Importance Of Business Efficiency In Business

746 Words3 Pages
Business efficiency is a scientific category of Microeconomic and macro economy generally. It is the goal that all economists aim with the purpose that they will gain the highest profit with the lowest cost, to expand their businesses, will occupy the market and want to improve reputation and its brand in the market. Firstly, business efficiency reflects the ability to use the resources of the enterprise. "Economic textbook" of P.Samuelson and W.Nordhaus wrote: "The effect that is used the most effectiveness of the economy's resources to satisfy the demand of human's desire", economist Prof. N.GREGORY MANKIW of Harvard University in his book "Principles of economics" that "Efficiency means that society obtained the highest results from its…show more content…
Secondly, business efficiency of the enterprise must demonstrate both qualitative and quantitative. To understand the real nature of the economic efficiency of business activities, we must distinguish the boundary between the two concepts it is efficiency and the result of business activities. The two concepts are sometimes understood in the same way, in fact, their difference is quite large. We can understand the result of business activities of the enterprise is what business achieved after a process of activities, which they have put effort and money. Results achieved or not that reflect to the business efficiency of the enterprise, the objective of the enterprise is the results that they need to achieve. The results achieved may be the quantity, which is measurable like the number of each type of products sold, the number of products produced, sales, profit and market share. In addition, it can also be the only quantity reflecting the quality of products that have a quantitative like the businesses' reputation credibility and product quality. As for the…show more content…
This view not only reflects the nature relationship of economic efficiency that is a comparison between the results of production with the production costs, but also expresses the correlation about the quantity and quality between results and costs. It is expressed detail as synthesis form with many economic indicators in the manufacturing process. Economic efficiency is the efficiency that is only considered economic side, are compared and calculated which is based on value and measured by money. Besides, social efficiency are compared based on guaranteed benefits for humans and measured by indicators system about human development, health care, education, the level of culture, human relationship, social relationship and ecology

More about Importance Of Business Efficiency In Business

Open Document