Organizational Efficiency
Organizational Efficiency
The efficiency is an extremely broad term and is based on various concepts in any organization. Every organization has its own way of defining efficiency as for some it is being budget efficient and spending less than allocated in a budget and for other organizations, it is producing higher quantity of output in a given period with a given input (Jeston & Nelis, 2008). In production, it means making labor and capital more productive so that they produce more in a low cost, leading organization towards saving costs, delivering needs of customers, and grasping large proportion of market. Efficiency also means doing best in what you have. Business assets comprise of cash, employees, properties, plants and many others depending upon kind and size of business that help business to deliver the desired products and services to the market and if they are utilized efficiently then success is just for a business to enjoy large market share, priority among consumers and most importantly good reputation locally or internationally.
Developing the culture of improving and encouraging efficiency in an organization is very important for its survival and ultimate success. For instance, we can take the example of Toyota Corporation. Toyota is one of the world’s biggest corporations and the major reason behind its success is its efficient business processes. Efficiency helps business to perform all the functions and actions in the best way at each different level and department, and bringing business in a position where it can reduce its expenditures and even losses, maximizing profits. In Toyota’s case it is evident, Toyota’s command in various new techniques led to overall success of its business. They revolutionized traditional business procedures and brought in new procedures such as TQM and JIT (Reijers & Liman, 2005, pp. 283-306). In a business efficiency is to count the output produced by each individual (manufacturing business or labor intensive industry), service provided by each individual in a given time (service or capital intensive industry), and the work done by each department. Once efficiency, meaning the output and productivity is counted then it can be gauged that how business utilized its resources, saved the time to put it for some more valuable activities, and saved costs to invest in some other resources. However, cost is never considered in terms of money, but it is in terms of quality and business reputation and goodwill too. In addition to this, if business is said to be efficient then it means it is able to produce effective output and give effective service too, reflecting that it has the competencies and expertise through which it works well and put all the efforts to gain satisfactory fulfillment of its objectives and goals.
In a competitive and globalized environment of today, it is crucial for organizations to be as efficient as possible. Business that does not understand the importance of efficiency is likely to fail; no matter it is a small, medium sized or larger business. It is because every business needs to be efficient enough to put limited resources but fulfilling needs of market with high quality products and services, cutting costs and winning in a competition. Through efficiency, business becomes more reactive and responsive towards the growing challenges and increasing needs of changing market, as otherwise it is just left behind in a line where highly successful organizations stand.
In any business, efficiency relates to its employees who are behind the operations, functions, and activities of business (Harmon, 2010). Their efficiency supports the business to adopt the position where it has no concerns of losing market and competition. It is important that employees are motivated to understand what efficiency is all about and practice it in their operations, workings to fulfill the organization’s and their own objectives and goals. They should be given a culture that encourages them to move ahead, do experiences and take chances, introduce innovations and become a part of business, thinking as their own. This alignment is essential as until employees feel in such a way they are unlikely to be transporting the desired output and becoming productive resource. In a culture that gives them insecurity, they are de motivated. If work becomes easy for them, they are likely to enjoy work and this positive attitude affects their productivity and efficiency levels. Good collaboration, effective communications system through departments, interaction, and sharing of information also boost efficiency, as many issues that arise are resolved quite effectively. Through interaction, they share their ideas, information, objectives, and thus make a positive progress. Skilled and competent employees are more flexible but if they are motivated through intrinsic and extrinsic rewards. They should be given goals and targets of efficiency through which their progress can be evaluated and then corrective actions should be taken if any weakness is found. They should be given direction and results of their review, which serves as good feedback of their productivity and efficiency. This helps to motivate them for desired improvements by business, as they know their focus and direction.
Moreover, in order to become efficient business also needs to understand needs of its market. It has to communicate with them and become responsive to stay along with their changing needs and requirements. Business is said to be efficient when it satisfies its customers, grasping full information about them (Skerlavaj et.al, 2007, pp. 346-367). Business needs to be developing good customer relationship management as this way it can come closer to the market and devotes its resources accordingly. If resources are effectively and efficiently spent where they need to be then it brings higher productivity in business, which is able to save huge costs. However, efficiency does not mean saving resources, time, and money. Efficiency means producing more output in a given input but not compromising quality. As a result, business needs to adopt good quality control policies and procedures all over the operations to track its quality, as otherwise it may lose market. It should always bear in mind that market is categorized in different types of customers who have distinct needs related to quality and costs they can bear. Thus, it needs to know what particular needs and requirements its target market has.
Furthermore, business should be aware about processes that can make it stronger in terms of efficiency. Adoption of value adding processes in an organization brings overall efficiency. Manufacturing businesses are increasingly adopting the processes and techniques of JIT, TQM, and BPR etc that help them to raise the quality of products and save the costs of products and services throughout business. If any process or department becomes inefficient then it can trigger the costs and bring business at very bad position. As a result, business should keep monitoring its ability to keep pace with changes in its inner world of processes, operations, and activities along with focusing on markets, technology, customer changing needs, globalization, and increasing pressures from competition.
In today’s high tech world, efficiency also means extensive use of technology, adopting advanced and time effective techniques and processes, using social media and strong building relationships with customer s and suppliers, being environmentally friendly and socially responsible, maximizing performance, effective information and accounting systems, and being lucrative. One example here can be taken of the process improvements and efficiency gain in a firm’s Supply Chain Department by utilizing RFID technology (Sabbaghi & Vaidyanathan, 2008, pp. 71-81). Business should consistently be ready for these challenges at present and in future as well and keep making its performances immensely high by innovation, taking measures for the enhancement of processes, and flexibility that give it a unique access of efficiency.
Refernces
Harmon, P. 2010. Business process change: a guide for business managers and BPM and six sigma professionals. Morgan Kaufmann.
Jeston, J., & Nelis, J. 2008. Business process management: practical guidelines to successful implementations. Routledge.
Reijers, H. A., & Liman M, S. 2005. Best practices in business process redesign: an overview and qualitative evaluation of successful redesign heuristics. Omega, 33(4), pp. 283-306.
Sabbaghi, A., & Vaidyanathan, G. 2008. Effectiveness and efficiency of RFID technology in supply chain management: strategic values and challenges. Journal of theoretical and applied electronic commerce research, 3(2), pp. 71-81.
Skerlavaj, M., Stemberger, M. I., Skrinjar, R., & Dimovski, V. 2007. Organizational learning culture—the missing link between business process change and organizational performance. International Journal of Production Economics, 106(2), pp. 346-367.
