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KANAGEICENT SCUUICEVoL 14. No. 3 , Oetober, 1H7Ptiufiin UM.A.MANAGERIAL PERCEPTIONS OF ORGANIZATIONALEFFECTIVENESS*!

THOMAS A. MAHONEYIndtutrial Relations Center, University of Minnesota

Perceptions and judgm ents of 84 m anagers were analyzed in the developmentof models of organisational eFectivenee applied in managerial judgm ents.Managers d escribed 283 subordinate organization units in terms of 114 variablesoften mentioned as indicative of organizational effectiveness. Managers alsomade judgments of the overall effectiveness of these organizations. Analj'sis ofthe descriptions indicated that the 114 variables reflect 24 basic dimensions ofoi^anizational effectiveness. Models predictive of managerial judgments oforganizational effectiveness were developed using these 24 dimensions. Ageneral model accounted for 56 per cent of the variance of judgments of overalleffectiveness made by the 84 managers. Other models developed for more ho-mogeneous sub-samples of managers accounted for 75 to 85 per cent of thevariance in judgments of overall effectiveness. These m odels typically involveonly seven of the 24 dimensions of organizational ^ectiveness with a singledimension ca ny ing the m ost weight in judgm ents. These models of managerial, judgm ents of oi^;anisational effectiveness identify the basic dimensions view edby managers in judging subordinate organizations and the relative weightsassigned them. As such, they provide a useful framework for the developmentof criteria for judging organizations for administrative and research applica-tions.

What is an effective organization? What criteria are appropriate for assessingorganizational effectiveness? These questions p l i ^ e both adm inistrators andscholars. The literature abounds with suggested criteria of organizational effec-tiveness. As two au thors recently noted, however:Moet of what has been written on the meaning of these criteria and on their interre-, latedness . . . is judgmental and open, to question . What is worse, it is filled with advicethat seems sagacious but is tautdogical and contradictory. [4]

The administrator or rraearcher seeking measures of oi^anizational effectivenessfaces a bewildering array of potentially rdevant criteria. A bibliography con-cerning evaluation of oi^uoizational jierformance published in 1959 lists over370 references; the relevant literature probably has tripled since that date [11].Onefindsrelativd y littie consensus about actual rdev ance of t h ^ e criteria in theorganizational literature . M ost consensus appears with respect to one concept oforg^mizational ^ectivenessgoal adueverx^ent. An effective oiganization is onewhich adiieves its goals. This c(m(pt of organisationa l effectiveness, wiahb validmerely recasts the seu tih for effectiveness criteria in to a search for organizationalgoals.

* Rw eiv d January 1967; revised May 1967.t The studies reported l^re received support from th e Univermty of M innesota's Ind m -trial Re lations C enter, Graduate Sch od , and Graduate Scbodl of Buainess Adm inistration

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MANAGERIAL PEHCEFTIONS OF ORGANIZATIONAL EFFECTIVENESS B - 7 7

References to oi^nizational goals and/or effectiveness in the literature typi-cally focus on either extremely general concepts [2], [9] or extremely specificmeasures [8]. The concept of organizational survival typifies one extreme, andunique measures of organizational operations typify the other extreme. Neitherapproach provides measures useful in comparing the current effectiveness ofdifferent operating organizations. Mid-range criteria, on the other hand, wouldprovide a basis for comparative assessment of on-going organizations. These mid-range criteria are m easures generally predictive of ultim ate criterion achievementsuch as su rvival and are more general in applicability across organizations. In asense, these criteria are intermediate between unique operating measures whichapply only to single organizations and general criteria applicable to all organiza-tions but which cannot be assessed except at term inal points in the organizatioa'slife. Thus mid-range criteria a re more generally applicable th an the unique meas-ures but not as conclusive as ultim ate criteria since they are viewed only as pre-dictive of ultimate achievements.The variety of suggested criteria of organizational effectiveness observed byKatz and Kahn is a result, in part, of searches for mid-range criteria generalenough to be applied in comparative judgments and predictive of ultimate or-ganizational criteria. Unfortunately, there is little evidence to indicate either th atthe suggested criteria are predictive of ultimate criteria or that they representgoals consciously sought by organizations. Rath er, most of the st^gested criteriarepresent goals which observers believe organizations should seek or variableshypothesized as predictive of ultimate survival criteria. Differences among sug-gested criteria refiect differences among administrative and managerial theoriraand idealogies.M anagers in biisiness and indu stry m ake frequent judgm ents abou t the relativeeffectiveness of subordinate organizations despite the lack of consensus amongwriters discussing organizational effectiveness. Judgments of effectiveness aremade, explicitly or implicitly, whenever budgets are formulated, projects andtasks are assigned, and whenever organizational shifts of resources are considered.Studies at the Industrial Relations Center have attempted to identify the vari-ables considered by business managers in making these judgments and, by in-ference, the criteria of organizational effectiveness applied in the judgments . Thisarticle reportsfindingsof some of these studies.

