Pareto Theorem in Time Management: Prioritising Activities for Maximum Efficiency

Abstract

The Pareto Theorem or “80/20 principle” is a cornerstone of time management and economics, being established by Italian economist Pareto Vilfredo, this thesis says that arround 80% of results are from only 20% of causes or efforts. This principle can be applied in order to optimize company’s resources and processes. For instance, identifying the 20% of activities that generate 80% of revenue can similarly increase profitability, additional, risk management can minimize negative impacts by focusing on the 20% of risks with the greatest negative impact in customer relations, identifying the most valuable customers and meeting their needs can increase loyalty and sales value. This article emphasize how Pareto theorem can bring significant business benefits, and why it is important that managers use this tool to improve overall companies’ performance. CZU: 005.962.11; JEL: M10, M21