ORGANIZATIONAL EFFECTIVENESS OLEH Kusdi Raharjo 1 KASUS 1

ORGANIZATIONAL EFFECTIVENESS OLEH: Kusdi Raharjo 1

KASUS 1) : Suatu organisasi pelayanan publik di bidang perijinan dan beroperasi di wilayah kota memiliki jumlah pegawai 105 orang, dan jumlah pelanggan yang berbeda pada setiap hari kerja. Pada hari senin – rabu, jumlah pelanggan mencapai sekitar 300 orang per hari, setelah itu, kamis dan jumát merupakan hari santai bagi pegawai karena jumlah pelanggan hanya sekitar 20 – 50 orang per hari. Visi – misi organisasi terpampang dengan jelas pada loby kantor, yakni pelayanan dilakukan secara cepat, murah dan baik. Hasil penelitian perguruan tinggi di kota tersebut, diperoleh informasi bahwa masyarakat mengeluhkan pelayanan yang buruk, antara lain pada jam-jam sibuk, seperti proses perijinan lamban, ada biaya ekstra, dan petugas yang tidak simpati. Pada tahun anggaran berikutnya, instansi tersebut telah mengusulkan kenaikan anggaran operasional pelayanan 20 % dari anggaran tahun ini, dengan tujuan untuk memperluas loket pelayanan, menambah pegawai, dan memberikan insentif pada pegawai untuk mencegah pungli. Anda diminta untuk menganalisis instansi tersebut dari aspek ‘éfisiensï” dan “efektifitas” organisasi. 2

Case 1: A public organization for delivering business licence has 105 employees. The daily numbers of consumers it serves are fluctuative, Monday – Wednesday there about 300 consumers in average but the visitors tend to decrease on Thursday and Friday, it reachs only 50 to 60 peoples. The vision and mission statements are clearly stated: We provide good, cheap, and quick services. Yet the research team from a reputable university in this city finds out that vision and mission don’t work well. Consumers are not satisfied due to bad service: delayed service, extra charge, bad manner behavior of employees (unsymphaty). For the following year, the office propose bigger budget than previous one. The increase of allocation will be addressed to build new counters, hiring new employees, and providing incentive for employees in order to prevent them from demanding illegal fees. Please you analyse the performance of this organization in term of efficiency and effectiveness. 3

KASUS 2) : Pada tahun pertama beroperasi, sebuah Bank swasta memperoleh kinerja sangat baik. Pada tahun ke dua jumlah nasabah naik sekitar 20 % dari tahun sebelumnya. Manajer pemasaran mengusulkan penambahan jumlah pegawai sekitar 2 % dari jumlah yang ada, namun Pimpinan tidak menyetujui alasannya rasio jumlah pegawai dan rasio jumlah nasabah masih relevan. Artinya work load masih bisa diatasi. Pada sisi lain, Pimpinan merencanakan untuk membuka hotline service dan merencanakan beberapa produk pelayanan yang tidak memerlukan proses transaksi dilakukan secara face to face di depan counter. Ketika rencana tersebut direalisasikan, maka pada 2 tahun berturut-turut setelah itu, jumlah nasabah terus meningkat, sedangkan jumlah karyawan tidak mengalami perubahan (kenaikan), namun jumlah sarana dan prasarana nampak semakin baik. Tahun depan akan dibuka cabang baru untuk lebih mendekatkan dengan nasabah. Anda diminta untuk menganalisis Bank tersebut dari aspek ‘éfisiensï” dan “efektifitas” organisasi. 4

Case 2 In the first year of operation, a private bank obtains very good performance. In the year two, the number of customers increased by about 20% from a year earlier. Marketing manager proposes increasing the number of employees approximately 2% of the amount available, but the leadership did not approve the reason the ratio of the number of employees and the ratio of the number of customers are still relevant. This means that work load can still be overcome. On the other hand, leaders are planning to open a hotline service and plan some products that do not require to process transactions are done face to face in front counter. When the plan is realized, then the two consecutive years after that, customer numbers continue to rise, while the number of employees does not change (increase), but the number of facilities and infrastructure appear the better. Next year will open a new branch to get closer with customers. You are required to analyze the bank of the aspects of "efficiency" and "effectiveness" of the organization. 5

