Organization Performance



Organization Performance




Relationship between Market Demand, Organization Culture on Innovation and Performance

Why is this phenomenon interesting?

Innovation is a key component to an organization’s survival in the business industry. Every cooperation admits the fact that keeping up with the latest in terms of market trends and technology enables them to stay afloat and relevant to their clients. Companies continually thrive to outdo one another and maintain the highest ranks when it comes to the world of innovation. In as much as this is the case, this factor is not the only determinant of an organization’s ultimate success (Cornelissen & Durand, 2014). Other factors within a company also play a crucial role in determining the successful flow of business.

The market demand, organization culture and employee performance play a significant role in influencing the rate of innovation in a company. Market demand, for example, determines the kind of products that a company manufactures. Client tastes and preferences may require that a particular product be designed in a given way to meet their needs. The need for innovation is already established within the corporation. However, the organizational culture may either be a limiting or fuelling factor for innovation (George, 2014). It can enhance both innovation and performance. The overall company and workforce performance is measured by how well the organization meets their client needs through innovative means. All these factors play a crucial role in the running of any corporation. Identifying the link will present knowledge on how well businesses can create a balance and better manage their organizations (Mantere, & Ketokivi, 2013). This study seeks to identify a relationship between market demand, organization culture on innovation and performance.

A lot of study has been previously conducted on the influence of innovation, market demand, organizational culture and workforce performance on an organization. These studies have mainly focused on these factors independently with no much emphasis given on the relationship between all three; how they relate within an organization to either bring foster success or failure (Cornelissen & Durand, 2014). One of the main aims of this study is to bridge the gap in literature and provide credible data and reliable information that organizations can use to further their success. It is also aimed at identifying models that enhance innovation and performance. The capability of innovation playing a mediatory role between culture and performance will also be established in this study.

How addressing this question will enhance understanding of this phenomenon.

One of the things that are clear in the business world is that change is inevitable. It is the only constant factor that we can anticipate in various organizations (Mantere & Ketokivi, 2013). Constant evolution in how we handle business processes is paramount. This need is met through innovation. A company cannot in any way survive without being innovative with regards to its business ideas and technology. Competitors keep organizations awake with each one seeking to be ahead (George, 2014). The need for an innovative culture within a corporation cannot in any way be overlooked.

The market demand is also constantly changing with client tastes and preferences tending towards products that are the latest in the market. The population seeks to be identified with the latest trends both in fashion, tech gadgets, lifestyles, among other products and services. The enhanced connectivity of people across the globe made possible through the internet has been the main contributing factor to the constant changes. The world is no longer unreachable as it was a few decades ago. Having a global market has presented both merits and its share of challenges in the business world. Keeping up with current trends can be quite a huddle for business organizations (Cornelissen & Durand, 2014).Constant market surveys and consumer feedback provides information to the organization of how they can meet client needs. Remaining relevant in this day and age is of paramount importance because the latter will only result in shelves stacked with goods that no one is willing to buy.

The organizational culture is the backbone of all its processes and activities. A culture that encourages creativity and innovation within its workforce has been seen to be the most effective. However, different individuals hold varying beliefs when it comes to leadership and management. Some belief in having more control over their workforce while others push to have an independent team of employees who can think for themselves and develop techniques that better aid the organization (Mantere & Ketokivi, 2013). The culture engraved in the workforce from the first day of business is the determining factor of how an individual conducts themselves in the workplace and performs their duties. These beliefs and perceptions run deep and can either limit or enhance overall performance. The culture within a company is also not constant and can be altered with time to suit company needs.

The link between innovation and company performance has already been established from previous studies. A highly innovative workforce is inevitably effective and efficient within the workplace and they are thus high performance. The contrary is also true as these feel that they are working within a limited environment. They tend to remain within their comfort zones and do little to advance themselves and the corporation. The Schein’s organizational model has provided a framework of how an organization’s culture supports innovation (Alvesson, &Sandberg, 2013). The use of this model in the study will provide further understanding of the interconnectedness of innovation and culture.

Establishing the relationship between all three factors will provide more clarity to business management bodies on where they ought to make necessary changes to enhance performance (George, 2014). A link established between market demand and organizational culture will provide answers to questions like; does the market demand directly or indirectly influence organizational culture? What influence does market demand play on performance? How does the market demand influence innovation within an organization? How do the three factors relate within the normal business cycle? Which factors have the greatest influence on company performance? The elements of organizational innovation will also be looked into.

Practical significance of addressing the research question

Businesses are constantly going into bankruptcy and making losses due to poorly made decisions. The results obtained from this study will aid in the decision-making process. An organization’s management will be in a better position to identify the area that they need to invest in most to enhance performance (Cornelissen & Durand, 2014). In some instances, some organizations tend to focus on performing market researches and identifying client needs while their weakness is in their organizational culture. Others may consider improving performance through appraisals and various motivations rather than giving their workforce the privilege of being creative and innovative which inevitably lowers operational costs (Alvesson & Sandberg, 2013). Making proper investments saves the company time and money which inevitably results to higher returns.

The study will also make a great contribution into the world of literature by availing findings on which further research can be conducted. A model may be developed that highlights a flow of the factors. Most of the results in the study may not be very new concepts. They will however contribute in supporting already made conclusions in the field or provide a different perspective (George, 2014). An organization will be in a position to apply this knowledge in whichever manner so as to further its success.

New businesses will also be in a better position to avert pitfalls in which those who have gone before them may have fallen into. A new enterprise being put up, for example, will put more emphasis on developing an innovation organizational culture before it seeks to improve employee performance through rewards and other benefits (Alvesson & Sandberg, 2013). A clear understanding of the relationship between the three factors will help in prioritizing on the areas that require the most investment and focus.

Overall, the study will help in making various business processes and management easier. Diagnosing that which is affecting performance both directly and indirectly will be made easier as mangers will have various factors to analyze (Mantere & Ketokivi, 2013). The flow established will avail the opportunity for them to know how best to make changes in one sector without bringing the other down. Furthering innovation within the corporation will no longer be an uphill task.


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Mantere, S., &Ketokivi, M. (2013). Reasoning in organization science. Academy of Management Review38(1), 70-89.