Figure 1.1 Efficiency, Effectiveness, and Performance in an Organization EFFICIENCY Low l-IGI-I Lowr efficiency! High efficiency! High effectiveness High effectiveness Manager chooses the right Manager chooses the right goals to pursue. but does a poor goals to pursue and makes job of using resources to good use of resources to achieve these goals. achieve these goals. Result: A product that Result: A product that customers want, but that is too customers want at a qualityr and expensive for them to buy. price that they can afford. Low efficiency! High efficiency;{ Lovv effectiveness Low effectiveness EFFECTIVENESS Manager chooses the wrong Manager chooses inappropriate goals to pursue and makes poor goals. but makes good use of use of resources. resources to pursue these Result: A low-quality product goals. that customers do not want. Result: A highquality product that customers do not want. High-performing organizations are efficient and effective. Efficiency is a measure of how productively resources Ea gas are used to achieve a goal. Organizations are efficient when managers minimize the amount of input resources (such as labor, raw materials, and component parts) or the amount of time needed to produce a given output of goods or services. For example, Burger King develops ever more efficient fat fryers that not only reduce the amount of oil used in cooking, but also speed up the cooking of french fries. UPS develops new work routines to reduce delivery time, such as instructing drivers to leave their truck doors open when going short distances