ORGANIZATIONAL GOAL 1. OFFICIAL GOALS, IS OFTEN CALLED MISSION (THE ORGANIZATION’S REASON FOR EXISTENCE). MISSION IS THE OVERALL GOAL FOR AN ORGANIZATION. OFFICIAL GOALS TEND TO BE ABSTRACT AND DIFFICULT TO MEASURE (STATED GOAL) 2. OPERATIVE GOALS, DESIGNATE THE ENDS SOUGHT THROUGH THE ACTUAL OPERATING PROCEDURES OF THE ORGANIZATION AND EXPLAIN WHAT THE ORGANIZATION IS ACTUALLY TRYING TO DO (ACTUAL GOAL) STATE VS ACTUAL GOALS 6

EFFICIENCY VS EFFECTIVENESS TWO FUNDAMENTAL OF GOALS ARE EFFICIENCY AND EFFECTIVENESS. 1. EFFICIENCY IS A PRIMARY FOCUS ON INPUTS, USE OF RESOURCES, AND COST 2. EFFECTIVENESS IS A FOCUS MORE ON OUTPUTS, PRODUCTS OR SERVICES AND REVENUES WHICH IS THE DOMINANT PRIORITY ? HOW DO YOU OBTAIN A BALANCE BETWEEN EFFICIENCY AND EFFECTIVENESS ? 7

ORGANIZATIONAL EFFECTIVENESS IS THE DEGREE TO WHICH AN ORGANIZATION REALIZES ITS GOALS. EFFECTIVENES IS A BROAD CONCEPT. IT IMPLICITLY TAKES INTO CONCIDERATION A RANGE OF VARIABLES AT BOTH THE ORGANIZATIONAL AND DEPARTMENTAL LEVELS. EFFECTIVENESS EVALUATES THE EXTENT TO WHICH MULTIPLE GOALS – WHETHER OFFICIAL OR OPERATIVE GOAL – ARE ATTAINED. EFFICIENCY IS MORE LIMITED CONCEPT THAT PERTAINS TO THE INTERNAL WORKINGS OF THE ORGANIZATIONAL EFFICIENCY IS THE AMOUNT OF RESOURCES USED TO PRODUCE A UNIT OF OUTPUT. IT CAN BE MEASURED AS THE RATIO OF INPUTS TO OUTPUTS. 8

ORGANIZATIONAL EFFECTIVENESS AN ORGANIZATIONAL EFFECTIVENESS IF IT CAN : 1. SECURE SCARCE AND VALUED SKILLS AND RESOURCES FROM OUTSIDE THE ORGANIZATION (EXTERNAL) 2. CREATIVELY COORDINATE RESOURCES WITH EMPLOYEES SKILLS TO INNOVATE PRODUCTS AND ADAPT TO CHANGING CUSTOMER NEEDS (INTERNAL) 3. EFFICIENTLY CONVERT SKILLS AND RESOURCES INTO FINISHED GOODS AND SERVICES (TECHNICAL) SOURCE : BURTON et al, 2006 : 11 9

THE GOAL SPACE EFFICIENCY HIGH B D LOW EFFECTIVENESS HIGH A C LOW SOURCE : BURTON et al, 2006 : 11 10

APPROACH TO MEASURING ORGANIZATIONAL EFFECTIVENESS APROACH 1) EXTERNAL RESOURCES APPROACH DESCRIPTION EVALUATES THE ORGANIZATION’S ABILITY TO SECURE, MANAGE, AND CONTROL SCARCE AND VALUED SKILLS AND RESOURCES GOAL TO SET TO MEASURE EFFECTIVENESS LOWER COST OF INPUTS HIGH QUALITY INPUTS OF RAW MATERIALS AND EMPLOYEES INCREASE MARKET SHARE GAIN SUPPORT OF STAKEHOLDERS SUCH AS GOVERNMENT 11

