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The model of organizational elements (presented in the explanation of dynamics in the Short Run, Moderate Run, and Long Run) is essentially descriptive: it only describes organizational dynamics. But it does not tell us what system states are good or bad.
However, if criteria for “goodness” are supplied, it is possible to determine:
• what types of the system states are good or bad, and
• what types of dynamics may lead an organization toward or away from such states
1. Criteria for Organizational Effectiveness
An organization could be labelled “effective” in a short-run time frame if the organization’s key processes displayed a high level of matter/energy efficiency and decision-making effectiveness: wasting a minimum of raw materials, of human energy, and of machine potential; handling information in a rational way.
It would not, for example, be diverting employee energy into hostile actions, or systematically ignoring important information needed for decision making.
An organization would be judged effective in a moderate-run time frame if it is capable of maintaining its short-run effectiveness over the moderate run. That is, it could maintain the key processes element in an efficient and effective state over a moderate time frame. That is, in a system state in which the structural elements are aligned – a state of co-alignment.
An organization would be defined as effective in a long-run time frame if it is capable to adapt quickly to inevitable changes that occur; that is, to move quickly into a state of co-alignment when a change has caused it to go into a state of non-alignment. Organization’s ability to adapt is a function of the adaptability of its structural elements.
Therefore an effective organization in the long run is one in which most of its structural elements are in highly adaptive states.
Overall, therefore, a highly effective organization is one in which the key processes are in efficient and effective state while the six structural elements are co-aligned and are in highly adaptive states.
2. Achieving Organizational Effectiveness
To attain a high level of effectiveness, an organization must use its resources successfully in three ways:
1 – to make sure, in the short run, that the key processes stay in an effective and efficient state;
2 – to create or maintain a co-alignment among the six structural elements;
3 – to push its structural elements into or maintain them in highly adaptive states.
To do so requires the organization to monitor all three aspects of organizational effectiveness and to allocate its surplus resources to these three ends.
There are three broad reasons why organizations may develop ineffectively:
1 – complexity of the system;
2 – potential conflict between what is best for the organization and what is best for individuals;
3 – dysfunctions cased by having too much surplus energy in the system, or by not having enough surplus.
2.1 Effectiveness Problems Caused by Complexity
When considering the amount of relevant information (from the seven different elements) and the uncertainties involved (especially considering three different time periods), it quickly becomes cleat that one of the barriers to organizational effectiveness is the complexity of the situations and the complexity if decisions that have to be made.
At any moment, for example, an organization with some unexpected energy – let us say in the liquid form of money – has to make a number of very difficult decisions regarding what to do with that money.
Furthermore, such decisions may cause quite different effects.
2.2. Effectiveness Problems Caused by Conflict of Interests
Under certain conditions it is possible for the dominant coalition to have interests that are significantly different from the organization’s. In pursuing their own interests, such leaders would then systematically create organizations that were less than highly effective.
Moreover, many managers often systematically develop their organizations in ineffective ways mainly because they are rewarded almost entirely for short-run performance: they spend far too much of their personal and discretionary resources trying to keep current processes effective and efficient. But they spend too little of their time and other resources trying to create or maintain a coalignment. And they spend far too little effort trying to create adaptive element states.
Some managers are masters at creating an impressive short-run performance in this way.
They appear to be successful because they move on to other jobs after one of two years, leaving the longer-run problems they have created for someone else.
2.3 Problems Caused by Too Much or Too Little Surplus
The third factor that can undermine organizational effectiveness is, ironically, too much success.
Extremely successful organizations often develop an overly self-confident management. The key managers in such organizations begin to believe what others tell them – that they are brilliant.
It becomes hard to believe that there’s need to also worry seriously about the future.
In the absence of tension, the dominant coalition and others tend to slow down the processes that use energy to maintain or increase the adaptability of the system’s elements.
Over a period of time, the adaptability of elements within the organization goes down. Strong position and extra surplus allow the organization to make mistakes, to develop massive non-alignments that drain energy out of the organization for years. This usually leads to a crisis.
The opposite situation - too little surplus matter/energy - can also lead to ineffective organizational development. Without a minimum surplus, an organization will simply be unable to invest in interventions that make its elements more adaptive or that maintain it in a state of coalignment.
Relevant Questions about Effectiveness
To determine the level of an organization’s effectiveness and the forces that limit greater effectives, the following questions can be put:
1. How efficient and effective are the key processes?
2. How close is the organization to a state of co-alignment?
3. How facilitative of adaptation is each of its structural elements”?
4. How large are the barriers to improving the organization’s effectiveness? That is:
a. How complex is the organizational system?
b. Is there an important conflict of interest between the organization and its dominant coalition?
c. Has the organization had too much or too little surplus?
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