Introduction
The effectiveness of an organization is a significant aspect in the success of a given firm since it determines the ability of the firm to meet its set goals. According to Hoque and James (2000), the approach on external resources seeks to establish the effectiveness in utilizing external resources while the approach on internal systems seeks to establish effectiveness through innovation. As discussed in this paper, the last technical approach establishes effectiveness of a firm using the skills to manufacture high quality products.
Metrics for Measuring Effectiveness
The effectiveness of an organization can be measured by the efficiency shown by its workers with metrics such as the external resource approach, the internal systems approach (innovation) and the technical approach being used by an organization. The external resource approach: Under this metric, the management of an organization examines its ability to manage and control the firm’s external resources.
Some of the external resources include investors who are a major stakeholders. The ability of a firm to effectively manage the perceptions of investors regarding the organization is significant since it can earn the firm investors’ trust, which means continued support through financing.
Other external resources are the raw materials that the firm uses in the production process. The effectiveness of managing the external environment is measured by the firm in different ways. The first is the ability of the firm to minimize all costs related to managing stakeholders as well as acquisition of quality raw materials such as employees at a low cost.
Similarly, the ability of the management to exploit any opportunity presented in the environment is another success factor for effectiveness. Lastly, the firm can gain the support of other stakeholders such as the government and environmentalists among others.
Innovation and Internal System Approach: According to Jones (2010), the internal system involves the ability of managers of an organization to evaluate the effectiveness of business processes of an organization. The success of an organization in its processes requires that there is a structure, culture and fast responses to issues as they occur.
The culture should be applied by all employees in the organization while adaptability is the ability of the organization to adapt to changes especially with new technology. In order to be flexible, a firm needs to increase the speed with which decisions are made. Innovation is also a measure of the effectiveness of internal processes.
In order to measure the ability of a firm to innovate, the management should establish the length of time that is needed to make a decision, make new products coordination and the period taken for all activities in different sectors (Jones, 2010, p. 16).
Technical Approach: This approach determines the ability of an organization to be efficient in all its undertaking. The metric measures the ability of a firm to convert its skills among other resources into goods and services. Technicality of a firm is measured by the amount of output and efficiency which is determined by the ratio of output to inputs (Jones, 2010).
For instance, efficiency could be realized when the amount of outputs increases given constant inputs. In addition, increased production measures the effectiveness of the firm’s operations. In service organizations, increased sales per employee represent a measure of effectiveness.
Example Case
A good example that can be used in this study is that of Starbucks, a dominant corporation that operates in the food sector where it offers beverages among other products. The organization has a well established brand name for its products especially coffee. However, it faces competition from other firms such as McDonalds.
The effectiveness of Starbucks can be determined by the quality of beverages and food products sold by the organization to its consumers. Poor quality products accompanied by poor quality services offered by the employees of the organization could lead to ineffectiveness (Kaplan and Norton, 1996).
When the employees of Starbucks offer poor services, the effect is reflected on the gradual reduction of the number of customers, which also ends up being reflected on the financial income of the firm. Poor products could result from poor preparation of the food or poor ingredients.
Similarly, poor quality products due to organizational processes could lead to poor financial performance, which is also an indicator of ineffectiveness. The other form of ineffectiveness could be depicted by a poor culture that leaves employees of the firm offering poor services (Jones, 2010).
Improving the Effectiveness of Starbucks
The performance of Starbucks could be improved through various means. To begin with, the firm needs to identify the sources of the problems affecting it. This could be done using a survey on all stakeholders of the firm and auditing of financial statements. The findings of the survey could help the firm strategize and plan on improving its effectiveness.
This could involve establishment of an organizational culture where the firm has its employees serving customers in a specified manner. This could be accompanied by a proper dress code worn by all employees especially those that are in direct contact with customers (Hoque & James, 2000).
Conclusion
To improve effectiveness in quality, production of the products has to be strictly supervised by professionals in the field. Knowledge management and application should be adhered to with employees being encouraged to advance their studies and skills through workshops and seminars.
While frequent auditing of financial operations could minimize fraud cases, purchase of high quality raw materials could enable the firm improve the quality of its products. Lastly, Starbucks should improve its systems to suit the modern technology.
References
Hoque, Z. & James, W. (2000). Linking balanced scorecard measures to size and market factors: impact on organizational performance. Journal of Management Accounting Research, 12, 1-17.
Jones, G. R. (2010). Organizational theory, design and change. 6 ed. Upper Saddle River, NJ: Pearson publishers
Kaplan, R., & Norton, D. (1996).The Balanced Scorecard: Translating Strategy Into Action. Boston, MA: Harvard Business Press.