R- SL5 Assign
matabi
SLP4ASIGNdone.docxRunning Head: ORGANIZATION CULTURE 1
ORGANIZATIONAL CULTURE 8
Organizational Structure
Name
Institutional Affiliation
Date
Organizational Structure
The research question seeks to assess the impact of market demand and organizational culture on innovation and performance relationship. In the study, the market demand and culture mostly defines the innovation boundaries and also indirectly influences the organization’s performance. The market demand and the organizational culture are the independent variables while the innovation and the performance are the dependent variables. The purpose of the assignment is to come up with a hypothesis that relates directly to the research question.
Independent Variables : The market demand and organizational culture influences changes in performance and innovation. The market demand could be measured in parameters of customer needs and supply options while organization culture could be examined using the working environment, strategies, effectiveness and overall performance. Market demand is characterized by trends, preferences, and tastes. On the other hand, organizational culture could be scaled on a basis of how effective, the degree of cooperation, performance and innovative a company is.
Dependent Variables : Innovation and Performance are directly influenced by the market demand and the organizational culture. The market could define how the organization could innovate to meet the market needs while the culture could influence the innovation processes in a company and hence directly influence performance. Innovation, on the other hand, could be the determining factor in a company's performance rating. The performance could be measured in both financial and non-financial ways, for example, the organization's objectives and goals and fiscal year audit.
According to research carried out previously, the market demand defines the kinds of innovation a company can indulge in. The market demand shapes the company’s innovation and performance. The demand constantly changes according to trends, preferences or tastes. These factors, in turn, prompt the organization to innovate towards fulfilling the clients' needs. The demand also influences performance as it increases, the organization will either increase performance or risk collapse due to the demand. On the other hand, the performance of the organization as a whole depends on individual performance hence indirectly being influenced by organizational culture.
The market demand, for example, influences the innovativeness in a company in different ways. The market can demand improvement on a product that has been on the market and hence the company has to come up with ways to improve the product. Likewise, trends, preferences, and tastes, change each and every day. It is, therefore, the duty of the organization to come up with ways to ensure that they cater to each and every demand that is there in the market. The shift in customer demand prompts the organization to change their innovative behavior and the level of innovativeness as illustrated in the study by Morozov & Taskaeva, (2016). Innovative behavior may shift by diffusion of innovation into other products that are consumer friendly.
The performance of an organization may directly or indirectly be affected by the innovativeness of a company. Due to the increase in customer demands and preferences, companies tend to move from one thing to the next through innovation and processes. Demand affects performance by changing the processes such as manufacturing from mass production to customized production. The performance change requires increased innovation on the company to meet these demands. Innovation could be encouraged by improving management strategies that could improve the performance. By creating a free environment, the employees are free to think outside the box and are more open to ideas hence improved performance.
According to Gattorna, (2017), organizational culture is the guide on how a company runs. Organizational cultures are unique to each and every company as it consists of beliefs, norms, behaviors and the work environment. It defines the leadership and ways of governance within an organization. The culture could have a strategy that encourages innovation and hence responds to customer demands. This way, the culture influences the innovation processes in such cases. The behaviors exhibited in a culture could involve activities that encourage innovation. The activities could involve risk-taking, idea generation and decision-making processes.
As in the example above, the market demand and organizational culture greatly impact the innovation processes and performance in almost all organizations. The three are interrelated as one affects the other either directly or indirectly. Organizational culture can also affect the performance of any organization. From the definition of organizational culture, one can learn that the norms and behaviors of a company can positively or negatively affect a company's performance. Organizational culture involves strategy, working environment, behavior, trust, purposefulness, customer orientation and also management, (Tuan et.al, 2014).
