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Productivity, an Approach more than a Concept

Abstract

The term productivity remained under use with diverse concepts and

meanings during different periods. In the era of Scientific Management, the

major concern was to have more production with the same unit of labour and

in modern era when there is a lot of awareness about the environment,

productivity means how a company strives to save the planet by improving

Resource Productivity and reducing pollution level. In this article

contemporary concept of productivity, including Green Productivityalong

with earlier concepts of productivity e.g. labour productivity has been

discussed. This article will help understand the journey of productivity

covering definitions from its simplest meaning to Total Image Building.

Rationale of Studying Productivity

Before starting to comprehend the productivity and its related issues, one

should be satisfied with the rationale of understanding productivity concepts.

Productivity is probably the most widely discussed yet least understood

concept of the current management practices. There are six main reasons to

examine productivity:

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1. High competition bases on price, delivery time and product

differentiation;

2. Globalisation and distribution of industry through out the world

based upon low manufacturing cost and less stringent laws;

3. Awareness about the limited natural resources;

4. More funds required for social services;

5. Threat of undesirable effects of inflation;

6. High environmental sensitivity.

Gaynard (1997, p. 90) has pointed out another avenue of productivity by

pinpointing the unfulfilled needs of the people. These needs can only be

fulfilled with higher productivity. According to Gaynard (1997, p. 90):

There are still many unsatisfied needs in the world today, the fulfilment of

which depends ultimately on economic growth. The productivity

movement throughout the world means that many people are engaged in

the pursuit of greater effectiveness, improved efficiency and enabling

their communities to seek a fuller life with a better standard of living.

When James Henry Heinz founded the company in Britain in 1886, he

stressed that the key to success is in doing a common thing uncommonly

well.

Gaynard (1997, p. 90) further stated that:

It is insufficient to believe that we need only to address the notion of the

time and cost of a product or service at the moment of its inception

competition is a continuous fact in the lifetime of a company and there is

a need for continuous improvement. It is only by adopting the strategy

that there is always a better way of doing things that the organization

will survive and prosper.

Savery (1998, p. 68) has also pointed out the importance of productivity in

current era in the following words, increase your productivity has been the

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catch cry of the 80s and 90s and appears certain to continue into the

twenty-first century.

Stainer (1995, p. 04) has given his views about the significance productivity

in the following words, productivity management has, in the past, mainlybeen practised in an informal manner, yet, like any other decision-making

procedure, and there is the need for it to be formalized. Stainer (1995, p.

04) has further proposed guiding principles about productivity. According to

Stainer (1995, p. 04):

The Japan Productivity Center, the largest in the world of its kind, has

three guiding principles, based on the conviction that productivity

improvement cannot be achieved without positive labour participation as

well as sound and constructive labour management relations.

There is a need to change the traditional ways of business in the current era.

This is mainly due to vibrant business environment. Khan (2003) has urged

business community to make a change in the traditional practices due to

rapid changes in the business world. According to Khan (2003, p. 374):

Intense global competition and diminishing trade barriers are making it

more and more difficult for companies to maintain their market share.

Competition among companies operating in different markets has

increased, as advancements in telecommunications and information

technology have broken down traditional barriers to entry (e.g.

geographical and trade barriers).

Harrington (1980, p.169) has shown another face of productivity. Harrington

(1980, p.169) took it as synonymous of improvement. According to

Harrington (1980, p.169), Improvement is not a part of the game it is the

game today. Everyone wants things to change for the better. Top

management wants employees to stop making so many errors. Harrington

(1980, p.169) emphasis on improvement and view it as the ultimate target of

the organisation for survival in the current business age.

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Common Misunderstandings about Productivity

There are some common misunderstandings about productivity. Lawlor

(1985, p. 33) has pointed out the followings:

1. Increased output increased productivity;

2. Profit and productivity are synonymous;

3. Cutting cost improve productivity;

4. Profit today and tomorrow are possible;

5. Partial productivity improvement is worthwhile;

6. Productivity applies only to production.

Stainer (1997, p. 224) has differentiated terms production and productivity in

the following words:

The term productivity is often confused with the term production.

Although there is often a close relationship, production is concerned with

the activity of producing goods or services while productivity relates to

the efficient utilization of inputs in producing prescribed outputs of goods

or services.

Stainer (1997, p. 224) has further stated that:

Some managers have been so bold as to propound the rate of return on

capital employed as a partial measure, that of capital productivity. A

fundamental problem in using profitability ratios is that they are often

affected by external conditions, which may bear no relationship to the

efficient use of resources.

