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AN EMPIRICAL STUDY ON THE ORGANIZATIONAL CLIMATE OF INFORMATION TECHNOLOGY INDUSTRY IN INDIA*Dr.Jain Mathew, **Prof.TomyK.K(corresponding author)***Dr. Uma Selvi****Dr Kennedy Andrew Thomas

The Information Technology Industry in India India has found an unexpected opportunity in the new revolution caused by information technology, especially in customized software development. India, with its large pool of qualified technical professionals has been recognized as an important base for software development (Gopalan, 2000; Paul, 2002). With a compounded annual growth rate of 32% between 2005 and 2009 the Indian IT software and services sector has expanded almost twice as fast as the US software sector. The sector is estimated to aggregate revenues of USD 88.1 billion in FY2011, with the IT software and services sector (excluding hardware) accounting for USD 76.1 billion of revenues. During this period, direct employment is expected to reach nearly 2.5 million, an addition of 240,000 employees, while indirect job creation is estimated at 8.3 million. As a proportion of national GDP, the sector revenues have grown from 1.2 per cent in FY1998 to an estimated 6.4 per cent in FY 2011. Its share of total Indian exports increased from less than 4 per cent in FY1998 to 26 per cent in FY2011. Export revenues are estimated to gross USD 59 billion in FY2011 accounting for a 2 million workforce. The year 2010-11 was characterized by

*Professor& Head, Department of Management Studies, Christ University, Bangalore. **Professor& Head, Department of Tourism Studies, Christ University, Bangalore. ** *Professor & Head, Department of Management Studies, Cauvery College for Women,Thiruchirappally. ****Director,Centre for Education Beyond curriculum,Christ University,Bangalore


a consistent demand from the US, which increased its share to 61.5 per cent. Emerging markets of Asia Pacific and Rest of the world also contributed significantly to overall growth. Within exports, IT Services segment was the fastest growing segment, growing by 22.7 per cent over FY2010, and aggregating export revenues of USD 33.5 billion, accounting for 57 per cent of total exports. Indian IT service offerings have evolved from application development and maintenance, to emerge as full service players providing testing services, infrastructure services, consulting and system integration (NASSCOM, 2011).

The world has recognized Indias competitive advantage in software services and today India is a magnet for software clients owing to the quality of its skilled software manpower (NASSCOM, 2010). India has gained a lot of interest as a source of software and has emerged as a leader in the software industry (Heeks, Nicholson and Sahey, 2000). Indian firms develop software for more than three fourth of the Fortune 500 companies and at least half of the Global 2000 corporations (NASSCOM, 2009). The most important success factor for quality software development is having talented and smart people (Brooks. 1987). Being manpower intensive industry, availability, cost, turnover and productivity of manpower are critical to the functioning of the organization. The key to success of Indian software industry is the supply of trained, low cost software professionals (Arora et aI., 1999). Software industry is driven by technology and hence tends to be skill intensive. The level of talent on software project is the strongest predictor of its results (Boehm, 1981). Personnel shortfalls are one of the most severe project risks (Boehm, 1988). Software development is largescale integrated, intellectual work (Humphrey, 1989). The skill of developing software is the skill of managing intellectual complexity (Curtis. 1981).


The high rate of employee turnover has been one major issue that most software companies have been worried about. Employee turnover causes disruptions in project implementation and loss of skills inculcated through training and hands-on experience. Though some turnover is inevitable and even healthy at times, a high leve1 of turnover could be detrimental to a companys business in a people-driven industry like software. Since the very survival and success of software companies depend on the availability and the effective utilization of talented people, human resource activities provide the largest source of opportunity for improving software development productivity (Boehm, 1981).

Organizational Climate Organizational climate has been defined as a perception of the psychologically important aspects of the work environment (Ashforth, 1985) and is recognized as a potential influence on employees workplace behaviour and job satisfaction (Ashforth, 1985). Climate consists of a set of characteristics that describe an organization, distinguish it from other organizations, are relatively enduring over time and influence the behaviour of people in it. The individual workers perception of their work environment rather than a consensus view is considered, as different individuals may perceive the same workplace in different ways (Klein, Conn, Smith, & Sorra, 2001).

Organizational climate is defined as shared perceptions or prevailing organizational norms for conducting workplace activities (Reichers & Schneider, 1990). It has been conceptualized as a cognitively based set of perceptual descriptions that define the psychological climate (Jain Mathew, 2008; James&Jones, 1974; Kozlowski&Hults, 1987), and therefore it is possible to measure individual-level perceptions of the organizational climate for updating (Kozlowski &


Farr, 1988; Kozlowski & Hults, 1987). So the focus is on employees perceptions of salient features of the organizational context. Kozlowski and Farr (1988) recommended that research consider the interaction between individual characteristics and perceived situational features of the environment when determining whether technical professionals will voluntarily seek to learn new skills. Perceptions relevant to a specific climate domain such as the innovation climate have motivational implications on congruent behavioural outcomes (Schneider, 1983). According to Campbell (1970) Organizational climate can be defined as a set of attributes specific to a particular organization that may be induced from the way that organization deals with its members and its environment. For the individual members within the organization, climate takes the form of a set of attitudes and experiences which describe the organization in terms of both static characteristics (such as degree of autonomy) and behaviour outcome and outcome-outcome contingencies. Organizational climate is a relatively enduring quality of the internal environment that is experienced by its members, influences their behaviour and can be described in terms of the value of a particular set of characteristics of the organization. It may be possible to have as many climates as there are people in the organization when considered collectively, the actions of the individuals become more meaningful for viewing the total impact upon the climate and determining the stability of the work environment (Jain Mathew,2008). The climate should be viewed from a total system perspective. While there may be differences in climates within departments these will be integrated to a certain extent to denote overall organizational climate. Organizational climate influences to a great extent the performance of the employees because it has a major impact on motivation and job satisfaction of individual employees. Organizational climate determines the work environment in which the employee feels satisfied or dissatisfied.


Since satisfaction determines or influences the efficiency of the employees, we can say that organizational climate is directly related to the efficiency and performance of the employees. The organizational climate can affect the human behaviour in the organization through an impact on their performance, satisfaction and attitudes.

Objective of the study 1. To investigate the influence of biographical variables such as gender, age, experience, marital status, qualification and designation on the organizational climate of Information Technology companies. 2. To study the significant difference between small scale, large scale and multi national companies with respect to organizational climate and its dimensions. 3. To discuss the implications arising out of the study for effective management of IT organizations.

Research design: The present study considers organizational climate experienced currently in a number (n=389) of 38 IT companies situated in India. The study is descriptive and cross sectional type of survey. It signifies the questions to be investigated, the process of sample selection, methods of procedure to be followed, measurements to obtain and comparison and other analyses to be made. The clear design of the study is as follows: Variables of the study: 1 Organizational climate (dependent variable)



Biographical variables namely type of company, Age, Gender, Marital status, Designations, Total work experience, work experience in current organization and Educational qualifications.

Tool Used ORGANIZATIONAL CLIMATE SCALE The organizational climate scale was constructed and standardized originally by Somnath Chattopadhyay and K.G Agarwal, Later it was adapted and standardized by investigator. The adapted and standardized organizational climate scale consists of 70 items to be responded on a five-point scale. Scoring of organizational climate scale is on a five point scale from 1 to 5 for the positive response of strongly disagree scoring is 1, Disagree it is 2, Neutral is