Approaches to Evaluation of Organizational Effectiveness - Essay Example

Running Head: ORGANIZATIONAL EFFECTIVENESS Topic Title: Organizational Effectiveness Name of student: Lecturer: Date of Presentation: Introduction An organization refers to a group of people bound by similar objectives. An organization has a system whereby the people are committed to and it is has arranged and designed structure. Organizational effectiveness can be said to be achievement of the set goal through maximization of profit, minimization of production cost, and achievement of the organizational goal of maximizing the profit. Managers are responsible to make strategies that will enable the organization meet its goals and objective. It’s therefore important for the organization to scan both internal and external environment and how they affect the entire operations of the organization and put measures on how to respond to them. There are three approaches towards organizational effectiveness which are, rational, natural and open system approach (Scott, 2009). For the purpose of this paper we will only discuss two approaches which are; rational approach and open system approach Rational approach The word rational means a systematic way to bring logic and order in the activity carried on. Rational approach therefore involves series of steps, which starts from identification of the problem/opportunity, solutions to the problem and it ends with action adopted. Rational goal approach is traced back to scientific management model introduced by Taylor where he believed that the efficiency of both workers and management will make organization meet its goal. Scott (2003) observes that rational approach denotes a sense of efficiency in organizing and achieving organizational goals. Rational goal approach mainly focuses on the organization’s ability to achieve its set goals and objectives. Evaluation criteria are derived from the goals the organization is expected to achieve. These criteria are determined by different factors and the goals can be accessed by use of the organizational manual, mission and vision etc. The organizational effectiveness is therefore evaluated by comparing the accomplished activities with those the company has planned to achieve in their strategic plan. In this model the organization is complete when it achieves its goals (Field, 2009). Rational approach is based on emphasis on rational action and it assumes that planning and setting goals leads to productivity of the organization, which leads to organizational effectiveness. According to Weber, modern organizations are characterized by networks of roles; divisions of labor; and hierarchies defining the relationship of each activity, project, program, and function to the overall goals of the organization. Organization is therefore rational if it works on the above element achieve the organizational goal. (Cunngham, 2001) An organizational goal is determined by identifying the objectives set to be achieved and therefore defining a set of each objective. Therefore it is a role of Management to involve all the stakeholders in decision making for the effective operation of the organization. This is because rational model requires that the goal has to be achieved and the goal of the organization cannot be achieved without involving all stakeholders in decision making. Different stakeholders have different interest in the organization and therefore they have different influences in the organization. When all stakeholders come together with the management, their ideas are evaluated and meet a consensus and therefore an a agreement is made for the success of the organization (Friedman, 2002) Organizations are instruments that can be shaped, molded and designed by the management and other stakeholders in order to reach their goals (Scott, 2009). The organization forms a strategic plan regarding the performance of the entire organization. The structure of the organization, the people, and the system involved in implementing the strategy is rational (Scott, 2003), Taylor, (1911) argued that the production of the organization was highly determined by the productivity of each employee. Davis and Scott (2007) enriched Taylor’s argument by indicating that employees play a key role in realization of the organization objectives and goals. Scientific management model is one of the most used models by organizations. Christian (2003), enriched this by adding that minimization of production cost, maximization of production through use of less labor and material increase productivity. In scientific management, Taylor insisted on productivity of the firm which is determined by the employees. Minimization of production cost and maximization of output was the whole idea behind it. In an organizational structure, whereby the top management assigns duties to the departmental managers and the channel continues to the subordinate staff, the duties and responsibilities are mostly allocated by the managers in their departments. Tolbert & Richard argues that this should not be the case. All the staff in an organization should be aware of their responsibility and carry out their duties well because if they wait for the manager to assign them duties it will be wastage of time. (Tolbert & Richard 2008) Rational approach system is highly formalized, hierachial and centralized in structure. Byman (1984) observes that, the way in which staff members interact with each other is guided by rules and roles they play in the organization. Therefore the in rational approach the important factor is to observe their rules and roles in order to achieve the goals. Organizations find rational approach easier to follow and to implement the plan. This is because it involves the entire organization to plan and act upon what they have planned as far as the resources are available. According to Marnet (2007), rational approach works towards achieving the organizational set goals regardless on whether they are achievable or not. Rational approach provides a structure to plan and implement the goals and considers that the entire organization gets involved in this. An example of a company using rational system model is Dell Computer Company. Dell uses rational system model to manage its global business. Open system model Open system model involves interacting and inter-related parts which are systems and environment in which the systems interact in. Open system model focus on the interchange between the system which is the organization and the external environment. This model explains that, the organization is effective to the degree that it acquires inputs from its environment and has outputs accepted by its environment (Field, 2002). The organization is a system composed of subsystem in the environment which includes economic, politico-legal, technological and socio-cultural system. To analyze organization as a system it’s important to understand the relationship between the firm and these external system and the major factors which influence them. (Accel, 2011) Open system model puts its emphasis on adaptability, readiness, growth, resource acquisition and external support. Innovation and creativity is therefore enhanced and the management inspired to work towards achieving the organizational goals. The environmental influence that affects the open approach system includes suppliers, distributors, government, and competitors. Zoghi & Mohr (2011) observes that this approach allows the management to visualize