holistic and systematic approach to under- Behavioral Science, 1(4), 337–360.
stand the multi-layered dynamics in their context. Bergmann, H., Geissler, M., Hundt, C., & Grave, B. (2018). The
climate for entrepreneurship at higher education institutions.
Abbreviations OC(s): Organization climate(s); MTN: Mobile Tel- Research Policy, 47(4), 700–716.
ecommunication Network; COVID-19: Coronavirus Disease of 2019; Borry, E. L. (2017). Ethical climate and rule bending: How organiza-
ASA: Attraction-selection-attrition framework; 4P: People, percep- tional norms contribute to unintended rule consequences. Public
tions, place, and purpose Administration, 95(1), 78–96.
Brem, A., Viardot, E., & Nylund, P. A. (2021). Implications of the
coronavirus (COVID-19) outbreak for innovation: Which tech-
Acknowledgements The authors acknowledge the inputs and works nologies will improve our lives? Technological Forecasting and
of researchers whose research were cited and contributed to the manu- Social Change, 163, 120451.
script. Also the support, constructive feedback and input of the review- Burton, R. M., & Obel, B. (2018). The science of organizational
ers and other researchers are acknowledged. design: Fit between structure and coordination. Journal of
Organization Design, 7(1), 1–13.
Author contribution AB and UC conceptualized the need for the study Carey, R. N., El-Zaemey, S., Daly, A., Fritschi, L., Glass, D. C.,
and jointly drafted the manuscript. BM contributed to the contextual & Reid, A. (2021). Are there ethnic disparities in exposure to
elements and proposed the need to include to visual representation workplace hazards among New Zealand Migrants to Australia?
through figures in the study. AB handled the formatting and submission Asia Pacific Journal of Public Health, 33(8), 870–879.
based on final inputs from UC and BM. Chen, Y., Sun, I. Y., Ukaejiofo, R. U., Xiaoyang, T., & Bräutigam,
D. (2016). Learning from China?: Manufacturing, investment,
Data availability Not applicable. and technology transfer in Nigeria (Vol. 1565). Intl Food Policy
Res Inst.
Code availability Not applicable. Child, J., & Rodrigues, S. B. (2003). Corporate governance and new
organizational forms: Issues of double and multiple agency.
Journal of Management and Governance, 7(4), 337–360.
Declarations Crampton, S. M., Hodge, J. W., & Mishra, J. M. (1998). The informal
communication network: Factors influencing grapevine activity.
Competing interests The authors declare no competing interests. Public Personnel Management, 27(4), 569–584.
Dawson, J. F., González-Romá, V., Davis, A., & West, M. A. (2008).
Organizational climate and climate strength in UK hospitals.
European Journal of Work and Organizational Psychology,
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Doh, J., Rodrigues, S., Saka-Helmhout, A., & Makhija, M. (2017).
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