Robbins 5e_Ch03.ppt

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

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Aims of this lecture

Discuss why organisational effectiveness is important

Explain four approaches to organisational effectiveness

Identify the key problems with each approach

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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

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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

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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

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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

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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

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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

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Systems approach continued:

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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

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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

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Strategic constituencies continued:

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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

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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

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The balanced scorecard approachcontinued:

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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

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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.