A System Resource Approach to Organizational Effectiveness

Abstract

The prevailing formal and implied conceptions of are examined and found deficient. When effectiveness is defined with reference to goal attainment, there are both methodological and conceptual problems, for the goals are those of persons (observers or members)-not of the organization itself-and there is in principle no possibility for stable consensus about the nature of the goals. When defined with reference to societal function, the values and standards for assessing are similarly external to the organization itself. An improved conceptual framework, derived from the systems model of organizations, is proposed; the framework emphasizes both the distinctiveness of the organization as an identifiable social structure and the interdependence of the organization with its environment. The interdependence takes the form of transactions in which scarce and valued resources are exchanged under competitive conditions. The organization's success over a period of time in this competition for resources-i.e., its bargaining position in a given environment-is regarded as an expression of its overall effectiveness. Since the resources are of various kinds, and the competitive relationships are multiple, and since there is interchangeability among classes of resources, the assessment of organizational effectiveness must be in terms not of any single criterion but of an open-ended multidimensional set of criteria. The implications of this conception for theory, for empirical investigation, and for organization management are discussed.