1. ORGANIZATIONAL EFFECTIVENESS

2. HISTORICAL OPINIONS ABOUT ORGANIZATIONAL EFFECTIVENESS
FREDERICK TAYLOR
HENRI FAYOL
ELTON MAYO

3. MINIMALIZATION, TECHNOLOGICAL EXCELLENCE, Etc.
FREDERICK TAYLOR
EFFECTIVENESS WAS DETERMINED BY FACTORS SUCH AS PRODUCTION MAXIMIZATION, COST
MINIMALIZATION, TECHNOLOGICAL EXCELLENCE, Etc.

4. HENRI FAYOL EFFECTIVENESS IS A FUNCTION OF CLEAR
AUTHORITY AND DISCIPLINE WITHIN AN
ORGANIZATION

5. ELTON MAYO EFFECTIVENESS IS A FUNCTION OF PRODUCTIVITY RESULTING FROM
EMPLOYEE SATISFACTION

6. TIME DIMENSION The organization must be The organization must be
NEAR
FUTURE
INTERMEDIATE
FUTURE
DISTANT
FUTURE
Approx.
1 year
Approx.
5 years
The organization
must be
EFFECTIVE in accomplishing its purpose(s)
EFFICIENT in the acquisition and use of scarce resources
A SOURCE OF
SATISFACTION to its owners, employees, customers and clients, and society.
The organization
must be
4. ADAPTIVE to
new opportunities
and obstacles
CAPABLE OF
DEVELOPING
the ability of its
members and of
itself
EFFECTIVENESS
CRITERIA
The organization
must be
6. CAPABLE OF
SURVIVAL in
a world of
uncertainties.

7. ORGANIZATIONAL EFFECTIVENESS
MEETING ORGANIZATIONAL OBJECTIVES AND
PRVAILING SOCIETAL EXPECTATIONS IN THE
NEAR FUTURE, ADAPTING AND DEVELOPING IN
THE INTERMEDIATE FUTURE, AND SURVIVING
IN THE DISTANT FUTURE.

8. 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.

9. 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.

10. Flow Charts of Approaches to Organizational Effectiveness – Goal Approach
INPUTS
TRANSFORMATION
OUTPUTS
GOAL APPROACH

11. Flow Charts of Approaches to Organizational Effectiveness – Internal Process Approach
INPUTS
TRANSFORMATION
OUTPUTS
INTERNAL PROCESS APPROACH

12. Flow Charts of Approaches to Organizational Effectiveness – System Resource Approach
INPUTS
TRANSFORMATION
OUTPUTS
SYSTEM RESOURCE APPROACH

13. Flow Charts of Approaches to Organizational Effectiveness – Constituency Approach
INPUTS
OUTPUTS
TRANSFORMATION
STRATEGIC CONSTITUENCIES APPROACH

14. 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

15. 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

16. The Contradictions Model of Organizational Effectiveness
The idea of trying to characterize a whole organization as
totally effective or ineffective is problematic. In any complex
organization there may be parts of the organization that function
well and suggest effectiveness while other aspects of that same
organization perform poorly.

17. Four Central Assumptions of the Contradictions Model
Organizations face complex environments that place multiple and
conflicting demands and constraints on them. It may not be possible
to succeed in meeting all the environmental conditions an organization
faces.
Organizations have multiple, conflicting goals. It is impossible to
maximize achievement of all goals.
Organizations face multiple internal and external stakeholders or
constituent groups that make competing or conflicting demands. It
may be impossible to satisfy all groups of people who express interest
in a company.
Organizations must manage multiple and conflicting time demands.
Satisfying short- or long-term demands at the expense of the other may
result in sub-optimal performance.

18. Competing Values Model
Organizational goals and performance are defined by top and middle management. By comparing the diverse effectiveness indicators used by managers and researchers, Quinn & Rohrbaugh looked for underlying similarities and found underlying dimensions of effectiveness criteria that reflected competing management values in organizations.

19. 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.

20. 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.

21. Dimensions of Effectiveness
Structure
Flexibility I II
Internal
External
Focus
III IV
Control

22. Four Models of Effectiveness
Quadrant I : 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.

23. Four Models of Effectiveness II
Quadrant II: Open Systems Model – Combination
of external focus and flexible structure.
Management’s 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.

24. 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.

25. 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.

26. Competing Values Four different opposing value sets within the
organization. Exist simultaneously, and the
“right” balance for the organization is subject
to managerial discretion.
Emphasis may change over time, especially as the
organization evolves through its life cycle.
Examples: hospitals, airlines