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Improving Organizational Effectiveness –

Theoretical Framework and Model

Working paper for the HFM-163/RTG Working Group

Esther Bisig, Tibor Szvircsev Tresch & Stefan Seiler

Swiss Military Academy at the ETH, Zurich

The Project

Research

Interest

In December 2007, NATO initiated the HFM-163/RTG project which aims to

investigate the organizational effectiveness of peace-promoting multinational

coalition operations – particularly the effectiveness of NATO headquarters of such

operations – and, where possible, to submit recommendations.

Project’s Goals The goals of this project are as follows: 1) to define what is commonly understood by

organizational effectiveness, 2) to outline which theories and models of

organizational effectiveness exist, 3) to assess how these models can be combined

to a new model of organizational effectiveness of peace-promoting multinational

operations' headquarters, 4) to investigate what factors influence this effectiveness,

5) to understand how it can be measured and last but not least, 6) to actually collect

data and prove the new model.

Definition of Organizational Effectiveness

Definition Generally speaking, the term of organizational effectiveness describes the degree to

which an organization realizes its goals (ETZIONI 1964).

Headquarter’s

Goal

From an experts’ discussion resulted that the main goal of a NATO headquarters in

a peace-promoting operation is to support the troops on the ground. Furthermore, it

was noted that this goal can only be realized effectively by a) information sharing, b)

quick and timely decision making, and c) shared awareness of tasks and

responsibilities.

In the following, factors influencing this goal achievement will be deducted from

previous theory and research on organizational effectiveness

Previous Research on Organizational Effectiveness

The research on and the measurement of organizational effectiveness focuses on

different parts of the organization.

Organizations bring resources in from the environment, and those resources are

transformed into outputs delivered back into the environment (Fig. 1).

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Fig. 1: Approaches to Organizational Effectiveness (DAFT 1998)

System

Resource

Approach

The system resource approach assesses effectiveness by observing the beginning

of the process and evaluating whether the organization effectively obtains resources

necessary for high performance.

The system resource approach is valuable when other indicators of performance are

difficult to obtain. In many not-for-profit and social welfare organizations, for

example, it is hard to measure output goals or internal efficiency

Although the system resource approach is valuable when other measures of

effectiveness are not available, it does have shortcomings. Often the ability to

acquire resources seems less important than the utilization of those resources.

(DAFT 1998).

Internal

Process

Approach

The internal process approach looks at internal activities and assesses effectiveness

by indicators of internal health and efficiency. The internal process approach is

important because the efficient use of resources and harmonious internal functioning

are ways to measure effectiveness. A significant recent trend in management is the

empowerment of human resources as a source of competitive advantage. Most

managers believe participative management approaches and positive corporate

culture are important components of effectiveness.

The internal process approach does have shortcomings. Total output and the

organization’s relationship with the external environment are not evaluated. Also,

evaluations of internal health and functioning are often subjective, because many

aspects of inputs and internal processes are not quantifiable. Leaders should be

aware that efficiency alone represents a limited view of organizational effectiveness

Organization

Internal activities and processes

Product and Service

Outputs

Resource

Inputs

System resource approach

Internal process

approach

Goal approach

External Environment

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(DAFT 1998).

Goal Approach The goal approach to organizational effectiveness is concerned with the output side

and whether the organization achieves its goals in terms of desired levels of output.

The goal approach is mostly used in business organizations because output goals

can be readily measured. Business firms typically evaluate performance in terms of

profitability, growth, market share, and return on investment.

However, identifying operative goals and measuring performance of an organization

are not always easy. Two problems that must be resolved are the issues of multiple

goals and subjective indicators of goal attainment. (DAFT 1998).

The three approaches – system resource, internal process, and goal approach – to

organizational effectiveness described here all have something to offer, but each

one tells only one part of the story (DAFT 1998).

