Organizational

Effectiveness
Prof. Pavni Kaushiva
DWO 2021-22
External Environment
Opportunities Top Management
Threats determines the
Uncertainty organizational goals,
Resource availability strategy and design

Enable organization
Internal Situation to be effective in a
Strengths changing
Weaknesses environment
Distinctive competence
Leader style
Past performance
2
Organizational Purpose- Strategic intent
Organization’s energies and resources are directed toward a focused, unifying, and compelling goal

Operating Goals
Mission: • Overall Performance
Overall goal/ reason for
existence • Resources

Competitive Advantage: • Market

What sets it apart
• Employee Development
Core Competence:
What it does better • Innovation and Change
than others
• Productivity
3
Goals Types and Purposes
Mission Communicate org’s purpose and values
(Official
Bestows legitimacy
goals)
Operating Provide direction and motivation to employees
goals Offer decision guidelines
Define a standard of performance

4
Strategy to achieve the organizational goals
Porter’s Competitive Strategies
Differentiation strategy – to distinguish products or services from
others in the industry
Low-Cost Leadership – increase market share by keeping costs low
compared to competitors

Organizations may choose to focus broad or narrow in reaching

multiple markets.
Miles and Snow’s Strategy
Prospector
◦ Learning orientation; flexible, fluid, decentralized structure
◦ Values creativity, risk-taking, and innovation
Defender
◦ Efficiency orientation; centralized authority and tight cost control
◦ Emphasis on production efficiency, low overhead
Analyzer
◦ Balances efficiency and learning; tight cost control with flexibility and adaptability at
the periphery
◦ Emphasis on creativity, research, risk-taking for innovation
Reactor
◦ No clear organizational approach; design characteristics may shift abruptly depending
on current needs 6
Organizational Effectiveness
Degree to which an organization realizes its goals – official and operating
How to evaluate Organizational Effectiveness?
•Goal Approach
•Resource-based Approach
•Internal process Approach
•Strategic Constituents Approach

7
Goal Approach
Identify and assess the organization’s output (operating) goals.
◦ Profitability
◦ Market share
◦ Growth
◦ Social responsibility
◦ Product quality
Assessment should be of multiple goals simultaneously
Can be done only after successfully identifying operating goals and a means to
measure them

8
Resource-based approach
Ability of an organization to obtain scarce and valued resources and successfully
integrate and manage them

◦ Bargaining position to obtain the resources

◦ Ability to perceive and correctly interpret real properties of the environment
and supply forces
◦ Ability to use tangible and intangible resources and capabilities to improve
day-to-day activities
◦ Ability to respond to changes in the resource sectors

9
Internal Process Approach
Effectiveness focused on organization’s internal processes; what it does with its
resources

◦ Adaptive culture and positive work climate

◦ Confidence and trust between employees and management
◦ Operational efficiency
◦ Clear horizontal and vertical communication paths
◦ Growth and development of employees
◦ Co-ordination among organization’s parts

10
Strategic constituents Approach
Focus on key stakeholders’ satisfaction
Strategic Constituent group Effectiveness criteria
Owners Financial return
Employees Pay, good compensation, job satisfaction
Customers Quality of goods and services
Creditors Creditworthiness
Community Contribution to community affairs
Suppliers Satisfactory transactions
Government Obedience to laws and regulations

11
Integrated Effectiveness Model

12