ISSN (Print) : 0974-6846

Indian Journal of Science and Technology, Vol 9(2), DOI: 10.17485/ijst/2016/v9i2/86353, January 2016 ISSN (Online) : 0974-5645

Use of Structural Equation Modeling to Empirically

Study the Impact of Organizational Climate
on Employees Work Related Attitude in
Information Technology Organizations
in Chennai City
A. K. Subramani1, N. Akbar Jan2, H. Moideen Batcha2 and N. Vinodh2
Vel Tech Business School, Vel Tech University, Chennai - 600085, Tamil Nadu, India; aksubramani@gmail.com
1

2
Department of Management Studies, Vel Tech High Tech Dr. Rangarajan Dr. Sakunthala
Engineering College, Chennai - 600062, Tamil Nadu, India; akbarjan.1975@gmail.com,
hmoideenbatcha @gmail.com, nvinodhsiva@gmail.com

Abstract
Background/Objectives: Information Technology (IT) industry is a fast growing industry, in that the developing countries
trying to cope with changes made in developed countries. It is very important to study the organizational climate of such
type of industry and the various kinds of variables that has a strong influence on establishing a dynamic organizational
climate. The main objective of the study is to study the impact of organizational climate in Information Technology
Industry in Chennai using Structural Equation Modeling technique. Methods/Statistical Analysis: The research followed
descriptive research. This research was conducted among employees of Tata Consultancy Services (TCS), Infosys, Wipro,
Hindustan Computers Ltd. (HCL), Tech Mahindra and L&T Infotech, those company offices located in Chennai. The 200
samples each from the above mentioned companies were chosen for the study. Snowball sampling techniques was used
to select the sample from the population. The structured questionnaire was used to collect the primary data. Findings:
Structural Equation Modeling was used to test the conceptual model. The conceptual model developed was found to be fit,
so from the research, it is concluded that the congenial organizational climate cultivate the positive attitudinal outcomes
for the employees and overall development for the organizations as well. Applications/Improvements: The model tested
in this research is a maiden attempt to find out the impact of organizational climate on employees work related attitude.

Keywords: Akbar-Subramani SEM Model, Employees Work Related Attitude, Information Technology (IT), Job In-
volvement, Job Satisfaction, Organizational Climate, Organizational Commitment, Structural Equation Model (SEM)

1. Introduction industry scenario. Only a few organizations in the world,

Today the world becomes a global village, the
competitions among the business organizations increases
day by day, even second by second. Every second is
crucial for the organizations, to survive, to retain the
present position and to go ahead in pace with changes in
becomes trend setters in the industry. While comparing
to the past decade, the information technology industry
scenario has changed a lot. Nowadays the organizations
have to be dynamic, either should make positive changes
(i.e. Trend setters) in the industry or should react (i.e.
Trend followers) to the changes in a positive manner. The