Chapman; Murray & Mellor (1996, p. 436) have identified a link between

productivity and profitability. They express their view in the following words:

In one of the more comprehensive examinations of the impact of qualityon business performance, Garvin (as cited by Chapman et al, 1996, p.

436) found that a strong association existed between productivity (both

labour and capital) and quality as well as between profitability (ROI) and

quality. Garvin found that the relationships between quality and

profitability were less established because of the many other variables

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affecting ROI measures. Other studies have found strong relationships

between productivity improvement and organizational success in such

factors as customer satisfaction programmes, product quality

improvement, reduction in waste and strategic quality improvement.

It is apparent from the above discussion that productivity is one of the

topics, which remained a core issue in the business world, yet there is much

confusion about its concept. In addition, like many other concepts, still this is

not well understandable and different people view it in different ways.

However, it is sure that productivity concern never remained out of focus

from human being. It was important in past, and is important in present and

will remain important in future; rather in the current scenario, it has become

more crucial. A list of productivity concepts and definitions will be given in

following pages. This list will help understand the theme of the productivity.

In addition, it shows a clear link between productivity understanding and

change in industrial practices.

Productivity Movement and Industrialisation

Mahoney (1998, p.13) has made a link between current industrial period and

productivity in the following words, every age has its slogans and energizing

concepts. Among other concepts, concern for productivity has characterised

much of the current decade.

Productivity, like many other concepts of business management has no

established definition. Different people view it from different angles.

Productivity concerns, concepts and definitions diverge considerably from

one analysis to another. In its simplest meanings, productivity is a relation

between inputs and outputs. No output is possible without inputs.

Significance of resources used for any output defines the behaviour

of the people towards its uses. This approach can be understood with the

following illustration. Labour is expensive in developed countries as

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compared to under developed countries. It is a part of planning in developed

countries to have more output with minimum workers. For this purpose,

every method and technique is used. Automation is one way to lessen the

number of working hands. On the other hand, more labour is used in

underdeveloped countries because labour is quite inexpensive and it does

not put a considerable effect on the cost when compared to developed

countries where labour is highly expensive but more productive. This

approach is supporting the theme mentioned above that; the productivity

becomes more crucial when the inputs are expensive or scarce. This

example makes a link between the importance of resources in terms of dollar

and its productivity. Following conclusion can be derived from the above-

mentioned example:

Productivity becomes a crucial issue when there is a scarcity of

resources.

This is one of the main reasons for different meanings of the productivity. In

1800s when raw material availability was not a big problem the main focus

was to improve labour output. Taylors Scientific Management theory is

focused to improve the labour productivity. This is supported by Andrews &

Brunner (1950, p. 09). They defined productivity in the following words, the

primary sense of productivity is that of output (quantity or value) per head in

a given period of time. In recent discussion productivity has also been used

in the sense of intensity of labour efforts. In this statement, major focus is

on output per head. In the modern times where there is a lot of awareness

about human rights, it is becoming quite complicated to emphasise on labour

productivity alone by just increasing wages. Hellerstein; Nuemark & Troske

(1999, p.410) have studied a relationship between wages and productivity.

According to their findings, wages, productivity and workers personal

characteristics have quite complex relationship. According to them, it is

difficult to determine whether wage differentials associated with workers

characteristics reflect productivity differentials or some other factors such as

discrimination. In past main concern was labour productivity but today

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many more factors are to be focused for higher productivity. In present

scenario, there is a great threat of the depletion of natural resources. Due to

this reason, management scientists are focusing on having maximum output

from minimum resources. This is clear from the Green Productivity concept

given by the Asian Productivity Organization in its conference held on 6

December 96, at Manila, in Philippines

The change in the concept of productivity is linked with the changes in the

industrial practices but it has never been ignored, since the first day of the

human life. It was equally significant for a cave man to have more hunting

from few stones and arrows and today it is a matter of survival for any

modern industry to produce more with less. Taira (1998, p. 40) has observed

productivity with reference to its industrialisation in Japan. According to Taira

(1998, p. 40), in Japan, productivity (seisansei) invaded public

consciousness in 55 and has since been perceived almost exclusively as the

physical productivity of direct labour in manufacturing and its auxiliary

industries.

