The survival of an organization must have the ability to change with the environment. New generations and advanced technology continue to challenge organizations. To completely gain an understanding on the effectiveness of an organization, it is important to identify the three key metrics and provide an example for each. Next, a company will be selected for ineffectiveness and a description of practices that have contributed to the organizations ineffectiveness. The last metric is recognized for the beneficial purpose toward the effectiveness on the organization.
Key Metrics and Examples
“Because managers are responsible for utilizing organizational resources in a way that maximizes an organization’s ability to create value, it is important to understand how they evaluate organizational performance” (Jones, 2010, p. 15). The three key metrics for an effective organization are control, innovation, and efficiency. The first key metric is control which is defined as focusing on the customers, stakeholders, and internal and external resources of the organization. The second key metric is innovation which means the recreation or discovery of a new product. During the innovation of a new product, the organization must then look into developing new skills and processes for the employees. The third key metric is efficiency which means to stay on top of competitive products, gaining knowledge of new technology, all in a cost effective and timely manner.
An example of control is when management takes the action to secure “scarce and valued skills and resources from outside the organization” (Jones, 2010, p. 15). To provide an example of innovation from an internal approach, a manager will evaluate an employee’s skills and ask them to invent a creative product based on their customer’s needs. An example of efficiency is “convert skills and resources efficiently into finished goods and services (technical approach)” (Jones, 2010, p. 15).
Ineffective Business and Practices
An ineffective business I am familiar with is a county courthouse I worked with for over five years. The practices they were utilizing in their offices was confusing for new hired employees and courtroom staff. Each courtroom judge and their staff ran their office differently so the main district clerk office would have to train their staff various ways pertaining to each judge. Information entered into an old software application was not accurate and documents were stored in folders with mistaken case numbers on some case files.
Constituents would often miss their court dates due to lack of written communication because the district clerk staff was not mailing out the forms in the appropriate time. Eventually, the courthouse had to benefit in a new technological approach to become an effective organization. “The technical approach allows managers to evaluate how efficiently an organization can convert some fixed amount of organizational skills and resources into finished goods and services” (Jones, 2010, p. 17).
Metrics to Improve Effectiveness
“Three metrics that are beneficial in measuring technical effectiveness include measuring product quality to be sure it increases, reduce the number of defects, and reducing production costs” (Jones, 2010). In this scenario, the measurement of product efficiency and productivity based on inputs and outputs is a beneficial way to measure effectiveness. Goals should be defined for control, innovation, and efficiency based on the focus of technology and the data exchanged between offices. It is important to increase the completion of files each day with accurate input on a data system. Reducing inaccurate data or misplaced information for courts will also increase the effectiveness of productivity between the court and clerk offices. The reduction of paper is a production cost if the software application is utilized to its full capacity.
The definition of an organization environment is “the set of forces and conditions that operate beyond an organization’s boundaries but affect its ability to acquire and use resources to create value” (Jones, 2010, p. 2). An organization that is willing to reinvent itself as their environment changes will be an effective organization that continues to succeed with their products and value their employees. To measure the effectiveness of an organization, the three metrics must be utilized within the inputs and outputs of processes. A county government office was selected for its ineffective practices but with improvement on the three measurements, the organization has the capability of working in an effective manner that would provide a large amount of revenue after five years.
Jones, G. R. (2010). Organizational, Design, Theory, and Change (6th ed.). Upper Saddle River, NJ: Prentice Hall.