Article Review 2

Joumal of Sport Management, 1987. 1, 37-47

Multidimensionality and Multiple Perspectives

of Organizational Effectiveness

p. Chelladurai The University of Western Ontario

Several models of organizational effectiveness are integrated into a compre- hensive framework from a viewpoint of organizations as open systems. The multidimensionality of effectiveness is seen as emanating from both the iiqnit- throughput-ouq)ut conceptualization of an organization and the distinctive domains of activities of an organization. The relevance of specific dimen- sions of effectiveness is said to be contingent upon the type of organization and/or the domain of activities the organization is engaged in. The paper describes the multiple constituency approaches that variously emphasize the need to satisfy the powerful groups, the least advantaged groups, or differ- ent groups at different times. The position taken in this paper, however, ad- vocates the perspective of the "prime beneficiary."

Organizational effectiveness is perhaps the most critical dependent variable in all organizational analyses and almost all organizational theories include the notion of effectiveness (Cameron & Whetten, 1983; Goodman & Pennings, 1977). Despite this significance, the construct has eluded a clear definition and/or descrip- tion. Instead it has emerged as one of the most complex and controversial issues in management. Given the variety of goals of an organization, the differential emphases placed on these goals by multiple constituencies of the organization, and the difficulty in measuring some of these goals, it is not surprising that a number of conflicting and confusing perspectives and theories of organizational effectiveness should emerge.

This paper (a) attempts to integrate the central models of organizational effectiveness, (b) clarifies the multidimensionality as well as the multiple per- spectives of the concept effectiveness, and (c) proposes that Blau and Scott's cri- terion of "prime beneficiary" be the underlying rationale in the evaluation of organizational effectiveness.

Address all correspondence to P. Chelladurai, Faculty of Physical Education, The University of Western Ontario, London, Ont., Canada N6A 3K7.

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38 Chelladurai

Models of Organizational Effectiveness A number of authors have attempted to reduce the complexity inherent in the effectiveness concept by narrowing the perspective from which effectiveness is viewed and/or measured (e.g., Cameron, 1978; CampbeU, 1977; Connolly, Con- Ion, & Deutsch, 1980; Perrow, 1977; Price, 1968; Steers, 1977; Yuchtman & Seashore, 1967). These various approaches to effectiveness can be subsumed under four different but widely acknowledged models of effectiveness—r/te goals model, the system resources model, the process model, and the multiple-constituency model.

The Goals Model

The goals model defines effectiveness as the degree to which an organization has achieved its goals (Price, 1972; Scott, 1977). Thus, a national sport team's final standing in the world championship would indicate the effectiveness of the na- tional sport organization (NSO).

System Resources Model

Yuchtman and Seashore (1967), who proposed the system resources model, de- fined effectiveness as "the ability of the organization, in either absolute or rela- tive terms, to exploit its environment in the acquisition of scarce and valued resources" (p. 898). Thus, an NSO would be considered effective based on its ability to obtain significant funds through corporate and private donations to car- ry out its programs. A school of physical education would be considered effec- tive if it can attract a large number of students to enroll and/or can recruit highly qualified faculty members. It is assumed that since resources are required to achieve the organization's goals, the greater the resources, the greater the or- ganizational effectiveness.

The Process Model

The process model emphasizes the intemal logic and consistency among the throughput processes of the organization since they convert an organization's in- puts into desired outputs (Pfeffer, 1977; Steers, 1977). The basic assumption of this approach is that there is a clear linkage between the intemal processes (such as decision making and staffing) and desired outputs.

The Multiple-Constituency Model

The multiple-constituency model, according to Connolly et al., is based on,

a view of organizational effectiveness in which several (potentially, many) different effectiveness statements can be made about the focal organization, reflecting the criterion sets of different individuals and groups we shall refer to as constituencies. (Connolly et al., 1980, p. 212)

Since these constituent groups (both intemal and extemal) would have different perspectives on what the organization should be doing, they are also likely to

Organizational Effectiveness 39

evaluate the organization's effectiveness differently. Obviously, the question arises as to which of these perspectives should take precedence in the determination of organizational effectiveness. Connolly et al. argued that since all of these per- spectives are legitimate, effectiveness must be considered as a plural concept; it is effectivenesses that should be considered, not effectiveness. Using this model, the administrators of a faculty may consider the unit effective but the students may rate the faculty as very ineffective. Both assessments are legitimate.

