The Meaning of Productivity

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The Meaning of Productivity

• By Alexandra DiGravino
• Danielle Bennett-Bruno

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• Businesses are interested in productivity.
• Factors of production include land, labour,
  capital, technology and entrepreneurship.
• Productivity refers to the amount of work that is
  accomplished in a unit using the factors
  production.
• Productivity can be increased by making slight
  changes.
• i.e. Altering the way employees work on an
  assembly line. Other times, large investments in
  capital products must be made to increase
  productivity.

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Business Purpose and Goals

• Main goal for a business is to make a profit.
• 2 simple purposes for a business are to fulfill a
  need or solve a problem.
• Performance efficiency ratings are part of
  measuring productivity.
• If a machine or production line needs changes, it
  can be altered to increase efficiency.
• A companys productivity is established by how
  well a company uses the resources it has and the
  relationship between inputs and outputs.

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Factors Influencing a Countrys Productivity

• Efficient use of human and physical resources.
• Necessary costs for labour such as wages and
  salaries
• Accessibility of a countrys usable natural
  resources.
• Quality and availability of a nations
  technology. i.e. When Henry Ford introduced the
  Assembly line in the early part of the twentieth
  century, it greatly increased car productions.
• Quality of education, government services and
  business leadership.

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Factors continued

• General work ethic and healthy lifestyle.
• Efficiency of plants and of organizational
  structures.
• Size of both domestic and international markets
  for a countrys products and services.
• Amount of support given to research and
  development.
• A countrys standard of living is determined by
  its productivity.
• A countrys GDP is an important way to determine
  the productivity of each country involved in
  global trade.

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Canadas Global Challenge

•  Improved levels of productivity in one nation
  will result in more competition among all
  countries engaged in trade.
• Canadian businesses must respond to the
  challenge by investing money in training and
  education and producing high quality products.
• Research and development must also be improved.
•  Standard of living is the way people live as
  measured by the quality of goods and services
  they can afford

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The Knowledge Economy

• The term knowledge economy refers to the
  increased reliance of business, labour and
  government on knowledge, information and ideas.
• Workers are paid to think and employ
  state-of-the-art information technology in many
  areas.
• Currently, the greatest rate of change is
  occurring in the application of information
  technology.

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Intellectual Growth

• The sum of knowledge, information, intellectual
  property, talent and experience within a country
  or an organization.
• It includes ideas, is part of a companys human
  capital and is a factor in a companys
  competitiveness.
• Our world economy requires companies to be
  innovative, creative and bring to the market
  products that are unique and superior to their
  competitors.

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Thriving in the Knowledge Economy

• The prime source of competitive advantage in the
  global economy.
• Managers must learn to develop, share, use and
  measure knowledge to create more value for
  customers.
• Knowledge develops when companies make
  connections. The more the connections the better
  the information.

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Innovation and Quality

• Innovation refers not only to technological and
  scientific breakthroughs but constant
  improvements in the way businesses adopt new
  processes and adapt to new market.
• Two major ways to ensure international
  competitiveness
• -Price and the Uniqueness of the product or
  service.
• Innovation is the key to finding new ways of
  increasing productivity and goes beyond
  investment in research.

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Taxation and Innovation

• Taxation is the method used to generate the
  finances required to run the country.
• The money is collected by municipal, provincial
  and federal governments and is spent on a variety
  of programs and projects.
• When companies look to other countries for
  investment opportunities they take more then
  taxes into account.i.e. When companies are
  deciding where to locate, they need to balance
  lower labour costs against higher tax rates.

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Rationalization

• Is the process used by an organization or company
  to change its organizational structure, its
  product line, or its process to become more
  productive, efficient and competitive.
• It may result in changes such as combining
  departments into a new division.

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Causes and Effects of Rationalization

• Companies may have to rationalize various aspects
  of its business because of changes in consumer
  demand for its products.
• Economics of scale refer to the tendency of the
  cost per item to go down when items are bought or
  produced in large quantities.
• When companies make decisions about rationalizing
  they look at various factors in different
  countries consumer demand, a countrys trade
  balance and business climate. In the following
  examples the relationship among these factors can
  be complex

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Factors

• The demand for the industrys product in
  Canada
• With some growth in the industries that market
  products to older Canadians, the growth doesnt
  always mean more jobs for Canadians.
• The demand for products may have increased, but
  so has productivity in many industries.
• The trade balance between Canada and other
  Countries
• Canada imports more of certain types of products
  than it manufactures and imports. However, if
  Canadian exports were to increase, the economies
  of scale and increased automation would mean
  there would not be any more jobs for Canadians.

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Factors Contd

• Canadian Business Activities
• The level of employment in an industry depends on
  a number of factors, including the likelihood of
  future earnings.
• Privatization is a type of rationalization.

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Developed Nations and Economies

• Canada is referred to as a developed or
  industrialized nation.
• Developed nations tend to have a high standard of
  living and produce a range of products.
• Lastly there are those countries that are known
  as less developed nations - these developing
  countries may be able to benefit by avoiding some
  of the negative aspects of industrial life.

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EVALUATIONPIECE
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True or False?

• 1. Labor is one of the factors of production
• 2. The 2 main purposes for a business are - to
  fulfill a need to solve a problem
• 3. Improved levels of productivity in one nation
  will not result in more competition.
• 4. The term knowledge economy does not refer to
  the increased reliance of business, labor
  government on knowledge.

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• 5. Intellectual growth is the sum of knowledge,
  information, profit and gross exports.
• 6. Knowledge develops when companies make
  connections and the more connections the better
  the information.
• 7. 2 ways to ensure international
  competitiveness are
• - Price and quality of the product