I agree with the statement that some of the best performing companies are likely to
put more focus on organizational capabilities, and I can understand why it is a smart
decision for them to make. By placing focus on the organizational capabilities, leadership
will be able to identify weaknesses in the organization's current practices and provide
solutions that will strengthen the internal processes of the company. By focusing on the
organization of these capabilities companies are then able to determine areas of strength
and competitive advantage as well as areas for improvement. While I do agree that some
companies place more worry on the organizational capabilities than their performance, I
do feel that some emphasis should remain on the actual performance of these
capabilities. To focus mostly on the capabilities of a company will provide little help in
assessing its performance. Given that perceived capabilities are much different from the
actual and realized ones, a company must maintain a measurement of performance
towards these capabilities to ensure that they are beneficial. Simply having organizational
capabilities will make a business able to be successful and efficient, but if they are unable
to be led or put to any meaningful use, then these organizational capabilities do little to
provide for the company. I agree with this quote to an extent but definitely feel that it is
just as important to monitor the performance of these perceived capabilities to understand
how the business is actually moving forward.
Organizational culture affects capability and performance because it determines
the environment in which they take place in. Organizational culture provides a basis for
employees to come together and collectively produce the capabilities in question. Without
organizational culture, there is no opportunity to bring these capabilities together and
perform in the intended fashion. Poor organizational culture builds a dull and inefficient
workspace which inhibits the capabilities of the employees individually and collectively,
and deters high performance. A weak organizational culture will provide ample
opportunity for miscommunications and failed checkpoints which would decrease
efficiency and productivity, as well as limit the capabilities of the organization. High
organizational culture will likely provide employees with an environment in which they are
easily able to come together with their individual and collective capabilities to then
perform at the highest possible standard.An active and participatory culture will likely
lead to more communication and growth between the employees which will only help to
make the business better. This organizational culture is extremely important due to its
ability to affect the environment in which the work and communication takes place, and
therefore should be maintained to prevent any loss or reduction in capabilities and
performance of employees and the company as a whole.
Company A’s leadership interviews demonstrate that the leadership is working on
the same team and towards the same goals which indicates a good organizational
culture. The leaders all seemed to be in conjunction with one another on the direction of
the company as well as its current business situation. Company A’s leaders were aware
of its current strengths and weaknesses and offered ideas for possible solutions or
opportunities to advance its current position. This demonstrates that Company A has
good organizational performance and helps explain why the company is at its current
position of success.
In contrast to Company A, Company B’s leadership interviews do not present a solid
understanding of the business and its intended direction. The interviews as a whole were
connotated with the notion of a newly instituted leadership without much bearing on where
or how to move the company forward. This certainly helps to explain why Company B has
experienced issues with maintaining growth over the years and shows that its
management and leadership has not recently been effective in determining a way to move
forward with the company. This lack of organizational performance helps explain why
Company B is not performing at the same levels it did previously and points to the
importance of a strong leadership in the setting of overall organizational culture.
I think that the varying levels of organizational performance between the companies is
the major driver for the difference in success that each company has had. A strong
organizational culture works to maintain the widely held ideas and objectives that work to
push a business forward and a lack thereof will result in stagnancy. The organizational
culture of Company A is much stronger than Company B’s and is the reason why
Company A currently sits in a better position. Company B likely needs more time to
accommodate the new hires and bring them together to a point at which they can work
cohesively towards the same task. Ensuring that is possible will allow the organizational
performance of Company B to increase dramatically and will result in a more able and
successful business model.
References
Bititci, U. S. (2015).Managing business performance: The science and the art. Wiley.
