ESTHER PROUD BUSINESS ADMINISTRATION COMPARATIVE MNGT ASSIGNMENT QUESTION;DISTINGUISH BETWEEN THE TERMS;PRODUCTIVITY AND PRODUCTION

Production and productivity are different terms and carry different meaning. It is wrong to assume that higher production will always lead to higher productivity or vice-versa. Production is related to the activity of producing goods or services. It is a process (or system) of converting input into some useful, value-added output. Productivity is related to the efficient utilization of input resource into produced in the form of value added goods or services. Production is a measure of output produced. The emphasis is Not on how well the input-resources are utilized. Productivity, on the other hand, puts emphasis on the ratio of output produced to the input used. Its focus is on how well the input resource is used for conversion into output. Example company is manufacturing !",### components per month $y employing %## wor&ers in ' hour shift. The company gets additional order from government to supply additional (### components. The manage-ment decides to employ additional wor&ers. )hat will $e production and productivity level when the num$er of a additional wor&ers employed are* (i) +# (ii) !, (iii) !#. -olution Present production . !",### /omponents Present productivity (of 0a$or) . Present Production (i.e., output)1Total man-hours (i.e., output)

. !",### components1(%## wor&ers) ('hour) (+# days of the month) . !",### 1 !",### . % /omponent1man-hour

)ith increased order (i) )hen additional +# wor&ers are hired Production . !",### 2 (### . +#,### components Productivity (of la$or) . Increased total production1 Total man-hour . +#,### 1 (%## 2 +#) (') (+#) . #.3( /omponent1man-hour (ii) )hen additional !, wor&ers are hired Production . !",### 2 (### . +#,### components Productivity (of la$or) . +#,###1 (%## 2!,) (') (+#) . % /omponent1 man-hour (iii) )hen additional !# wor&ers are hired Production . !",### 2 (### . +#,### components Productivity (of la$or) . +#,###1 (%## 2!,) (') (+#) . %.#" /omponent1 man-hour

In this e4ample, it is clear that production has increased $y (### units. Therefore,

Increase in Production . +#,### 5 !",###1!",### 6 %## . !,7 In case of productivity, the la$or productivity falls $elow the initial level of % component per man-hour if more than !, wor&ers are hired. This level of additional man-power may $e termed as $rea&-even level from the la$or productivity point of view. Therefore other things remaining constant, no more than !( wor&ers should $e hired for this increased production. )e have understood three things from the a$ove e4ample* %. Production and productivity are two different things. !. Increase in production does not necessarily mean increase in productivity. +. Productivity is always associated with the conte4t in which it is calculated. 8or e4ample, in the a$ove case, we have calculated and interpreted la$or productivity. In another case, someone may li&e to &now a$out material productivity or energy productivity. If la$or productivity has decreased due to some reason, it may not always mean that other forms of productivity, say material productivity, will also fall. 9arious forms of productivity will $e e4plained in sections to follow.

Productivity of an organization is defined as the ratio of outputs produced $y the organization and the resources consumed in the process. :ere the output refers to the ;uantity of goods and services produced $y the company, and inputs refers to the ;uantities of resources such as la$or, material, physical facilities, and energy consumed for producing the same. Productivity is used to assess the e4tent to which certain outputs can $e e4tracted from a given input. )e can measure productivity for a single input resource such as manpower used, or for multiple resources. There can $e many different types of productivity measurement depending on the type of resources considered. <easures of productivity descri$e how well the resources of an organization are $eing used to produce input. They are very useful in achieving and maintaining high level of performance in any organization, particularly in improving the efficiency of various operations within the organization as

well as for the total organization. Productivity measures are also used for planning, monitoring, and improving performance at national levels. Productivity can $e improved $y increasing the outputs &eeping the inputs constant, or $y giving the same ;uantity of outputs with reduced inputs, or $y increasing outputs and at the same time reducing inputs. )e can do this $y several methods such as*
o o o o

Improving systems and methods of operations. mong other measures this includes use of automation. Improving planning and scheduling. Improving control. Improving motivation of people.