* Author for correspondence

 Use of Structural Equation Modeling to Empirically Study the Impact of Organizational Climate on Employees Work Related At-
titude in Information Technology Organizations in Chennai City
organization cant become dynamic over night; it should
create such kind of organizational culture and climate
over a period of time.
Dynamic organization can be defined as organizations
operate in business environments characterized by
frequent and discontinuous change, they compete by
marketplace agility; that is on their ability to generate
streams of both large and small innovations in products,
services, solutions, business models, and even internal
processes1. Marketplace agility requires the reallocation
of resources, including human resources. A dynamic
work force is the one that forecast and accepts the changes
in the industry and cooperate with top level executives;
to ensure the success of the organization in any kind of
situations. The organizational climate plays an important
role; it becomes heart-beat of the organization.
Indian software organizations are taking measures to
ensure that employees are satisfied and do not get inten
tions to quit2. Every organization is trying to create an
innovative organizational culture to ensure the success
of their businesses3 and attempting to create a favourable
atmosphere within the organization, which shall ensure
better employees work related attitude (i.e. organizational
commitment, job involvement and job satisfaction)
and improved productivity of the employees4. Here,
organization is interpreted as a dynamic process, since
it is a simple mechanism for coordinated behaviour. The
satisfaction of employees with organizational climate is
a predictor of better performance. The organizational
climate is having impact on organizational support,
organizational justice and organizational citizenship
behaviour5.
In this study, the researcher is intended to find out
the perception of the employees towards the various
dimensions of organizational climate and its impact on
work related attitude (i.e. organizational commitment, job
involvement and job satisfaction) of employees working
at IT companies in Chennai.
1.1 Organizational Climate
Organizational climate refers to a descriptive
perception of a set of attributes of a work environment.
Organizational climate research can be traced back to
the late 1930s, from the researches related to aggressive
behaviour in groups under various conditions of social
climate6. Organizational climate as a set of attributes
specific to a particular organization that may be induced
2 Vol 9 (2) | January 2016 | www.indjst.org
from the organization, deals with its members and its
environment7. Climate is a set of measurable properties
of the work environment, based on the collective
perceptions of the people who work in the environment
and demonstrated to influence their motivation and
behaviour8. In other words, organizational climate is a
relatively persistent quality of the internal environment
that is experienced by its members, impacts on their
behaviour and can be described in terms of the value of a
particular set of characteristics of the organization.
1.2 Employees Work Related Attitude
Attitude is disposition, demeanour; it is a manner of doing
things. It is the spirit that underlies our behaviour. It is the
attitude and emotion that employees put with our actions
and the temperament that defines who we are and what we
do. A good attitude brings a caring, positive and upbeat
approach, whereas a bad attitude is harmed by uncaring,
rude and negative behaviour. Organizational climate and
culture plays a vital role in shaping the attitude of the
employees. The work-related attitudes are organizational
commitment, job involvement and job satisfaction. The
attitude of a person towards his job or organization or
anything cannot be directly measured. Unlike production,
sales, etc. that can be quantitatively measured and that too
directly in case of a study on attitudes a direct quantitative
measurement is not possible.
1.3 Organizational Commitment
Organizational commitment can be one of many facets
that can be studied in order to measure workforce
attachment to an organization within a definite climate.
Today, firms tend to create comfortable atmosphere and
suitable working environment to enrich performance,
increase job satisfaction, decrease employees turnover
and absenteeism and to improve workers involvement
and connection to the organization as a whole entity.
Three different forms of organizational commitment
are Affective commitment, Continuance commitment
and Normative commitment. Affective commitment
represents involvement, participation, emotional
attachment and identification of workers with the
organization that lead to low employees turnover (feelings
of loyalty). Continuance commitment is when employees
believe it is in their own personal interest to remain
within the same organization. Normative commitment is
an emotional obligation towards the organization. That is,
Indian Journal of Science and Technology

