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Summary Organization Theory, Concepts and Cases (Robbins)
Te gebruiken bij
Auteur(s): Stephen P. Robbins and Neil Barnwell
Druk/Jaar van uitgave: 5th, 2006
Zoek recente samenvattingen & studiehulp
H1 – Basics of organisation theory
An ORGANISATION is a consciously managed and coordinated social entity, with an identifiable boundary, which functions on a relatively continuous basis to achieve a common goal or set of goals.
The above definition implies that:
There is a management hierarchy involved in decision making in the organisation.
The unit is composed of people or groups of people who interact with each other.
Organisations have a boundary that differentiates who is and who is not a part of the organization. Organization’s boundary can be created through explicit or implicit contracts between members and their organisation (e.g. contract of employment).
Organisations exist to achieve something and it is reflected iWn the organisation’s goals.
ORGANISATION STRUCTURE defines:
how tasks are to be allocated,
what are the areas of responsibility and authority of each employee,
what are the reporting relationships, and
the formal coordinating mechanisms and interaction patterns that will be followed in the organization.
Organization’s structure has three components:
Complexity, which considers the extent of differentiation within the organisation. This includes:
the degree of specialisation or division of labour (the number of different occupations and tasks that exist within the organization)
the number of levels in the organization’s management hierarchy, and
the extent to which the organization’s units are dispersed geographically.
Formalization, which is the degree to which an organization relies on rules and procedures to direct the behaviour of the employees.
Centralisation, which considers where the responsibility for decision-making lies.
It is important to recognise that an organization is not either centralized or decentralized. Organisations tend to be centralized or tend to be decentralized. The same applies to the concepts of complexity and formalisation.
Organization design is concerned with constructing and changing an organization’s structure to achieve the organization’s goals. Organization theory includes the study of the structure and design of organizations. Organizational behaviour is the study of the way in which individuals and teams behave in the workplace.
A system is a set of interrelated and interdependent parts which interact to produce a unified output. A SYSTEMS PERSPECTIVE offers important insight into how organizations operate.
Organizations can be considered to be systems – inputs go through a transformation process to emerge as outputs that are different in form to the inputs.
Systems are usually classified as either closed or open. A closed-system is a system that is self-contained – it essentially ignores the effect of the environment on the system and does not interact with it. An open system recognizes the interaction of the system with its environment and its dependence upon it.
Characteristics of an open system are:
Environment awareness – open systems acknowledge the interdependence between the system and its environment. In an open system it is recognized that changes in the environment affect one or more of the systems and subsystems and changes in the system affect its environment.
Feedback – open systems receive feedback from their environment. That is, they absorb information which helps the system to understand and adjust to environmental changes by taking corrective action to rectify deviations from its planned course.
Cyclical character – open systems consist of cycles of events; the repetition of the cycle is possible as system’s outputs furnish the means for new inputs.
Tendency towards growth – open systems import energy from their environments and consequently they are able to repair themselves, maintain the structure, avoid death and even grow (as they can import more energy than they put out).
Steady state – there is generally a balance between inputs from the environment and those spent to counteract the terminating of the system. As a result, the system experiences a relatively steady state with the character of the system remaining almost unchanged over long periods of time.
Movement towards growth and expansion – the many subsystems within the system usually import more energy from the environment than is required for the system’s output. Consequently, the steady state is applicable to simple systems but, at more complex levels, becomes one of preserving the character of the system through growth and expansion.
Balance of maintenance and adaptive activities – open systems seek to achieve the balance between two sets of activities:
Maintenance activities are those activities which ensure that the various subsystems are in balance and that the total system conforms to its environment. This, in effect, prevents rapid changes that may unbalance the system. Examples of the maintenance activities are: the purchase, maintenance, and repair of machinery; the introduction and enforcement of rules and procedures.
Adaptive activities are necessary so that the system can adjust over time to variations in internal and external demands. Examples of adaptive activities are: planning, market research, and recruitment.
Equifinality – the concept of equifinality argues that a system can reach the same final state from differing initial conditions and by a variety of paths. In other words, an organizational system can accomplish its objectives with varied inputs and transformation processes.
The ORGANISATIONAL LIFE CYCLE refers to the pattern of predictable change through which the organization moves from start-up to dissolution. It is important to be aware that:
there are distinct stages through which organizations proceed,
the stages follow a consistent pattern, and
the transition from one stage to another is a predictable rather than a random occurrence.
