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Efficiency or Effectiveness?

by | 22/01/2021 | Blog

In Business, are these words interchangeable or do they have specific inference in the context of business?

 

Definition:

Efficiency is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without waste.

Effectiveness is the capability of producing a desired result or the ability to produce desired output. When something is deemed effective, it means it has an intended or expected outcome, or produces a deep, vivid impression.

 

Key Differences Between Efficiency and Effectiveness

  • The ability to produce maximum output with limited resources is known as Efficiency. The level of the nearness of the actual result with planned result is Effectiveness.
  • Efficiency is ‘to do the things perfectly’ while Effectiveness is ‘to do planned things, exceptionally’.
  • Efficiency has a short run perspective. Conversely, the long run is the point of view of Effectiveness.
  • Efficiency is yield-oriented. Unlike Effectiveness, which is result oriented.
  • Efficiency is measured in operations of the organisation, but Effectiveness is measured on that, which are made (outcomes) by the organisation.

 

My Conclusion:

Efficiency and Effectiveness both have a prominent place in the business environment which must be maintained by the organisation because its success lies on them. Efficiency has an introspective approach, i.e., it measures the performance of operations, processes, workers, cost, time, etc. inside the organisation. It has a clear focus on reducing the expenditure or wastage or eliminating unnecessary costs to achieve the output with a stated number of inputs.

Effectiveness, it has an extroverted approach, that highlights the relationship of the business organisation with the rest of the world to attain a competitive position in the market, i.e., it helps the organisation to judge the potency of the whole organisation by making strategies and choosing the best means for the attainment result.

My view: EFFECTIVENESS every time

Want to know more? Contact Malcolm Gibbs of Q&A Management Services Ltd, to get your business off to a flying start.

 

Written by Malcolm Gibbs
Q&A Management Services Ltd
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