The role of organizational climate in setting project goals

Purpose: Project goal setting, led by a project proposal development team, is an important operations process because effective goal setting aligned with the operations strategy can enhance project investment decision making, project success and thereby operations performance. The purpose of this paper is to argue that because of the strategic nature of this task, the organizational climate (OC) that the proposal development team works in is critical for the effectiveness of their goal setting. Design/methodology/approach: The authors raise hypotheses regarding the role OC plays in enhancing the effectiveness of the support senior executives provide to project proposal teams. The authors test the hypotheses in a longitudinal survey of 200 managers in the USA. Findings: Results show that a formal organizational process used by proposal development teams for setting project goals is highly effective and that an appropriate OC further intensifies the positive effect of such a process. However, a formal organizational process has no positive effect on effective goal setting if implemented in an environment with a poor OC. Originality/value: The paper contributes to the literature by finding that a positive OC intensifies the already positive effect of organizational support. In practice, the creation of such a climate can enhance project goal setting, project success, and as a result, operations performance.