$3.$ Organizational Performance

An organization is a structured group of people who are all trying to achieve the same goal. Each person in the organization is responsible for completing certain subtasks that contribute to the overall goals of the organization. When an organization achieves its goals, we say that it has high performance.

High performance depends on the organization$$s efficiency and effectiveness. Efficiency refers to the amount of resources needed to meet a goal. For example, an organization that takes one week to hire a new employee is more efficient than an organization that takes eight weeks to hire a similar employee.

Effectiveness is about achieving goals. An organization is considered to be effective if it matches the performance goals it sets for itself. For example, suppose an organization set the goal of reducing it$$s costs by $15$ percent in the upcoming year. If it reduces it$$s costs by $18$ percent, it will be effective, but if costs are only reduced by $10$ percent, it will not be considered effective.

Organizations can be effective, but not efficient, and efficient, but not effective. When considering an organization$$s performance, it is imperative to look at both efficiency and effectiveness.

Which of the following components make up the formal definition of an organization? Check all that apply.

A structured group

A shared goal

Shared communication

A clear hierarchy

Suppose that two office supply stores both have the goal of selling a million dollars' worth of supplies over the next year. One store sells $$850,000,$ while the second store sells $$1,120,000.$ The first store is less Than the second store.

Suppose that you are the CEO of a new $($virtual reality$)$ VR gaming design company. Your company has plenty of money $$ an angel investor has seen to that. Your biggest worry right now is to develop a new game that will be much more successful than Minecraft, a popular existing VR game. Your biggest concern right now is with:

Effectiveness

Efficiency