Wednesday, May 27, 2009

What are effectiveness and efficiency, and how are they related to organizational behavior?

What are effectiveness and efficiency, and how are they related to organizational behavior?

An organization is productive if it achieves its goals (effective) and does so by transferring inputs to outputs at the lowest cost (efficiency). As such, productivity implies a concern for both effectiveness and efficiency. Hospital example—effective when it successfully meets the needs of its clientele. It is efficient when it can do so at a low cost. Business firm example — effective when it attains its sales or market share goals, but its productivity also depends on achieving those goals efficiently. Achieving productivity through effectiveness and efficiency involves all three levels of an organization, the individual, the group, and the organizational system. OB provides the tools, insights, and ability to predict outcomes needed to balance these two elements.

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