ORGANIZATION EFFECTIVENESS

I. INTRODUCTION
Organizational effectiveness is about each individual doing everything
they know how to do and doing it well; in other words organizational efficiency is
the capacity of an organization to produce the desired results with a minimum
expenditure of energy, time, money, and human and material resources. The
desired effect will depend on the goals of the organization, which could be, for
example, making a profit by producing and selling a product. An organization, if it
operates efficiently, will produce a product without waste. If the organization has
both organizational effectiveness and efficiency, it will achieve its goal of making
a profit by producing and selling a product without waste. In economics and the
business world, this may be referred to as maximizing profits.The main measure of
organizational effectiveness for a business will generally be expressed in terms of
how well its net profitability compares with its target profitability. Additional
measures might include growth data and the results of customer satisfaction
surveys.
II. DEFINITION

Organizational effectiveness is the tool to which a goal that has been set for an
operating task is attained in terms of quality and completion.

Houck Levis

Organizational effectiveness is the system's capacity to survive adapt,maintain and

grow, regardless of the particular function it performs

Warren G Bennils

Organizational effectiveness can be defined as the efficiency with which an

association is able to meet its objectives. This means an organization that produces
a desired effect or an organization that is productive without waste

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 III. MEANING

Efficiency: Takes into account the amount of resources used to produce the desired
output.
Effectiveness: The degree to which objectives & goals are achieved and the extent
to which targeted problems are solved.
Organizational Effectiveness: Organizational effectiveness is the concept of how
effective an organization is in achieving the outcomes the organization intends to
produce. The idea of organizational effectiveness is especially important for
nonprofit organizations as most people who donate money to nonprofit
organizations and charities
Concept of Organizational Effectiveness

Sometimes efficiency and effectiveness are used as synonyms. However, there

exists a difference between the two concepts. Therefore, it is important to explain
the difference between the concepts of effectiveness and efficiency to understand
why organizations may be effective but not efficient, or efficient but not effective.
Effectiveness is a broad concept and takes into account a collection of factors both
inside and outside an organization. It is commonly referred to as the degree to
which predetermined goals are achieved. On the other hand, efficiency is a limited
concept that pertains to the internal working of an organization. It refers to an
amount of resources used to produce a particular unit of output. It is generally
measured as the ratio of inputs to outputs. Further, effectiveness concentrates more
on human side of organizational values and activities whereas efficiency
concentrates on the technological side of an organization.

IV. FACTORS AFFECTING ORGANIZATIONAL

EFFECTIVENESS
1. Organizational characteristics
2. Environmental characteristics

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 3. Employee characteristics
4. Managerial policies and practices.
A. Organizational characteristics

1.Effective Sharing of Goals

A healthy organization shares its business goals with employees at every

level of the organization. Management shares goals with employees and gets them
on board with the mission and vision of the organization. Employees and
managers understand what is required to reach these shared goals and make every
effort to achieve them.

2. Great Teamwork

Another characteristic is teamwork. Healthy companies know how to

develop teams that collaborate to achieve common goals. Employees and
managers readily offer their assistance to each other to meet corporate objectives.

3. High Employee Morale

Healthy organizations possess high employee morale. Employees value

their positions in the organizations and desire to work there for a long time.
Productivity is high and organizational events are enjoyable and successful.

4. Offers Training Opportunities

Companies provide on-the-job training and opportunities for employees to

enhance their work-related skills. Organizations bring in other individuals to
provide necessary departmental and corporate-wide training. Companies also offer
opportunities to pursue certification and continual education.

5. Strong Leadership

Good leadership is one of the main characteristics of a healthy organization.

Employees have good relationships with management that are based on trust.

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Managers know how to get employees to function together. When correction is
needed, employees readily accept the constructive criticism offered by leaders.

6. Handles Poor Performance

Companies confront poor performance instead of ignoring it. Organizations

take corrective actions to improve performance. Upper-level management values
the input of employees who make suggestions on how to improve productivity and
achieve high performance rates. Companies may even bring in specialists to detect
problems and offer solutions.

7. Understands Risks

Healthy organizations understand the risks they are open to and take the
necessary steps to protect themselves against them. When an event happens due to
organizational risks, a healthy organization learns from the event. Companies use
precaution but understand that risks are necessary to facilitate growth.

