Latin is where we can establish the etymological origin of the term inefficiency that concerns us now. Specifically, it must be stated that it is the sum of several lexical components of said language, such as these:
-The prefix “in-”, which is synonymous with “without” and “no”.
-The “ex” component, which means “outwards.”
-The verb “facere”, which can be translated as “to make”.
-The suffix “-ia”, which is used to indicate “quality” as well as to give shape to nouns that are obtained from verbs.
Inefficiency refers to the absence of efficiency : the ability to have something, and to make use of it, to achieve a result. Efficiency is linked to rationally using the available means to achieve a goal.
Therefore, if efficiency refers to meeting an objective with the minimum possible use of resources and in the shortest amount of time , inefficiency means the opposite.
Suppose an inventor makes two automobiles. Car A consumes 1 liter of fuel to travel 10 kilometers ; car B , 4 liters to complete the same distance. This means that, when traveling 100 kilometers, car A will use 10 liters of fuel , while car B will consume 40 liters . Car B, in short, needs four times more fuel than car A, which demonstrates its inefficiency in terms of this type of consumption .
Take the case of the manager of a large company who must manage a million-dollar budget. The company, when the executive took over, did not have debts. However, two years later, it is in debt and did not register any type of growth in the period. Faced with this reality, the manager is fired for his inefficiency in managing the firm's resources.
In the field of finance we have to establish that the term that concerns us now is also used. Thus, for example, we talk about what is called economic inefficiency. This expression refers to the lack of efficiency that a specific economic system has when it comes to using productive resources with the aim of satisfying existing needs.
In the same way, reference is also made to what the inefficiency of monopolies is. Specifically, it is assumed that they fall into the same category when they produce a lower quantity than their competition and also when the price of their production is higher than that of their rivals. What's more, it is determined that what these monopolies do is commit an action that represents an attack against consumer sovereignty.
Finally, it is important not to confuse efficiency with effectiveness : efficiency is associated with the good use of resources and the results achieved; Efficiency, on the other hand, refers to the level of results obtained over a certain period of time. Returning to the example of cars, both are effective if they can transport people from one place to another, but car B shows its inefficiency due to the resources it demands to fulfill that purpose.