Rat ionale for the StudiesMost discussions of organizational effectiveness in the literature tend to benormative; they s u r e s t criteria which are prescribed by outside observers. Thesecriteria may or may not be related to goals actually sought by business organiza-tions. Business managers' judgments about oi^nizational effectiveness pre-sumably reflect their perceptions of organizational goals and their beliefs aboutvariables related to the achievement of organizational goals. Identification of thecriteria of effectiveness applied in m anagerial judgments should provide informa-

tion about nianagerial perceptions of both ultimate and short-run organizationalgoals. Th is information would be useful in the development of operational meas-

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B-78 THOMAS A. MAHONEY

Discussions of organizational effectiveness in the literature suggest a number ofvariables as relevant in defining the concept of effectiveness. Early discussionswhich we conducted with managers about their judgments of effectiveness pro-duced additional variables as possible elements of effectiveness. A ll in all, we werable to specify ab out 150 different variables suggested as components or measureof the concept of organizational effectiveness.The potential elements of organizational effectiveness are too numerous to beapplied as independent criteria by managers when judging effectiveness. Ratherwe suspect that managers implicitly group variables into a smaller number ofbasic dimensions of organizational effectiveness. A group of variables is viewed asindicative of a single dimension, and these variables are considered as a group informing an impression of the organization in term s of th at dimension. Juc^m entsof overall effectiveness are based upon a composite of these dimensional measuresor impressions. Th e proliferation of variables comprising th e concept of organiza-tional effectiveness occurs as persons select specific variables to characterize agiven dimension.The variables mentioned as criteria of oi^nizational effectiveness might begrouped into any of a number of alternative sets of dimensions. We sought toidentify dimensions which, in fact, accoun t for differences managers perceiveamong subordinate organizations, especially differences in judged overall effec-tiveness. Our studies have sough t to answer the following questions:1. What are the basic dimensions of organizational effectiveness perceived bybusiness managers?2. W hat relative importance do m anagers assign to each of these dimensions in

making judgm ents about overall effectiveness of organizations?These two questions suggest, by inference, an underlying assumption which alsomight be stated as a question for s tud y:3 . To what extent do criteria used in judging organizational effectiveness varyby company, industry , and m anagerial characteristics?Design of the Studies

The questions posed above call for analysis of managers' perceptions of andjudgments about subordinate organizations. Earlier pilot studies had indicatedth at while managers encountered little apparen t difficulty in making comparativejudgments of oi^nizational effectiveness, they foxmd it difficult to verbalizeabout their judgmental processes and to specify with operational clarity thecriteria applied in making judgments of effectiveness. The current studies weredesigned to provide a framework for indirectly eliciting from managers the cri-teria they apply in judgm ents of organizational effectiveness. Th e general designinvolves an analysis of managers' perceptions of the characteristics of subord inateorganizations, identification of the basic dimensions of characteristics perceivedamong subordinate organizations, and analysis of the predictive relationships ofthese dimensions to managerial judgments of overall effectiveness. The analysisfocuses upon managers' perceptions of subordinate oi^nizatlons, regardless ofthe validity of these perceptions, since the managers' judgments presumably arebased upon these perceptions.

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MANAGERIAL PERCEPTIONS OF ORGANIZATIONAL EFFECTrVENESS B - 7 9

1. Managers were asked to describe each of the organizations (department,division, section) whose supervisor reported to them. These descriptions were inthe form of perceptions of 114 specific characteristics of the organization. Addi-tionally, the managers provided their judgments of overall effectiveness of eachof th e organ izations.2. The dimensions of managerial perceptions of organizational characteristicswere sought in an analysis of covariation (principal components factor analysis)of perceptions of subordinate organizations. The organizational characteristicscomprising a factor identified in the ana lysis were interpreted as components of asingle dimension; managers' perceptions of these characteristics in subordinateorganizations were so highly correlated that these characteristics can be viewedas specific att rib ute s of a more general variable .3 . The relative importance of each of these dimensions in managerial judg-ments of overall effectiveness was sought in an analysis of relationships betweenjudged effectiveness and variation of perceptions of the dimensions of organiza-

