Effectiveness:
Entails promptly achieving a stated
organizational objective. Given the reality of limited resources, effectiveness
alone is not enough.
Efficiency:
Entails balancing the amount of resources used to achieve an objective against
what actually accomplished. The more favorable the ratio of benefits to costs,
the greater the efficiency.
Productivity improvement
(a favorable ratio between inputs and output) is the constant struggle to
balance effectiveness and efficiency.
Making the Most of Limited Resources
We live in a world of scarcity. There is a lopsided
use of resources. Our planet is becoming increasingly crowded. Approximately
83% of the world’s population in the year 2020 will live in poor and
less-developed countries. Managers are responsible for the efficient and
effective use of the basic factors of production–land, labor, and capital.
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