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Based on the following reading, please answer the questions below:

Because managers are responsible for utilizing organizational resources in a way that maximizes an organization$$s ability to create value, it is important to understand how they evaluate organizational performance. Control, innovation, and efficiency are the three most important processes managers use to evaluate how effectively the organization is creating value.

Control means having control over the external environment and having the ability to attract resources and customers.

Innovation means developing an organization$$s skills and capabilities so the organization can discover new products along with creating new organizational structures and cultures to adapt to change.

Efficiency means developing modern production facilities using new information technologies that can produce and distribute a company$$s products in a timely and cost$-$effective manner.

There are three approaches by which an organization$$s efficiency can be measured. $($Refer to Table $1\mathrm{.}1)$

The External Resource Approach: Control

This is a method used by managers to evaluate how effectively an organization manages and controls its external environment. Managers use indicators such as stock price, profitability, and return on investment, which compare the performance of their organization with the performance of other organizations. Top management$$s ability to perceive and respond to changes in the environment or to initiate change and be first to take advantage of a new opportunity is another indicator of an organization$$s ability to influence and control its environment.

The Internal Systems Approach: Innovation

This is a method that allows managers to evaluate how effectively an organization functions and resources operate. To be effective, an organization needs a structure and a culture that fosters adaptability and quick responses to changing conditions in the environment. Measures of an organization$$s capacity for innovation include the length of time needed to make a decision, the amount of time needed to get new products to market, and the amount of time spent coordinating the activities of different departments.

The Technical Approach: Efficiency

This is a method managers use to evaluate how efficiently an organization can convert some fixed amount of organizational resources into finished goods and services. Technical effectiveness is measured in terms of productivity and efficiency. Productivity measures are objective indicators of the effectiveness of an organization$$s production operations.

Measuring Effectiveness: Organizational Goals

Managers create goals that they use to assess how well the organization is performing. Two types of goals used to evaluate organizational effectiveness are official goals and operative goals.

Official goals are guiding principles that the organization formally states in its annual report and in other public documents and usually they lay out the mission of the organization.

Operative goals are specific long$-$ and short$-$term goals that guide managers and employees as they perform the work of the organization.

Questions:

$1.$ What is organizational effectiveness? Discuss three approaches to evaluating effectiveness and the problems of each approach.

$2.$ Draw up a list of effectiveness goals that you would use to measure the performance of $($a$)$ a fast$-$food restaurant and $($b$)$ a school of business.