Read the Passage Given below and answer the following question.
Namchi Designer Candles, run by Smita has 100 per cent women as employees and they also produce varieties of candles. During Diwali, they produce customized candles meant for the occasion. These Diwali themed candle has been a success in Sikkim as its demand increases on a yearly basis. Namchi Designer Candles has been receiving numerous awards such as North East Women Entrepreneur of the year 2015-2016 for Sikkim and Sreemanta Shankar Mission of Guwahati on 26th April 2018 at New Delhi. A typical day in Smita’s life consists of a series of interrelated and continuous functions. She has to plan a special festive collection for Diwali. This means organising more funds and recruiting more workers. She also has to regularly communicate with her suppliers to ensure that deadlines regarding delivery of goods are met. In the course of the day, she meets customers for a general feedback and any suggestions that they may have.

Suppose, the target production set by Smita is 5000 candle boxes by Diwali. However, she was not able to recruit more workers and hence, to achieve this target She convinced the workers to do overtime at higher wage rate resulting in acheiving the production target of 5000 boxes but at a higher production cost. Under this situation, which of the following is correct?

Smita is effective but not efficient

In this case, the manager (Smita) was effective but not so efficient, since for the same output, more inputs (labour cost ) were used.

Being effective or doing work effectively basically means finishing the given task. Effectiveness in management is concerned with doing the right task, completing activities and achieving goals. In other words, it is concerned with the end result.

Efficiency means doing the task correctly and with minimum cost. There is a kind of cost-benefit analysis involved and the relationship between inputs and outputs. If by using less resources (i.e., the inputs) more benefits are derived (i.e., the outputs) then efficiency has increased. Efficiency is also increased when for the same benefit or outputs, fewer resources are used and less costs are incurred. Input resources are money, materials, equipment and persons required to do a particular task. Obviously, management is concerned with the efficient use of these resources, because they reduce costs and ultimately lead to higher profits.