a person should continue employment due to moral and
ethical norms. It is viewed as an acceptance about ones
responsibility towards the organization9.
1.4 Job Involvement
Job involvement refers to the degree to which individuals
psychologically identify with their present job10. For
highly involved employees, their jobs seem inexorably
connected with their very identities, interests and life
goals and are crucially important11. Job involvement
develops in the individual through a long and meaningful
process12,13. The prevailing assumption in research is that
high job involvement is an inherently desirable attribute
of employees, since job involved workers develop.
Indeed, highly job involved individuals generally seem
to be satisfied with their jobs, to be in characteristic
positive moods at work and to be highly committed to
their employing organizations, their careers and their
professions14,15.
1.5 Job Satisfaction
Job satisfaction is a positive emotional state that occurs
when a persons job seems to fulfil important job values,
provided these values are well-matched with ones
needs16. In other words, job satisfaction can be defined
as, an intangible, unseen, unobserved variable and a
complex assemblage of cognitions (Beliefs or Knowledge)
and emotional feelings (Sentiments or Evaluations) and
such behavioural tendencies17. Job satisfaction is the
persistent feeling towards discriminable aspects of the job
situation18,19. Job dissatisfaction are seen as function of
perceived relationship between what one wants form one
job and what one perceives it as entailing. Organizations
that have goals to achieve satisfy and happy staff. Job
satisfaction is the degree to which employees enjoy
their work job satisfaction is an integral component
of organizational climate and an important element in
management employee relationship20.
2. Research Methodology
The study is descriptive in nature. The main objective of
the study is to develop a model integrating the factors of
organizational climate and portray its relationship with
employees work related attitude. The survey method
of data collection was adopted to collect primary data
Vol 9 (2) | January 2016 | www.indjst.org
A. K. Subramani, N. Akbar Jan, H. Moideen Batcha and N. Vinodh
through the structured questionnaire. For this research,
the top six IT companies, which come under the top
20 ranking companies in 2013-14 in the IT industry as
mentioned in the NASSCOM (The National Association
of Software and Services Companies) website was selected.
As per the NASSCOM list the top six IT companies
listed are TCS, Infosys, Wipro, HCL, Tech Mahindra
and Mahindra IT Systems and L&T Infotech21. The
respondents for our study are those who are employed in
TCS, Infosys, Wipro, HCL, Tech Mahindra and Mahindra
IT systems and L&T Infotech located in Chennai city. The
snowball sampling technique has been used to select the
employees from the selected IT companies for the study.
About 1450 questionnaires was circulated among the
employees working in selected IT companies, only 1200
valid questionnaires were chosen as primary data for
the study after rejecting the incomplete and inconsistent
questionnaire, in which 200 sample respondents were
selected from each company.
The questionnaire to assess organizational climate
was framed on the basis of Organizational Climate
Questionnaire (OCQ) developed by Litwin and Stringer
with appropriate modifications22, job satisfaction scale
was developed on the basis of Measures of Job Satisfaction
(MJS) developed by Traynor23, whereas the organization
commitment scale was sourced from three-component
Meyer and Allen model and job involvement scale was
formed on the basis of Lodahal and Kejner Model.
The questionnaire meant for the respondents was pre-
tested with 75 employees from the selected IT Companies.
After pre-testing, necessary modifications were made in
the questionnaire to fit in the track of the present study.
Finally, the questionnaire was checked by the reliability
test for the fifty samples. As per the test for reliability,
a high scale reliability alpha = 0.921 for the section
employees perception towards organizational climate,
alpha = 0.938 for the section of job satisfaction and 0.947
for the section of employees performance and alpha =
0.903 for the section of organizational commitment.
The researcher has used the below mentioned
formulae for calculation of sample size for an unknown
population: ZS
2
Sample size n = (1)
E
Where, Z =Standardized value corresponding to a
confidence level of 95% = 1.96.
S = Sample SD from pilot study of 75 samples =
0.8836.
Indian Journal of Science and Technology 3
 Use of Structural Equation Modeling to Empirically Study the Impact of Organizational Climate on Employees Work Related At-
titude in Information Technology Organizations in Chennai City

E =Acceptable error 5 % = 0.05. commitment, e6: Error term for Job involvement, e7:
2
Error term for Job satisfaction, e8: Error term for Em-
1.96 * 0.8836 ployees work related attitude and e9: Error term for
Hence , Sample size n =
0.05 Organizational Climate.
= 1199.73 ~ 1200,
Where n = 1200. Hence number of variable in the SEM is:
The conceptual framework is presented in Figure Number of variables in the model : 18
1. The Akbar-Subramani Structural Equation Model
Number of observed variables : 07
was developed for impact of organizational climate
Number of unobserved variables : 11
on employees work related attitude and tested using
Number of exogenous variables : 09
Structural Equation Modeling approach (Figure 1).
Number of endogenous variables : 09

The Figure 2 (a and b) represent the computed

estimates of Akbar-Subramani Structural Equation
Model for impact of organizational climate on employees
work related attitude.

Figure 1. Conceptual framework.

3. A
 kbar-Subramani Structural
Equation Model
In order to ascertain the impact of organizational climate
on employees work related attitude in IT companies at
Chennai. The relationship between observed variables (a)
such as Internal Process, Human Relations, Open
Systems, Rational Goal, organizational commitment, job
involvement, job satisfaction and unobserved variables
like organizational climate and employees work related
attitude were studied with the help of Akbar-Subramani
Structural Equation Model.

