martes, 10 de mayo de 2016

Mauro Libi: Productiveness increases the overall efficiency of an organization


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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