Productivity 5.05

Examples of regulatory laws (10)

- Control monopolies and unfair competition - Protect small buyers from price discrimination - Set product-safety standards - Require honest labeling and standard packing of products - Prohibit the sale of impure food, drugs, and cosmetics - Regulate product warranties - Outlaw the harassment of debtors - Protect the rights of workers and of consumers - Regulate prices and wages - Prohibit false or deceptive advertising

Licensing (4)

- Issuing a government permit that allows an individual or a business to function in the marketplace - to obtain one businesses or individuals must meet government requirements - allows government to control who operates certain businesses and the way in which they are operated - they can deny or cancel licenses to people who don't meet the requirements or have stopped meeting the requirements

What holds productivity back?

- Lack of standardization - Lack of tools/equipment - Too many different products - Poor product/service design - Lack of communication - Poor planning - Lack of worker knowledge and education - Personality conflicts - Poor or unsafe working conditions - Unclear goals

Changes in technology (2)

- one reason why government's new role was necessary - rapid use of technology has made regulation with how business is conducted over the internet

Tariff

A tax on imported goods; also called a duty

Objectives

Goals to be reached

Private sector

The part of the economy that is owned and controlled by individuals and/or businesses

Food and Drug Administration (FDA)

The regulatory agency established by the federal government to enforce laws that protect consumers' health

How do we measure worker productivity?

- The amount of work the individual can produce: if Jill checks out 50 customers in one eight-hour day, her productivity rate is 6.25 customers per hour - The amount of time needed to do the work: if one writer can write an ad in 30 minutes instead of an hour, that person is considered more productive - The monetary value of the work: a salesperson's productivity would be based on the income received from sales divided by the costs involved in sales (travel, salary)

Why is productivity important for consumers?

- greater selection of high quality products at lower prices

Growth and expansion

- one reason why government's new role was necessary - the population grew so businesses grew - Governments also had to start collecting taxes to build roads because more people needed them

Communication (3)

- one way to improve productivity - managers must explain goals to ensure that everyone knows their role in reaching the goals - employees need to understand their customers to be able to satisfy the customers' needs and wants, without this knowledge employees may not produce to the full capacity

Specialization

- one way to improve productivity - the process of making the best use of resources in the production of goods and services - this means only producing a few type of products that best utilize the resources

Why is productivity important for workers?

- when they are productive and the company is productive they will get higher wages and job security

Unclear goals

An employee cannot be productive if they don't know what they are working toward

Public goods

Goods and services that are used by all people and cannot be withheld from people who don't help pay for them

Subsidy

Government financial help given to a business

Lack of worker knowledge and education

If employees don't understand how to use a machine or use the wrong equipment, their productivity will not be high

Lack of communication

If new information about a product doesn't get passed along, or if instructions for completing a sale aren't clearly explained, mistakes that hinder productivity will happen

Poor or unsafe working conditions

If working conditions are poor or unsafe, accidents are bound to happen. When injuries occur, productivity declines.

Job orientation

Job preparation or induction training in which new employees are acquainted with their surroundings, receive general information about the company and its policies, and are given specific information about their jobs

Poor planning

Poor planning has a drastic impact on productivity. If materials, labor, or other resources are not available at the time needed, then the business's productivity suffers

Monetary Policy

The government policy that determines the amount of money that will be in circulation and the level of interest rates

Participative decision-making

The involvement of several individuals in making decisions; in business, the participation of employees in decision to be made by management

Inputs

The specific economic resources used in producing goods and services

Labor

The work people do or the workers themselves

Regulatory laws

These are laws passed by government to regulate things in business

Lack of tools/equipment

To be productive workers must have easy access to all tools and equipment they need. They also need to have up-to-date equipment

Disproportionately

Unsuitable, unreasonable, or inappropriately sized

Personality conflicts

When team members do not get along with each other, their productivity suffers. They spend their time arguing and complaining instead of efficiently completing assigned tasks

How do we measure business productivity?

- Number of products produced/number of steps involved in producing them - Dollar value of total sales/number of salespeople who make the sales - Dollar value of total sales/costs of making those sales - Service business productivity-quantity, quality, appropriateness, timeliness, cost

Governments Original Intentions

- Protecting business property: provide fire, police, and military. Issue trademarks, copyrights, and patents to protect ideas - Enforcing business contracts: contracts would be binding, if customers refused to pay they would be taken to court and forced to pay Settling business disagreements: Disagreements between businesses would be settled in government courts - Setting and collecting taxes: government would set and collect taxes on the products businesses sell. Funds would pay expenses of government. Extra taxes on imported products

Monetary policy (3)

- The government policy that determine the amount of money that will be in circulation and the level of interest rates - increasing money in circulation has a positive effect on business, it increases demand for goods and services - raising interest rate is bad because it is more expensive to borrow money and can slow business activities

Fiscal policy (3)

- The government policy that sets levels of government spending a taxation - if government spends more demand for items will increase, if spend less demand will be reduced - more taxes is bad because people have less money to spend on things

Why is productivity measured?

