Organizational effectiveness


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  • Folly - a lack of good judgment; the fact of doing sth stupid; an activity or idea that shows a lack of judgment: Conceptualize - to form an idea of sth in your mind:
  • Organizational effectiveness

    1. 1. ORGANIZATIONAL EFFECTIVENESS Business Process Unit – II G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    2. 2. Synopsis <ul><li>Methods to achieve effectiveness </li></ul><ul><li>Models of Organizational Effectiveness </li></ul><ul><li>Development of Contradiction Model </li></ul><ul><li>Explanation of Contradiction Model </li></ul>
    3. 3. What is Organizational Effectiveness? <ul><li>Effectiveness refers to the degree of congruence between organizational goals and some observed outcome. </li></ul><ul><li>Three reasons why the concept of organizational effectiveness remains muddled. </li></ul><ul><ul><li>There are important differences in the way scholars have conceptualized organizations. </li></ul></ul><ul><ul><li>The complexity of organizations. </li></ul></ul><ul><ul><li>Researchers have often used different, non-overlapping criteria, thus limiting the accumulation of empirical evidence about organizational effectiveness. </li></ul></ul>
    4. 4. What is Organizational Effectiveness? <ul><li>Organizations can be effective or ineffective in a number of different ways, and these ways may be relatively independent of one another. </li></ul><ul><ul><li>Productivity </li></ul></ul><ul><ul><li>Efficiency </li></ul></ul><ul><ul><li>employee absenteeism </li></ul></ul><ul><ul><li>Turnover </li></ul></ul><ul><ul><li>goal consensus </li></ul></ul><ul><ul><li>Conflict </li></ul></ul><ul><ul><li>participation in decision making </li></ul></ul><ul><ul><li>Stability </li></ul></ul><ul><ul><li>communications. </li></ul></ul>
    5. 5. Toward a Contradiction Model <ul><li>A contradiction model is folly to try to conceptualize organizations as effective or ineffective. </li></ul><ul><li>A contradiction model of effectiveness will consider organization to be more or less effective in regard to the variety of goals. </li></ul><ul><li>The goals in public sector are more amorphous and contradictory than those in private sector. </li></ul><ul><li>Decisions regarding goals first appear to be rational turn out to be disastrous because of events beyond organizational control. </li></ul>
    6. 6. Models of Organizational Effectiveness <ul><li>System – Resource Models </li></ul><ul><li>Goal Models </li></ul><ul><li>Participant – Satisfaction Models </li></ul><ul><li>Contradiction Models </li></ul><ul><li>Process Approach Models </li></ul>
    7. 7. System Resource Model <ul><li>This is the first effectiveness model because this provides the organizational – environmental interface </li></ul><ul><li>Organizations are not assumed to possess goals, nor is goal accomplishment a relevant consideration. Instead, an organization is effective to the extent that it can obtain needed resources from its environment. </li></ul>
    8. 8. Contd… <ul><li>The resource acquisition must be viewed as relative to the capacity of the environment. </li></ul><ul><li>The resource acquisition does not just happen, but is based on what the organization is attempting to achieve – namely its goals. </li></ul>
    9. 9. The Goal Model <ul><ul><li>The goal model is the most common theoretical perspective on effectiveness. </li></ul></ul><ul><ul><li>It is both simple and complex. </li></ul></ul><ul><ul><li>In its simplest form , the goal model defines effectiveness as the degree to which an organization realizes its goals. </li></ul></ul><ul><ul><li>The model becomes complex , when organizations have multiple and frequently changing or conflicting goals. </li></ul></ul><ul><ul><li>Goals involve intents and outcomes and serve as constraints on decision making. </li></ul></ul>
    10. 10. Contd… <ul><li>The goal of any organization is an abstraction distilled from the desires of members and pressures from the environment and the internal systems. </li></ul><ul><li>Types of goals </li></ul><ul><ul><li>Official Goals </li></ul></ul><ul><ul><li>Operative Goals </li></ul></ul><ul><li>Operative goals are a derivation of and a distillation from official goals. </li></ul><ul><li>They are developed and modified through ongoing interaction patterns within organizations. </li></ul>
