Management

Gaga and Madonna are factory managers in Richie Dollies Limited, a toy company that specialises in producing designer dolls for rich customers worldwide. Gaga is in charge of the company’s factory in Batam while Madonna is in charge of the factory in Java. Last year, under Gaga’s management, her factory spent $300,000 to produce $9,000,000 worth of dolls while Madonna’s factory spent $500,000 to produce $10,000,000 worth of dolls. Gaga managed to source for the cheapest form of production for her factory which, unfortunately, caused the release of some pollutants into the air and soil that could cause long-term harm to the health of people living nearby. Madonna was aware of this same production method but decided that it was against her conscience to use it due to its possible health hazards. Instead Madonna decided to use the second cheapest form of production which does not emit pollutants into the external environment. Distinguish between efficiency and effectiveness in management. (5 marks) Which manager, Gaga or Madonna, is more efficient as a manager? Explain. (6 marks) Which manager, Gaga or Madonna, is more effective as a manager? Explain. (6 marks)

The definition of efficiency in management is to use resources, such as people, money, raw materials, wisely and cost-effectively. While, the definition of effectiveness in management is to achieve results, to make the right decisions and to successfully carry them out so that they can achieve organizational goals. An efficient manager will strive to maximize productivity at work, while, an effective manager is able to do the right things for his or her company, staff as well as customers.

Gaga is more efficient as a manager. An efficient manager will use resources such as people, money, raw materials, wisely and cost-effectively. An efficient manager will strive to maximize productivity at work. Productivity can be calculated by the following ratio: Output/Input. As Gaga’s factory