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Exercise - Chapter 1

There are four perspectives for assessing organizational effectiveness: 1) Open system perspective views organizations as dependent on external environment for resources. 2) Organizational learning perspective sees effectiveness as dependent on acquiring, sharing and storing knowledge. 3) High-performance work practices perspective emphasizes importance of human capital and practices like employee involvement. 4) Stakeholder perspective states companies must understand and satisfy interests of stakeholders like employees, customers.

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45 views2 pages

Exercise - Chapter 1

There are four perspectives for assessing organizational effectiveness: 1) Open system perspective views organizations as dependent on external environment for resources. 2) Organizational learning perspective sees effectiveness as dependent on acquiring, sharing and storing knowledge. 3) High-performance work practices perspective emphasizes importance of human capital and practices like employee involvement. 4) Stakeholder perspective states companies must understand and satisfy interests of stakeholders like employees, customers.

Uploaded by

hzqh john
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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NUR HAZIQAH BINTI JOHN (2019695632) AC220B5V

EXERCISE – CHAPTER 1

Question:

Organizational effectiveness is the ultimate dependent variable in organizational


behavior. For example, Apple and Google are two admired companies in the
world known for high organizational effectiveness.

Describe all four (4) perspectives when assessing an organizational


effectiveness.

(10 marks)

Answers:

The organizational effectiveness is a broad concept represented by several


perspectives, including the organization’s fit with the external environment,
internal sub systems configuration for high performance, emphasis on
organizational learning and ability to satisfy the needs of key stakeholders. There
is several perspective of effectiveness: open system perspective, organizational
learning perspective, HPWP perspective and stakeholder perspective.

i. Open system perspective


It is one of the earliest and deeply entrenched ways of thinking about
organizations. The other major perspectives on organizational
effectiveness might be considered detailed extensions of the open-
systems model. It views organizations as complex organisms that ‘live’
within an external environment. The word ‘open’ describes this
permeable relationship, whereas ‘closed’ systems can exist without
dependence on an external environment. As open systems, organizations
depend on the external environment for resources, including raw
materials, employees, financial resources, information and equipment.

ii. Organizational learning perspective


It is a perspective which holds that organizational effectiveness depends
on the organization’s capacity to acquire, share, use and store valuable
knowledge. The organizational learning perspective also considers the
company’s stock of knowledge, called its intellectual capital. The most
obvious form of intellectual capital is human capital, the knowledge, skills
and abilities that employees carry around in their heads. When key
people leave, they take with them some of the knowledge that makes the
company effective. The next form is structural capital, which includes the
knowledge captured and retained in an organization’s systems and
structures, such as the documentation of work procedures and the
physical layout of the production line. The last one is relationship capital,
which is the value derived from an organization’s relationship with
customers, suppliers and other who provide added mutual value for the
organization.

iii. High-performance work practices


This perspective begins with the idea that human capital is an important
source of competitive advantage for organizations. Human capital helps
the organization realize opportunities or minimize threats in the
externals environment. In short, human capital is valuable, rare, difficult
to imitate and non-substitutable. There are four practices with strong
research support, which are employee involvement, job autonomy,
employee competence and performance or skill based rewards.

iv. Stakeholder perspective


Stakeholders include individuals, organizations and other entities that
affect, or are affected by the organization’s objectives and actions. The
essence of the stakeholder perspective is that companies must take into
account how their actions affect others and this requires that they
understand, manage and satisfy the interests of their stakeholders. The
key strengths of the stakeholder perspective is that it incorporate values,
ethics and corporate social responsibility into the organizational
effectiveness equation. It also states that to manage the interests of
diverse stakeholders, leaders ultimately need to rely on their personal
and organizational values for guidance.

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