ORGANIZATIONAL EFFECTIVENESS

HISTORICAL OPINIONS ABOUT ORGANIZATIONAL EFFECTIVENESS
1. FREDERICK TAYLOR 2. HENRI FAYOL 3. ELTON MAYO

FREDERICK TAYLOR EFFECTIVENESS WAS DETERMINED BY FACTORS SUCH AS PRODUCTION MAXIMIZATION. Etc. TECHNOLOGICAL EXCELLENCE. . COST MINIMALIZATION.

HENRI FAYOL EFFECTIVENESS IS A FUNCTION OF CLEAR AUTHORITY AND DISCIPLINE WITHIN AN ORGANIZATION .

ELTON MAYO EFFECTIVENESS IS A FUNCTION OF PRODUCTIVITY RESULTING FROM EMPLOYEE SATISFACTION .

itself customers and clients. EFFECTIVE in The organization accomplishing its must be purpose(s) EFFICIENT in the 4. members and of employees. . ADAPTIVE to new opportunities acquisition and use and obstacles of scarce resources 5. 3. CAPABLE OF SURVIVAL in a world of uncertainties. The organization must be 6. EFFECTIVENESS CRITERIA 2. CAPABLE OF A SOURCE OF DEVELOPING SATISFACTION the ability of its to its owners.TIME DIMENSION NEAR FUTURE Approx. and society. 1 year INTERMEDIATE FUTURE DISTANT FUTURE Approx. 5 years The organization must be 1.

AND SURVIVING IN THE DISTANT FUTURE. ADAPTING AND DEVELOPING IN THE INTERMEDIATE FUTURE.ORGANIZATIONAL EFFECTIVENESS MEETING ORGANIZATIONAL OBJECTIVES AND PRVAILING SOCIETAL EXPECTATIONS IN THE NEAR FUTURE. .

. coordination. • System Resource Approach: Effectiveness is the ability to acquire scarce and valued resources from the environment.APPROACHES TO MEASURING ORGANIZATIONAL EFFECTIVENESS • Goal Approach: Effectiveness is the ability to excel at one or more output goals. and employee satisfaction. motivation. • Internal Process Approach: Effectiveness is the ability to excel at internal efficiency.

Effectiveness.Approaches to Measuring Org. continued • Constituency Approach: Effectiveness is the ability to satisfy multiple strategic constituencies both within and outside the organization. • Domain Approach: Effectiveness is the ability to excel in one or more among several domains as selected by senior managers. .

Flow Charts of Approaches to Organizational Effectiveness – Goal Approach INPUTS TRANSFORMATION OUTPUTS GOAL APPROACH .

Flow Charts of Approaches to Organizational Effectiveness – Internal Process Approach INPUTS TRANSFORMATION OUTPUTS INTERNAL PROCESS APPROACH .

Flow Charts of Approaches to Organizational Effectiveness – System Resource Approach INPUTS TRANSFORMATION OUTPUTS SYSTEM RESOURCE APPROACH .

Flow Charts of Approaches to Organizational Effectiveness – Constituency Approach INPUTS TRANSFORMATION OUTPUTS STRATEGIC CONSTITUENCIES APPROACH .

COMPARISON OF THE FOUR OE APPROACHES Approach Definition An organization is effective to the extent that: Goal attainment it accomplishes its stated goals When Used Preferred when: goals are clear. time bound and measurable System Resource it acquires needed resources a clear connection exists between inputs and outputs constituencies have powerful influence on the organization. and the organization must respond to demands costs. outputs & satisfaction are easily measurable Constituencies all strategic constituencies are at least minimally satisfied Internal Processes combines internal efficiency and affective health .

satif. future sales Satisf.OE Criteria for Selected Constituencies Constituency Owners Employees Customers Suppliers Creditors Unions Typical Criteria Return on Investment. w/price. avoidance of penalties . fringe benefits. fairness in bargaining Local Communities Involvement in local affairs. w/debt payments Satisf. environmental damage Government Agencies Compliance w/laws. quality. service Satisf. w/competitive wages & benefits. growth in earnings Compensation. Satisf. working conditions. w/payments. job satisf.

In any complex organization there may be parts of the organization that function well and suggest effectiveness while other aspects of that same organization perform poorly. .The Contradictions Model of Organizational Effectiveness The idea of trying to characterize a whole organization as totally effective or ineffective is problematic.

Four Central Assumptions of the Contradictions Model 1. Satisfying short. It may be impossible to satisfy all groups of people who express interest in a company. Organizations face complex environments that place multiple and conflicting demands and constraints on them. Organizations have multiple. conflicting goals. It may not be possible to succeed in meeting all the environmental conditions an organization faces. 3. 4. It is impossible to maximize achievement of all goals. Organizations face multiple internal and external stakeholders or constituent groups that make competing or conflicting demands.or long-term demands at the expense of the other may result in sub-optimal performance. 2. Organizations must manage multiple and conflicting time demands. .

By comparing the diverse effectiveness indicators used by managers and researchers. .Competing Values Model Organizational goals and performance are defined by top and middle management. Quinn & Rohrbaugh looked for underlying similarities and found underlying dimensions of effectiveness criteria that reflected competing management values in organizations.

Competing Values Dimensions I Focus: whether dominant values concern issues that are internal to the organization or external to it. External focus reflects an emphasis on the well-being of the organization itself and its “fit” with its environment. . Internal focus reflects management concern for well-being and efficiency of employees.

while flexibility represents a management value for learning and change. Stability reflects a management value for efficiency and top-down control.Competing Values Dimensions II Structure: whether stability versus flexibility is the dominant structural consideration. .

Dimensions of Effectiveness Structure Flexibility I Focus Internal II External III Control IV .

Employees are given opportunities for autonomy and development. Management concern is on the development of human resources. Organizations using this are more concerned with employees than the environment. Management works toward sub-goals of cohesion.Four Models of Effectiveness Quadrant I : Human Relations Model – internal Focus and flexible structure. . morale. and training opportunities.

readiness. . Management’s goals are primarily growth and resource acquisition. Sub-goals are flexibility. Dominant value is establishing a good relationship with the external environment to grow and acquire resources. Similar to the Systems Resource Model. and positive evaluation by the external environment.Four Models of Effectiveness II Quadrant II: Open Systems Model – Combination of external focus and flexible structure.

Four Models of Effectiveness III Quadrant III: Internal Process Model – Reflects the values of internal focus and structural control. Sub-goals include mechanisms for efficient communication. information management. Seeks a stable organizational setting that maintains itself in an orderly way. Well established in environment and just wish to keep their current position. and decision-making. .

and profit. Similar to the Goal Approach. . Primary goals are productivity. Sub-goals include internal planning and goal-setting. efficiency. Organization wants to achieve output goals in a controlled way.Four Models of Effectiveness IV Quadrant IV: Rational Goal Model – Reflects Management values of structural control and external focus. which are rational management tools.

Exist simultaneously.Competing Values Four different opposing value sets within the organization. Emphasis may change over time. and the “right” balance for the organization is subject to managerial discretion. especially as the organization evolves through its life cycle. airlines . Examples: hospitals.

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