organisation effectiveness and its measurement

8/8/2019 Organisation Effectiveness And Its Measurement

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ORGANISATIONAL EFFECTIVENESS


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Effectiveness is a measure of whether or not theorganisational objectives are accomplished.

Efficiency is the relationship between inputs and

outputs. Organisational effectiveness is also called as

organisational success or growth.

Effectiveness is defined as the degree to which the

organisation realises its goals. Effectiveness of an organisation can be seen in

terms of the survival of the organisation.


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An organisation remains effective as long as it

uses its resources in an efficient manner and

continue to contribute to the large system.


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SOME INSIGHTS ON ORGANISATIONAL

EFFECTIVENESS.

No single approach to the evaluation of

effectiveness is aappropriate in all

circumstances or for all organisational types.

To be truly effective,today`s productive

organisations need to strike a generally

acceptable balance between organisational

and societal goals.


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A TIME DIMENSION

The organisation needs to be effective in thenear, intermediate and distant future.

Organisational effectiveness can be defined as

meeting organisational objectives andprevailing societal expectations in the nearfuture , adapting and developing in theintermediate future and surviving in the distantfuture.

Most people think about the near future.


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ORGANISATIONAL DECLINE

Because of unsteady economic

growth,resource

shortages,mismanagement,global competition

etc have resulted in organisational decline.

Ex. GM, IBM.

Strategies such as reengineering can be

applied under such circumstances.


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PERSPECTIVES OF EFFECTIVENESS

Individual effectiveness results in group

effectiveness which results in organisational

effectiveness.


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CAUSES OF INDIVIDUAL

EFFECTIVENESS

Ability

Skill

Knowledge Attitude

Motivation

Stress.


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CAUSES OF GROUP EFFECTIVENESS

Cohesiveness

Leadership

Structure Status

Roles

Norms.


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ORGANISATIONAL EFFECTIVENESS

Environment

Technology

Strategic Choice Structure

Processes

Culture.


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MANAGEMENTS CONTRIBUTION TO

EFFECTIVENESS

Management performs the function of

Planning , Organising, Leading, Controlling.

To Coordinate the

Individuals Groups

Organisations

To Attain

Individual Effectiveness Group Effectiveness

Organizational Effectiveness


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FACTORS CAUSING EFFECTIVENESS

Failure of managers.

Delay in taking decisions

Lack of sufficient efforts Excessive efforts in relation to the need

Wasted efforts.


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FACTORS CAUSING EFFECTIVENESS

ACCORDING TO TOP MANAGEMENT OF INDIAN

COMPANIES Central Govt. regulations

State Govt Regulations

Interference of Political Leaders in the working of

organisations.

Interference of financial institutions in the workingof organisation.

Lack of infrastructure facilities. Lack of Technological Development.

Competition from imports.


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APPROACHES TO EFFECTIVENESS

Goal Approach to effectiveness

Systems theory approach to effectiveness

Contemporary Effectiveness Approach Stakeholders Approach

Competing Values Approach


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GOAL APPROACH TO EFFECTIVENESS

Effectiveness is the accomplishment of recognisedobjectives of cooperative effort. The degree ofaccomplishment indicates the degree of

effectiveness. The idea that organisations as well as individuals

and groups should be evaluated in terms of goalaccomplishment is really practical.

Many management practices are based on goalapproach.

Ex. Management by objectives(MBO)


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PROBLEMS ASSOCIATED WITH GOAL

APPROACH

Goal Achievement is not readily measurable for

organisations that do not produce tangible

products.

Organisations attempt to achieve more than

one goal. But, the achievement of one goal

diminishes their ability to achieve other goals.

Obtaining consensus among managers

regarding their organization's specific goals.


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SYSTEMS THEORY APPROACH OR

SYSTEM RESOURCE APPROACH TO

EFFECTIVENESS. Effectiveness is the ability to acquire scarce and valued

resources from the environment.

The flow of inputs and outputs is the basic starting pointin describing the organisations.

Organization takes the resources(Input) from the largersystem(Environment), processes these resources, andreturns them in changed form(Output)

Systems theory also stresses the organisationsconnectivity to the larger system

Every organization is part of an industry(a largersystem),a society(a yet larger system) and a globaleconomy(the largest system of all)


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Systems theory also describes the behaviour ofindividuals and groups.

The inputs of individual behaviour are causes

that arise from the workplace.

Ex. The cause may be the managers directivesto perform a particular task.

The input is then processed by individual`smental and psychological processes to producea particular outcome.


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INTERNAL PROCESS APPROACH


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Effectiveness is the ability to excel at internal

efficiency, coordination, motivation and

employee satisfaction.

Internal efficiency can be achieved by keeping

the right people for the right job.

Organisational effectiveness can be achieved

by the best utilisation of human resources for

the accomplishment of organisational goals.


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Organizational effectiveness can be achieved

by better co-ordination and co-operation among

the members of the organization for the

accomplishment of organizational goals.


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Contemporary effectiveness Approach


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According to this approach, Organizational

effectiveness depends on

The ability to understand environment.Frequent changes.

