Efficiency and Effectiveness

While the productivity in an organization can be improved by better application of materials, improved processes and machinery, faster production lines and application of more energy from the workers, however this is not all. The productivity measures mentioned so far and the technique of time study, methods study, production scheduling, inventory control, etc are basically efficiency-oriented.

There is nothing wrong in being efficiency-oriented; however, when the prime motive is efficiency rather than effectiveness, the productivity improvements happen to be generally of a short-term nature. More lasting and more appropriate results can only be produced through a change in the attitudinal aspects of the people in the organization from top to the lower level.

The attitude of the top management has to be right in order to give the right direction. The attitude of the lower levels of people has to be tuned to that of the higher levels of management, so that the right message is picked up. A right direction leaves a prolonged impact on productivity. Productivity is a vector and not a scalar quantity.

If emphasis is laid only on increasing efficiency, no doubt there will be more action. Machines will work for long hours, surplus quantity will be produced, more papers will be shuffled or filed, more people will be seen running around, and there will be more of everything that you can see. But, such an effort will in fact be worthless. A well-run organization improves productivity by eliminating such unnecessary exercises and reassigning the persons to needed work.

While more output with the same or reduced inputs is good, it must be remembered that all that is ‘put out’ is not output. A product can be truly termed as an output only if it is marketable; that is, if the customer’s want it and are ready to buy it. Too much of quantity orientation entails a danger that one will be so submerged in work, that he/she will not be able view, listen or even think about the customer.

After all, it is the customer for whose satisfaction an organization works hard. Overemphasis on trivia can drown out critical thinking and acting. It takes constant reaffirmation of “what the business is about” in order to stay at the top.

Quantity Orientation:

Our Indian industry is replete with quantity orientation. There are always AOPs (Annual Operating Plans) or targets to meet. The activity during the year-end (February and March) is feverish. Again, during April and May there is a lull. Obviously, market is not asking for this pattern of production. Production volumes are not driven by the market but by the ‘targets’ or the numbers themselves. Several managers, from the top to the junior level, are busy saving their skins because, their productivity or performance is measured by the numbers without relating to the ultimate objective of the organization of providing value to the customer. The real objectives and goals lie in the background and the ‘appearance’ of managerial productivity takes the front seat. Sometimes even the modern management techniques/ procedures become the victim of the following ‘appearance’ orientation. One industry has been doing ‘Business Process Reengineering’ and believe more in TQM for which they have begun a Small Group Activity. Through ERP (Enterprise Resource Planning) they are going to cut down late deliveries by one-third from the present level of about 80 percent.

While the techniques are good, the ‘intent’ behind the usage of the buzz-words is missing. Therefore, the application takes place haphazardly. The buzz-words have become status symbols of the managerial class in a large number of Indian organizations. In several cases, unnecessary work evolves because of wrong orientation at the top. Efforts to increase productivity need to focus more on managerial work. ‘Hard-working’ and ‘efficient’ managers may be really unproductive or, worse. They may create useless work for themselves and others. In order to make an organization more productive, it becomes wise to reduce the organizational levels or managerial levels. Productivity does not mean production.