    11. 11. Contd… <ul><li>Three reasons for changes in the goals of organizations. </li></ul><ul><ul><li>Indirect interaction with the environment through their IORs </li></ul></ul><ul><ul><ul><li>Competition </li></ul></ul></ul><ul><ul><ul><li>Coalitional relationships </li></ul></ul></ul><ul><ul><ul><li>Bargaining </li></ul></ul></ul><ul><ul><li>Internal organizational changes </li></ul></ul><ul><ul><ul><li>Shifts of power coalition </li></ul></ul></ul><ul><ul><ul><li>Change in Leadership </li></ul></ul></ul><ul><ul><li>Outside the organization – involves indirect pressures from the general environment </li></ul></ul><ul><ul><ul><li>Technological Development </li></ul></ul></ul><ul><ul><ul><li>Economical Change </li></ul></ul></ul><ul><ul><ul><li>Change in government </li></ul></ul></ul><ul><ul><ul><li>Change in Rules and Regulations </li></ul></ul></ul>
    12. 12. Goals and Effectiveness <ul><li>The goal suggests that an organization is effective to the degree to which it achieves its goals. </li></ul><ul><li>These goals are few enough in number to be manageable and can be defined well enough to be understood. </li></ul>
    13. 13. Problems with Goal Model <ul><li>According to Hannan & Freeman: </li></ul><ul><li>Multiplicity of organizational goals. </li></ul><ul><li>Goals involves their specificity. </li></ul><ul><li>Temporal Dimension </li></ul>
    14. 14. Methods of Assessing Effectiveness <ul><li>Reviewing a variety of theoretical perspectives on effectiveness is useful because it not only points out the limitations of the goal model but also provides alternative ways of considering organizations. </li></ul><ul><li>Variable Analysis. </li></ul><ul><ul><li>Research designs that attempt to measure the attainment of some goal. </li></ul></ul>
    15. 15. Outcome Assessment in Goal Model <ul><li>It is difficult for several reasons. </li></ul><ul><li>Time perspective used. </li></ul><ul><ul><li>The outcome, which is successful in a short run could be disastrous for the long run. </li></ul></ul><ul><li>Bounding Systems or the problem in distinguishing the effects of events both inside and outside the organization. </li></ul><ul><ul><li>It is difficult to understand whether the outcome is result of organizational action or of some external force. </li></ul></ul>
    16. 16. Process approach Model <ul><li>Under this model, effectiveness is described as a process rather than an end state, as might be the case under the goal model. </li></ul><ul><li>The process approach consists of three related components: </li></ul><ul><ul><li>goal optimization, </li></ul></ul><ul><ul><li>a systems perspective, </li></ul></ul><ul><ul><li>and an emphasis on behavior within organizations. </li></ul></ul>
    17. 17. Contd… <ul><li>A systems view incorporates concerns for changes in an organization’s environment </li></ul><ul><li>The behavioral emphasis suggests attention to the possible contributions of individual employees to organizational effectiveness. </li></ul><ul><li>The effective organization is one in which goals are responsive to the environment, optimization of multiple goals is pursued, and employees are contribute to meeting those goals. </li></ul>
    18. 18. Participant – Satisfaction Models <ul><li>Individuals contributed their activities to organizations in return for incentives. </li></ul><ul><li>The motives of the individuals participating in organizations as the critical determinants for survival. </li></ul><ul><li>Incentives must be adequate for maintaining the contributions of organizational members. </li></ul><ul><li>Freedom to used the organizational resources </li></ul>
    19. 19. Problems <ul><li>There are some major problems. </li></ul><ul><li>Steer’s approach – individuals have varying forms of linkages to the organizations of which they are a part. </li></ul><ul><ul><li>Many persons are unaware of organizational goal </li></ul></ul><ul><li>Psychological formation </li></ul><ul><ul><li>The individuals may neglects the organizational activities when there is a freedom </li></ul></ul><ul><li>Individuals outside the organization are affected by what organizations do. </li></ul>
