The Pareto Principle for Business Management

Understand the essentials of the Pareto principle for business management (also known as Pareto’s rule, Pareto’s law, the 80/20 rule and the law of the vital few) in just 50 minutes with this practical and concise book. The Pareto principle is a model which can be applied to many different fields, and argues that, in many cases, 80% of the effects are the product of 20% of the causes. It allows businesses to make improvements in a range of areas, including customer relations, relationship marketing and even turnover.

This book will provide you with a handy introduction to the Pareto principle, a model which can be applied universally in the corporate domain and even has its uses in wider society.  In addition to learning how to understand the 80/20 relationship, you will consider real-life case studies, find out about the tool’s shortcomings, including its occasional inefficiency, and learn about related models, such as the ABC model and the long tail theory.

About the Pareto principle for business management

The Pareto principle was inspired by the realization that a few faults tend to be responsible for the majority of problems in the production line. This means that efficiency and time management can be significantly improved with relatively little effort by isolating the most problematic faults. As a result, Pareto’s principle is now used in a wide range of fields, particularly in business and quality control.

In this book, you will discover how the Pareto principle for business management can help you, learn how to evaluate the seriousness of problems in a given field, and use your results to significantly improve time management and efficiency. A clear explanation of the benefits and potential drawbacks of the method, a discussion of a practical case study, and an introduction to related models will give you the tools you need to tailor your approach to your situation.

This straightforward and accessible 35-page book is structured as follows:

• Introduction to the Pareto principle for business management
• Theory
  • Initial context
  • Applications in business
  • What if the rule was used regularly?
  • Advantages
• Limitations and extensions of the Pareto principle for business management
  • Limitations and criticisms
  • Related models and extensions
• Practical application of the Pareto principle for business management
  • Formatting the table
  • Creating the graph
  • Identifying the most important 20%
  • Taking action
  • Case study: a production line
  • Conclusion
• Summary