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Management: Effectiveness versus efficiency

Management is almost entirely concerned with getting things done and determing how to get things accomplished. In each manager's mind there is a debate over whether more concern should go into low-cost production or to disregard production costs and go after complete satisfaction of goals and objectives. These two paths are known as the decisions which seperate "Effectiveness" and "Efficiency."

Effectiveness means that the job was done correctly and was accomplished but does not regard if the job was done inexpensively or on time. Whereas, efficiency means that the job was accomplished cheaply and on time yet may not be a very thorough and impressive accomplishment.

Let us place in the simple example of creating a marketing brochure. To be effective the brochure must be colorful, informative, well-written, well-organized on the page, and presented on a common-sensical layout such as a tri-fold page, on decent quality paper. Effectiveness would be concerned with having the most colorful, most well-written, grammatically correct, most visually pleasing and interesting lay out possible, which may cost hundreds of dollars for merely a few dozen print outs. Yet, efficiency would accept minimal color, appropriate wording, a simple layout, on simple paper. The efficient brochure may yield two thousand dollars of business activiy and only cost one hundred dollars, yet the effective marketing brochure may yield four thousand dollars but cost one thousand dollars to produce. There is some debate as to which is more desirable: a return of $20 to 1; or an overall greater profit of $1100.

One marketing brochure was more effective with a lower rate of profit return, whereas the other brochure was more efficient but less profitable overall.

A simple analysis is to stretch out the comparision. Imagine if the efficient company used its same tactics and spend $1000 on their campaign. The revenue return may have produced as much as $20,000 (although the law of diminishing returns claims that they would have experienced a moment of less return for each continual dollar.) Whereas, the effective company only yielded $4000 in revenue from $1000.

Let us view this scenario in the case of a military battle, known as the pyrrhic victories. A pyrrhic victory is a win that came at too great of a cost. The ancient king pyrrhus won two battles against the Romans, yet was left with a hollow army that could no longer fight. He was effective. He did win the battle, but he lost to many men to


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