Organizational Capabilities

Organizational capabilities play an important part in the successful business development of organizations. At the same time, organizational capabilities depend on multiple factors, including human resources and material and financial resources available to organizations. In this regard, it is possible to refer to the experience of my organization which focuses on the development of its organizational capabilities to enhance its marketing performance and to take the lead in the market. In actuality, the organizational capability plays an important part in the strategic organizational development because it determines the company’s ability to manage people to gain a competitive advantage over its rivals. At this point, it is worth mentioning the fact that today organizations have to come prepared to the tight competition as the process of globalization expands opportunities for the fast business expansion. In such a situation, the organizational capability is one of the crucial factors that can grant the company with a strategic competitive advantage over its rivals.

The organizational capability contributes to the effective management of human resources, which helps the company to take a strategic competitive advantage over its competitors. At the same time, the organizational capability focuses above all on internal business processes and systems, which help the company to meet customers’ needs. The development of the effective system of internal business processes is essential for the successful organizational performance because the organization confronts substantial problems, if its internal business processes start stumbling. For instance, the failure of internal business processes can lead to internal conflicts within the organization and the failure of the organization to deliver its products and services to customers in time and of the high quality. For instance, the failure of the sales department to maintain the effective communication with the production department of the company may lead to the failure of the company to meet the existing demand and customers’ needs in the particular product or service. As a result, the deficit or oversupply of certain products and service may occur that naturally have a negative impact on the organizational performance. At the same time, customers grow dissatisfied with the quality of services and the work of the company with its customers because the company is just incapable to meet needs and expectations of its customers.

In such a situation, the organizational capability helps the organization to match needs of customers through the development of effective internal business processes and systems. To put it more precisely, the organizational capability is the capability of the organization to manage its internal business processes and systems effectively and, thus, to meet needs and expectations of customers. The better the organization manages its internal business processes and systems, the higher is the customer satisfaction because customers can enjoy receiving products and services of the high quality, while the poor management of internal business processes and systems leads to the decline of the customer satisfaction because the company is incapable to provide products and services in time and of the high quality.

At the same time, the organizational capability creates organization-specific competencies that provide the company with the competitive advantage since they are unique and attributed to this particular organization only. In fact, organization-specific competencies imply competencies that the organization creates in the course of its development and which are different from competencies of its rivals because, in such a way, the company can distinguish itself from rivals. Competencies of the organization depend on the nature of its business and they may focus on the particular management approach, or to specific strategies of the company-customer relations, or any other field, where the organization can accumulate competencies, which distinguish its performance and services from those of rivals. The development of organization-specific competencies naturally gives the company a strategic advantage because rivals do not have those competencies and, thus, customers looking for specific services or organizational competencies turn to the organization, which can provide them for customers.

The organizational capability also ensures employee skills and efforts are directed toward achieving organizational goals and strategies. In this regard, my organization focuses on the close coordination of employees’ performance and the company’s mission, vision and marketing strategy. To put it more precisely, managers communicate closely with employees to convey them the mission and vision of the company and to identify clearly strategic goals, which the company strives to achieve. In such a way, employees grow aware of what the organization wants to achieve and how they should perform to reach the organizational goals. At the same time, they become fully aware of their role and position in the organization and organizational performance. As a result, employees focus on the improvement of their performance focusing on organizational goals or setting their own goals within the framework of organizational goals. Hence, the organization improves its organizational performance through the increase of the employees’ responsibility and awareness of the organizational goals, its mission and vision. The better understanding of aspirations, goals, mission and vision of the organization helps employees to work more effectively because they understand where the organization is moving to and what they are supposed to do to receive positive feedback from managers along with material rewards and bonuses.

Sources of the competitive advantage generated by the organizational capability vary but it is possible to single out three major sources, including economic or financial capability, strategic and marketing capability, and technological capability. The three major sources of the organizational capability play the crucial part in the enhancement of the organizational capability because, if either source starts stumbling, the organization may face considerable problems and its organizational capability weakens. For instance, recently my organization has faced financial problems which caused certain downturn in its business development. The company has lost some of its customers because they have lost the confidence in the reliability of the company and its capability to perform its functions properly. Thus, customers have grown uncertain in the capability of the organization to deliver its products and services in time and of the high quality and respectively to customers’ needs and expectations.

