ARTICLE: The Modern Dynamic Concept of Productivity and Factors Affecting It

The productivity is a regularly used term in the business world, and it can be defined as the optimum utilization of the resources, for example, the labour and the raw material and other inputs. It can also be understood as the ratio of output to the input. For instance, if we have to measure the productivity of the labour, it can be calculated regarding the units which are produced by every worker in a given period. The concept of productivity is very closely linked with the quality of the products of the services which are produced at the end of the production process, the use of technology and the profitability which the organization can or have gained with those processes.

There are many factors which help in increasing the productivity which are:

  • The controlling inputs and decisions made for them
  • The continuous improvement of the processes according to the market trends
  • Using the reduces to maximize the output from the same inputs
  • The growth in the technological tools to decrease the time taken by the procedures and increasing their effectiveness. This also helps the companies to standardize all their processes for maximum efficiency.

The concept of productivity studies in the operations management. To understand the productivity concept, you should know about the operations management. You can acquire in-depth understanding of this topic by reading the article on this having the title “Operations Management and its strategic roles in business.”

The modern dynamic concept of productivity

The modern dynamic concept of productivity says that the productivity is a multidimensional phenomenon and it becomes more rigorous when the competition increases. According to this concept, the competition and the productivity are positively correlated with each other, and the competition has a direct effect on enhancing the productivity of the processes. This can be understood with the help of productivity flywheel concept which says that the higher the competition in the market, the productivity of the organizations increases. When the productivity increases then it leads to higher customer satisfaction. When the customers like and buy the product or service of a firm, then it helps it gain more significant market share. When the company gains more market share, then the competition also becomes fierce, and this cycle keeps on going look this. In this way, the productivity initiates a sequence, and it helps the organizations to design their products in such as way that clicks to its customers.

Different types of productivity

  • The factor productivity
    When the organizations measure the effectiveness of each process and input separately, then it is called as factor productivity, or it is also called as the partial productivity. When the managers calculate the productivity all the related aspects and the procedure, then it is known as the total factor productivity. Usually, the calculations for measuring the factor productivity are done at the organizational level or the industrial level.
  • The total productivity
    When the productivity of the whole procedures is, measured, then it is called as the overall productivity. In this process, the calculation of the productivity is done on the national or even on the international level.

Factors which affect the productivity

There are many reasons which are directly or indirectly affect the productivity. The principal elements which have a significant effect on the productivity rates are as following:

  • The ratio of capital to labour
    In this measure, it is assessed that whether the company has made adequate investment in its plant, in acquiring the latest machinery and tools. The acquisition of the skilled and knowledgeable workforce is also a necessary parameter which has a significant effect on the productivity of a firm and its processes.
  • The unavailability or scarcity of some resources
    There are some resources which can be available with difficulty or which are scarcely available such as the energy, various metals, and water etc. This can pose a problem in front of the production managers and have an adverse effect on the productivity also.
  • The change in work-force
    If there is a high about turn over then also the productivity suffers a lot because of the frequent change in the workforce. The companies, therefore, should retain their employees so that they can prevent this problem to arise as much as possible. The companies can achieve less turnover by adopting and implementing employees friendly policies which can keep the workers motivated to work with their highest efficiency.
  • The technological advancements
    The technological advancements have a positive effect on the productivity as the processes will be enhanced and streamlined to a greater extent with the use of latest techniques. The use of latest technology has an enormous impact on making the procedures easy to handle and they also consume less time and energy.
  • The regulatory policies of the government
    The regulatory policies can have a negative impact on the government can come up with constraining policies which can decrease the productivity of many firms.
  • The bargaining power of the workers
    If the workers have high demands and they have high bargaining power, then it can also have a very detrimental effect on the productivity of the procedures of the organizations.
  • The decision making and managerial factor
    The decision making is one of the essential aspects of the production system and therefore if the different levels of hierarchy make the decision are right and by achieving the strategic as well as day to day targets effectively then it has an appositive impact on the overall productivity of the processes as well as the whole organizations. The managerial skills to optimize each process which is associated with the production stem is highly essential to derive higher productivity levels.