Chapter 2(Increasing Productivity & Quality)
Productivity: measure of economic performance. It measure to how much is produced relative to the
resources used to produce it.
(Considers both the amounts and the quality of what is produced)
Quality: fitness for use –offering features that consumers want.
Four factors interact in the process: Customers, quality, productivity, profits.
To measure country productivity: labour productivity of a country = Gross Domestic Product
Total number of Workers
- Labour Productivity : partial productivity ratio calculated by dividing gross domestic product by
total number of workers
- Difference in productivity between nations:
- If productivity drops, wages can be increased only by reducing profits or by increasing prices.
(If you lose something, you must take others resources to make your own stable).
Total Quality Management (TQM): A concept that emphasizes that no defects are tolerable & that all
employees are responsible for maintaining quality standards
Performance Quality: the features of a product & how well it performs
Quality Reliability: the consistency of quality of the performance
if managers succeed in developing employees (training) empl