Organizational Effectiveness - Case Study Example

Running Head: Organizational Effectiveness Name xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx The Paradoxical Twins: Case Study Summary The companies have their differences in their operation in electronics. Not only are the operations are different, but also they are various issues within their organization. Acme and Omega did compete for the same contractors and both benefitted from the booming of electronics business in the 1960s. As a result of increase in the demand of integrated circuits (ICs) and the efforts shown by the manufacturing company of ICS to satisfy the demands, Acme and Omega had to dig deeply to look for new clients as their future was threatened. One of the major company involved in the photocopy needed subcontractor who would assemble the memory unit for the new experimental copier. Both companies were given the blue prints to come up with the design. Each company had its own way to come up with the needed design. In the Acme Company most of the progresses were mainly centered on the president while the Omega Company involved all the stakeholders of the company (Gareth, 2006). Acme However, various important and interesting issues are worth to be mentioned. Acme Company is said to have retained all the former employees and the general manager made to be the president. It is said to have an organization chart. This brings out the irony in that the president is seen to be handling all issues affecting the company without utilizing the various heads. All the decisions made in the company are seen to be made by the president. For instance, on the testing of the quality of memory unit, the president does the testing without involving the quality department (Gareth, 2006). Eventually they get the contract on the weight of cost effectiveness. Omega One the hand, Omega Company does not have an organization chart as the president put it that it does not require one as the company is too small to have an organization chart. However, it is interesting to note that the company had different departmental heads that were headed by personnel who are mandated to handle the issues that were affecting the departments. The president is seen to allow the heads to make the departmental decisions as the most of the major decisions are handled by the management team. While they deliver a faultless prototype on time, they do not get the contract award. Issues analyses It is expected from the few employees and a new president who has a vast knowledge on electronics, that the Omega Company would have a higher net profit compared to Acme Company that has maintained the employees and the president. It is also interesting to that at long last after reducing their costs, Acme Company was given the contract bearing in mind that they were not effective in coming up with defective memory units. However, one may urge that they may have maintained zero defects and cut down their unit costs. In addition, initially, the split of the contract between the two companies is an interesting issue as it is expected that Omega which handled the work effectively should have been given the contract. However, its unit cost was high as compared to Acme. Both companies have various issues that have openly affected the productions sector as it has been well seen in the handling of the contractor given by the manufacturing photocopy company. Acme Company, as much as it has an organization chart, it is seen not to be effective and working. This is because all the decisions which are expected to be handled by the department heads are being managed by the president. This has reached to that extent of the certain managers complaining that they needed to know what is happening in the company. This brings in the aspect of lack of communication and information flow in the company. Lack of effective communication is also seen when the production foreman does not notify the methods engineer in the setting up efficient assembly processes. The result of this is the methods engineers becoming upset as they did not have a chance to come up with a layout. The impact of this is felt when the company comes up with defective memory units. It is evident that the issue of having the president handling and directing without consultation from the concerned employees has created a negative impact on the company and the employees. For instance, on receiving the blueprints it is expected as seen in the Omega Company for the president to call for a meeting to discuss the way forward. On the contrary, the president goes ahead to authorize the purchasing department to purchase the necessary materials (Gareth, 2006). The engineering department is also directed on what to do. His attitude to any delay was received with bitterness by the departments who had argued that consultation was necessary to avoid problems. The consequence of these is seen as the process of assembly is on progress, differences arise and heated words are exchanged among the employees. In addition, the process of assembly is then delayed leading to the last minute rush which then results to production of defective products. This has affected the performance of the organization, including its reputation. The employees are not motivated as a result their main reason for working is to satisfy the president which has affected the organization. Omega Company on the hand has issues that though they are not well illustrated have affected the company. For example, lack of organization chart has resulted to the employee not understanding their job description. It is therefore, evident that orientation is lacking in the company. One of the employees did not know which job specification was right for him. Though every stakeholder was involved in decisions making, there were issues which were meant to be handled by the president only. Valued time was lost and cost incurred as the resultant of this. The situation was worsened by the lack of memos. High cost of the Omega Company made it loss the contract. However, the company was effective in its operation as the employees were allowed to air the views leading to effective and efficient work (Christensen & Overdorf, 2000). Organizational Effectiveness concepts and theory Organizational effectiveness is a broad concept conceived as the degree to which an organization realizes its goals. Evaluating effectiveness is evaluating the extent to which multiple goals are attained considering several variables at the organizational and departmental level (Daft, 2010). Effectiveness at the organizational and departmental levels is highly related to efficiency. The two are congruent. The paradox twins’ evaluation puts into light the relationship between the two. Efficiency refers to the relationship between outputs and inputs laying much emphasis to the outcome than the process. It is a ratio of the two. Efficiency explores into the internal workings of the organization. According to Daft (2010), an organization may be highly efficient but fail to achieve its goals while another may be inefficient and fail to achieve its goals. Omega presents an efficient cog-system with elaborate structure and decision making processes. The leadership offered by the president, though he does not believe organizational charts provides for efficiency. This is unlike Acme