Organizational Effectiveness

First of all, every organization should have a mission and vision, and establish goals and objectives that drive employee actions toward their achievement. Without a mission and vision, the organization will move erratically like a ship without a clear destination. The mission should be clear and be communicated to all employees, providing a sense of direction, motivating, and sparking ambition toward its achievement. The mission is also long lasting, providing consistency to the long-term aspirations and actions of the entity.

Goals and objectives provide identifiable markers of the achievement of something, and help establish tactical actions to work toward. These are more immediate and facilitate the assignment of resources (e.g., budgets and projects) that can be aligned with the mission.

How do we know if we are achieving the goals and objectives set for ourselves? The answer lies in the concept of effectiveness.

Effectiveness is the process of evaluating the degree to which the organization, program, or process is achieving its goals and objectives. Effectiveness consists of comparing the planned outputs with the actual outputs. This can be expressed simply as achieving X percent of the goal. If the number is under 100%, the goal was not fully achieved, and conversely, if above 100%, the goal was surpassed.

Organizational effectiveness is defined as a concept to measure the efficiency of an organization in meeting its objectives with the help of given resources without putting undue strain on its employees. It is about how the company can produce the target quota of products and/or services, how efficient its process is, and how much waste is produced.

Trending effectiveness metrics is a useful technique as well. It allows management, and auditors during their review, to ascertain the degree to which there is consistent accomplishment of goals. Furthermore, it provides context to metrics that in isolation may appear satisfactory. For example, if the organization has a goal of keeping scrap under 5% of total raw materials used in production, and at the time of the audit, the scrap yield was 4.7%, the auditor may conclude that while it is close to 5%, it is below the limit, so at best, he may make a verbal comment to monitor that figure.?

Internal auditors can make a substantial contribution for improvement in company operations by closely examining or even questioning the appropriateness, usefulness, and relevance of policies and procedures, which have a tendency to become outdated. Merely following existing policies and procedures is not enough. These must be appropriate and enable the achievement of objectives.

If there is a discrepancy in this regard, internal auditors should question them.

Finally, to achieve organizational effectiveness, the organization must demonstrate a willingness to continuously improve its processes. This will require feedback techniques, internal and external communication channels, and that suggestions for improvement are taken seriously. If nothing ever changes, people will develop apathy toward the organization, leading to stagnation and ineffectiveness.