APPROACH TO MEASURING ORGANIZATIONAL EFFECTIVENESS APROACH DESCRIPTION 2). INTERNAL SYSTEM EVALUATES THE ORGANIZATION’S APPROACH ABILITY TO BE INNOVATIVE AND FUNCTION QUICKLY AND RESPONSIBILITY GOAL TO SET TO MEASURE EFFECTIVENESS CUT DECISION MAKING TIME INCREASE RATE OF PRODUCTS INNOVATION INCREASE COORDINATION AND MOTIVATION OF EMPLOYEES REDUCE CONFLICT REDUCE TIME TO 12 MARKET

APPROACH TO MEASURING ORGANIZATIONAL EFFECTIVENESS APROACH 3). TECHNICAL APPROACH DESCRIPTION GOAL TO SET TO MEASURE EFFECTIVENESS EVALUATES THE ORGANIZATION’S ABILITY TO CONVERT SKILL AND RESOURCES INTO GOODS AND SERVICES EFFICIENTLY INCREASE PRODUCT QUALITY REDUCE NUMBER OF DEFECTS REDUCE PRODUCTION COST IMPROVE CUSTOMER SERVICES REDUCE DELIVERY TIME TO CUSTOMER 13

TOP MANAGEMENT DIRECTION EXTERNAL ENVIRONMENT OPPORTUNITIES THREATS UNCERTAINTY RESOURCE AVAILABILITY CEO, MNGR TEAM DEFINE MISSION, OFFICIAL GOAL INTERNAL ENVIRONMENT SELECT OPERATIVE GOAL STRATEGIES ORGANIZATION DESIGN STRUCTURE TECHNOLOGY CONTROL HRD POLICIES INCENTIVES CULTUR NETWORKING INFORMATION EFFECTIVENESS OUTCOME RESOURCES EFFICIENCY GOALATTAIMENT STAKEHOLDERS COMPETING – VALUES STRENGTHS WEAKNESSES LEADER STYLE PAST PERFORMANCE 14 SOURCE: DAFT, 1992: 39

1) TRADITIONAL EFFECTIVENESS APPROACHES EXTERNAL ENVIRONMENT ORGANIZATION RESOURCE INPUTS SYSTEM RESOURCE APPROACH SOURCE : DAFT, 1992: 47 INTERNAL ACTIVITIES AND PROCESS INTERNAL PROCESS APPROACH PRODUCT AND SERVICE OUTPUT GOAL APPROACH 15

SYSTEM RESOURCE APPROACH 1. THE SYSTEM RESOURCE APPROACH LOOKS AT THE INPUT SIDE OF THE TRANSFORMATION PROCESS. 2. ORGANIZATION MUST BE SUCCESSFUL IN OBTAINING RESOURCE INPUTS AND IN MAINTAINING THE ORGANIZATIONAL SYSTEM IN ORDER TO BE EFFECTIVE. 3. FROM A SYSTEM VIEW, ORGANIZATIONAL EFFECTIVENESS IS DEFINED AS THE ABILITY OF THE ORGANIZATION TO EXPLOIT ITS ENVIRONMENT IN THE ACQUISITION OF SCARCE AND VALUED RESOURCES. 4. INDICATORS : BARGAINING POSITION – THE ABILITY OF THE ORGANIZATION TO EXPLOIT ITS ENVIRONMENT IN THE ACQUISITION OF SCARCE AND VALUED RESOURCES. ABILITY OF THE SYSTEM’S DECISION MAKER TO PERCEIVE AND CORRECTLY ENTERPRET THE REAL PROPERTIES OF THE EXTERNAL ENVIRONMENT. MAINTENANCE OF INTERNAL DAY-TO-DAY ORGANIZATIONAL ACTIVITIES ABILITY OF THE ORGANIZATION TO RESPOND TO CHANGES IN THE ENVIRONMENT. 16