whose decision-making is haphazard in a “tight ship” with a lot of impulse crisis management. However, the employees registered satisfaction which is a parameter of measuring effectiveness. Effectiveness is a factor of two value dimensions: organizational focus and organizational structure. Organizational focus relates to whether the dominant values of the organization are internally focused detailing on the empowerment and satisfaction of employees whereas external focus is about being well placed relative to the external environment, such as competitors and clients. The focus of structure is finding the link between stability and flexibility. The interaction of these two is along a continuum made of four considerations: human relations emphasis, rational goal emphasis, internal process emphasis and open system emphasis. It is this interaction that brought the eventual difference between Omega and Acme. There are several factors that affect organizational effectiveness. Literature has identified amongst others personal characteristics, leadership styles, organizational culture, working environment, organizational operation model and commitment. Organizations thrive in the competitive market to the extent they are effective. This effectiveness is subject to the management of environment information and resource dependencies. Personal characteristics of a leader will often determine the leadership approach undertaken. These should be related to organizational structure, size, objectives and strategic make-up. There is literature evidence that certain structures and planning favor the success in the leadership role. The organizational structure at Acme gave the president meaningful space to exert control. Though one may critique and find fault in the leadership approach as being solitary, there was cost cutting at the end of the day. Every activity in preparing the order for the print firm is centered on the president, to the last point of it: inspecting. He solely ran the projects in the system. On the contrary, Omega’s president was not considerate of the organizational structure. This may have contributed to the eventual failure. He tried applying consultative style in a system he did not believe in. Outcomes are often attributed to the leaders’ contribution toward effectiveness. As such analysis of effectiveness is relative to the leadership styles and practices. Organizational culture is vital for effectiveness. The culture affects all managerial functions. A focus of human resource is essential so is an emphasis on organizational design in which relationships and structures are created to accomplish objectives. The design gives direction to action and efficient resource management. The control theory has been classified as a systems theory and has an overlap with Likert’s systems theorizing. The theory offers an open systems view detailing that a greater amount of control contributes to a more effective organization (Miner, 2005) . The case studies present companies with so much interrelated aspects, individually, a phenomenon characterizing the theory. The control asserted by leaders and the relative participation of the employees is the focus of this theory forwarded by Tannenbaum in whose view too much control is as dysfunctional as too little. Recommendations Addressing the case studies, the following recommendations are important. In applying and considering them, management should be critical of the situations they are in. Open system It is important that the organizations adopt open system approach in order survive. Open system is considerate of stability and flexibility. Daft (2009) argues that a combination of external focus and flexible structures lead to an open systems emphasis. In this approach, Acme and Omega management should focus on growth and acquisition of resources. As such, they should combine readiness, flexibility and positive external evaluation. Omega’s inability to respond to the client’s demand of reduced cost leads to closure. This is contrary to closed system design and approach whose focus is internal without consideration to dependence upon or ability to influence the external context. Developing a system that integrates considerations across organizational borders is key to survival and prosperity. Goal setting and management-by-objectives Management by objectives is an approach whereby management and employees define goals at various levels in an organization and use them to track and monitor performance (Daft & Marcic, 2009). This is a four-step cyclic- approach to concerns in an organization: goals setting, action plans, progress review and appraisal of performance. Goal setting is a relatively difficult start given that it lays the base for consecutive steps. A good goal is concrete, realistic, with specific targeted time frames and assigned responsibility (Daft & Marcic, 2009). Developing goals should be done along organizational strategic objectives and should be inclusive of employees’ contributions. This enhances ownership and cost effectiveness. Goals often lead into action plans which define course of action for the organization, individuals and as well departments. It is in the plans where the congruency of effectiveness and efficiency is guaranteed. The last two management-by-objectives strategies relate to evaluation. Draft and Marcic (2009) argue that periodic progress is vital checking into action plan implementation and should involve management and employees. The final step is appraising overall performance in which the eventual successes and failures are analyzed. The management-by-objective recommendation is the most tenable approach. This is due to its inclusive approach. It involves management and employees in relating the internal and external environments. Unlike the open systems with its emphasis on external boundaries, there is more balance on all relevant environments and personnel. Conclusion The companies display organizational behavior and leadership patterns whose eventual results are the paradox. Acme and Omega are paradoxical twin companies. Acme presents a side of the coin where the organization has no structure or a certain structure in which decision making and management process are done. This is unlike the sister company, Omega which displays detailed structures and decentralized system where the employees are involved in every detail in preparing the chips. However, Omega is outdone by Acme despite the organizational effectiveness apparent in the system. The key determinant about the contract is cost effectiveness. This is the paradox. Evaluating the correlation between effectiveness and efficiency, the paper makes recommendation to improve effectiveness and efficiency: open systems and management-by-objectives. References Daft, R., & Marcic, D. (2009). Understanding management. Mason: South-Western Cengage Learning. Daft, J. (2010). Organization theory and design. Mason: South-Western Cengage Learning. Mine, J. (2005). Organizational behavior 1. Essential theories of motivation and leadership. New York: M.E Sharpe. Christensen, C, and Overdorf, M, 2000, Meeting the Challenge of Disruptive Change Harvard Business Review 78(2):66-78. Gareth, J, 2006, Pharmacia and Upjohn, in Organizational Theory, Design & Change: Text & Cases. 5th Edition USR: Pearson New Jersey, pp. 428-431 Read More