tional characteristics (multiple regression ana lysis). Those dimensions with a highdegree of independent relationship to judged effectiveness presumably carriedmost weight in judgments of effectiveness. The predictive weights assigned thedimensions in the regression analysis were interpreted as indicating the relativeimportance of the dimensions assigned by managers in their judgm ental processes.Data for the analysis were obtained from a diverse sample of managers. De-scriptions of 283 subordinate organizations were obtained from 84 managers in13 companies. The com panies ranged in size from 175 to over 10,000 employees;the companies were engaged in heavy manufacturing, insurance, wholesale trade,electronics, and finance. Participating managers held middle- and top-manage-ment responsibiKties in their companies, and each described an average of 3-4organizations. The organizations described were engaged in production, market-ing, engineering, research, administrative services, and staff functions; theyranged in size from 4 to over 1,000 employees, and the number of managementlevels in each varied with size.Managers completed a questionnaire for each organization by indicatingperceptions of the organization's characteristics in terms of a niae-point ratingscale for each characteristic listed. One characteristic, for example, was describedusing the following scale:Causes problems for other organ izations by failing to achieve assigned goals.

Very often 9 8 7 6 5 4 3 2 1 RarelyManagerial perceptions of 114 characteristics were culled from a larger list ofvariable mentioned in the literature through the elimination of obvious overlapand by dropping items with low reliability in pilot test s. Pilot tests of item reli-ability also indicated that item placement in the questionnaire did not affectresponse reliability. A measure of overall effectiveness of each organization alsowas obtained usipg a nine-point scale. Each manager was asked to apply his ownconcept of organizational effectiveness and was not provided a struc tured defini-tion of effectiveness.

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B-80 THOMAS A. MAHONET

Analysis and FindingsDimen sional Analysis of Orga nizational Cha racteristics

Factor analysis of th e 283 descriptions of organizations jrielded a struc ture ofeighteen factors accountir^ for 65 per cent of the variance in the 114 variabledescriptions of these or ^n izat ions . One of these factors, comprising 41 variableswas sub-divided into seven components providing an overall structiire of 24dimensions of orpnization characteristics. These 24 dimensions are listed anddracribed in Figure 1. Th e twenty-four dimensions identified in this ana lysisappear to underlie the range of 114 specific organizational characteristics in-vestigated. Since these 114 characteristics have been suggested as criteria oforganizational effectiveness, the twenty-four dimensions in Figure 1 can be inter-preted as basic dimensions of the general concept of o r^ niza tio na l effectiveness.Ea ch of th e specific characteristics inves tigated is an expression or illustration of one of these m ore basic dimensions.

Descriptions of the 283 organizations were summarized in measures of thetwenty-four basic dimensions and analyzed for relationships among these dimen- sions. Measures of seven dimensions (18-24) are rather highly related although most of the other dimensions are relatively independent of each other. An or- ganization perceived as high on one of these seven dimensions is likely to beperceived as high on the other six dimensions; an organization characterized by effective plann ing also is likely to be perceived as efficient in performance. I t neednot, however, be characterized with a dem ocratic style of supervision, supervisorydelegation, or decentralization of decisions despite frequent hypotheses abou t t heimportance of these characteristics in achieving efficient performance.In a summary, the dimensional analysis of managerial perceptions of sub-ordinate organization su^ests 24 basic dimensions of the general concept oforganizational effectiveness. Since all of the characteristics analyzed have beensu^ested as criteria of or^nizational effectiveness, the dimensions identifiedcan be interpreted as dimensions of the general effectivenras concept. Th e rangeof criteria investigated was sufficiently large that it is doubtful that additionaldimensions would have been, identified with a larger number of characteristics.W hat is more likely is tha t a num ber of the dimensions identified in the analysisare not relevant to the concept of effectiveness. Some of these are dimensions of

organizational characteristics, but they are not relevant to judgments of or-ganizational effectiveness.Predictive Analysis of Orga nizational Dimen sions

The relevance of the above 24 dimensions for predicting managers' judgmentsabou t overall effectiveness of their subord inate units was determined statistically.Using a multiple regression model, a weighted combination of the 24 dimensionswas developed to predict judgments of overall effectiveness. One can infer fromthe w eights the relative impo rtance managers assigned to ^ c h of the dimensionsin making judgm ents of oi^ ni za tio na l effectiveness.The weighted combination of the twenty-four dimensions accoimted for 58

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MANAGERU.L PERCEPTIONS OF ORGANIZATIONAL EFFECTIVENESS B - 8 1FiQUBB 1. Dimensions of Organizational Effectiveness(The number in parentheses indicates the number of items usedto measure the dimension.)1. FlexibilityW illingly tries out new ideas and suggestions, ready to tackle unusual problems. (14)2. DevelopmentPersonnel participate in training and development activities , high level of personnelcompetence and skill. (6)

