EFFICIENCY AND EFFECTIVENESS | CAP CLASSES

Hi Friends !!!

Good Morning. Hope you are doing well.

Happy weekend, chilling winter and lazy morning. Hope you are enjoying the climate.

Today I came up with a very peculiar topic. The difference between Efficiency and Effectiveness.

We use these two words regularly but am scared, do we know the actual meanings and proper usage? Are they same, identical or similar? Can they be used synonymous?

What is the difference between Efficiency and Effectiveness? Have you ever thought of it? Usually we use efficiency and effectiveness words in same contexts. But do you know, there is not a subtle but a dramatic difference between these two words.

To throw some light on it, first let us see some words where we use these words.

1. Effective leader (we don’t use efficient leader)
2. Labour efficiency (we don’t use labour effectiveness)
3. Effective utilization of funds (in Financial Management) (but not efficient use of funds)
4. Effective communication (but not efficient communication)

From the above, what did you understand? Is it like, Effectiveness is in planning or thinking and efficiency is in implementing and doing. If it is so, you are damn correct.

Let us understand the two words starting with their dictionary meanings. The dictionary meaning of the words is as follows.

a)      Effectiveness:

Adequate to accomplish a purpose, producing the intended or expected result (Pursuing right goals)

b)     Efficiency:

Performing or functioning in the best possible manner with the least waste of time and effort. (Utilization of resources)

The difference between efficiency and effectiveness is,

effectiveness is about doing right things and

efficiency is about doing things right.

So now on, whenever you do think of and do something, ask yourself these two questions.

1. In the planning stage – “Am I doing right thing” (is it a right thing to do?)
2. While executing the plan – “Am I doing it right” (the way in which the plan is being put into action is right or can it be better)?

In The context of an organisation, the top level management should be effective and lower level management should be efficient.

The combinations of effectiveness and efficiency can give them a solid growth on a positive note and can cause the decay if it is poor.

There can be four combinations as given below

1. Effective top level and efficient lower level
2. Effective top level and inefficient lower level
3. Ineffective top level and efficient lower level
4. Ineffective top level and inefficient lower level

Till the time, the top level is effective; firm survives and has good chances to grow. This is because, if the top level is effective, even if the lower level is inefficient, it can be addressed either by way of trainings or in worst case replacement of bottom line personnel. However, if the top level is ineffective, there can’t be a solution to the problem except in a situation where they can be replaced with new blood.

Consider the following diagram: