An organizational effectiveness definition is a good place to start … but to see tangible results in the workplace, we need to look beyond definitions.
In this article, we’ll do just that, looking at organizational effectiveness inside and out.
- What organizational effectiveness means
- How models of organizational effectiveness can be applied in the real world
- How to measure and optimize organizational effectiveness over time
For those new to the concept, of course, it pays to start with the basics…
What Is the Best Organizational Effectiveness Definition?
Many definitions of organizational effectiveness tend to agree on the basic meaning:
Organizational effectiveness refers to how effectively and efficiently an organization achieves its stated aims and objectives.
Today, many definitions reflect this same essential idea, though there are some variations:
- “Organizational effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intends to produce.” – Wikipedia
- “The efficiency with which an association is able to meet its objectives.” –BusinessDictionary.com
- “Organizational Effectiveness (OE) is a systemic and systematic approach to organizational excellence.” – UW Madison
- “Organizational effectiveness is a business strategy designed to improve the efficiency of the company without reducing the quality of the products or services.” – Central Christian College
- “By definition, organization effectiveness is the efficiency of an organization, group, or company can meet its goals.” – Six Sigma
Over the years, organizational effectiveness definitions have evolved.
The Evolution of Organizational Effectiveness Definitions
Each definition depends on the underlying intellectual framework or model it derives from.
According to a book on organizational effectiveness by Raymond F. Zammuto:
- Early definitions were goal-based, defining an action as being effective if it accomplished its specific aim. Today, this is the approach that has survived, which we can see in the definitions cited above. For instance, one definition cited in the book was “the congruence between organizational goals and observable outcomes.”
- In the 1950s, social systems-based approaches appeared. These defined organizational effectiveness in the context of social systems. That is, it was defined as the extent to which an organization was “a social system … fulfills its objectives without incapacitating its means and resources and without placing strain upon its members.”
- Yet other models defined effectiveness in terms of an organization’s ability to exploit resources. That is, an organization’s bargaining position and its ability to acquire resources determined its effectiveness.
- Later, multiple constituency models entered the picture. These defined the concept in terms of its ability to meet criteria imposed by constituencies.
Despite this variety of approaches, many of the popular definitions found online still adhere to the goal-based approach.
Of course, all of these definitions offer insight into the concept of organizational effectiveness – not to mention food for thought.
But these definitions are only useful if they can be applied.
Achieving Organizational Effectiveness (OE) through Organization Development (OD) and Change Management
In organizations, organizational effectiveness can refer to:
- A department or business function within an institution or organization
- A systematic approach to improving organizational effectiveness
- A framework or model, as mentioned above
It is often used in the same context as related disciplines and concepts, such as:
- Change management. Change management is the business discipline devoted to driving organizational change efficiently, mitigating risk, overcoming obstacles, and improving organizational effectiveness through organizational change projects.
- Organization development (OD). Organization development, like change management, is a business field centered around improving organizations through interventions and managed change projects.
- Organizational behavior (OB). The study of human behavior and how that behavior impacts an organization’s efficiency and effectiveness.
- Human resources (HR). Human resources, as most professionals know, is the business function that manages employees, the employee experience, employee training, and other tasks related to employment. In many organizations, HR owns – or is closely linked to – functions such as OD and OE.
- Organizational change. Organizational changes are changes to a business, organization, or institution aimed at improving the organization in some way.
Regardless of the department, business function, or label, improvements to an organization’s effectiveness are always driven through organizational change.
Improving Organizations through Structured, Managed Change Initiatives
We have seen a variety of definitions and perspectives on organizational effectiveness.
And we have looked at several disciplines and approaches dedicated to improving an organization’s performance.
However, all of these approaches must employ the same fundamental process to make improvements … organizational change.
Organizational change is a process designed to alter specific areas of a business, such as:
- Tools and technology
To successfully change and achieve measurable results, a few things are needed, such as:
- An understanding of organizational effectiveness
- A systematic approach to intervention and change, such as OD or change management
- The skills, expertise, and ability to implement and manage those changes
In this article, we have examined several definitions of organizational effectiveness.
Those definitions can provide some necessary background information on the topic, but to achieve tangible results, organizations must apply that knowledge in the real world.