Distinction between Effectiveness and Efficiency

1 Both these words often refer to a particular objective and/or activity.

2 Effectiveness refers to whether any actions taken achieve an objective or not.    Thus we have effective behaviour – one which achieves the end objective and ineffective behaviour – which does not achieve the objective.

3 Efficiency refers to the amount of resources used in relation to the objective achieved.

4 Example. If Tom used $1,000 and one hour of time to achieve a particular objective but Pam used $800 and 45 minutes to achieve exactly the same objective, Pam’s activity would rate as more efficient.

5 The resources may include time, money, materials, machines anything required to achieve an end objective.

Efficiency has no meaning in connection with Ineffective Actions

6 In the above explanation of the distinction, efficiency has no meaning with respect to ineffective behaviour. If an action does not achieve an end objective, unless someone can measure the extent of achievement, the knowledge of the amount of resources used to reach some point has no meaning. We have nothing into which to divide the number of resources.

7 Even if someone achieves a certain proportion of the objective (e.g. half achieves it) we still do not know whether the resources necessary to achieve half the objective equal exactly half the resources necessary to achieve the whole objective.

8 In any case if someone can refer to half an objective then it could become one possible end objective and someone could relate the resource to that (different) objective. In this case efficiency would relate to a different objective.

9 Thus we would have a whole series of objectives and it would prove better to consider effectiveness in relation to each one.    Then we could measure efficiency for any part(s) of the original (overall) objective achieved.

A Summary Diagram

10 The following diagram shows the above concepts – specifically the relationship of effectiveness and efficiency.


11 Many people use words quite regularly without having any clear distinction between them.

12 The above distinction should help to achieve clearer communication if people distinguish the ideas of (a) whether a person (or some thing) has achieved an objective and (b) the resources necessary to achieve that objective.

13 The distinction represents an important one because in any Organisation some objectives prove so difficult to achieve that personnel tend to emphasise achieving or not achieving – with almost no emphasis on the resources used.

14 In other cases the objective identified rates as quite clear and definitely achievable. In this case the emphasis rests on achieving it with fewer resources.

15 Examples. Consider the objective – Change Tom’s attitude to the usefulness of achieving a particular objective. “Everyone accepts it will prove difficult to change Tom’s mind on this subject.” Under these circumstances people tend to give more attention to whether they have achieved the objective (as compared with the resources necessary to achieve it). In their planning, they ask whether the plan will achieve the objective, not – can we prepare a plan to achieve the objective with less cost (and/or fewer resources)?

16 However in a manufacturing process an Organisation will know that it can produce a particular article. Thus its personnel tend to look for ways of achieving the objective with less resources – as compared with just achieving the objective. The personnel know they will achieve the objective so they give their attention to efficiency – they take effectiveness for granted.

17 Where someone knows how to achieve an objective and can almost guarantee effectiveness, the person has more chance to look at the amount of resources they should use to achieve the particular objective.

18 Thus the above points suggest that the distinction should lead Managers to think more clearly about whether to concentrate on (a) factors to increase the chance of effectiveness or (b) factors to improve efficiency.

19 Less importantly – some people use the term interchangeably and/or change their meaning from one occasion to another. The adoption of the above distinction will reduce communication problems between two people who have both adopted the above approach.

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