This is the time when Japan started its activities in the industrial field after

WW II. They made a strong link between industrialisation and productivity. It

is a general belief that Japan could not have done such an amazing

performance without the concept of high productivity. In addition, main

concern was labour productivity since they were having greater number of

people as compared to the high tech machinery. Due to this reason, their

main emphasis was on labour productivity.

Arnold & Dennis (1999, p. 07) have discussed productivity growth. They

have identified following three factors in productivity growth:

1. Endowment of natural resources;

2. Capital accumulation;

3. Technological progress.

It is understandable from the above statements that above three factors are

the main contributors in productivity growth. Arnold & Dennis (1999, p. 11)

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have given example of USA in the favour of their assumption. It is true to

some extent. Nevertheless, there are certain examples where this does not

apply, like, Japan and Middle East. There was no natural endowment in Japan

but Japan is at the top in productivity and even better than USA. On the other

hand, Middle East is not among the list of highly productive countries; even

they have abundant resources of natural endowment. The basic thing in

productivity growth is the political leadership. It is the political leadership

that provides basic infrastructure to the individual and organisation which is

the fundamental requirement for productivity augmentation, like, long term

policies, security, educated work force, communication net work etc.

Murugesh; Devadasan & Natarajan (1997, p. 239) have given their views about

changes in business practices and requirement of industrial era in these

words:

From time to time, the industrial world has witnessed the emergence of

technologies and managerial philosophies due to increased competition.

Particularly, this trend has been phenomenal over the last 20 years. An

overview of literature regarding manufacturing status covering this

period indicates that there has been an upsurge in the emanation of

various concepts and philosophies since the 80s.

According to Mittal (2002, p. 27) use of most modern technologies in the

business to improve productivity is a vital factor in productivity phenomena.

According to Mittal (2002, p. 27), large productivity gains are possible if the

vast potential of all these technologies are combined cohesively.

Nevertheless, this is not true in every field, like, agriculture. Once it was

thought that green revolution will eliminate starvation from the world but

today scenario is totally different. Umetsu; Lekprichakul & Chakravorty

(2003, p. 943) have given their opinion on application of modern technology.

They have identified another aspect of productivity and scientific revolution.

Umetsu at al (2003, p. 943) have given their views in the following words:

In the 60s and 70s, the Green Revolution caused agricultural

intensification in many parts of the world. However, recent studies have

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suggested that intensification itself may have led to a decline in

agricultural productivity. Empirical evidence from the past Green

Revolution era has generally concluded that the Green Revolution led to

a plethora of problems. Most of high yielding varieties introduced at time

have quickly exhausted their yield potential (Haymi and Kikuchi).

Intensive monoculture production systems have contributed to declining

or stagnant productivity and farm incomes and have led to

environmental problems such as increased pest and disease incidences,

depletion of soil micronutrients, and changes in soil chemistry (Bouis and

Pingali et al).

From the above statement, it is clear that productivity does not mean

producing more. Rather there is a strong need to add some more concepts

while discussing productivity. It has been discussed in the early part of the

paper that once environment was not big issue but today it has become a

core issue and people are coming back to farming without any synthetic

fertilisers and pesticides. Savery (1998, p. 68) has pointed out the

significance of productivity in the current business environment in the

following words, The battle cry of the 80s and 90s has been the need to

increase the productivity of the organizations. This cry appears to be certain

to continue into at least the early part of the twenty-first century.

From the above discussion, it is understandable that significance of

productivity awareness has a direct link with industrial practices. It

becomes the point of focus when resources are limited, more concern about

environment, high competition, application of free trade agreements, latest

information technology and more factors associated with business practices.

Productivity Progression

As it has been discussed in previous pages, that productivity concern kept on

changing in different eras. It was mainly circumstances, which forced people

to change their behaviour towards productivity. Murugesh et al (1997, p. 239)

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have discussed in detail about the change in priorities of industry from

productivity to TQM. According to Murugesh et al (1997, p. 239):

Though productivity would have been mans concern as soon as he

became a manufacturer, its very formal presentation was noticed in the

literature only in the year 1766. Thereafter a lot of work emerged in this

area with various definitions and concepts.

They have further sated that:

During the early 00s, various models to improve productivity in complex

industrial enterprises were brought out. A comprehensive literature

survey on productivity studies in manufacturing systems over the last 20

years revealed two main aspects:

(1) The work on productivity in the initial days was biased towards only

its improvement and, later, slowly it shifted to its management;

(2) Its reception among the manufacturing community was moderate

during the early days of 70s.

