Define and discuss the relationship between effectiveness and efficiency. Why is it important for managers to balance these?

Effectiveness is the process of management that entails achieving a stated organizational objective, whereas efficiency is the process of management that balances the amount of resources used to achieve an objective against what is actually accomplished. The more favorable the ratio of benefits to costs, the greater the efficiency. Managers are responsible for balancing effectiveness and efficiency; too much emphasis in either direction leads to mismanagement. On the one hand, managers must be effective by getting the job done. On the other hand, managers need to be efficient by reducing costs and not wasting resources. In addition, those managers who are too stingy with resources may fail to get the job done. Balancing effectiveness and efficiency is important for any organization that is committed to productivity improvement (a favorable ratio of input and output) and sustainability.