How Do Managers Measure Organizational Effectiveness - Term Paper Example

How do managers measure organizational effectiveness of ______________ Submitted by: Email address: Telephone Number: Due Submission: How do managers measure organizational effectiveness? Introduction: Organizational effectiveness undoubtedly hinges on the effectiveness of managers. The role of a manager in an organization is like that of a captain steering a ship. The olden perception of a manager was one who could plan, control and co ordinate, however in the modern day it has become very clear that it’s the people skills that matter to differentiate a good manager from a bad one (Analoui, 1990). This essay focuses on understanding measures managers take for organizational effectiveness. The paper aims at discussing the steps managers need to take to ensure complete organizational effectiveness. There have been various attempts to explain organizational effectiveness; some believe it to be completely financial based, others explain it completely based on profits. The next section is a research that tries to explain what organizational effectiveness really is and what role managers play in this. Organizational Effectiveness: Organizational effectiveness is one of the most essential and most elusive research subjects since the birth of organizational theory. There has been no one explanation for this. There is no ready literature on measures of organizational effectiveness; however there have been four key models that have been mentioned in the literature to measure organization performance. The models approaches are quite different in a few ways however they all aim at one common goal – organization effectiveness. To briefly touch upon these models, the first model focused on production which was considered as the companies output, leadership which highlighted the degree of influence and personal ability, inter - personal conflicts highlighted the possible misunderstanding between team members and team supervisors and lastly commitment which refers to the amount of attachment to the organization. The second model was mainly developed as a management tool. It focused on interrelated organizational processes. This approach used organizational survival and maximized returns as key to effectiveness. Also along with these variables it utilized a few other minor variables which were equally important to run the business smoothly and effectively. These variables were sensitivity to change, promotions, flexibility, adaptability, efficiency, transformations, etc. (Helms, 2008). The third model was a little different and believed that there were six indicators to organizational effectiveness. These indicators varied from internal communications, involvement of board of directors, volunteer involvements, political factors, management experience and finally the organizational structure. This approach highlighted the above mentioned factors as the main indicators of organizational effectiveness. The final approach being extremely different from the rest of the approaches focused both on profit making as well as non profit making organizational effectiveness. It based itself on four important pillars of an organization i.e. human relation which mainly aimed at how to improve the morale and achieve commitment, open systems was based more on external factors like the external recognition, growth etc., rational goals aimed more at the stability, control, continuity etc., and internal process which aimed at productivity through directions and goals. This approach has been approved more than the other three and has been tested for approval. Even thought there have been various differences in the definition or measurement of organizational effectiveness it is still possible for us to judge the effectiveness based on a lot of factors, like the speed of service, cleanliness, quality, performance, etc. This puts a lot of pressure on the managers and makes it a requirement for effectiveness to have strong, confident and competent leaders (Helms, 2008). Effectiveness measured by Managers: Since management plays such an important role in effectiveness of an organization, this section aims at understanding how managers measure effectiveness and the essential tasks of the top management. There are three very essential tasks for the top managers. The tasks can be classified into three main categories namely Control, Innovation and Efficiency. These are the most essential tasks the top management needs to take up to ensure complete effectiveness of the organization. To understand these tasks better, the following sections describes them in detail individually. Control: This approach to measure organizational effectiveness mainly evaluates the organization’s ability to manage scarce valued skills and resources. It evaluates how much of these resources can be secured by the organization and the ability of the organization to manage them. The goals that would need to be set to measure organizational effectiveness would be an external and varied like obtaining higher quality of raw materials and employees at much lower costs, increased market share with increased stock prices and gaining support from stakeholders like the government and environmentalists (Dressler, 2004). Innovation: This approach is used to measure effectiveness of the organization and to evaluate the effectiveness of the organization to innovate and function responsively and quickly. The goals that would be required to measure the organizations effectiveness and how well it is able to utilize the internal systems like faster decision making, increased rate of production innovation, reduced internal conflicts, reduced time to market, etc. This is based completely from the