MGTA02H3 Chapter 2: MGTA04- Chapter 2 - Class 3.docx

• School: UTSC
• Department: Management (MGT)
• Course: MGTA02H3
• Professor: Bill Mc Conkey

Document Summary

Productivity: measure of efficiency that compares how much is produced with the resources used to produce it. Quality: a product"s fitness for use in terms of offering the features that consumers want. 4 factors interact as quality improvement practices are implemented: customers, quality, productivity, and profits. Compares the total annual output of goods and services with the resources used to produce that output. A country that improves its ability to make something out of its existing resources can increase the wealth of all its inhabitants. A decline in productivity shrinks a nation"s total wealth. Additional wealth from higher productivity can be shared among workers (as higher wages), investors (higher profits), and customers (stable prices). When productivity drops, wages can be increase only by reducing profits (penalizing investors) or by increasing prices (penalizing customers). Manufacturing productivity is higher than service productivity. Services providers increased productivity by becoming more like factories, and they use modern information technology to eliminate inefficiencies.