Business

Efficiency

Efficiency involves getting the most output from the least amount of inputs, i.e. doing things right.

It is a measure of how well resources are used to achieve a goal; usually managers must try to minimize the input of resources to attain same goal.

Effectiveness

It involves meeting the objectives of the organisation by using inputs productively to meet customers’ needs.

A measure of the appropriateness of the goals chosen (are these the right goals?), and the degree to which they are achieved; organisations are more effective when managers choose the correct goals and then achieve them.