Efficiency Or Effectiveness? Which Is More Important In Today's Business Environment?

Assignment Prompt

In Today’s Environment, Which Is More Important To Organizations—Efficiency Or Effectiveness? Explain Your Choice.

Sample Answer

Understanding the terms effectiveness and efficiency in relation to the running of an organization is critical to answer this question. Efficiency refers to getting the work done in a manner that uses the least input for the greatest output. On the other hand, effectiveness implies following the proper procedures to ensure the achievement of desired results. In other words, efficiency relates to resource utilization (including time) in production while effectiveness is a measure of quality of the goods or services produced. Having understood that, efficiency and effectiveness are heavily dependent in ensuring the success of any organization. Without one, there will be disruption in the proper functioning of an organization especially in today’s highly dynamic and competitive business environment.

Efficiency is important in that it helps in the proper utilization of resources in an organization. For an organization to thrive in the ever-changing business environment, it needs to keep good track of the income, assets, and liabilities. At the end of the day, there must be a balance in these elements. Businesses that look to maximize their profits must eliminate inefficiencies in the production of their goods or services. Efficiency helps cut costs and maximize profits. For example, the daily production of milk in a dairy factory must be done fast enough to cater for daily customer needs. Therefore, things such as breakdown of machines cause inefficiencies that ultimately reduce profits for the company.

Effectiveness is equally important to an organization because it helps a company to produce goods or services in line with people’s desire and the organization’s goal. It includes how employees interact and how well they perform their roles in the production process. Being effective is vital in the modern dynamic business world since there is high competition and the need to remain relevant in the market.

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