- To see if business objectives are being met: a business sets goals and productivity helps them see if they are meeting those goals - To determine the efficiency of actual production methods: a business can determine if workers are using time and resources effectively, if not working efficiently improvements need to be made - To determine if productivity is going up or down: comparing the current productivity level with past productivity rates will show if a business's productivity is increasing or decreasing - To show trends in business conditions: If productivity is increasing, then business conditions are improving. If productivity is decreasing, then business conditions are declining, too. - To plan for productivity improvement: must measure surrent productivity to determine whether improvement is needed. This helps the business set goals for the future - To manage resources: When a business knows how productive it is everyday, it can be sure to keep enough resources in stock to manufacture or sell products

Wage/Price controls (3)

- another example of government control - government tells businesses the maximum amounts they can pay workers and/or charge for their products - these controls are only used in times of economic or national crisis

Why is productivity important for economy? (3)

- has a positive growth in economy - when productivity drops economy fails, inflation occurs, costs of labor go up, prices rise, - the economy does not do well if productivity is bad

Why is productivity important for businesses?

- helps them compete in global economy - helps them to keep their costs down and their profits high - gives a competitive advantage over others

Lack of standardization

- if tasks and processes aren't doing things the same way every time then employees will not be productive

Why is productivity important for society? (2)

- meets people's wants and needs more effectively - higher standard of living, more products, competitive prices

To protect specific business (3)

- one purpose of government involvement in business - government has price supports for farmers so they can make enough money - government also does subsidies for businesses like transportation, housing, agriculture, and mining industries

To protect public health (4)

- one purpose of government involvement in business - government has to make sure that products are not harmful - builders cannot use asbestos in buildings - water has to be tested to remove harmful bacteria, restaurants also have to be tested to make sure they are clean

To protect consumers and investors (6)

- one purpose of government involvement in business - government passes laws to prohibit false advertising - laws that require product testing to make sure it is safe - set safety standards for work - food inspection - laws that regulate business practices and financial reporting to protect investors

To protect competition (4)

- one purpose of government involvement in business - government promotes free competition and bans monopolies - governments also regulate natural monopolies to protect consumers and monitor the practices of the monopoly - may deregulate industries where natural monopolies exist to increase competition and consequently lower prices for consumers

To provide public goods (2)

- one purpose of government involvement in business - government provides goods that everyone can use, no one can be withheld from using these

To improve public welfare (3)

- one purpose of government involvement in business - government provides public welfare systems for the benefit of those who are unable to provide for themselves - other examples are job-training programs and loans to small businesses

To regulate workplace conditions (4)

- one purpose of government involvement in business - governments regulate the workplace to eliminate hazards - also regulate minimum pay - prohibit discrimination and require equal pay

To protect business property (4)

- one purpose of government involvement in business - issues trademarks, patents, and copyrights to protect ideas - passed zoning laws to protect business property - make sure that no one can open undesirable businesses in the neighborhood

To conserve the environment (4)

- one purpose of government involvement in business - pass laws that prohibit business activities that harm the environment, like chemicals or materials - might require use of products that don't damage too much of the environment - may say that businesses have to replace resources they use, like trees

To stabilize the economy (3)

- one purpose of government involvement in business - use monetary policy to regulate business, more money in circulation more demand, higher interest rates, more expensive, lower, better - also intervene with taxes and government spending, high spending good, high taxes, bad

Attitude changes

- one reason why government's new role was necessary - as marketplace became more complicated people needed government to protect them from dishonest or deceptive practices and false advertising

Government in business (3)

- one reason why government's new role was necessary - government has started to take part in business - Ex. United States Postal Service

Industrialization

- one reason why government's new role was necessary - more factories were produced - government had to regulate how companies treated workers and other companies

Environmental concerns (2)

- one reason why government's new role was necessary - pollution became widespread - people wanted government to put rules in place to protect the earth

Taxes (5)

- one way the government pays the costs of regulation - changes in prices charged by businesses affects the amount of income the government receives - when prices go up, wages and profits go up and more money is paid to the government - when prices go down, wages and profits go down and less money is paid to the government - government collects several kinds of taxes from businesses

