This paper explores the nexus between organizational culture and organizational climate in the management of change by presenting a case study wherein an Australian regional university is currently undertaking the development of online courses. Important consideration is given to the complementary roles of culture and climate in managing organizational change. The single most important determinant of success is strong, committed senior management whose task is to articulate the organization's new vision and the manner in which it reshapes the organization's culture. At another level the climate of the organization as reflected in the systems that facilitate people's work (including policies, procedures, rewards and communication) must mesh with the new culture if organizational change is to proceed smoothly. This paper discusses the interactive nature of these two powerful organizational variables. The case study draws on the experiences of a school of academics acting as developers and deliverers of online initiatives and a number of concerns are raised that threaten the goodness of fit between the culture and climate of the organization. Policy issues requisite to the successful delivery of online courses are identified and discussed. The most contentious issue revolves around the question of ownership. Many academics, accustomed to exercising autonomy with respect to determining appropriate learning strategies, openly resisted the role the Information Technology department of the university assumed in making decisions that are often seen as having pedagogical overtones. To the extent that transactional issues such as these detract from the climate of the organization, they prevent academics from performing to their full potential. It is concluded that the climate of the organization, if properly managed, contributes to an enduring organizational culture which in turn is better able to deal with the inevitability of change and face the challenges that initiatives such as online education bring
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