3.1 Variables used in the Structural Equation

Model
3.1.1 Variables used in the Structural Equation Model are
(b)
as follows
Figure 2. (a) SEM model based on unstandardised
Observed endogenous variables are Internal Process,
estimates (b) SEM model based on standardised
Human Relations, Open Systems, Rational Goal, Or-
estimates.
ganizational commitment, Job involvement and Job
satisfaction.
Unobserved, endogenous variables are organizational
3.2 Hypothesis Formulation
climate and Employees work related attitude. The research hypothesis have been defined on the basis
Unobserved, exogenous variables are, e1: Error term of the model fit summary outlined in Table 1 and using
for Internal Process, e2: Error term for Human Rela- previous research on impact of organizational climate on
tions, e3: Error term for Open Systems, e4: Error term employees work related attitude. On the basis of above
for Rational Goal, e5: Error term for Organizational presented model, the following hypothesis is proposed:

4 Vol 9 (2) | January 2016 | www.indjst.org Indian Journal of Science and Technology
 A. K. Subramani, N. Akbar Jan, H. Moideen Batcha and N. Vinodh

Table 1. Regression weights for employees work related attitude

Measured Latent Variable Unstandardized S.E Standardized t value p value
Variables Co-efficient Co-efficient
Employee Work <--- Organizational climate 1.16 0.086 0.81 13.391 < 0.001**
related Attitude
Internal Process <--- Organizational climate 1.000 - 0.71 - -
Rational Goal <--- Organizational climate 1.38 0.072 0.86 19.005 < 0.001**
Open Systems <--- Organizational climate 0.82 0.047 0.70 17.365 < 0.001**
Human Relations <--- Organizational climate 1.13 0.057 0.71 19.952 < 0.001**
Job Satisfaction <--- Employee work related attitude 2.37 0.116 0.84 20.368 -
Job Involvement <--- Employee work related attitude 0.50 0.074 0.22 6.831 < 0.001**
Organizational <--- Employee work related attitude 1.000 - 0.68 - -
Commitment

H0: Organizational climate is not having impact
on employees work related attitude with its various
dimensions like organizational commitment, job
involvement and job satisfaction.
Table 1 encapsulates regression weights for measured
and latent variables. From the Table 1, it is identified that
the coefficient value for organizational climate is 1.16
which represents effect over employees work related
attitude holding the other variables as constant. The
estimated of positive sign implies that employees work
related attitude would increase by 1.16 for every unit
increase in organizational climate in the IT companies
and this coefficient value is significant at 1% level.
The coefficient value of organizational climate is 1.000
which represents the effect over internal process, holding
the other variables as constant. The estimated of positive
indication implies that internal process would increase
by 1.000 for every unit increase in organizational climate
activities in the IT companies and this coefficient value is
not significant at 5% level.
Similarly the coefficient value of human relations
is 1.13 which represents the effect on human relations
towards organizational climate holding other variables
as constant. The estimated positive sign implies that
such effect is positive that organizational climate would
increase by 1.13 units for every unit increase in human
relations activities in the IT companies at 1% level of
significance.
The coefficient value of Open systems is 0.82 which
represents the partial effect of Open Systems towards
organizational climate holding other variables as
constant. Therefore it is projected that positive indication
implies such effect is positive that organizational climate
would increase by 0.82 units for every unit increase in
Open systems activities in the IT companies and 1% level
significant as coefficient value.
The coefficient value of Rational Goal is 1.38 which
represents the effect on Rational Goal on organizational
climate, holding the other variables as constant. Hence it
estimates a positive sign implies such effect is positive that
organizational climate would increase by 1.38 units for
every unit increase in rational goals, where the coefficient
value is significant at 1% level.
The coefficient value of organizational commitment
is 1.000 which represents the complete effect of
organizational commitment on employee work related
attitude, holding the other variables as constant. The
scope of positive sign implies that for every 1.00 unit of
increase in employee work related attitude would increase
by 1.000 units in organizational commitment where the
coefficient value is not significant at 5% level.
The coefficient value of job involvement is 0.50
which represents the partial towards job involvement
on employee work related attitude, holding the other
variables as constant. This estimated of positive sign
implies for every 1.000 unit of increase in employee work
related attitude would increase by 0.50 for every unit
increase in job involvement with significant at 1% level.
The coefficient value of job satisfaction is 2.37 which
represents the effect on employee work related attitude,
holding the other variables as constant. The estimated
positive sign implies such effect is positive that employees
work related attitude would increase by 2.37 for every unit
increase in job satisfaction of the employees those who
are working in the IT Company, at 1% level significance.
Table 2 shows the hypothetical relationship of the

Vol 9 (2) | January 2016 | www.indjst.org Indian Journal of Science and Technology 5
 Use of Structural Equation Modeling to Empirically Study the Impact of Organizational Climate on Employees Work Related At-
titude in Information Technology Organizations in Chennai City

