thank you so much for your nice question. It is very difficult to answer of this question. But my personal observation regarding this question that 80-20 rule should not be implemented in modern business Administration. Because modern business organization is very competitive and if you want to gain competitive advantage you (organization) need to ensure the equal contribution of all employees. For that reason we can say time has come to avoid this theory. But unfortunately most of the developing countries like Bangladesh can not still now avoid this theory.

Thanks

thank you so much for your nice question. It is very difficult to answer of this question. But my personal observation regarding this question that 80-20 rule should not be implemented in modern business Administration. Because modern business organization is very competitive and if you want to gain competitive advantage you (organization) need to ensure the equal contribution of all employees. For that reason we can say time has come to avoid this theory. But unfortunately most of the developing countries like Bangladesh can not still now avoid this theory.

Thanks

Md. Mizanur Rahman:

I fully agree that applying 80-20 rule to Modern Business Industry will be disastrous.

In another thread, I am following discussion about "attitude" and "organizational behaviour". Kindly note that "equal contribution of all employees" is more in theory than in practice. In many organizations, hard-working people tend to get more and more workload..which may be a case of Pareto's "80-20" rule.. I remarked on this only!

Best wishes,

Sundar

Dear Sundarapandian

I am also supported your viewpoints. Actually that's why it is an interesting question.

Finally, unintentionally you have to follow "80-20 rule. Otherwise any organization in the world can not survive.

Thanks

Although Wilfred Pareto's 80-20 rule has found many applications in business management like the concept of vital few and trivial many, success depends on 80% planning and 20% execution etc., the rule does not seem to be applicable in generalizing human performance in organizations. Any organization generally have three categories of people : approximately 3%- 5% are star performers and highly talented, who tend to keep on changing jobs unless organization provides them with challenging assignments and try to explore their creative potential; approximately 75%- 78% are the bulk load carriers of the organization and normally do not like job hopping; approximately 17%- 22% are passengers, who are disengaged and organization has to carry them unless they are motivated and gainfully employed or else a suitable exit policy is worked out. If in any organization, only hard working people are loaded and rest are not engaged gainfully, then the organization will only be heading towards disaster.

Dear Prof. Jaharkanti Dattagupta :

Thank you for providing a direct, clear & detailed reply to my query!

The 3-categories of people you mentioned in an organization (in general) - this is very true! How to motivate the third category (17-22%) is a challenging task for any organization.

Best wishes

Sundar

My perception is that the Pareto principle is more applicable in the government departments and public sector organizations; but somewhat or much less so in private organizations. I feel performance is linked to the degree of employee engagement in the organization. The Pareto principle may not apply  in Google, for example, where almost everyone is a high performer or each is better than the other. They select people after 11 to 16 interviews.

I have significant doubt that the Pareto Principle ever could be applied in a meaningful way in modern organizational environment where the employees are supposedly knowledge workers. In fact I doubt seriously if the principle was *ever* valid for human organized activity. There are so many problems, what is the purpose of an organization from different stakeholders point of view? There are many. What is supposed to be *produced* depends on stakeholder view. An organization is a Human Activity System, as such the organization itself is an emergent property of the activities of those individuals. So what is the difference between effectivity and efficiency? What metrics are to be used, what is included in any metrics - from whos point of view is any metrics valid and from whose point of view is any metrics not valid? and so on. Really to refer to the Pareto Principle is to ignore that any definition of *what is the whole* is not necessarily agreed upon by the stakeholders and further more even if something was agreed - it is constantly in a flux. SO when you have no *whole* you also have no *100 percent*. So any use of percentages is not a scientifically neutral exercise but is something based on assumptions that are purely politically grounded.

Dear Peter

I think, Pareto principle is almost fully applicable in public systems in the developing world, where productivity is low, and there is lack of good leaders who have the competence to get things done from subordinates by inspiring them. Some people who must work as a habit, make a major contibution to the organization's goals.

Good reply by Debi S. Saini. Thank you.

Best wishes

Sundar

Dear Debi

The Pareto principle can be applied on anything. But what makes it valid, or relevant and for what purpose? The prejudice of the researcher - perhaps? It would be interesting to see any evidence of research supporting the proposition that *the Pareto principle is almost fully applicable*. But then again the point with *almost* applicable could easily be understood as *not applicable*, And now I cannot tell the difference between *almost fully applicable* and *almost not fully applicable* anyway, so I get lost. I still have doubts about who should and should not make the distinction about what is a *major contribution* and what is not. Who should decide on that distinction? And why nobody else? Then we have another point and that is *productivity* - what is to be included in what is to be recognized as *productivity* and is this a good thing - for who? I am also not sure what is meant with *public systems* and why the *developing world* (whatever that may be) would be appropriate to be looked upon as homogenous when it comes to their *working culture*. Low productivity can be associated with many things, some of them are to be attributed to the definition of what is to be recognized as produced and who is making the judgement of what is valuable.