A Redefined Productivity Model and Socio-Economic Development Oriented Management Decisions
Monthly Journal of the Sharjah Chamber of Commerce & Industry, pp. 26-28, May 2001, pp. 20-23, September 2001, pp. 32-35, March 2002
ICFAI Journal of Managerial Economics, pp. 25 - 41, August 2004
40 Pages Posted: 30 Jun 2004
In the 1977 Nobel Symposium held in Stockholm, Harry G. Johnson (1923-1979 Canada) defined technology as an intangible investment in any productive operation. This techno-investment concept opened the channel to evaluate the effectiveness of any techno-commercial operation in terms of its return to the Social and National Cultural environment. Using this as a thought-provoking guideline, I happened to discuss the modus operandi followed by persons, who are committed to accelerate the pace of Socio-Economic development, among nations in different brackets of development. This covered a range of active and accredited persons in Administrative, Business, Nobel Laureates in Economic Science, Political, Professional and. Social circles. Based on the outcome of these discussions and the concept of techno-investment, I redefined Productivity as a Ratio between pre-determined Socio-Economic Development goals and the Inputs, subject to a favourable ratio of Physical outputs to Inputs. Between 1978 and 1998, I applied this expanded Productivity model in my Socio-Economic development and Management oriented assignments in different parts of the world, in different brackets of development, in different areas of management span, and evaluated its utility during my know-how update visits to these countries. Based on these experiences, this paper is prepared to design a suitable Management-Decision model with reference to this enlarged Productivity definition, so as to aid an accelerated pace of Socio-Economic Development as a Prime goal.
Assuming n inputs, m outputs, x goals, y ratios of outputs to inputs and z ratios of goals to inputs, the expanded Productivity model is developed in this Part-1. But the integration of this model with Management Decisions relating to input and output, and generation of conditions with reference to Socio-Economic Development goals, need a vicious dimension in its implementation. The conditions generated in Part-1 provide a lead to integrate the Management Decision process in the world, with the expanded Productivity model and operating constraints, in Part-2.
Like a capital investment to initiate a productive activity, technology is an intangible investment to convert the inputs to the outputs. Hence, both these should be evaluated with reference to their return towards the social and national cultural environments. This concept initiated by Harry G. Johnson (1923-1979 Canada) during the 1977 Nobel symposium, is endorsed by the persons in the international scene, who are committed to the Socio-Economic development of their nation or region, This warrants a redefinition of Productivity to suit the expanded scope. Accordingly, the Productivity is redefined as the ratio of Socio-Economic development goals to Inputs, subject to a favourable ratio of Outputs to Inputs. In order to apply this enlarged Productivity concept under practical operating environments, a mathematical model is framed in Part-1.
In this Part-2, the dominant constraints to implement the enlarged Productivity are identified as Psychological, Social, Local, International, and Universal in nature. Their relative influences with reference to Input, Output, and Socio-Economic development acceleration, along with the utilisation of techno-commercial throughputs, are identified, and fitted into a Mathematical model. An algebraic approach to solve this Management-decision model infers that Decisions of Psycho-Techno-Commercial (PTC) intensive contents should be cautiously made. The relative influences of Social, Universal, International and Local constraints on Socio-Economic goals G and outputs O, should be pre-assessed and reduced to a possible minimum, as well as their influence should be assessed more critically on the former (G) than the latter (O). Bilateral Input Decisions relative to Socio-Economic development goals and Outputs should be pre-evaluated and well synchronised with unilateral Output Decisions.
The Optimum Management Decision is a favourable Ratio between pre-determined Socio-Economic Development goals to the Input Management Decisions, as well as the Ratio between pre-determined Socio-Economic Development goals to the Output Management Decisions, subject to a favourable ratio of Output Management Decisions to Input Management Decisions.
Hence, the final redefinition of Productivity is a favourable Ratio between pre-determined Socio-Economic Development goals to the Inputs, as well as the Ratio between pre-determined Socio-Economic Development goals to the Outputs, subject to a favourable ratio of Physical outputs to Inputs.
These algebraic inferences are supported by the practical occurrences among various nations in different development brackets in the world.
The development of this model and the solutions are expected to indoctrinate an environment for better quality and standard of life among world population, through optimum integration of the research and development in the area of Economics, Science, Technology and Management, in line with the expectations of the human society from the dawn of the civilisation till the current millennium.
CONCEPT DERIVATIONS (SED = SOCIO-ECONOMIC DEVELOPMENT UNITS):
01. PRODUCTIVITY = SED GOALS/INPUT > 1 & SED GOALS/OUTPUT > 1 SUBJECT TO OUTPUT/INPUT > 1.
02. SOCIAL RATE OF RETURN IS IMPORTANT THAN QUANTUM RATE OF RETURN.
03. INTANGIBLE ELEMENTS ARE IMPORTANT THAN TANGIBLE ELEMENTS. (PSYCHO-SOCIO-INTER NATIONAL-UNIVERSAL)
04. MANAGEMENT DECISIONS ARE OPTIMUM WHEN SED GOALS/INPUT DECISIONS > 1 & SED GOALS/OUTPUT DECISIONS > 1 SUBJECT TO OUTPUT DECISIONS/INPUT DECISIONS > 1
Universallly Applicable to All Developed/Developing/Under-Developed Nations.
(These Concepts and the inferences are supported with a number of Algebraic derivations, Bibliography, Diagrams, International experience supports, Opinions of the Viewers, Slide show and Schematics in the Author's Website.)
Keywords: Economic Development, Social Development, Productivity, Management Decision, Algebraic Model, Redefined Productivity
JEL Classification: A13, B41, C52, C67, D78, D84, M21, O33, P27
Suggested Citation: Suggested Citation