Organisational Effectiveness

Organizational Effectiveness

Kamahoro Claire Pamella

ORG/581

Sara Garski

6/15/2015

Organizational Effectiveness

Introduction

          Effectiveness directly correlates to meeting objectives. The major measure of organizational effectiveness can be expresses of how well it means it achieves its intended goals. Determining effectiveness of an organization requires understanding of resource utilization and how they can be used to maximize organization’s ability to create value. Given that resource utilization is the manager’s role, they may use metrics to understand organizational effectiveness. “Researchers analyzing what CEOs and managers do have pointed to control, innovation, and efficiency as the three most important processes managers use to assess and measure how effective they, and their organizations, are at creating value” (Jones, 2010). 

Key Metrics Linked to Organizational Effectiveness

          Three metrics linked to organizational effectiveness include control, innovation, and efficiency. Control relates to the organization’s ability to govern external environments and attract prospective customers and resources. Innovativeness relates to the organization’s ability to adapt to the changing environments and resilience to market place dynamics. It also relates to how well an organization develops skill to discover new products and improve the way it functions. Efficiency pertains to adapting to mechanisms that make company delivery of services or products timely and most cost effective manner. “It also means introducing techniques like Internet-based information systems, total quality management, and just-in-time inventory systems to improve productivity” (Jones, 2010).

        There are three approaches to evaluate the effectiveness with which an organization confronts each of these three challenges. “An organization is effective if it can (1) secure scarce and valued skills and resources from outside the organization (external resource approach); (2) coordinate resources with employee skills creatively to innovate products and adapt to changing customer needs (internal systems approach); and (3) convert skills and resources efficiently into finished goods and services (technical approach)” (Jones, 2010).

Eternal resource approach

          This allows managers to assess how effective their organization manages the external environment. They evaluate whether an organization has successfully influences key stakeholders to perceive the organization in positive fashion. It also enables manager’s ability to use the environment to secure the scarce resources that are vital for the organization’s competitive advantage. “To measure the effectiveness of their control over the environment, managers use indicators such as stock price, profitability, and return on investment, which compare the performance of their organization with the performance of other organizations” (Jones, 2010).