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CHAPTER 2: THE CONSTRUCT OF ORGANISATIONAL EFFECTIVENESS
INTRODUCTION
In this Chapter the construct of organisational effectiveness will be discussed. The Chapter will start by making a distinction between organisational performance and organisational effectiveness, followed by a discussion of the lack of consensus on the meaning of organisational effectiveness. Thereafter the importance of organisational effectiveness as well as the difficulty of defining the construct will receive attention. The Chapter will be concluded by a discussion of the approaches to organisational effectiveness as well as a summary of the evolution of approaches to organisational effectiveness.
ORGANISATIONAL EFFECTIVENESS VERSUS ORGANISATIONAL PERFORMANCE
Before discussing the construct of organisational effectiveness, the researcher is of the opinion that it must firstly be distinguished from the concept of organisational performance, which, according to Venkatraman and Ramanujam (1986), is a recurrent theme in most branches of management and is of interest to both academic scholars and practising managers. Venkatraman and Ramanujam (1986, p. 803), take the view that « business performance, which reflects the perspective of strategic management, is a subset of the overall concept of organizational effectiveness”. The authors then provide a schematic representation of how they propose that business performance differs from organisational effectiveness, which is shown in Figure 2.1 below. According to Venkatraman and Ramanujam (1986), the domain of business performance refers to financial and operational performance, which uses simple outcome-based financial indicators that are assumed to reflect the fulfilment of the economic goals of the firm, such as sales growth, profitability, return on equity, earnings per share, and so forth.
Financial and operational performance, which they refer to as business performance, is seen as a subset of the wider construct of organisational effectiveness (Venkatraman & Ramanujam, 1986).This view is supported by Richard, Devinney, Yip and Johnston (2009), who state that organisational effectiveness is a broader construct that captures organisational performance, but with grounding in organisational theory that entertains alternate performance goals. To distinguish between the two, Richard et al. (2009, p. 722) provide the following two definitions:
Domain of financial performance Domain of financial + operational performance (Business performance) Domain of organisational effectiveness “Organizational performance encompasses three specific areas of firm outcomes: (a) financial performance (profits, return on assets, return on investment, etc.); (b) product market performance (sales, market share, etc.); and (c) shareholder return (total shareholder return, economic value added, etc.).
Organizational effectiveness is broader and captures organizational performance plus the plethora of 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”.Further support for distinguishing between organisational effectiveness and performance is provided by Henri (2004, p. 93), who states that: “As a response to theoretical and practical pressures, the evolution of organisational effectiveness models reflects a
construct perspective, while the evolution of performance measures mirrors a process perspective”. In this study the researcher will thus focus on the wider construct of organisational effectiveness as delineated by Henri (2004), Richard et al. (2009) and Venkatraman and Ramanujam (1986).
THE LACK OF CONSENSUS ON THE MEANING OF ORGANISATIONAL EFFECTIVENESS
As far back as 1957, Georgopoulos and Tannenbaum made the statement that “organisational effectiveness is one of the most complex and least tackled problems in the study of social organisations” (Georgopoulos & Tannenbaum, 1957, p. 534). Over the next 57 years the problem of finding an acceptable definition of organisational effectiveness has persisted, with this problem being re-emphasised by various authors up to the present. In 1967, Yuchtman and Seashore stated that “We are badly in need of an improved conceptual framework for the description and assessment of organisational effectiveness” (Yuchtman & Seashore, 1967, p. 891). Katz and Katz (1971) stated that most of what had been written on the meaning of criteria of organisational success and on their interrelatedness is judgmental and open to question. Steers (1975) stated that there is only a rudimentary understanding of what is actually involved in or constitutes the concept of organisational effectiveness. Two years later, Steers (1977) remarked again that an examination of the available literature on organisational effectiveness revealed little agreement concerning the exact nature of the construct. Adding to the debate, Hrebiniak (1978) concluded that measuring effectiveness is a critical but problematic issue. Connolly, Conlun and Deutsch (1980) also concluded that the field of organisational effectiveness research appears to be in conceptual disarray. Quinn and Rohrbaugh (1981) added to this by saying that despite the attention given to effectiveness, a widely shared definition of effectiveness has proven to be elusive. These views are supported by Rojas (2000, p. 97) who states that “The issue of organizational effectiveness has been one of the most sought out yet elusive of research subjects since the early development of organizational theory.”
