In terms of physics and engineering, efficiency can be defined as the difference between the amount of energy a machine needs to make it work, and the amount it produces. According to COLLINS, "efficiency is the quality of being able to do a task successfully, without wasting time and energy.” Efficiency may also be defined as “Given the objectives, and the means to pursue the objectives, the minimising of inputs to the programme in relation to the outputs from it” (Treasury and Civil Service Committee, 1982, para. 52).
Efficiency is concerned with the relationship between the inputs and outputs. Therefore an efficient programme is “one where the target is being achieved with the least possible use of resources. Similarly, on the way to achieving the target, the actual output should be secured with the least use of resources” (Treasury and Civil Service Committee, 1982, para. 52). Thus, efficiency is about getting more for less. It can be achieved by minimising inputs in relation to outputs or, alternatively, maximising outputs in relation to inputs or both. The determinant of this relationship will be the process that transforms the inputs into outputs. For the public service, the emphasis has been on managerial reform and the introduction of new working practices. Advocates of competitive tendering argue that “the process of preparing a tender encourages the in- house organization to ask fundamental questions about what needs doing and how it should be done.” (Lawton & Rose, 1994, p.156).
On the other hand, “an effectiveness measure reveals the extent to which objectives have been met: it makes no reference to cost.” (Treasury, 1992, p.33). Effectiveness is about achieving what we want to achieve. It is about the relationship
between intended outputs and actual outputs. In the private sector, companies will set their targets for expected profit and shares of the market. It will then be able to compare how they actually performed against those targets. But effectiveness in the public services is a more problematic concept because in many cases it is very difficult, or even impossible, to set a definite target, for example, the target for a search and rescue service.
Efficiency and effectiveness are norms of operation in private sector. Companies have to compete in the market place against a number of competitors who are equally keen to maximise profits. Therefore efficiency and effectiveness can be easily measured. In contrast, it is argued that the public sector in general lacks efficiency and effectiveness and it is much more difficult to apply those principles used in the private sector, because of a number of problems:
• Many public sector organizations are monopoly suppliers of a good or service. For example, there is only one maritime safety administration. If the client is not satisfied with the service, he or she cannot go elsewhere for that service. In a competitive environment there is an incentive to be efficient. Inefficiency leads to reduced profits, lower dividends for shareholders and ultimately closure. A monopolist does not have that incentive.
• A private company has a clearly identifiable product and therefore its objectives are definite. Objectives of a public organization are usually ill-defined with only vague description, for example, “safer shipping and cleaner oceans”.
• In the public sector it is not always easy to identify the customers. For example, in many cases the customer could be a member of the public with whom the civil servant is dealing. It could also be the minister in charge of the service or it could be the taxpayer. Ministers may be anxious to reduce the overall expenditure on services while the general public wants more services.
• Strategic planning in a public organization is more difficult because of the short- term consideration. Due to the shortness of the political cycle it is sensitive to greater and more open accountability.
• Functions of a public organization are limited by statute. On the other hand, there is no clear boundary between organizations having similar responsibilities, for example, the maritime safety administration and the environment department in
relation to environment protection. So in many cases public organizations tend to shift responsibility onto others when things go wrong.
• The public sector is principally funded by appropriation rather than by charging for goods or services.
These problems make the pursuit of efficiency and effectiveness in the public sector more difficult. Various initiatives have been undertaken to improve performance. The early 1980s were dominated by the government’s efficiency strategy in OECD countries. But critics of the strategy argued that it was aimed at reducing the inputs to the process rather than improving the ratio between inputs and outputs.
Study of strategies to improve public sector performance, or its efficiency and effectiveness, must be seen in the context of a particular industry and its related environment. In the maritime safety administration, its efficiency and effectiveness could be improved by understanding the concept of safety, pursuing quality shipping, increasing transparency, and establishing partnerships with the main players in the shipping industry, the shipowner or operator.