What defines "organizational effectiveness"?

Organizational effectiveness is centered on how well an organization meets its objectives in a manner that is both efficient and effective. This means that it is not just about achieving goals, but doing so in a way that optimizes the use of resources. The concept emphasizes the importance of aligning organizational practices and outcomes with strategic objectives, ensuring that not only are goals met, but that they are achieved through efficient processes.

For instance, this definition considers both the results obtained and how those results were attained. If an organization reaches its targets but uses excessive resources or time, it may not be deemed effective. The efficiency dimension, therefore, is crucial as it highlights the balance between achieving goals and doing so with minimal waste.

The other choices reflect aspects of organizational performance or specific metrics rather than the broader concept of effectiveness. Maximizing profits in the short term may lead to unsustainable practices; retaining employees does not directly measure goal achievement or efficiency; and budget management is important for operational success but does not encompass the holistic view of how well an organization meets its overall objectives. Thus, the definition that best captures organizational effectiveness is the extent to which an organization achieves its goals efficiently.