ACKNOWLEDGEMENTS
DECLARATION
SUMMARY
CHAPTER 1: SCIENTIFIC ORIENTATION TO THE RESEARCH
1. INTRODUCTION
1.1 ORIENTATION
1.2 BACKGROUND TO THE STUDY
1.2.1 The importance of local government
1.2.2 The effectiveness of local governments in South Africa
1.2.3 The importance of metropolitan municipalities in South Africa
1.2.4 The importance of organisational effectiveness
1.2.5 The assessment of organisational effectiveness
1.2.6 Assessing Public Sector effectiveness
1.3 MOTIVATION FOR THIS STUDY
1.4 PROBLEM STATEMENT
1.5 AIMS
1.5.1 General aim
1.5.2 Specific aims
1.6 THE PARADIGM PERSPECTIVE
1.6.1 The meta-theoretical paradigm
1.6.2 The methodological paradigm
1.6.3 The theoretical paradigm
1.7 RESEARCH VARIABLES
1.8 UNIT OF ANALYSIS
1.9 RESEARCH DESIGN
1.10 Research approach
1.11 Research method
1.11.1 Research participants
1.11.2 Measuring instrument
1.11.3 Research procedure
1.11.4 Statistical analysis
1.11.5 Refinement of the new proposed theoretical assessment framework
1.12 CONCLUSION, LIMITATIONS AND RECOMMENDATIONS
1.13 CHAPTER LAYOUT
1.14 CHAPTER SUMMARY
CHAPTER 2: ORGANISATIONAL EFFECTIVENESS
2.1 INTRODUCTION
2.2 ORGANISATIONAL EFFECTIVENESS VERSUS ORGANISATIONAL PERFORMANCE
2.3 THE LACK OF CONSENSUS ON THE MEANING OF ORGANISATIONAL EFFECTIVENESS
2.4 THE IMPORTANCE OF ORGANISATIONAL EFFECTIVENESS
2.5 THE DIFFICULTY OF DEFINING ORGANISATIONAL EFFECTIVENESS
2.5.1 Introduction
2.5.2 Properties of organisational effectiveness making a common definition difficult
2.5.3 Obstacles constraining the development of a common definition of organisational effectiveness
2.5.4 Barriers to developing a general operational model of organisational effectiveness
2.6 APROACHES TO ORGANISATIONAL EFFECTIVENESS
2.6.1 Introduction
2.6.2 The criteria approach to organisational effectiveness
2.6.3 The goal approach to organisational effectiveness
2.6.4 The systems resource approach to organisational effectiveness
2.6.5 The internal processes approach to organisational effectiveness
2.6.6 The strategic constituencies approach to organisational effectiveness
2.6.7 The conflicting values approach to organisational effectiveness
2.7 WHICH IS THE BEST APPROACH TO ORGANISATIONAL EFFECTIVENESS?
2.8 A SUMMARY OF THE EVOLUTION OF APPROACHES TO ORGANISATIONAL EFFECTIVENESS
2.8.1 Ideal types
2.8.2 Contingency approaches
2.8.3 Multiple constituencies
2.8.4 Paradox approach
2.9 CHAPTER SUMMARY
CHAPTER 3: ORGANISATIONAL EFFECTIVENESS IN PUBLIC SECTOR ORGANISATIONS, INCLUDING LOCAL GOVERNMENT
3.1 INTRODUCTION
3.2 CLARIFYING PUBLIC AND PRIVATE SECTOR ORGANISATIONAL EFFECTIVENESS TERMINOLOGY
3.3 THE IMPORTANCE OF ORGANISATIONAL EFFECTIVENESS FOR PUBLIC SECTOR ORGANISATIONS
3.4 THE DIFFERENCE BETWEEN PUBLIC SECTOR ORGANISATIONAL PERFORMANCE AND PRIVATE SECTOR ORGANISATIONAL EFFECTIVENESS
3.5 THE IMPORTANCE OF LOCAL GOVERNMENT AS PART OF THE PUBLIC SECTOR
3.5.1 Introduction
3.5.2 The objectives of local government in South Africa
3.5.3 The importance of metropolitan municipalities in Africa as a special form of local government
3.5.4 The importance of metropolitan municipalities in South Africa as a special form of local government
3.6 THE ORGANISATIONAL EFFECTIVENESS OF LOCAL GOVERNMENT IN SOUTH AFRICA, INCLUDING METROPOLITAN MUNICIPALITIES
3.7 CONCLUSIONS REGARDING THE MEASUREMENT OF ORGANISATIONAL EFFECTIVENESS IN THE PUBLIC AND PRIVATE SECTORS
3.8 CHAPTER SUMMARY
CHAPTER 4: THE ASSESSMENT OF ORGANISATIONAL EFFECTIVENESS
4.1 INTRODUCTION
4.2 THE IMPORTANCE OF ASSESSING ORGANISATIONAL EFFECTIVENESS
4.3 THE DIFFICULTY OF ASSESSING ORGANISATIONAL EFFECTIVENESS
4.4 CHARACTERISTICS OF ASSESSMENT FRAMEWORKS/MODELS
4.4.1 Introduction
4.4.2 The basic components of an assessment framework/model
4.4.3 How assessment frameworks/models differ
4.4.4 Criteria for effective assessment frameworks/models
