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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Chapter 2: Increased Productivity and Quality THE PRODUCTIVITY-QUALITY CONNECTION -productivity: a measure of the efficiency that compares that how much is produced with the resources used to produce it -productivity considers both the amounts and the quality of what is produced -by using resources more efficiently, the quantity of output will be greater -quality: a products fitness for use in terms of offering the features that consumers want Responding to the Productivity Challenge -a nation whose productivity fails to increase as rapidly as that of competitor nations will see its standard of living falling -quality is defined in terms of value to the customer, therefore companies must design their marketing efforts to cultivate a more customer-oriented focus -four factors interact in this process: customers, quality, productivity, and profits Measuring Productivity -labour productivity: partial productivity ratio calculated by dividing gross domestic product by total number of workers -the focus on labour rather than on other resources (such as capital) is preferred since most countries keep accurate records on employment and hours worked -Canadian producers that had foreign units were just as productive as foreign-owned plants -firms that compete internationally have more incentive to be more productive Productivity Among Global Competitors -there are differences from nation to nation -the answer lies in many factors: technologies, human skills, economic policies, natural resources and even in tradition -Canadas competitiveness is a concern because we have been living off our rich diet of natural resources -Canada will have to start developing a more sophisticated mix of products if it hopes to be successful in international markets Domestic Productivity -nations must be concerned about domestic productivity regardless of their global standing -a decline in productivity shrinks a nations total wealth -when that happens, an increase in one persons wealth comes only at the expense of others with whom he or she shares an economic system
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