Peter Drucker, management guru talks about efficiency and effectiveness as two important concepts of management. Efficiency is “doing things right” and Effectiveness is “doing the right thing”. Efficiency is an input output concept wherein an efficient manager is one that uses minimum inputs to product maximum outputs. Effectiveness, by contrast, involves chosing the right goals. A manager, who selects the wrong goal, says producing Plasma televisions, when the demand is for LCDs, is an ineffective manager, even if the Plasmas are produced with maximum efficiency.
No amount of efficiency can make up for lack of effectiveness. According to Drucker, Effectiveness is the key to an organisation’s success.