Difference between effective manager and efficient manager.

To understand the difference between an efficient and
effective manager we need to understand the difference between efficiency and
effectiveness.

Efficiency refers to the ratio of output and
input. Higher the output obtained from a given quantity of inputs used, higher is the
efficiency. Effectiveness is a measure of the total output. Thus efficiency is concerned
with reducing waste and unit costs, while effectiveness is concerned with increasing
total output.

We will illustrate this difference between
efficiency and effectiveness by an example . Let us consider two production managers. 
The first manger produces 1000 units of widgets per day at a cost of $8 per widget,
while the second managers produces 1200 units of same type of widgets per day at a cost
of $8.5 per widget. In this situation the first manager is more efficient than the
second one. However, if the widgets sell at price of $12 per widget, and profit on the
1000 widgets produced by first manager is $4000. In comparison the profit on the 1200
widgets produced by the second manager is $4200. As the second manager is able to
generate greater profit, he is more effective than the first
one.