Strategic Management: Formulation and Implementation

Approaches To The Evaluation Organizational Effectiveness

An organization's effectiveness is in major part a measure of the effectiveness of its master strategy. Selection of the appropriate basis for assessing organizational effectiveness presents a challenging problem for managers and researchers.

There are no generally accepted conceptualizations prescribing the best criteria. Different organizational situations - pertaining to the performance of the organization's structure, the performance of the organization's human resources, and the impact of the organization's activities -require different criteria.

J. Barton Cunningham, after reviewing the relevant literature, concluded that seven major ways of evaluating organizational effectiveness existed: rational goal model, systems resource model, managerial process model, organizational development model, the bargaining model.

The Rational Goal Model

The rational goal approach focuses on the organization's ability to achieve its goals. An organization's goals are identified by establishing the general goal, discovering means or objectives for its accomplishment, and defining a set of activities for each objectives.

The organization is evaluated by comparing the activities accomplished with those planned for. These criteria are determined by various factors.