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CMA Foundation · Fundamentals of Business Economics and Management · Introduction to Management

The head of production at Sundaram Textiles completes a job at the target output but uses 20% more raw material than the standard allows. In management terms, the head has shown:

The production head showed effectiveness but not efficiency. The target output was achieved, so the goal was met, but using 20% more raw material than standard means resources were wasted. Efficiency requires achieving results with the least input, so the job was effective yet inefficient.

  1. AEfficiency but not effectiveness
  2. BEffectiveness but not efficiencyCorrect
  3. CBoth efficiency and effectiveness
  4. DNeither effectiveness nor efficiency, since the job was completed

Explanation

Effectiveness means achieving the goal, which was done as the target output was met. Efficiency means using minimum resources for the output, and using 20% extra material shows poor efficiency. Hence effectiveness without efficiency. Saying both ignores the wastage.

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