Mukul Ltd has received an order of supplying 15000 units of a specific type of auto spare part. The per unit cost of production of such part is ₹980/-. In order to avoid wastage of resources and to keep the cost low, the supervisor had instructed the workers to take approvals at various steps. As a result, the order could not be delivered on time. The client cancelled the order due to the delay. Which concept of management is discussed in the above case ?

Efficient but not effective

The correct answer is option (3) : Efficient but not effective.

Effectiveness and efficiency are two sides of the same coin. But these two aspects need to be balanced and management at times, has to compromise with efficiency. At times, a business may concentrate more on producing goods with fewer resources i.e., cutting down cost but not achieving the target production. Consequently, the goods do not reach the market and hence the demand for them declines and competitors enter the market This is a case of being efficient but not effective since the goods did not reach the market. Therefore, it is important for management to achieve goals (effectiveness) with minimum resources i.e., as efficiently as possible while maintaining a balance between effectiveness and efficiency. Usually high efficiency is associated with high effectiveness which is the aim of all managers. But undue emphasis on high efficiency without being effective is also not desirable. Poor management is due to both inefficiency and ineffectiveness.