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Elucidate the following statement about productivity.productivity is an important tool...

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nithyajagan | Student, Undergraduate | (Level 1) eNoter

Posted November 29, 2010 at 11:34 PM via web

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Elucidate the following statement about productivity.

productivity is an important tool for managers as it helps to track progress toward the more efficient use of resources in producing of resources in producing goods and services. Elucidate?

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krishna-agrawala | College Teacher | (Level 3) Valedictorian

Posted December 2, 2010 at 3:00 PM (Answer #1)

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Productivity is not just a tool of management. It is more of an important purpose or objective of management. As productivity is an important objective of management measuring and monitoring productivity is definitely an important tool for managers.

However there is a need to be clear about the means and objectives. The statement made in the question:

... productivity is an important tool for managers as it helps to track progress toward the more efficient use of resources ...

reverses the correct sequence. Productivity is not important because it helps to track progress towards efficient use. Rather tracking of efficient use is important as it helps to improve productivity.

While on the subject, it will be appropriate to differentiate between efficiency and productivity. While efficiency concentrates on reducing input resources employed, productivity concentrates on increasing the output. We can improve labour productivity by increasing automation and capital resources. Such and increase in labour productivity cannot be attributed to increase in labour efficiency. Thus, I disagree with the statement made in the previous answer posted that productivity is a measure of efficiency.

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted November 29, 2010 at 11:38 PM (Answer #2)

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By its very definition, productivity (measuring productivity) is a good way to make sure that your firm is using resources as efficiently as possible.  This is because productivity is defined as the amount (value) of output that can be produced per unit of input (such as raw materials or labor).

If you measure your productivity over time, you will be able to see what trends, if any, are visible in terms of productivity.  If you experiment with various different ways of producing your products (while at the same time measuring productivity) you will be able to know more about which methods use the resources most efficiently.

Productivity is a measure of efficiency, so of course measuring it helps you understand how efficiently your firm is producing.

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