Organizational and Managerial

Effectiveness

Dr. Koustab Ghosh

IIM Rohtak
TIME NEAR INTERMEDIATE DISTANT
FUTURE FUTURE FUTURE
DIMENSION
Approx. Approx.
1 year 5 years

The organization
must be
1. EFFECTIVE in
accomplishing its The organization
purpose(s) must be
EFFECTIVENESS 2. EFFICIENT in the 4. ADAPTIVE to The organization
CRITERIA acquisition and use new opportunities must be
of scarce resources and obstacles 6. CAPABLE OF
3. A SOURCE OF 5. CAPABLE OF SURVIVAL in
SATISFACTION DEVELOPING a world of
to its owners, the ability of its uncertainties.
employees, members and of
customers and itself
clients, and
society.
 APPROACHES TO MEASURING
ORGANIZATIONAL EFFECTIVENESS
Goal Approach: Effectiveness is the ability to
excel at one or more output goals.
Internal Process Approach: Effectiveness is the
ability to excel at internal efficiency, coordination,
motivation, and employee satisfaction.
System Resource Approach: Effectiveness is the
ability to acquire scarce and valued resources from
the environment.
Approaches to Measuring Org.
Effectiveness, continued
Constituency Approach: Effectiveness is
the ability to satisfy multiple strategic
constituencies both within and outside the
organization.
Domain Approach: Effectiveness is the
ability to excel in one or more among
several domains as selected by senior
managers.
Organizational Effectiveness
Goal Approach

INPUTS TRANSFORMATION OUTPUTS

GOAL APPROACH
Organizational Effectiveness
Internal Process Approach

INPUTS TRANSFORMATION OUTPUTS

INTERNAL PROCESS APPROACH

 Organizational Effectiveness
System Resource Approach

INPUTS TRANSFORMATION OUTPUTS

SYSTEM RESOURCE APPROACH

Organizational Effectiveness
Constituency Approach

INPUTS TRANSFORMATION OUTPUTS

STRATEGIC CONSTITUENCIES APPROACH

 COMPARISON OF THE FOUR OE APPROACHES
Approach Definition When Used
An organization is effective Preferred when:
to the extent that:

Goal attainment it accomplishes its stated goals goals are clear, time
bound and measurable

System Resource it acquires needed resources a clear connection exists

between inputs and outputs

Constituencies all strategic constituencies constituencies have powerful

are at least minimally influence on the organization,
satisfied and the organization must
respond to demands

Internal Processes combines internal efficiency costs, outputs & satisfaction

and affective health are easily measurable
 OE Criteria for Selected
Constituencies
Constituency Typical Criteria
Owners Return on Investment; growth in earnings
Employees Compensation; fringe benefits; job satisf.
Customers Satisf. w/price, quality, service
Suppliers Satisf. w/payments, future sales
Creditors Satisf. w/debt payments
Unions Satisf. w/competitive wages & benefits;
satif. working conditions, fairness in
bargaining
Local Communities Involvement in local affairs; environmental
damage
Government Agencies
Compliance w/laws, avoidance of penalties
 Competing Values Dimensions I
Focus: whether dominant values concern issues that are
internal to the organization or external to it.

Internal focus reflects management concern for well-being

and efficiency of employees. External focus reflects an
emphasis on the well-being of the organization itself and its
fit with its environment.
Competing Values Dimensions II
Structure: whether stability versus flexibility is the
dominant structural consideration.

Stability reflects a management value for efficiency

and top-down control, while flexibility represents
a management value for learning and change.
 Dimensions of Effectiveness
Structure
Flexibility

II I

Focus Internal External

III IV
14
17
15
Control
16
Four Models of Effectiveness II
Quadrant I: Open Systems Model Combination
of external focus and flexible structure.

Managements goals are primarily growth and

resource acquisition. Sub-goals are flexibility,
readiness, and positive evaluation by the external
environment. Dominant value is establishing
a good relationship with the external environment
to grow and acquire resources. Similar to the
Systems Resource Model.
13
 Four Models of Effectiveness
Quadrant II : Human Relations Model internal
Focus and flexible structure.

Management concern is on the development of human

resources. Employees are given opportunities
for autonomy and development. Management
works toward sub-goals of cohesion, morale, and
training opportunities. Organizations using this
are more concerned with employees than the
environment.
13
 Four Models of Effectiveness III
Quadrant III: Internal Process Model Reflects
the values of internal focus and structural
control.

Seeks a stable organizational setting that

maintains itself in an orderly way. Well
established in environment and just wish to keep
their current position. Sub-goals include
mechanisms for efficient communication,
information management, and decision-making.

13
Four Models of Effectiveness IV
Quadrant IV: Rational Goal Model Reflects
Management values of structural control and
external focus.

Primary goals are productivity,

efficiency, and profit. Organization wants to
achieve output goals in a controlled way.
Sub-goals include internal planning and
goal-setting, which are rational management
tools. Similar to the Goal Approach.

13
Integrated Competing Values Framework Vilkinas and Carton, 2005