Organizational effectiveness is a concept organizations use to gauge how effective they are at reaching intended outcomes. Organizational effectiveness is both powerful and problematic term. The strength of it is that it may be used to critically evaluate and improve organisational activities. It is problematic since it means various things to different individuals. And there are other alternative methods for measuring organizational performance. Organizational effectiveness embodies the degree to which firms achieve the goals they have decided upon, a question that draws on several different factors. Among those are talent management, leadership development, organization design and structure, design of measurements and scorecards, implementation of change and transformation, deploying smart processes and smart technology to manage the firm's human capital and the formulation of the broader Human Resources agenda.

Economic Models of Organizational Effectiveness

In economics, organizational effectiveness is defined in terms of profitability and the minimisation of problems related to high employee turnover and absenteeism. As the market for competent employees is subject to supply and demand pressures, firms must offer incentives that are not too low to discourage applicants from applying, and not too unnecessarily high as to detract from the firm's profit maximization capability. As organizational effectiveness translates across a broad array of organizational functions, several different models have been developed to achieve flexibility among organizations with different functions and objectives.

Major approaches to Effectiveness

Multidimensional approaches The multidimensional technique measures efficacy in several dimensions at the same time. It is frequently used in conjunction with the goal realisation approach and the system resource method. The Competitive Value Framework is a version on the multidimensional method that covers the three value dimensions that are at the heart of most legitimate definitions. They are as follows: organisational focus, organisational structure, organisational means, and organisational goals. In different situations, these multidimensional methods merely reflect an increasing realisation that, in the words of Starbuck and Nystrom, "organisations contain ambiguous, partially incomparable, and incongruous goals." Reputational approach The reputational method combines validity requirements with voter satisfaction. The effectiveness of reputation measures is often measured based on the self-reported perceptions of consumers, workers, or outside professionals.

Social Science Disciplines

Rapid advances in social sciences and technology aided by clever experimentation and observation are bringing several truths to the light of society. There are several disciplines of social sciences that help the OE Practitioner be successful. Four of them are outlined below:

Application

The broader idea of organizational effectiveness is applied to non-profit organizations in making funding decisions. Foundations and other sources of grants and other types of funds are interested in the organizational effectiveness of those people who seek funds from the foundations. Foundations always have more requests for funds or funding proposals and treat funding as an investment using the same care as a venture capitalist would in picking a company in which to invest. According to Richard et al. (2009) organizational effectiveness captures organizational performance plus the myriad internal performance outcomes normally associated with more efficient or effective operations and other external measures that relate to considerations that are broader than those simply associated with economic valuation (either by shareholders, managers, or customers), such as corporate social responsibility.

Multiple dimensions

Scholars of nonprofit organizational effectiveness acknowledge that the concept has multiple dimensions and multiple definitions. For example, while most nonprofit leaders define organizational effectiveness as 'outcome accountability,' or the extent to which an organization achieves specified levels of progress toward its own goals, a minority of nonprofit leaders define effectiveness as 'overhead minimization,' or the minimization of fundraising and administrative costs. Organizational effectiveness is evaluated within nonprofit organizations using logic models. Logic models are a management tool widely used in the nonprofit sector in program evaluation. Logic models are created for specific programs to link specific, measurable inputs to specific, measurable impacts. Typically, logic models specify how program inputs production activities and outputs, such as services delivered, which in turn lead to impacts, such as improved beneficiary health.