ORGANISATION EFFECTIVENESSORGANISATION EFFECTIVENESS

Outlines-:Outlines-:

►DefinationDefination►Differences between O.E & EffeciencyDifferences between O.E & Effeciency► Importance of measuring effectivenessImportance of measuring effectiveness►Theory of effectivenessTheory of effectiveness

DefinationDefination

►Effectiveness may be defined as the Effectiveness may be defined as the degree to which an organisation degree to which an organisation achieves its goals.achieves its goals.

oror Organisation remains effective as long Organisation remains effective as long

as the org.uses its resources in an as the org.uses its resources in an efficient manner to achieve its goalsefficient manner to achieve its goals

Differences between O.E & Differences between O.E & EffeciencyEffeciency

►The two term are used quite closely & The two term are used quite closely & sometimes interchangeably,but they sometimes interchangeably,but they are differentare different

►Barnard states that-:Barnard states that-:

O.E is the degree to which O.E is the degree to which operative operative goals have been achievedgoals have been achieved..

Efficiency means the Efficiency means the cost incurredcost incurred to achieve the goals.to achieve the goals.

Cont…Cont…

►Three situation comes out-:Three situation comes out-:

1)Org.may be efficient but may not 1)Org.may be efficient but may not be be effective. effective.

2)Org.may not be efficient but may 2)Org.may not be efficient but may be be effective effective

3)Both3)Both

Cont..Cont..

►11stst case case-Efficiency refers to internal -Efficiency refers to internal conversion process where conversion process where effectiveness reflects external effectiveness reflects external phenomenon.phenomenon.

►Example-Org. may be low cost Example-Org. may be low cost producing(efficient)but it may fail to producing(efficient)but it may fail to realise matching price for its realise matching price for its product.Thus it incurrs loss(ineffective)product.Thus it incurrs loss(ineffective)

Cont..Cont..

►22ndnd case- case-It may not be effective but It may not be effective but due to external environment it may due to external environment it may earn profit & show effectiveness.earn profit & show effectiveness.

►33rdrd case case-In this situation people tend to -In this situation people tend to use both the term interchangeably.use both the term interchangeably.

Importance of measuring Importance of measuring effectivenesseffectiveness

►Whether the org. is doing things rightly Whether the org. is doing things rightly or not.or not.

►Whether the customers are satisfied or Whether the customers are satisfied or not.not.

►Changes are to be made in the Changes are to be made in the policies,strategies etc or not.policies,strategies etc or not.

► It helps to find out the link between It helps to find out the link between casual variables,intervening variables & casual variables,intervening variables & end result variables.end result variables.

Cont..Cont..

Casual Variables

Leadership,Strategies,Skills & Styles

Org. philosophy,Objective etc.

Intervening variables

Motivation,Morale of Members,Conflict

Resolution,DecesionMaking etc

End-result Variables

ProductionCostSales

EarningsIR

Turnover, etc.

Cont..Cont..

►Whether decesions are taken at the Whether decesions are taken at the proper time or not.proper time or not.

►To check whether the company is To check whether the company is technologicaly sound or not.technologicaly sound or not.

►To check the interference of the To check the interference of the political leaders & financial leaders in political leaders & financial leaders in the activity of the org.the activity of the org.

Theory/Approaches of Theory/Approaches of effectivenesseffectiveness

►Goal Approaches-Goal Approaches-::

*Attempts at measuring effectiveness *Attempts at measuring effectiveness in in terms of goal terms of goal

In studying effectiveness in terms of In studying effectiveness in terms of goal achievement theorist tends goal achievement theorist tends implicity or explicity to make two implicity or explicity to make two assumption:-assumption:-

* Each org. has an ultimate goal or * Each org. has an ultimate goal or function. function.

Cont..Cont..

* the ultimate goal can be identified & * the ultimate goal can be identified & progress towards it can be measured.progress towards it can be measured.

System Resource ApproachSystem Resource Approach--:It is derived :It is derived from the open system model.The from the open system model.The interdependence between org. & its interdependence between org. & its environment takes the form of input-output environment takes the form of input-output transaction of various kind of various transaction of various kind of various things.The org effectiveness is valued in things.The org effectiveness is valued in terms of barganing position.terms of barganing position.

Cont..Cont..

►Strategic Constituencies Approach-Strategic Constituencies Approach-:: It has been derived from system It has been derived from system

resource approach with two major resource approach with two major differences-differences-

*This approach considers only *This approach considers only relevant environment of the org.relevant environment of the org.

*This approach does not only *This approach does not only consider taking inputs from the consider taking inputs from the environment but exporting its output to environment but exporting its output to its environmentits environment

Cont..Cont..

►Behavioural approach-:Behavioural approach-: It takes into account the behaviour of It takes into account the behaviour of

the people of the org.which ultimately the people of the org.which ultimately determines the degree of goal determines the degree of goal achievement by an org.This approach achievement by an org.This approach is based on two assumptions-:is based on two assumptions-:

1)Organisations as collectivity of 1)Organisations as collectivity of people have one set of goals & people people have one set of goals & people as individual has another set of goal.as individual has another set of goal.

Cont..Cont..

2)Degree of organisation effectiveness 2)Degree of organisation effectiveness depends on the degree of integration depends on the degree of integration of organisational & individual goals.of organisational & individual goals.

In between this two extreme points(org In between this two extreme points(org goal & individual goal)there may be goal & individual goal)there may be three alternative level of integration:-three alternative level of integration:-

Cont..Cont..

► Low degree of goal integrationLow degree of goal integration►Moderate degree of goal Moderate degree of goal

integrationintegration►High degree of goal High degree of goal

integrationintegration

Low degree of goal integrationLow degree of goal integrationThis is the situation where the This is the situation where the organisational members are organisational members are opposed to the organisational opposed to the organisational goals.In this situation either goals.In this situation either organisation or individual may organisation or individual may satisfy its need.satisfy its need.

Degree Degree of of effectiveffectivenesseness

Org goalOrg goal

Individual goalIndividual goal

Cont..Cont..

►Moderate degree of goal integration-:Moderate degree of goal integration-:

In this case the organisational & In this case the organisational & individual individual goal are goal are some what some what compatible but they compatible but they are not exactly are not exactly same. The result of same. The result of

interaction betweeninteraction between

two sets of goal is two sets of goal is

Org goalOrg goal

Individual goalIndividual goal

Degree of Degree of effectiveneseffectivenesss

Cont..Cont..

two sets compromise & actual two sets compromise & actual performance is combination of both.performance is combination of both.

High degree of goal integration-:High degree of goal integration-:

In this situation individual goals are In this situation individual goals are identified with organisational goalsidentified with organisational goals

Degree of effectivenessDegree of effectiveness

Individual goalIndividual goal

Org goalOrg goal