INTERNAL PROCESS APPROACH 1. EFFECTIVENESS IS MEASURED AS INTERNAL ORGANIZATIONAL HEALTH AND EFFICIENCY 2. AN EFFECTIVE ORGANIZATION HAS A SMOOTH, WELL OILED INTERNAL PROCESS. EMPLOYEES ARE HAPPY AND SATISFIED. DEPARTMENTAL ACTIVITIES MET WITH ONE ANOTHER TO ENSURE HIGH PRODUCTIVITY. 3. INDICATOR : STRONG CORPORATE CULTURE AND POSITIVE WORK CLIMATE TEAM SPIRIT, GROUP LOYALTY, AND TEAM WORK CONFIDENCE, TRUST, AND COMMUNICATION BETWEEN WORKERS AND MANAGEMENT DECISION MAKING NEAR SOURCES OF INFORMATION UNDISTORTED HORIZONTAL AND VERTICAL COMMUNICATION GOOD FOR REWARD SYSTEM FOR PERFORMANCE 17

GOAL APPROACH 1. ORGANIZATION DO TRY TO ATTAIN CERTAIN LEVELS OF OUTPUT, PROFIT, OR CLIENT SATISFACTION 2. THE IMPORTANT GOALS TO CONSIDER ARE OPERATIVE GOALS. EFFORTS TO MEASURE EFFECTIVENESS HAVE BEEN MORE PRODUCTIVE USING OPERATIVE GOALS THAN USING OFFICIAL GOALS 3. IDENTIFYING OPERATIVE GOALS AND MEASURING PERFORMANCE OF AN ORGANIZATION ARE NOT ALWAYS EASY. 4. ISSUE TO RESOLVE WITH THE GOAL APPROACH IS HOW TO IDENTIFY OPERATIVE GOALS FOR AN ORGANIZATION AND HOW TO MEASURE GOAL ATTAINMENT. 18

2) CONTEMPORARY EFFECTIVENESS APPROACHES 1. STAKEHOLDERS APPROACH A STAKEHOLDERS IS ANY GROUP WITHIN OR OUTSIDE AN ORGANIZATION THAT HAS A STAKE IN THE ORGANIZATION’S PERFORMANCE. CREDITORS, SUPPLIERS, EMPLOYEES, AND OWNERS ARE ALL STAKEHOLDERS. IN THE STAKEHOLDERS APPROACH, THE SATISFACTION OF SUCH GROUPS CAN BE ASSESSED AS AN INDICATOR OF THE ORGANIZATION’S PERFORMANCE EACH STAKEHOLDERS WILL HAVE DIFFERENT CRITERION OF EFFECTIVENESS BECAUSE IT HAS A DIFFERENT INTEREST IN THE ORGANIZATION EACH STAKEHOLDERS GROUP HAS TO BE SURVEYED TO LEARN WHETHER THE ORGANIZATION PERFORMS WELL FROM ITS VIEWPOINT. 19

INDICATOR OF STAKEHOLDERS APPROACH STAKEHOLDER 1. 2. OWNERS EMPLOYEES 3. 4. 5. CUSTOMERS CREDITORS COMMUNITY 6. 7. SUPPLIERS GOVERNMENT EFFECTIVENESS CRITERIA FINANCIAL RETURN WORKER SATISFACTION, PAY, SUPERVISION QUALITY OF GOOD & SERVICES CREDITWORTHINESS CONTRIBUTION TO COMMUNITY AFFAIRS SATISFACTORY TRANSACTIONS OBEDIENCE TO LAW, REGULATIONS 20

2. COMPETING VALUES APPROACH IN THE COMPETING VALUES APPROACH, USING A COMPREHENSIVE LIST OF PERFORMANCE INDICATOR CAN BE NEEDED. THE ANALYSIS PRODUCED UNDERLYING DIMENSIONS OF EFFECTIVENESS CRITERIA THAT REPRESENTED COMPETING MANAGEMENT VALUES IN ORGANIZATIONS. 1. THE FIRST VALUE DIMENSION PERTAIN TO ORGANIZATIONAL FOCUS WHICH IS WHETHER DOMINANT VALUES CONCERN ISSUES THAT ARE INTERNAL OR EXTERNAL TO THE FIRM. INTERNAL FOCUS REFLECTS A MANAGEMENT CONCERN FOR THE WELL BEING AND EFFICIENCY OF EMPLOYEES EXTERNAL FOCUS REPRESENTS AN EMPHASIS ON WELL BEING OF THE ORGANIZATION ITSELF WITH RESPECT TO ENVIRONMENT 2. THE SECOND VALUE DIMENSIONS PERTAINS TO ORGANIZATION STRUCTURE, AND WHETHER STABILITY VERSUS FLEXIBILITY IS THE DOMINANT STRUCTURAL CONSIDERATION. CONTINUED……. 21

