Differences between efficiency and

effectiveness and their importance for

organization performance
• Organization is a social entity that is goal-directed ( to achieve some outcomes, such as a
profit) and deliberately structured( tasks are divided, and responsibility for their performance
is assigned to organization members)
• Performance is defined as the organization’s ability to attain its goals by using resources in an
efficient and effective manner
• Managers are responsible for seeing that resources are used wisely to attain organizational
goals
• Effectiveness is the degree to which the organization achieve a stated goals ( providing a
product or service that customers value)
• Efficiency refers to the amount of resources used to achieve an organizational goals .It is
based on how much raw material, money and people are necessary for producing a given
volume of output.
• All managers have to pay attention to costs, but severe cost cutting to improve efficiency
• The ultimate responsibility for managers is to achieve high performance, which is the
attainment of organizational goals by using resources in an efficient( cost low) and effective
( financially successful) manners.
Efficiency Effectiveness

R G
E O
S A
O L
Low
U Goals High
R A
waste
C attainment T
E T
A
U I
S N
A M
G E
E N
T
 Technical, Human and Conceptual
skills(Management Skills)
• The necessary skills for managing a department or an organization can be placed in three categories:
conceptual, human and technical
• Technical skill is the understanding and proficiency in their performance of specific tasks. It includes
mastery of the methods, techniques and equipment involved in specific functions such as manufacturing,
or finance.
• Technical skills include specialized knowledge, analytical ability, and the competent use of tools and
techniques to solve problems in that specific discipline.
• Important at lower organization levels( Job specific skill/ Hard skill)
• Human skill is the ability to work with and through other people and to work effectively as a group
member.( soft skill)
• Ability to motivate, coordinate, lead, communicate and resolve conflicts
• Need in all levels of management
• Conceptual skill is the cognitive ability to see the organization as a whole and the relationship among its
parts.( soft skill= EQ+IQ)
• Conceptual skill involve knowing where one’s team fits into the organization and how the organization fits
into the industry, the community, and the broader business and social environment.
• The ability to think strategically – long- term view ( who can do what?)
Relationship of technical, human and conceptual skills
Non-managers
Technical skills
Human skills
Conceptual
skills

Middle managers
Technical
skills
Human skills
Conceptual skills
 Management types and the horizontal and
vertical differences between them
• Managers use conceptual, human and technical skills to perform the four management
functions of planning, organizing, leading and controlling.
• Managers are responsible for different departments, work at different levels in the
hierarchy, and meet different requirements for achieving high performance.
• There are many types of managers based on their purpose and location in an organization
Vertical differences(Top-down management structure)
An important determinant of the manager’s job is the hierarchical level
( 3 levels )- top, middle and first-line managers
• First-line manager – facilitating individual performance
• Middle-manager – less with individual performance and more with linking groups of people
,such as , allocating resources , coordinating teams or putting top management plans into
action across the organization
• Top-level manager – monitoring the external environment and determining the best
strategy to be competitive
Top managers- top of the hierarchy and responsible for the entire organization
• Responsible for setting organization goals, defining strategies for achieving them, monitoring and
interpreting the external environment, and making decisions that affect the entire organization.
• Look to long-term future and concern themselves with general environmental trends and the
organizations’ overall success
• Responsible for communicating a shared vision for the organization
Middle managers-middle level of the organization and responsible for business units and major
departments( departmental head, division head, etc)
• Responsible for implementing the overall strategies and policies defined by the top managers
• Concerned with the near future, rather than with long-range planning.
• traditional pyramidal organization charts were flattened to allow information to flow quickly
from top to bottom and decisions to be made with greater speed.
• Monitoring performance and creating reports
• Success of the organization depends partly on middle managers effectively implementing the
company’s strategy
First-line manager –responsible for the pro-level of management (supervisor, line-manager, etc)
• Responsible for teams and non-management employees
• Primary concern is application of rules and procedures to achieve efficient production, provide
technical assistance, and motivate subordinates
• Accomplishing day-to-day goals
Horizontal differences
The other major difference in management occurs horizontally across the
organization.
Functional manager- responsibility for departments that perform a single
functional task and have employees with similar training and skills
( advertising, sales, finance, HR, etc)
Line-manager – responsibility for the manufacturing and marketing
departments that make or sell the product or service
Staff manager- in charge of departments, such as finance and HR that support
line departments
General manager – responsibility for several departments that perform
different functions
Project manager also have general management responsibility because they
coordinate people across several departments to accomplish a specific project
Top managers
(Operate business in order to
accomplish objectives/co-ordinate activities
To attain objectives)long-term
Middle managers
(Assist seniors executives and
Implementing overall strategies and
Policy defined by top managers)
Near future
First-line managers
(Put management plans into
effective action, allocating individual work and seeing that it’s accomplished)day-to-day