What is efficiency? What is effectiveness? Imagine you manage a local car wash. Which criteria might you use to determine your efficiency as a manager? Which criteria might you use to determine your effectiveness?
What will be an ideal response?
Efficiency is the means, while effectiveness is the ends. Efficiency is the means of attaining the organization's goals. To be efficient means to use resources (people, money, raw materials, and the like) wisely and costeffectively. To be effective means to achieve results, to make the right decisions, and to successfully carry them out so that they achieve the organization's goals. Good managers are concerned with trying to achieve both qualities.
Answers regarding the efficiency and effectiveness of a manager at a local car wash will vary, but here are two possibilities:
Because efficiency means using resources wisely and cost-effectively, a manager might appraise his efficiency on how much water the car wash uses (for example, does the car wash recycle water in order to keep its water bills down?), how well he negotiates with vendors (for example, by getting the best possible prices on detergent and polish), and how well he manages his staff (which might be measured by turnover or number of sick days taken).
To determine his effectiveness, the manager would look at how well he carries out the company's goals. If the company's owners have set a goal of increasing monthly subscriptions (unlimited car washes for a set fee per car per month) by 10 percent per month, the manager can look at the number of subscriptions sold each week to determine if he is meeting that goal.
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