8. Adapts to Opportunities and Changes

Healthy organizations know how to recognize and seize good opportunities.

Healthy organizations always look for opportunities to grow. They also know how
to adapt to technological or operational changes. They try to stay ahead or inline
with changes in the industry and business environment.

9. Clearly Defined Structure

Companies possess a sense of order and organizational structure. The

structure and order of the organization does not limit innovation and growth.
Employees do not mind complying to the company's order because they
understand it and see the benefits of its implementation.

10. Well-Known Company Policies

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 Organizations create and implement company policies that are readily
available to their employees. Healthy organizations follow the policies and
regulations of local, state and federal governments. When employees or managers
break policies, the issue is dealt with immediately and in a professional manner.

B. Environmental characteristics
There are 3 sets of factors which determine the appropriateness of organizational
response to environmental changes. These factors are;
The environments factors with which influence the organization are 2 types;
a) Internal environment
The internal environment is the second of the types of organizational
environment. The internal environment of an organization consists of the
conditions and forces that exist within the organization. Internal environment
portrays an organization’s ‘in-house’ situations. An organization has full control
over these situations. Dissimilar to the external environment, internal environment
is much more straight manageable. For the convenient analysis of the types of
organizational environment, the internal environmental factors are also divided
into several types. It comprises numerous internal factors of the organization. Such
as:-

 Resources of the Organization

 Owners or Shareholders or Stockholders
 Board of Directors
 The culture of Organization, and
 Image or Goodwill of Organization and so on.
b) External environment
In the types of organizational environment, the strategy-creators must
recognize the complexities and challenges of both the remote environmental

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aspects and the instant operating environmental factors. They should appreciate
that the remote environmental factors are widely overpowering as a consequence
of their distantly located external environment. Nevertheless, they can assume
appropriate strategies to deal with these factors, usually collectively with other
factors in the industry, to reduce the intensity of their impact on the businesses.
Alternatively, the operating environmental factors are the immediate competitive
circumstances of a company. These often regard as ‘specific environment’ or ‘task
environment’. These factors basically make the competitive environment of a
company. When strategists take into cognizance of both the remote and operating
environments, they can become more proactive in the following discussions.
C. Employee characteristics
Should have a following characteristics,
 They should be attracted towards and satisfied with the organization.
 They should be committed to the organization
 Their motives, goals and needs should not be in conflict with the
organizational goals
 The employees should be able and knowledgeable
 They should have their role clarity
 The job turnover should be very low, if any.
a) Being Disciplined and Dependable

Reliability is a trait that should be instilled at an early age, and employees

often can overcome deficiencies such as lack of experience simply by showing up
on time and performing their assigned duties. Being able to work without a
supervisor is a sign of discipline. So it is not having to be told not to make
personal phone calls, the Internet or constantly text and tweet.

Closely related traits are work ethic, honesty and integrity. It boils down to
an employer being able to count on you to show up, do your job, stay focused, be
prepared and not steal – either physically or by stealing company time.

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 b) Taking Initiative and Responsibility

Offering solutions to problems in a constructive manner, as well as standing

up and taking responsibility for mistakes that have made, goes a long way in
catching an employer’s attention. Supervisors can't be everywhere at all times, so
it is up to pay attention and speak up when identify a problem or a way that a
process can be improved. Be willing to pitch in when the company is faced with a
serious deadline or a coworker has to take an unexpected break. Bosses take notice
when you are willing to do more than just your own job as a way of looking out
for the company's interests.

c) A Good Attitude

Even dependable and responsible employees may not have the most
cheerful dispositions. A smile alone won’t get the job done, but a positive outlook
and a pleasant disposition combined with fundamentals such as work ethic and
discipline make for a well-rounded employee. Flexibility and enthusiasm also are
components of possessing a good attitude. Being a team player, which is another
attribute of a successful employee, is difficult if not approachable and if don’t play
well with others. This doesn't mean that, it need to be a pushover, but you can
learn to be assertive while not demoralizing the coworkers.

d) Good Communication Skills

Whether writing, speaking or using computers, communication skills are

essential in virtually any job. These skills often are the result of upbringing and
education but are fundamental to most businesses. Improving these skills is vital to
becoming a successful employee. It’s especially important when trying to
communicate ideas to improve company’s performance. The good ideas won't help
anyone, or career, if can't deliver them effectively. Think before speak and take a
few minutes to read and proof read the emails before sending them.

