Running Head: ORGANIZATION CULTURE 1 ORGANIZATIONAL CULTURE 8 Organizational Structure Name Institutional Affiliation Date Organizational Structure The research question seeks to assess the impact of market demand and organizational culture on innovation and performance relationship. In the study, the market demand and culture mostly defines the innovation boundaries and also indirectly influences the organization’s performance. The market demand and the organizational culture are the independent variables while the innovation and the performance are the dependent variables. The purpose of the assignment is to come up with a hypothesis that relates directly to the research question. Independent Variables: The market demand and organizational culture influences changes in performance and innovation. The market demand could be measured in parameters of customer needs and supply options while organization culture could be examined using the working environment, strategies, effectiveness and overall performance. Market demand is characterized by trends, preferences, and tastes. On the other hand, organizational culture could be scaled on a basis of how effective, the degree of cooperation, performance and innovative a company is. Dependent Variables: Innovation and Performance are directly influenced by the market demand and the organizational culture. The market could define how the organization could innovate to meet the market needs while the culture could influence the innovation processes in a company and hence directly influence performance. Innovation, on the other hand, could be the determining factor in a company's performance rating. The performance could be measured in both financial and non-financial ways, for example, the organization's objectives and goals and fiscal year audit. According to research carried out previously, the market demand defines the kinds of innovation a company can indulge in. The market demand shapes the company’s innovation and performance. The demand constantly changes according to trends, preferences or tastes. These factors, in turn, prompt the organization to innovate towards fulfilling the clients' needs. The demand also influences performance as it increases, the organization will either increase performance or risk collapse due to the demand. On the other hand, the performance of the organization as a whole depends on individual performance hence indirectly being influenced by organizational culture. The market demand, for example, influences the innovativeness in a company in different ways. The market can demand improvement on a product that has been on the market and hence the company has to come up with ways to improve the product. Likewise, trends, preferences, and tastes, change each and every day. It is, therefore, the duty of the organization to come up with w.

1. Running Head: ORGANIZATION CULTURE
1
ORGANIZATIONAL CULTURE
8
Organizational Structure
Name
Institutional Affiliation
Date
Organizational Structure
The research question seeks to assess the impact of market
demand and organizational culture on innovation and
performance relationship. In the study, the market demand and
culture mostly defines the innovation boundaries and also
indirectly influences the organization’s performance. The
market demand and the organizational culture are the
independent variables while the innovation and the performance
are the dependent variables. The purpose of the assignment is to
come up with a hypothesis that relates directly to the research
question.
Independent Variables: The market demand and organizational
culture influences changes in performance and innovation. The
market demand could be measured in parameters of customer
needs and supply options while organization culture could be
examined using the working environment, strategies,
effectiveness and overall performance. Market demand is
characterized by trends, preferences, and tastes. On the other

2. hand, organizational culture could be scaled on a basis of how
effective, the degree of cooperation, performance and
innovative a company is.
Dependent Variables: Innovation and Performance are directly
influenced by the market demand and the organizational culture.
The market could define how the organization could innovate to
meet the market needs while the culture could influence the
innovation processes in a company and hence directly influence
performance. Innovation, on the other hand, could be the
determining factor in a company's performance rating. The
performance could be measured in both financial and non-
financial ways, for example, the organization's objectives and
goals and fiscal year audit.
According to research carried out previously, the market
demand defines the kinds of innovation a company can indulge
in. The market demand shapes the company’s innovation and
performance. The demand constantly changes according to
trends, preferences or tastes. These factors, in turn, prompt the
organization to innovate towards fulfilling the clients' needs.
The demand also influences performance as it increases, the
organization will either increase performance or risk collapse
due to the demand. On the other hand, the performance of the
organization as a whole depends on individual performance
hence indirectly being influenced by organizational culture.
The market demand, for example, influences the
innovativeness in a company in different ways. The market can
demand improvement on a product that has been on the market
and hence the company has to come up with ways to improve
the product. Likewise, trends, preferences, and tastes, change
each and every day. It is, therefore, the duty of the organization
to come up with ways to ensure that they cater to each and
every demand that is there in the market. The shift in customer
demand prompts the organization to change their innovative
behavior and the level of innovativeness as illustrated in the
study by Morozov & Taskaeva, (2016). Innovative behavior may
shift by diffusion of innovation into other products that are

