Factors affecting Organizational effectiveness


Likert has classified the factors affecting organizational effectiveness into following three variables:

  • Causal
  • Intervening
  • End result



Causal Variables

Causal variables are those independent variables that determine the course of developments within an organization and the objectives achieved by an organization. These causal variables include only those independent variables, which can be altered by organization and its management. Causal variables include organization and management’s policies, decisions, business and leadership strategies, skills and behavior.


Intervening Variables

Intervening variables according to Likert are those variables that reflect the internal state and health of an organization. For example, loyalties, attitudes, motivations, performance goals and perceptions of all the members and their collective capacity for effective interaction, communication and decision-making.


End-Result Variables

End-Result variables are the dependent variables that reflect achievements of an organization such as its productivity, costs, loss and earnings.


Inter-Relationship of Variables

The three variables such as causal, intervening and end-result ore interrelated. The inter-relationship may be visualized as psychological process where stimuli or causal variables acting upon the organism or intervening variables and creating certain responses or end-result variables. The causal, intervening and end-result variables comprise a complex network with many interdependent relationships. The causal variables are the key to organizational effective­ness. Hence, to make organization effective, attempt should be made to improve the causal variables, while other variables will be corrected or improved automatically because of causal variables. Figure 19.1 shows the relationship among various variables.


Casual Variables   Intervening Variables   End Results Variables
  • Leadership Style


  • Commitment to


  • Production
  • Cost
  • Sales
  • Earning
  • Turnover
  • Management Union


  • Management


  • Motivation and


  • Organizational


Objectives and


  • Communication

Leadership Skills

  • Conflict Resolution
  • Technology
  • Decision –Making

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