Existing Models of Organizational Effectiveness

This is the reason why we are now looking at several existing models with different

approaches to organizational effectiveness; namely: the Command Team

Effectiveness (CTEF) Model (ESSENS ET AL. 2005), the Dynamic Five-Factors Model

of Leadership (SEILER & PFISTER under review), the Star Model (GALBRAITH 2002),

and the 7-S-Model (PETERS & WATERMAN JR. 1982). Later, we will try to integrate

and combine their conceptual ideas and indicators to a new, single framework for

organizational effectiveness of peace-promoting multinational coalition operations'

headquarters.

CTEF Model The CTEF model (Fig. 2) makes possible observing, evaluating and promoting group

activities. The model assumes that successful leaders have to understand and take

into account the following factors: 1) conditions (operation framework, task,

organization, leader, team members, team), 2) behavior and processes occurring

during the operation (a distinction is made between behavior/processes related to

tasks and those related to groups), 3) evaluating the result of these processes

(again distinguishing between behavior related to tasks and to groups), and 4)

adapting processes and conditions in order to become more effective.

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Fig. 2: CTEF-model (ESSENS et al. 2005)

This model was developed by a working group of the NATO Research and

Technology Organization. Existing models were used as an inspiration to identify the

factors (e.g. DRISKELL, SALAS, & HOGAN 1987; SALAS, DICKINSON, CONVERSE &

TANNENBAUM 1992; KLIMOSKI & JONES 1995; BLENDELL, HENDERSON, MOLLOY &

PASCUAL 2001; all as cited by ESSENS ET AL. 2005). Moreover, articles and chapters

on organizational effectiveness were consulted and interviews with experts were

conducted.

The advantages of this model are its strong theoretical foundation; the fact that it

includes learning and adjustment loops and that it takes the mission framework and

context into consideration.

However, in regard to multinational peace-promoting operations, this model lacks

the (inter-)cultural aspects. Additionally, it focuses very much on team and task

characteristics, which does not correspond to a headquarters’ perspective. On the

HQ level, there are other emphases and vulnerabilities, e.g. organizational culture

and structure. Yet another weakness of the CTEF model is the complex cause-and-

effect structure, which in practice can only be verified partially.

Five Factors

Model of

Intercultural

Leadership

Behavior

The Five Factors Model of Intercultural Leadership Behavior (Fig. 3) presumes that

competent leadership in an operation is based on more than just individual

competence 1). Additionally, the behavior of a leader is influenced by 2) the

dynamics of the team the leader works with, 3) by the organizational framework, 4)

by the present context and 5) by the particular situation the leader is faced with.

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Fig. 3: Dynamic Five-factors Model of Leadership (SEILER & PFISTER under review)

A big advantage of the Five Factors Model is its focus on intercultural aspects of

leadership behavior. In military coalition operations, successful collaboration

between troops of different countries, international partners and the population on

site is pivotal for success. Hence, intercultural competence is a key factor for

organizational effectiveness in a NATO HQ. Another advantage is that it includes the

external environment into the evaluation.

The main disadvantage of this model in our case is the fact that it is a leadership and

not an effectiveness model. Therefore it does not specify how effective leadership is

linked with organizational effectiveness.

Star Model The basic premise of the Star Model (Fig. 4) is simple but powerful: different

strategies require different organizations to execute them.

The Star Model framework for organizational design is the foundation on which an

organization bases its design choices. This framework consists of a series of design

policies that are controllable by leadership and can influence employee behaviour.

The policies are the tools with which leadership must become skilled in order to

shape the decisions and behaviours of their organizations effectively.

In the Star Model, design policies fall into five categories: strategy, structure,

processes, rewards and people.

Individual Competence

Team/Group

Organization Context

Situation Intercultural

Leadership Behavior

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Fig. 4: The Star Model (GALBRAITH 2002)

For an organization to be effective, all these policies must be aligned, interacting

harmoniously with one another. This idea of alignment is fundamental to the Star

Model.

But to solely focus and align the organization is to become vulnerable because

alignment around a focused strategy can impede to a new strategy.

