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International Journal of Business

Management & Research (IJBMR)


ISSN(P): 2249-6920; ISSN(E): 2249-8036
Vol. 6, Issue 2, Apr 2016, 15-24
TJPRC Pvt. Ltd.

ORGANIZATIONAL EFFECTIVENESS: A STRUCTURAL AND OPERATIONAL


ANALYSIS OF PWD, KOTLI AZAD KASHMIR
IMRAB SHAHEEN1, IFTIKHAR A.BUTT2, SABAHAT AKRAM3 & SHAHID HUSSAIN4
1
2

Lecturer, Research Scholar, University of Management Sciences & Information Technology Kotli, AJ&K

Dean Faculty of Social Sciences, University of Management Sciences & Information Technology Kotli, AJ&K
3

Director Planning & Development, Chairperson Department of Economics, University of Management


Sciences & Information Technology Kotli, AJ&K

Assistant professor & Director Finance, University of Management Sciences & Information Technology Kotli, AJ&K

ABSTRACT
Effectiveness of an organization greatly depends on its type of structure and management of operations. This study
was aimed to assess the impact of organizational structure and operations on its effectiveness. Public works department Kotli
branch was taken as case study. The predictor variables were structure and operations while criterion was organizational
effectiveness. Simple random and purposive sampling techniques were used and sample was comprised of 100 employees

and analyzed through regression on SPSS. The findings of this study revealed that operations management structure has a
greater impact while organizational structure has lesser impact on effectiveness. PWD needs to improve working relationship
among the employees; communication system and it also need to pay attention on quality management, management
information system and performance management to ensure effectiveness.
KEYWORDS: Effectiveness, Structure, Operations, Working Relationship, PWD, Quality Management, Management
Information System

Original Article

from Public works department. This study is based on quantitative approaches as data were gathered through questionnaire

Received: Feb 18, 2016; Accepted: Mar 01, 2016; Published: Mar 07, 2015; Paper Id.: IJBMRAPR20162

INTRODUCTION
The biggest challenge for today's organizations is to prove their compatibility by giving outstanding
performance in all facets. Organizational effectiveness has been remained the focus of researchers from all over the
world since the early development of organizational theory (Rojas 2000). Organizational effectiveness is determined
by organizational performance which decides the destiny of organization itself. Days are gone when competitive
environment was lacking and organization could have claimed that they lack technology, competent human resources,
financial resources etc but now these excuses have lost their worth and such organizations are thrown out of the
competition. The first dimension of organizational effectiveness is competence which is used as a tool of judgment and
measurement of organizational effectiveness. According to Shockley-Zalabak, et.al (1999), competence is a vast and
generalized concept that is not only confined to the leadership but it also shows the organizational ability to survive in
the market as well as to sustain its momentum. They further argued that on organizational level, competence and
caliber are linked with employee's perception of organizational effectiveness, its survival and long term continuity. For
survival and particularly for sustainability, effective organizational performance is of pivotal importance. Paul,( 2010)
noted that effectiveness of projects is affected by number of factors and among these organizational structure and
operations are important ones. In this study an attempt is made to give coverage to this issue by taking Public works
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Imrab Shaheen, Iftikhar A.Butt, Sabahat Akram & Shahid Hussain

department as a case study.

BACKGROUND OF THE ACCESS ORGANIZATION


This assignment was carried out in Public works department (PWD) Kotli, Azad Kashmir. PWD was established
in 1989 and since then it is striving hard to work properly and efficiently to develop the city but its performance remained
under criticism. Its critiques raise queries about its inefficiencies and obsolete methods of working. Department of Public
works is as important as the basic needs to the people. Infrastructure, water management system, public health, high ways
and building construction etc all fall with the jurisdiction of PWD. This stud emphasize that unless the organizational
structure and operations management at PWD are improved, the poor performance of PWD will remain poor.
Research Questions

What is the impact of organizational structure on organizational effectiveness?

What is the role of organizational operations on organizational effectiveness?

which factor ( structure or operations) has the greater impact on organizational effectiveness

Research Objectives

To examine the impact of organizational structure on organizational effectiveness.

To find the role of operations Management on organizational effectiveness?