Organizational capability focuses on achieving goals through employee commitment and competence. In fact, my organization focuses on the regular training of employees to ensure their high professional level and steady progress of their skills and abilities. In such a way, the company attempts to maintain the competence of employees at the high level. At the same time, the company pays a lot of attention to the development of the employees’ commitment through the development of the healthy organizational culture and positive manager-employee relationships. The regular communication of managers with employees and the explanation of organizational goals, mission and vision help the company to keep employees committed to organizational goals because employees feel their responsibility for outcomes of the performance of the entire organization. In such a way, the company has reached the high level of the employees’ commitment that contributes to their effective performance and positive organizational performance. At this point, it is worth mentioning the fact that the organizational capability to maintain employees’ commitment and competence is crucial in the contemporary highly competitive environment because employees have to keep progressing through their career within the company. The company introduces new technologies and other innovations to maintain its competitive position and employees should come prepared to such changes. Otherwise, they will be unable to perform effectively and the organizational performance will start stumbling.

Two criteria for gaining the competitive advantage are adding perceived value to the customer and offering uniqueness that cannot be easily imitated by a competitor. Adding perceived value to the customer helps the company to attract customers and to increase their loyalty because the company always focuses on the higher customer satisfaction. For instance, my organization focuses on the analysis of customers’ needs and expectations to meet them even before customers clearly shape their expectations for themselves. In such a way, the company offers new products and services which evoke a strong interest in customers and provide the company with the high sale rates. Adding perceived value to the customer increases the customer loyalty to the brand because customers believe that the company is really concerned with their needs and attempts to do its best to meet customers’ needs and to maximize the customer satisfaction with products and services, which they buy from the company.

Offering uniqueness that cannot be easily imitated by a competitor is a particularly important organizational capability in the contemporary competitive environment. The uniqueness of my company includes the orientation of innovations in the field of the company-customer relations. To put it more precisely, the company attempts to introduce innovations, which change and facilitate the company-customer relations and communication. However, this field is not easy to improve on the permanent ground because innovations cannot be always introduced frequently. As a result, the organization has to work constantly on possible ways to improve its company-customer relationships and to make unique offers that can increase the customer satisfaction.

The organizational capability enhances the perceived customer value in three ways, such as responsiveness, relationships, and service quality. These ways allow the organization to achieve a sustainable competitive advantage over its major rivals. They help to achieve positive marketing effect and to maintain positive marketing performance of the company.

The responsiveness of the organization implies the ability of the business to understand and meet customer needs more quickly than competitors (Hart, 2004). My organization monitors the customer behavior and conducts in-depth marketing researches on the regular basis. In such a way, the company attempts to maximize the effectiveness of its performance through meeting customer needs. To put it more precisely, the company attempts to foresee customer needs and expectations and to introduce new products and services to meet them.

The relationships of the organization imply the ability of a business to develop enduring relationship between customer and employee (Clarke, 2000). In this regard, my company focuses on the development of the customer loyalty through offering unique services and developing the customer loyalty through the high level of the customer satisfaction. In addition, the company offers loyal customers a system of discounts and loyalty programs that encourage them to purchase products and services of the company over and over again. In such a way, the company maximizes the effectiveness of its marketing performance and builds up long lasting, endurable relationships between its employees and customers. Employees receive special training to learn how to work and communicate with customers.

Service quality is the ability of business to design, develop and deliver service that meets or exceeds customer expectations (Bovee & Thill, 2005). In this regard, my company has implemented the automated system of the quality assurance, which involves the assessment of the productivity of each employee along with the customer feedback concerning the performance of each employee. In such a way, the service quality helps to maintain the service quality at the high level. The service quality is one of the essential components of the customer satisfaction because if the service quality is low, customers grow dissatisfied and, on the contrary, if the service quality is high, customers grow satisfied.

