HOW DO MANAGERS MEASURE ORGANIZATIONAL EFFECTIVENESS ??

APPROACHES TO MEASURE ORGANIZATIONAL EFFECTIVENESS

External Resource Approach Internal Resource Approach Technical Approach

EXTERNAL RESOURCE APPROACH

•Lower cost of inputs•Obtain high quality inputs of raw materials and employees•Increase market share•Increase stock price•Gain support of stakeholders such as government or environmentalist

Goals

Evaluates the organizations ability to secure , manage and control scarce and valued skills and resources

•Stock Price•Profitability•Return on investment

INTERNAL RESOURCE APPROACH

•Cut decision making time•Increase rate of product innovation•Increase coordination and motivation of employees•Reduce conflict•Reduce time to market

Goals

Evaluates the organizations ability to be innovative and how effectively it functions and operate its resources.

•Time to market a new product•Time to take a decision •Time taken to coordinate activities

New Parivartan

CITIZEN SBI

HP- COMPAQ MERGER

ALLAN MULLAY

TECHNICAL SYSTEM APPROACH

•Increase product quality•Reduce number of defects •Reduce production cost •Improve customer service•Reduce delivery time to customers

Goals

Evaluates the organizations ability to convert skills and resources into goods and services efficiently.

• Increased productivity• Reduced cost of labor or materials

MEASURING EFFECTIVENESS

Official Goals

Operating Goals

Form groups with four members each. Select any company from the industry which you

would like to work. Evaluate the effectiveness of that company

based on the three approaches Prepare a presentation based on it.