Define the concept of efficiency and effectiveness. Elaborate on differences and similarities between effectiveness and efficiency. How would you apply these two concepts (ef

  Organizational Models of Human Behavior

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The concept of the organization stems from the very social nature of the human being, who lives in coexistence and continuous interaction with others. This causes the human being to coexist with other human beings and form organizations. Chiavenato (2011) defines an organization as a system of coordinated activities between two or more individuals. He mentions that an organization exists if the following conditions are present; people capable of communicating, willing to contribute to joint action, and a purpose of achieving a common goal. Each member of the organization can put the common interest above personal interest. 

According to Chiavenato (2011), organizations can engage both in the production of goods or products (consumer goods, machinery, equipment, etc.) and in the production or provision of services (specialized activities, such as money management, medicine, dissemination of knowledge, traffic planning, and control, etc.). […] there are industrial, economic, and commercial organizations, religious, military, educational, social, and political, among others (p. 6). 

These various organizations impact and influence people regarding their value systems, how they dress, what and how they buy, attitudes, and norms, among others. It should be noted that organizations are, in turn, influenced by individuals. Organizations grow, excel, and have positive outcomes. Still, at the same time, hierarchical levels increase, distancing the individual from their personal objectives from the organizational objectives, which almost always causes conflict between them. We can emphasize that organizations are diverse and complex as they grow. 

The following table allows us to understand organizational development (OD) over time:

T able 1: The Three Stages of Organizations in the Twentieth Century 

Classic Industrialization

Neoclassical Industrialization

Information Age

Period

1900-1950

1950-1990

After 1990 

Predominant Organizational Structure

Functional, burrocratic, pyramidal, centralized, rigid, and inflexible. Emphasis on areas.

Matrix and mixed. Emphasis on departmentalization by products, services, or other strategic business units

Fluid and flexible, fully decentralized. Emphasis on multifunctional networks

Organizational Culture

Theory X oriented to the past, traditions, and values. Emphasis on maintaining the status quo. Value to experience

Transition. Oriented to the present and the current. Emphasis on adaptation to the environment

Theory Y. Future-oriented. Emphasis on change and innovation. Values knowledge and creativity

Organizational environment

Static, predictable, few changes, and gradual. Few environmental challenges

Intensification of changes, which occur more quickly

Changing, unpredictable, turbulent

How to Treat People 

People as inert and static factors of production, subject to rigid rules and regulations that control them

People as organizational resources that need to be managed

People as proactive human beings, endowed with intelligence and skills, which must be motivated and driven

People’s Vision 

People as suppliers of labor

People as resources of the organization

People as providers of knowledge and skills

Denomination 

Industrial relations

Human Resources Administration

Managing human talent

Source: Chiavenato, 2011, p. 9. (translated)

Organizations are social systems that interact with each other. Systems are intentionally constructed and reconstructed to achieve specific goals and objectives. They consist of planning to achieve their objectives. Once they are achieved, they are reconstructed, redefined, or reorganized to achieve new objectives with the least possible cost and effort. It is necessary to understand that organizations are not static but constantly in movement, action, modification, and change. It is a living and open system, not linear but cyclical (Chavianato, 2011, Caciope, Mock, 2005) (Figure 1). 

F igure 1: Organizational Development (OD) 

 

The Katz and Kahn Approach  

Katz and Kahn developed a model of open system organization by applying the theory systems. This broad and complete model accounts for how all systems interact, achieving changes, movement, transactions, transformations, and balance (Chiavenato, 2011).  This author and Fernandez (2014) present several aspects that occur that imbricate interactions between systems, organizations, and the environment. These aspects are as follows: 

1. The organization receives input from the environment, other organizations, and others. Every organization must receive energy supplies as no structure or organization is self-sufficient or self-contained.

2. The organization transforms the supplies received into services, products, labor force, etc. In other words, organizations reorganize the inputs received into goods, services, labor, etc.

3. The organization now exports (outputs) these services, products, labor force, etc. This denotes that the organization is an open and cyclical system (Figure 2).

4. Feedback consists of repetitive import-transformation-export cycles (Figure 2).

Organizations transform the supplies received as priorities change, receiving feedback from other organizations, the environment, or people. It should be stated that any change, reform, or transformation in an organization affects others; that is, there is an exchange of energy. Chiavenato (2011) argues that “the social structure is a dynamic concert, and not static. The activities are structured in cycles of events that repeat and harmonize. The functioning of any system consists of recurring cycles of inputs, transformations, and outputs” (p. 14).  

Figure 2: Cyclic Open System Process

Katz and Kahn’s approach include negative entropy, negative feedback, dynamic homeostasis, differentiation, equifinity, limits, and boundaries. Negative feedback refers to the negative information the system receives, which allows it to correct deficiencies or deviations, allowing the organization to stay on track. Negative entropy is the process by which the system obtains energy reserves to deal with disequilibrium, disintegration, and disorganization to avoid demise or eventual death and thus maintain its organizational structure. 

The system constantly seeks to maintain homeostasis or equilibrium, although it is neither static nor rigid. This allows the system or organization to have a certain constancy. On the other hand, organizations tend to differentiate internally, that is, the division of tasks, roles, and specialized functions. This produces an organizational structure and, in turn, the creation and establishment of regulations. It is important to know that these regulations are subject to change, recognizing that there is more than one way to produce the expected result, in which the initial conditions may differ. The limits and boundaries of systems and organizations vary depending on the degree of openness in each and the barriers present between one system to another and the environment. The means to achieve the objectives may also be different. This is known as equifinality. 

