Determining Organizational Effectiveness: Another Look, and an Agenda for Research

Abstract

Concern with the effectiveness, productivity, efficiency or excellence of organizations is a subject that has motivated the writings of economists, organization theorists, management philosophers, financial analysts, management scientists, consultants, and practitioners. It has served as a unifying theme for over a century of research on the management and design of organizations, yet the empirical research has not contributed to the development of a universal theory of organizational effectiveness. In this paper we review the extent to which the components of a contingent behavioral theory of organizational effectiveness already exist, one that incorporates the paradoxes and tradeoffs inherent in real life organizations. We consider the problem of effectiveness measurement, and we propose a research approach utilizing a strategy of engineering organizational effectiveness which could lead to an inductive, applied, empirically-based theory of contingent organization design. In this context the engineering of organizational effectiveness has a dual purpose. For the organizations and their managers participating in the research, it refers to understanding, constructing and managing organizational activities in given contexts so as to achieve and maintain improved performance as measured by one or more situationally-determined criteria. In addition, to provide the empirical basis from which induction can proceed, the engineered events must be structured and implemented in such a way so as to facilitate theory construction and testing.