Borrowing (4)

- one way the government pays the costs of regulation - they can borrow money from other countries or from the private sector - gov. borrows money by issuing bonds - when they purchase government bonds they are lending money to a government for a stated period of time they promise to repay the amount of borrowed at the end of that time and to pay the bondholder a specified rate of interest for the use of the money

Division of labor (3)

- one way to improve productivity - Dividing a large job into units, or job tasks, and assigning and individual to do each of the tasks - each workers does a limited number of activities that they specialize in and know how to do well

Increased capital investment (5)

- one way to improve productivity - The amount of money the business has invested in its goods and other property - Buying new and up-to-date equipment, supplies, and technology - buying new buildings and expanding when needed - also benefit form public capital investment like roads and transit systems

Mass production

- one way to improve productivity - The rapid production of large quantities of a product - reduces wasted time, energy, and resources

Quality of work life (5)

- one way to improve productivity - an atmosphere of cooperation between labor and management is essential for good quality work life - offer fair wages, competitive benefits - safe and healthful working conditions - if they feel safe and comfortable they will work more productively

Training and education (4)

- one way to improve productivity - better trained and educated workers are usually more productive - more apt to be creative and organized - training your employees for exactly what they need to do will help them to be productive

Working within government regulations (3)

- one way to improve productivity - by adhering to regulations they reduce the chance of inspections and orders to cease production, this prevents production from stopping - if you obey laws you won't be shut down

Research and development

- one way to improve productivity - by determining better processes, refining or simplifying existing products, or developing new products, researchers can speed up the production process and make it more efficient

Motivation (6)

- one way to improve productivity - financial rewards motivate people to perform well - commendation also motivates people - showing respect - self motivation - when you motivate your employees this makes them like their job and it makes them want to work harder

Participative decision-making (3)

- one way to improve productivity - when people participate in business decision-making, they work harder and do better quality work - motivate people to make suggestions on how to improve business, this makes them feel heard and they take pride in their jobs and are more productive

Poor product/service design

A complex, very detailed product often take more time and steps to produce than a simpler product

Monopoly

A condition in which a market is controlled by one supplier with no substitute goods or services readily available

Occupational Safety and Health Administration (OSHA)

A federal government agency that writes and enforces safety and health standards for businesses

Federal Communications Commission (FCC)

A government agency that regulates interstate and international communications by radio, television, wire, satellite, and cable

Federal Trade Commission (FTC)

A government regulatory agency that administers and enforces antitrust laws to prevent price fixing and to prohibit unfair competitive practices

Inflation

A rapid rise in prices that may occur when demand exceeds supply or when productivity declines and costs of labor go up

Natural monopoly

A single business that influences the entire production of a particular good or services because it is in the best interests of the public for the business to do so

Service business

A type of business that performs intangible activities that satisfy the want of consumers or industrial users

Efficiency

Accomplishing a task with a minimum expenditure of time and effort

Private enterprise system

An economic system in which individuals and groups, rather than government, own or control the means of production; also known as free market economy, private profit system, market system, capitalistic system, or free enterprise system

Price discrimination

An illegal activity in which a business charges different customers different prices for similar amount and types of products

Price Supports

Assistance by government in maintaining the price of a good or service to enable the producers to earn a profit

Public sector

That part of the economy that is owned and operated by government at all levels (e.g., schools, libraries, highway systems)

Goal setting

The ability to visualize, set, and focus on achieving business objectives

Productivity

The amount and value of goods and services produced (outputs) from set amounts of resources (inputs) - Productivity=Outputs/Inputs - a measure of how efficiently those inputs are changed into outputs in a set time period

Business productivity

The amount of goods or services produced by a business from a set amount of resources

Disposable income

The amount of money people have to spend, or dispose of, after they have paid their taxes; also called discretionary income

Worker productivity

The amount of work a worker can perform in a given period of time

Gross domestic product per capita

The average productivity of individual workers calculated by dividing the gross domestic product by the worker hours required to produce it

Competitive advantage

The edge achieved by businesses that offer something better than competitors

Gross domestic product

The final market value of the total outputs of all goods and services produced within a country's geographic boundaries during a year's time

Quality of work life

The general conditions in which employees work

Standard of living

The general conditions in which people live; quality of life

Trend

The general direction in which people or events are moving

Outputs

The goods or services produced as the result of combining inputs

Too many different products

businesses who try to do to much will not be productive, focus on a limited variety of products