How does efficiency and effectiveness impact the perfomance of an organization? What are some of the examples?

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A company is in a constant struggle to balance efficiency and effectiveness, it is a delicate balance to achieve because overall performance of an organization is measured by customer satisfaction.  If a company decides that there are too many layers, for example, in the labor force, jobs could be eliminated...

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A company is in a constant struggle to balance efficiency and effectiveness, it is a delicate balance to achieve because overall performance of an organization is measured by customer satisfaction.  If a company decides that there are too many layers, for example, in the labor force, jobs could be eliminated to improve efficiency, but might result in a reduction in the company's ability to effectively serve the needs of their customers.

If a company wants to reduce costs with regard to overall expenses, in an effort to utilize resources, such as employees, more efficiently, a company might decide to reduce the workforce, let's say in a factory.  So the factory workers are now required to work harder to make up for the smaller size in the staff, but this also requires them to work overtime to meet demand, which results in 1. expenses on overtime pay, which might be more than regular salaries, and could result in health issues with the workers who become exhausted from the faster pace in the work environment.

More mistakes could result from employees who are always straining to meet production quotas, which eventually results in customer dissatisfaction with inferior product.  The natural outcome will be that customers will discontinue buying the product because the company can no longer be regarded as reliable.

Another example of a struggle between effectiveness and efficiency or output is found in the mail-order business with regard to shipments and distribution.  In most cases, there is an inspected by ticket or a check mark next to the item on the order sheet,  placed in the package that allows the customer to understand that their order was verified after it was placed in the box, before it was sealed and shipped.

If you purchase merchandise from a certain mail-order catalog and your order arrives incomplete or contains the wrong size or color item, this causes you an inconvenience as a customer, you are not happy with your purchase, your post-purchase dissonance is negative, it leaves an impression with you that will influence your purchases in the future.

What the customer does not know is that the company just eliminated several jobs, among the inspectors, because they were taking too long to do their job and the shipping process was delayed.  The company wants the shipping process to be quicker, so they don't use the inspectors anymore and packages are sealed without a final inspection, and many order are incorrect.

In the name of efficiency of resources, costs particularly, effectiveness has been reduced.

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