THE FOUR MODELS OF EFFECTIVENESS VALUES STRUCTURE Flexibility FOCUS internal HUMAN RELATION OPEN SYSTEM MODEL Goal values: growth, Goal values : Human resource acquisition resource development Subgoals : flexibility, Subgoals: cohesion, morale, readiness, external and training evaluation external INTERNAL PROCESS MODEL RATIONAL GOAL MODEL Goal values : stability, equilibrium Subgoals : information management, communication Goal values : productivity, efficiency, profit Subgoals : planning, goal setting control 22

THE FOUR MODELS OF EFFECTIVENESS VALUES STRUCTURE Flexibility HUMAN RELATION MODEL OPEN SYSTEM MODEL ORGANIZATION A FOCUS external internal ORGANIZATION B INTERNAL PROCESS MODEL RATIONAL GOAL MODEL control SOURCE: DAFT, 1992: 56 23

FACTORS INFLUENCING THE SELECTION OF EFFECTIVENESS CRITERIA 1. TOP MANAGEMENT INFLUENCE GOALS REPRESENT VALUE JUDGMENTS BY MANAGERS, SO TOP MANAGER COALITION HAVE SUBSTANTIAL INFLUENCE OVER ORGANIZATION DIRECTION, LIKE A VISION AND MISSION OF ORGANIZATION. 2. GOAL MEASURABILITY ANOTHER FACTOR IS EXTENT TO WHICH GOALS AND THEIR ATTAINMENT CAN BE READILY MEASURED. 3. ENVIRONMENTAL CONDITIONS ENVIRONMENTS VARY WITH RESPECT TO RESOURCE SCARCITY. WHEN RESOURCES ARE PERCEIVED AS SCARE, ORGANIZATIONAL GOALS WILL DEFINE RESOURCE AQCUISITION AND INTERNAL EFFICIENCY CRITERIA, ON THE OTHER HAND, IN A DYNAMIC ENVIRONMENT. 24

BALANCED SCORECARD LEARNING AND GROWTH PERSPECTIVES n n n IKLIM KERJA KOMPETENSI TEKNOLOGI INTERNAL PERSPECTIVE n n ACHIEVE OPERATIONAL EXCELLENCE INCREASE CUSTOMER VALUE 25

CUSTOMER PERSPECTIVE n n n KEPUASAN PELANGGAN TINGKAT KOMPLAIN PENGEMBALIAN FINANCIAL PERSPECTIVE n n ROI ROE PM EPS 26

BSC UNTUK ORGANISASI PUBLIK LEARNING AND GROWTH n n n MANAGEMEN INFORMASI MENGHILANGKAN CELAH KETRAMPILAN IKLIM KERJA YANG BAIK INTERNAL PROCESS n n n MENINGKATKAN PRODUKTIFITAS MENINGKATKAN KAPASITAS INFRASTRUKTUR MEMBANGUN PENYELESAIAN MASALAH BERBASIS MASYARAKAT 27

FINANCIAL PERSPECTIVE n n n MENJAGA HUB DENGAN MITRA PENDANAAN DAN PENYEDIA LAYANAN MEMAKSIMALKAN RASIO BENEFIT/COST MENGEMBANGKAN TAX BASE CUSTOMER PERSPECTIVE n n MENEKAN KRIMINALITAS MENINGKATKAN RASA AMAN MENINGKATKAN PELAYANAN MENYEDIAKAN LAYANAN TRANSPORTASI YANG AMAN DAN NYAMAN 28

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