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 V. APPROACHES TO EFFECTIVENESS
Organizational effectiveness and corporate performance research appear to
take care of the same core construct: organizational effectiveness and
performance. Since the beginning of industrialization, the concept of assessing
organizational effectiveness has been crucial in organization practice and theory.
Four Approaches to Organizational Effectiveness

a) Goal Approach
The Goal Approach is also called rational-goal or goal-attainment
approach, it has its origins in the mechanistic view of the organization. This
approach assumes that organisations are planned, logical, goal-seeking
entities and they are meant to accomplish one or more predetermined
goals. Goal approach is worried with the output side and whether or not the
organization attains its goals with respect to preferred levels of output. It
sees effectiveness with respect to its internal organisational objectives and
performance. Typical goal-attainment factors include profit and efficiency
maximization.

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 The key constraint of this approach pertains to the content comparability of
organizational goals. The dependable identification of comparable and practically
appropriate goals within groups of organizations is thus a serious problem. What
a company declares as its formal goals don’t always echo the organisations actual
goals. Therefore, an organisations formal goals are typically dependent upon its
standards of social desirability. As goals are dynamic, hence they will probably
change as time passes, simply because of the political make-up of an
organisation. An organisations short-term goals are usually not the same as their
long term goals. The utilization of goals as a standard for assessing
Organizational Effectiveness is challenging. The goal approach presumes
consensus on goals. Considering the fact that there are numerous goals and varied
interests inside an organisation, consensus, is probably not possible.
b) System research approach
This approach to Organizational Effectiveness was developed in
response to the goal approach. The System Resource Approach sees an
organisation as an open system. The organisation obtains inputs, participates in
transformation processes, and generates outputs. This approach emphasizes inputs
over output. It sees most organizations as entities which function in order to
survive, at the same time rivaling for scarce and valued resources. It assumes that
the organisation consists of interrelated subsystems. If any sub-system functions
inefficiently, it is going to influence the performance of the whole system.
The disadvantages of this approach relate to its measurement of means. An
issue with this approach is that a higher amount of obtained resources is not
going to promise effective usage. In addition, it is tough to define an ideal degree
of resource acquisition across distinct organizations.
An organization should follow the following points in order to be effective:
 The organization should have favorable relation with the environment to
ensure continued availability of inputs and positive acceptance of outputs.

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 This approach also emphasizes flexibility of responses of the organization
to changing environment
 Managers have a responsibility to understand the nature of the environment
and to set the realistic goals accordingly.
 The organization should be able to successfully adapt structure,
technologies and policies with the changing environment to facilitate the
achievement of organization goals.
c) Internal-Process Approach
This approach has been developed in response to a fixed output view
of the goal approach. It looks at the internal activities. Organizational
effectiveness is assessed as internal organizational health and
effectiveness. According to Internal-Process Approach effectiveness is the
capability to get better at internal efficiency, co-ordination, commitment
and staff satisfaction. This approach assesses effort as opposed to the
attained effect. Some experts have criticized the internal-process approach,
like the system-resource approach, cannot lead to legitimate indicators of
organizational effectiveness itself. Rather, it is accepted as an approach for
studying its assumed predictors. Similar to the system-resource approach,
the internal-process approach could possibly be applied only where
comparable organizational outcomes can hardly be assessed accurately.

d) Strategic Constituencies Approach

This approach suggests that an efficient organisation is one which
fulfills the demands of those constituencies in its environment from whom
it needs support for its survival. It assesses the effectiveness to satisfy
multiple strategic constituencies both internal and external to the
organization. Strategic Constituencies Approach is ideal for organizations
which rely highly on response to demands. The Strategic-constituencies

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 approach takes explicitly into consideration that organizations fulfill
multiple goals: each kind of organizational constituency (like proprietors,
workers, consumers, the local community, etc.) is supposed to have distinct
interests with the corporation, and will thus use different evaluation criteria.
However, the job of isolating the strategic constituencies from their
environment within which they function is a challenging and tricky task.
Because the environment swiftly changes, what was a crucial goal today
might not be so tomorrow. Individual constituents may create significantly
diverse ratings of an organisations effectiveness. These constituents may
use diverse factors or weight the same criteria in a different way.
There is little agreement either theoretically or empirically, in regards to
what makes up organizational effectiveness and what is the best way to
measure it.

