DU SOL BA 3rd Year Administration and Public Policy Notes Chapter 7 Good Governance and Development of Corporate Governance

DU SOL BA 3rd Year Administration and Public Policy Notes Chapter 7 Good Governance and Development of Corporate Governance

Question 1.
What is an Organization? Discuss its goals and effectiveness.
Organization-Goals And Effectiveness –

We are living in an age of organisation. Most of us are members of several organisation. We earn our livelihood through organisation. Whatever our vocation, we came into contact with a large number of organisations in our official and private work. We get electricity from the Electricity Board, water from Municipality; milk from a cooperative dairy and so on. The lists are endless. The plain truth is that from birth to death a man now is surrounded by all kinds of organisations.

In fact, one has to depend on them for getting various kinds of services and goods. The interest of the society in the working of the organisation is, therefore, natural. The well-being of the society depends on the functioning of the various Government and private organisations. For example, if a single organisation like Electricity Board does not function properly, the citizens will not get the required electricity for their domestic contraption. Industries will not get power for running their manufacturing rants. This will result in large scale shortage of goods leading to rise in prices. Since the industries face shut down due to power shortage, the problem of unemployment will raise its head. It is, therefore, essential that various Governmental or private organisations should function effectively.

This would naturally raise the question as to what is effectiveness of the organisation and how is it to be judged. Obviously, the effectiveness of the organisation will have to be judged against the goals, it was set to achieve.

We, therefore, propose to study first the concept of organisational goals and then more on to the concept of effectiveness.

As already mentioned; the organisations are set up to perform some functions. Le. achieve some goals. Yet the concept of organisational goal is not- very clear.

Etzioni has defined, “an organisational goal is a desired state of affairs which the organisational attempt to realise”.

Telcott Parsons gave a classificatory scheme according to which, at the social level, organisational goals are really an extension of what the society needs for its own survival.

Herbert Simon developed his own goal concept while discussing the theory of organisational decision making. He said, “We must explain organisational behaviour in terms of the goals of the individual members of the organisation, or we must postulate the existence of one or more organisational goals, over and above the goals of the individuals”.

Simon postulated the notion that the goals of an organisation at any point of time are result of interaction among the members of die organisation. In his approach, goals become constraints on the decision-making process. They are based on abstract value around which the organisation operates. Decisions are made within the framework of constraints, (goals) and organisation attempt to make decisions that are optional within the constraints they face.

With slight modifications, we may that organisation actions are constrained not only by goals, but also by pressure from the external environment and forces generated within the organisation.

Types of Goals. The treatment of goals as abstract values has the advantage that the goals do not depend on the whims of individual members. At the same time these goals may be too abstract to serve as guides for action. For that purpose the) organisational, members need some simple operational rules which can help them in performing their functions for organisational effectiveness.

Perrow divided the goals into two types :

  1. Official goals
  2. Operative goals

The Official Goals are the general purposes of the organisation defined by their statutes, rules, regulations, administrative instructions and other authoritative statements. They are board goals and purposes which help in the formulation of specific courses of action.

The Operative Goals are a set of goals derived and distilled from both official and unofficial sources. These are developed by the interaction of official goals with the internal pressures and external environment of the organisation.

The official goals are to be found in administrative and authoritative statements like statutes, rules, regulations, etc. The operative goals of the organisation have, however, to be studied from the actual decisions of the top decision-makes, for example, from the kinds of decisions that are taken about allocation of manpower and material resources, etc.

Changes in Organisational Goals. Like every, living tiling, the organisation change over time and so do their goals land objectives. Some reasons for such change are :

(i) Environmental Factors. Change in the external environment bring about changes in the goals df the organisation. For example, the goals of the defence organizations may be different in war and peace.

(ii) Internal Pressures. Operative goals of an organisation may undergo a drastic change when the power equations within the organisation change. If new leaders gain prominence, they may bring a different outlook to the process of goal determination.