Marketers identify that products move through four stages:
Birth or formation,
An organization’s life cycle follows a five-stage model:
Entrepreneurial stage – this is when the organization is in its formative years. At this stage:
goals tend to be fluid or ambiguous, and
creativity and managerial input is high.
In order to progress to the next stage an organization needs to acquire and maintain a steady supply of resources (e.g. capital and labour).
Collectivity stage – at this stage the organization’s mission is clarified and its chances of survival have increased. The innovation from the earlier stage continues. Communication and structure within the organization is still quite informal. The organization is generally quite small, with intensive, hands-on management.
Formalization-and-control stage – at this stage the operation of the organization stabilizes (i.e. its production of goods and services becomes more established). Formal rules and procedures are introduced as predictability increases. Innovation is de-emphasized and efficiency and stability become more and more important. Decision making within the organization is clarified and established management positions emerge. At this stage, the organization exists beyond the presence of any one individual. As the roles within the organization have been clarified and defined the changes in organizational membership do not cause a threat to the organization.
Elaboration-of-structure stage – at this point, the organization has reached a large size with the characteristics of a bureaucracy. Management searches for new products and growth opportunities. The organization structure becomes more complex and elaborated. Decision making is decentralized.
Decline stage – as a result of competition, poor management, etc. the organization at this stage experiences falling demand for its products or services. Employee turnover is high and decision making becomes more centralized. Eventually organization ceases to exist.
Figure 1.3 on page 19 illustrates organizational life cycle.
Most important approaches to research in the organization theory field are:
Positivism is an assumption that the world may be known and improved by extending knowledge through research. Positivism leads to the development of normative theories. That is, researchers try to develop theories that are applicable across a wide range of situations.
Critical theory is an approach to studying organizations which concentrates on their perceived shortcomings and deficiencies. Critical theorists consider work in a capitalist system as inherently dehumanizing, oppressing and exploitative, particularly of minorities. They also tend to view managers not as an essential part of the organization but as an exploitative group allied with the forces of capital and management as the agent of capital against the worker. Most critical theorists seek to create conditions and organizational structures and practices that promote the emancipation of people.
Postmodernism theorists challenge the claim that science is objective and impartial. They think that it falsely promotes the concept that the world is capable of being known and controlled through reason. They propose that positivist approaches structure knowledge in ways that do not represent what is occurring in organizations. Postmodernists consider knowledge to be socially constructed and interpreted.
H2 – Management theories
In the 18th century the concept of division of labour was developed. The division of labour is the breaking down of tasks into simple components which can be undertaken on a repetitive basis by job specialists. Adam Smith was one of the first to write about the economic advantages of the division of labour and he concluded that the division of labour can bring about significant efficiencies. The introduction of division of labour implied that:
someone had to decide what to produce,
how to produce it, and
provide the capital equipment and then staff.
Additionally, a far more sophisticated system of exchange was required to trade the outputs of the division of labour. Adam Smith recognized that market forces played this role, and he was the first to describe the role of markets and the price system as mediators in economic exchange (the concept of ‘invisible hand’).
In the 19th century two major industrial innovations took place: the emergence of mass production and the introduction of railways. These had serious implications on the organization theory.
The development of the mass production system became the basis of the modern industrial structure, with workers, lower- and middle management, and general managers. New departments emerged to improve flows of information and assist management control (e.g. accounting and planning) and to promote innovation and the introduction of new techniques and products (e.g. research and development).
The development of railways was also quite influential. Railways were very knowledge and labour intensive and large numbers of people had to be employed with many different job specialisations. The railways were structured along departmental lines, with each department specialising in a particular task - this promoted effective work effort and minimized complexity. Additionally, clear lines of authority were introduced and areas of responsibility spelt out.
The main aim of theorists during the 1900-1930s was to identify universal principles and management techniques that could be applied in a workplace. The output of the various theorists from that period is called the classical school. Although many different approaches were developed at that time, the classical theorists had in common the view that organizations were established, and managed, to achieve rational goals (e.g. profit). They viewed the ideal organization as a closed system created to achieve goals efficiently.
