The degree to which organizational members integrate an organization's identity into themselves influences their loyalty, performance, and effectiveness within that organization. With the eyes of a dynamic external environment increasingly interested in and vocal about the internal operations and outputs of organizations, managers have to recognize the dynamic link between the organizational identity held by its members and the effectiveness of the organization and to develop strategies that allow the organization to adapt its internal image to the environment better.

This section investigates the connection between organizational identity and organizational effectiveness by defining organizational identity, exploring concepts of group dynamics to establish measurements for organizational effectiveness, assessing Social Identity Theory and frameworks for shaping organizational identity, and considering how organizational identity can hinder an organization's effectiveness.