1. Contrast efficiency and effectiveness.

Give example of a time when an

organization was effective but not efficient, efficient but not effective, both
efficient and effective and neither efficient nor effective.
Efficiency: Efficiency refers to the ability to produce maximum output from the
given input with the least waste of time, effort, money, energy and raw
materials. On the other hand, according to Peter F. Drucker, “Efficiency is doing
things right.”
It can be measured quantitatively by designing and attaining the input-output
ratios of company’s resources like funds, energy, material, labor, etc.
Effectiveness: Effectiveness refers to the extent to which something has been
done, to achieve the targeted outcome. It means the degree of closeness of the
achieved objective with the predetermined goal to examine potency of the
whole entity. On the other hand, according to Peter F. Drucker, “Effectiveness is
doing the right things.”
Effectiveness is result oriented that shows how excellently an activity has been
performed that led to the achievement of the intended outcome which is either
accurate or next to perfect.

Efficiency Effectiveness
Meaning The virtue of being efficient The magnitude of nearness of the
is known as efficient. actual result with the intended
result is known as effectiveness.
What is it? Work is to be done in a Doing accurate work.
correct manner.
Approach Yield oriented Result oriented
Emphasis on Inputs and outputs Means and ends.
Time horizon Short run perspective Long run perspective
Ascertainment Strategy implementation Strategy formulation

Example:
1. An organization was effective but not efficient:
XYZ apparel limited wanted to gain sells of BDT 100 crore from their new factory
by end of the year. In order to get that targeted sells the organization used
resources (Man, Machine, Time, Raw materials etc.) of BDT 120 crore. As the
organization was able to achieve the target sells so it was effective. But it used
more resources to achieve the target so the organization was not efficient.

2. An organization was efficient but not effective:

XYZ apparel limited wanted to produce 1 lakh garments by end of the month.
But at the end of the month the organization was able to produce 90 thousand
garments. The process of producing the garments was right but it was not able
to meet the target. So, the organization was efficient but not effective.

3. An organization was both efficient and effective:

XYZ apparel limited wanted to produce 1 lakh garments by end of the month
with predefined allocated resources. And at the end of the month the
organization was able to produce 1 lakh garments by using less resources than
that was allocated. The process of producing the garments was right and it was
able to meet the target. So, the organization was both efficient and effective.

4. An organization was neither efficient nor effective:

XYZ apparel limited wanted to produce 1 lakh garments by end of the month
with predefined allocated resources. And at the end of the month the
organization was able to produce 90 thousand garments but it used more
resources than that was allocated. As the organization was not able to meet the
target and used more resources to produce less so the organization was neither
efficient nor effective.