System approach to assessing the effectiveness of...

A systematic approach to assessing the effectiveness of an organization

Given the ambiguous interpretation of the organization's goals in the economy and society, as well as the complexity of determining the integrity and sustainability of the development of the organizational system, an exceptional variety of approaches to determining the effectiveness of the organization becomes understandable. Only an enumeration and a brief description of all that has been written on this topic over the past decades by economists, managers and sociologists will take many hundreds of pages. In this section, we will propose a system model for evaluating efficiency, based on a number of the most significant prerequisites regarding the functioning and development of organizations.

The definition of efficiency is one of the basic areas of rational reasoning in economics, sociology, and political science. Traditional rationalism tried to derive certain formulas of success based on the logical configuration of the initial data, thereby determining the most effective ways of human development. The study of successes and failures of various subjects of economic activity has become very popular today. It is worth remembering a lot of books under the titles "Success story ...", "The secret of success", "How to become ... & quot ;. As a rule, when these books are published, they are somewhat obsolete and do not carry an algorithm of successful activity. However, they can be creatively reworked to create some new and largely individual ways to achieve efficiency in the activities of an individual or organization.

The efficiency category is an unshakable foundation of traditional applied social sciences. Efficiency sets the goal of the study, determines its methods and, most importantly, the practical focus of the results. Here it is worth remembering the traditional reports on the conduct of sociological research, which traditionally end with the section "Recommendations for improving efficiency ...". Efficiency allows you to compare a variety of phenomena and processes in society. In this case, this category guides people to a permanent competition to achieve the highest efficiency. The profound philosophical meaning of such a competition, based on the perception of life as a permanent contest, often remains unexplained or understandable to a few.

The efficiency of a modern company has three dimensions: (1) relational (the ratio of results to costs); (2) absolute (the amount of intangible assets); (3) institutional (compliance with norms and rules existing in society).

Relative efficiency

The traditional method of calculating the effectiveness was to correlate the results with the resources spent on them, what is at the output (outputs), with what was on the input (inputs) - income with capital, revenue with costs, etc. The most important category of economic science - profitability - reflected exactly this understanding of efficiency, which can be designated as relative, ie. based on the correlation of certain quantities (Figure 12.1). The convenience of this interpretation of efficiency consisted in the fact that in the industrial era, resources and wealth were something one-way, and more often just one and the same. In the traditional accounting system, costs and wealth were virtually identified with the firm's assets. The wealth of the firm consisted of land, real estate, used technical means and materials. In the balance of the industrial company, these lines always formed the lion's share of assets and were in fact equated with wealth. The material content of these lines provided a unique opportunity to put them in the denominator when calculating profitability. Moreover, the accounting principles of recording the values ​​of each category in accordance with the money spent on them, although originally a known conventionality (the axiomatics of the accounting model), were generally perceived as not so drastic a departure from reality (especially in the era of stable and non-inflationary development) . Material wealth can not be born and die instantaneously. It should not instantly depreciate or fabulously increase in price.

Relative understanding of organizational effectiveness

Fig. 12.1. Relative understanding of organizational effectiveness

Thus, the industrial era clearly unequivocally equated material wealth with resources and made it possible to calculate the efficiency of an organization quite easily. Wealth (it's resources, it's assets) took the place of the denominator under the numerator, reflecting the results of the work (see Figure 12.1). The relational calculation of efficiency seemed unshakable and became the basis of competent orientation in market space. To invest money you need to go there and so that the efficiency was the highest.

thematic pictures

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)