ORGANIZATIONAL ORGANIZATIONAL EFFECTIVENESSEFFECTIVENESS

Business Process

Unit – IIG Roy Antony Arnold

LecturerPanimalar Engineering College

Chennai, Tamilnadu, India

Synopsis Synopsis

Methods to achieve effectiveness

Models of Organizational Effectiveness

Development of Contradiction Model

Explanation of Contradiction Model

What is Organizational What is Organizational Effectiveness?Effectiveness?

Effectiveness refers to the degree of congruence between organizational goals and some observed outcome.

Three reasons why the concept of organizational effectiveness remains muddled.◦There are important differences in the way

scholars have conceptualized organizations.◦The complexity of organizations.◦Researchers have often used different, non-

overlapping criteria, thus limiting the accumulation of empirical evidence about organizational effectiveness.

What is Organizational What is Organizational Effectiveness?Effectiveness?

Organizations can be effective or ineffective in a number of different ways, and these ways may be relatively independent of one another.◦Productivity◦Efficiency◦employee absenteeism◦Turnover◦goal consensus◦Conflict◦participation in decision making◦Stability◦communications.

Toward a Contradiction ModelToward a Contradiction Model

A contradiction model is folly to try to conceptualize organizations as effective or ineffective.

A contradiction model of effectiveness will consider organization to be more or less effective in regard to the variety of goals.

The goals in public sector are more amorphous and contradictory than those in private sector.

Decisions regarding goals first appear to be rational turn out to be disastrous because of events beyond organizational control.

Models of Organizational Models of Organizational EffectivenessEffectiveness

System – Resource Models

Goal Models

Participant – Satisfaction Models

Contradiction Models

Process Approach Models

System Resource ModelSystem Resource Model

This is the first effectiveness model because this provides the organizational – environmental interface

Organizations are not assumed to possess goals, nor is goal accomplishment a relevant consideration. Instead, an organization is effective to the extent that it can obtain needed resources from its environment.

Contd…Contd…

The resource acquisition must be viewed as relative to the capacity of the environment.

The resource acquisition does not just happen, but is based on what the organization is attempting to achieve – namely its goals.

The Goal ModelThe Goal Model

The goal model is the most common theoretical perspective on effectiveness.

It is both simple and complex. In its simplest form, the goal model

defines effectiveness as the degree to which an organization realizes its goals.

The model becomes complex, when organizations have multiple and frequently changing or conflicting goals.

Goals involve intents and outcomes and serve as constraints on decision making.

Contd…Contd…

The goal of any organization is an abstraction distilled from the desires of members and pressures from the environment and the internal systems.

Types of goals◦Official Goals◦Operative Goals

Operative goals are a derivation of and a distillation from official goals.

They are developed and modified through ongoing interaction patterns within organizations.

Contd…Contd…

Three reasons for changes in the goals of organizations.◦ Indirect interaction with the environment through their IORs

Competition Coalitional relationships Bargaining

◦ Internal organizational changes Shifts of power coalition Change in Leadership

◦ Outside the organization – involves indirect pressures from the general environment Technological Development Economical Change Change in government Change in Rules and Regulations

Goals and EffectivenessGoals and Effectiveness

The goal suggests that an organization is effective to the degree to which it achieves its goals.

These goals are few enough in number to be manageable and can be defined well enough to be understood.

Problems with Goal ModelProblems with Goal Model

According to Hannan & Freeman:

1. Multiplicity of organizational goals.

2. Goals involves their specificity.

3. Temporal Dimension

Methods of Assessing EffectivenessMethods of Assessing Effectiveness

Reviewing a variety of theoretical perspectives on effectiveness is useful because it not only points out the limitations of the goal model but also provides alternative ways of considering organizations.

Variable Analysis.◦ Research designs that attempt to measure the

attainment of some goal.

Outcome Assessment in Goal Outcome Assessment in Goal ModelModel

It is difficult for several reasons.