3. CohesionLack of com plaints and grievances, conflict among cliques within the organization. (3)4. Democratic supervision (1)5. ReliabilityMeets objectives without necessity of follow up and checking. (2)6. SelectivityDoesn't accept marginal employees unloaded by other organizations. (1)7. DiversityWide range of job responsibilities and personnel ab ilities within the organization. (2)8. DelegationHigh degree of delegation by supervisors. (4)9. BargainingRa rely bargains with o ther organizations for favors and cooperation. (1)IQ. Results emphasisResults, output, and performance emphasized, not procedures. (4)11. StaffingPersonnel flexibility among assignm ents, developm ent for promotion from within theorganization. (6)12. CoordinationCoordinates and schedules activities with other organizations, utilizes staff assist-ance. (3)13. DecentralizationWork and procedural decisions are delegated to lowest levels. (3)14. UnderstandingOrganization philosophy, policy, directives understood and accepted by all. (2)15. ConflictLittle conflict with other organizations about authority, failure to meet responsi-bilities. (5)16. Personnel planningPerformance is not disrupted by personnel absences, turnover, lost time. (2)17. Supervisory backingSupervisors back up their subordinates. (1)18. PlanningOperations are planned and scheduled to avoid lost time, little time spent on minorcrises and "putting out flres". (12)19. CooperationOperations are scheduled and coordinated with other organizations, rarely fails to

meet responsibilities. (8)20 . PerformanceSupportUtilizationEfficient performance, mutual support and respect of supervisors and subordinates,utilization of personnel skills and abilities. (10)21. CommunicationWork information and communications flow freely within the organization. (5)22. TurnoverLittle turnover from inability to do the job. (2)23 . InitiationInitiate s improvem ents in work methods and operations. (1)24. Supervisory controlSupervisors are on top of thing s, know how performance is progressing. (3)

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B-82 THOMAS A. MAHONETper cent of the variance in managers' judgments of overall effectiveness (R =.76). However, a niimber of these dimensions were assigned little, if any, weightin the estimation of the judgments of overall effectiveness. These dimensionswere successively eliminated until a final model involving only seven of thetwenty-four dimensions was developed. Thisfinalmodel was virtually as accu rateas the original model in the estim ation of managers ' judgments of effectiveness; itaccounted for 56 per cent of the variance in managers' judgments of overalleffectiveness (R = .74) as compared with 58 per cent in the twenty-four dimen-sion model. Standardized weights for these dimensions (B ) and the proportionof variance in judgments of effectiveness attributable to each {Br) are presentedin Table 1.

Four of the seven dimensions in thefinalmodel are dimensions derived from thelarge factor yielded in the factor analysis. These four dimensions accounted for84 per cent of the criterion variance explained by the model. One of these dimen-sions, performance-support-utilization, accounted for 49 per cent of the explainedvariance or 27 per cent of the criterion variance. Several dimensions similar incontent to the four predominant dimensions contributed little to the estimationof effectiveness judgments and were dropped in the analysis. One possible inter-pre tation casts these related dimensions in the role of necessary, bu t no t sufficient,conditions for organizational effectiveness; the four predominant dimensions canbe viewed as sufficient conditions for effectiveness. Thus, for example, personnelplanning adequate to avoid shortages is necessary to achieve effectiveness butadditional improvement along this dimension is less relevant for effectivenessthan more general planning and analysis in all aspects of organizational opera-tions.

One conceptualization of criteria of organizational effectiveness involves whatMacKinney calls "progressive levels in evaluation" [5]. The ideal criterion meas-ures achievement of ultimate goals. Since these ultimate goals typically are long-range goals, it is impossible to assess their achievement in the short-run . Rath er,TABLE 1

Weights Assigned Dimensions of Organizational Effectiveness inEstimating M anagers' JudgmentsBimension rmpoitance* (Br)

DevelopmentReliabilityStaffingPlanningCooperationPerformance-Support-UtUizationInitiation

.04.05.01.14.01.27.04.56

* The proportion of variance in judgments of overall effectiveness att ributa ble to adimension.

