Tuesday, March 18, 2008

Efficiency vs. Effectiveness

How is effectiveness different from efficiency?

In MBA, we often say:

To be efficient is to do the thing right.

To be effective is to do the right thing.

Confused? Here is a real example…

Dell outsourced its call centers from North America to India, where wages were low. In doing so, it successfully cut operating costs. Unfortunately, not all American customers of the PC manufacturer were happy. They complained that the Indians spoke an accent that was hard to comprehend, or that they did not understand the customers who were half-way around the globe so well.

Dell’s decision to outsource the call centers was an efficient one, but it may NOT be very effective.

Indian call center


  1. Apparently, we need both effectiveness and efficiency to perform good.

  2. Not only Dell is outsource the call center to Dell... The Nike has also outsource their customers service to India. :->

    I agreed with you it might be efficient but not necessary effective. Language is the barrier.

  3. jam
    Yes, we need both...

    Language is not the only barrier. I read that Dell's customers also waited for too long before they were served.

  4. A lot of other MNCs have moved their call centers to India. That seems to be the trend.

    I saw a documentary that these employees undergo language training which includes accents so that they'd be able to speak with the accent of the caller. I think that's neat.

  5. China dominates manufacturing.

    India dominates service.

    What does that leave us?

  6. same as IBM...talking with their support personnel is like talking to some 'alien'..
    is just so hard to get what they mean...
    btw, u hav been tagged!

  7. happysurfer
    Do you think it is easy to change one's accent? Hmm...

    We go back to agriculture. Our PM spelled this out when he launched the Northern Region Economic Corridor.

    If you come to my blog more often I will do the blog :-)