Issue № 60. February 2017

The Effectiveness and Efficiency of an Organization: Complexities of an Agreement Achievement

Ph.D., Associate Professor, School of Public Administration, Lomonosov Moscow State University, Moscow, Russian Federation.
E-mail: Purlik@spa.msu

The article gives an interpretation of different views on the hierarchy of organizational values and the essence of organizational effectiveness and efficiency. The differences between operational and strategic effectiveness are defined along with their role in achieving superiority over other organizations. The article explores the notion of the “production-possibility frontier” and covers the factors which help organizations in certain business branches to get close to it. The article reviews the situation in which the company with the greatest operational effectiveness receives the greatest benefits. The consequences of competitive convergence are defined. The difficulties of achieving a compromise, and the necessity of that compromise between effectiveness and efficiency of an organization in both long and short term are described.

Keywords

Efficiency, effectiveness, hierarchy of values, the operating efficiency, strategic effectiveness, production possibility frontier, convergence, strategy, competitive advantage, value chain.