Approaches to Organizational Effectiveness

There are a number of approaches to Organizational Effectiveness but we will discuss about four only.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.

Generally, it is not clear what experts mean whenever they make reference to effectiveness and it has led to ambiguities in interpreting the results of their work. The sad thing is, just a few studies have tried to give a definition of Organizational Effectiveness.

Four Approaches to Organizational Effectiveness

1. 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.

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.

2. System Resource 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.

3. 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.

4. 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.

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Strategic Constituencies Approach is ideal for organizations which rely highly on response to demands. The Strategic-constituencies 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 vis-à-vis 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.