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Efficient managers and effective managers

Paper Type: Free Essay Subject: Finance
Wordcount: 1372 words Published: 1st Jan 2015

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Difference between efficient managers and effective managers

Effectiveness and efficiency are mutually exclusive things. For a manager, they are both fundamental preconditions. Being effective means that one is able to properly analyse the evolving environment and selecting the right things as the areas of strategic focus for the enterprise. On the other hand, being efficient requires a carefully carved cultural and operational framework which helps the manager to achieve a particular degree of success, given the level of resources applied to a particular objective.

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In any business, an efficient manager is one who uses limited resources available viz., time, material and men to get the job done in a more professional manner. This includes securing productive and profitable results in a short span, using funds allotted for a business more legibly yet smartly, and appraising employee performance etc., In other words, an efficient manager would keep the business running even in dire circumstances.

An effective manager, on the other hand, is slightly different from the efficient one. The effective manager focuses on productivity rather than increased/balanced profitability. Effective management has various layers in its setup such as motivation, teamwork, communication and objectives. An effective manager is someone who leads, coordinates and filters various activities of the sub-ordinates and decides an appropriate mechanism to work upon. An effective manager usually works without any constraints such as funds, manpower etc. The focus always implies on better management practices and in turn, better output.

Effectiveness is a precondition for the success of any manager; however that depends more upon the uncontrollable variables dictated to the manager by the operational environment and his ability to come up with the right choices that would suit his resources built over time. It may be appreciated that a firm’s resources in terms of manpower and technology as well as capital would have been built up over time and they have a great degree of rigidity. Once you become effective, efficiency can be an easier thing to bring into operation. The two things are in fact complimentary. Efficiency in fact depends upon the lower level managerial abilities and culture while effectiveness is almost always a top management variable.

In management, operating in efficient and in effective ways is a key to good performance and to successfully reaching the goals set for the business. While efficiency and effectiveness are similarly desirable characteristics of business behavior, either one is often seen as attainable only at the expense of the other. Looking at the interplay of the two characteristics can give a clear insight into the ideal behavior for a manager when faced with tasks which must be completed quickly, but also completed in such a way that the key goals are attained.

Luther Gulick advocates seven elements which make up common management in any organization. He calls it the POSDCORB.

� Planning a strategy to accomplish the objectives set for an enterprise.

� Organizing a formal structure of authority, arranged and defined for specific jobs.

� Staffing / Recruiting and training personnel.

� Directing/ Decision � making and embodying rules, instructions etc.,

� Co-ordinating various parts of work.

� Reporting through records, research and inspection.

� Budgeting in form of fiscal planning, accounting and control.

These make up the common administrative tasks managers perform in an organization. The effectiveness of each element makes up both an efficient and effective management system. The following make up management behavior.

Management of human resources is a social phenomenon. An effective communication channel is always imperative in any kind of an organization. James Pfiffner calls it �the heart of management�. Chester Barnard remarks it as the foundation of co-operative group activity. For an effective communication, the information passed on must be clear, consistent, adequate, timely, uniform, flexible and acceptable. A manager must make sure that a proper communication channel is present in an organization. This includes avoiding semantic and ideological barriers, two-valued thinking (Halo effect), stereotyping and dogmatism among the employees.

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Decision-making is a vital part of an efficient management system. Robert Tannenbaum says decision-making involves a conscious choice or selection of one behavior alternative from a group of two or more behavior alternative. A behavior alternative may simply be known as a decision. Decision-making, in more ways or the other, is a singular function of the manager. It is thus very important in an organization.

Herbert Simon came up with the fact that every decision has two basic premises � a factual premise and a value premise. A fact is a statement of reality while a value is an expression of preference. A manager would go by decisions based on these only. An effective manager goes in for the factual premise because it can be measured empirically, while the value premise, which may determine efficient factors such as profit, loss, employee satisfaction, cost-cutting etc., would be more preferred by efficient managers.

Rensis Likert calls motivation as �the core of management�. Motivation is a psychological process which energizes and activates an individual to achieve formulated objectives. A manager thus plays a vital role as a driving force behind motivation. On this part, both effective and efficient managers must be good motivators, so as to bring about the best in the employees. Classical and modern management thinkers have listed money and a variety of socio-psychological factors as a source of motivation. Motivation also helps to build teams and perform better.

Teamwork is another essential part of management. A manager is the undisputed leader of a team. He delegates work to his sub-ordinates, assigns tasks, creates plans and makes decisions. An autocratic manager would do all the above functions by himself. It is not desirable in an effective organizational system. On the other hand, an efficient manager would tend to be a little autocratic in his functions, because of the limited resources available and some other constraints. It is however better for an organization to be more democratic for proper functioning.


Managing effectively and efficiently is the way to go about in business. Efficient business tactics would help to know how to deal with finance and personnel in a more productive way. Most successful businesses in the world today are rather efficient than effective. Efficient management practices provide increased sustainability and stability in an organization. It involves novelty in management practices and output.

An effective management system takes a long time to fully materialize. It has more to do with the long-term vision of an organization than its present objectives. Effective management also involves setting time benchmarks within the organization, so that a given objective gets completed within a set time. Traditional management practices are usually followed, and the manager sets up an instructional framework within which the sub-ordinates are expected to follow. An effective management system, summarily can be defined as, one which

� Raises productivity

� Increases work output from sub-ordinates

� Functions within a set of rules and regulations

� Works in a more democratic manner

� Builds teamwork and effective communication channels

A good manager, therefore is one who works both efficiently and effectively simultaneously. It is imperative that he does work in a more systematic manner and adapts himself depending on the organizational situation and environment. What an organization / business would need is an effective mechanism and an efficient output.


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