Characteristics of Organizational Effectiveness

Every organization seeks to design and maintain the most effective structure and culture to support pursuit and achievement of the organization’s mission, goals and strategies.  Organizational design is a complex undertaking and this checklist focuses on major issues such as the vision of organizational leaders; the existence and clarify of an organizational mission statement; creation and implementation of a formal strategic plan; organizational governance procedures; organizational communications; definition of organizational tasks and responsibilities; and organizational procedures for training, rewards and resolution of problems.

  • Is there a clear statement of the vision of the organizational leadership as to where the organization aspires to be in the future?  A vision statement provides stakeholders with an image of what a successful organization would look like and serves as an important motivator for organizational members.

  • Is there a short, clear and concise mission statement for the organization that describes what the organization does, why the organization exists, how the organization seeks to achieve its mission and the persons who will be positively affected by the organizational activities?  The mission statement should be regularly reviewed.

  • Does the organization have a written strategic plan as well as an annual operating plan with implementation steps?  The strategic plan should include specific goals and objectives that are related to achievement of the stated mission of the organization and the operating plan should have detailed steps and budgets.  Each plan should be created by the executives of the organization with input from managers and supervisors at all levels.  There should be a regular strategic planning process.

  • Does the organization have a formal process for monitoring progress toward its goals and objectives and making adjustment to the strategic plan as necessary?  A strategic plan has little value unless the organization continuously tracks progress and measures new initiatives against the objectives of the existing plan.

  • Does the organization have a strong and well-organized board of directors or governance body?  The duties of the governance body should be clearly delineated and members of the body should collectively provide experience in each of the areas that are crucial to the success of the organization’s strategic plan.  Procedures should be established for continuously training members of the body and ensuring that they receive adequate information to discharge their duties.

  • Does the organization have a group of strong leaders who believe in the mission and values of the organization and who convey their passion and excitement to the members?  The organizational leaders serve as role models and teachers for the members and should always act in a way that is aligned with the expressed values of the organization.

  • Does the organization have a system for clearly defining the roles and activities of each of the members?  Members need to know their duties, with whom they are expected to communicate with, and how they are going to be evaluated and rewarded.

  • Does the organization have a formal system for communications and sharing of information?  Communication and information sharing is essential for coordinating activities throughout the organization, keeping members informed of news and defining and reinforcing cultural values and norms.

  • Does the organization have a formal system for training members about their job responsibilities and broadening their knowledge base so that they can assume different roles during their career path with the organization?  Training improves job satisfaction and makes it easier for members to work collaboratively with other members.

  • Does the organization has a well defined system for allocating rewards among the stakeholder groups based on their performance in pursuit of the organizational goals and objectives?  Allocation of property rights, including profit-based rewards, is a key issue in determining the culture of an organization and it is important for the reward system to be clear to everyone and encourage behaviors that support the mission, values and norms of the organization.

  • Does the organization have adequate policies and procedures for resolving problems that may arise during the day-to-day activities of the organization?  Things don’t always go according to plan and the mark of an effective organizational structure and culture is the ability to address problems quickly through coordinated effort from all relevant groups within the organization.

This material will appear in Alan Gutterman’s publication entitled “Business Transactions Solutions” and is presented with permission of Thomson/West.  Copyright 2008 Thomson/West.  For more information or to order call 1-800-762-5272.  Alan Gutterman is the Founder/Principal of Gutterman Law & Business (, which publishes the Emerging Companies Blog and the Business Counselor Blog, and a Partner of The General Counsel LLC (




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