Enhancing sustainable business performance in retail pharmacies: the role of organizational climate

Staying in business is fundamental to the sustainability of both large and small firms. While researchers have investigated some of the management practices that contribute to the performance of large firms, including creating supportive organizational climates, few have focused on practices in small firms. This paper addresses this gap, investigating the relationship between climate and performance in Australian retail pharmacies. Based on the literature, the researchers predicted that pharmacies characterized by supportive organizational climates would outperform peers with less supportive climates. SEM and ANOV A tests supported these predictions using five measures of organizational performance, namely financial assessments, measures of employee and customer satisfaction, numbers of prescriptions written per day, and employee tennre. On all these indices, pharmacies demonstrating supportive organizational climates outperformed their counterparts exhibiting low levels of supportive climate. Thus, managers are advised to adopt supportive climates in the interests of enhancing business performance on multiple criteria, including retention of employees.