3. consumer friendly.
The performance of an organization may directly or
indirectly be affected by the innovativeness of a company. Due
to the increase in customer demands and preferences, companies
tend to move from one thing to the next through innovation and
processes. Demand affects performance by changing the
processes such as manufacturing from mass production to
customized production. The performance change requires
increased innovation on the company to meet these demands.
Innovation could be encouraged by improving management
strategies that could improve the performance. By creating a
free environment, the employees are free to think outside the
box and are more open to ideas hence improved performance.
According to Gattorna, (2017), organizational culture is
the guide on how a company runs. Organizational cultures are
unique to each and every company as it consists of beliefs,
norms, behaviors and the work environment. It defines the
leadership and ways of governance within an organization. The
culture could have a strategy that encourages innovation and
hence responds to customer demands. This way, the culture
influences the innovation processes in such cases. The
behaviors exhibited in a culture could involve activities that
encourage innovation. The activities could involve risk-taking,
idea generation and decision-making processes.
As in the example above, the market demand and
organizational culture greatly impact the innovation processes
and performance in almost all organizations. The three are
interrelated as one affects the other either directly or indirectly.
Organizational culture can also affect the performance of any
organization. From the definition of organizational culture, one
can learn that the norms and behaviors of a company can
positively or negatively affect a company's performance.
Organizational culture involves strategy, working environment,
behavior, trust, purposefulness, customer orientation and also
management, (Tuan et.al, 2014).
Organizational culture directly relates to the innovation

4. processes, performance and market demand. An example is if
the culture is customer oriented, the market demands will then
be met by improving performance in the organization to
brainstorm and innovate new ways to satisfy the clients. The
market demands are influenced by factors such as preferences,
tastes, and trends. The market will, in turn, shape the innovation
processes to customize their merchandise to suit every client
individually. In order to actively innovate, the working
environment should encourage risk-taking and hence the
performance of a company could be more open to ideas, tolerate
mistakes and avail the resources for it to achieve customization
(Uzkurt et.al, 2016). The company could then improve customer
services in order to understand the customer needs. This way,
the company’s performance overall improves.
Innovation is the only competitive advantage that sets
apart a company in an increasingly diverse environment (Tuan
et.al, 2014). In many scholarly studies, scholars agree that
innovation capability defines the company’s performance.
According to Schumpeter, a scholar from the 1920s, innovation
could consist of production, supply, market, quality or
structure. Innovation could, therefore, be summarized as
product and process innovation, market innovation or
organizational innovation.
Production innovation is when a company adopts new ways
of production to respond to the market demand (Romero et.al,
2017) or change tactics in way of production to curve a niche
for themselves. Production innovation can also be as a result of
wanting to customize their goods to suit individuals. This could
be a change in product packaging and design as a marketing tool
for the company. It could also involve different prices,
promotion strategies, and placement. Production innovation
could also be as a result of new equipment or new technologies
as the market continues to evolve and seek more digital
products. The companies will, therefore, innovate to meet this
new demand. The demand may also influence a change of
strategy from retail to manufacturing hence improving

5. performance and challenging the company to innovativeness.
Organizational innovation is when the company comes up
with new ways to do things, (Abdi & Senin, 2014). This could
occur in many ways; change of organization example to
customer-oriented practices, external relationships, change in
working environment and also change in management practice.
The company could change the way they do things in response
to a market demand or in order to encourage both market
innovation and product innovation. Innovative organizational
culture is associated with positive firm performance, market
share and market value, (Uzkurt et.al, 2013)
Hypothesis: The market demand and organizational culture
defines innovation and performance in a company
The research seeks to answer the question of whether there
is a relationship between the organizational culture, the market
demand, innovativeness and the performance of a company. The
hypothesis states that all the four factors are interrelated and
hence the justification above. The relationship between the
market demand and organizational culture is that they directly
affect a company’s innovativeness and performance. A market
could shape the response of a company by either prompting
innovation that is achieved through the culture and improvement
of performance in the company.
There is a direct relation to innovation could be defined in all
aspects of the research question. There is marketing innovation,
product and process innovation and organizational innovation.
All the factors relate to influencing the other. Organizations
should, therefore, focus on the factors as a unit instead of
focusing on the independent factors as they are all crucial in
improving the overall performance of a company. As seen
previous research has mainly focused on the factors
independently while this research intends to lay focus on all the
factors dependent on each other.
The study seeks to bridge the gap in the form of providing
information for companies that are yet to discover the
interrelation of the four. The hypothesis then needs to be proved