Competitor strategies.

The ability to be flexible and adaptive.Ability to adapt to the changes.


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THE COMPETING VALUES

APPROACH


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The criteria you value and use in assessing anorganization's effectiveness return oninvestment, market share, new product innovation,

job security-depend on who you are and theinterests you present.

The stockholders,unions,suppliers,

management, or internal specialists in

marketing,personnel,production or accountingmay look at the organization but evaluate itseffectiveness in a different way.


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ASSUMPTIONS

There is no best criterion for evaluating an

organisation`s effectiveness.

There is neither a single goal that everyone can

agree upon.

The concept of OE is subjective.

The goals that an evaluator chooses will

depend upon his or her personal values,

preferences and interests.


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Ex. Xerox.

Financial Analysts may define OE in terms of

high profitability.

Production executives may define OE in terms

of the quality of the equipment manufactured.

Marketing people and competitors may look at

the percentage of market that Xerox`s various

products hold.


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HR- absence of strikes, competency of the

human resource.

R and D-Number of new inventions.


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MAKING COMPETING VALUES

OPERATIVE

The three basic sets of competing values.

1.Flexibility Vs Control.

Flexibility values adaptation, innovation andchange.

Control favours stability, order and

predictability.


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2.Whether emphasis should be placed on the

well being of the people or on the well being of

the organisation.

The concern for the feelings and needs of the

people versus concern for production and task

accomplishment.


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3. Organizational means vs. ends.

The former stressing the internal processes

and the long term and the latter focussing final

outcomes and the short term.


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EIGHT OE CRITERIA CELLS

Cells Description Definition

OFM Flexibility Able to adjust well to shifts in

external conditions and demands.

OFE Acquisition of resources Able to increase external support

and expand size of work force.

OCM Planning Goals are clear and wellunderstood.

OCE Productivity and efficiency. Volume of output is high

PCM Availability of information Channels of communication

facilitates informing people about

things that affect their work.

PCE Stability Sense of order, continuity and

smooth functioning of operations.

PFM Cohesive work force Employee trust,respect and work

well with each other.

PFE Skilled work force Employees have the training,skills

and capacity to do their work

properly


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STAKEHOLDERS APPROACH

Organisations exist because of their ability to

create value and acceptable outcomes for

various groups of stakeholders.

Stakeholders-People who have an interest,

claim or stake in the organisation in what it

does and in how well it performs.


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There are inside stakeholders and outside

stakeholders.


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SHAREHOLDERS

Shareholders are the owners of the

organisation, their claim on organisational

resources is often considered superior to the

claims of other inside stakeholders.


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MANAGERS

Employees who are responsible for

coordinating organisational resources and

ensuring that an organisation`s goals

successfully met.

Top managers are responsible for investing

shareholder money in resources in order to

maximize the future output of goods andservices.


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Managers are in fact,the agents or employees

of shareholders and are appointed directly by

shareholders through an organisation`s Board

of Directors to manage the organisation`s

business.


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THE WORK FORCE

All nonmanagerial employees


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OUTSIDE STAKEHOLDERS

People who do not own the organisation, are

not employed by it,but do have some interest in

it.

Customers

Suppliers

The Government

Trade Unions

Local Communities


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The General Public


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CUSTOMERS

Largest outside stakeholder group.

They are induced to select a product from

alternative products.

The money they pay is their contribution to the

organisation and reflects the value they feel

they receive from the organisation.


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SUPPLIERS

Contribute to the organisation by providing

reliable raw materials and component parts

that allow the organisation to reduce

uncertainty in its technical or production

operations and thus reduce production costs.

High quality inputs result in high quality output.

Reliability of product.


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THE GOVERNMENT

Wants companies to compete in a fair manner

and to obey the rules.

Laws concerning the payment and treatment of

employees, workers` health, workplace

safety,non discriminatory hiring practices and

other social and economic issues about which

legislations are there.


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TRADE UNIONS

Conflict or cooperation.

Nature of relationship has an effect on the

productivity and effectiveness of the

organisation.


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LOCAL COMMUNITIES

Employment, housing and the general

economic well being of a community are

strongly affected by the success or failure of

local business.


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THE GENERAL PUBLIC


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ORGANISATIONAL EFFECTIVENESS-

SATISFYING STAKEHOLDERS`GOALS AND

INTERESTS Shareholders evaluate an organisation by the

return they receive on their investment;

customers by the reliability and value of

products relative to their price and managers

and employees , by their salaries, stock

options, conditions of employment and career

prospects.


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Often these goals conflict.

Organisations are often regarded as alliances

alliances or coalitions of stakeholder groups

that directly bargain with each other and use

their power and influence to alter the balance

of inducements and contributions in their

favour.


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Enron and worldcom collapsed when their

illegal actions become public and their

stakeholdersrefused to contribute.

Shareholders sold their stock,banks refused to

lend money and debtors called in their loans.


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So, the organisation must minimally satisfy the

interest of all the groups that have a stake in

the organisation.

organisation effectiveness and its measurement

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