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Strategic Management
what is EFFECTIVE utilization of funds and EFFICIENT allocation of resources? please, explain with an example and also explain the difference between EFFECTIVE and EFFICIENT.
Answers (2)
Effective utilisation : It's states on what or on where we have to invest eg : company purchases a plant which assembles car to reduce man force and production cost. And how efficiently that plant is used so that the cost per production of car is reduced is efficiency Efficient allocation is simply getting things done in a proper/ right way
Effective utilisation of funds - where and how to invest funds (whether in fixed assets or working capital) to maximise return and create further wealth with optimal risk example : buy or make decisions Efficient allocation of resources - where and how to use available resources procured through investing funds to achieve the objective. example : using labour for a production of a product which gives more profits
