Comparison Between Organizational Efficiency and Effectiveness

Comparison Between Organizational Efficiency and Effectiveness

In today's economy, a business's prosperity and success lean on your team's ability level and how well they bring off a task. We all know that the business environment is wavering swiftly. Organizational efficiency and effectiveness are two primary paths that can yield growth and development for an organization. However, most of us get puzzled between the accurate apprehensions of both these terms. Organizational effectiveness and efficiency are equally crucial for a successful business.

What is the difference between Organizational Efficiency and Organizational Effectiveness?

Both these terms are frequently used in the management field and operations as well. To depict the difference between these methodical aspects, firstly, we need to understand their meaning.

Organizational Efficiency – It can be defined as doing any administrative task with great potency and expertise. Organizational efficiency can be understood as achieving goals and objectives with optimum utilization of resources without any wastage when using a few resources results in maximum output, which is considered organizational efficiency. These include monetary, human, natural resources, organic and raw materials etc. Resources are inlets in the procedure of conversion and transformation. The chief efficiency objective is to utilize minor resources to obtain apex outputs amid the transformation process.

Organizational efficiency can be achieved by appropriately utilizing natural and artificial resources and distributing fine-quality products and services. Focusing effectively on employee training and advanced education will help attain organizational efficiency. Keeping the customers' trending requirements in mind also enhances the organization's efficiency.

Organizational Effectiveness – We need to analyze a broader concept of organizational effectiveness than organizational efficiency. Administrative efficiency is directly related to the results. It is a process that assures final and proficient results by following specific potent steps. These steps include:

  • Leadership – In the leadership step, the organization and project leaders tend to set the objectives and goals needed to be achieved.
  • Communication– The communication step ensures the even distribution of targets, goals, responsibilities and objectives among the management and employees.
  • Answerability – The managers and senior team management must sustain employees to complete assigned tasks and targets effectively. It is a pretty crucial step for achieving organizational effectiveness.
  • Distribution and confinement – An organization must deliver products and services to the ultimate customers. The firm needs to distribute its end products to consumers.
  • Performance and realization – In this particular step in achieving organizational effectiveness, one needs to hire and engage talented employees to enhance performance and achieve goals.
  • Assessment and Evaluation – organizational effectiveness can only be achieved with proper measurement and Evaluation of processes and other management projects.

Difference between Organizational Efficiency and Organizational Effectiveness






It means doing the thing rightly within an organization

Process of doing the proper/correct something.

Focus on

End Results

Maximum utilization of resources

Time Sphere

Short Run

Long Run

Type of strategy used

Introvert Approach

Extrovert Approach


Both efficiency and effectiveness are equally crucial for an organization to grow and earn profits. An organization and management must balance these two aspects reasonably to maintain a successful business and a healthy working environment.

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