Title: Introduction to Organizations and Organizational Effectiveness
1Introduction to Organizations and Organizational
Effectiveness
2Definitions of Organizations
- Response to and means of creating value that
satisfies human needs. Embodies collective
knowledge, values, and vision (Jones) - Social entity, goal directed, deliberately
structured, identifiable boundaries (Daft) - Integration of specialized knowledges into a
common task (Drucker)
3Organizations
- Human creations whose operations and products are
results of the ways we govern them and of the
social, institutional, and political structures
within which they operate (i.e., their
environments) - Organizations are both products of these
structures and de-stabilizers of these structures
4Trends and Tensions in Contemporary Organizations
- What do you think are the most significant
challenges organizations are facing today?
5Essential Features of Organizations
- Open system input, transformation, output
- Subsystems boundary spanning, production,
maintenance, adaptation, management - Domains range of products and services produced
for serving markets and customers - Environmental transactions dealing with factors
outside the organizational boundaries
6Open Systems View of Organization
ENVIRONMENT
Raw Materials Resources
Products Services
Output
Transformation
Input
Organization
Production Maintenance Adaptation Management
Boundary Spanning
Boundary Spanning
Subsystems
7Assessing Organizational Effectiveness
- Goals approach
- Achieving organizational goals is effectiveness
- Official Goals Mission (broad and long term)
provide legitimacy - Operative Goals specific goals that direct
behavior in the short term (what organizations
are really doing) - Official and operative goals often differ (e.g.,
higher education prisons Wal-Mart)
Organizations are not always or primarily what
they pretend to be.
8What are the benefits of setting goals?
- Guidelines for action
- Serve as constraints on actions
- Source of legitimacy
- Serve as standards for performance
- Source of motivation
- Rationale for organizing
9Areas of Organizational Goal Setting
- Market goals
- Innovation
- Productivity
- Physical and financial resources
- Profitability
- Management performance and development
- Employee performance and development
- Social responsibility
10Problems with Goal Approach
- Multiple goals are set that conflict
- Whose goals receive priority?
- When should goals change?
- Individuals set goals not organizations process
is political - Goals are set and pursued through complex
processes of bargaining among powerful coalitions
of individuals in organizations
11Assessing Organizational Effectiveness
- External resource approach
- Evaluation of a firms ability to manage and
control external environment - Obtaining scarce and valued inputs
- Measured by quality and costs of inputs stock
price quality of products/services ROI - Example Software firm hires the best engineers
with competitive compensation university
acquiring research faculty biotech hiring best
scientists sports teams acquiring talented
players - Problems?
12Assessing Organizational Effectiveness
- Internal Systems Approach
- Innovation and quick response to changes
- Measured by decision making time, product
innovation rate, time to get new products to
market, reduction of conflict and motivation
problems - Especially important in competitive industries
- Example 3M 25 of sales must come from
products less than 5 years old
13Assessing Organizational Effectiveness
- Technical efficiency approach
- Ability to convert skills and resources into
goods and services efficiently - Measured by rate of reduction of defects,
reduction of product costs and delivery times,
increases in customer service and product quality - Example TQM processes at Stanley Engineering
Six Sigma Processes
14Balanced Scorecard
15Areas of Balanced Scorecard
- Financial
- Cash flow analysis, income statement, balance
sheet, financial ratios, budgets, EVA analyses - Customer
- Monitor customer service, defections, changes in
quality of customer - Quality
- TQM, business process re-engineering, Six Sigma,
waste prevention/reduction - Employee Performance
- Performance evaluation methods
16Outline of the Course
- Decision Making Processes
- Stakeholder Management and Social Responsibility
of Firms - Organization and Environment Relationships and
Strategy - Organizational Design
- Organizational Culture
- Organizational Change