Organizational effect

Organizational effect is the impact of a project on an organization’s mission, values, culture, processes and structures. It is measured by how much the project changes, adds to, or detracts from the organization’s overall goals. It includes the effect on organizational resources, such as time, money and personnel, as well as the effect on the organization’s internal environment, such as morale, communication, and customer relations. The organizational effect of a project should be weighed carefully before proceeding, as it may have a lasting impact on the organization’s performance and success.

Example of organizational effect

• A manufacturing company develops a new software system to track inventory and production. This new system has an organizational effect in that it allows the company to better monitor factory resources and better track the progress of production and inventory. The organizational effect on the company would be an increased efficiency in production, an improved ability to respond to customer demands, and a better understanding of the company’s costs and profits.
• A non-profit organization begins a new initiative to increase awareness of its cause. This new initiative has an organizational effect in that it allows the organization to reach a new audience, create more awareness of its mission, and build new relationships with potential donors and volunteers. The organizational effect on the non-profit would be an increased ability to spread its message, greater engagement with its supporters, and improved financial resources to support its work.

Types of organizational effect

Organizational effect can be divided into four distinct categories: financial, operational, social and cultural, and technological.

• Financial effect involves the costs associated with the project and how they may affect the organization’s budget. This includes cost of labor, materials, and any other resources needed to complete the project.
• Operational effect includes the changes made to the organization’s processes, how efficiently the project is completed, and how it impacts the organization’s ability to meet its goals.
• Social and cultural effect looks at how the project may affect the organization’s internal environment, such as morale, communication, and customer relations.
• Technological effect considers the impact of the project on the organization’s use of technology, such as the adoption of new tools or processes, and how those changes may affect the organization’s ability to compete in the market.

Advantages of organizational effect

Organizational effect can bring several advantages to an organization. These include:

• Increased effectiveness: Projects can give an organization a competitive edge by enhancing its processes, structures, and resources. This can help the organization achieve its goals more efficiently and effectively.
• Improved communication: Projects can help improve communication within the organization. This can lead to better collaboration and better decision-making.
• Improved morale: Projects that involve employees can promote a sense of camaraderie and encourage team spirit. This can lead to improved morale and productivity.
• Cost savings: Projects can provide cost savings by streamlining processes and eliminating unnecessary steps. This can reduce overhead costs and improve the organization’s bottom line.
• Improved customer relations: Projects can improve customer relations by increasing the quality of services and products. This can help the organization build customer loyalty and increase sales.

Limitations of organizational effect

The organizational effect of a project can have both positive and negative impacts on an organization, but there are several limitations to consider. These include:

• Lack of Predictability: It is difficult to predict how a project’s organizational effect will play out in the long run. Changes in the external environment, such as economic or political factors, can alter the outcome of a project significantly.
• Complexity: Projects often involve a large number of stakeholders, each with their own interests and objectives. This can make it difficult to coordinate and manage the organizational effect of a project.
• Cost: Implementing a project can require substantial resources, including time, money and personnel. This can lead to cost overruns or delays in delivering the project, which can have a negative impact on the organization.
• Resistance to Change: People tend to resist change, and this can be especially true when it comes to organizational change. Employees who are accustomed to the status quo may be reluctant to accept a project’s new processes or procedures.
• Unforeseen Problems: Problems can arise during the implementation of a project that were not anticipated during the planning stages. These unanticipated issues can delay project completion or lead to cost overruns.

Organizational effect — recommended articles

Development and change — Efficiency and effectiveness — Integrated project management — Project environment — Lack of support — Lack of awareness — Sustainable project management — Allocation of resources — Types of objectives

References

• Mueller, F. (1994). Societal effect, organizational effect and globalization. Organization Studies, 15(3), 407-428.
• Aktaş, E., Çiçek, I., & Kıyak, M. (2011). The effect of organizational culture on organizational efficiency: The moderating role of organizational environment and Ceo values. Procedia-Social and Behavioral Sciences, 24, 1560-1573.