On the other hand. Miles (1980) proposed that only the orientations of the powerful constituencies should matter in the determination of effectiveness. Accordingly, in the example of a professional sport team, the owner's percep- tions and evaluations would prevail.

A Synthesis The various approaches to organizational effectiveness discussed earlier can be synthesized if an organization is viewed holistically from a system's perspective rather than a reductionist frame of reference. Clearly, if we subscribe to an open systems view of organizations, then inputs affect throughputs which affect out- puts, which are exchanged with the environment for a return of inputs for the organization. From this perspective of an organization the goals model, system resources model, and process model focus, respectively, on the output, input, and throughput sectors of an organization. The multiple constituencies approach emphasizes the organization's dependence on its environment represented by the various interest groups and the need to satisfy their expectations. Since all of these models deal with specific elements of the system, as noted earlier, they are inter- related as illustrated in Figure 1.

If we focus on the notion of an open system operating dynamically, the criteria of effectiveness could relate to any one point in the input-throughput- output-feedback cycle of that system, and the indices of effectiveness derived at various points in the cycle should be equivalent. For instance, the availability of sufficient resources is a necessary condition for organizational performance. From a different perspective, it could also be argued that the availability of resources is a function of societal acceptance of organizational outputs. From either perspective, it is only logical to suggest that measures of the various inputs would be legitimate indicators of effectiveness. Similarly, the input-throughput- output conceptualization of an organization also supports the notion that mea- sures of the throughput processes should be indicative of organizational effec- tiveness. The interrelatedness of the above three approaches was illustrated by Frisby's (1983, 1986) study of the national sport organizations (NSOs) in Cana- da. The pattern of relationships among the set of variables related to the inputs, throughputs, and outputs of the NSOs led her to conclude that,

acquisition of financial inputs is associated with the attainment of organiza- tional objectives such as performance excellence.... [i.e.] the goal and sys- tems models are complementary tools for measuring organizational effectiveness. . . . NSGBs that are more bureaucratic [an internal process] . . . are more likely to be effective. (Frisby, 1983, p. 245)

40 Chelladurai

MULTIPLE-CONSTITUENCY APPROACH

SYSTEM RESOURCE

MODEL PROCESS

MODEL GOALS MODEL

r ENVIRONMENT

INPUTS

MATERIAL HUMAN VALUES EXPECTATIONS

L..

THROUGHPUTS

STRUCTURAL VARIABLES

HUMAN VARIABLES

OUTPUTS

PRODUCTS

MAINTENANCE

T INTERNAL FEEDBACKS—J

—^ENVIRONMENTAL FEEDBACKS

Figure 1 — A systems view of models of organizational effectiveness. (Note: From Chelladurai, P., 1985, SpoH management: Macro perspectives (p. 172), London, Canada: Sports Dynamics. © 1985 by Sports Dynamics. Reprinted by permission.)

Multidimensionality of Effectiveness Unfortunately, however, organizational reality is such that the causal and cycli- cal relationships among the inputs, throughputs, and ou^uts of an organization are not as clear-cut and direct as theory would suggest. It is indeed rare to find an organization with goals that are unambiguous and congruent and with resource inputs that are clearly coupled to performance through appropriate organization- al processes. Thus, although goal attainment is the most appealing and direct mea- sure of effectiveness, the topic of goals itself is complex and confusing in

Organizational Effectiveness 41

organizational literature (Perrow, 1961) and adds to the confusion surrounding the notion of effectiveness. As Kanter and Brinkerhoff (1981) pointed out, "goals can be inconsistent, contradictory or incoherent; and it is unclear at what level or with respect to what units the attainment of goals should be measured" (p. 327). Thus, the utility of the goals model is reduced considerably when organiza- tional goals are numerous, global and ambiguous, and transient in the short run, or when goal attainment cannot be precisely measured (Hoy & Miskel, 1982).

The logic of applying the system resources model in the absence of clear-cut goals also fails when the inputs are guaranteed by a suprasystem. Thus, "third sector" organizations whose resources are guaranteed by some legislative authority cannot legitimately use the system resources model (Chelladurai, 1985). Thus, a city recreation department carmot use the budget allotments from the city as a measure of its effectiveness.

The use of the process model of effectiveness, as noted before, is predi- cated upon a clear linkage between specific processes and organizational perfor- mance. Such linkages must first be established before effectiveness can be as- sessed via measures of the process. Even when some relationship between processes and performance can be shown, there is the added danger that "or- ganizations would tend to deify the processes irrespective of their relationship to effectiveness" (Chelladurai, 1985, p. 179). For instance, Frisby's (1983) finding that the degree of bureaucratization was related to organizational performance might lead NSOs to an error in causal thinking and to increased bureaucratiza- tion without reference to further increases in organizational performance.