LITERATURE REVIEW
Organizational effectiveness is characterized by its structure which includes division of labor, working
relationships, delegation of authority, formalization, span of control and chain of command etc. The second determinant of
organizational effectiveness depends on the way operations are performed and managed. Effectiveness is associated with
certain important elements, such as the ability of an organization to access and control over resources for achieving its
goals (Federman, 2006).
According to Malik et al., (2011), organizational effectiveness is the concept of how effective an organization is
in achieving its outcomes which it intends to achieve. They further highlighted that organizational effectiveness is a
multifaceted and abstract concept which is not possible to measure directly however; it can be measured by some of its
determinants. McCann (2004) observed that effectiveness is characterized by the successful attainment of purpose through
strategies. In the literature, there is not a single model of organizational effectiveness applicable to all organizations.
Balduck and Buelens (2008) identified that the concept of effectiveness in organizations revolves around four main
approaches: the system resource approach, the goal approach, the strategic constituency approach and the internal process
approach. Lipe and Salterio (2000) suggested that managers do not concentrate on non financial measures and unable to
get the work done by employees.
Simons (2000) found some dimensions of performance measurement and effectiveness which include decision
making, control, signaling, education and learning, and external communication. He further explained that the decision
making is referred to the improvement of decision processes through planning and coordination of business to achieve
objectives. Control is referred to feedback to ensure the input-process-output system which likely to manage the operations
effectively by emphasizing on productivity. Signaling refers to signals sent by managers throughout the organization
Impact Factor (JCC): 5.3125

NAAS Rating: 3.07

Organizational Effectiveness: A Structural and Operational


Analysis of PWD, Kotli Azad Kashmir

17

related to their values, preferences and where the employees should be focusing their attention and energy. Education and
learning denotes the organizational understanding of changes in the internal and external environment and the links
between their components. External communication highlights to the diffusion of information to external constituents.
Operational planning, resource availability and capabilities (facility, equipment, tools, supplies, and personnel), work
scheduling, work reporting, quantity and quality of work produced, efficiency, and performance indicates the efficiency of
operations management.
An et. al. (2011) identified two dimensions of organizational effectiveness i.e, job satisfaction and organizational
involvement. These two parameters are used to assess and measure effectiveness and provide a factual picture to
organization and ensure sustainability. The aim of organizational effectiveness issue and its relation with organizational
structure is the existence of an appropriate structure makes organizations effective. Appropriate structure, in which there
are fully defined regulations and relations, is a success factor for organizations.
Organizational structure determines formal reporting relationships and includes the number of levels in the
hierarchy and control area of the managers and supervisors. Organizational structure focuses on division of work,
delegation of authority, formalization and reporting. Organizational operations include, designing systems for ensuring
effective communication, coordination and correlation of the attempts inside sections (Daft, 2004). For that reason, the
main issues in the success of organization are the control of the budget and cost of management, and the identification of
the influential factors over productivity (Dooley et al, 2005).Organizations which manage multiple projects at the same
time needs to keep a good monitoring and controlling mechanism to ensure good performance, and to create the best
project governance structure (Dinsmore & Cabanis-Brewin, 2006).Organizational structure is depicted in organizational
chart and organizational chart is a visible symbol of the all the activities and processes takes place in the organization.
Business leaders need to focus their attention on making and creating a fit between their structure, systems and
people in alignment with organizational strategy while engaging their employees (Right Management, 2010). Hence a
differentiation comes in front between managers and leaders, manager are people who do things right and leaders are
people who do the right thing. Leaders facilitate the identification and accomplishment of organizational goals. Turner and
Muller (2003) explain that if a company wants to achieve the goals of the projects on which it is working on, it is necessary
that the company aligns its operational process with the needs of the projects in order to save costs using the resources
available in the best way. A vertical communication where the superior gives instructions to the subordinate is used rather
than a horizontal discussion (Hatch, 2006).Timely communication, know how about both internal and external
environment, a proper fit between inputs and system, along with proper fit between output and environment , and feedback
provides the foundation stone of achieving effectiveness. Centralization or decentralizatio25f2qfn of authority also effect
organizational effectiveness, in this context Abernethy and Lillis (2001) found that decentralized organizations appear to
use a mix of performance measures to a greater extent than centralized organizations.
Dalton (2000) found that high performance organizations are designed to bring out the best n people and create an
exceptional capability to deliver high-end results.
The reason is quiet obvious because high performance organizations have high trust among co-workers which
denotes the good and healthy working relationships as well as among management, is because they empower their
employees. This empowerment requires management to place trust in the workers to finish the task(s) they are assigned to
complete (Costigan, Ilter & Berman, 1998). Another way of achieving organizational effectiveness is the higher the quality
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Imrab Shaheen, Iftikhar A.Butt, Sabahat Akram & Shahid Hussain

