Organizational Goals, Effectiveness, and Ethical Approaches

Posted on Oct 17, 2024 in Other subjects

Organizational Design

Session 5 and 6: Organizational Goals and Effectiveness

Organizational Goals

Organizational goals define the desired future state of an organization, providing it with identity and direction. These goals serve several key functions:

  • Establish the Desired Future State: Acting as guiding principles.
  • Create Legitimacy: Providing a rationale for the organization’s existence.
  • Provide Standards: Offering clarity for achieving targets and measuring performance.

Classification of Goals

  • Factors Related to Goals:
    • Beneficiaries of the organization
    • Framework for specific targets
    • Relative importance of specific goals
  • Primary and Secondary Beneficiaries (Stakeholders):
    • Primary Beneficiaries: Customers served by the organization.
    • Secondary Beneficiaries (Stakeholders): Those who derive satisfaction through their association with the organization. They often have multiple, potentially conflicting goals.

Types of Goals

Short-Term Goals
  • Maximum of one year or accounting period.
  • Targeted and specific.
  • May not affect the entire company.
  • Respond to long-term goals and the environment.
  • Common examples: Profit, sales goals.
Long-Term Goals
  • More than one year or accounting period.
  • Provide overall direction.
  • Affect the entire company.
  • Adapt to a changing world while maintaining a sense of direction.
  • Unique to each company.

Mission of the Organization

The mission statement outlines official targets and strategic objectives. These typically relate to the product or service, market niche, production methods, and financial objectives. Key elements of a mission statement include:

  • Address
  • Company Philosophy
  • Operational Goals

Operational goals are formulated with measurable results and encompass all subsystems of the organization:

  • Market
  • Financial Performance
  • Resources
  • Innovation
  • Productivity
  • Management Development
  • Employee Attitude and Performance
  • Social Responsibility and Ethical Behavior

Ethical Principles and Dilemmas

Characteristics of ethical dilemmas:

  • Actions have a broad impact.
  • Managers choose from multiple alternatives.
  • Results are mixed.
  • Consequences are unclear.
  • Decisions have personal implications and affect people.
Ethical Approaches
Utilitarianism (Jeremy Bentham)

This approach judges actions by their consequences, aiming to maximize happiness and comfort for the most people. Actions causing pain or suffering are deemed unethical. A cost-benefit analysis weighs anticipated profits (pleasure) against future losses (pain and suffering). If profits outweigh losses, the action is considered ethical. This approach is flexible, situational, tolerant, and liberal.

Formal Ethics (Immanuel Kant)

Ethical actions are determined by universally recognized principles and rules, regardless of consequences. Actions violating laws, rules, or ethical values are unethical. Pure reason guides ethical judgments, independent of individual or group opinions. Ethical principles are absolute, universal, and consistent. Formalism emphasizes consistent application of rules. Ethical issues arise when rules are unclear or conflict.

Purpose of Goals and Objectives

Goals and objectives provide:

  • Guidance and Direction: Indicating what and how employees should contribute.
  • Philosophy and Values (Culture): Supporting goal achievement.
  • Motivation: Encouraging employees to achieve goals.
  • Legitimacy: Justifying the organization’s existence. The mission establishes legitimate intentions, while operational goals provide the means to achieve them.
  • Achievement Standards: Quantifying goals for progress and performance monitoring.
  • Structure and Design: Different structures support different organizational goals.
  • Unification of Efforts: Promoting synergy and coordination.

Management of Goals and Objectives

Managing goals is a political, not purely rational, process. Multiple, potentially conflicting goals may exist. The process can be ambiguous and uncertain, with interest groups disagreeing on organizational goals. Techniques for managing goals include:

  • Negotiation and Compromise: Aiming for win-win outcomes.
  • Generating Satisfaction: Seeking acceptable and satisfactory solutions.
  • Prioritization and Sequencing:

Effectiveness

Effectiveness measures how well the organization is performing. This includes:

  • Internal Efficiency: Measured by appropriate resource use.
  • Human Relations: Including affective/emotional health, communication, and a climate of satisfaction and fairness.
  • Goal Achievement: The degree to which goals are met. This can be problematic due to potential misidentification of goals, failure to represent all interest groups, and the influence of resource acquisition and stakeholder satisfaction.
Efficiency and Effectiveness
Model of Contradictions

Defining an organization as solely effective or ineffective is problematic. Organizations face complex environments, multiple conflicting goals, and diverse stakeholder demands. Managing these competing demands can lead to suboptimal results in some areas.

Competing Values Model

Effectiveness measurement depends on the organization’s orientation (internal vs. external) and its need for control vs. flexibility. This model identifies four approaches:

  • Human Relations Model: Focuses on cohesion and morale for human resource development.
  • Open Systems Model: Emphasizes flexibility and readiness for growth and resource acquisition.
  • Internal Process Model: Prioritizes information management and communication for stability and control.
  • Rational Goal Model: Focuses on planning and goal setting for productivity and efficiency.