(iii) Technological Change. This is usually covered under the environment factors mentioned above. But, the impact of technology is so – great that it is often treated separately. New technological development – may lead to drastic readjustment of strategy and structure of the organisation. For example, while organisation may be promoting a particular product technological obsolescence may force it to abandon the idea.

Goal Displacement may also occur due to what Etzioni has called ‘over measurement’ and Bertram Gaass has called “number magic”. When organisations organised their activities around more easily quantifiable factors, organisational goals get deflected towards the achievement of easily measured aspects.

Organisational goal-setting is therefore a dynamic phenomenon. The decision-makers have to keep adjusting goals with reference to internal pressures and external environment. The goals are thus evolved by a continuous process of learning and bargaining.

This is a rather extended discussion on the process of goal setting in an organisation. But, was essential to an understanding of effectiveness.

Organisational Effectiveness –

Effectiveness is the extent to which an organisation achieves its goals within the constraints of resources.

Effectiveness should not be confused with efficiency which refers to the process by which the organisation maximises its objectives with the minimum use of resources. An organisation can be effective without being efficient It may achieve its goals without utilising the resources very efficiently.

Evaluation of Organisational Effectiveness. It is a complex process involving the measurement of several variables. However, even conceptually, there have been different approaches to the question of evaluating the effectiveness of an organisation. Two approaches are prominent.

(i) The goal model, and (ii) The system model
These are discussed below :

Goal Model for Organisational Effectiveness. The model emphasises that the organisational effectiveness should be measured only in terms of the achievement of the goals of the output.

The Main Advantages of this model is that it gives a very tangible and concrete framework for measuring effectiveness. The goals are very specific and measurable effectiveness. The goals are very specific and measurable. This method can be very useful in measuring organisational effectiveness.

The Drawback of the model is that it ignores many internal and external realities. For example, it fails to consider that managers may have to allocate resources to activities like personnel recruitment, etc., which do not directly contribute to the achievement of goals. Again in many service organisations it is very difficult to set quantifiable goals and very difficult to measure them. An obvious example is the police organisation.

System Model. In this model an ’organisation’ is a part of larger system with which it constantly interacts. It takes inputs (resources) from the system (environment) processes, these resources and returns them to the environment in processed form (output); An organisation will be termed ineffective, if it does not contribute to the environment enough in relation to the resources it draws. If it is ineffective and does not contribute to the system, it cannot survive.

The organisational effectiveness should be measured in terms of the entire cycle of the input-processing-output system. It should depend on the capacity of the organisation to adjust to this environment. While making such adjustments the capacity of the organisation to hold together has also to be observed.

Effectiveness in systems context, can then be defined in terms of optimum balance among various adaptation and maintenance activities. These activities will include :

  • Acquisition of resources which has to be done efficiently at the minimum cost.
  • Use of resources for processing. This must reflect efficient use of resources in relation to the output generated by the system.
  • Producing outputs which should be useful to society and should be of good quality.
  • Performing technical and administrative tasks efficiently and rationally.
  • Conforming to the codes of behaviour – no malpractices have to be adopted to show improved performance.
  • Satisfying various people and interest groups. It is important that the organisation should also be able to satisfy important client groups as well as people generally. Otherwise there may be demands against it.

(vii) Generation of surplus – A living organisation has to grow. This it can do only by producing more output than the input in takes. The resulting excess of output over input can be used for further investment and important of the organisation.

(viii) Maintaining internal balance – In any human organisation there are various internal pulls and pressures. Various kinds of conflicts are generated which need to be resolved. An effective organisation has to maintain good working environment within the organisation so that the conversion process may be efficient. In short, the organisation shall have to make efforts to maintain proper human relationship within the organisation.

Conclusion. Ultimately the effectiveness of the organisation depends on the extent to which it can maintain of the organisation depends activities. It has to adjust the environment by contributing more than it takes or perish. But, it has to do this while maintaining good internal health.

DU SOL BA 3rd Year Administration and Public Policy Notes

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