Frederick Winslow Taylor was a mechanical engineer who after years of conducting experiments with workers proposed four principles of scientific management, which, according to him, would result in significant increases in productivity. These principles are:
the replacement of inexact methods for determining each element of a worker’s job with scientific determination;
the scientific selection and training of workers;
the cooperation of management and labour to accomplish work objectives, in accordance with the scientific method; and
a more equal division of responsibility between managers and workers (he proposed that the managers should focus on the planning and supervising, while the employees should focus on the execution).
Taylor’s approach was widely criticised by workers for the shift in power from the worker to the manager, which leads to centralization in organizations.
The Frenchman Henri Fayol developed principles of organization. Fayol was more concerned with the problems of management than Taylor, thus he attempted to develop general principles applicable to all managers at all levels of the organization. He proposed 14 principles that, according to him, were universally applicable. These are:
Division of work – specialisation increases output as employees become more efficient.
Authority – it gives managers ability to give orders. To be effective, a manager’s authority must equal his or her responsibility.
Discipline – employees should obey and respect the rules that govern the organization. Effective leadership, a clear understanding between management and workers regarding the rules, and the sensible use of penalties for violation of the rules provide for a good discipline in a workplace.
Unity of command – every employee should receive orders from only one superior.
Unity of direction – each group of organizational activities that have the same objective should be directed by one manager using one plan.
Subordination of individual interests to the general interest – the interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole.
Remuneration – workers must be paid a fair wage for their services.
Centralization – whether decision making is centralized (to management) or decentralized (to subordinates) is a question of proper proportion; thus, the challenge is to find the optimum degree of centralization for each situation.
Scalar chain – the line of authority from top management to the lowest ranks represents the scalar chain and communications should follow this chain. Cross-communication can be allowed if agreed to by all parties and if superiors are kept informed.
Order – people and materials should be in the right place at the right time.
Equity – managers should be kind and fair to their subordinates.
Stability of the tenure of personnel – managers should provide systematic personnel planning and ensure that replacements are available to fill vacancies. They should keep in mind that high employee turnover is inefficient
Initiative – employees who are allowed to originate and carry out plans will exert high levels of effort.
Esprit the corps – promoting team spirit will build harmony and unity within the organization.
The German sociologist, Max Weber proposed the ‘ideal-type’ organization structure. He developed a structural model that, according to him, was the most efficient means by which organizations could achieve their ends.
He called this ideal structure bureaucracy. Such organization was characterized by:
division of labour,
a clear authority hierarchy,
formal selection procedures,
detailed rules and regulations, and
Yet another contribution of the classical theorists is the rational-planning perspective. Ralph C. Davis proposed that structure was the logical outcome of the organization’s objectives. The rational-planning perspective offered a simple and straightforward model for designing an organization – because management’s formal planning determines the organization’s objectives, these objectives determine the development of structure, the flow of authority and other relationships.
During the 1930s-1960s the main aim of theorists was to accommodate human needs in work practices with the focus on individual and group work. They looked at achievement of social goals with a closed system perspective. It became clear to these researchers that the motivations and actions of the workforce had a major impact on organizational effectiveness. They recognized the social nature of organizations and viewed organizations as made up of both tasks and people. Their movement is called human relations school.
Elton Mayo was an academic researcher involved in experiments being undertaken between 1924 and 1927 at an electrical manufacturing plant in the United States. His research became known as the Hawthorne studies. These studies emerged from work being undertaken by industrial engineers at the Hawthorne plant. They examined the effect of various lighting levels on worker productivity. Over the years, numerous additional experiments covering the redesign of jobs, changes in the length of the work day and work week, and introduction of rest periods were undertaken. The Hawthorne studies had a dramatic impact on the direction of management and organization theory. The outcome of the experiments caused that managers no longer considered the issue of organization design without including the effects on work groups, employee attitudes, and manager-employee relationships.
The notion that an organization is a cooperative system is generally credited to Chester Barnard. He merged the ideas of Taylor, Fayol, and Weber with the results from the Hawthorne studies. As cooperative systems, organizations should be seen as composed of tasks and people that have to be maintained at an equilibrium state. Attention only to technical jobs or to the needs of people who do the jobs sub-optimizes the system. Consequently, management should organize around the requirements of the tasks to be performed and the needs of the people who will perform them. Barnard challenged the classical view that authority flowed from the top down by arguing that authority should be defined in terms of the response of the subordinate; he introduced to organization theory the role of the informal organization; and he proposed that the manager’s major roles were to facilitate communication and to stimulate subordinates to high levels of effort.
