Discuss the Various Approaches to Organizational Effectiveness

Introduction of organization effectiveness

OE is defined as the degree to which an organization attain its short and long term goals, the selection of which reflects strategies constituencies, the self-interest of the evaluator, and the life stage of the organization

Organization effectiveness meaning & definition

Organizational Effectiveness is the extent to which an organization achieves its goals with the given resources and means. An Organization is said to be effective if it is able to achieve its goals. The goals must be achieved within the constraints of limited resources as none of the resources provided by an organization environment are really unlimited

According to Price, “Organizational Effectiveness is the degree of achievement of multiple goals”.

According to Paul E. Mort, “Effectiveness is the ability of an organization to mobilize its centre’s of power for action- production and adaptation”.

According to Hannan and Freeman “Organizational Effectiveness, is the degree of congruence between organizational goals and observable outcomes”.

Levels of organizational effectiveness

Individual Effectiveness depends upon

Ability

Aptitude

Skills

Knowledge

Attitude

Emotions

Motivation

Stress

Group Effectiveness depends upon

Cohesiveness

Leadership

Structure

Status

Roles

Norms

Organizational Effectiveness depends upon

Environment

Technology

Strategic choice

Structure

Process

Culture

Approaches to organizational effectiveness/Achieving OE (Four approaches to $OE$ )

I. Goal- Attainment Approach- organizations are created to achieve one or more goals example profit maximization, high productivity, employees satisfaction and retention, high morale, providing efficient service may be examples of goal attainment criteria ( simple stake holders goals achievement)

II. Systems- Approach- Four Criteria

Adaptability- The ability to solve problems and to react with flexibility to changing environmental demands

A sense of Identity- Knowledge and insight on the part of the organization of what it is, what its goals are, and what it is to do

Capacity to Test Reality- The ability to search out, accurately perceive, and correctly interpret the real properties of the environment, particularly those which have relevance for the functioning of the organization

Integration- among the sub parts

III. Strategic-Constituencies Approach- Stake Holders

Owners- Return on investment, growth in earnings,

Employees-compensation, fringe benefits, satisfaction with working conditions

Customers- satisfaction with, quality, service

Suppliers- satisfaction with payments

Creditors- ability to pay indebtedness

Unions- competitive wages and benefits, satisfactory working conditions; willingness to bargain fairly.

Local community- involvement of organization members in local official affairs, lack of damage to the communities’ environment.

Government- compliance with laws, avoidance of penalties agencies and warning

IV. Competing values approach are two

Basic- return on investment, market share of your product, new product development
According to Robbins- three dimensions of $OE$ value approach

1. Flexibility versus Control- flexibility and control are two incompatible dimensions of organizational structure
2. People versus Organization- whether people in organization should be valued more or organization itself. This is because people organization dichotomy is another set of essentially incompatible dimensions
3. Means versus Ends- means stress internal forces and the long term, whereas ends value final outcomes and the short term

Indicators of organization effectiveness

a. Innovation

b. Results

c. Productivity

d. Absence

e. Fiscal indicators

f. Perceptions of corporate performance

g. Balanced score card

Factors influencing organizational effectiveness

According to Likert classification

Causal factors- example, organizational culture, managerial policies, leadership styles and skills
Intervening factors- example, attitudes, behavioral, motivations, performance goals, communication help in building and developing the organization
End-result factors- example, production, sales, earnings, growth, and market share

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