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Organisation Effectiveness
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Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia
PowerPoint to accompany
Stephen RobbinsNeil Barnwell
Organisation TheoryCONCEPTS AND CASES
5e
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia
Chapter three
Organisational effectiveness
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 3
Aims of this lecture
Discuss why organisational effectiveness is important
Explain four approaches to organisational effectiveness
Identify the key problems with each approach
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 4
Importance of organisational effectiveness
The main aim of organisational theory is to improve the effectiveness of organisations
Organisational effectiveness is the degree to which an organisation achieves is goals, the selection of which reflects the interests of the evaluator and the life cycle stage of the organisation
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 5
Organisational effectiveness continued:
Effectiveness differs from efficiency
Efficiency stresses productive use of resources
Effectiveness stresses doing a range of relevant things successfully
Efficiency is a subset of effectiveness
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 6
Goal attainment approach
The goal attainment approach to effectiveness stresses that effectiveness depends upon an organisation achieving its goals
It assumes organisations are rational, goal seeking entities with clearly defined and widely agreed upon goals
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 7
Goal attainment approach continued:
But there are problems with this approach
Many scholars question whether organisations are rational goal seeking entities
Different groups have differing goals ie employees, shareholders, management, customers, suppliers
Differences between official and unofficial goals
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 8
Goal attainment approach continued:
Differences between short term and long term goals
Often multiple and conflicting goals coexist
The value to managers is to stress that organisations exist to achieve goals but these goals require clarification for them to be of use
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 9
Systems approach
The systems approach bases effectiveness judgements upon how effectively the organisation operates as a system in converting inputs into outputs (See Chapter 1)
It examines how the various subparts coordinate with each other, environmental interactions, whether resources are being replenished and the productivity of the system
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 10
Systems approach continued:
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 11
Systems approach continued:
Difficulties arise in measuring some important processes such as innovation. Environments can also change very quickly making measures redundant
The approach emphasises processes over goals which may lead to misleading measures being applied
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 12
Strategic constituencies approach
The strategic constituencies approach stresses that the survival of the organisation depends upon satisfying key environmental sectors
These are called strategic constituencies
This is a political approach to assessing effectiveness
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 13
Strategic constituencies continued:
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 14
Strategic constituencies continued:
A variation on strategic constituencies is the stakeholder approach
This extends the strategic constituencies to include important stakeholders who may not have political influence
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 15
The balanced scorecard approach
The balanced scorecard approach to effectiveness views effectiveness as arising from the balance between the various demands upon the organisation and its capabilities
It identifies four important performance perspectives• Financial• Customers• Internal business• Innovation and learning
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 16
The balanced scorecard approachcontinued:
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 17
The balanced scorecard approachcontinued:
The balanced scorecard approach identifies what is important to organisations and how the various measures are interrelated
Development of the measures may also be used as an organisational development exercise
Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia 18
Discussion questions
Why is organisational effectiveness be more important than organisational efficiency?
Discuss the difficulties of using the goal attainment approach to assess organisational effectiveness.
Evaluate whether politics and personal opinions will always play a significant part in assessing organisational effectiveness.
Is it possible for an effective organisation to cease to exist? Discuss.