Table 6-1

Measure of Organizational Effectiveness

INTERNAL EXTERNAL

Efficiency:
Units produced per work-hour Cost of capital
Rate of return on invested capital Market share
Cost of goods sold Cost of raw materials
Scrap material per unit Labor cost
Sales per salesperson Product price leadership
Sales per advertising dollar New product development
Inventory cost New market development

Effectiveness:
Employee turnover Community satisfaction with organization
Absenteeism Satisfaction of supplier with organization
Number og grievances Consumer satisfaction
Employee attitudes Ability to identify problems or opportunities
Organizational climate Social responsibility
Employee commitment Quality of life
Interpersonal relationships Environtmental impact

Source: adapted from R.H. Klimann and Richard P. Herde, "Towards a Systemic Methodology for Evaluating the
impact of interventions on Organization Effectiveness", Academy of Management Review, vol. 1 p. 95, 1976