organizations systems comprising of various components that reacts to external environment. Open approach system strives to achieve and satisfy the needs of its components (systems and its subsystem) which must be met for the organization to reach its objectives (Millett,1998).The organization should be able to exploit its environment to acquire scarce and valued resource, to correctly interpret the external environment variables, to produce a specified output, supervise day to day operations and co-ordinate the relationship among various subsystems, (Cunningham 2001) Therefore, this model analyses whether the management has the capability to distribute its resources effectively to satisfy the interacting and interrelated parts of the environment. (Cunningham 2001) For the organization to achieve their set goals it’s necessary to establish the relationship between the system and the environment. Open system model needs the organization to be able to adapt to all environmental changes for it to survive the competitive environment in long run. Scott, (2003) .argued that in an open approach there are several factors which occur outside and can affect the on internal environment of the organizations Tsykin,M. Langshaw ,D.C (1996), argues that, in an open system approach, the organization should examine the industry changes, research on their causes, weighing them and therefore find a way to address them. Scott and Davis argues that the process of strategic planning is directly influenced by the environment .2007) Open system approach views quality and cost as externally driven variable that must be managed by understanding the environmental changes and understanding what influences these variables. (Scott, 2003).The approach seeks continuous improvement but not stability and therefore the approach focus on working towards improving the status of the organization. For example the introduction of computers in the world made the organizations to computerize their operation in order to improve their performance and position in the market. (Scott & Davis 2007) According to the Eccel team, (2011), open systems approach is more useful to the organization because of its benefits. The system focuses on important elements within the system and in its environment and therefore it makes it easier to solve the problem. Management is ever faced with uncertain, complex, and ever changing environment, and the organization operates in this environment. As globalization takes its way, organization operation and management should also change. It is therefore important for the managers to adopt an approach which will help them reach compete fairly in the international economy. Open systems approach is an investigative tool which enables the organization to examine both internal and external environment, their effects to the organization and how best the organization can use them to improve their performance. When management uses open system approach it should evaluate all the factors and first concentrate on the most important ones. An example of an organization using open system model to meet its goal is Apple Bank. The management of the bank has used this model to achieve its goals to be the best bank in New York. Conclusion For the organization to achieve organizational effectiveness, the organization can embrace either of the approaches of management. A rational approach argues that an organization has a systematic structure, set goals and objectives which the organization has to work towards achieving them. In open an approach model, the organization environment is complex and therefore the organization works towards improving the environment which affects the operation of the business. Rational model approach assumes that the management which is the decision maker has the right information and ability to make correct decision in helping the organization meet its goal. The approach assumes that the management agrees on the goals to be achieved. With rational approach, the organization has to involve the key players in the organization for them to achieve the goal. In open approach the management has to make connections with the environment to improve its performance. In rational view, an organization is a collectively oriented to pursuit of relatively specific goals and it exhibits high formalized structure while an open system is whereby individuals with the same interest develops goals whereby its outcome and activities are influenced by environmental factor. Rational approach allows only the internal environment to interact in order to achieve the set goals of the organization while an Open system approach allow the organizations internal and external environment to interact. Rational approach is mostly used in management of the organization which has hierarchal model of management like Schools, Government organizations .Hatch ,(1997) observes that a decentralized organization requires employee to be flexible which is the case here while an open approach is mostly applied to small organization which doesn’t have much complexity or it centralized like hotels etc. Hatch (1997) observes that it is important for the organization to know what models other organizations are using so that they can create more consciously and conscientiously to promote organization effectiveness. All the models play their roles to meet the organizational effectiveness. Each approach has its own guideline to achieve the set organizational goal. According to the argument of Robbins and Barnwell, (2006), managers in an organization can select either rational or open system approach or both based on their organizational strategic plan/strategy and the system which fits their organizational goals. The management can therefore choose the approach they think will meet their interests. References Accel-team, 2011, “productivity improvement” open system approach: retrieved on3rd Nov 2011from http/www.productivityimprovement.com/accel.download/pdf Christian, M. (2003) “Post-bureaucracy – control through professional freedom”, Journal of Organizational Change Management, Vol. 16(5), pp.547 - 566 Cunningham, B. (2001), Approaches to Evaluation of Organizational Effectiveness: retrieved on 3rd Nov 2011 < http://www.angelfire.com/creep/brendan/Cunningham_article.pdf> Field, R. (2002), “Management and Information Science”, organizational Effectiveness. Retrieved on 3rd Nov 2011 from http//www.mnagementscience/org.effectivenesss/field_pdf Millett,B.(1998).understanding Organizations: The Dominance of Systems Theory. International Journal of Organizational Behaviour.1 (1), 1-12. Robbins, S.P. and Barnwell, N.S., (2006) Organization Theory: Concepts & cases, 5th Edition Prentice Hall, Sydney, Australia. Scott, W.R. (2003). Organizations: rational, natural, and open systems, (5th ed.). Upper Saddle. Scott, R. W. & Davis, G. F. (2007), Organizations and Organizing: Rational, Natural and Open Systems Perspectives, New Jersey: Prentice Hall. Zoghi, C. & Mohr, R. (2011), “The Decentralization of Decision Making and Employee Involvement within the Workplace: Evidence from Four Establishment Datasets”, British Journal of Industrial Relations, Vol. 49(3) pp. 411–600 Tsykin,M. & Langshaw ,D.C.(1996), An Approach to Open Systems Capacity Management, Australia: Fujitsu Auatralia Ltd .Retrieved on 3rd Nov 2011 from Http/www.fujitsu com/download/AU// Tolbert, P. S. &Richard, H. (2008), Organizations: Structures, Processes and Outcomes, New Jersey: Prentice Hall Read More