Given the difficulty in exclusively applying either goal, the system resource or the process models, it may be necessary to assess the effectiveness of an or- ganization from a multidimensional perspective (i.e., at all three stages of the input-throughput-output cycle). As Evan (1976) pointed out, "to appraise the effectiveness of an organization with the aid of systems theory . . . one must measure its performance with respect to all four systemic processes [including the feedback mechanisms] as well as their interrelationships" (p. 19).

This need to measure organizational effectiveness at various stages in the input-throughput-output cycle may be greater in those organizations with more than one domain of activities, each domain having its own distinctive goals. In those cases, the three models of effectiveness may be differentially relevant to the domains of organizational activity. This notion of differential relevance was illustrated by Chelladurai, Szyszlo, and Haggerty (1986), who identified the rela- tive importance attached by die administrators of NSOs in Canada to six dimen- sions of effectiveness which were derived by superimposing the three phases of the input-throughput-output cycle on the two domains of NSO activities—mass and elite sport. The six dimensions of NSO effectiveness as perceived by the NSO administrators were input-human resources, input-monetary resources, through- put-mass, throughput-elite, output-mass, and ou^ut-elite. These administrators rated input-human resources, throughput-mass, throughput-elite, and output- elite as the more important set of effectiveness dimensions than input-monetary resources and output-mass. Chelladurai et al. (1986) suggested that the adminis- trators might have minimized the importance of monetary resources since a large proportion of the NSOs' revenue was provided by the govemment. Further, since

42 Chelladurai

the outputs of the mass programs are not as clear-cut and quantifiable or meas- urable as those ofthe elite programs, it stands to reason that the administrators would emphasize outputs of the elite programs to a greater extent than the out- puts of the mass programs. The results also showed that in the context of NSOs and similar organizations, the throughput processes become significant indica- tors of effectiveness.

"The implication of the foregoing discussion is that effectiveness is a multi- dimensional construct and that the utility of specific dimensions is contingent upon the organization and/or the domain of activities. From a normative perspective, several authors (e.g., Miles, 1980; Price, 1968) have maintained that goal at- tainment should be the yardstick of organizational effectiveness despite the problems of identification and measurement of the goals. The notion that goals are inextricably linked to organizational effectiveness is consistent with the defi- nition of an organization as "a social system deliberately established to carry out some definite purpose" (Caplow, 1976, p. 3, emphasis added). If the goals cannot be clearly identified or measured, however, tiien it would be necessary to select other criteria that are easily measured and closely related to goal attain- ment (Campbell, 1977).

Multiple Perspectives of Organizational Effectiveness

The issue of effectiveness becomes more complex when the various interest groups (the multiple constituencies ofthe organization) hold a number of incom- patible goals for the organization. The possibility that the multiple constituencies of an organization could have different preferences for organizational performance, and therefore would select different criteria for assessing organizational effec- tiveness, gives rise to the importance ofthe values underlying these differing sets of criteria (Quinn & Rohrbaugh, 1983; Zammuto, 1984).' As Zammuto (1984) suggested.

Organizational effectiveness fundamentally is a value-based concept in that the whole of the evaluation process requires the application of value judge- ments, from the selection of constituencies and the weighting of their judge- ments to the development of recommendations for future organizational performance, (p. 614)

In fact, Zammuto proposed the above generalization from an analysis of the various effectiveness models that focused on the multiple constituencies of an organization (e.g., Connolly et al., 1980; Goodman & Pennings, 1977; Kee-

•Quinn and Rohrbaugh (1983) identified three value dimensions: (a) the welfare of the members or the growth and strength of the organization itself, (b) stability versus flexibility in structuring the organization, and (c) emphasis on process related criteria (e.g., planning and goal-setting) or on outcome related criteria. Based on these three competing values of attention orientation, structural preferences, and means-ends dichotomy, Quinn and Rohrbaugh proposed four models of effectiveness—the Human Relations Model, the Open System Model, the Rational Goal Model, and the Internal Process Model.