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MANAGERIAL PERCEPTIONS OF ORGANIZATIONAL EFFECTIVENESS B - 8 3

MacKinney notes, we develop various levels of mid-range criteria, measures ofmore immediate, short-run achievements considered indicative of long-runachievements. Various levels of mid-range criteria might be conceptualized on thebasis of their relationships with ultimate achievements. Thus, for example, first-order criteria such as productivity and output would be viewed as predictive ofultimate goal achievement an d as essential to the achievement of ultimate goals.Second-order criteria such as reliability of performance and initiative might beaccepted as necessary to the achievement of first-order criteria and thus predic-tive of ultimate goal achievement. Third and lower-order criteria such as super-visory sytle and employee attitudes are further removed from ultimate goalachievement and yet might be viewed as contributing to the achievement ofhigher-order criteria. Current supervisory style and employee attitudes areviewed in this example as contributing to organizational reliability and initiativewhich in tu m contribute to the level of productivity and o utput a t a future d ata .Lower-order criteria measure variables hj^pothesized as determinants or antece-dents of ultimate goal achievement and often are substitutes for ultimate criteria.The results of our analyses can be interpreted in terms of this hierarchicalmodel as follows:

Managers view efficient performance as a first-order criterion, th e dimensionof organizational effectiveness which most closely approximates the achieve-ment of ultimate goals. Mutual support and utilization of personnel withinthe organization are Adewed as second-order criteria which are so closely re-lated to performance that they are considered equivalently in judging effec-tiveness. Planning, reliability, initiation, and development are second-ordercriterion dimensions; these variables are considered indicative of first-ordercriteria and ultimate goal achievement by the organization. The remainingseventeen dimensions of effectiveness can be viewed as third-order criteria.They are considered desirable as supplem entary behavior capable of influenc-ing higher-order criteria. However, relationships among these variables andbetween them and higher-order variables are often too complex to warrantassigning them much influence in the judgment of overall oiganizationaleffectiveness.The results of these analyses present a reasonable and consistent descriptionof managers' judgments about oi^nizational effectiveness. They suggest that

managers distinguish among a number of criteria suggested for the measurementof oigardzational effectiveness. Managers further appear to assign differentdegrees of importance to these criteria consistent with a hierarchical model oforganizational effectiveness criteria. The model obtained from our analysesmerely simulates or reproduces managers' judgments of organizational effective-ness. We can say that managers in our sample act as though they utilize thismodel in judging effectiveness. Th e consistency between the statis tical m odel anda reasonable conceptual model of organiiiational effectiveness suggests thatmanagers consciously evalu ate organizational effectivenss as indicated.The proportion of criterion variance explained by the seven-dimension regres-sion model (2? = .56) is relatively high considering the diverse sample of mana-

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B-84 THOMAS A. MAHONEY

gers and organizations involved. This result suggests th a t managers in differentindustries, companies, and organizational environments share to a considerableextent a common framework for judging organizational effectiveness. Additionalvariance might be explained within a more homogeneous sample of managers.We would expect the same seven dimensions to figure in most managerialjudgments of organizational effectiveness; the relative importance of dimensionsmight vary from one situation to another, but the more relevant dimensionswould be examined in all situations. As indicated in t he next section, wewere ableto identify more homogenous groups of m anagers and improve the explanation ofvarian ce; however, these groups did not conform to any simple industry or com-pany groupings of managers.The predictiven^s of the general model developed in this analysis is not sur-prising in the sense th a t the seven basic dimensions of effectiveness in th e modelhave been mentioned often in the literature as criteria of effectiveness. What ismore surprising is the lack of predictive ability of some of the other characteris-tics investigated. Dimensions such as delegation, democratic style of supervision,results orientation, and imderstanding and acceptence of organizational goalsemerge as third-order criteria despite the atten tion given these variables in litera-ture discussions. Either managers in our sample do no t accept these variables aspredictive of higher order goals, or thrae organizational characteristics in fact areno t closely related to higher order goal achievement in the or^n iza tio ns studied.Analysis of Mana gerial Siib-Groups

A common hypothesis sii^ests that the relevant criteria for judging organiza-tional effectiveness vary significantly with characteristics of the administrativeor m anagerial situation. T hus, for example, we might expect m anagerial percep-tions of organizational effectiveness to vury with ind ustry, size of firm, organiza-tional level of the manager, growth pattem of the firm, and related characteris-tics. I t is not clear, however, which of these characteristics is likely to have thegreatest impact upon managerial perceptions of organizational effectiveness.The analysis of differences in managerial perceptions of oi^nizational effec-tiveness was approached by first identifying groups of m anagers with appa rentlysimilar criteria for judging effectiveness and then ex aminir^ th e situation al andpersonal characteristics associated with the different groups of managers. Groupsof managers with apparentiy similar views of or^nizational effectiveness wereidentified using a form of d us ter analysis. Maru^e rs clustered together in a singlegroup tended to perceive the game pattem of dimension score differences betweeneffective and ineffective subordina te o i^ ni za tio ns. While a num ber of the result-ing managerial groups were small in size, three were selected for analysis andcomparison. Th e seven-dimension regression m od d vm s fitted to th e descriptionsand judgments of subordinate organizations in each group; the regressionweight appropriate for this model applied to each of the three groups are pre-sented in Table 2.Group A (N = IS managers, 44 organizations). The seven-dimension model organizational effectiven^a accounts for almost 73 percent of variance of judg-

