Approaches to Organizational Effectiveness

There are a number of approaches to Organizational Effectiveness but we will discuss about four only.
Organizational effectiveness and corporate performance research appear to take care of the same core
construct: organizational effectiveness and performance. Since the beginning of industrialization, the
concept of assessing organizational effectiveness has been crucial in organization practice and theory.

Generally, it is not clear what experts mean whenever they make reference to effectiveness and it has
led to ambiguities in interpreting the results of their work. The sad thing is, just a few studies have tried
to give a definition of Organizational Effectiveness.

Four Approaches to Organizational Effectiveness

Approaches to Organizational Effectiveness

1. Goal Approach

The Goal Approach is also called rational-goal or goal-attainment approach, it has its origins in the
mechanistic view of the organization. This approach assumes that organisations are planned, logical,
goal-seeking entities and they are meant to accomplish one or more predetermined goals. Goal
approach is worried with the output side and whether or not the organization attains its goals with
respect to preferred levels of output. It sees effectiveness with respect to its internal organisational
objectives and performance. Typical goal-attainment factors include profit and efficiency maximization.

The key constraint of this approach pertains to the content comparability of organizational goals. The
dependable identification of comparable and practically appropriate goals within groups of
organizations is thus a serious problem. What a company declares as its formal goals don’t always echo
the organisations actual goals. Therefore, an organisations formal goals are typically dependent upon its
standards of social desirability. As goals are dynamic, hence they will probably change as time passes,
simply because of the political make-up of an organisation. An organisations short-term goals are usually
not the same as their long term goals. The utilization of goals as a standard for assessing Organizational
Effectiveness is challenging. The goal approach presumes consensus on goals. Considering the fact that
there are numerous goals and varied interests inside an organisation, consensus, is probably not
possible.

2. System Resource Approach

This approach to Organizational Effectiveness was developed in response to the goal approach. The
System Resource Approach sees an organisation as an open system. The organisation obtains inputs,
participates in transformation processes, and generates outputs. This approach emphasizes inputs over
output. It sees most organizations as entities which function in order to survive, at the same time
rivaling for scarce and valued resources. It assumes that the organisation consists of interrelated
subsystems. If any sub-system functions inefficiently, it is going to influence the performance of the
whole system.
The disadvantages of this approach relate to its measurement of means. An issue with this approach is
that a higher amount of obtained resources is not going to promise effective usage. In addition, it is
tough to define an ideal degree of resource acquisition across distinct organizations.

3. Internal-Process Approach

This approach has been developed in response to a fixed output view of the goal approach. It looks at
the internal activities. Organizational effectiveness is assessed as internal organizational health and
effectiveness. According to Internal-Process Approach effectiveness is the capability to get better at
internal efficiency, co-ordination, commitment and staff satisfaction. This approach assesses effort as
opposed to the attained effect.

Some experts have criticized the internal-process approach, like the system-resource approach, cannot
lead to legitimate indicators of organizational effectiveness itself. Rather, it is accepted as an approach
for studying its assumed predictors. Similar to the system-resource approach, the internal-process
approach could possibly be applied only where comparable organizational outcomes can hardly be
assessed accurately.

4. Strategic Constituencies Approach

This approach suggests that an efficient organisation is one which fulfills the demands of those
constituencies in its environment from whom it needs support for its survival. It assesses the
effectiveness to satisfy multiple strategic constituencies both internal and external to the organization.

Watch a video on Organizational Effectiveness Approaches

Strategic Constituencies Approach is ideal for organizations which rely highly on response to demands.
The Strategic-constituencies approach takes explicitly into consideration that organizations fulfill
multiple goals: each kind of organizational constituency (like proprietors, workers, consumers, the local
community, etc.) is supposed to have distinct interests vis-à-vis the corporation, and will thus use
different evaluation criteria.

However, the job of isolating the strategic constituencies from their environment within which they
function is a challenging and tricky task. Because the environment swiftly changes, what was a crucial
goal today might not be so tomorrow. Individual constituents may create significantly diverse ratings of
an organisations effectiveness. These constituents may use diverse factors or weight the same criteria in
a different way.

There is little agreement either theoretically or empirically, in regards to what makes up organizational
effectiveness and what is the best way to measure it.
Introduction to Management of Change

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ELEMENT OVERVIEW

Managing changes to processes over the life of a facility is one of nine elements in the RBPS pillar
of managing risk. This chapter describes the management practices involving (1) the recognition of
change situations, (2) the evaluation of hazards, (3) the decision on whether to allow a change to be
made, and (4) necessary risk control and follow-up measures. Section 15.2 describes the key principles
and essential features of a management system for the MOC element. Section 15.3 lists work activities
that support these essential features and presents a range of approaches that might be appropriate for
each work activity, depending on perceived risk, resources, and organizational culture. Sections 15.4
through 15.6 include (1) ideas for improving the effectiveness of management systems and specific
programs that support this element, (2) metrics that could be used to monitor this element, and (3)
management review issues that may be appropriate
for MOC.

