In this module you will learn


Goal: a desired state of affair an organization attempts to reach

Official goals (or mission): an outcome that an organization states it is trying to achieve.
Official goals are typically vague, describing a value system; they are akin to ideologies.

Operative goal: an end sought through the actual operating procedures of the organization.
Operative goals are more concrete, short term; they describe what the organization is actually trying to do.

Coomon types of operative goals:

The purposes of official goals, on one hand, and operative goals, on the other, are different.
Goal Type and Purpose (Daft E2.3 p. 56)
Type of Goals Main Purposes of Goals
Official goals (mission) Legitimacy
Operative goals Employee direction & motivation
Decision guidelines
Criteria of performance

Q - Zachary Cronbach is head of the marketing department of Columbus Tool and Die Co.  One of his goals is to increase market share by 10% in the next year.  This is an example of an ___  goal.  (OFFICIAL/OPERATIVE?)

Q - "Official goals provide (a), while operative goals and strategies provide (b)."  Match (a) and (b) with 1 or 2 of

  1. employee direction
  2. legitimacy


Strategy refers to the techniques used by an organization to reach its goals.

Two studies have described generic strategies used by organizations.

1.  Michael Porter's Competitive Strategies

Michael Porter distinguishes three main strategies.  He argues that each strategy implies a specific pattern of organizational characteristics.
Michael Porter's Competitive Strategies (cf. Daft E2.5 p. 62)
Organizational Design Emphasis
Low-cost Leadership Increase market share by emphasizing low cost compared to competitors.
EX: Walmart. 
Other examples?
  • efficiency with strong centralizaiton, tight cost control
  • standard operating procedures
  • efficient procurement & distribution
  • close supervision, routinization of tasks, limited empowerment of employees
Differentiation Attempt to distinguish organization's product or service from others in the industry.
EX: Godiva Chocolates. 
Other examples?
  • organizational learning
  • research
  • customer intimacy
  • innovation & risk-taking
Focus Concentrate on specific market (region or group of customers).
Other examples?
Note: Porter distinguishes further between focused low-cost & focused differentation strategies.  See Daft.

Q - Food Lion's old slogan "When we save, you save!" exemplifies which of Michael Porter's 3 competitive strategies?

2.  Raymond Miles & Charles Snow's Framework

Miles and Snow have proposed an alternative typology of organizational strategies that distinguishes between prospector, defender, analyzer, and reactor strategies.


Q - Are effectiveness and efficiency the same thing?  Find counterexamples of The three traditional approaches to effectiveness are related to the model of an organization as an open system.  The three approaches are each associated with the output, input, and internal process of the organization, respectively.

1.  Goal Approach (associated with OUTPUT)

Emphasizes the ability of organization to achieve its operating goals.


MORE ON GOAL MULTIPLICITY & INCONSISTENCY (in relation to the Goal Approach)
The following exhibit illustrates the typical multiplicity & inconsistency of goals of business organizations. Multiple operative goals are often conflicting.  EX: profit (return to stockholders) versus market share (which may mean reinvesting profits into R&D, advertising, etc., which reduces profit)

Therefore organizations use standard techniques for managing multiple & conflicting goals, including

Q - A student who chooses social activities and work for money over studies throughout most of the semester and then concentrates on studying as final exams approach is managing conflicting goals by which standard technique?

Q - How does one call an alliance among several managers who agree on organizational goals?

Q - What does "satisficing" mean?

2.  System Resource Approach (associated with INPUT)

Emphasizes the ability of the organization to acquire scarce & valued resources.

Indicators of system resource effectiveness:


3.  Internal process approach (associated with INTERNAL PROCESS)

Emphasizes internal health & efficiency.

Indicators reflect 2 different perspectives:

Example of the economic efficiency perspective:
Honda produces 870 cars per day with 2423 workers -> O/I = 0.36 c/w per day
Jeep produces 750 cars per day with 5400 workers -> O/I = 0.14 c/w per day
Thus Honda is more efficient than Jeep
PRO: CON: Q - The degree to which an organization achieves its goals is its ___ .  (EFFICIENCY/EFFECTIVENESS?)

Q - Two colleges of comparable size are located in adjacent towns.  The admissions office at College A has been telling prospective students that College A is better than College B because their freshman class has an average SAT score 23 points higher than the freshman class at College B.  Which effectiveness approach is the admissions office of College A using?

Q - In evaluating the effectiveness of professors, universities are more likely to use the number of scholarly publications rather than their teaching ability.  Why is this?

Q - Managers at the PETSEC Corporation believe that efficiency is the key to success.  Therefore, they instituted a piece-rate incentive program to increase productivity.  This is an example of which traditional approach to effectiveness?

Q - The system resource approach emphasizes the ____ of an organization.  (INPUT/OUTPUT/TRANSFORMATION PROCESS?)


1.  Stakeholder (aka Constituency) Approach

A stakeholder is any group (within or outside the organization) that has a stake in the organization's performance
NOTE: let us not confuse a "stakeholder" with a "stockholder" or a "steakholder"! EX: How does it apply to a university? Minicase:  Delta Airlines  (Daft p. 70).  Illustrates how CEO Allen's cost-cutting efforts pleased stockholders but alienated employees and damaged the reputation of the firm in Atlanta.


CON: Q - The strength of the constituency (aka stakeholder) approach is that it takes a broad view of effectiveness and ___ ?

2.  Competing Values Approach (Quinn & Rohrbaugh)

In Q&R's research experts rate indicators of effectiveness for similarity; statistical analysis produces 2 underlying dimensions: Putting these 2 dimensions together produces 4 models representing different emphases on basic values: the open system model, the rational goal model, the internal process model, and the human relations model. Minicase:  Ford Motor Company  (Daft old edition p. 68).  The company has shifted to a growth-oriented strategy since 1994, resulting in an increase in domestic share of 7% and progress in other countries.  This illustrates a shift from the rational goal model to the open system model.


Q - The Stevens Corporation has goals of growth and resource acquisition.  In the competing values approach to effectiveness, the organization would be described primarily by which model?

Q - A recent article in the DTH States: "Chapel Hill-Carrboro schools have long been regarded as the best in the state, and a comparison of funding, salaries and test scores with county schools seems to substantiate that belief."  What approach(es) to measuring organizational effectiveness is the author of the article using?

Last modified 24 August 2001