“The best-performing companies worry less about performance and
more about their organizational capabilities” (Bititci, 2015).
Do you agree with the statement above? Why or why not?
a The best performing companies prioritize organizational capabilities
over performance because without the proper support for processes
and culture creativity and performance will be restricted. An
organizations long-term sustainability relies on their ability to
continually mature and improve capacity through learning and
balancing exploitation and exploration. Their organization capabilities
are also what keep them relevant and competitive in their market.
Solely focusing on performance can be OK for short-term gains but
hinder long-term success by holding employees to unachievable
standards and ultimately creativity a toxic culture where they aren't
motivated to achieve company goals.
How does organizational culture affect capability and performance?
For example, an active, participative culture is essential for
encouraging organizational learning.
a Organizational culture is the support structure on which an
organization's long-term capability and performance depends. From
the four organizational structures presented by Bititci in our
textbook, the most important and basis in which the others are
achieved is an organizations learning capability. The capability of an
organization to learn relies on the atmosphere of their culture, a
culture conducive to learning is one where learning and growth are
supported and continuously featured as opposed to a culture where
learning is restricted or one where individual growth, development,
and participation is not encouraged.
a If an organization's culture does not support learning, creativity or
development than it will not mature enough to achieve top certainty
and optimization in organization capability and performance. When
an organization achieves "certainty" on the capability maturity scale
it's "optimized practices produce leading outcomes" (Bititci, 2015).
High performing organizations understand how important culture is
and how it plays a key role in their long-term monetary and
operational success.
What do you think about the organizational culture and capabilities of
Companies A and B and their role in the two companies’
performances?
a Based on the interview memo, Company A's organizational culture
and capabilities seem a bit misaligned. While their overall
performance and capability to satisfy customers and grow revenue
are good and even increasing over the the past year, their operational
capability and culture are currently not supporting long-term growth.
Their operational processes and technology are out of date
contributing to high operating costs and their culture is stagnant
without much opportunity for growth, learning or development
causing recruitment and retention issues. By focusing on customer
needs and regulations first, it seems they have neglected the
important foundational areas of their business. If they were to update
their technology they would be able to cut personnel and operational
costs and invest those savings into their fleet, and employees to help
prevent these issues from affecting their long-term performance.
a Company B's organizational capabilities are strong but there are
some underlying issues that have caused low revenue performance
that need to analyzed further. They have the most updated
technology helping keep their operations smooth and less costly but
their culture seems resistant to change and new ideas. The interview
memo mentions that their new president is motivated with innovative
ideas but may lack the industry experience needed to equip the
company and culture with the ability to accept and manage them.
Also, the IT manager is also sited for having big costly excessive ideas,
their inability to manage and implement these ideas could be
contributing to their revenue decline. Their learning capability seems
slow as it's mentioned that their seasoned employees are close to
retirement and the others have not been brought up to speed quick
enough to offset their absences. It sounds to me that Company B is in
need of a cultural shift and support to help re-align their direction and
performance and put focus back on growing their organization and
customers.
References
Bititci, U.S. (2015)
Managing Business Performance
. Wiley
professional. Reference & Trade (Wiley K&L),
https://wileyplus.vitalsource.com/books/9781119025696.