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MANAGERIAL PERCEPTIONS OF ORGANIZATIONAL EFFECTIVENESS B - 8 5TABLE 2

Regression Wdghts for Dimensions of Organizational Effectiveness inManagerial Stib-Groups

D i m e n a i o i i 44

B Br

Gn rn p BCAT32)B

..B Br

2. Development5. Reliability. . .11 . Staffing18. Planning. . . .19. Cooperation.20 . Perf-Sup-Util23. InitiationMultiple R

R

.158.062- . 0 8 3.605- . 0 6 9.148.159.854

.092.016.023.494.047.107.091

.729

.221.124.001.191.165.856.013.913

.079.046.000.147.091.752.007

.833

.162.197.012.294.128.213.018.772

.064.100.004.202.085.156.008

.596ments of effectiveness by managers in this group (R = .854, R^ = .729). Onedimension, planning, accoimts for almost half of the criterion variance {Br .494) and clearly dominates judgm ents of effectiveness by these m anagers. M ana-gers in this group appear to base their judgments of organizational effectivenessupon their perceptions of the quality of planning and analysis of operationswithin th e organization and accord relatively little consideration to o ther dimen-sions of eff3tiveness.Group B {N 7 managers, S8 organizations). The seven-dimension model oforganizational effectiveness accounts for 83 per cent of variance of judgments ofeffectiveness by managers in this group (R = .913, IP .833). One dimension,performance-support-utilization, accounts for 75 per cen t of th e criterion variance(B r = .752) and clearly dominates judgments of effectivenras by these managers.Managers in this group appear to base their judgments of oi^anizational effec-tiveness upon th eir perceptions of efficiency of performance, amoun t of teamsupport, and quality of persormd utilization within the organization and accordrd a ti v d y littie consideration to o ther dimensions of effectiveness.Group C (N = 8 managers, 29 organizaHons). The seven-dimension modd of

organizational effectiveness accounted for only 60 per cent of the variance ofjudgm ents of effectiveness by m an n e rs in this group (R = .772,22* = .596). Nosingle dimension appeared to dom inate juc^m ents of effectiveness as in th e case ofGroups A and B .A more predictive modd of judgments of effectiveness within this group ofmanagers was obtained by substituting two different dim^isions in the model.This nwre predictive modd accounted for 74 per cent of variance in judgmentsof effectivaieffi (R = .861, .B* = .741). Wdghts developed for the dimensions inthis new model are presented in Table 3. Judgments of effectiveneas made bymanages in this'group appear to differ significantiy from judgmsits made by theother two groups of managers. No single dimraision dearly dominates the judg-

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B -8 6 THOMAS A. MAHONETTABLE 3

Regression Weigh ts for Dimen sions of Orga nizational Effectiveness inManagerial Svb-Group C {N = S9 orgs)Pimension

2. Development5 . Reliabi l i ty15. Conflict18. Planning19 . Cooperation20. Perf-Sup-Uti l24. Supv ControlMult iple RR

B

.010.219- . 0 8 1.393.411.584- . 6 0 5.861

Br

.004.111- . 0 5 5.261.302.431- . 3 1 3

.741

m ents; th e dimensions of conflict, cooperation, perform ance-support-utilization,and supervisory control are all assigned relatively heavy weights. There alsoappears to be a complex interaction among these dimensions as they relate tojudgments of effectiveness. It appears, for example, that perceptions of coopera-tion and supervisory control figure importantly in judgments of effectiveness ofthose organizations perceived as conflicting over authority with other organiza-tions, and are relatively unimportant in judging effectiveness of organizations notinvolved in confficts over authority.These analyses of judgm ents of managers w ithin three relatively homogeneousgroups were based upon small numbers of observations and th e r ^ u lt s may notbe reliable. They do, however, suggest several interesting observations. Modelsbased upon the seven dimensions identified earlier were at least as predictivewithin ea

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MANAGERIAL PERCEPTION S OF ORGANIZATIONAL EFFECTIVENESS B -8 7an organization and the "operational" goals applied in administrative action [7].Oiir findings indicate that the operational models of organizational goals ororganizational effectiveness applied by managers tend to be much simpler thanone would expect from litera ture discussions or organizational policy statem ents .Comparisons of the personal characteristics and organizational environmentcharacteristics of the three sub-groups of managers failed to identify any s tatis ti-cally significant differences. Judgmenta l characterizations of th e three groups ofmanagers suggest tha t the managers who emphasize the perfommnce-support-utilization dimension (Group B) tend to be young managers of production opera-tions in lai^e manufacturing companies, while the managers with a complexcombination of considerations of conflict, cooperation, supervisory control andother dimensions (Group C) tend to be older managers of staff functions in salesand service organizations. These minor differences, while statistically insignifi-cant, surest that further research may be fruitful in identifying situationalvariables relevant in determining the operational model of organizational effec-tiveness applied by managers.