Tavistock’s Approach: The Socio-Technical System  

This model proposed by Tavistock states that every organization is managed by combining technology and people. This combination constantly interacts with its environment and other systems or organizations. This system is also known as a structured socio-technical system. This dual function is both technical and social. The technical aspect includes the organization and realization of work with the assistance of technology. On the other hand, social refers to the action of people in relating with others to achieve the organization’s goals. 

The socio-technical system consists of three subsystems; technical or task system, managerial or administrative system, and social or human system (Chiavenato, 2011). The technical system includes technology, distribution of tasks, and the positions required to perform the tasks. The managerial system defines the structural organization, objectives, procedures, rules, protocols, remuneration, and sanctions that will be implemented in the organization. In other words, it includes all administrative processes. Finally, the social system covers the informal organization, values, attitudes, culture, level of motivation, and the satisfaction of personal needs.  

Participants in the Organizations: From Obedience to Participation in Decision Making  

Today, due to the structured process of organizations, all its members participate in achieving individual and organizational goals. However, as an organization grows, they develop its own goals, sometimes very different from those initially established and different from the objectives of the people who formed them (Chiavenato, 2011). Chiavenato (2011) argues that “previously only owners, managers, and employees were recognized as participants in organizations; that is, only their internal participants” (p. 17). Today the organization is conceived as a structured process in which several actors interact whose purpose is to achieve the established objectives, but they impact decision-making. 

Chiavenato (2011) refers that the partners and actors of the organization are: 

1. Shareholders, owners, or investors.

2. Clients, users, consumers, or taxpayers.

3. Managers and employees.

4. Suppliers (raw materials, technology, services, credits, financing, etc.).

5. Government.

6. Community and society (Table 2) (p. 17).

All actors interact, participate, and seek balance. However, we know that this is never achieved due to constant changes in power relations, changes in priorities, reorganization, reforms, changes in needs, and the emergence of problem subjects, producing the rule of change and adjustment. Chiavenato (2011) states that actors can “influence the decisions of the marketing area, and shareholders in the resolutions of the financial area” (p. 17). This indicates flexible organizational boundaries, boundaries that expand and contract, where decisions, products, or services include some and exclude others depending on the situation/problem/need and the objectives set at a given time. 

Table 2: Organizational Factors 

Partners (participants)

Contributions (investments made)

Incentives (expected earnings)

Staff

contribute with work, effort, personal dedication, performance, knowledge, skills, competencies

They are motivated by salary, benefits, awards, praise, recognition, opportunities, permanence in employment

Investors or Owners

contribute money in the form of shares, loans, financing, and credits

They are motivated by profitability, utility, liquidity, investment gains, dividends

Suppliers 

contribute with materials, raw materials, technology, specialized services

They are motivated by business, price, payment terms, billing, utility, profit on investment

Customer

contribute money for the purchase of the products or services offered by the organization and for their consumption or use

They are motivated by price, quality, payment terms, the  satisfaction of a need, achievement of expectations

Source: Chiavenato, 2011, p. 16. (translated)

Organize According to the Mission, Vision, and Objectives of the Entity

An organization’s mission is the statement of the organization’s purpose and reason to exist. It can also include the organization’s scope in terms of products and services. Chiavenato, 2011 suggests that the mission should consider the following aspects: 

· What is the reason for the organization’s existence? 

· What is the role of the organization in society? 

· What is the nature of the organization’s business? 

· What types of activities should the organization concentrate its future efforts on? (p. 18). 

On the other hand, the vision includes what is expected to be achieved. It informs not only the actors but also internal and external stakeholders and the community. The vision includes the direction of the organization and where it is going, provides focus, informs about the future situation, inspires others to join, and motivates all involved to perform their tasks towards achieving the goals. Objectives are set in a clear, precise, and measurable way. Objectives serve as a ‘compass,’ orientation, and guide for achieving the organization’s goals and avoiding improvisation. They also serve to measure the success of the organization. 

Organizational Rationality: Between Efficiency and Effectiveness 

Every organization should consider simultaneously assessing its efficiency and effectiveness to achieve its objectives successfully. Effectiveness includes aspects such as; emphasis on results, meeting deadlines, achieving objectives, getting results, and a proactive approach. Efficiency emphasizes means, setting and following rules, doing things right, saving costs, fulfilling tasks and obligations, reactive approach, and task focus. Chiavenato (2011) argues that “efficiency increases as costs and resources decrease. Effectiveness is a normative measure of the achievement of results, while efficiency is a normative measure of the use of resources in processes” (p. 35). 

Ideally, the organization should be efficient and effective. We refer to efficiency when emphasizing getting things done right using resources well. On the other hand, if the results are evaluated to corroborate whether the objectives were achieved, this is referred to as effectiveness.

 

References

Chiavenato, Idalberto (2011).  Administración de recursos humanos: El capital humano en las organizaciones, 9na Edición, McGraw Hill. 

Fernández, E. (2014, 3 de agosto).  La organización como un sistema abierto  http://teoriadekatzykahn.blogspot.com/2014/08/la-organizacion-como-un-sistema- Links to an external site. abierto.html 

 

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