Efficiency means using available resources rationally to achieve an objective.
The notion of efficiency has its origin in the Latin term efficientia and refers to the ability to rely on something or someone to obtain a result . The concept is also often equated with strength or action .
For example: “Prove your efficiency in doing this job and you will stay in the company” , “The efficiency of this engine cannot be disputed” , “Without efficiency, the existence of this office is meaningless” .
Efficiency, therefore, is linked to using available resources rationally to reach a goal. It is the ability to achieve a previously set objective in the shortest possible time and with the least possible use of resources, which is an optimization .
Efficiency in physics and economics
The idea of efficiency can be found in different fields. In physics , for example, efficiency has to do with the link between the energy invested and the energy used in a procedure or system.
In economics , we speak of Pareto efficiency or Pareto optimum (after Vilfredo Pareto ) to name the state that is reached when it is impossible to improve the situation of a system component without harming others.
Pareto optimum in an example
An example of Pareto efficiency would be the following: a man enters a store to buy a computer . Each one has different characteristics and its own price, which is usually linked to quality. Thus, when the buyer decides to make his purchase, there are two possibilities:
On the one hand, the person has enough money to buy the best computer without having to worry about the price. There is only one objective here: to buy the equipment with the best technical characteristics.
On the other hand, it may happen that the buyer has a limited budget. This creates a multi-objective problem, since the person has to consider the technical properties of the computer but also its price. In this case, there is no optimal product, but rather several Pareto-optimal options that can be chosen.
Mainly the term refers to those resources that are available ( human, technological, financial, physical , etc.) to achieve something, the way in which they are used and the results that have been achieved. The better those resources have been used, the greater the efficiency in the way of seeking that goal.
The idea of efficiency can be linked to optimization.
How efficiency is applied
Efficiency can be defined in one way or another depending on the area in which it is applied. For example, if it is applied to administration, it refers to the use of resources, which are the means of production available, and the level of efficiency developed can be determined through the equation E=P/R (P= resulting products; R= resources used).
Some experts, such as Koontz and Weihrich , say that efficiency consists of achieving the goals that a company has set for itself using the least amount of resources possible. Robbins and Coulter , on the other hand, say that it is obtaining results of a significant magnitude by investing the least amount possible in them; while Reinaldo O. Da Silva is inclined to say that efficiency implies operating in a certain way in which all resources are used in the most appropriate way possible.
In terms of economics , efficiency implies the use of society's resources in the best possible way, satisfying the desires and needs of individuals with the results. Within this area, expert Simón Andrade defines it as the way in which the capacity of a certain system to act is measured, minimizing the use of the resources available.
Differences with effectiveness
A common mistake is to confuse the meaning of the term efficiency with that of effectiveness , when in reality they are extremely different.
While efficiency implies a positive relationship between the use of project resources and the results achieved, effectiveness refers to the level of objectives achieved within a given time frame, i.e. the ability to achieve what a group sets out to do. Being effective is simply reaching the stipulated goal, regardless of the level of resources used.
This means that you can be efficient without being effective and vice versa, but if both requirements are met, we would be faced with an ideal project : efficient because it has been achieved using the minimum of resources and effective because it has not been extended over the time we had set.