Another important approach from that time was developed by Douglas McGregor. He proposed two distinct views of human beings Theory X and Theory Y.
McGregor concluded that management’s view of the nature of human beings is based on a certain grouping of assumptions and on the fact that managers style their behaviour towards employees based on those assumptions.
Under Theory X, management’s assumptions are quite negative. Managers tend to think that:
Employees dislike their work and, whenever possible, will attempt to avoid it.
As employees dislike work, they must be persuaded, controlled or threatened with punishment to achieve desired goals.
Employees will avoid responsibilities and seek formal direction whenever possible.
Most workers are not very ambitious as they place security above all other factors associated with work.
Under Theory Y, management’s assumptions are rather positive:
Employees can view work as something completely natural.
Employees will exercise self-direction and self-control if they are committed to the objectives.
Employees can learn to accept and even seek responsibility.
Most people can handle responsibility because creativity (the ability to make good decisions) and ingenuity are common in the population.
McGregor argued that Theory Y assumptions were preferable and that they should guide managers in the way they design their organizations and motivate their employees.
In the 1950s-1970s theorists were concerned with improving the manageability and decision-making processes of organizations.
The Peter Principle was proposed by Laurence Peter and Raymond Hull. They suggested that in large, stable, hierarchical bureaucracies which offered lifetime employment, managers would be promoted until they reached a level at which they were incompetent. This meant that in the absence of redundancies and downsizing, many managers were essentially incompetent, limiting the amount of effective work being accomplished in the organization.
Parkinson’s laws – C. Northcote Parkinson proposed a number of laws relating to organizations. The best known of these is that work expands to fill the time available for its completion. Another of Parkinson’s laws noted that in meetings the time spent on any item on an agenda is in inverse proportion to its importance.
Herbert Simon proposed that the assumption of rationality in decision making, as typified by ‘economic man’ is misplaced. He suggested the term ‘administrative man’ to describe decision-making behaviour. According to him, rational decision makers sought to optimise the outcomes of decision making, while ‘administrative man’ was satisfied with adopting a course of action that was barely satisfactory or ‘good enough.’ Simon proposed that decision making could be placed upon a continuum with programmed and non-programmed decision making at either end. He suggested that advances in information technology would lead to a move towards programmed decision making and, hence, greater rationality in decision making.
In the 1960s-1980s theorists focused on determining the most appropriate structural form. They looked at achievement of rational goals with an open systems perspective.
The CONTINGENCY APPROACH views the structure of organizations as contingent. It means that the structure is dependent on pressures that can be identified and analyzed. The researchers noted that organizations do not have an infinite number of forms, thus their structures could be predictable depending on the contingency factors. One of the main aims of their research was to help with improving organizational effectiveness by, given the contingency factors, providing managers with guidance as to the most appropriate structure.
Research in the 1960s by Joan Woodward, Charles Perrow, and the conceptual framework offered by James Thompson, have made an impressive case for the importance of technology in determining the appropriate structure for an organization. Other researchers looked at the importance of environment and organization size as the factors influencing structure.
Raymond Miles and Charles Snow published a book in which they proposed a categorization of strategy. They argued that in order to successfully implement the chosen strategy the organization needs to adopt an appropriate structure.
A paradigm is a model used as a framework of ideas. Paradigm proliferation refers to the emergence of a number of new frameworks with which to view organizations. These have emerged because the study of organizations is multidisciplinary and also because researchers approach their task from varying perspectives.
Symbolic-interpretive perspective views the organization as a social construct. It considers itself more with behavioural than with structural issues. The approach concentrates on how organizational participants interpret language and symbols in organizations and attribute meanings to relationships between people. It then examines how these interpretations and meanings influence the interactions between organizational participants.
Peters and Waterman popularized the idea that organizational culture had a significant impact on effectiveness. Their observations popularized the view of the culture of business organizations and redirected the research attention of management and business researchers.
A number of other approaches to organization theory have been developed and refined over the past 20 years and these approaches have little in common, which has contributed to the paradigm proliferation in the field.
One of the applications of economics to organization theory is that of agency theory. A manages in an organization has a number of subordinates, who are considered to be the manager’s agents. The manager has the natural motivation to obtain as much benefit from his or her agents as possible, and the agents in turn have the incentive to avoid or otherwise cheat on the contract. The resulting behaviour is an outcome of the bargaining process. Another common application of agency theory is where the managers of a company are the agents of the shareholders.
