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Management and its philosophy stem from one integrated objective – i.e. how to achieve organizational growth and goals, remain effective and efficient, while helping stakeholders achieve their goals and aspirations. Effectiveness is defined as the organizational goal that management has set and how it goes about achieving them. Efficiency is defined as the best way management uses its resources to help the organization attain its goals.
Amazon is the best example of a company which is both very effective and efficient. The aim of the company is to lead the ecommerce and internet based businesses. It began as a company selling books and then innovated into other areas of commerce. With a big focus on customer satisfaction and need identification, the company has grown rapidly. It has utilized its resources like data centers to spin off new Cloud business. It has used its capital efficiently to expand globally and is very efficient in managing its resources like employees, IT, capital, leadership experience and loyal customers, leading to high volume growth, revenue and profitability.
On the other hand, if we take the example of Sears Holdings, we see a company which is seen as neither efficient nor effective in its operations (Bowman). The company did not innovate or feel the need to understand customers and build the business. They are more focused on EPS and shareholders and are busy selling off its core assets, land and stores. It is clear that planning, organizing, leading and controlling various resources at Sears has been inefficient and ineffective, leading to its inability to build a robust operation in the face of competition from companies like Amazon and other e-commerce businesses.
References
Bowman, Jeremy. “The Problem With Sears Holdings Isn't Tesla, Uber, or Amazon.” The
Motley Fool, 6 March 2016, http://www.fool.com/investing/general/2016/03/06/the-problem-with-sears-holdings-isnt-tesla-uber-or.aspx. Accessed 8 September 2016.
