Question

1. You are a consultant to Twinkle Teeth Corporation producing titanium dental implants. The CEO insists that effectiveness must be evaluated by an increase in stock price to satisfy stockholders. The marketing vice president insists that the main goal is to reduce the time to bring products to the customer. The manufacturing vice president states that production costs should be the key focus of the organization. What approach is each manager using to evaluate organizational effectiveness, and What can this organization do to ensure that effectiveness is properly evaluated?

Answer 1

The CEO focuses on the stockholder and therefore is focusing on Strategic Constituencies Approach.

Marketing vice president's main goal is to reduce the time to bring products to the customer and he is using Goal Approach of effectiveness.

Manufacturing vice president focuses on production costs i.e. the inputs of the organisation and so is using Systems Resources Approach which focuses on limiting the resources of the organisation.

There are three ways to measure the effectiveness of approach-

External research approach which includes suppliers, customers, government and competitors.If the goal of lower cost of inputs is met, stock prices are increased, market share is increased and the support is achieved from government , then the organisation is effective.

Internal system approach which evaluates on the basis of an organisation works through its culture, structure, flexibility and coordination. If the time in decision making and time to market the good is reduced, conflicts are removed and there is product innovation then the organisation is effective.

Technical approach which evaluates on the basis of productivity of converting fixed inputs to outputs. If the product quality is ensured, production costs is reduced, time to deliver the product is decreased and customer service is improved, then the organisation is effective.