Summary and Impl ica t ionsThe studies reported here represent one approach to the study of organizationaleffectiveness. Related studies are being conducted by o thers, notably researchersat the University of Michigan and at Ohio State University [3], [10]. Their re-search efforts and the studies reported here are all slightly different in terms offocus, questions asked, and methodology. All, however, are attempting to estab -lish some empirically based criteria for organizational effectiveness and to providealternatives to the tautological criteria observed by K atz and Kahn. Preliminaryresults obtained from the three approaches suggest somewhat different sets ofcriteria of organizational effectiveness, although the results are in part supportiveof each other. For example, a criterion concept of productivity or efficient per-formance is identified in all three series of studies. Similarly, a criterion conceptvariously labeled mutual support, cohesiveness, and lack of internal strain isidentified in all three studies. Other criterion concepts identified in at least two ofthe sets of studies include flexibilityor initiation, and coordination or cooperation.Additional research based upon results of these different approaches to th e stud yof organizational effectiveness should be productive in establishing intermediatecriteria of organizational effectiveness useful in comparative evaluation of or-ganizations for administrative and research applications.Resu lts of our studies are descriptive of managerial judgments of organizationaleffectiveness; they are no t intended to be prescriptive. Findings of t h ^ e studiessimulate managerial judgments of or^nizational effectiveness. As such, thesefindings wOl not satisfy those who seek a definitive prescription of criteria appro-pria te for the evaluation of organizational effectiveness. However, the findin gsof these studies suggest several i n t e r r i n g implications for the design and applica-tion of orgiuii^tional effectivene^ criteria. Our studies su r e s t th at the ntimerouscriteria s u ^ e s t ^ in the literature can be reduced to a smalla* number of bade

factors or dimensions; appropriate dimensions are indicated in the findings.

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B - 8 8 THOMAS A . MAHONET

Fu rther, our studies suggest th a t m anagers tend to base their judgm ents of effec-tiveness upon perceptions of relativdy few of these dimensions; approximatdyone to five dimensions appear adequate to estimate judgments of effectiveness.Finally, although a simple m odd of or^n iza tiona l effectiveness appears adequateto explain much of the variance in managerial judgm ents of effectiveness, thereapp^ur to be differences in judgmental models applied by managerial sub-groups.There axe no de ar indications of the reasons for these differences in the currentfindings.These findings surest that evaluative research into managerial practicesemploy several criteria, that no single criterion can be identified as appropriatefor all situations. In general, it appears that criteria of ^cient performance,mutual support, persormel utilization, planning performance, initiation, reli-ability, and development should adequately cover most situations. Managerial

practices can be evaluated against all of these criteria and the res^irch user mayselect the findings relevant to the criteria he wishes to employ. Further, studiesemploying several criteria should permit us to leam more about th e interrelation-ships among these criteria and, possibly, to refine the criteria based upon empiri-cal relationships.Our findingBalso surest that administrators and researchers utilizing mana-gerial judgments of organ izational effectiveness recognize th a t managers typ icallybase these judgments upon limited dimensions of information and that the rele-vance assigned to these dimensions by managers vari^. Judgments of organiza-tions along the limited dimensions identified in these studies generally wouldprovide more rdevant and useful information for both administrative and re-search purposes tha n is provided by a single criterion, whether global or limited indefinition.

AppendixThe dimensional analysis of organizational characteristics involved factoranalysis of the 114 variable descriptions of 283 organizations. A varimax rotationof the principal components solution was used in retracting eighteen factorsaccountir^ for 64 per cent of the 114 variable m atrix. All of the factors bu t one, a

large factor accounting for 19 per cent of the variance, were easily interpreted.Further, all but 13 of the 114 variables were dearly assignable to a single factor;these 13 variables were discarded from fxirther analysis. Forty-one variables wereassigned to the large factor mentioned above. Interpretation of this factor wasdifficult becaiise of heterogendty of content among the 41 variables. Contentana lym of the 41 va ria bl e supplemented with du ster analysis based upon inter-correlations of the variable sui^ested seven distinct components. These sevencomponoats were combined with the seventeen factor to provide an overallstruc ture of twenty-four dimensions of oigsniza tional characteristi(.Intercorrdations an)ng managers' perceptions of the twenty-four dimendons

are presented in Ta ble A. As expected, pon sptio ie of moiA of tiie dimensions a reind^)endent of pert^tions of oth^r dim^isbns. Only perceptions of the seven