The strategic constituency approach is closely related with the

system resource approach. In system approach, all the components of the
external environment acting independently have to be carefully regulated to
ensure effectiveness. In the strategic constituency approach, it is the control
of the critical constituencies which will automatically bring about
effectiveness in the organization.
The important constituents which affects the organizational effectiveness
are:
 Owners
 Managers
 Employees
 Customers
 Suppliers
 Government

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 This approach integrates both the goal approach and system
approach to effectiveness. In the strategic or the multiple constituency approach,
the objectives of all the relevant constituency are stated and compared with the
actual attainment, just like in the case of goal approach, the objectives of the
constituents that supply the necessary organizational resources are dealt with in
this approach also.

e)Maximization or optimization approach

Another conflict in the concept of organizational effectiveness is that of

maximization Vs optimization. This conflict gives rise to two clearly separate sets
of decision making models: one based upon maximization and one based upon
optimization. The first approach is referred to as the economic man approach and
the second is referred to as his administrative man approach. Both these
approaches help us to find out what extent an organization can become effective
VI.ESSENTIALS OF ORGANIZATION EFFECTIVENESS(SIX
SYSTEM FRAME)
1. Leadership.
To achieve high performance or sustain results, leaders must define
and refine key processes and execute them with daily discipline. They must
translate vision and values into strategy and objectives, processes and practices,
actions and accountabilities, execution and performance. Leaders address three
questions: 1) Vision/Value. What unique value do we bring to our customers to
gain competitive advantage? What do we do, for whom? Why? 2)
Strategy/Approach. In what distinctive manner do we fulfill the unique needs of
our customers and stakeholders? What strategy supports the vision for achieving
competitive advantage? 3) Structure/Alignment. What is the designed alignment of
structure and strategy, technology and people, practices and processes, leadership

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and culture, measurement and control? Are these elements designed and aligned to
create optimal conditions for achieving the vision?
2. Communication.
Everything happens in or because of a conversation, and every
exchange is a potential moment of truth a point of failure or critical link in
the success chain. Strategic communication ensures that the impact of the
message is consistent with the intentions, and results in understanding.
When leaders maximize their contribution to daily conversations, they
engage and align people around a common cause, reduce uncertainty, keep
people focused, equip people for moments of truth that create an on the-
table culture, prevent excuses, learn from experience, treat mistakes as
intellectual capital, and leverage the power of leadership decisions to shape
beliefs and behaviors.
3. Accountability.
Leaders translate vision and strategic direction into goals and
objectives, actions and accountabilities. Performance accountability
systems clarify what is expected of people and align consequences or
rewards with actual performance. Leaders need to build discipline into their
leadership process and management cycle to achieve accountability,
predictability, learning, renewal, and sustainability.
4. Delivery.
The best organizations develop simple processes that are internally
efficient, locally responsive, and globally adaptable. Complexity is
removed from the customer experience to enable them to engage in ways
that are both elegant and satisfying. Establishing and optimizing operational
performance is an ongoing journey. Operations need to be focused on the
priority work, using the most effective techniques aligning initiatives and
operations with strategy; continuously improving operations; pursuing
performance breakthroughs in key areas; using advanced change techniques

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 in support of major initiatives; establishing a pattern of executive
sponsorship for all initiatives; and building future capability and capacity.

