Organizational Effectiveness MG345 Organizations & Environment Tony Buono Universal & Centurion Jack Harris’ Universal$600 m sales480 employeesProfitability through:EffectivenessEmployee SatisfactionNo organization chartsCross-training & inter-departmental collaborationControl through commitment / mutual adjustment Len Semp’s Centurion$750 m sales550 employeesProfitability through:EfficiencyProcess Standardization Detailed org chartsNarrowly defined jobs & functional responsibility Control through command / compliance Management Control & Organizational Effectiveness EFFECTIVENESS High Low Command/ Compliance Commitment/ Mutual Adjustment MANAGEMENT CONTROL ORIENTATION Programmable Non-programmable Type of Work Perspectives on Organizational Effectiveness Input Conversion Process Output Organizations as Input-Process-Output Systems Resource-based (System Resources) Internal Process Excellence & Competency Efficiency Goal Strategic Constituencies (Stakeholder Model) Goal ApproachOfficial goals: Formally stated, abstract goals that are often difficult to measureOperative goals: reflect the activities the organization is actually performing profitability  growth  market share product quality  efficiency  diversification employee welfare  financial stability  R&D social responsibility  management development Limitations:multiple goals identification of operative goalssubjective indicators of goal attainment Examples: Perspectives on Organizational Effectiveness Input Conversion Process Output Organizations as Input-Process-Output Systems Resource-based (System Resources) Internal Process Excellence & Competency Efficiency Goal Strategic Constituencies (Stakeholder Model) Strategic Constituencies Approach (Stakeholder Model)Organizational effectiveness as the extent to which key stakeholders are satisfied with the firm’s performance. Stakeholder Owners/investors Employees Customers Creditors Local community Suppliers Government Example Effectiveness Criteria Financial return, shareholder value Job satisfaction, compensation Quality and cost of goods/services Creditworthiness, company rating Contribution to community affairs Satisfactory transactions Adherence to laws, regulations The Balanced Scorecard: Integrating Goals & Stakeholders Process-Centric People-Centric Internal Focus External Focus Organization Results Investor Results Employee Results Customer & Other Relevant Stakeholder Results Source: Adapted from Ulrich, et al, Results-Based Leadership (2000) Perspectives on Organizational Effectiveness Input Conversion Process Output Organizations as Input-Process-Output Systems Resource-based (System Resources) Internal Process Excellence & Competency Efficiency Goal Strategic Constituencies (Stakeholder Model) Resource-based ApproachKey assumption: to be effective organizations must obtain scarce and valued resourc.

1. Organizational Effectiveness
MG345
Organizations & Environment
Tony Buono
Universal & Centurion
Jack Harris’ Universal$600 m sales480 employeesProfitability
through:EffectivenessEmployee SatisfactionNo organization
chartsCross-training & inter-departmental collaborationControl
through commitment / mutual adjustment
Len Semp’s Centurion$750 m sales550 employeesProfitability
through:EfficiencyProcess Standardization Detailed org
chartsNarrowly defined jobs & functional responsibility Control
through command / compliance
Management Control & Organizational Effectiveness
EFFECTIVENESS
High
Low
Command/
Compliance
Commitment/
Mutual Adjustment
MANAGEMENT CONTROL
ORIENTATION
Programmable Non-programmable

2. Type of Work
Perspectives on
Organizational Effectiveness
Input
Conversion
Process
Output
Organizations as Input-Process-Output Systems
Resource-based
(System Resources)
Internal Process Excellence &
Competency Efficiency
Goal
Strategic Constituencies
(Stakeholder Model)
Goal ApproachOfficial goals: Formally stated, abstract goals
that are often difficult to measureOperative goals: reflect the
activities the organization is actually performing
profitability
product quality ciency
employee welfare
Limitations:multiple goals identification of operative
goalssubjective indicators of goal attainment Examples:
Perspectives on

