Organizational effectiveness relates to the capacity of an organization to sustain the people, strategies, learning, infrastructure and resources it needs to continue to achieve its mission. It is a long-term outcome that some capacity building strategies may affect, while others may not (and this is acceptable in the continuum of management support service strategies needed to build capacity). A way to assess and improve organizational effectiveness is discussed, with a focus on factors that inhibit successful organizational performance.The basic assumption is that it is easier, more accurate, and more beneficial for individuals and organizations to identify criteria of ineffectiveness (faults and weaknesses) than to identify criteria of effectiveness (competencies).
An organization is defined as being effective to the extent that it is free from characteristics of ineffectiveness. There are many ways to measure the effectiveness of an organization.Campbell lists over 30 different criteria from productivity, profits, growth, turnover, stability and cohesion. Different theoretical perspectives can account for the diversity in usage of effectiveness measurements. Rational perspectives emphasize goal attainment and focus on output variables such as quality, productivity, and efficiency. Natural system perspectives focus on the support goals of the organization such as participant satisfaction, morale, interpersonal skills, etc.
Open system perspectives focus on the exchanges with the environment -- this includes information processing, profitability, flexibility, adaptability. There are seven strategies for assessing organizational effectiveness in different situations: rational goal, system resource, managerial process, organizational development, bargaining, structural functional, and functional. Each of them has advantages in the evaluation of specific organizational problems.