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C9 CO I * eo '

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B-90 THOMAS A. MAHONETT A B L E B

Regression Weights of Dimensions of Organizational Effectiveness{N S8S organizations)Dimensions I criterion B Bse

1. Flexibil i ty2. Development3 . Cohesion4 . Democratic Supervision5 . Reliabil i ty6. Selectivity7. Divers i ty8. Delegation9. Bargaining10. Results Empha8is11 . Staffing12 . Coordination13. Decentral ization14 . Understanding15 . Conflict16. Personnel Planning17 . Supervisory Backing18. Planning19 . Cooperation20. Performance-Support-Uti l ization21. Communication22 . Turnover23 . In i t ia t ion24. Supervisory Control

Multiple Correlat ion R

.57.3 4.47.00.3 7.09.2 3.26.1 2.22.21.30- . 1 7.44.4 1.3 7.22.65.60.69.49.3 3.42.50.76

-I-.073-I-.083-1-.073-f.O32-t-.125-t-.O38- . 0 2 3+ .040- . 0 5 4-f.008-I-.060- . 0 8 1- . 0 1 0- . 0 8 3- . 0 9 1- . 0 3 5- . 1 1 5-t-.252+ .105+ .433- . 0 7 4+ .013+ .097+ .029

.073.056.059.045.048.045.051.048.048.046.049.051.050.059.071.054.047.095.089.105.069.052.051.072

A step-wise regression analysis was used in the development of the predictivemodels. Th e initial analysis involved all twenty-four of the dimensions and eachsubsequent analysis dropped the least sigrdficant of the dimensions. Standardizedbe ta weights developed in this initial analysis are presented in Table B . Intere st-ingly, dght of the dimensions were assigned negative coefi&cients although eachwas correlated positively with th e overall effectiveness criterion; there apparentlyis considerable interaction among th e twenty-four dimensions.A partial check upon the stability of regression wdghts \ms provided in theapplication of the twenty-four dimension regression model to each of two sub-samples of or^nizations. The 283 organization descriptions and judgments ofoverall effectivenss were sorted randomly into two samples of 141 and 142 or-ganizations. Difference between estimates of beta weights derived from regres-sion analyses in each sample were statistically ^ n if ic an t (p ^ .05) in only two ofthe twenty-four comparisons, a result which m%ht occur by chance. Further,estimates of tiie 24 beta w dg hts obtained by av en gin g ihe two sample estimatescorresponded d o sd y w ith the w d ^ t s obtained u an g the entire sample of 283

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MANAGERIAL PERCEPTIONS OF OKGANIZATIONAL EFFECTIVENESS B-91R ef e r en ces

1. B B U N E B , J . S . , GOODNOW, J., AND AUSTIN, G . A., A Study of Thinking, John Wiley andSons, New York, 1956.2 . D E NT , J., "Organizat ional Correlates of the Goals of B usiness Man ageme nts ," Journalof Personnel Psychology, Vol. 12 (1959), pp. 365-393.3. GEOBGOPOULOS, B . S., INDIK, B . P., AND SRASHOBB, S., "Some Models of Organiza-t ional Effect iveness" (mimeographed). Inst i tute for Social Research, U niversi ty ofMichigan, 1960.4 . KATZ, D . , AND K AH N, R . , The Social Psychology of Organizations, John W iley and Sons,New York, 1966, p. 149.5. MACKINNEY, A. C, "Progressive Levels in the Evaluat ion of Train ing Programs,"Personnel, Vol. 34 (1957), pp. 72-77.6. MILLEB, G . A., "The Magical Number Seven, Plus or Minus T wo : Some Limits on OurCap acity for Processing Inform ation, " Psychological Review, Vol. 63 (1956), pp . 81-97.7. PEBBOW, C , "The Analysis of Goals in Complex Organizat ions," American Socio-logical Review, Vol. 26 (1961), p p . 854-865.8. ScHEiD, p. N., "Char t e r of Accountabil i ty for Execut ives ," Harva rd Business Review,Vol. 43 (1965), pp. 88-89.9. SHTTBIK, M . , "Approaches to the Study of Decision-Making Relevant to the F i r m , "The Journal of Business, Vol. 34, pp. 101-118.10. STOGDILL, R . , Managers, Employees, Organizations, Bureau of Business Research, TheOhio Sta te U niversi ty , 1965.11. WASSEBMAN, P . . Measurement andEvaluation of Orgamzalional P erformance, GraduateSchool of Business and Public A dministrat ion, Cornel l Un iversi ty , 1959.

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