Agency theory examines these relationships, particularly where there is asymmetrical knowledge – that is, where more is known about the transaction by one party than the other.
Institutional theory claims that organizational responses are often repetitive and products of past actions and practices, thus, over time, responses become institutionalized. These institutionalized practices are often the result of social pressures to conform to convention. As a result, many organizational actions and management decisions are imitations of past practices and many management decisions are seen to be cloning the practices of other successful organizations.
H3 – ORGANIZATIONAL EFFECTIVENESS
ORGANIZATIONAL EFFECTIVENESS is the degree to which an organization attains its short-term (ends) and long-term (means) goals, the selection of which reflect strategic constituencies in the organization’s environment, the self-interest of the evaluator and the life stage of the organization.
It is important to remember that a company might be efficient but not effective. However, it is difficult to find a company which is effective but not efficient. Efficiency in resource usage is not a substitute for the wider measure of effectiveness.
There are various approaches to the study of organizational effectiveness, namely:
- the goal-attainment approach,
- the systems approach,
- the strategic-constituencies approach, and
- the balanced scorecard approach.
The GOAL-ATTAINMENT APPROACH states that an organization’s effectiveness should be judged by whether it has achieved what it sets out to achieve (its organizational goals). Examples of organizational goals are:
- achieving certain quality outcomes,
- achieving certain profit objectives,
- increasing market share.
The goal-attainment approach assumes that organizations are:
- goal-seeking entities.
Consequently, successful goal accomplishment can be considered an appropriate measure of effectiveness. But the use of goals implies additional assumptions that must be valid if goal attainment is to be a viable measure of effectiveness. These assumptions are:
- organizations must have goals;
- the goals must be explicit, adequately clear, and widely known;
- there should be a manageable number of goals which reflect areas important to the organization (thus, organizations cannot set to achieve too many goals); and
- progress towards goals must be measurable and there should be a time limit attached to them.
Disadvantages of the goal-attainment approach are:
- Potential difficulties with choosing whose goals should be applied – should these be the goals of shareholders, top management, or goals of environmental pressure groups?
- Organizations tend to have “official” and “unofficial” sets of goals. “Official” goals are usually influenced strongly by standards of social desirability (e.g. ‘to be a responsible member of the community’ – such goal sounds desirable, but it does not really help to understand what the organization is trying to achieve).
Many organizational goals are confidential in order not to become known to competitors. Consequently, it may be difficult to assess whether organizational goals are achieved.
- Organizations usually have both short- and long-term goals. Thus, the problem is which goals should be used when applying this approach?
- Essentially all companies have multiple goals. In order to assess effectiveness management must decide which goals are the most important and rank them somehow. The problem arises – how to rank goals which tend to be quite different? That is, the goals of a financial department are quite different to those of a research and development, but which ones are more important for the organization?
In order to increase the validity of the identified goals managers should:
- Make sure that input is received from all those who have a major influence on formulating and implementing the official goals, even if they are not part of senior management;
- Recognize that organizations pursue both short- and long-term goals;
- Reduce the degree of incompatibility between goals;
- Aim to set tangible, verifiable, and measurable goals rather than rely on vague statements attempting to meet societal expectations;
- Be aware that goals usually change / evolve over time.
Some argue that defining effectiveness only in terms of goal attainment results in a incomplete measure of effectiveness. Thus, an organization should also be judged on its ability to:
- acquire inputs,
- process them efficiently,
- distribute the outputs, and
- maintain stability and balance between the various subsystems of the organization.
This means that the organization can maintain itself through a repetitive cycle of activities.
SYSTEMS APPROACH views end goals as only one element in a more complex set of criteria. Systems models stress additional criteria that will increase the long-term survival of the organization. These are:
- the organization’s ability to acquire resources,
- maintain itself internally as a social organization, and
- interact successfully with its external environment.
In contrast to the goal-attainment approach, the systems approach focuses on the means necessary to ensure the organization’s continued survival. Thus, it can be said that in the systems approach the main focus is not on the goals but on the way in which those goals are achieved.
One of the implications of the systems approach to effectiveness is that organizations are made up of interrelated subparts and, consequently, if any of these subparts performs poorly, it will negatively affect the performance of the whole system. Additionally, the system needs to acknowledge and interact with important environmental constituencies. In order to survive, the system needs a steady replenishment of resources consumed in production.
