“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?
b 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.
b 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.
b 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?
b 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.
b 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
