CHAPTER 1

CREATING A FAVORABLE ORGANIZATION CLIMATE

• An expert in organizational development remarked that even the most
competent manager cannot succeed in an unfavorable work environment. A
food company may not have hired the best managers but if it fails to provide a
favorable climate where people can move, interact and operate efficiently, than
all attempts to produce expected results become a futile exercise.
 ELEMENTS
• PURPOSE
• The corporate vision, goals, targets and objectives that state the company’s
direction; a statement of what the company wants to achieve

• STRUCTURE
• Well- defined division of labor, systems, policies and procedures that
regulate the flow of work

• REWARDS
• What employees get for doing a good job
• LEADERSHIP
• Ability of leaders to mobilize human and material resources to generate
expected results

• SANCTIONS
• System of detecting infractions and enforcing disciplinary action against
erring employees

• RELATIONSHIPS & CULTURE

• A healthy working relationship governed by positive corporate beliefs values
and practices
PURPOSE

• Sets the direction of the company, stating in specific

terms the purpose of its existence, the desired results
and the strategies to be implemented to be able to
attain goals.
• A successful business starts with a good direction. It is
in the exercise of direction- setting that desired results
are clearly defined before they can be achieved. But
the following conditions must prevail for the business
to move towards attaining its goals.
• STRUCTURE
• Provides the mechanism for dividing, arranging and administering the job to be done
in a manner that will ensure maximum efficiency and productivity.
• Questions to address in setting an organizational structure:
• What are the major tasks to be accomplished and how should they be distributed
and delegated? An organizational chart is used to illustrate the division of labor.
• Who is in command in each unit t? Who is accountable for results? (Unit head) What
is his span of control or area/ scope of responsibility? Will the structure enable him
to manage the operations efficiently?
• What are the lines of authority? Will “double bossing” be avoided? Who reports to
whom? Who is responsible to whom?
• Does the power structure provide for autonomy and flexibility?
• How are the job positions classified? Is each job position appraised to ensure a fair
job classification?
• REWARD SYSTEM
• What incentives and benefits does the company provide?
• Are these competitive with those offered by other establishments
in the same category?
•  Can the company afford to pay the required benefits?
• On what basis are incentives distributed? Are these based on the
merits of performance? How does the company measure a
satisfactory job? 
• Is a job evaluation system in place for the company to have a
sound basis for a job and wage classification?

• What company practices are being implemented to boost

employee morale?
• Are employees consistently recognized and appreciated for their
efforts?
• LEADERSHIP
• Speaks of the manage style- how people are mobilize, trained,
directed and motivated to be able to deliver the expected results
• Are all company officers properly screened to avoid the hiring of
misfits?
• What is the dominant leadership style- autocratic, democratic, and
bureaucratic?
• Is situational leadership effectively utilized? (matching leadership
styles with various levels of personnel and varying work
situations)
• How is the rapport between leader and their staff; managers and
the owners?
• Are managers and unit heads consulted by the owners or top
management regarding policies, goals and other critical decisions
affecting operations?
•  
SANCTIONS
• This element covers administrative penalties or disciplinary actions given
to employees for unjustified infractions, deviations from standards, and
other performance and behavioral deficiencies.

• Before administering sanctions, consider the following:

• Are the standards of productivity, quality of work, cost, efficiency, etc.
clearly defined? Were these made clear to all concerned?
• Is the acceptable level of performance defined?
• Is there a way of measuring levels of performance?
• Is there a code of ethics or house rules that define undesirable behavior?
• Are offenses properly classified? (minor, major and grave offenses)
• Are there appropriate and just sanctions for every type of offense?
• RELATIONSHIP & CULTURE
This has reference to the working relationship among staff in various levels,
the degree of teamwork, cooperation and the prevailing culture that governs
the relationships and the cooperate practices.
Healthy working and relationships and teamwork are important
elements in enhancing group productivity. Are they given attention
by top management?