Efficiency and Effectiveness
The resources of the economy are very limited. In order for a business to earn profits, the management of a company should always make sure that their resources are distributed throughout the company efficiently and effectively. However, though this idea is considered a very important one, many people still fail to see the difference of effectiveness and efficiency.
Efficiency is concerned with getting the most output from a given input. This indicates that a company should make sure that they make the most out of their every resource. In relation with company activities, the efficiency of an activity lies on how it is done; a job is considered efficient when they are done correctly.
On the other hand is effectiveness. Compared to efficiency, this characteristic is more involved with the attainment of the many goals of an organization. It is more concerned with whether the employees are doing the right thing; the right thing being any activity that is to help the company reach its goals.
In any business, though these two might seem to contrast, it is important to balance the efficiency and effectiveness of activities. If a business wants to prosper and come up with positive profits, it should learn how to measure the weighs that these two hold.