What Is It?

The MOC element helps ensure that changes to a process do not inadvertently introduce new hazards
or unknowingly increase risk of existing hazards (Refs. 15.1 and 15.2). The MOC element includes a
review and authorization process for evaluating proposed adjustments to facility design, operations,
organization, or activities prior to implementation to make certain that no unforeseen new hazards are
introduced and that the risk of existing hazards to employees, the public, or the environment is not
unknowingly increased. It also includes steps to help ensure that potentially affected personnel are
notified of the change and that pertinent documents, such as procedures, process safety knowledge,
and so forth, are kept up–to-date.

Why Is It Important?

If a proposed modification is made to a hazardous process without appropriate review, the risk of a
process safety accident could increase significantly.

Where/When Is It Done?

MOC reviews are conventionally done in operating plants and increasingly done throughout the process
life cycle at company offices that are involved with capital project design and planning. MOC reviews
should be done for bona fide “changes” – not for replacements-in-kind (RIKs).

Who Does It?

An individual originates a change request. Qualified personnel, normally independent of

the MOC originator, review the request to determine if any potentially adverse risk impacts could result
from the change, and may suggest additional measures to manage risk. Based on the review, the change
is either authorized for execution, amended, or rejected. Often, final approval for implementing the
change comes from another designated individual, independent of the review team. A wide variety of
personnel are normally involved in making the change, notifying or training potentially affected
employees, and updating documents affected by the change.

What Is the Anticipated Work Product?

The main product of an MOC system is a properly reviewed and authorized change request that
identifies and ensures the implementation of risk controls appropriate to the proposed change. Ancillary
products include appropriate revisions or updates involving other RBPS activities, such as modifying
process safety information, and change communication/training. Outputs of the MOC element can also
be used to facilitate the performance of other RBPS elements. For example, approved change requests
are necessary to determine when some readiness activities are performed.

How Is It Done?

Organizations usually have written procedures detailing how MOC will be implemented. Such
procedures apply to all work that is not determined to be RIK. The results of the review process are
typically documented on an MOC Review form. Supplemental information provided by system designers
to aid in the review process is often attached to the MOC review form. Once the change is approved, it
can be implemented. Potentially affected personnel are either informed of the change or provided more
detailed training, as necessary, prior to startup of the change. Follow-on activities, such as updates to
affected process safety information and to other RBPS elements, are assessed to identify which are
required before startup, and which may be deferred until after startup. All such activities are tracked
until completed.
Higher risk situations usually dictate a greater need for formality and thoroughness in the
implementation of an MOC protocol, for example, a detailed written program that specifies exactly how
changes are identified, reviewed, and managed. Companies having lower risk situations may
appropriately decide to manage changes in a less rigorous fashion, for example, through a general policy
about managing changes that is implemented via informal practices by trained key employees. Facilities
that exhibit a high demand rate for managing changes may need greater specificity in
the MOC procedure and a larger allocation of personnel resources to fulfill the defined roles and
responsibilities. Lower demand situations can allow facilities to operate an MOC protocol with greater
flexibility. Facilities with a sound process safety culture may choose to have more performance-
based MOC procedures, allowing trained employees to use good judgment in managing changes in an
agile system. Facilities with an evolving or uncertain process safety culture may require more
prescriptive MOC procedures, more frequent training, and greater command and control management
system features to ensure good MOC implementation discipline.
Total Quality Management - Meaning and Important Concepts

To understand the meaning of “Total quality management”, let us first know what does Quality mean?

Quality refers to a parameter which decides the superiority or inferiority of a product or service.
Quality can be defined as an attribute which differentiates a product or service from its competitors.
Quality plays an essential role in every business. Business marketers need to emphasize on quality of
their brands over quantity to survive the cut throat competition.

Why would a customer come to you if your competitor is also offering the same product? The difference
has to be there in quality. Your brand needs to be superior for it to stand apart from the rest.

Total Quality Management

Total Quality management is defined as a continuous effort by the management as well as employees
of a particular organization to ensure long term customer loyalty and customer satisfaction.
Remember, one happy and satisfied customer brings ten new customers along with him whereas one
disappointed individual will spread bad word of mouth and spoil several of your existing as well as
potential customers.