Organizational culture directly relates to the innovation processes, performance and market demand. An example is if the culture is customer oriented, the market demands will then be met by improving performance in the organization to brainstorm and innovate new ways to satisfy the clients. The market demands are influenced by factors such as preferences, tastes, and trends. The market will, in turn, shape the innovation processes to customize their merchandise to suit every client individually. In order to actively innovate, the working environment should encourage risk-taking and hence the performance of a company could be more open to ideas, tolerate mistakes and avail the resources for it to achieve customization (Uzkurt et.al, 2016). The company could then improve customer services in order to understand the customer needs. This way, the company’s performance overall improves.
Innovation is the only competitive advantage that sets apart a company in an increasingly diverse environment (Tuan et.al, 2014). In many scholarly studies, scholars agree that innovation capability defines the company’s performance. According to Schumpeter, a scholar from the 1920s, innovation could consist of production, supply, market, quality or structure. Innovation could, therefore, be summarized as product and process innovation, market innovation or organizational innovation.
Production innovation is when a company adopts new ways of production to respond to the market demand (Romero et.al, 2017) or change tactics in way of production to curve a niche for themselves. Production innovation can also be as a result of wanting to customize their goods to suit individuals. This could be a change in product packaging and design as a marketing tool for the company. It could also involve different prices, promotion strategies, and placement. Production innovation could also be as a result of new equipment or new technologies as the market continues to evolve and seek more digital products. The companies will, therefore, innovate to meet this new demand. The demand may also influence a change of strategy from retail to manufacturing hence improving performance and challenging the company to innovativeness.
Organizational innovation is when the company comes up with new ways to do things, (Abdi & Senin, 2014). This could occur in many ways; change of organization example to customer-oriented practices, external relationships, change in working environment and also change in management practice. The company could change the way they do things in response to a market demand or in order to encourage both market innovation and product innovation. Innovative organizational culture is associated with positive firm performance, market share and market value, (Uzkurt et.al, 2013)
Hypothesis : The market demand and organizational culture defines innovation and performance in a company
The research seeks to answer the question of whether there is a relationship between the organizational culture, the market demand, innovativeness and the performance of a company. The hypothesis states that all the four factors are interrelated and hence the justification above. The relationship between the market demand and organizational culture is that they directly affect a company’s innovativeness and performance. A market could shape the response of a company by either prompting innovation that is achieved through the culture and improvement of performance in the company.
The study seeks to bridge the gap in the form of providing information for companies that are yet to discover the interrelation of the four. The hypothesis then needs to be proved either null or valid in order to bridge this gap of ignorance in company research. The research will answer a question of whether or not the factors are valid to improve overall performance or not. It is, therefore, a valid hypothesis and could answer many of the questions in the research such as the effect of one factor on all the others and vice versa. Research in the past is closed and hence this study opens up to the idea that companies need to revise their organizational culture and revisit the market in order to strategize on innovation and improve overall performance.
References
Abdi, K., & Senin, A. A. (2014). Investigation of the impact of organizational culture on organization innovation. Journal of Management Policies and Practices, 2(2), 1-10.
Gattorna, J. (2017). Introduction. In Strategic supply chain alignment (pp. 15-21). Routledge.
Morozov, V. S., & Taskaeva, N. N. (2016). Basic market factors affecting innovative activities. The Journal of Internet Banking and Commerce.
Romero, D., Larsson, L., Rönnbäck, A. Ö., & Stahre, J. (2017, September). Strategizing for Production Innovation. In IFIP International Conference on Advances in Production Management Systems (pp. 3-12). Springer, Cham.
Tuan, Nham & Huong, Pham & Pham, Giang. (2014). THE IMPACT OF ORGANIZATIONAL CULTURE ON INNOVATION ACTIVITIES -THE CASE OF X CORPORATION IN VIETNAM. 29.
Uzkurt, Cevahir & Kumar, Rachna & Semih Kimzan, Halil & Eminoglu, Gözde. (2013). Role of innovation in the relationship between organizational culture and firm performance: A study of the banking sector in Turkey. European Journal of Innovation Management. 16. 10.1108/14601061311292878.
