Business – 4.1 The nature of operations – Efficiency, effectiveness, productivity and sustainability | e-Consult

Answer:

• Efficiency: The ratio of useful output to the resources used to produce it. It is important because it reduces costs, maximises resource utilisation and improves competitive advantage.
• Effectiveness: The degree to which an organisation achieves its intended objectives or outcomes. It matters as it ensures that the business is delivering value to customers and meeting strategic goals.
• Productivity: The amount of output produced per unit of input (e.g., units per labour hour). High productivity drives profitability, enables growth and supports investment in innovation.
• Sustainability: The ability to operate in a manner that meets present needs without compromising the ability of future generations to meet theirs, encompassing environmental, social and economic dimensions. Sustainability is crucial for reputation, regulatory compliance and long‑term resource security.

Collectively, these concepts help a business minimise waste, maximise value creation, maintain stakeholder confidence and ensure ongoing viability.