Understanding and Managing Public

Organizations

Chapter 6Organizational Goals and

Effectiveness

Chapter Overview

• Major issues about organizational goals and the goals of public organizations

• Models of effectiveness and their implications for organizations

• How expectations about goals and the effectiveness of public organizations (especially in comparison to the private sector) have played a major role in political and governmental reforms

General Organizational Goals

• Organizations are goal-directed, purposive entities, and their effectiveness in pursuing those goals influences the quality of our lives and even our ability to survive.

• An organizational goal is a condition that organizations seek to attain.

Types of Goals

• Official goals

• Mission statements and annual reports contain what organization theorists refer to as official goals. These

• Specify official value statements• Enhance organization legitimacy• Guide and motivate employee behavior

• Operative goals are relatively specific intermediate ends.

General Organizational Goals

• Literature offers useful insight into nature of goals. For example:

• Goals are expressions of an organization’s values; they orient employees toward the organization’s mission.

• Clarification of goals can improve efficiency and productivity.

General Organizational Goals

• Literature also underscores problems (for theorists and practitioners) with the concept of goals.

• Goals are multiple (a goal is one of a set).

• Goals often conflict.

• Short-term and long-term goals can conflict.

• Goals are arranged in hierarchies and chains.

• One goal leads to another or is operative for a higher or more general goal.

Goals of Public Organizations

• The most often repeated observation about public organizations is that goals are particularly vague and intangible compared to those of business firms.

• What is the reason for this?

• What implications might this have to employee motivation, commitment, satisfaction?

Goal Ambiguity: Reasons and Implications

• One reason is because of vague mandates.

• Studies suggest that goal ambiguity may create problems in motivating employees.

• Goal ambiguity presents problems for developing clear performance indicators. In turn, this may raise questions about accountability and lead to performance evaluations on the basis of rules.

To What Extent Does an Organization Reach Its Goals?

• This question assumes that organizations have goals, that the goals can be discovered, that the goals are at least somewhat stable, that abstract goals can be converted into specific, objective measures, and that data relevant to those measures can be collected, processed, and applied in a timely and appropriate manner.

• Much of academic organizational theory has observed that these are problematic assumptions. Organizational theorists challenged this commonsense understanding of formal organizations.

More Assumptions

• Organizations will perform better if goals are clarified and progress is measurable.

• Public organizations need to do much better.

• Public organizations will do better if they adopt business practices.

• The federal nature of the U.S. system does not matter much to goal attainment.

– Multiple authorities at multiple levels agree on goals.

Models for Assessing Organizational Effectiveness

• Scholars are not in agreement on one model.• Goal approach

• Systems-resource approach

• Participant satisfaction models

• Human resource and internal process models

• Government performance project

Goal Approach• It is the simplest approach, based on the link between stated

goals and effectiveness.

• Its shortcoming is that it does not consider complications. It is concerned with the output side and whether the organization achieves its goals in terms of the desired level of output.

– It implies a view of management as a rational and orderly process with a single expression of goals.

• Its indicators include operative goals .

• It does not consider goal conflict, hierarchy, and goal types and sub-types.

The Systems-Resource Approach

• This approach concentrates on whether an organization can obtain valued resources from its environment.

• It places effectiveness criteria in a hierarchy with the organization’s ability to exploit external resources and opportunities as the ultimate criterion.

• This criterion is ultimately un-measurable; it has to be inferred by measuring the next-highest or penultimate criteria.

Systems-Resource Approach

• Observes the beginning of the process and evaluates whether the organization effectively obtains resources necessary for high performance

• Indicators:

• Bargaining position—the ability to exploit its environment• The ability to interpret the real properties of the external

environment• Maintaining of internal day-to-day activities• The ability to respond to changes in the environment

• Usefulness: when other indicators are difficult to obtain or are hard to measure

Participant Satisfaction Models

• The ecological model or the participant satisfaction model defines organizational effectiveness according to organizations’ abilities to satisfy key strategic constituencies in their environment.

Internal Process Approach

• Looks at internal activities and assesses effectiveness by indicators of internal health and efficiency

• Indicators:

– Strong corporate culture and positive work climate– Team spirit, group loyalty, and teamwork– Confidence, trust, and communications between workers and management– Decision making near information sources, regardless where those sources

are on the organizational charts– Sharing of relevant facts and feelings (horizontal and vertical)– Rewards to managers for performance, growth, and development of

subordinates and for creating an effective working group– Interaction between the organization and its parts, with conflicts that occur

over projects—resolves in the interest of the organization

Human Resource and Internal Process Models

• Refers to such factors as communications, leadership style, motivation, interpersonal trust, and other internal states assumed to be desirable

• University of Michigan (Likert and others, 1961): Specified two leadership behaviors: job-centered and employee-centered

The Government Performance Project

• The GPP is a source of information about state management.