Today, every organization needs to be adaptive and change as quickly as its context

changes. If not, it is falling behind. And if change is constant, we need to design our

organization to be constantly and quickly changeable. We need to have organization

structures and processes that are easily reconfigured and realigned with a

constantly changing strategy. This asks for the skilled use of extensive internal and

external networking capabilities. (GALBRAITH 2002)

One advantage of this model is the concept of strategic alignment. This alignment of

the diverse policies ensures goal-oriented working and therefore organizational

effectiveness. Another advantage of the model is the consideration of the

adaptability to a constantly changing environment.

Nevertheless, the Star Model is not tailored to the organization of a NATO HQ – but

rather to business and market-oriented companies. Another two weak points are 1)

that effectiveness is not a direct output of the design policies, and 2) that culture is

only understood as an output and not as an input to the organization. But in a

multinational headquarters, where people from different nations are working

together, culture certainly also is an entry.

7-S-Model The 7-S-Model of the former McKinsey management consultants PETERS and

WATERMAN JR. (1982) divide organizations into “hard” and “soft” factors. The “hard”

factors cover elements more concrete and can be exposed with policy papers, plans

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and documentations on the development of the organization. The three “hard” or

“cold” factors of an organization are: 1) strategy, 2) structure, and 3) systems. The

expression “soft” refers to substantially and only marginally concrete elements of an

organization that can hardly be described. These elements develop permanently,

and can be planed or controlled only limitedly because they are highly dependent on

the members of the organization. These “soft” or “warm” factors are namely: 4) skills,

5) staff, 6) style/culture, and 7) shared values / super ordinate goals (Fig. 5). While

the hard factors are easier to test, the assessment of the soft factors is much more

difficult - but they are at least as important for the organization.

Fig. 5: The 7-S-Model (PETERS & WATERMAN JR. 1982)

Effectively functioning organizations are characterized by a coordinated balance of

theses seven factors. In times of change and adjustment, it should be noted that the

modification of one factor also impacts on the other factors. A well-functioning

organization must aspire towards a right balance between the above introduced

factors. In practice, it is often the case that leaders are only focusing on the hard

factors. PETERS and WATERMAN JR. (1982) argue, however, that the most successful

organizations put their attention also on the optimum balance of the soft factors as

they can be decisive for success because new structures and strategies can barely

be built on completely opposed cultures and values.

This praxis proven model has the advantage that 1) it takes into consideration hard

as well as soft factors, and 2) that it emphasizes the importance of a balance

between those factors.

Summary The four models just discussed above have different foci and cover different aspects

of organizational effectiveness, yet they have many similarities.

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To sum up, we expect the following concepts and components of a new model for

multinational coalition operations’ headquarters:

a direct link from the input factors through the transformation processes to the

goals of the organization

the concept of strategic alignment which states that the input factors must be in

optimum balance to result in effective goal achievement

consideration of hard (e.g. structures, processes) as well as soft (e.g. people,

culture) input factors

inclusion of the external environment; specifically the ability of the organization to

adapt and adjust to the constantly changing situation and context

and last but not least, a simple model which can be easily applied in practice

New Model

On this basis we are now developing a new model in order to capture the

effectiveness of military coalition operations’ headquarters (Fig. 6). In the following

paragraph, each component will be briefly described.

Fig. 6: Model of Organizational Effectiveness of Peace-Promoting Multinational Coalition Operations’

Headquarters

Goal

Achievement

As stated earlier, organizational effectiveness means goal achievement. The main

goal of NATO multinational coalition operations’ headquarters is to support the

troops on the ground.

