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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.