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Structuring and Managing Organizational Performance Published: Sunday, April 18, 1999 By: Dr. Manuel Angel Morales

There is no strong and quality performance without a little fanaticism in the performer. What the organization as a collectivity succeeds in achieving is organizational performance. It is not the performance of an individual or a small group but the net result of the combined efforts of all individuals and groups in the organization. You can never be too busy to contribute to the collective efforts of the organization. When addressing the challenge of organizational performance we have in mind not only independent organizations but also embedded ones, such as departments, divisions and units that have the properties of an organization. We stress the need of always seeing the system or the forest as a set of interacting, interdependent elements or trees forming an organized whole.

Organizational performance is the summon bonus of organizational design. The whole point of designing an organization is to improve its performance. But performance is important not only as an end-result-of design but also as a change initiating venture. A set of core factors such as, situational, strategic, structural, behavioral and patterns of execution affect organizational performance. Also, the relative performance of an organization (performance in relation to its targets or its rivals) can initiate important changes in its strategic and structural elements, and sometimes in its situational and behavioral condition.

Organizational performance is a complex term as organizational goal. Since it is difficult to define exactly what the goals of an organization are, so it is challenging to determine how well the organization has performed. This is precisely why we need a vision, purpose and a strategy. It is always necessary to establish how performance contributes to the organizational vision and purpose. In assessing organizational performance we are forced to tackle with requirements and ask the following question: Performance from whose set of requirements? This is why often organizations have difficulties in establishing who really are their customers. Take for example, a company. From a society`s viewpoint, efficient production of products and services needed by society may be said to be the goal of the organization. The company should then be pondered in terms of whether it does this or not. From the point of view of the owners, profitability and growth rate in earnings may be the criteria for assessing performance. From the point of view of the employees, performance may be assessed in terms of its work environment, incentives, how well it treats people and the prestige or legitimacy in the community.

From the point of view of the external customers, we may be referring to quality, service, quickness, options, value-added, technology and competitive price as the key criteria in terms of which performance is established.

The principal argument is that management must take into account the various expectations of society, customers, employees, and owners in planning its strategy. The art and craft of designing and managing organizational performance is about reflecting the concerns of society, employees, suppliers and customers. It is about macro-managing the stakeholders.

 


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