Business Productivity is the ability of an
organization to utilize its available resources in order to produce profitable
goods or services as desired by customers or clients. It is the productivity
that measures the performance of an organization, and it can also be used for
companies themselves in order to assess their own progress.
Productiveness
increases the overall efficiency of an organization. When the efficiency of the
organization increases, the production capacity of the company is utilized to
the optimum level. Thus, all resources are used in an effective and efficient
manner to get the best possible results. As is often indicated by
business, the more products you make, the lower your overhead, and the higher
your profits.
Enhanced production lowers the cost per unit
of a product which in turn, results in lower prices for better quality, which
enhances a business’ competitiveness
in the market. In the current turbulent world, every organization faces stiff
competition from their counterparts. Hence, lower prices as a result of
enhanced production give an edge to businesses to sell products at more
competitive prices. If the rates are competitive, the business is in a better
position to attract more customers and make more sales. This is the primary
motive of any business organization.
Increased production due to efficient
utilization of organizational resources leads to a lower cost production
resulting in better sales and profits. If the profits of an organization shoot
up, it increases the confidence of investors in the organization. Moreover, the
share value of the company increases. Due to this, the reputation and goodwill
of the organization increases.
Similarly, the business can share a portion
of its profits as a result of enhanced production with its employees. This
boosts the morale of the employees as they get to enjoy a part of the profits
and the satisfaction of a job well done. As a result, their working efficiency
tends to increase which in turn, further increases the production of the
company. As you can start to see, there is a snowball of business success that starts with increased productivity.
Productivity is much more important than
revenues and profits of the organization because profits only reflect the end
result whereas productivity reflects the increased efficiency as well as
effectiveness of business policies and processes. Moreover, it enables a
business to find out its strengths and weaknesses. It also lets the business
easily identify threats as well as opportunities that prevail in the market as
a result of competition and changes in business environment.
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