of tools, quality of information, user satisfaction, usage and accessibility, well informed decision making , the greater the
effect on organizational performance.

RESEARCH METHODOLOGY
Conceptual Framework
Independent variables

Dependent variable

Figure 1
Research Methodology
Cross-sectional survey research design was used with the aim of assessing the impact of organizational structure
and operations Management on organizational effectiveness.
The population of interest consisted of employees from three divisions (Public health, highway and Buildings) of
Public Works Department (PWD), Kotli, Azad Kashmir (Pakistan). In order to collect the information, first of all
questionnaire guidelines were outlined, target population was accounted and pilot survey was made to revise the
questionnaires.
Both primary and secondary data have been collected and used in this study. Primary data were collected from
questionnaire

survey,

and

this instrument

is

adapted

(after

customizing)

from the

literature

of

Right

Management,(2010),Matrix Consulting Group,(2014) and Unit 3 (n.d) Secondary data were collected from review of
related documents and articles. The population of this study was comprised of all employees of PWD and sample size was
100. Both simple random and purposive sampling have been used and this study is cross-sectional in nature. Quantitative
techniques are applied to measure the responses and more over data were collected through itemized rating scale
questionnaire which was comprised of 54 items. The Independent variables of this study were organizational structure and
Impact Factor (JCC): 5.3125

NAAS Rating: 3.07

Organizational Effectiveness: A Structural and Operational


Analysis of PWD, Kotli Azad Kashmir

19

operations Management while dependent variable is effectiveness. Based on key issue identified, quantitative approach is
used to measure the response.
Data Analysis
Data were analyzed through correlation and regression analysis on Statistical Package for Social Sciences (SPSS).
For checking the assumptions of model fit, and regression fit there are three parameters; Data should be linear, there should
be the normal distribution & there should not be multi co-linearity in the model. Scatter diagram(annexure) obtained from
the data is used to check the reliability and it can be observed from diagram that data obtained is reliable as the different
points are located around a straight upward sloping line. P Plot (annexure) confirms that multicolinearity does not exist
which proves its accuracy. Histogram is used to check the normality of the distribution and it can be observed from
histogram that data is normally distributed.
Table 1: Predictors: (Constant), Working Relationship F
Model Summary
Model

R Square

Adjusted R Square

1
2
3
4
5
6
7
8
9

.229a
.351b
.379c
.393d
.413e
.414f
.421g
.423h
.562i

.052
.123
.144
.155
.171
.171
.177
.179
.316

.034
.089
.093
.086
.084
.065
.052
.033
.157

Std. Error of the


Estimate
.26765
.25995
.25941
.26038
.26059
.26326
.26519
.26778
.25010

Working relationship explains only 0.5 (5.2 %) variance in organizational effectiveness. This is because the part
correlation values represent only the unique contribution of each variable, with any overlap or shared variance removed or
partially sorted out. The adjusted R square value, however, includes the unique variance explained by each variable and
also that shared. Performance management explains 0.316 variance and hence it is contributing (31.6 %) much greater than
all other variables. Communication, MIS, HRM, budget and cost control are explaining more than 17% variance each in
the dependent variable. Whereas division of labor, formalization, decision making are contributing more in the
organizational effectiveness. Communication, MIS, HRM, quality management, budge t and cost control are making large
contribution in organizational effectiveness. Performance management and budget cost control are jointly explaining 31.6
% variance in the dependent variable. This result endorses and confirms the previous findings and also this is proved by
statistical analysis.
Significance level of communication is quiet low (0.99) as it can be seen in above table. working relationship is
also remained less significant (.096) Such low significance levels might be due to overlapping of some other independent
variables, otherwise these two variables are important variables of the study. Besides this quality management is also less
significant (.733). All other variables i.e division of labor, decision making formalization, MIS, HRM, budget and cost
control and performance management are significant.