Organizational Effectiveness 43

ley, 1978; Pfeffer & Salancik, 1978). In Zammuto's view, the various multiple constituency approaches can be classified under four perspectives on the basis of how they address the "distributive issue," that is, "whose preferences should be satisfied through the distribution of the outcomes of organizational perfor- mance?" (p. 606). The relativisticperspective (e.g., ConnoUy etal., 1980) holds that the evaluations by all the various constituencies are legitimate, and therefore the primacy of one view over the other cannot be established.

In suggesting that the evaluator's task is only to collect effectiveness ratings from multiple constituencies for superiors, the relativistic ^>proaches do not really address the distributive issue. On the other hand, the power perspective (e.g.. Miles, 1980; Goodman & Pennings, 1977; Pfeffer & Salancik, 1978) is categor- ical in asserting that the preferences ofthe most powerful constituents or the coa- lition of powerful constituents need to be satisfied. The focus ofthe social justice perspective (Keeley, 1978) is on satisfying the needs ofthe less powerful or the less advantaged constituents. Finally, the emphasis in Zammuto's evolutionary perspective is on "the continual process of becoming effective rather than on be- ing effective" (1984, p. 608). Iliat is, organizational effectiveness is viewed in terms of how the organization attempts to satisfy the divergent needs over the long term as the constituents and their needs change over time.

But the suggestion that the various constituencies may emphasize different values that lead to differential emphases on organization^ goals, and the neat classification ofthe multiple constituency approaches based on their value orien- tations and/or time perspective, do not provide any guidelines for the top ad- ministrators and/or the researchers who have to select specific perspectives to guide their actions.

In contrast, the models that subscribe to the power perspective are cate- gorical in their identification ofthe critical goals. For instance, the application of Miles' (1980) ecological model would require the preference ordering of the various goals held by different constituencies, based on the relative power ofthe constituencies. In the case of a university's intercollegiate athletic program, for example, the significant constituencies (or power centers as Miles calls them) would include the athletes themselves, the coaches, the wider student body, the university administrators, the alumni, the media, the immediate community, and the local government. Information on the powerfiil or strategic constituencies is sought from the top administrators ofthe program and then corroborated by other sources.

The relative power of a constituency depends upon its ability to infiuence and/or control the activities ofthe focal organization, which in turn is often, but not always, a function ofthe resource contributions made. For example, in many American universities the alumni association has considerable infiuence in the affairs of the athletic programs because of its significant contributions of resources. In contrast, the athletic programs in many Canadian universities are sustained solely by the activity fees paid by the students. Yet the students do not have the degree of infiuence commensurate with their resource contribution.

One approach that had been taken to identify the critical goals of inter- collegiate athletics was to administer a specially constructed scale (Chelladurai, Inglis, & Danylchuk, 1984) to ascertain the priority of the goals held for inter- collegiate athletics by students (Inglis & Chelladurai, 1983), or by the adminis- trators of intercollegiate athletics (Chelladurai & Danylchuk, 1984). According

44 Chelladural

to Miles (1980), once the priorities of the powerful constituents are identified, effectiveness is evaluated on the basis of attainment of these prioritized goals. But despite the sophistication in the assessment of relative power ofthe constitu- ent groups, and the establishment of priorities ofthe goals they hold, the process still does not solve the problem that is encountered when two equally strategic interest groups hold conflicting values and/or goals for the organization.

The suggestion that these conflicting goals should be minimally satisfied is consistent with Eilon's (1971) argument that goals may also be perceived as constraints. That is, one goal acts as a constraint on the maximal attainment of the confiicting goal.

Paradoxical Nature of Effectiveness When the focal organization must satisfy contradictory sets of criteria, it is forced to engage in activities that undermine the effects of each other. This exemplifies what Cameron (1986) calls the "presence of paradox." According to him, "or- ganizational effectiveness is inherently paradoxical. To be effective, an organi- zation must possess attributes that are simultaneously contradictory, even mutually exclusive" (p. 545). Although Cameron uses the notion of paradox mainly to refer to confiicting organizational processes, the concept is relevant to the con- tradictions inherent in the viewpoints ofthe multiple constituents. The organiza- tion faces paradox, and its activities are paradoxical when it attempts to satisfy those "contradictory, even mutually exclusive" viewpoints. In fact, Cameron (1986) found that,

the organizations that achieved the highest levels of effectiveness were also those that satisfied the most separate constituency group expectations, even when different constituencies held contradictory expectations. Highly effec- tive organizations were paradoxical in that they performed in contradictory ways to satisfy contradictory expectations, (p. 550)