1.Time perspective used.

1. The outcome, which is successful in a short run could be disastrous for the long run.

2.Bounding Systems or the problem in distinguishing the effects of events both inside and outside the organization.

1. It is difficult to understand whether the outcome is result of organizational action or of some external force.

Process approach ModelProcess approach Model

Under this model, effectiveness is described as a process rather than an end state, as might be the case under the goal model.

The process approach consists of three related components:◦goal optimization,

◦a systems perspective,

◦and an emphasis on behavior within organizations.

Participant – Satisfaction ModelsParticipant – Satisfaction Models

Individuals contributed their activities to organizations in return for incentives.

The motives of the individuals participating in organizations as the critical determinants for survival.

Incentives must be adequate for maintaining the contributions of organizational members.

Freedom to used the organizational resources

ProblemsProblems

There are some major problems.

1.Steer’s approach – individuals have varying forms of linkages to the organizations of which they are a part.

◦ Many persons are unaware of organizational goal

2.Psychological formation

◦ The individuals may neglects the organizational activities when there is a freedom

3.Individuals outside the organization are affected by what organizations do.

The Contradiction ModelThe Contradiction Model

Multidomain – Effectiveness in one domain may not necessarily relate to effectiveness in another domain.

Contradiction model can be explained in simple manner based on…

1. Constraints

2. Goals

3. Stakeholders (internal & external)

4. Time frames

Contradiction Model - Constraints

Organizations face multiple and conflicting environmental constraints.

These constraints may be imposed (legal & economical dimension), bargained (agreements), discovered (environmental change) or self-imposed (org. utilization).

Imposed constraints are beyond organizational control.

In general, the larger and more complex organization have to face variety of constraints.

Organizations have to consider the their environments, recognize and order the constraints and attempt to predict the consequences of their actions.

Contradiction Model - GoalsContradiction Model - Goals

Organizations have multiple and conflicting goals.

When the organization want to reduce the expenditure, actions are taken based on goals and power coalitions.

At the same time, goals do not just “disappear”.

Organizations have multiple and conflicting internal and external stakeholders.

The people those who are affected by an organization are called as stakeholders.

They may be employees, members, customers, clients or the public at large and can also be other organizations.

Obviously the individual and organizational stakeholders will have different and contradictory interests.

Contradiction Model - Contradiction Model - StakeholdersStakeholders

Organizations have multiple and conflicting time frames.

This is closely associated with the organizations goals.

Fluctuations will be there from one year to another.

During the discount period, possibility of sales will be more.

Each organization may capitalize some situations to increase their profit.

Environmental constraints also vary over time.

Contradiction Model – Time FramesContradiction Model – Time Frames

Some ApplicationsSome Applications

Decision making is the vital part of this model.

Compromises – the ordering of compromises is based on power relationships and coalitions within the organizations, coupled with external pressures.

Response – when responding to an action others are not possible because of environmental constraints.

Can easily identify the constraints on which organizations can have no control.

Constraints beyond controlConstraints beyond control

Weather – Some organizations are dependent on weather patterns. (Agricultural, tourism , pharmaceutical)

World political and economic shifts (Soviet Union)

World events (demolition of twin tower)

Environmental Constraints Environmental Constraints

Board Composition (selection procedure)

Rules and regulations (AICTE, UGC)

Budget, specially for public organizations.

Organizations engage in a variety of activities designed to manipulate their environment in their favor

Whether through interlocking of boards of directors, purchasing suppliers, seeking to have favorable legislations passed, or propaganda, the attempt is to manipulate the environment on behalf of the organization.

Organizational CharacteristicsOrganizational Characteristics

Structure and restructure happens according to the outcomes of decision making and political processes

Organizations are not completely flexible

Organizations are in a constant change mode i.e. technological change will not occur rapidly. (CBS)

There is a reciprocal relationship between strategy and structure.