However, management needs to remember that the resources of the system are not just physical assets - they also include such intangibles as inventions and patents, brand names, etc. Failure to replenish these as they decay will result in the organization’s decline.
The systems view looks at factors such as:
- the ability to ensure continued receipt of inputs into the system and the distribution of outputs,
- the efficiency with which the organization transforms inputs to outputs,
- the clarity of internal communications,
- flexibility of response to environmental changes,
- the level of conflict among groups, and
- rates of innovation.
These measures may be benchmarked against other organizations in the same industry. Table 3.2 on page 84 gives some examples of measurement criteria that could be used.
Another systems application of organizational effectiveness is the concept of added value, developed by John Kay. The cycle of absorbing inputs from the environment, turning them into usable products and services and then marketing these should leave a surplus of cash over and above that needed to maintain the system in its repetitive cycle. This surplus is called the value added, and Kay argued that the larger it is the more successful the company will be. He also argued that a commercial organization that does not add value cannot justify its existence in the long run.
Disadvantages of the systems approach are:
- Some process variables are specified and easy to measure; however, other critical ratios may not be as easy to quantify (e.g. rate of innovation).
- Where environments change very quickly, a certain set of measures may easily become irrelevant, making certain measures less important, while raising the importance of what previously was not considered significant.
- The systems approach seems to focus on the means necessary to achieve effectiveness rather than organizational effectiveness itself.
Advantages of the systems approach are:
- Management using this approach is less likely to make decisions that trade off the organization’s long-term health and survival for ones that will make them look good in the near term.
- The approach increases the managers’ awareness of the interdependence of organizational activities.
- It is applicable where end goals either are very vague or defy measurement.
The STRATEGIC-CONSTITUENCIES APPROACH proposes that an effective organization is one that satisfies the demands of those important parts of the environment, the constituencies, from which it requires support for its continued existence. Thus, it seeks to satisfy only those in the environment who can threaten the organization’s survival – that is, the strategic constituencies.
Under this approach, organizations are assumed to exist within an environment where demands are placed on the organization by various important groups, or constituencies.
In such a context, organizational effectiveness becomes an assessment of how successful the organization has been in satisfying those strategic constituencies on which the survival of the organization depends. The ‘political arena’ metaphor highlights that the organization has a number of important constituencies, each with different degrees of power and each trying to have its demands satisfied. Additionally, the strategic-constituencies approach assumes that managers pursue a number of goals and that those selected represent a response to those interest groups that control the resources necessary for the organization to survive.
The stakeholder approach recognizes not only the importance of strategic constituencies but also of those who may not have the political power to influence the existence of the organization or even its direction (e.g. families of workers, environmental activists). Such groups, even though they may not be formally organized as a pressure group, are considered to be affected by the organization and should therefore be considered when important decisions are made.
Disadvantages of the strategic constituencies approach are:
- It is not always easy to identify the strategic constituencies, especially if the organization’s environment is large.
- Because the environment changes rapidly, what is critical to the organization today may not be so tomorrow. Today’s strategic constituencies may not be any threat to the organization tomorrow, while overlooked groups may suddenly threat the organization’s existence.
- As with the goals in the goal-attainment approach, managers must rank the strategic constituencies somehow. It is often difficult to decide which strategic constituencies are more important than the others.
The BALANCED SCORECARD, developed by Kaplan and Norton, seeks to balance the various demands on the organization with its capabilities. The main aim of this approach is to provide an integrated measure of organizational effectiveness. Kaplan and Norton suggested that there is no one measure that can assess an organization’s performance or that can focus attention on critical areas of the business; thus, the balanced scorecard attempts to view performance in several areas simultaneously and identify not just results but how the results were achieved.
The various components of the balanced scorecard are illustrated in Figures 3.1a-b on pages 92. The components attempt to identify four basic perspectives facing any organization. These are:
- Financial perspective – financial measures enable an organization to determine how profitable it is and its rate of return on assets. Thus, the financial measures indicate whether an organization’s strategy and its execution are contributing to profitability, or covering costs.
- Customer perspective – goals and measures under this heading typically include assessment of time to delivery, product utility, market share etc. which, when combined, show how the product or service contributes to creating value for customers.