They have pointed out another change in the behavior of people towards

productivity. They have expressed their views in the following words,

however, when the TQM movement gained momentum from the early 80s,

productivity concepts were pushed to the background. This resulted in the

declining trend of productivity literature over the years. They have surveyed

articles published on productivity in different eras. According to them:

From the 80s, the frequency of articles appearing in journals was reduced

by a very insignificant extent. Meanwhile, during the mid-80s, attempts

were made to implement TQM concepts either as a whole or in part (like

initiating quality circle programmes). However, during the late 80s and

early 90s sceptical observations emerged as the real benefits of TQM.

Particularly, a variety of articles such as Juran, Dale and Lightburn, and

Noci, dealing with the failures of quality improvement projects appeared.

More recently, Garvin claimed that the failure of TQM projects is reported

to the extent of 70 per cent. At the outset, a literature review has

indicated a disproportionate growth of quality and productivity studies,

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which has resulted in insignificant improvement in overall manufacturing

systems management.

According to their survey productivity article ratio was 66.5 % in 70, while it

is only .84 % in 84. Baily; Gordon; Nordhaus & Romer (1988, p. 347) have

studied growth rate change in US economy. Their observation confirms that

in last two decades productivity growth rate in US has passed through a

period of recession. Their research supports that in last two decades major

focus of firms was quality rather than productivity. They express their views

in following words:

Almost two decades have now passed since U.S. productivity growth first

showed signs of slowing, more than 15 years since the first paper on that

topic appeared in this journal. Overall, the process of slowdown continues

with little relief; in the non-farm business sector the annual growth rate

for both output per hour and multifactor productivity was more than 1.5

percentage points slower during 73-87 than during 48-73.

Nickless (1979, p. 907) has established the inappropriateness of the sex ratio

as a proxy for changing skill composition in the nineteenth century cotton

textile. Nickless (1979, p. 907) has further stated that:

After 1845, it was necessary to increase capital input to maintain a

steady rise in a labour productivity. In those years when the

capital/labour ratio fell, total factor productivity also fell. In order to

maintain a modest productivity advance it was necessary to substitute

capital for labour and in which such substitution was possible appears to

have been in the jobs of unskilled workers.

Lin; Kincade & Warfield (1994, p. 21) have made a link between productivity

and scientific management in the following words:Productivity is a measure of work with origins tied to the development of

scientific management. Definitions of productivity are numerous, but in

the simplest terms, productivity is measurement of output relative to an

input. The output for a production facility is often measured in units

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produced, and the input is some variation of numbers of workers or hours

worked.

It is clear from the above statement that in scientific management era

productivity was associated with input and output.

Productivity Concepts and Definitions

The word productivity first time appeared in literature in 1766. According to

Sumanth (1990, p. 01), the term productivity was probably first time used

by French mathematician in an article in 1766. In 1883, another French man,

Littre, defined productivity as the faculty to produce. Many organisations

have defined productivity in different ways. Hereinafter, diverse meanings of

productivity coined by different people and organisations in different periodswill be presented. Sumanth (1990, p. 04) has given a list of nine different

organisations and people who have given definition of productivity. A list of

different meanings has been prepared with the help of definitions proposed

by Sumanth (1990, p. 04), some more definitions have been added and

finally a conclusion is given based on research.

According to Sumanth (1990, p. 03), Quesnay (1766) used the word

productivity in an article and after that, Littre (1883) used this word as

faculty to produce. Fabricant defines productivity (as cited in Ali 1978, p. 55)

in the following words, always a ratio of output and input. This is the most

common definition of productivity. Kendrick and Creamer have proposed two

definitions of productivity (as cited in Afzal, 2004, p. 07). They expressed in

the following words, a-Functional definitions for partial, total factor and total

productivity, b-Loose description of relationship usually in ratio form,

between outputs and all of the associated inputs in real terms. In these

definitions, authors have differentiated partial productivity from total

productivity. Nevertheless, their focus is on relationship between the output

and input. Mali has proposed the similar concept of productivity (as cited in

Afzal, 2004. p. 06). According to Mali:

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Productivity is the measure of how well resources are brought together in

organisations and utilised for accomplishing a set of results. Productivity

is the name of reaching the higher level of performance with the least

expenditures of resources.

