Class 12 Business Studies - Chapter Nature and Significance of Management NCERT Solutions | “A successful enterprise has to ac
“A successful enterprise has to achieve its goals effectively and efficiently.” Explain.
Management is the place of working together to achieve a specific goal by utilising the resources available effectively and efficiently. For management it is important to be both effective and efficient. Effectiveness and efficiency are two sides of the same coins. Effectiveness means finishing the given task in a given period of time. In other words it is concerned with the end result. It is one of the important aspects of management.
Efficiency means doing the task correctly, and with least amount of resources at minimum cost. If an organisation is efficient then it would reduce the cost of the organisation and as a result it will lead to increase in profit. Effectiveness and efficiency are two important aspects of the management for achieving the desired goal. Being effective means actually achieving the goals without considering the cost of input. While, being efficient will reduce the cost of input which results in increase in profit. That is why if the company focuses on effectiveness, then it may have to compromise on efficiency and vice versa.
For example if a company need to hire more employees to achieve the target then it would increase the cost of production as they need to give salary to the employees that are hired for that project. Here the task will complete effectively not efficiently.
And if the company continues to work with available resources then it would delay the project. Here the cost is not increased and the work is done efficiently not effectively. So, the company has to compromise on one for the other. Therefore, it is important for management to achieve goals with minimum resources as possible while maintaining a balance between effectiveness and efficiency.
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