Page 71 - CITN 2017 Journal

2. LITERATURE REVIEW

Corporate Effectiveness and Efficiency
An organization has finite resources and must decide on how best to use them to develop
strengths when pursuing opportunity worldwide. A key assumption is that effective
resource management can deliver competitive advantage; organizations must manage
people, information, knowledge and technology resources along with tangible goods and
materials if they are to be responsive, innovative, effective and efficient. While managers
are striving for better performance results, scientists are reaching for best ways to evaluate
the organization. One of the most common ways to assess the performance of a firm is to
measure the effectiveness or the efficiency of the organization.
Effectiveness and efficiency are exclusive performance measures, which firms can use to
assess their performance. Efficiency is oriented towards successful input transformation
into outputs, where effectiveness measures how outputs interact with the economic and
social environment. Bounds, Dobbins, and Fowler (2005); Robbins, (2000) in their various
studies opined that common measures of the organizational performance are effectiveness
and efficiency. Therefore corporate drivers, suppliers and investors these two terms might
look synonymous, yet, according to Mouzas (2006), each of these terms have their own
distinct meaning. Most organizations assess their performance in terms of effectiveness.
Their main focus is to achieve their mission, goals and vision. At the same time, there is
plethora of organizations, which value their performance in terms of their efficiency,
which relates to the optimal use of resources to achieve the desired output (Chavan, 2009).
Cameron (1986) and Hitt (1988) have suggested that studies of organizational
performance should include multiple criteria. According to Pennings and Goodman
(1977), efficiency and effectiveness are performance domains that have been clearly
distinguished. Efficiency refers to an input-output ratio or comparison, whereas
effectiveness refers to an absolute level of either input acquisition or outcome attainment.
Although the best-performing organizations are both effective and efficient (Katz & Kahn,
1978), however, according to Mahoney (1988), there may be trade-offs between the two.
While Kopelman, Brief & Guzzo (1990) assert that progression along one performance
dimension could entail regression along another. Thus, an organization can be effective,
efficient, both, or neither.

Corporate Effectiveness and Asset measurement
Conceptual Framework does not articulate a comprehensive set of criteria for determining
the appropriate measurement bases for assets and liabilities. However, it is the ability of
management to put machinery in place towards achieving the organization's set goal.

According to The American Public Works Association Asset Management Task Force
(2002), asset management is a methodology needed by those who are responsible for
efficiently allocating generally insufficient funds amongst valid and competing needs.
Asset management systems are goal-driven and, like the traditional planning process,
include components for data collection, strategy evaluation, program development, and
feedback. Also, according to Organization for European Cooperation and
Development(1999), proper asset management, can improve organization's project and
infrastructure quality, increase information accessibility and use, enhance and sharpen
decision-making, make more effective investments and decrease overall costs, including
the social and economic impacts of the economy.

Asset management is a systematic process of maintaining, upgrading, and operating
physical assets cost-effectively. It combines engineering principles with sound business

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