Organizational effectiveness is a concept that measures how thoroughly and efficiently an organization achieves its business goals. It is a powerful term that organizations use to gauge how effective they are at reaching intended outcomes. Organizational effectiveness embodies the degree to which firms achieve the goals they have decided upon, which draws on several different factors. These factors include:
- Environmental inputs
- Inter-relations among its constituent divisions
- Degree of flexibility a firm has to respond to changes in the market
- Level of efficiency an organization has when delivering output
Organizational effectiveness is not just about financial performance, but also about staff retention, job experience, community impact, or market share. It is a crucial concept for sustainable business activity today. Organizational effectiveness cannot be achieved by a cycle of recurring initiatives to make a company more efficient, but rather it must be learned and baked into the day-to-day behavior of the organization. Understanding the drivers of organizational effectiveness can help leaders do a better job and help the organization advance in multiple ways.
