Deeper Thoughts on Competing Values and Organizational Effectiveness

Thinking out loud about organizational effectiveness, part 2. Warning: this is a long post.

The idea of organizational effectiveness is a deceptively tricky one. Many people have a tendency to confuse effectiveness with efficiency, and that tends to lead directly to a discussion of productivity, with an inevitable primacy given to financial measures. A somewhat more enlightened consideration regards effectiveness in terms of overall goals, objectives and (heaven save us) mission statements. Aside from the motherhood-and-apple-pie-ness of functional, elitist, traditional and charismatic values [Note: Access to JSTOR req’d.] that comprise the bulk of mission statements, organizational effectiveness can be usefully thought of as a construct of those people who provide guidance to organizations so that they may accomplish their objectives, constrained by a wide variety of real-world contingencies. It was (and, truth be told, continues to be) popular to search for a statistical model that would deterministically predict those factors that contributed to organizational effectiveness. Theorist after theorist [JSTOR again; also Campbell (1977) is quite good] would make the empirical attempts to find the magic combination of factors that would be the key to unlock effectiveness in organizations. Others [ditto] examined the role of typologies in modelling just how effective certain organizations were under certain circumstances.

Robert Quinn and John Rohrbaugh (1983) decided to take a different approach. They observed that researchers who hypothesized certain variables that might comprise effectiveness, and then statistically tested them, often introduced their own biases concerning the preconditions for effectiveness, effectively tainting the results. Quinn and Rohrbaugh reasoned that, since organizational effectiveness is indeed a construct and not a strictly empirical phenomenon that can “objectively” be measured, they should survey those who were doing the constructing. They assembled two panels of experts and presented them with thirty possible criteria of organizational effectiveness, and asked the panels to sort through them, eliminate those that were clearly redundant, and see what was left.

The findings suggest that organizational researchers share an implicit theoretical framework and, consequently, that the criteria of organizational effectiveness can be sorted according to three axes or value dimensions. The first value dimension is related to organizational focus, from an internal, micro emphasis on the well-being and development of people in the organization to an external, macro emphasis on the well-being and development of the organization itself. The second value dimension is related to organizational structure, from an emphasis on stability to an emphasis on flexibility. The third value dimension is related to organizational means and ends, from an emphasis on important processes (e.g., planning and goal setting) to an emphasis on final outcomes (e.g., productivity)

The result was a Competing Values Model of organizational effectiveness, the axes of which represent fundamental dilemmas in organization design. They argued convincingly that balancing the tensions among each of these competing values creates an effective organization. In a later book, Quinn (1988) articulates the value of acknowledging and addressing the inherent complexity of existing organizations that must deal in real-world paradoxes, apparent contradictions and inconsistencies; the most effective organizations are those who do not adhere to “blind moral statements” that tend to polarize opinions, worldviews, and management approaches. Here is what Quinn & Rohrbaugh’s framework looks like in terms of values and organizational tendencies:
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This proved to be a very effective framework (at least until the “quants” returned, and managers became overly focused on performance rather than effectiveness). The experts helped reveal the polarities that exist and must be negotiated in real-life organizations across three dimensions: organizational structure (control vs. flexibility), organizational focus (external vs. internal), and means vs. ends. The idea was to understand whether, for a given organization, there was alignment among the polar tensions as they were being managed, and the values the organization nominally held (which, of course, ties this conversation with that conversation). Additionally, organizations could be compared for certain typological attributes and behaviours among the four main identified models (Human Relations, Open Systems, Internal Process, and Rational Goal) to determine relative effectiveness in responding to various contingencies.

However, in all cases, the Quinn and Rohrbaugh dimensions are unanimously oriented inwardly, towards the organization itself. Even within the focus dimension, the dichotomy considers the balance between internal processes and external stakeholders (for example). There is no context provided that would account for the degree to which a given organization concerns itself with other social entities that may not be “stakeholders” (or even competitors) in the conventional sense of that (those) word(s).

I am proposing an additional dimension called “orientation” that spans from inner to outer. I would suggest that almost every existing organization would tend to have an orientation that tends more towards “inner” in its actual behaviours and operations; these would be the conventional organizations that would likely be organized along a traditional “industrial age” model. An “outer” orientation would be present to a greater or lesser degree among many contemporary organizations, reflecting the degree to which they share characteristics with Castells’s (1996) “network enterprise,” and have adopted and adapted to conditions of ubiquitous connectivity and pervasive proximity.
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Flipping the orientation from inner to outer enables me to provide a tentative proposal for correspondences between the four Quinn and Rohrbaugh-identified models with (primarily) inner orientations and models with (primarily) outer orientations:

• Human Relations => Social Justice
• Internal Process => Social Accounting
• Open Systems => Open Knowledge
• Rational Goal => Activist

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In keeping with Sashkin’s (1981) notion of socio-technical systems design, that “the technical system must mesh with the social system if the organization is to operate effectively,” (p. 218) I would propose that the effects of an organization must mesh with the effects of the environment in which it exists and interacts if both are to be effective. The challenge is to articulate the characteristic aspects or “variables” so that the organization can align itself with its emergent Effective Theory and thereby become truly effective.

References:

• Campbell, J. P. (1977). On the nature of organizational effectiveness. In Goodman, P.S. & Pennings, J.M. (Eds.), New perspectives on organizational effectiveness (pp. 13-55). San Francisco: Jossey-Bass.
  
• Castells, M. (1996). The rise of the network society. Cambridge, MA: Blackwell Publishers.
  
• Doty, D. H., Glick, W. H., & Huber, G. P. (1993). Fit, equifinality, and organizational effectiveness: A test of two configurational theories. Academy of Management Journal, 36(6), 1196-1250.
  
• Hitt, M. A., & Middlemist, R. D. (1979). A methodology to develop the criteria and criteria weightings for assessing subunit effectiveness in organizations. Academy of Management Journal, 22(2), 356-374.
  
• Lewin, A. Y., & Minton, J. W. (1986). Determining organizational effectiveness: Another look, and an agenda for research. Management Science, 32(5), 514-538.
  
• Quinn, R. (1988). The Competing Values Model: redefining organizational effectiveness and change. In Beyond Rational Management: Mastering the paradoxes and competing demands of high performance. San Francisco: Jossey-Bass.
  
• Quinn, R., & Rohrbaugh, J. (1983). A spatial model of effectiveness criteria: towards a competing values approach to organizational analysis. Management Science, 29(3), 363-373.
  
• Sashkin, M. (1981). An overview of ten management and organizational theorists. In Jones, J. & Pfeiffer, J. (Eds.), The 1981 annual handbook for group facilitators (pp. 206-21). San Diego, CA: University Associates.
  
• Wiener, Y. (1988). Forms of Value Systems: Focus on Organizational Effectiveness and Cultural Change and Maintenance. Academy of Management Review, 13(4), 534-545.

Update (13 July 2010): The fully worked out version of Effective Theory, plus my entire Valence Theory of Organization, are available via the links.


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