PowerPoint to accompany

Organisation Theory
CONCEPTS AND CASES

5e
Stephen Robbins Neil Barnwell

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

Chapter three

Organisational effectiveness

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

Aims of this lecture

Discuss why organisational effectiveness is important

Explain four approaches to organisational effectiveness Identify the key problems with each approach

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

Importance of organisational effectiveness

The main aim of organisational theory is to improve the effectiveness of organisations Organisational effectiveness is the degree to which an organisation achieves is goals, the selection of which reflects the interests of the evaluator and the life cycle stage of the organisation

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

Organisational effectiveness
continued:

Effectiveness differs from efficiency Efficiency stresses productive use of resources Effectiveness stresses doing a range of relevant things successfully Efficiency is a subset of effectiveness

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

Goal attainment approach

The goal attainment approach to effectiveness stresses that effectiveness depends upon an organisation achieving its goals It assumes organisations are rational, goal seeking entities with clearly defined and widely agreed upon goals

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

Goal attainment approach

continued:

But there are problems with this approach Many scholars question whether organisations are rational goal seeking entities

Different groups have differing goals ie employees, shareholders, management, customers, suppliers
Differences between official and unofficial goals

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

Goal attainment approach

continued:

Differences between short term and long term goals Often multiple and conflicting goals coexist The value to managers is to stress that organisations exist to achieve goals but these goals require clarification for them to be of use

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

Systems approach
The systems approach bases effectiveness judgements upon how effectively the organisation operates as a system in converting inputs into outputs (See Chapter 1)

It examines how the various subparts coordinate with each other, environmental interactions, whether resources are being replenished and the productivity of the system

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

Systems approach
continued:

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

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Systems approach
continued:

Difficulties arise in measuring some important processes such as innovation. Environments can also change very quickly making measures redundant

The approach emphasises processes over goals which may lead to misleading measures being applied

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

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Strategic constituencies approach

The strategic constituencies approach stresses that the survival of the organisation depends upon satisfying key environmental sectors These are called strategic constituencies This is a political approach to assessing effectiveness

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

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Strategic constituencies
continued:

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

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Strategic constituencies
continued:

A variation on strategic constituencies is the stakeholder approach This extends the strategic constituencies to include important stakeholders who may not have political influence

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

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The balanced scorecard approach

The balanced scorecard approach to effectiveness views effectiveness as arising from the balance between the various demands upon the organisation and its capabilities

It identifies four important performance perspectives

Financial Customers Internal business Innovation and learning

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

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The balanced scorecard approach

continued:

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

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The balanced scorecard approach

continued:

The balanced scorecard approach identifies what is important to organisations and how the various measures are interrelated Development of the measures may also be used as an organisational development exercise

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

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Discussion questions
Why is organisational effectiveness be more important than organisational efficiency? Discuss the difficulties of using the goal attainment approach to assess organisational effectiveness. Evaluate whether politics and personal opinions will always play a significant part in assessing organisational effectiveness. Is it possible for an effective organisation to cease to exist? Discuss.

Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia

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