Furthermore, the organizational capability enhances uniqueness because it is difficult to imitate. The imitation requires changing the way people think, act, and interact. In this regard, researchers (Notorantonio, 2006) refer to the concept of social engineering as an effective tool of developing the organizational uniqueness and shaping the target customer behavior. The social engineering of complex social processes such as culture, teamwork, leadership are neither well-understood nor easily replicated (Keener, 1999).

Four critical elements of capable organizations include shared mindset, management practices, capacity for change through understanding and managing organizational systems, and leadership at all levels in the organization. Shared mindset includes common understanding and goals of ends (strategies) and means (processes, work systems, activities) and congruence between customer and employee expectations (Notorantonio, 2006). The shared mindset involves all professionals working within the organization from employees to top executives. In my organization, shared mindset is achieved through the regular and extensive communication between managers and employees, which can share ideas and information concerning the organizational development as well as their personal views on the organizational development.

Management practices play the crucial part in the development of the organizational capability. In this regard, management practices include policies, programs, operating procedures, and traditions that guide work of employees and managers. In such a way, managers develop the framework within which the company operates and employees and managers are responsible for the fulfillment of policies and strategies of the company.

Management practices transform individual behavior to create customer satisfaction and consistency in how customer is treated. In this regard, the company pays a particular attention to training of employees to help them to develop effective approaches to customers to maximize the customer satisfaction.

Furthermore, management practices complement and integrate with one another to create common expectations, behaviors, and goals. Management practices enroll all employees and managers of the company as well as customers, who are the target group for management practices because the ultimate goal of management practices is to reach the high level of the customer satisfaction and to increase the customer loyalty which provides the company with the possibility of a sustainable and stable growth.

The capacity for change through understanding and managing organizational systems is another essential component of the organizational capability. The capacity for change includes the organization’s ability to reduce cycle time of all activities. In such a way, the organization can speed up internal business processes, production processes, and other processes that directly or indirectly affect the company’s performance and its relations with customers.

In addition, my company respects four principles of the organizational capability, which are symbioses, reflexiveness, alignment and self-renewal. Symbioses is the ability to cope with external change; a bridge between internal action and external conditions (Notorantonio, 2006). Reflexiveness is the ability to learn from past experiences; self-assessment and continuous learning (Notorantonio, 2006). Alignment is the ability to integrate tasks, structures, processes, and systems with political, technical, and cultural aspects of the firm (Notorantonio, 2006). Finally, self-renewal is the ability to change over time successfully when needed (Notorantonio, 2006).

Leadership is crucial at all levels in the organization and contributes to the development of the organizational capability. Researchers (Kotter, 2001) point out that the effective leadership owns passionately a vision which is promoted both within and outside the organization. Furthermore, the true leadership translates external conditions into vision for organization and how employee must act to attain vision (Kotter, 2001). Finally, the leadership empowers individuals at all levels within the organization to act within his or her domain (Kotter, 2001).

Thus, the organizational capability determines, to a significant extent, the competitive position and performance of the organization. At the same time, the organizational capability focuses on the effective human resource management, which allows optimizing their performance. In such a way, the organization can enhance its marketing performance and competitive position in the industry.

 

References:

Bovee, C.L. and Thill, J.V. (2005). Excellence in Business Communication. Prentice Hall.

Hart, J.L. (2004). “Organizational Communication in an Age of Globalization: Issues, Reflections. Practices”. Business Communication Quarterly, Vol. 67.

Kotter, J. (2001) “What Leaders Really Do!” Harvard Business Review, Boston. Volume 79.

Clarke, R. L. (2000).  Investing in the human resource.  Healthcare Financial Management 54 (2); 16.

Keener, R. (1999, May). Problems for everyone in IT staffing needs. Healthcare Management Technology 20 (4), 10.

Notorantonio, R. (2006).  Going Once, Going Twice… Health Management Technology 27 (2), 30.

The terms offer and acceptance. (2016, May 17). Retrieved from

[Accessed: January 20, 2022]

"The terms offer and acceptance." freeessays.club, 17 May 2016.

[Accessed: January 20, 2022]

freeessays.club (2016) The terms offer and acceptance [Online].
Available at:

[Accessed: January 20, 2022]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: January 20, 2022]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: January 20, 2022]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: January 20, 2022]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: January 20, 2022]
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