Sumanth (1990, p. 04) believes that productivity is a family of ratios of

output to input. The living standard of the country is measured by the

productivity. Productivity is measured by the goods and services produced

by per unit of national resources. Sink (1985, p. 15) has further clarified

productivity with reference to time and application of generic system of

calculation. According to Sink (1985, p. 15), the concept that productivity is

a relationship between outputs from a given system during or over a given

period in time, and inputs to that system during that same period, should be

generic and universal. Lawlor (1985, p. 33) has also given two concepts of

productivity. According to Lawlor (1985, p. 33), a- at its simplest meaning

productivity is the relationship between goods produced and sold or service

provided the out put, and the resources consumed in doing it

(Output/input= productivity). b- productivity is a comprehensive measure

about how efficiently and effectively organisations satisfy the following five

aims:

1. Objective achievements

2. Efficiency of the process

3. Effectiveness-

4. Comparability with other organisations

5. Trend- productivity measured over a period.

Campbell & Campbell (1998a, p. 01) have viewed this issue in a different

manner. According to them productivity is a concept that has captured the

imagination and energy of managers and behavioral scientist for decades. In

this statement, productivity looks a concept more than a definition.

Productivity is normally considered as the output of a worker. Moreover, the

factors affecting the productivity are taken into account like, cultural

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background, education but the level of technology is usually ignored.

Prokopenko & North (1996, p. 13) have expressed their views about

productivity in the subsequent words, productivity is about making the

most efficient use of all resources and gaining maximum added value from

them

Baig (2002, p. 08) has defined productivity in the following words, doing

things right at the least possible cost in least possible time with the highest

possible quality and to the maximum level of satisfaction of the customers

and employees. Chen; Liaw & Chen (2001, p. 378) defines productivity in the

following words, productivity is often used to evaluate the aggregate

performance of a business unit, generally defined as the ratio of outputs to

inputs. However, for different applications and research domains there are

different definitions of productivity. This definition supports the established

fact discussed in previous pages that productivity has different meanings in

different situations.

As it has been discussed in previous pages that there is no consensus about

the definition of productivity, it is the case of its impact on inflation. Initially

people were of the view that there is a negative relation but most recent

research has proved that no such relation is present. Papapetrou (2001, p.

214) has discussed this point in detail. Papapetrou (2001, p. 214) has listed

down names of many authors who have proved that there is a negative

inverse link between productivity and inflation but at the same time many

authors have given their view on the bases of their own research that there

is not a negative relationship between inflation and productivity and they

support the idea that the statistical correlation between inflation and

productivity growth.

Vittal (2002, p. 28) has attached another concept with productivity and that

is the objective of the organisation. Vittal (2002, p. 28) says that,

productivity, at a very element level can be defined as output by input. But

mere increase in output is of no value unless the output also has a bearing

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Psychologists, Economists, Politicians, Sociologists, Organisational

behaviourists and Managers all have different perception on the concept of

productivity. Baig (2002, p. 09) has defined productivity in another way.

According to Baig (2002, p. 09), Productivity has different meanings to

different people.

A summary of the Baigs (2002, p. 09) presentation is given hereunder:

For employers: Improve competitive position in the market

For Employees: An increase in compensation, development of skills

and other capabilities

For Customers: Lower price, high quality, timely delivery,

For Society: Low inflation, improvement in living standards,

environmental protection

For Government: More revenues, more resources for social services

As it has been discussed in previous pages, that productivity is mainly a

topic for the economists. However many industrial engineers have also

worked on this subject. Productivity is also a matter of concern for

government officials. Today other people are also discussing productivity

including environmental engineers, social scientists as well as industry itself.

The meaning of productivity is different for every sector of life. For example,

industrial engineers want more with less and on the other hand,

environmental engineers are focusing to save the environment by

attempting to lessen pollution. There is a subtle difference of understanding

of productivity among all the people concerned.

Productivity Meanings Diversification

Ali (1978, p. 55) has divided productivity definitions into following eight

groups. Ali (1978, p. 55) has given the names of different authors who are in

favour of these definitions. According to Ali (1978, p. 55) these are eight

different groups to describe productivity:

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Group # 01

Productivity is a ratio of output to input

Group # 02

Productivity is generally interpreted as efficiency in industrial production

measured by some relation of output to input.

Group # 03

Productivity is the relationship between the amount of goods or services

produced and one or more input used to produce that product.

Group # 04

Productivity is a measurement or the efficiency with which input can be

converted into output over some given period of time.

Group # 05

Productivity is the attainment of goals verses all relevant inputs.

