Source: http://www.digital-knowledge.nl/dikn/en/to-develop/to-change/efficiency-versus-effectiveness.html Change is often difficult; sometimes it's not. Sometimes it's just a matter of looking at things differently. In our society efficiency is seen as very important, but should we really make efficiency that important? Perhaps by using slightly different, but very similar measures, the nett result is really different! The terms effectiveness and efficiency are related. Efficiency describes the nett use of resources required to perform a task; effectiveness refers to the degree a goal is reached.
Efficiency is a measure of the way something functions, as seen from the point of view of that thing or process. Efficiency primarily describes whether something is done correctly, in essence 'economically'. To determine efficiency, it suffices to investigate the way something works (and possibly compare it to something similar). If the business operations are geared towards maximum efficiency, all resources (internal organisation, processes, budgets, utilisation of people and other resources) have optimum fit. Whether that yields the intended results regarding customer demands is – at least – uncertain. This type of business implementation cannot guarantee the result from that perspective.
Many traditional companies base themselves, implicitly or explicitly, on efficiency as the driving parameter for the design of the structure and processes of the organisation. In contrast, effectiveness describes the way something contributes to the effect desired, seen from the result. Effectiveness is about getting the right thing done. To determine whether something is effective, it is necessary to measure the contribution towards reaching the goal(s). Many knowledge-driven organisations prefer effectiveness over efficiency; however, this does not always express itself in the structure and processes of the organisation.