Organizational effectiveness is defined as an extent to which an organization achieves its predetermined objectives with the given amount of resources and means without placing undue strain on its members.

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Sometimes efficiency and effectiveness are used as synonyms. However, there exists a difference between the two concepts. Therefore, it is important to explain the difference between the concepts of effectiveness and efficiency to understand why organizations may he effective bin not efficient, or efficient but not effective. Effectiveness is a broad concept and takes into account a collection of factors both inside and outside an organization. It is commonly referred to as the degree to which predetermined goals are achieved. On the other hand, efficiency is a limited concept that pertains to the internal working of an organization. It refers to an amount of resources used to produce a particular unit of output. It is generally measured as the ratio of inputs to outputs.

Further, effectiveness concentrates more on human side of organizational values and activities whereas efficiency concentrates on the technological side of an organization. However the concept of effectiveness is not simple because there are many approaches in conceptualizing this term. Such approaches can be grouped into following three approaches:

  • Goal Approach,
  • Functional Approach
  • System Resource Approach
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