Chapter 13: Organizational Effectiveness
Determining Criteria of Effectiveness
There are many ways to measure the effectiveness of an organization. Campbell
(1977) lists over 30 different criteria from productivity, profits, growth,
turnover, stability and cohesion (Scott p. 343). Different theoretical perspectives
can account for the diversity in usage of effectiveness measurements.
Rational perspectives emphasize goal attainment and focus on output variables
such as quality, productivity, and efficiency. Natural system perspectives
focus on the support goals of the organization such as participant satisfaction,
morale, interpersonal skills, etc. Open system perspectives focus on the
exchanges with the environment -- this includes information processing,
profitability, flexibility, adaptability.
Effectiveness criteria also vary with time, and often subgroups have different
Also often there are different
evaluation criteria applied by those who assign tasks and those who evaluate
performance (Scott p. 346). Often
effectiveness criteria involve self-interst, are stated as universalistic
and objective, and cause conflict and disagreement among subgroups.
(Scott p. 348).
Market and Non-market Organizations
Many people emphasize the difference between market and non-market organizations
(Scott p. 349). The traditional view is that in properly functioning markets,
effectiveness can be readily measured in the marketplace and are directly
influenced by customer satisfaction. Fligstein (1990) argues however that
markets, like all structures, are socially constructed and vary over time
and space, so that conceptions of efficiency or effectiveness also vary.
Public organizations often operate in non-market conditions. Often this
means that there is no direct link between the services an organization
provides and the income it gets for providing them (Downs, 1967). Controls
over these organizations emphasize control over process than over outcome
(Scott p. 350). While there have been attempts to evaluate goverment agencies,
it proves very difficult, and there continues to be rising discontent with
the performance and responsiveness of public agencies. Many of these services
have been "privatized" and contracted out to independent businesses.
High Reliability Organizations
Complex organizations that require a high level of reliability are vulnerable
to "normal accidents"
(Perrow, 1984), inevitable failures due to the overly complicated and tight
control mechanisms in some organizations.
To evaluate peformance, criteria must be selected and then work sampled
and compared to developed standards (Scott . 352).
Cyert and March (1963) use an aspiration level perspective and argue that
organizational goals are a function of previous goals, experience with these
previous goals, and other organization's experience with these previous
goals. Thompson (1967) notes that the appropriate effectivess criteria
depends on how clear the standards and cause-effect relationships are known.
There are three basic types of indicators-- those based on outcomes, on
processes, and on structures (Scott p. 353).
Outcomes focus on materials or objects on which the organization has performed
some operation (Scott p. 353). These are the most common effectiveness measurements,
but can be the most difficult to define and measure and are not immune to
ambiguity and measurement error.
Process measures assess effort rather than effect (Scott p. 355). Some measure
work quantity or quality. Though they are in some respects a more pure measurement
of organizational performance, they are an assessment of conformity of a
given objective that can be decoupled from output performance (and ultimately
survival itself). Substituting process criteria for outcome criteria can
compromise service in some situations though.
"Structural indicators assess the capacity of the organization for
effective performance" (Scott p. 357). These are often include organizational
features (equipment age or type) or participant characteristics (degree
attained, liscensing, etc.). Structural indicators form the basis for accreditation
reviews and licensing systems, those these criteria can displace the goals
of the organization sometimes.
Selecting samples requires proper definition of the organizations, it's
work, and it's ultimate organizational goals. Is the organization doing
things right, and is it doing the right things?
Participants, Constituents, and Measures
We would expect different groups to prefer different measures Organizational
managers may emphasize structural features because they are more under their
control. We would expect workers to emphasize process measurements. Clients
and customers will naturally focus on output measurements (meets, needs
and expectations, promptness, courtesy, sensitivity, etc.). It seems there
is a bias in the literature toward structure and process measurements.
Because many of the proposed measures of effectiveness are negatively correlated,
we shouldn't expect to "find general explanations that will distinquish
effective from ineffective organizations" (Scott p. 360). Given the
complexity of organizations, we shouldn't find a simple set of factors that
accout for effectiveness either. Much of the popular management literature
indentifies simple factors that only partially explain effectiveness (and
thus the prescriptions based on them are only partly effective as well).
Scott notes that "we are too often in thralldom before a general principle,
applying it mindlessly to situations whose complexity swamps whatever truth
might have been revealed by a more thoughtful approach. Let us not be misunderstood.
We need the guidance of general principles". But we also require sufficiently
detailed knowledge of the organizations and their technologies and environments
to be able to select valid indicators of the variables to be assessed."
Ultimately, organizational effectiveness is not based only one path nor
purely on technical, rational processes, but also a function of sociology