Transformation

Processes

Our model hypothesizes that the transformation processes, which include 1)

information sharing, 2) quick and timely decision making, and 3) developing a

shared awareness, influence the effectiveness of a military coalition operation’s

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headquarters. GALBRAITH (2002) also supports the assumption that these three

factors are needed to meet an organization’s goal effectively. ESSENS ET AL. (2005)

say that effectiveness is tied to the ability to acquire the lacking information and to

manage the information it possesses. Three features are important – obtaining,

processing, and exchanging information. They also assume that the effectiveness of

a team is defined by the quality and efficiency of its decisions. PETERS and

WATERMAN JR. (1982) expect that shared understanding of what the organization

stands for and what it beliefs in is central for its effectiveness. Thus, a clear

understanding of the mission is essential for organizational effectiveness, as is

retaining the same mission objective (ESSENS et al. 2005).

Input factors The three factors (information sharing, decision making and shared awareness) in

turn depend on the interaction of four influencing factors; these are: 1) structure, 2)

people, 3) processes, and 4) culture.

Structure The Structure is understood as the way organizational units are related to each other

and determines the location of the decision-making power and authority in the

organization. (GALBRAITH 2002; PETERS & WATERMAN JR. 2005). Additionally

important is the aspect of organizational infrastructure. Are there adequate

resources and communication channels in place to facilitate interaction and

knowledge transfer? (SEILER & PFISTER under review)

People The People factor include selection, rotation, training, and development (GALBRAITH

2002). Additionally important is the embedding of new members (PETERS &

WATERMAN JR. 1982) and the internal networking (GALBRAITH 2002). Another central

area within the People factor is leadership. Research demonstrates that an effective

leader can have a positive impact on effectiveness (HOGAN, CURPHY & HOGAN 1994;

JUDGE, PICCOLO & ILLIES 2004; and KURECA, AUSTIN, JOHNSON & MENDOZA 1982).

Within leadership we focus in the capabilities of the leader, his skills and knowledge.

In order for leaders to be successful in an organization, they must be 1) strategically

(e.g. planning, conflict resolution), 2) professionally (e.g. expertise), 3) socially (e.g.

communications, cooperation, support), 4) cognitively (e.g. knowledge, intelligence),

5) individually (e.g. stress resistance, self criticism), and 6) interculturally (e.g.

foreign language skills, tolerance of ambiguities) competent (BOLTON 2005; as cited

in SEILER & PFISTER under review).

Processes By Processes is meant the way the organization implements its goals in the

framework of the given structures (PETERS & WATERMAN JR. 1982). That is to say

that information and decision processes cut across the organization’s structure; if

structure is thought of as the anatomy of the organization, processes are its

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physiology or functioning (GALBRAITH 2002). This functioning involves managing

information, assessing the situation, making decisions, planning, directing,

controlling, networking, providing and maintaining vision and common intent,

motivating, and adapting to context and situation (ESSENS ET AL. 2005). The

adaptability to the external environment is especially important as effectiveness can

only be achieved if the organization as a whole is willing to adapt its structures,

where necessary, to the ever-changing conditions (SEILER & PFISTER under review).

Culture Culture is divided into three components: 1) organizational culture, 2) leadership

culture, and 3) national cultures. PETERS and WATERMAN JR. (1982) also distinguish

between 1) the organizational culture as the dominant values and norms that have

developed over time and become stable elements of the headquarters and 2)

management style as the general manner, outlook, attitude, and behaviour of a

leader in his or her dealings with subordinates. In multinational coalition operations,

national culture must certainly be added as a third cultural component.

Strategic

Alignment

Most important for effectively achieving goals is that the four factors Structure,

People, Processes, and Culture are strategically aligned towards the organizational

goals.

Usability

Instrument This new model's scope and simplicity allow for a construction of an instrument

which measures effectiveness in a particular context like a NATO multinational

coalition operations' headquarters.

One application possibility of the model is for example 1) identifying the current state

of each factor in the headquarters and 2) describing the generally perceived

influence of each of these factors on effectiveness.

On the basis of the collected data – and taking into account the mutual interaction of

the factors – can be 1) investigated the impacts of different influencing factors, 2)

localized inefficiencies in NATO headquarters 3) determined measures to achieve

better organizational effectiveness, and 4) proved and – if necessary – adapted the

newly developed model.

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