Group # 06

Productivity is a management problem, involving how best to manage

excess capacity.

It is true that management is ultimately responsible for all of the functions of

any firm.

Group # 07

Productivity is primarily a function of companys effectiveness to meet the

need of the market.

Group # 08

Productivity is most conveniently expressed as an index number in current

period as compared to the performance in a base or reference period, which

is quoted to 100.

From the above-mentioned discussion, it is clear that there is a wide range of

productivity definitions available in the literature. In the next pages few more

concepts of productivity are being given.

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Performance and Innovation Unit (2001, p. 25) has defined productivity in

the following words, productivity is the efficient and effective use of

resources by the organisation.

This is a modified shape of the approaches mentioned under Group # 2 and

4. In this approach effectiveness has also been taken into account along with

efficiency. This approach seems more comprehensive when compared to

others. The main focus of this approach is on resource utilisation. It also

ignores other factors like, market satisfaction and environment. Overall, this

approach is more suitable to assess the productivity of the firms.

Nevertheless, this approach ignores the quality factor of products or

services. Productivity also covers the quality aspects of the production.

Industrial Engineers can use this approach to calculate the productivity

focused on resource utilisation. Environmental Engineers are more

concerned with depletion of natural resources. However, it does not mean

that other people are not concerned with the safety of nature. However,

environmental engineers are more concerned about the environment. This

approach is the most popular in the current age. In current period the major

point of discussion among the industrialists, economist and all other related

authorities is to save environment. Some decades back it was not that much

important as it is today. The main reason of such ignorance was slow pace of

industrial activities in the past. This approach seems to be one of the most

suitable approaches. On the other hand, industry is facing a tough situation

due to compliance on environmental issues. According to Porter and Linde

(1995, p. 134) companies can achieve higher productivity by adopting the

environmental protection laws. However, this approach is only a survival

point for the nature. Firms productivity should be judged with reference to

the loss it makes to the nature.

National Productivity Centre [NPC] (1999, p. 03) has defined productivity

more specifically according to NPC (1999, p. 03); productivity compares the

amount of output with the amount of input resources used to produce the

output at any given period of time.

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Lawlor (1985, p. 20) given a list of eight factors related to productivity.

According to Lawlor (1985, p. 20):

The productivity issue as now described is a complex one involving many

factors. Therefore, we can focus our attention on the following eight

factors that have been selected as having the greatest bearing on

productivity:

Economic climate

Markets

Change

Organisations

People Rewards

Information

Technology

According to Lawlor (1985, p. 20) productivity is a complex phenomenon.

According to Bernolak (1980, p. 03), productivity is the relationship

between the quantity of goods and services produced and the quantity of

one or all of the resources utilised in turning out these goods and services. Itis usually expressed as a ratio. It seems that Bernolak (1980, p. 03) is also

in favour of the general definition, which is about the ratio of output and

input.

Monga (2000, p. 13) comments on productivity in a changed manner.

According to Monga (2000, p. 13), productivity is a multidimensional and

dynamic concept. Bernolak has projected another view of the productivity

(as cited in Monga, 2000, p. 13) that most manager do not know (1) what

productivity really means (2) how much vital it is for them and for their

organization (3) that, it can be improved significantly (4) how to measure

and analyse it, (5) what factors affect it (6) how to improve it.

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Mahoney (1998, p. 18) gives his comments on productivity definition in the

following words, productivity is an efficiency concept generally cast as ratio

of output o input into some productive process. Mahoney (1998, p. 18) has

further explained productivity concept in these words, productivity is also a

performance variable and it is perhaps best illustrated in comparison with

other performance variables. There were many studies conducted to

evaluate productivity by comparison.

According to the above-mentioned statement, comparison of performance,

efficiency or effectiveness is the best way to illustrate productivity. It seems

that the best use of productivity is in its comparison, and for comparison

purpose, there should be some criteria with which comparison is done. This

may be the previous record, common industry output or any other

benchmark available.

Campbell & Campbell (1998b, p. 83) are of the view that efficiency and

productivity are interchangeable words. According to them, there is a clear

consensus that it is useful to reserve the term productivity for efficiency

indices. That is the indicator in question is a ratio of outcomes, measured in

some way, to inputs, also measured in some way.

This is a very narrow concept of productivity. One can have more efficient

system with bonded labour or making planet polluted. However, in some

particular situation this term is acceptable.

