ow to combine resources.
Technology is one of the means by which productivity may be increased within an economy, an industry, or an organization. The introduction of new technology into industries tends to lower production costs in those industries, over the long-term. Technology, thus, is indispensable with respect to growth. With respect to natural resource requirements, it is said that society is "engaged in a race between technology and the exponentially rising demand for raw materials." With respect to most firms, an essential resource is human capital. Advances in technology enable organizations to utilize available human capital in more productive ways. Technology assists organizations to eliminate some of the limits to their ability to grow.
The scientific study into productivity improvement dates at least back to the pioneering work of Frederick Taylor in the second decade of this century. His scientific management began the development of the empirical foundations for the analysis of employee productivity. Later, in the 1930s, studies by Elton Mayo led to the discovery of what was termed the Hawthorne Effect, which led to the development of the human relations approach to management. The human relations approach postulates that treating employees less as if they are automatons will lead to improved productivity.
Productivity is defined as a measure of the rate at which output flows from the use of given amounts of the factors of production. When the factors of production are used in an efficient manner, a greater output is derived from a given level of inputs; therefore, productivity increases. By contrast, when the factors of production are used in an inefficient manner, a lesser output is derived from the given level of inputs, and, in this latter instance, productivity will fall. Productivity, thus, is the equivalent of the marginal product.
The necessity of competitiveness has been promo...