6. either null or valid in order to bridge this gap of ignorance in
company research. The research will answer a question of
whether or not the factors are valid to improve overall
performance or not. It is, therefore, a valid hypothesis and could
answer many of the questions in the research such as the effect
of one factor on all the others and vice versa. Research in the
past is closed and hence this study opens up to the idea that
companies need to revise their organizational culture and revisit
the market in order to strategize on innovation and improve
overall performance.
References
Abdi, K., & Senin, A. A. (2014). Investigation of the impact of
organizational culture on organization innovation. Journal of
Management Policies and Practices, 2(2), 1-10.
Gattorna, J. (2017). Introduction. In Strategic supply chain
alignment (pp. 15-21). Routledge.
Morozov, V. S., & Taskaeva, N. N. (2016). Basic market factors
affecting innovative activities. The Journal of Internet Banking
and Commerce.
Romero, D., Larsson, L., Rönnbäck, A. Ö., & Stahre, J. (2017,
September). Strategizing for Production Innovation. In IFIP
International Conference on Advances in Production
Management Systems (pp. 3-12). Springer, Cham.
Tuan, Nham & Huong, Pham & Pham, Giang. (2014). THE
IMPACT OF ORGANIZATIONAL CULTURE ON
INNOVATION ACTIVITIES -THE CASE OF X
CORPORATION IN VIETNAM. 29.
Uzkurt, Cevahir & Kumar, Rachna & Semih Kimzan, Halil &
Eminoglu, Gözde. (2013). Role of innovation in the relationship
between organizational culture and firm performance: A study
of the banking sector in Turkey. European Journal of Innovation
Management. 16. 10.1108/14601061311292878.

7. Running head: ORGANIZATION PERFORMANCE 1
ORGANIZATION PERFORMANCE 2
Organization Performance
Name
Institution
Date
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

8. 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,

9. 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

10. 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

11. 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.
References
Alvesson, M., & Sandberg, J. (2011). Generating research
questions through problematization. Academy of management
review, 36(2), 247-271.
Alvesson, M., & Sandberg, J. (2013). Has management studies

12. lost its way? Ideas for more imaginative and innovative
research. Journal of Management Studies, 50(1), 128-152.
Ashkanasy, N. M. (Ed.). (2013). Editor's comments:
Internationalizing theory—How “fusion theory” emanates from
Down Under.
Cornelissen, J. P., & Durand, R. (2014). Moving forward:
Developing theoretical contributions in management studies.
Journal of Management Studies, 51(6), 995-1022.
George, G. (2014). Rethinking management scholarship.
Mantere, S., &Ketokivi, M. (2013). Reasoning in organization
science. Academy of Management Review, 38(1), 70-89.
R- SL5 instructions
DEVELOPING A RESEARCH MODEL
Based on the readings for this module, the content of previous
courses (especially ORG 601 and 602), and your SLP 3 & 4
research questions and hypotheses, develop a research model
which addresses your research question.
1. Define the variables clearly, and identify IVs, DVs,
Mediators and Moderators. You need at least one of each.
2. Justify the effects you expect using prior research and logic.
3. State your hypotheses clearly, and explain how they relate to
the research question.
4. Draw a diagram that explicates the expected relationships.
SLP Assignment Expectations
1. Answer all questions with clarity and depth. Show your
critical thinking ability.
2. Show ability to construct hypotheses and research models.
3. Show necessary reasoning.
My notes:

13. My Hypothesis: The market demand and organizational culture
defines innovation and performance in a company
Cite sources within your comment to support your statements.
Include references, properly formatted
5pgs
Attached my SLP 3 & 4 Research questions
Required Reading
Steiner, E. (1988). Methodology of theory building. Retrieved
from https://www.indiana.edu/~tedfrick/steiner/Methodology%2
0of%20Theory%20Building.pdf
Gioia, D. A., & Pitre, E. (1990). Multiparadigm perspectives on
theory building. Academy of Management Review, 15(4), 584-
602. doi: 10.2307/258683
Watch:
Vary Your Stats. (2010). Deviant square episode 1: Mediator,
moderator, and suppressors: Part 1. Retrieved
from https://www.youtube.com/watch?v=72Tll7AeMjw
Gaskin, J. (2010). A simple guide to mediation. Available
at https://www.youtube.com/watch?v=9mf7nIAlH5c
Loar, L. (2014). Independent and dependent variables.
Retrieved
from https://www.youtube.com/watch?v=eDdMOMdh1jM
Optional Reading

14. Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building
from cases: Opportunities and challenges. Academy of
Management Journal, 50(1), 25-32.
George, J. M., & Jones, G. R. (2000). The role of time in theory
and theory building. Journal of Management, 26(4), 657-684.
doi: 10.1016/s0149-2063(00)00051-9
Klein, K. J., Tosi, H., & Cannella, A. A. (1999). Multilevel
theory building: Benefits, barriers, and new
developments. Academy of Management Review, 24(2), 243-
248.
Martyn, G. (n.d.) Experimental Method: IV + DV. Retrieved
from http://www.showme.com/sh/?h=DMuRmbY
Judkins, B. (2014). IV & DV math specific. Retrieved
from https://www.youtube.com/watch?v=hooWlUwv4y8