Efficiency and/or Effectiveness in Managing Organizations

Abstract

Does efficiency or effectiveness lead to successful organization management? Being efficient means investing as minimum resources as possible in order to get a desired result. Being effective by contrast means to achieve a desired result by using the right means or pursuing the right action. The question is not how to do this or that but rather, in what way the resources and efforts of a business should be directed to produce superior results rather than the usual efficient outcomes it can create. Organizational efficiency is the ratio between inputs and outputs in an organization. Organizational effectiveness is whether the organization fulfills its goals in doing the right thing. Concentrating on efficiency rather than effectiveness may limit an organization, so the argument of this article is that an organization should focus on effectiveness that is to pursue the right action. An effective organization is one that succeeds in adapting itself in place, time and content to a rapidly changing reality; such a business or public organization would succeeds over time in fulfilling and achieving its goals.