This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Dynamic capabilities is what companies need to focus on the main competencies and how the role of management builds, changes and adapts to the changing forces that could affect the competencies and how these the companies capabilities can work around the changing factors of the business environment. It is also provides the fundamental organizational processes that facilitate a firm to be innovative within the whole organisation.
Many organisations fail to sustain their business and performance through the changing market and technologies. Organisations need to sustain their competitive advantage, therefore, they would have to manage, influence and adjust their competencies and assets in order to gain and sustain their competitive advantage.
Culture can affect different aspects of the organisation's dynamic capabilities such as its innovation, employee's involvement, its openness to change, teamwork, morale, customer service and trust. Culture creates a basis for the company's employees; it is also created by the employees not the company itself. The organisation will only provide the objectives, missions and aims, but the employees will develop the culture and how to manage and achieve the objectives. According to Schein (2004) he stated that culture is an important and stable factor in the organisation's framework. McShane (2003) defines culture as an essential outline of shared values and beliefs on how the employee's practice, process and act on issues and opportunities the organisation faces. The culture of the organisation is what sets them apart from different organisations; therefore the organisation can position itself in the environment through its culture. However one of the most used definition of organisational culture which identifies the role of culture and how culture plays its part in the success of the organisations activities, was stated by Schein (2004, 17) who noted that organisational culture (OC) is "A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems".
Organizational Culture can also be defined as a form of shared values, routines, norms and objectives shared by the employees of the organization. Therefore, organizational culture is created on a foundation of communication, socializing and common trust and understanding. Furnham and Gunter (1993) reviewed the basic functions of how organisational culture can be incorporated as internal integration which can be formed through socializing between members of the organization and creating a community of trust and identity within personnel and commitment to the organization.
Daft and Weick (1984) defined interpretation as the process through which information is given meaning, thus, organizational culture can create the context (through values, norms and practices) for individuals to share a common interpretation.
Organisational culture consists of paradigms which are intangible frameworks. Capra (1997) defined it as "A paradigm is a constellation of concepts, values, perceptions and practices shared by a community, which forms a particular vision of reality that is the basis of the way a community organises itself". This basically means if there ever was a shift or a change in paradigms the organisation would need to prepare their employees and get them used to the idea of change. In other words they would need to learn how to unlearn their old habits in order to give in to organisation's new culture. The management need to introduce the notion of cultural change and help recognize them and help them let go of the old paradigm.
However, Shared values among the organizational members enhance internal coordination and promote a sense of importance and sense of recognition. The coordinating function operates on creating a competitive advantage, building an awareness of the environment on the base of behaviours and social constancy. OC plays a huge part in the company's strategic direction, goals, tasks, decision making, communication and cooperation. Some organizations would form their OC based on creativity and innovation in order to secure their sustainability, however, OC affects dynamic capabilities of the organisation by enhancing innovations that influence the behavioural or structural aspects of a firm. In order for the organization to achieve a sustainable organizational culture management should generate values that encourage creativity for example, encouraging staff to come forward with new ideas and not to be afraid of stepping up to different tasks. Introducing a more open communication policy allows the employees to feel comfortable with one another while sharing their ideas, knowledge and opinions in order to gain new views and outlooks; this supports the idea of creating a creative and innovative based culture. The organisation should develop a learning culture within the organisation, for example they should encourage the idea of learning and acknowledging mistakes that occur, as a result, this can influence creativity and employees can enhance their innovative skills in order to achieve the tasks. Each department within an organisation have their own sub-culture that differs from other departments in the organisation, therefore, it's created by the different role each department plays in the organisation as they formed their own objectives and tasks that should be achieved in order to improve the organisations performance. According to Denison and Mishra (1995) developed a theory of organizational culture and firm effectiveness by focusing on the cultural values and giving an example of IT management practices. As IT is rapidly changing and new technologies are emerging, organisational culture helps them focus on the internal and external changes and advances of the IT environment. Organisational culture assists dynamic capabilities by preparing them for the external factors of the rising changes, while internally it may face issues in adapting to the new changes. However, if the organisations have adapted to the innovation and creativity culture, employees would find it easier to be flexible and more open to the new advances, new knowledge and changes that occur such as the IT departments.