Efficiency and effectiveness are both commonly used management terms. Efficiency means whatever we produce or perform; it should be done in a perfect way. Efficiency refers to doing things in a right manner. It is defined as the output to input ratio and focuses on getting the maximum output with minimum resources.
Effectiveness has a broader approach, which means the extent to which the actual results have been achieved to fulfill the desired outcome, ie, doing accurate things. Being Effective is about doing the right things while being Efficient is about doing things right. Difference between Efficiency and Effectiveness:
| Efficiency |
Effectiveness |
| (1) Work is to be done in a correct manner |
(1) Doing accurate work only |
| (2) Emphasis is on inputs and outputs |
(2) Emphasis on means and ends |
| (3) Short run objective |
(3) Long run objective |
| (4) Narrow concept (Introverted) |
(4) Wide concept (Extroverted) |
| (5) Aims at strategy implementation |
(5) Aims at strategy formulation |
