Organisational Effectiveness

Chapter 3: Organisational effectiveness

Organisational effectiveness: The degree to which an organisation attains its short- and long-term goals, the selection of which reflects strategic constituencies, the self-interest of the evaluator and the life stage of the organisation

The goal-attainment approach 
--> an organisation’s effectiveness is judged in terms of whether it achieves its goal

Assumptions:                

This approach assumes that organisations are deliberate, rational, goal-seeking entities. Therefore, goals must be set which should be clear, executable and the progress regarding the achievement of these goals should be measurable.

Making goals operative:
Managers should identify organisation’s goals and develop measures to determine the extent to which these goals are met.

Problems:
-unclear goals regarding membership
-short-term goals which don’t correspond with long-term goals

Value to managers:
Managers should do their best to make sure that the problems mentioned above are avoided as much as possible to obtain reasonably valid information for assessing an organisation’s effectiveness.

The systems approach 
--> evaluating an organisation’s effectiveness by its ability to acquire inputs, process the inputs, channel the outputs and maintain stability and balance

Assumptions:
An organisation requires a steady replenishment of resources consumed in production. If any of the subparts don’t work properly, it will affect the whole system.

Making goals operative:

This approach focuses on the means necessary to ensure the organisation’s continued survival. It’s important that the interrelationships between these systems can be converted into organisational effectiveness variables or ratios.

Problems:

There are two most telling shortcomings of the system:

1. Too many variables are not easy to quantify. Also, environments may change quickly. These uncertainties may cause problems in the continuity of a system.
2. The focus often is on the means necessary to achieve effectiveness rather than on organisational effectiveness itself.
   

Value to managers:
Managers in this system are less inclined for immediate results. They have to focus on the process itself and in the future of the organisation.

The strategic-constituencies approach 
--> an organisation’s effectiveness is determined by how successfully it satisfies the demands of those constituencies in its environment from which it requires support for its continued existence

Assumptions:
This approach assumes to exist within an environment where demands are placed on the organisation by various important groups, or constituencies.

Making strategic constituencies operative:
The management needs to satisfy the important groups in a company. This could be difficult in a large organisation because there are many different environments. In organisations like these, the management should identify the groups and their expectations.