1. Productivity

2. The act, process or result of manufacturing or refining something.
Production
The act, process or result of manufacturing or refining something.
Copyright © Texas Education Agency, All rights reserved.

3. Productivity
The amount of output (goods and services) produced per unit of input (productive resources) used.
Why is it important to measure productivity?
For businesses, productivity growth is important because providing more goods and services to consumers translates to higher profits. As productivity increases, an organization can turn resources into revenues, paying stakeholders and retaining cash flows for future growth and expansion. Productivity leads to competitiveness and potentially competitive advantages.
Copyright © Texas Education Agency, All rights reserved.

4. Resources/Productive Resources
The basic resources used to produce goods and services:
Land or natural resources
Human resources (including labor and entrepreneurship)
Capital
Copyright © Texas Education Agency, All rights reserved.

5. Labor
The quantity and quality of human effort available to produce goods and services.
What is the impact of labor specialization?
Having workers perform specialized labor tasks is one of the factors that can lead to increased productivity.
Division of labor can lead to a large increase in efficiency for two key reasons:
Allocational efficiency makes the best use of a particular worker's skill. For example, a worker who is good with numbers can do a better job on inventory control than one who is not.
Technical efficiency arises from a division of labor by reducing the transition time between tasks. A worker who completes painting a car, for example, does not then have to put down his painting tools and pick up the tools needed to assemble the car, as that job goes to a different worker.
Copyright © Texas Education Agency, All rights reserved.

6. Division of Labor
An arrangement in which workers perform only one step or a few steps in a larger production process (as when working on an assembly line).
What are the advantages of the division of labor?
Workers focus on performing one task and become the best at it.
Workers focus on performing one task and become the best at it.
Copyright © Texas Education Agency, All rights reserved.

7. Specialization
A situation in which people produce a narrower range of goods and services than they consume.
How is specialization related to productivity?
Specialization increases productivity; it also requires trade and increases interdependence.
Specialization of labor increased product output due to employees trained to do specific tasks for products that are and produce a narrow range of goods and services.
Copyright © Texas Education Agency, All rights reserved.

8. Entrepreneur
One who draws upon his or her skills and initiative to launch a new business venture with the aim of making a profit.
Who is the entrepreneur associated with productivity?
Henry Ford was a risk-taker, seeing opportunity when others did not. He first introduced the assembly line and revolutionized the automobile industry.
Henry Ford was a risk-taker, seeing opportunity when others did not. He first introduced the assembly line and revolutionized the automobile industry.
Copyright © Texas Education Agency, All rights reserved.

9. Innovation A new idea or method.
How is innovation related to productivity?
Innovation may include new or more effective products, processes, services, technologies, or ideas that are more readily available to markets, governments, and society.
Innovative employees increase productivity through by creating and executing new processes, which in turn may increase competitive advantage and provide meaningful differentiation. Innovative organizations are inherently more adaptable to the external environment; this allows them to react faster and more effectively to avoid risk and capture opportunities.
Henry Ford was innovative.
Copyright © Texas Education Agency, All rights reserved.

10. Case Study on Productivity: Henry Ford and the Model T
Read: The Early Days of Ford Motor Company and the Model T
Answer: The Model T and Productivity Worksheet
Copyright © Texas Education Agency, All rights reserved.