Organisational Productivity

Efforts have been made to identify the principal parameters of the "operating situations" of the organisation. This involves the interaction of the contextual elements of organisation (e.g. size, policies, culture, operating and information technologies, management, etc.) with environment (e.g. demand and supply market, relevant technologies, political, financial and socio-economical climate etc.). Contingency theories emphasise that the organisational form, structure and behaviour are contingent to the environment as a guide to organisational efficiency. Every discipline in the administrative sciences contributes in some way towards organisational efficiency. Marketing guide managers in increasing market share and demand and hence revenues. Financial management assists managers in making optimum use of funds invested, production and operation techniques help in designing, operating and maintaining efficient production processes. Management information system assists managers in obtaining constant information and feedback that can enhance the quality of decisions they make, thus, each is having an impact on organisation's efficiency. 

Organisational efficiency is defined as the degree to which an organisation realised its goals. This was a simplistic definition with many ambiguities. For example, the "goal" means what ?,  the short term goals or long term, stated goals or actual goals ? Even each individual, subdivision or division in an organisation can have different goals. Since 1970, many attempts have been made to study the organisational efficiency. The total output, unit output, profit, quality, turnover, morale, growth, flexibility, etc. are several of the parameters used to define the efficiency of the organisation. 

An organisation is by definition, created deliberately to achieve one or more specified goals, and hence, goal attainment is the most widely used criterion of effectiveness. It assumes that organisation  has goals which are well defined, understood and identified and there is a general consensus about these goals in the organisation. Once identified, a measurable criteria is to be devised to ensure that these goals are achieved. For instance, if the consensus goal is profit animations, measures such as return on investment, return on sales or some such numerical measure has to be selected. Management by Objectives (MBO) is the direct outcome of this approach. 

Organisations can be considered as a system. They require inputs, engage in transformation processes, and generate outputs, while interacting with the environment. Diagrammatically they can be represented as system model as shown in Figure. 

 System Model 

The goal attainment approach concentrate only on the output as goal attainment, which is only a partial measure of efficiency. In system approach, end goals are not ignored but they are considered only as one of the element of a more comprehensive criteria. It also takes into consideration  the ability to acquire input resources, the quality of transformation system, and ability to maintain itself as a productive social organisation, and its capability to interact successfully with the external environment, thus, maintain stability and balance along with the growth.