Efficiency & Effectiveness

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A managers role within an organization is to supervise and co-ordinate the use of available material and human resources to achieve the organizations goals. Efficiency and effectiveness are both measures with which the performance of the organisation and in turn, the success of the manager can be determined. Although both factors are important for an organisation, focusing on one usually leads to a decline in the other. As mentioned by Chapman, Merritt and Norris (2000), a manager must balance both the efficiency and effectiveness of their decisions. Therefore, in order for a manger to be successful they must identify and create the optimal balance between the two.

Efficiency is described by Jones and George (2006 p.5) as being 'a measure of how well or how productively resources are used to achieve a goal'. Robbins et al. (2006 p.9) states that it is 'getting the most output from the least amount of inputs.' The resources an organisation has at its disposal are finite and often scarce. Managers are therefore concerned with making the most efficient use of these resources as possible. Braue's article (2006) gives an example of an organisation taking steps to improve its efficiency. It describes how the South Australian Department for Transport, Energy and Infrastructure implemented an online registration renewal system. This system is now used by 60 percent of vehicle owners who renew their registration online. This has resulted in reduced queue time in their offices and has dramatically streamlined their operations.

Effectiveness is given the simple definition by Bartol et al. (1998 p.11) as being 'the ability to choose appropriate goals and achieve them'. When a manager chooses the right goals for an organization to pursue and ensures that they are achieved to the desired degree, it can be said that the organization is effective. An example of effectiveness is given in an article by Woodhead (2006). He describes how Centrelink was given...
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