Document Type

SCU access only

Publication details

Manning, RL 2009, 'Organisational climate in small enterprises of the tourism and hospitality industry : climate’s influence on organisational outcomes and its relation to owner psychological profile', PhD thesis, Southern Cross University, Lismore, NSW.

Copyright RL Manning 2009


In 52 restaurants and cafés, this study investigated the relationships between psychological characteristics of owners, organisational climate, and two organisational outcomes, employee turnover intention and customer satisfaction.

Responses of 316 employees were used to develop the first organisational climate instrument designed specifically for use with small business - the Tourism & Hospitality Organisational Climate Scale – Small Business (THOCS-SB). Principal components analysis identified seven interpretable climate dimensions from the sample. Seven subscales were developed to represent each of these dimensions: Owner facilitation & support (α = .95); Job training & standards (α = .90); Regulations organisation & pressure (α = .89); Rostering (α = .85); Workgroup cooperation, friendliness & esprit (α = .89); Friction & conflict (α = .77); and Standards & objectives (α = .74). An eighth scale, labelled Global climate, was also created to provide an overall climate score (α = .97).

This study used a multi-level analytical approach. At the individual level of analysis, owners’ psychological characteristics (represented by the Big Five personality factors, two measures of empathy, and emotional intelligence) explained 10.1% of the variation in organisational climate. Organisational climate explained; 26.3% of variation in overall customer satisfaction, 40.2% of variation in employee perception of overall customer satisfaction, and 27.5% of the variation in employee turnover intention.

At the organisational level of analysis, owners’ psychological characteristics were found to be significantly related to variation in organisational climate between establishments. Global climate was found to explain 46.4% of variation in employee turnover intention between establishments and 49.7% of variation in overall satisfaction measured directly from customers between establishments. Three measures of employee perceptions of customer satisfaction were found to be highly correlated with three corresponding measures of satisfaction taken directly from customers: satisfaction with food and beverage (r = .662); satisfaction with service (r = .635); and overall customer satisfaction (r = .693). In contrast, owner perceptions of customer satisfaction were not correlated with any customer satisfaction measure.

The role of climate strength was also investigated. Results indicate that climate strength did not add any additional explanatory value beyond that provided by climate quality.

Structural equation modelling techniques resulted in the development of a well fitting model which proposes owner psychological characteristics to have indirect effects, via organisational climate, on employee turnover intention and both direct and indirect effects, via organisational climate, on overall customer satisfaction.