Organizational Development: A Manual for Managers and ... - FPDL

director ensures more efficient use of all available resources for the survival of an organization, but
also negative due to erroneous problem diagnosis, irrational decisions, or poor implementation.
The efficiency of a manager corresponds to the ratio between his or her positive effectiveness
(providing there is some value above zero) and the organizational expenses related to having him
or her as the director. The salary is not the main point; often it is insignificant in comparison with
the effect, and with other costs of having this manager…
Managerial capacity is the specific ability to manage the organization and to ensure the positive
effect of the governing process - including all managers and controllers from top to bottom, all
infrastructures they use to perform their functions, and any technologies involved.
Larger managerial capacity means an enhanced ability to find better solutions, and to implement
them in the best possible way. When suitable solutions are easy to find, and implementation does
not have too many challenges or directions – then greater managerial capacity may be not
needed. Reduced capacity may be sufficient and much cheaper. Thus, the efficiency of
management should always be considered the primary criteria.
Investments in enhancing managerial capacity may pay off (if the capacity really increases) due to
increased resource potential, or better functioning given the same resources, or a combination of
both. However, it may never be worthwhile if the increased capacity cost too much to create or
maintain, or is not really utilized.
Being an emergent feature of an organization, managerial capacity may rise or change with
changing structure, substituting one particular element for another, implementing new procedures,
etc. Thus increasing (or optimizing) managerial capacity is another important feature of the
organizational development process. As such, it should also be controlled and managed.
42