Organization Development is about improving performance at the individual, group, and overall organization levels. It is about improving the organization’s ability to effectively respond to changes in its external environment, and it’s about increasing internal capabilities by ensuring the organizational mechanisms, human resources systems, job designs, communication systems, and leadership/managerial processes fully harness human motivation and improve people function to their full potential.
To initiate developing an organization, management will have to analyse and evaluate various approaches to the organizational effectiveness. The Organizational Effectiveness is a relative term and is conceptualized by different theorists of Organizational Cultural Difference differently. As such there is no unanimity found in their approaches. The diverse approaches are not only judgment but subject to questions also.
Organizational Effectiveness is observed in how the organization is equipped to move towards its goals and survive in the face of external and internal variability through various creative adaptation strategies.
Organizations are developed to achieve more and more goals. Goal attainment is one of the most profound criteria of effectiveness. Profit maximization, high productivity, employees’ high morale, providing efficient service are some examples of attainment criteria. This approach assumes that:
However, managers should be able to identify and measure the goals, in order to assess the level of organizational effectiveness.
Sometimes the goal attainment approach may not be suitable since there may be multiple goals which could conflict with one another. It may also so happen that the performance may be highly encouraging regarding some goals, while there may be a dismal failure regarding the others. Hence, we can never say that an organization is effective or ineffective in terms of measurement of its multiple goals.
Therefore, it may be necessary to look at Organizational Effectiveness through a system approach. Some scientist term this positivistic approach as “input- throughput-output approach”.
The behavioral scientist Bennies has listed the following criteria for explaining Organizational Effectiveness:
The systems approach however also suffers from two major limitations.
Problem of measurement: There has not been any accurate and convincing criterion to derive or measure the process variables in quantity or intensity. With this difficulty, the measures that may or are being used are subject to question.
Problems of means: Another problem of systems approach is how much it is valid to attach significance to “means to end” for assessing Organizational Effectiveness. This is because once the ends are achieved, the means may not be important thereafter.
One closely related approach to systems approach is the Strategic-constituencies Approach. This positivistic approach to Organizational Development proposes that an effective organization is one that satisfies the demands of those constituencies in its environment from which it requires support for its continuous survival.
This approach too however has problems. The first problem is that there is no reliable technique to tap information accurately and consistently on what constituencies expected from the organization. The other problem is that task of segregating one strategic constituency from the other. Given the fast-changing business environment, what was strategic to the organization some time back may not be so today.
The below table is given to enable us to know the typical criteria of selected strategic constituencies.
|Constituency||Typical of Criteria|
|Owners||Return on investment, growth in earnings, earnings per share.|
|Employees||Compensation, firing benefits; employee turnover rates, satisfaction with working conditions.|
|Customers||Satisfaction with price, quality, after sales-service.|
|Suppliers||Satisfaction with payments, future sales potential.|
|Creditors||Ability to pay indebtedness, competitive wages and benefits.|
|Unions||Satisfactory working conditions, willingness to bargain fairly.|
|Local officials||Participation of organization’s members in local affairs, lack of damage to the community’s environment, Corporate Social Responsibility|
|Government agencies||Compliance with laws; avoidance of penalties and reprimands.|
It is a positivistic Organizational development approach that is not assessed based on one single criterion in terms of goals or systems or constituencies, as discussed in the preceding three approaches, does not give a comprehensive understanding of Organizational Effectiveness. Hence, there exists a need to integrate all key variables in the domain of organizational effectiveness. Such an integrative approach is enabled by the Computing – values approach.
The basic underlying theme of the competing- values approach is that the criterion you actually value and use in assessing an organization’s effectiveness be it, for example, return on investment, or market share of your product, or new product development depends upon the position of the person evaluating the level of Organizational effectiveness and the interest they represent in the organization.
Different stakeholders such as stockholders, unions, creditors, suppliers, management, employees, or public represent different interests in the organizations. It should come as no surprise then to find that all above mentioned stake-holders look at the same organization but evaluate its effectiveness differently.
As we can evaluate from the different ideologies among these positivistic Organizational behaviour approaches, and the distinction of variables being evaluated, it is not possible to consider any particular approach as an ideal one. It all depends upon the interest of the entity making the evaluation of Organizational Effectiveness or desiring any sort of positive Organizational change.
Moreover, if Organizational Development is an integral part of the Organization’s survival mechanisms, Organizational interventions can be carried out on a regular basis by shuffling the approaches followed to carry out such interventions. This may act as the Organization becoming effective from the viewpoint of various stakeholders.
Positivistic approaches to Organizational development not only guide us about the different variables to be evaluated, but also guides us as to which approach shall be followed by a particular entity as per their interest in the Organization.