Question

Nisha had given some old dresses of her own to her house-helper Beenu. After a few days, Nisha was happily surprised when she saw Beenu wearing one of the dresses beautifully refurbished. On enquiry, Beenu told Nisha that this was done by her daughter who had just completed her Class 12th studies. Beenu also told Nisha that she was a little concerned as her daughter did not want to study further. Nisha was very much impressed by the creativity of Beenu’s daughter, so she decided to setup a small business for her. Nisha bought 15 sewing machines and appointed 15 girls to refurbish the old dresses. Nisha also arranged old dresses from various sources and employed a person who will sell these dresses at a very low cost for the one’s who could not purchase new dresses due to their low income. Nisha divided the girls in three equal groups, each having five sewing machines. Each group was given a target of refurbishing 150 old dresses in a fortnight with a cost of Rs. 30 per dress. After a fortnight, Nisha who was supervising this business with Beenu was informed that Group I was able to meet the target by refurbishing 150 old dresses at a cost of Rs. 30 per dress. Group II was able to refurbish 150 old dresses at a cost of Rs. 35 per dress, whereas Group III could refurbish only 140 old dresses but at a cost of Rs. 27 per dress.

1. Identify the concepts of management discussed above for each of the three groups giving reason in support of your answer.
2. Give meaning of the concepts identified in (i) above and state which one is important for the management and why?

Answer 1

(i) Effectiveness and efficiency are the concepts of management discussed for each group.

1. Group I is both efficient and effective; they met their aim by refurbishing 150 dresses at a cost of Rs. 30 per dress. This means they utilised resources optimally (efficiency) and obtained the desired result (effectiveness).
2. Group II is effective but not efficient, completing 150 dresses at a higher cost of Rs. 30 per dress.
3. Group III is efficient but not effective because it achieved a lower cost (Rs. 27 per dress) while refurbishing only 140 dresses.

(ii) Meaning of the identified concepts and their Importance:

1. Efficiency: Refers to minimising costs and maximising output with the least resources. It guarantees that work is completed with minimal waste.
2. Effectiveness: Focusses on achieving goals within the timeline specified, regardless of the resources required.

Most important concept for management: Both are equally important. A balance of efficiency and effectiveness is essential for long-term success.