5. Performance.
The Human Performance System is designed to attract, develop, and
retain the most talented people. The idea is to hire the best people and help
them develop their skills, talents, and knowledge over time. Of course, it
becomes more critical, as they add abilities and know how, that we reward
them properly so they feel good about their work and choose to remain with
the organization as loyal employees.
6. Measurement.
A system of metrics, reviews, and course corrections keeps the
business on track. Organizations need concrete measures that facilitate quality
control, consistent behaviors, and predictable productivity and results. Within
these parameters, control is instrumental to viability and profitability. Every
activity has a set of daily rituals and measures. Leaders establish and maintain
the measurement system to ensure disciplined processes. They track progress
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against strategy and planning; review status on operational results through
clear key metrics; update the strategy regularly; and ensure action is driven by
insight based on relevant, current information that is focused on achieving the
vision. This Six Systems frame helps people see how everything is integrated.
Again, until the Leadership System operates effectively, all other systems are
degraded. We work with leaders to ensure their Leadership System is highly
effective, and we have dozens of cases that demonstrate the power of using a
Whole Systems Approach

VI.STRATEGIES TO IMPROVE THE ORGANIZATION

EFFECTIVENESS
1. Make Use of Human Resources
The human resources department of any company plays a key role in
the organizational effectiveness of a company. According to Forbes, human
resource personnel provide assistance with organizational effectiveness by
helping with the design of new business strategies. Since the human resources
professionals in a company play an essential role in hiring new employees,
they also impact the company goals. Get human resource professionals
involved in the design and implementation of changes within the company to
improve the organization. They offer unique perspectives that leaders may
overlook and play an active role in identifying the right professionals for new
positions within the company.
2. Focus on Education and Growth
Organizational leadership requires active measures to work with different
groups and individuals. A leader must understand the strengths and weaknesses
of different professionals before making a plan of action to improve the
effectiveness of the organization. Before making any changes to the company,
consider the education of professionals in different areas of the business. Find

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out about their abilities, skills and strengths. Identify their weaknesses or the
areas where specific professionals face difficulties when working as a team.
After identifying the strengths and weaknesses of professionals with
different educational backgrounds, focus on the growth of the company by
building effective teams. Develop teams with complementary skills and
strengths. Encourage professionals to work toward specific goals and give
assignments based on their skills, knowledge and background. Efficiency in a
company requires an understanding of different professionals and their role
within the business, as well as ways to improve their abilities or make use of
unique skills.
3. Keep the Customers in Mind
Organizational effectiveness only works well when evaluating the needs
and interests of the customers. Quality management is just as important as the
overall efficiency of the company. If a professional does not provide a quality
product or service, then customers look for alternatives for their needs and
goals. Ask customers to fill in surveys or answer questions about the services
provided. Find out what the customers want from the company or the services
they find the most valuable for their needs and goals. For businesses with
direct interaction with a customer, provide anonymous options for customers
to fill out complaints or provide feedback. Use social media pages or other
online tools to gain feedback from clients. Allow customers to leave
comments or point out weaknesses from the company by asking questions on
social media or a company blog.
4. Work on Quality Services or Products
Although clients play a role in the effectiveness of a company, a business
must also identify an appropriate level of quality for the products or services
provided. The key is focusing on a balance of quality with cost effective
solutions. The goal of any business is improving the products without
exceeding a set budget or price range. Organizational leadership requires

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 active participation in the decision-making processes. Ask professionals in
different areas of the business for advice about improving the products
without increasing the costs for materials. Discuss ways to reduce the time
required to accomplish specific goals without cutting back on the quality of
the final product or service. By involving different professionals from multiple
fields in the decision-making process, a leader gains multiple perspectives and
ideas about better ways to improve the organization.
5. Use Technology
Technological tools play an essential role in the efficiency and effectiveness of
a company. Make use of computers, tablets or smart phones to improve the
efficiency of the company. Use software or sharing tools to keep different
members of a team up-to-date with the state of a project, even when they are not
actively working on a specific portion of the project. Work with technological
professionals to determine the best ways to protect the business and client
information without exceeding a set budget. Use software programs designed
specifically to improve efficiency or effectiveness in the office. For example, use
spreadsheets for better organization or set up an office-wide system for sharing
information among team members or different professionals in the business.
Organizational effectiveness is a business strategy designed to improve the
efficiency of the company without reducing the quality of the products or services.
By working with professionals in different fields or at different educational levels,
a leader obtains new ideas to help reduce costs, improve the product and provide
quality customer service.
VII.SUMMARY
As far we discussed about definition,factors affecting organizational
effectiveness,approaches to organizational effectiveness and strategies of
organizational effectiveness

VIII.BIBLIOGRAPHY

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