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Imrab Shaheen, Iftikhar A.Butt, Sabahat Akram & Shahid Hussain

Table 2: Dependent Variable: Effectiveness


Coefficients
Model

Unstandardized Coefficients

B
(Constant)
1.712
Working Relationship F
.228
Division of Labour
-.179
Decision making
-.163
Formalization
-.074
1 Communication
.096
management Information System .016
Human Resource Management -.059
Quality Management
-.034
Budget & Cost Control
-.245
Performance management system -.127

Std. Error
.287
.134
.088
.148
.093
.100
.095
.093
.101
.105
.104

Standardized
Coefficients
Beta
.229
-.270
-.145
-.110
.130
.024
-.097
-.050
-.357
-.198

Sig.

5.960 .000
1.693 .096
-2.031 .047
-1.101 .276
-.794 .431
.960 .342
.169 .867
-.635 .528
-.343 .733
-2.323 .025
-1.217 .230

Results from the estimation of regression analysis show that all predictor variables and their latent variables
(Working Relationship, Division of Labor, Decision making, Formalization. Communication management Information
System, Human Resource Management, Quality Management, Budget & Cost Control, Performance management system)
have significant coefficients. The more important are the ones having higher b coefficients that are Working Relationship,
Division of Labor Budget & Cost Control Performance management system. The beta values obtained in this analysis can
also be used for other more practical purposes than the theoretical model testing shown here. Standardized beta values
indicate the number of standard deviations that scores in the dependent variable would change if there was a one standard
deviation unit change in the predictor Beta coefficients denotes/explains the strength of independent variable contributing
in dependent variable. Hence in this case division making, formalization, MIS,HRM, quality Management, budget and cost
control are much stronger contributor in organizational effectiveness as compare to working relationship, communication
and quality management which are not strongly effecting organizational effectiveness.

FINDINGS AND DISCUSSION


It can be seen from above tables that communication, working relationships, MIS and quality management are
explaining less variance in the dependent variable (organizational effectiveness).Among other independent variables i e
division of labor, decision making formalization( which are components of organizational structure) are explaining more
variance in organizational effectiveness. MIS, HRM, Quality management, Budget and cost control and performance
management (which are the components of operations management) are strongly effecting organizational effectiveness.
The strength of theses predictors is proved through statistical analysis (beta values) given in above table. Working
relationship, communication and quality management are not significant and strong contributors of organizational
effectiveness and this can be due to overlapping of some other predictors. There are many reasons behind this less
significance level like political interference, and inefficiency, nepotism are generally associated with public sector
organization like Public works organization which can effect working relationship, communication, quality of services.

CONCLUSIONS & RECOMMENDATIONS


Among structural components, formalization, division of labor and decision making have a significant impact on
organizational effectiveness while from operations management side, HRM, performance management, budget and cost
control are significantly affecting effectiveness of public works department. Whereas working relations and
Impact Factor (JCC): 5.3125

NAAS Rating: 3.07

Organizational Effectiveness: A Structural and Operational


Analysis of PWD, Kotli Azad Kashmir

21

communication quality management remained less significant.


On the basis of findings, it can be recommended that PWD needs to improve its structure by focusing on working
relations, proper communication. Besides this, PWD also needs to improve its operations management by focusing on
introducing a sound management information system. It also needs to improve the quality of its services especially in the
high way division and public health. Performance management at public works department is an ignorant area and hence
PWD needs to streamline its accountability mechanism to ensure the good performance of contractors and also its
employees from top to bottom.
Canvass of this study can be extended by adding other organization for assessing effectiveness. Other elements
prevailing in the external environment such as legal, economical, socio-cultural and technological factors can also be
examined with regard to organizational effectiveness. A qualitative study is strongly recommended for analyzing
effectiveness.
REFERENCES
1.

Abernethy, M. A. and A. M. Lillis (2001). "Interdependencies in Organization Design: A Test in Hospitals." Journal of
Management Accounting Research 13: 107-129.

2.

An, J. Y., Yom, Y. H., & Ruggiero, J. S. (2011). Organizational Culture, Quality of Work Life, and Organizational
Effectiveness

in

Korean

University

Hospitals.