Table 2. Result of hypotheses

Hypothesis Hypothetical Result
relationship
There is no significant causal relationship between organizational climate and employees work related Positive Rejected
attitude
There is no significant causal relationship between Human relations and organizational climate Positive Rejected
There is no significant causal relationship between Internal Process and organizational climate Positive Rejected
There is no significant causal relationship between behavioural change and organizational climate Positive Rejected
There is no significant causal relationship between Rational Goal and organizational climate Positive Rejected
There is no significant causal relationship between job satisfaction and employees work related attitude Positive Rejected
There is no significant causal relationship between organizational commitment and employees work Positive Rejected
related attitude
There is no significant causal relationship between job involvement and employees work related attitude Positive Rejected

Table 3. Model fit summary

S. Test Factor Value Suggested Value
No
1. CMIN or Chi Square Value 2.170 Range from as high as 5.024to as low as 2.025.
2. P value 0.903 > 0.0526
3. GFI (Goodness of Fit Index)) 0.999 >0.9027
4. RMR (Root Mean Square Residuals) 0.041 <0.08 27
5. RMSEA (Root Mean Square Error of Approximation) 0.000 <0.08 27
6. AGFI (adjusted Goodness of Fit Index) 0.998 >0.9028
7. CFI (Comparative Fit Index) 1.000 > 0.9029
8. TLI (Tucker-Lewis Index) 1.000 > 0.9529,30
9. NFI (Normed Fit Index) 0.999 > 0.9529,30

variables tested and its result. From the Table 2, it is
found that the all the measured variables organizational
climate, organizational commitment, job involvement
and job satisfaction are having positive association with
the employees work related attitude with respect to the
selected IT companies.
Table 3 summarizes the model fit summary based on
absolute indices and incremental fit indices. From the
Table 3, it is found that CMIN value which is 2.17024,25
and the calculated p value is 0.903, which is greater than
0.0526 which indicates Null hypothesis is accepted (i.e.
Model is fit). Here GFI (Goodness of Fit Index) value27 and
also it is found that RMR (Root Mean Square Residuals)
value is 0.04127 and RMSEA (Root Mean Square Error of
Approximation) value is 0.000, which is less than 0.0827
indicates good fit. AGFI (Adjusted Goodness of Fit Index)28
value are greater than 0.9 which represents it as a good fit.
The calculated CFI (Comparative Fit Index) value is 1.00029
which indicates absolute fit The TLI (Tucker-Lewis Index)
and NFI (Normed Fit Index) values also greater than 0.95
which indicates the model is good fit29,30.
4. Results and Discussions
The various human relationships are represented as below:
H1: There is significant causal relationship between
organizational climate and employees work related
attitude.
H2: There is significant causal relationship between
human relations and organizational climate.
H3: There is significant causal relationship between
internal process and organizational climate.
H4: There is significant causal relationship between
Open system and organizational climate.
H5: There is significant causal relationship between
Rational Goal and organizational climate.
H6: There is significant causal relationship between
job satisfaction and employees work related attitude.
H7: There is significant causal relationship between
organizational commitment and employees work re-
lated attitude.
H8: There is significant causal relationship between
job involvement and employees work related attitude.
From the path analysis, it is found from the result

6 Vol 9 (2) | January 2016 | www.indjst.org Indian Journal of Science and Technology
 A. K. Subramani, N. Akbar Jan, H. Moideen Batcha and N. Vinodh
of hypothesis that all the measured variables Human
relations, Internal process, Open systems, Rational goal,
Job satisfaction, organizational commitment and job
involvement are having positive association with the latent
variables organizational climate and employees work
related attitude in the selected IT companies. Structural
Equation Modeling was used to test the conceptual model.
The conceptual model developed was found to be fit.
5. Conclusion
In hyper competitive world, organizations are like finger
prints which are always unique. Each has its own culture,
traditions and methods of action which in their totality
constitute its climate. This study examines the framework
of employees perception towards organizational climate
and its impact on employees work related attitude in IT
sector. The findings also reveal that the organizational
climate is having positive impact on employees work
related attitude and its components such as job satisfaction,
organizational commitment and job involvement. So
from the research, it is proved that the compassionate
organizational climate cultivate the positive attitudinal
outcomes for the employees and overall development for
the organizations as well.
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