Consider the case of university athletics. The expectations of the alumni, the student body, and the athletes could be divergent and even be counterpoised against each other. Many universities have succeeded in balancing these oppos- ing and paradoxical expectations. Yet, other universities have allowed one ofthe constituencies (e.g., the alumni) to assume a dominant position, which has resulted in great repercussions for athletics as well as the universities concemed. This situation is akin to what Cameron calls schismogenesis, "a process of self- reinforcement where one action or attribute in the organization perpetuates itself until it becomes extreme and therefore dysfunctional" (1986, p. 546). t h e problem with the "power" perspective in the assessment of organizational ef- fectiveness is that it sets the process of schismogenesis in motion. Choosing the criteria of the most powerful groups makes them more and more dominant till they are able to virtually dictate what the organization should do. Organizations and their administrators need to be concemed about such negative processes. The following section outlines one approach to safeguard against schismogenesis within organizations.

Organizational Effectiveness 45

The Prime Beneficiary Approach A major concem within the multiple constituency approaches is the question, which of the multiple perspectives should prevail? One approach already discussed is to accept the perspectives ofthe most powerful constituencies. It was noted earli- er that the notion of power most often refiects the control a constituency has over the resources needed by the organization. In other words, powerful constituen- cies are seen as the "benefactors" of the organization. A weakness in this ap- proach is that the real benefactors of the organization have no real power, as in the case ofthe students who may pay for the entire intercollegiate athletic pro- gram. Similarly, the citizens who pay the taxes may not directly exercise tiieir power in the distribution of those taxes.

These and similar situations could be an artifact of the diffusion of power among a large number of benefactors, or their disinterestedness. Nevertheless, an altemative approach would be to use Blau and Scott's (1962) notion of' 'prime beneficiary" in the evaluation of organizational effectiveness. They argued that although several groups may benefit from the organization, one group can be identified as the prime beneficiary, that is, the group whose benefit is the primary reason why the organization exists. Accordingly, the organizational and noanagerial concems ensure that the benefits that accrue to the prime beneficiaries are not diverted or thwarted. If this argument is accepted, then the answer to the ques- tion of whose perspective should prevail in the assessment of effectiveness is straightforward.

To extend the argument further, Blau and Scott's (1962) four-level classi- fication of organizations facilitates the identification of prime beneficiary with respect to any particular type of organization. That is, the rank-and-file mem- bers are the prime beneficiaries in mutual benefit associations such as an exclu- sive golf club or a trade union; the owners are the beneficiaries in business concems; the public in contact are the prime beneficiaries in service organiza- tions such as a school board or a community hospital; and the public at large are the prime beneficiaries in commonweal organizations such as Ae police force or the prison system. With such relatively clear specifications, it is easier and more justifiable to uphold the perspective of the prime beneficiary in the evalua- tion of organizational effectiveness.

To recommend the perspective ofthe prime beneficiary is not to minimize the need for any organization to seek and secure the required resources by cater- ing to the wishes of other constituent groups. From Cameron's (1986) perspec- tive of effectiveness as a paradox, it would be necessary for an organization to accommodate some of the expectations of the other groups even though these may be inconsistent with the needs ofthe prime beneficiaries. The essential point is that an effective organization attempts to satisfy these contradictory expecta- tions only with a view to increase the payoffs to its prime beneficiaries. To keep the prime beneficiary in perspective is to keep the ultimate purpose of the or- ganization in perspective.

Summary In simimary, the various models of organizational effectiveness can be synthe- sized into a comprehensive systems-based framework. The multidimensionality

46 Chelladurai

of effectiveness stems from both the input-throughput-output conceptualization of an organization and the distinctive domains of activities of an organization (e.g., research and teaching in a faculty of physical education). The relevance of specific dimensions of effectiveness is contingent upon the type of organization and/or the domain of activities the organization is engaged in.

The complexity surrounding organizational effectiveness increases dramati- cally when the perspectives of the multiple constituencies are taken into account. Approaches for determining the priority among the perspectives of the multiple constituencies variously emphasize the viewpoints of the powerful constituencies (the power perspective), the least advantaged constituencies (the social justice perspective), different constituencies over time (the evolutionary perspective), or they simply suggest that all perspectives are legitimate (the relativistic per- spective). Tlie position taken in this paper, however, emphasizes the perspective ofthe "prime beneficiary."

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Acknowledgments I thank Professors Terry Haggerty and Gordon Olafson for reading the paper,

and for their helpful comments.