ORGANIZATION EFFECTIVENESS

APPROACHES TO ORGANISATIONAL EFFECTIVENESS

Because different organizations have different needs, goals, and objectives, as well as different financial budgets, customer demands, and resource availability, effectiveness can mean different things to different organizations. As a result, organizations use various strategies to achieve organizational effectiveness. Organizational approaches can be broadly classified into two categories: traditional effectiveness approaches and contemporary effectiveness approaches.

TRADITIONAL EFFECTIVENESS APPROACHES

Previously, a lot of organizations measured their effectiveness using strict, conventional methods. These methods only addressed internal process improvement and goal achievement. The goal approach, systems approach, internal process approach, and competing value approach are the four conventional methods used to assess an organization's effectiveness.

GOAL APPROACH :

This is the most traditional method that organizations use to evaluate their efficacy. The rational goal or goal attainment approach are other names for the goal approach. In this approach, an organization's objectives define its existence. As a result, achieving objectives is how an organization's effectiveness is determined. The goal approach states that an organization must determine what are realistic goals and assess how to get there. This strategy works well for businesses that aim to accomplish predetermined goals, like revenue and customer satisfaction. The goal approach makes the assumption that organizations are logical, goal-oriented entities.

Therefore, the following presumptions are made in order to measure organizational effectiveness using the goal approach:

Organizations aim for quantifiable results.

Employees understand the goals.

There is broad agreement on objectives between upper management and staff.

There are certain shortcomings in the goal approach, despite the fact that organizations use it to gauge organizational effectiveness. The following are these weaknesses:

Existence of multiple goals : Organizations frequently place a strong emphasis on achieving a number of competing goals at once, which makes it challenging for them to assess their effectiveness. An organization's objective might be, for instance, to increase profits while advancing the current infrastructure. These two objectives, however, are incompatible because improving the infrastructure might require significant financial outlays that would have an impact on profitability.

Non-measurable objectives: It is challenging to gauge an organization's effectiveness if its objectives are not quantifiable. An organization might want to raise consumer awareness of its products, for instance. Determining the extent to which this objective can be accomplished is difficult, though.

Variations in the term objectives: An organization sets both long-term and short-term objectives. These objectives frequently diverge from one another. The goal approach cannot be used in this situation. An organization's short-term objective might be to sell things at a loss, while its long-term goal might be to double revenue by the end of the year.

SYSTEM APPROACH

The systems approach states that an organization is effective if it makes the best use of the resources that are available to it. According to the systems approach, an organization's primary characteristics are as follows:

An organization is a small part of a larger context.

It has objectives.

It uses tools, facilities, machinery, and knowledge to become a subsystem.

It is made up of individuals who collaborate and build social bonds.

Its managers carry out a variety of tasks, including organizing, motivating, communicating, controlling, and planning, in order to accomplish a predetermined set of objectives.

An organization must consider the following two factors in order to achieve organizational effectiveness when using the systems approach:

First and foremost, the organization's ability to adjust to changes in the business environment will determine its ability to survive.

Second, the organization's management needs to concentrate on the input-process-output cycle in order to adjust to different changes. Cycle states that an organization functions as a system that processes input to create output.

INTERNAL PROCESS APPROACH

According to the internal process approach, the effectiveness of an organization is determined by its internal health and efficiency. Stated differently, an organization is considered effective if its internal procedures result in high productivity. This method does not account for changes in the external environment, such as shifts in government regulations, consumer behavior, or rival strategies.

The internal process approach lists the following characteristics of a successful organization:

Employee collaboration

progressive workplace environment

Mutual respect between the staff and management

Efficient communication and prompt dispute resolution

There are a few other disadvantages to the internal process approach, which are as follows:

Owing to non-quantifiable inputs, internal factors that are used to evaluate the effectiveness of an organization are frequently subjective in nature. For instance, it can be challenging to determine the exact level of employee satisfaction within an organization.

The evaluation is still lacking because the internal process approach does not take external factors into account when gauging the effectiveness of an organization. This is due to the fact that an organization's efficacy is impacted by a number of outside variables, including alterations to governmental regulations and the introduction of new technology.

CONTEMPORARY EFFECTIVENESS APPROACHES :

Modern, efficient methods integrate a number of indicators into a single framework to analyze an organization's performance. These methods contend that an organization is effective when it reacts swiftly to changes occurring in the external environment.

STAKEHOLDER METHOD :

People with an interest in the success of an organization are called stakeholders. They may be found inside or outside the company. Since stakeholders have an interest in an organization, their standards for judging its efficacy would differ. According to the stakeholder approach, stakeholder satisfaction serves as a proxy for organizational effectiveness. The constituency approach is another name for the stakeholders approach.

Competing Value Approach :

The competing value approach, created by Robert Quinn and John Rohrbaugh, compiles a wide range of performance indicators into an exhaustive list. A panel of experts rates these indicators for similarity, resulting in competing management values within an organization.

These values serve as effectiveness dimensions that aid in assessing the performance of the organization. Two dimensions are taken into account in the competing value approach, and these are explained as follows:

Main Point: The emphasis that the organization's management places on both the internal and external environments is reflected in this value dimension. In the external environment, the emphasis is placed on adhering to legal requirements, satisfying customer needs, and establishing long-term relationships with suppliers; in the internal environment, management prioritizes the welfare of its workforce.

STRUCTURE : Organizational goals and objectives are achieved through the allocation, coordination, and supervision of tasks, which is reflected in the structure value dimension. An organization's structure places a strong focus on adaptability and stability. While flexibility denotes an organization's readiness to adjust to changes in the business environment, stability represents management's perspective on vertical (top-down) control.

Four interrelated models of organizational effectiveness are provided by the model's combination of dimensions, and they are as follows:

Model of human relations: Under this model, employee development is the management's top priority. As a result, management has decided that fostering cohesion, employee morale, and training are sub-goals. Employee commitment to achieving organizational effectiveness is aided by this.

Model of internal processes: Under this model, management aims to create a stable environment within the organization. Thus, effective information management and communication are sub-goals in this model. This aids businesses in securing and holding onto their market position.

Open systems model: This model employs stability and external focus in tandem. Organizations place a high value on acquiring resources and growing. Organizations concentrate on achieving a number of sub-goals, such as developing flexibility and assessing the external environment, in order to reach these main objectives.

Rational goal model: Under this model, organizations embrace external focus and structural control. The main objectives of this model are therefore to raise profit, efficiency, and productivity. Organizations need total control to accomplish these objectives. The rational goal model's sub-goals are internal planning and goal-setting. Organizations can effectively develop a single perspective from disparate concepts of effec- tiveness by using the competing value approach.

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