• Its stated mission is to improve service to citizens by strengthening government policy and performance.

• The GPP systematically evaluates how well states manage their money, people, information, and infrastructure—four areas critical to ensuring that states’ policy decisions and practices actually deliver their intended outcomes.

• The GPP produces a report card.

Conceptual Framework of the Government Performance Project

Management SubsystemsFinancial

Management

Human Resources

Management

Capital Managemen

t

Information Technology Managemen

tLeadership as Driver

Information as Connector

Managing for Results

Management Capacity Program

Delivery

Performance

Measurement

Organizational Effectiveness Dimensions and Measures

1. Overall effectiveness

2. Productivity3. Efficiency4. Profit5. Quality6. Accidents7. Growth8. Absenteeism9. Turnover10.Job satisfaction11.Motivation12.Morale13.Control14.Conflict / cohesion15.Flexibility /

adaptation

16. Planning and goal setting17. Goal consensus18. Internalization of organizational

goals19. Role and norm congruence20. Managerial interpersonal skills21. Managerial task skills22. Information management and

communication23. Readiness24. Utilization of environment25. Evaluations by external entities26. Stability27. Value of human resources28. Participation and shared influence29. Training and development emphasis30. Achievement emphasis

Source: Campbell, 1977, pp. 36-39.

Effectiveness Dimensions for Educational InstitutionsPerceptual Measures

Objective Measures 1. Student educational satisfactionStudent dissatisfaction; student complaints Number of terminations;

counseling center visits

2. Student academic developmentExtra work and study; amount of academic development Percentage going on to graduate school

3. Student career developmentNumber employed in major field; Number receiving career

counselingnumber of career-oriented courses

4. Student personal developmentOpportunities for personal development; Number of extracurricular

activities;emphasis on nonacademic development number in extramurals and

intramurals

5. Faculty and administrator employment satisfactionFaculty and administrators’ satisfaction with Number of faculty members

and school employment

administrators leaving

6. Professional development and quality of the facultyFaculty publications, awards, conference attendance; Percentage of faculty with

doctorates;teaching at the cutting edge number of new

courses

7. System openness and community interactionEmployee community service; emphasis on community Number of continuing education coursesrelations

8. Ability to acquire resourcesNational reputation of faculty; General funds

raised;drawing power for students; drawing power for faculty previously tenured faculty hired

9. Organizational healthStudent-faculty relations; typical communication type;levels of trust; cooperative environment; use of talents and expertise

Source: Adapted from Cameron, 1978, p. 630. See original table for numerous additional measures for each dimension.

The Competing Values Framework

Output

Quality

Human Relations Model

Internal Process Model

Open-Systems Model

Rational Goal Model

Flexibility

Internal External

Control

Means: Cohesion; morale

Ends:Human resource

development

Means: Information management; communication

Ends:Stability; control

Means: Flexibility; readiness

Ends:Growth;

resource acquisition

Means: Planning; goal setting

Ends:Productivity;

efficiency

Source: Quinn and Rohrbaugh, 1983. Reprinted by permission of the authors. Copyright 1983. Institute of Management Sciences.

The Balanced Scorecard

• Incorporates multiple dimensions and measures for assessing organizational performance and effectiveness

• A performance measurement framework that added strategic nonfinancial performance measures to traditional financial metrics to give managers and executives a more “balanced” view of organizational performance

Effectiveness in Organizational Networks

• Networks are “structures of interdependence involving multiple organizations or parts thereof, where one unit is not merely the formal subordinate of the others in some hierarchical arrangement” (O’Toole, 1997, p. 44).

• Networks are common to public management.

Networks and Effectiveness

• Brings up questions about measuring effectiveness

• Effectiveness should not be focused on one part, but the entirety (Provan and Milward, 1995).

• These are most likely to be effective when core agency integrates the network, the mechanisms for fiscal control are not fragmented, resources are plentiful, and network is stable (Milward and Provan, 1998, 2000).

Managing Goals and Effectiveness

• The information presented in this chapter raises important issues concerning the goals of public organizations that allegedly influence their operations and characteristics.

• Later chapters will build on these issues.

Effectiveness in Public Organizations

• The information presented in this chapter raises important issues about the distinctions between public and private sectors and the problems using the private sector as a benchmark for comparative assessments.

• Yet beliefs and perceptions have influenced reforms while ignoring the complexities in assessing performance that have been discussed in this chapter.