- Internal perspective – these measures concentrate on what the company must do internally to meet the customers’ expectations.
This is a process-driven measure, examples of which may include quality attainment, costs of production, etc.
- Innovation and learning perspective – this goal is associated with the ability to develop and introduce new products of value to customers or clients. It also includes measures of continuous improvement and production efficiencies.
Kaplan and Norton stress that it is possible to have too many measures of organizational performance. They suggest that management should identify just a few goals for each of the four perspectives. The measures developed for each goal should be easy to understand and contribute to deciding whether the goal has been achieved or not.
The disadvantages of the balanced scorecard approach are:
- The identification and ranking of goals by importance is not an easy, subjective process; thus, there is no certainty that chosen goals and measures are the most relevant ones.
- The utility of the balanced scorecard may be limited if what is chosen to be measured is not important.
- As noted before, what is important usually changes over time, thus goals and measures may need to be changed quite often.
The disadvantages of the balanced scorecard approach are:
- It brings together in a single report many areas of importance to an organization’s competitiveness. These include both short-term efficiency issues and those relating to the long-term adaptability of the organization.
- As senior managers need to consider all important operational issues together, they have to evaluate whether improvement in one area may have been achieved at the expense of creating problems in another.
Table 3.4 on page 97 summarizes each of the approaches discussed above.
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JoHo donateur met service-abonnement II (= €5 + €20 per kalenderjaar): upgraden naar abonnement II
- Voor wie online volledig gebruik wil maken van alle JoHo's en boeksamenvattingen voor alle fases van een studie, met toegang tot alle online HBO & WO boeksamenvattingen en andere studiehulp
- Voor wie extra kortingen wil op de JoHo's en boeksamenvattingen
- Voor wie extra kortingen wil op (reis)artikelen en services
- Voor wie gebruik wil maken van de emigratie- en expatservice
JoHo donateur met service-abonnement III (= €5 + €40 per kalenderjaar):
- Voor wie gebruik wil maken van een cv-check, persoonlijke adviesservices & de hoogste kortingen op artikelen, samenvattingen en services
JoHo donateur met een doorlopende verzekering
- Sluit je via JoHo een jaarlijks doorlopende verzekering af, dan kan je gedurende de looptijd van je verzekering gebruikmaken van de voordelen van service-abonnement III: hoge kortingen + volledig online toegang + alle extra services. Lees meer
Je bent al donateur, maar je hebt geen toegang
Indien het een adviespagina, keuzehulppagina of een (exclusieve) samenvatting betreft, dan heb je een (service)abonnement nodig om toegang te krijgen tot deze pagina. Lees hierboven meer over welk abonnement je kunt afsluiten.
Wil je tijdelijk extra toegang, bijvoorbeeld tot de Exclusive samenvattingen of keuzekits en advieswijzers, sluit dan als donateur een maandabonnement met volledige online toegang af. Lees hier meer over de voordelen en services bij dit tijdelijke (service)abonnement.
Samenvattingen & Studiehulp: Mogelijk heb je als JoHo donateur heb je vorig studiejaar, ter kennismaking, gebruik kunnen maken van de de toegang tot de online JoHo's (samenvattingen en studiehulp) voor de propedeusevakken. Dit studiejaar kan je gebruik blijven van de JoHo's door te 'upgraden' naar abonnement I of abonnement II en een voordelig JoHo (service)abonnement af te sluiten. Daarnaast kan je ter waarde van de kosten van je abonnement gratis JoHo's komen afhalen in de JoHo support centers!
Lees hier de antwoorden op de meest gestelde vragen.
Meer en uitgebreide advieswijzers
voor samenvattingen en stages - voor vacatures en sollicitaties - voor reizen en backpacken - voor vrijwilligerswerk en duurzaamheid - voor emigratie en lang verblijf in het buitenland- voor samenwerken met JoHo
Steun JoHo en steun jezelf door JoHo donateur te worden
Bezoek gratis de Nederlandse carrièredagen in de Jaarbeurs Utrecht!
JoHo is een ontwikkelingsorganisatie met wereldwijd winkels en websites,
waar mensen en organisaties worden gestimuleerd en geholpen bij talentontwikkeling en internationale samenwerking
|Samenwerken & Adverteren||World Supporter platform||World Summaries platform||Expat platform||World Activity Platform||Emigratie platform||Jouw account pagina|
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