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Both the terms efficient and effective refer to the ability of a person, enterprise, or process to perform a function well. An efficient person has high efficiency while an effective person has high effectiveness. However there is a small but very significant difference difference between these two measure of performance. Efficiency refers to the economy in use of resources for performing a task, and effectiveness refers to the total output generated.
Efficiency is measured in terms of ratio of "output generated" divided by inputs used in the process - for example, widgets produced per kilogram of raw material used.
Effectiveness measures the total output produced - for example, total widgets produced in a day.
An example will help us to understand this concept better. Two different lathe operators, say A and B, are assigned the task of making bushes on a lathe. Let us say A produces 100 bushes in a shift, and in the process uses up 5 kilogram of steel rod in the process. In comparison, B produces 120 bushes using 7.5 kilogram of steel rod.
The effectiveness and efficiency of these two lathe operators based on their performance is compared in table below:
Operator Effectiveness Efficiency
A 100 Bushes per shift 20 Bush per Kg of Steel
B 120 Bushes per shift 16 Bush per Kg of Steel
Thus we see that operator A has higher efficiency but lower effectiveness.
In management, it is important to achieve high efficiency as well as effectiveness. The relative emphasis to be given to efficiency and effectiveness will depend from situation to situation. For example, we must be careful to control the quantity and cost of water used in a factory during routine operations. However, if the same factory is on fire, we will not think twice about using whatever water can be made available for putting out the fire.
What is the difference between an efficient and an effective
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