    20. 20. The Contradiction Model <ul><li>Multidomain – Effectiveness in one domain may not necessarily relate to effectiveness in another domain. </li></ul><ul><li>Contradiction model can be explained in simple manner based on… </li></ul><ul><ul><li>Constraints </li></ul></ul><ul><ul><li>Goals </li></ul></ul><ul><ul><li>Stakeholders (internal & external) </li></ul></ul><ul><ul><li>Time frames </li></ul></ul>
    21. 21. Contradiction Model - Constraints <ul><li>Organizations face multiple and conflicting environmental constraints. </li></ul><ul><li>These constraints may be imposed (legal & economical dimension), bargained (agreements), discovered (environmental change) or self-imposed (org. utilization). </li></ul><ul><li>Imposed constraints are beyond organizational control. </li></ul><ul><li>In general, the larger and more complex organization have to face variety of constraints. </li></ul><ul><li>Organizations have to consider the their environments, recognize and order the constraints and attempt to predict the consequences of their actions. </li></ul>
    22. 22. Contradiction Model - Goals <ul><li>Organizations have multiple and conflicting goals. </li></ul><ul><li>When the organization want to reduce the expenditure, actions are taken based on goals and power coalitions. </li></ul><ul><li>At the same time, goals do not just “disappear”. </li></ul>
    23. 23. <ul><li>Organizations have multiple and conflicting internal and external stakeholders. </li></ul><ul><li>The people those who are affected by an organization are called as stakeholders. </li></ul><ul><li>They may be employees, members, customers, clients or the public at large and can also be other organizations. </li></ul><ul><li>Obviously the individual and organizational stakeholders will have different and contradictory interests. </li></ul>Contradiction Model - Stakeholders
    24. 24. <ul><li>Organizations have multiple and conflicting time frames. </li></ul><ul><li>This is closely associated with the organizations goals. </li></ul><ul><li>Fluctuations will be there from one year to another. </li></ul><ul><li>During the discount period, possibility of sales will be more. </li></ul><ul><li>Each organization may capitalize some situations to increase their profit. </li></ul><ul><li>Environmental constraints also vary over time. </li></ul>Contradiction Model – Time Frames
    25. 25. Some Applications <ul><li>Decision making is the vital part of this model. </li></ul><ul><li>Compromises – the ordering of compromises is based on power relationships and coalitions within the organizations, coupled with external pressures. </li></ul><ul><li>Response – when responding to an action others are not possible because of environmental constraints. </li></ul><ul><li>Can easily identify the constraints on which organizations can have no control. </li></ul>
    26. 26. Constraints beyond control <ul><li>Weather – Some organizations are dependent on weather patterns. (Agricultural, tourism , pharmaceutical) </li></ul><ul><li>World political and economic shifts (Soviet Union) </li></ul><ul><li>World events (demolition of twin tower) </li></ul>
    27. 27. Environmental Constraints <ul><li>Board Composition (selection procedure) </li></ul><ul><li>Rules and regulations (AICTE, UGC) </li></ul><ul><li>Budget, specially for public organizations. </li></ul><ul><li>Organizations engage in a variety of activities designed to manipulate their environment in their favor </li></ul><ul><li>Whether through interlocking of boards of directors, purchasing suppliers, seeking to have favorable legislations passed, or propaganda, the attempt is to manipulate the environment on behalf of the organization. </li></ul>
    28. 28. Organizational Characteristics <ul><li>Structure and restructure happens according to the outcomes of decision making and political processes </li></ul><ul><li>Organizations are not completely flexible </li></ul><ul><li>Organizations are in a constant change mode i.e. technological change will not occur rapidly. (CBS) </li></ul><ul><li>There is a reciprocal relationship between strategy and structure. </li></ul>