DETERMINING EFFECTIVENESS
 Efficiency implies doing things right.
 Effectiveness is doing the right things.
Management Effectiveness Vs.
Leadership Effectiveness
 Management is thought of as a special kind of
leadership in which the accomplishment of
organizational goals is paramount.
 Leadership is an attempt to influence people,
individually and in groups, for whatever
reason.
 “Leadership is not magnetic personality- that
can just as well be a glib tongue. It is not
‘making friends and influencing people’ – that
is flattery. Leadership is lifting a person’s
vision to higher sights, the raising of a
person’s performance to a higher standard,
the building of a personality beyond its
normal limitations.”
Successful leadership vs.
effective leadership
 An attempt by an individual to have some
effect on the behaviour of another is called
attempted leadership, which can be
successful or unsuccessful in producing the
desired response.
Bass’s successful leadership
continuum
Successful
Attempted
Leadership
A
B
Resultant
Behavior
Unsuccessful
 A’s success could be depicted on a continuum
ranging from very successful to very
unsuccessful.
 If A’s leadership style is not compatible with
the expectations of B, and if B is antagonized
and does the job only because of A’s position
of authority, then we can say that A has been
successful but not effective.
 Success has to do with how the individual or
the group behaves, performs or reacts. On
the other hand, effectiveness describes the
internal state, or predisposition of an
individual or a group.
 There are two types of power that contribute
to a leader’s success and effectiveness. They
are: Position power and Personal power.
Bass’s successful and effective
leadership continuum
Effective
Successful
Attempted
Leadership
A
B
Ineffective
Resultant
Behaviour
Unsuccessful
Fred Luthan’s study Activities of Real Managers
Descriptive Categories derived from
free observation
Exchanging Information
Paperwork
Planning
Decision making
Controlling
Interacting with outsiders
Socializing/Politicking
Motivating/ Reinforcing
Disciplining/ Punishing
Managing Conflict
Staffing
Training/Developing
A balanced approach is needed
Real Managers’ Activities
Communication
Traditional
Management
Networking
Human Resource
Management
 The study concluded that more attention
needs to be paid to designing systems to
reward & support effective managers , not
those with the most successful political &
social skills.
By rewarding effectiveness, organizations will
increase their abilities to compete and excel
in rapidly changing market and
environmental conditions.
What determines
Organizational effectiveness
 Rensis Likert identified 3 variables that are
useful in discussing effectiveness over time.
They are:
 Causal Variables
 Intervening Variables
 End result variables
Causal Variables
 They are those factors that influence the
course of developments within an
organization and its results or
accomplishments. They can be altered by the
organization and its management.
Intervening Variables
 Intervening variables represent the current
condition of the internal state of the
organization. They are reflected in the
commitment to objectives, motivation and
morale of members and their skills in
leadership, communications, conflict
resolution, decision making and problem
solving.
End result variables
 These dependent variables reflect the
achievements of the organization. In
evaluating effectiveness, more than 90 % of
managers in organizations look at measures
of output alone.
 The relationship between the 3 variables can be
visualized as stimuli (causal variables) acting on
the organism (intervening variables) and
creating certain responses (output variables).
 The causal variables largely produce the level of
condition of the intervening variables, which in
turn influence the end result variables.
 The end result variables directly will usually be
much less effective than will attempts to
improve them by changing the causal variables.
 Business consultant David P. Norton
suggested that businesses should
concentrate on 4 perspectives in setting
performance measures.
a) The customers’ perspective
b) The internal operations perspective
c) The change perspective
d) The financial perspective
Relationship among Likert’s Causal,
Intervening and Output variables
Causal Variables
Leadership
Strategies, skills
and styles
Management’s
Decision
Organizational
philosophy,
objectives, policies
and structure
Technology
Intervening
Variables
Commitment to
variables,
motivation, and
morale of members
Skills in Leadership,
Communications,
Conflict resolution,
decision making,
problem solving
Output Variables
Production
(Output)
Costs
Sales
Earnings
ManagementUnion relations
Turnover
Long Term Goals vs. Short
Term Goals
 Intervening variables are concerned with
building and developing the organization and
they tend to be long term, goals.
 This is the part of effectiveness that many
managers overlook because it emphasizes long
term potential as well as short term
performance.
 Most managers tend to be promoted on the
basis of short term output variables such as
increased production and earnings without
concern for long run potential and organizational
development.
Organizational Dilemma
 The basis of promotion is short run output so managers
achieve high levels of productivity & overemphasize tasks ,
placing extreme pressure on every one. The immediate or
short run effect is probably increased activity.
 Some indications of deterioration of these intervening
variables at work may be turnover, absenteeism, increased
accidents, loss of resources, and the number and nature of
grievances.
 The manager is promoted, or “rewarded”, for the
disruptive or ineffective behaviour and the next manager
has to clean up the problems or deal with the end result
variables, which the leader did not cause.
 No matter how effective this manager may
be in the long run, reviewing a productivity
drop may cause senior management to give
the manager only a few months to improve
performance.
 Likert’s studies indicate that rebuliding a
group’s intervening variables in a small
organization may take 1 to 3 years, and in a
large organization, it may take up to 7 years
 The art of achieving a balance is essential to
effective leadership.
 In summary, effectiveness is a function of the




following four items:
Output variables (productivity/ performance)
Intervening variables (the condition of the
human resources)
Short range goals
Long range goals
Integration of goals and
effectiveness
Goals of Orgn.
Degree of
Attainment
Directions of goals of management, employees and
organization—moderate organizational
accomplishment
Little Organizational
Accomplishment
Goals of Orgn.
Degree of
Attainment
No positive organizational
effectiveness
Losses
Degree of
Attainment
Goals of Orgn.
High Organizational
accomplishments
Goals of Orgn.
Degree of
Attainment
 One of the ways in which effective leaders bridge
the gap between the individual’s and the
organization’s goals is by creating a loyalty to
themselves among their followers.
 They do this by being an influential
spokesperson for their followers with higher
management.
 These leaders have little difficulty
communicating organizational goals to
followers, and these followers find it easy to
associate the acceptance of these goals with
accomplishment of their own need satisfaction.
Participation and effectiveness
 criteria for an individual’s or a group’s performance

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should be decided mutually in advance.
In making these decisions, managers and their
employees should consider output and intervening
variables, short range and long range goals.
This has two advantages.
First, it will permit employees to participate in
determining the basis on which their efforts will be
judged.
Second, involving employees in the planning process
will increase their commitment to the goals and
objectives established.