Journal

of

Tran

cultural

Nursing,

22(1),

22-

30.http://dx.doi.org/10.1177/1043659609360849
3.

Bal duck, A. L., & Buelens, M. (2008). A Two-level Competing Values Approach to Measure nonprofit Organizational
Effectiveness. Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium

4.

Costigan, R.D., Ilter, S.S., & Berman, J.J. (1998). A Multi-Dimensional Study of Trust in Organizations. Journal of
Managerial Issues, 10 (3), 303-317.

5.

Dalton, D. (2000). Understanding High Performance Organizations. Security, 37, 69-73.

6.

Chen, C. & Huang, J. (2007). How organizational climate and structure affect knowledge management The Social
Interaction Perspective. International Journal of Information Management, 27, 104-118.

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Dooley, L.; Lupton, G. and O Sullivan, D. (2005) Multiple Project Management: a Modern Competitive Necessity, Journal
of Manufacturing Technology Management, Vol. 16, No. 5, p. 466-482

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Dins more, P. and Cabanis-Brewin, J. (2006) The AMA Handbook of Project Management, American Management
Association, 2nd Edition, U.S.A.

9.

Hatch, M.J., & Cunliffe, A.L. (2006). Organisation Theory Modern, Symbolic and Postmodern Perspective. Oxford
University Press; New York.

10. Lipe, M. G. and S. E. Salterio. (2000). "The balanced scorecard: judgemental effects of common and unique performance
measures." The Accounting Review 75(3): 283-298.
11. Malik, Ghafoor & Nasser. (2011).Organizational Effectiveness: A case Study of Telecommunication and banking Sector of
Pakistan. Far East Journal of Psychology and Business Vol. 2 No 1, January 2011.
12. Henry, E. A. (2011). Is the Influence of Organizational Culture on Organizational Effectiveness Universal? An Examination of
the Relationship in the Electronic Media (radio) Service Sector in the English Speaking Caribbean.

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Imrab Shaheen, Iftikhar A.Butt, Sabahat Akram & Shahid Hussain


13. Matrix Consulting Group. (2007). Operational, Organization and Management Review of Department of Public Works, Town
of Falmouth Massachusetts, Retrieved on 06-05-2015.
14. Parsaeian, A & Arabi, M. (2009).Organization Theory and Design, Daft LR. Tehran, Commercial Publishing Company,
Volume II, P. 106.
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http://pauldrasmussen.blogspot.com/2009/04/ project-management-how-organisational.html,
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Organizations." Nonprofit Management & Leadership 11(1): 97-104.
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Paper Funded by IABC Research Foundation
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APPENDICES
Annexure 1-4
Table 3: Dependent Variable: Effectiveness

Impact Factor (JCC): 5.3125

Model
Regression
Residual
Total
Regression
Residual
Total
Regression
Residual
Total
Regression
Residual
Total
Regression
Residual
Total
Regression
Residual
Total
Regression
Residual
Total
Regression
Residual
Total
Regression
Residual
Total

ANOVAa
Sum of Squares Df Mean Square
.205
1
.205
3.725
52
.072
3.931
53
.484
2
.242
3.446
51
.068
3.931
53
.566
3
.189
3.365
50
.067
3.931
53
.609
4
.152
3.322
49
.068
3.931
53
.671
5
.134
3.259
48
.068
3.931
53
.673
6
.112
3.257
47
.069
3.931
53
.695
7
.099
3.235
46
.070
3.931
53
.704
8
.088
3.227
45
.072
3.931
53
1.241
10
.124
2.690
43
.063
3.931
53

F
Sig.
2.867 .096b

3.583 .035c

2.803 .049d

2.244 .078e

1.977 .099f

1.619 .163g

1.413 .223h

1.227 .306i

1.984 .059j

NAAS Rating: 3.07

Organizational Effectiveness: A Structural and Operational


Analysis of PWD, Kotli Azad Kashmir

23

Figure 1

Figure 2

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Imrab Shaheen, Iftikhar A.Butt, Sabahat Akram & Shahid Hussain

Figure 3

Impact Factor (JCC): 5.3125

NAAS Rating: 3.07