internal end of the organization. It is based on the manager’s abilities to improve and enhance the internal processes to ensure better effectiveness of the organization. Managers need to use their people skills as well as require good planning, coordinating, and controlling skills. It is here that a manager’s potential is put to real test to see how they can make changes to the organizations internal processes without causing any conflicts within the organization (Denton, 1998). Efficiency: Every organization has a lot of skills and resources, however if these are not utilized correctly and efficiently, it would be completely useless. This approach evaluates how effectively an organization can convert the set of skills they have and the resources to goods and services efficiently and effectively. The managers here need to ensure that this approach is handled technically and is well utilized to increase the quality of the products, improve the customer service, reduce the delivery time to customers, reduce the production and over head costs and most important of all reduce the defects. This would ensure complete customer satisfaction and would ensure better brand and quality recognition amongst the customers hence improving the companies’ efficiency and effectiveness (Friesen, 1995). Apart from the above mentioned approaches to organizational effectiveness there are two main goals that the managers need to keep in mind. These are official goals and operative goals. The operative goals mainly focus on the short and long term goals that help and guide managers and employees, the official goals on the other hand are the formally stated principles of the organization mostly in documents like the Memorandum of Association etc. Conclusion: Based on the above mentioned approaches to measure the organizational effectiveness, it is very clear that managers need to be very strategic in their thinking, strong, with excellent people skills and very read about the markets. It is essential that managers have a keen interest in the business and are committed to ensure better utilization of resources. There are other factors as well which need to be kept in mind for an organization to be more effective like efficient and effective board of directors who emphasis on the ethics of the company and ensure that there is always customer focus and optimization of customer value. There needs to be an emphasis on production processes for efficiency and effectiveness. Also there needs to be high levels of organizational trust which would reduce the potential for destructive conflicts, unnecessary bureaucratic control and administration expenses. It is clear that organizational effectiveness depends a lot on doing everything and ensuring that it is all done well. The basic management principle like planning, leading, directions and controlling have always remained the same and will continue to be the same with a few improvements. Thus it is very essential for the managers to follow the same rules as set by the experts in the past years to ensure complete organizational effectiveness and efficiency. One of the best examples of this is of Ford, who still follow the principles set by Sr. Henry Ford in 1920’s which he complied in a book called ‘My life and Work’. The principles in this book are the same as what in recent days is called ‘total quality principles’. Hence this is one of the best examples to understand the fact that all the basic principles always remain the same the only differences are that of any possible improvements over and above the basics, to ensure complete organizational efficiency and effectiveness (Lawler III, et.al, 2006). Personal Development Statement: This section of the essay aims at explaining the improvements and knowledge gained from the research conducted. It is a known fact that the basics of management have always been the same and are very essential to be followed by managers to provide the customers with excellent goods or services and to ensure organizational effectiveness. This essay has highlighted the importance of the basic management principles and has proved that a good manager is one who has his foundations set right from the beginning. At such an early stage of my life and career, this essay has helped me understand the importance of planning, controlling, leading, organizing, and direction, not only in terms of career also in terms of my personal life and education. It is also now clear that having all the resources is one side of the story, however having them and utilizing them to the fullest is what brings out the effectiveness and efficiency of the resources. In conclusion I would like to add that this essay has helped me improve my managerial knowledge and the research has helped me gain a great insight on this subject. References Analoui, F., 1990, ‘Managerial Skills for senior Managers’, International Journal of Public Sector Management; 1990, Vol. 3, Issue 2, p26, 13p Denton, J., 1998, ‘Organizational learning and Effectiveness’, 17 December 1998, 1st edition, Routledge, New York Dressler, S., 2004, ‘Strategy, Organizational Effectiveness and Performance Management: From Basics to Best Practices’, 30 July 2004, Universal Publishers, Boca Raton Friesen, M.E. and Johnson, J., 1995, ‘The success paradigm – Creating organizational effectiveness through quality and strategy’, 1995, Quorum Books, Westport, CT Helms, M. M., 2008, ‘Defining organizational Effectiveness’, 2008, Dalton State College, Accessed on 08 September 2008, Retrieved from http://www.daltonstate.edu/faculty/mhelms/citizen/2001_10_28.html Lawler III, E. and Worley, C., 2006, ‘Built to Change: How to Achieve Sustained Organizational Effectiveness’, 17 February 2006, Jossey – Bass, San Francisco Read More