3. Organizational Effectiveness
Input
Conversion
Process
Output
Organizations as Input-Process-Output Systems
Resource-based
(System Resources)
Internal Process Excellence &
Competency Efficiency
Goal
Strategic Constituencies
(Stakeholder Model)
Strategic Constituencies
Approach (Stakeholder Model)Organizational effectiveness as
the extent to which key stakeholders are satisfied with the
firm’s performance.
Stakeholder
Owners/investors
Employees
Customers
Creditors
Local community
Suppliers
Government
Example Effectiveness Criteria
Financial return, shareholder value
Job satisfaction, compensation
Quality and cost of goods/services
Creditworthiness, company rating
Contribution to community affairs
Satisfactory transactions

4. Adherence to laws, regulations
The Balanced Scorecard:
Integrating Goals & Stakeholders
Process-Centric
People-Centric
Internal
Focus
External
Focus
Organization
Results
Investor
Results
Employee
Results
Customer &
Other Relevant
Stakeholder
Results
Source: Adapted from Ulrich, et al, Results-Based Leadership
(2000)
Perspectives on Organizational Effectiveness
Input
Conversion
Process
Output
Organizations as Input-Process-Output Systems
Resource-based
(System Resources)

5. Internal Process Excellence &
Competency Efficiency
Goal
Strategic Constituencies
(Stakeholder Model)
Resource-based ApproachKey assumption: to be effective
organizations must obtain scarce and valued resources from its
environment Indicators:
Bargaining position ~ ability of an organization to capture
critical resources at a fair price
Ability to accurately perceive and interpret the external
environment
Ability of the organization to respond to changes in its
environment Limitations:
Focus on acquisition of resources ~ use? To
what end?
Perspectives on Organizational Effectiveness
Input
Conversion
Process
Output
Organizations as Input-Process-Output Systems
Resource-based
(System Resources)
Internal Process Excellence &
Competency Efficiency
Goal
Strategic Constituencies

6. (Stakeholder Model)
Internal Process ApproachFocus is on internal organizational
health (harmony, competency, excellence) and efficiency (use
of resources)
loyalty, teamwork
-management trust
(1) Total output not evaluated
(2) Closed system orientation
(3) Measurement can be highly subjective Indicators:
Perspectives on Organizational Effectiveness
Input
Conversion
Process
Output
Organizations as Input-Process-Output Systems
Resource-based
(System Resources)
Internal Process Excellence &
Competency Efficiency
Goal Accomplishment
Strategic Constituencies
(Stakeholder Model)
Competing Values Approach to Organizational Effectiveness

7. Flexibility
Control
Internal
External
STRUCTURE
FOCUS
Human Relations
Model
Open-System
Model
Rational-Goal
Model
Internal-Process
Model
MEANS:
Morale
Cohesive
Work Force
ENDS:
Valued HRs
Skilled Work Force
MEANS:
Adaptability
Flexibility
ENDS:
Resource
Acquisition
External Support
MEANS:
Communication
Availability of Information
ENDS:
Stability
Control
MEANS:

8. Planning
Goal Setting
ENDS:
Productivity
Efficiency
Universal & Centurion
Jack Harris’ Universal$600 m sales480 employeesProfitability
through:EffectivenessEmployee SatisfactionNo organization
chartsCross-training & inter-departmental collaborationControl
through commitment / mutual adjustment
Len Semp’s Centurion$750 m sales550 employeesProfitability
through:EfficiencyProcess Standardization Detailed org
chartsNarrowly defined jobs & functional responsibility Control
through command / compliance
Mapping Organizational Effectiveness
Flexibility
Control
Internal
External
STRUCTURE
FOCUS
Human Relations
Model
Open-System
Model
Rational-Goal
Model
Internal-Process
Model

9. Universal
Centurion
Factors Influencing Organizational Effectiveness CriteriaTop
Management InfluenceValue Judgments & Leader
ChoicesOrganizational Culture & StructureGoal
goalsNon-
quality, growth) & internal processes (e.g., satisfaction,
collaboration)Environmental ConditionsUncertainty & Resource
-based (input) & internal efficiency
satisfaction & internal processes (e.g., competency,
adaptability)