4.4.5 Benefits of using an assessment framework/model to measure organisational effectiveness
4.5 AN EVALUATION OF EXISTING ASSESSMENT FRAMEWORKS OR MODELS WHICH MEASURE THE ORGANISATIONAL EFFECTIVENESS OF A TOTAL ORGANISATION TO DETERMINE THEIR APPLICABILITY TO METROPOLITAN MUNICIPALITIES IN
SOUTH AFRICA
4.5.1 Introduction
4.5.2 Porter, Lawler and Hackman’s Model of Individual Performance in Organisations
4.5.3 Weisbord’s Six-Box Model
4.5.4 The Nadler-Tushman Congruence Model of Organisational Behaviour
4.5.5 The 7-S/8-S Framework
4.5.6 Tichy’s Technical Political Cultural (TPC) Framework
4.5.7 The Causal Model of Organisational Performance
4.5.8 The Balanced Scorecard
4.5.9 The South African Excellence Model for Local Government
4.5.10 The High Performance Model
4.6 THE APPLICABILITY OF EXISTING ASSESSMENT FRAMEWORKS WHICH MEASURE THE ORGANISATIONAL EFFECTIVENESS OF A TOTAL ORGANISATION TO THE MEASUREMENT OF ORGANISATIONAL EFFECTIVENESS IN METROPOLITAN MUNICIPALITIES IN SOUTH AFRICA
4.6.1 Summary
4.6.2 Conclusions
4.7 RECOMMENDED NEW CUSTOMISED THEORETICAL ASSESSMENT FRAMEWORK FOR MEASURING THE ORGANISATIONAL EFFECTIVENESS OF A METROPOLITAN MUNICIPALITY IN SOUTH AFRICA
4.7.1 Introduction
4.7.2 Answering seven critical questions when measuring organisational effectiveness
4.7.3 The recommended theoretical framework to measure the organisational effectiveness of a metropolitan municipality in South Africa
4.7.4 Conclusions
4.8 CHAPTER SUMMARY
CHAPTER 5: EMPIRICAL STUDY
5.1 INTRODUCTION
5.2 THE RESEARCH DESIGN
5.2.1 Phase 1: Literature review
5.2.1.1 Step 1: Literature review
5.2.1.2 Step 2: Develop a proposed theoretical assessment framework
5.2.2 Phase 2: Empirical study
5.2.2.1 Step 3: Administering the survey instrument
5.2.2.2 Step 4: Analysis of the data
5.2.2.3 Step 5: Validating the proposed theoretical assessment framework by means of SEM
5.2.2.4 Step 6: Refinement of the new proposed theoretical assessment framework
5.3 CHAPTER SUMMARY
CHAPTER 6: RESEARCH RESULTS
6.1 INTRODUCTION
6.2 DESCRIPTIVE STATISTICS
6.2.1 Frequency distributions
6.2.2 Means and standard deviations
6.3 RELIABILITY OF DIMENSIONS
6.4 EXPLORATORY FACTOR ANALYSIS
6.5 STRUCTURAL EQUATION MODELLING (SEM)
6.5.1 Introduction
6.5.2 Confirmatory factor analysis
6.5.2.1 Developing and specifying the 1st order measurement model
6.5.2.2 Assessing 1st order measurement model validity
6.5.2.3 Developing and specifying the 2nd order measurement model
6.5.2.4 Assessing 2nd order measurement model validity
6.5.2.5 Specifying the structural model
6.5.2.6 Assessing the structural model validity
6.5.3 Adaptation of the original proposed theoretical assessment framework to conform to the structural model of organisational effectiveness obtained from the SEM process
6.5.4 The implications of the new adapted theoretical model
6.6 CHAPTER SUMMARY
CHAPTER 7: CONCLUSIONS, LIMITATIONS AND RECOMMENDATIONS
7.1 INTRODUCTION
7.2 CONCLUSIONS REGARDING THE AIMS OF THE STUDY
7.2.1 Conclusions regarding the specific theoretical aims of the study
7.2.2 Conclusions regarding the specific empirical aims of the study
7.2.3 Conclusions regarding the general aim of the study
7.2.4 Conclusions regarding the research hypothesis
7.3 LIMITATIONS OF THE STUDY
7.3.1 Limitation related to the literature review
7.3.2 Limitations related to the empirical study
7.4 SUGGESTIONS FOR FURTHER RESEARCH
7.5 RECOMMENDATIONS FOR THE PARTICIPATING METROPOLITAN MUNICIPALITY
7.6 RECOMMENDATIONS FOR THE FIELD OF INDUSTRIAL AND ORGANISATIONAL PSYCHOLOGY REGARDING ORGANISATIONAL EFFECTIVENESS
7.7 CHAPTER SUMMARY
GET THE COMPLETE PROJECT
THE DEVELOPMENT AND VALIDATION OF AN ASSESSMENT FRAMEWORK FOR MEASURING THE ORGANISATIONAL EFFECTIVENESS OF A METROPOLITAN MUNICIPALITY IN SOUTH AFRICA
