1. 1- A quick review OB, HRM, OT, OD (2X2 – Macro vs Micro, Theory vs Application) What is organisation? Organisation Theory? It’s relation to ‘environment’ Structure, Culture, Design, Change Why an organisation, not an individual? Importance of ODC – Contigencies Competitive Advantage Core Competence Diversity – Culture Speed, Innovation, Efficiency – more value

2. 1- Organizational Effectiveness What is OE? Why is it Important? Approaches to Study OE

3. 1- What is OE? TCS? Ten by Ten, Largest Market Cap Reliance? Highest Net Sales, Net profit of 21K Crs TATA STEEL? Uninterrupted profits/Lowest Cost Steel Producer, 5 th Largest Steel Company? Value Based Company? SBI? Highest Total Assets (2.62 Lac crores) Bennet Coleman? Profitable for 175 years, Profitability with Social Responsibility? Google India? Best place to work in – two years in a row BCCI? For producing a world beating team and richest Board?

4. 1- What is OE? (Cont’d) Unique Identification Authority of India? Most innovative problem solving to create one of the largest biometric databases in the world Goonj?

5. 1- Why is it Important? To an aspiring employee? To an investor To an employee? To a Customer? To a Creditor? To the Community?

6. 1- What is OE? It is there, but difficult to define Structure influences OE No universal agreement on what OE means

7. 1- What is OE? No operational definition but true from Research perspective Used operationally Some consensus emerging Multiple Criteria To evaluate different functions Means and Ends

8. 1- The Goal Attainment Approach Organizations exist to achieve goals OE, therefore, must be appraised in terms of accomplishment of ‘Ends’ rather than ‘means’ It is the ‘bottom line’ that counts Profit Maximization, Victory in Battle, Winning a Game, Restoring a patient’s good health

9. 1- The Goal Attainment Approach Organizations have ‘Ultimate Goals’ These ‘Goals’ are identified and well defined to be understood Must be few enough to be manageable There must be ‘consensus’ on these goals Progress towards these Goals must be measurable Assumptions:

10. 1- The Goal Attainment Approach Whose Goals? Top Management? Where does ‘Top Management’ end? Dominant Coalition? ‘Official’ or ‘Actual’ Goals? ‘Short Term’ or ‘Long Term’ Goals? Multiple conflicting Goals? Different Interest Groups? Quality vs Cost? How to prioritize? What if the structure/hierarchy changes? Goals around past accomplishments? Are Goals created mainly to placate the dominant stake holder? Objections:

11. 1- The Systems Approach Acquire Input Engage in Transformation Process Generate Output Goal Attainment only a partial measure of effectiveness Organization should also be judged on its’ ability to acquire inputs, ability to transform, channel the outputs, maintain balance and stability

12. 1- The Systems Approach Acquire Input Engage in Transformation Process Generate Output In the ‘Systems Approach’, end goals are not ignored End Goals are only one element of a complex set Systems Approach emphasize criteria that will emphasize long term survival Focuses on ‘means’ rather than ‘ends’

13. 1- The Systems Approach Organizations are made up of inter-related sub parts Sub-Parts can affect the whole system Effectiveness requires awareness and successful interaction with environmental constituencies (Suppliers, Customers, Government) Survival requires steady replenishment of resources (R/M, Men, Product Lines, Customers) Assumptions:

14. 1- The Systems Approach Making it Operative: Factors Relations with Environment (for replenishment of resources, favorable receipt of outputs) Flexibility of Response to Changes Efficiency of Input-Output transformation Clarity of Internal Communication Level of Conflict Mining Lease, Campus Recruitment, Route Licensing Design to Market Time, Product Development ICS Chain

15. 1- The Systems Approach Value to Managers: Measurement – Measuring ‘Ends’ is easier Do ‘Means’ really matter? Focus is on ‘Means’ to OE rather than OE itself Less prone to look into immediate future Awareness of interdependency in an organization Where the ‘Ends’ are vague Problems:

16. 1- The Strategic Constituencies Approach An effective oz is one that satisfies the demands of constituencies in the environment from whom it requires support for survival PSU, Private Sector, NGO, Public Utility, Media

17. 1- The Strategic Constituencies Approach OE = How successful an Organization has been in satisfying the critical constituencies, upon whom future depends Assumptions: Political Arena Vested Interests Control of Resources Identify Critical Constituencies Assess their preference pattern Satisfy those demands

18. 1- Integrative Approach 18

19. 1- A nother way of Looking at Approaches to Study OE Control: external resource approach Method evaluates how effectively an organization manages and controls its external environment Innovation: internal system approach Method allows managers to evaluate how effectively an organization functions and operates Efficiency: technical approach Method evaluates how efficiently an organization converts a fixed amount of resources into finished goods and services

20. 1- Organisational Effectiveness ApproachDescription External Resource Approach Evaluates the oz’s ability to secure, manage and control scarce and valued skills and resources Internal Systems Approach Evaluates the Oz’s ability to be innovative and function quickly and responsively Technical ApproachEvaluates the oz’s ability to convert skills and resources into goods and services efficiently

21. 1- Organisational Effectiveness ApproachDescriptionGoals to Set to Measure Effectiveness External Resource Approach Evaluates the oz’s ability to secure, manage and control scarce and valued skills and resources Internal Systems Approach Evaluates the Oz’s ability to be innovative and function quickly and responsively Technical Approach Evaluates the oz’s ability to convert skills and resources into goods and services efficiently

22. 1- Organisational Effectiveness – External Resources Approach ApproachDescriptionGoals to Set to Measure Effectiveness External Resource Approach Evaluates the oz’s ability to secure, manage and control scarce and valued skills and resources Lower input costs Obtain high quality inputs of R/M and human resources Increase market share Increase stock price Gain support of stakeholders such as Govt or environmentalists

23. 1- Organisational Effectiveness – Internal Systems Approach ApproachDescriptionGoals to Set to Measure Effectiveness Internal Systems Approach Evaluates the Oz’s ability to be innovative and function quickly and responsively Cut decision making time Increase rate of product innovation Increase coordination and innovation of employees Reduce conflict Reduce time to market

24. 1- Organisational Effectiveness – Technical Approach ApproachDescriptionGoals to Set to Measure Effectiveness Technical Approach Evaluates the oz’s ability to convert skills and resources into goods and services efficiently  Increase product quality  Reduce number of defects  Reduce production costs  Improve customer services  Reduce delivery time to market