You need to give something extra to your customers to expect loyalty in return. Quality can be
measured in terms of durability, reliability, usage and so on. Total quality management is a structured
effort by employees to continuously improve the quality of their products and services through proper
feedbacks and research. Ensuring superior quality of a product or service is not the responsibility of a
single member.

Every individual who receives his/her paycheck from the organization has to contribute equally to design
foolproof processes and systems which would eventually ensure superior quality of products and
services. Total Quality management is indeed a joint effort of management, staff members, workforce,
suppliers in order to meet and exceed customer satisfaction level. You can’t just blame one person for
not adhering to quality measures. The responsibility lies on the shoulder of everyone who is even
remotely associated with the organization.

W. Edwards Deming, Joseph M. Juran, and Armand V. Feigenbaum jointly developed the concept of total
quality management. Total Quality management originated in the manufacturing sector, but can be
applied to almost all organizations.

Total quality management ensures that every single employee is working towards the improvement
of work culture, processes, services, systems and so on to ensure long term success.

Total Quality management can be divided into four categories:

 Plan

 Do
  Check

 Act

Also referred to as PDCA cycle.

Planning Phase

Planning is the most crucial phase of total quality management. In this phase employees have to come
up with their problems and queries which need to be addressed. They need to come up with the various
challenges they face in their day to day operations and also analyze the problem’s root cause.
Employees are required to do necessary research and collect relevant data which would help them find
solutions to all the problems.

Doing Phase

In the doing phase, employees develop a solution for the problems defined in planning phase. Strategies
are devised and implemented to overcome the challenges faced by employees. The effectiveness of
solutions and strategies is also measured in this stage.

Checking Phase

Checking phase is the stage where people actually do a comparison analysis of before and after data to
confirm the effectiveness of the processes and measure the results.

Acting Phase

In this phase employees document their results and prepare themselves to address other problems.
Principles of TQM

TQM can be defined as the management of initiatives and procedures that are aimed at achieving the
delivery of quality products and services. A number of key principles can be identified in defining TQM,
including:

 Executive Management – Top management should act as the main driver for TQM and create an
environment that ensures its success.

 Training – Employees should receive regular training on the methods and concepts of quality.

 Customer Focus – Improvements in quality should improve customer satisfaction.

 Decision Making – Quality decisions should be made based on measurements.

 Methodology and Tools – Use of appropriate methodology and tools ensures that non-
conformance incidents are identified, measured and responded to consistently.

 Continuous Improvement – Companies should continuously work towards improving

manufacturing and quality procedures.

 Company Culture – The culture of the company should aim at developing employees ability to
work together to improve quality.

 Employee Involvement – Employees should be encouraged to be pro-active in identifying and

addressing quality related problems.

The Cost Of TQM

Many companies believe that the costs of the introduction of TQM are far greater than the benefits it
will produce. However research across a number of industries has costs involved in doing nothing, i.e.
the direct and indirect costs of quality problems, are far greater than the costs of implementing TQM.

The American quality expert, Phil Crosby, wrote that many companies chose to pay for the poor quality
in what he referred to as the “Price of Nonconformance”. The costs are identified in the Prevention,
Appraisal, Failure (PAF) Model.

Prevention costs are associated with the design, implementation and maintenance of the TQM system.
They are planned and incurred before actual operation, and can include:

 Product Requirements – The setting specifications for incoming materials, processes, finished
products/services.

 Quality Planning – Creation of plans for quality, reliability, operational, production and
inspections.

 Quality Assurance – The creation and maintenance of the quality system.

  Training – The development, preparation, and maintenance of processes.

Appraisal costs are associated with the vendors and customers evaluation of purchased materials and
services to ensure they are within specification. They can include:

 Verification – Inspection of incoming material against agreed upon specifications.

 Quality Audits – Check that the quality system is functioning correctly.

 Vendor Evaluation – Assessment and approval of vendors.

Failure costs can be split into those resulting from internal and external failure. Internal failure costs
occur when results fail to reach quality standards and are detected before they are shipped to the
customer. These can include:

 Waste – Unnecessary work or holding stocks as a result of errors, poor organization or

communication.

 Scrap – Defective product or material that cannot be repaired, used or sold.

 Rework – Correction of defective material or errors.

 Failure Analysis – This is required to establish the causes of internal product failure.

External failure costs occur when the products or services fail to reach quality standards but are not
detected until after the customer receives the item. These can include:

 Repairs – Servicing of returned products or at the customer site.

 Warranty Claims – Items are replaced or services re-performed under warranty.

 Complaints – All work and costs associated with dealing with customer’s complaints.

 Returns – Transportation, investigation, and handling of returned items.