Efficiency and effectiveness in management
Efficiency in a company or organization is the ability to produce using the least input. The input may be in the form of energy, money, time and other various raw materials in a company. The produce is referred to as the output. Therefore efficiency is fully described as, the ability to maximize output with less amount of input. With efficiency, a company is expected to use the limited recourses to maximize their production. Efficiency ensures that the output is achieved in the best and cheapest way.
Efficiency dictates that an operation in an organization must be done in a precise manner. The staff in an organization must spend the least time doing their duties knowing that time is a limited resource. An individual in managerial posts must ensure that communication in an organization takes the shortest and most direct way to the intended people. Also, the manner of documentation in an organization must be well chosen to save time in case someone ones to refer to a particular document.
Efficiency is concerned with strategy implementation, and it’s a short run process. A company must design its strategies and implement them within a short time to determine whether they are viable or not. The company must use the available resources to implement their policies.
A company must maximize its output l for efficient operation. A company must be capable of optimizing the production since efficiency is mainly concerned with the yield. Efficiency focuses on how to reduce expenses of a company, e.g. wages, to realize maximum yield in a company.
Effectiveness refers to a long-term assessment of how something is successful in providing the result. The result might not be the exact wanted results, but its closeness to wanted result can be taken as a success. From the results, the personnel responsible can know whether the means they used in their production is sufficient enough to be employed in the future.
Effectiveness deals with strategy formulation. In attempts to improve productivity in a company, the long term results must be monitored and new methods of production formulated. The development of new strategies helps in making a company have an advantage over other competitors. Customers or clients preferences changes with time, and therefore, to keep your first customers plus new customers, a company must satisfy them effectively. Research must be conducted to know what exactly the customers expect and want.
A company must focus on doing things accurately to be effective. The means of production must focus on producing desired end products. Since effectiveness depends on formulating a long term strategy, if things are not done accurately, in the long run, it may result in the closing of the company due to excessive losses. The management must ensure things are done well to prove that the formulations are targeting their intended customers.
Efficiency and effectiveness have a crucial role to play in business management to realize success in a competing environment. Efficiency has an introspective approach in the company; it’s for internal operation of the company. Efficiency measures the amount of every resource put into production in a company against the output. Therefore expenses can be controlled to realize maximum profit. Effectiveness has extroverted approach; it deals with the business environs. Effectiveness helps a company know how to relate to other firms and compete effectively in the market. Therefore effectiveness and efficiency must complement each in the management of a company or organization.