Gharneh (1997, p. 01) has widened the concept of productivity. According to

Gharneh (1997, p. 01), productivity is a road to competitive enterprises, the

economic development of countries and welfare and well being of nations.

In this statement, productivity is some thing else and it is other than ratio. It

is a way, method or technique to have more with less.

Brinkerhoff and Dressler (1990, p.16) have given their conclusion about

productivity in the subsequent words:

In a nutshell, productivity reflects results as a function of effort. If

productivity improves, it means that more results are being gained from

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a given amount of effort. In a classical sense, productivity is defined as a

ratio such that the output of an effort under investigation is divided by

the input required to produce the output.

In the above mentioned statement two major concepts have been

elaborated: a- productivity is a result of effort and b- ratio of output to input.

This definition is a modified shape of the previous given statements.

Wilson (1994, p. 50) has defined productivity more specifically in the

following words, productivity is the ratio of outputs produced to the

input resources utilized in their production. Typically, productivity is also

measured against a base period so as to facilitate trend analysis of the

productivity measure. Therefore, the dollar value of outputs and inputs are

adjusted for monetary inflation. Productivity for period i (with respect to base

period b) can then be represented as:

(Outputi/Inputi) / (Outputb/Inputb) *100.

Industry Commission (1997, p. 03) has defined productivity more precisely

in the following statement:

Productivity is a measure of the capacity of individuals, firms, industries

or entire economies to transform input into output. More specifically

productivity is a measure of the rate at which output (of goods and

service) are produced from given amount of input.

In this statement productivity is not the simple ratio rather it is capacity of

the organisation and individuals who take part in the production process.

Sink (1985, p.03) has advocated the term productivity in the following words,

productivity is simply the relationship between outputs generated from a

system and the input provided to create those outputs.

Traditionally productivity is considered as a ratio between input and output.

Productivity is often confused with efficiency and rationalisation or

profitability. In reality, the modern understanding of productivity is doing

things right at the least possible cost, in the least possible time with the

highest possible quality and to the maximum level of satisfaction of the

customers and employees. In this sense productivity is a total business

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concept rather than a rationalisation of production and the productivity

has social dimensions, not only economic ones (Prokopenko, 1999, p. 10).

Prokopenko (1999, p. 10) has added some other dimensions in the concept

of productivity. This looks a more comprehensive statement when compared

to all those mentioned above. Daniels (1997, p. 52) has indicated another

avenue of productivity in the following words, the approach and attitude to

productivity improvement is much more important than the type or nature of

any techniques. Nachum (1999, p. 943) has defined productivity in the

following words:

Productivity is defined as the level of output produced by per unit of

input. Changes in productivity reflect changes in the ratio between input

and output, e.g. increase/decrease in output produced from a given

input, or same output produced with more/less input.

In a scenario where product life cycle is becoming short every day,

significance of innovation is one of the fundamental requirements for high

productivity. Taylor; English & Graves (1994, p.13) have stated the

importance of new product development in the following words, as product

life cycles have decreased and manufacturers are facing with increasing

global competition, engineering designs play an increasingly important role

in the successful manufacture of products. This shows that survival of firms

mainly depends upon innovation.

Total Image Building

Marketing gurus are agree on one point that buying decisions are much

influenced by the perception of the brand or firm in the minds of buyers.

Every firm is trying to create a better image in the minds of customers and

buyers about their products and as

well as firms. All efforts are done to improve their images. One takes goods

and services from others to improve his or her productivity. Brand perception

is directly related with the contribution of service or goods in improving

buyers productivity. In the current scenario, every firm should try to be

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major contributor in the enhancement of buyers productivity. Furthermore,

firms have to be much careful in their operations. People are more

concerned with social practices of the firms. They will never prefer a firm,

which is using child labour, creating high-level pollution or involve in anti

social activities. It is the call of the day that firms should prove that their

operations are as per business ethics and they are contributing in up lifting

of the society as a whole. This is also part of productivity and ultimately this

would help in increasing the image of the firm and that is the major tool for

better profits.

All above discussion is to understand the meaning of productivity. Still there

is no precise meaning of the productivity. It is highly complicated and has

many dimensions. There is no chance that people would have a common

meaning of productivity. This is due to many factors (discussed above). After

in detail discussion, we have reached to the following conclusion:

Productivity is an approach, a mindset, and a way of thinking to do

more with less by observing the business ethics, caring the risk of

stakeholders and keeping the planet clean.

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