ch.12 summary/study guide
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Chapter 12: Productivity and
Productivity – measure of economic performance that measures how much is produced
relative to the resources used to produce it.
Quality – a product’s fitness for use in terms of features and satisfaction.
Most countries use labour productivity to measure their level of productivity. It is equal to
GDP divided by the total number of workers. Findings show that international
organizations are more productive. Belgium has the highest worker productivity, with
Japan and New Zealand being the lowest.
Manufacturing productivity is higher than service productivity, seemingly due to ‘Baumal’s
Disease’, the fact that machines can’t replace human ‘services’. However, that is changing as
automated kiosks are popping up.
The agricultural and steel industry has been very successful in Canada.
Total Quality Management
Fishbone diagrams (cause and effect diagrams) helped employees track causes of
Total Quality Management (quality assurance) includes all the activities needed for
getting high quality goods and services into the marketplace. It must consider
customers, employees, and suppliers. Customer focus is the starting point.
Planning for Quality –
Performance quality is the features of a product and how well it performs.
Quality reliability refers to the consistency or repeatability of performance, e.g.
Organizing for Quality –
All parts of the organization should be part of this process, and there are quality
Leading for Quality –
Quality Ownership is the idea that quality belongs to each person who creates or
destroys it while performing a job. Managers must inspire employees to have this.
Controlling for Quality –
Tools for Total Quality Management
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