'CARO Tech Solutions' aimed at development of a software system for the company's growing operations. The project was to be completed within six months with a budget of Rs. 12,00,000. The software development team successfully completed its project on time by outsourcing a part of the project, leading to an additional expense of Rs. 2,00,000. From the following, identify whether the software development team is :
'CARO Tech Solutions' aimed at development of a software system for the company's growing operations. The project was to be completed within six months with a budget of Rs. 12,00,000. The software development team successfully completed its project on time by outsourcing a part of the project, leading to an additional expense of Rs. 2,00,000. From the following, identify whether the software development team is :
Options
The correct option is (C) Effective but not efficient.
Effective: The team completed the project on time (within the six-month deadline), so the goal or end result was achieved.
Not efficient: It incurred an extra expense of Rs. 2,00,000 by outsourcing, exceeding the planned budget. Higher cost for the same output means resources were not used economically.
Marking Scheme
- 11 mark: correct option (C) Effective but not efficient.
- 2No marks for merely stating one term without the correct pairing.
Hint
On time = goal achieved (effective); extra cost over budget = resources wasted (not efficient).
Quick Oral Answer
Effective but not efficient — the team hit the six-month deadline, so it was effective, but it spent Rs. 2,00,000 over budget on outsourcing, so it was not efficient.
Analysis & Explanation
This question tests the crucial distinction between effectiveness and efficiency, both of which management tries to balance.
Concept
- Effectiveness = completing the task and achieving the end goal on time (result-focused).
- Efficiency = doing the task at minimum cost, using resources economically (cost/input-focused).
Applying it to the case
- Deadline of 6 months was met → effective.
- Budget of Rs. 12,00,000 was overshot by Rs. 2,00,000 due to outsourcing → not efficient.
Why the distractors are wrong
- (A) Efficient and Effective: Rejected because the cost rose above budget, so it is not efficient.
- (B) Efficient but not effective: Reversed — the goal was met (effective) but cost was high (not efficient).
- (D) Neither efficient nor effective: Wrong because the target was clearly achieved on time.
Exam trap: Students often confuse the two terms. Remember: management wants to be BOTH, but here only the goal was met, not the cost control.
Common Mistakes
- 1Reversing the terms and choosing 'Efficient but not effective' — completing on time is effectiveness, not efficiency.
- 2Choosing 'Efficient and Effective' by ignoring that the Rs. 2,00,000 extra cost breaks the efficiency condition.
- 3Believing efficiency and effectiveness mean the same thing; efficiency is about cost/resources, effectiveness is about the end result.
Interesting Facts
Peter Drucker famously distinguished the two as 'Efficiency is doing things right; effectiveness is doing the right things.'
NCERT stresses that management must strike a balance between the two — high effectiveness with low efficiency (met target but wasted resources) is common in real firms racing to meet deadlines.
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Frequently Asked Questions
Why is the team effective but not efficient and not the other way round?
Effectiveness relates to achieving the end goal — the project was completed within the six-month deadline, so it is effective. Efficiency relates to the cost of resources used — an extra Rs. 2,00,000 was spent above budget, so it is not efficient. The order of the two terms is fixed by these definitions.
Can a task be efficient but not effective?
Yes. If resources are used economically (low cost) but the actual target or deadline is not met, the work is efficient but not effective. Management aims to be both efficient and effective simultaneously.