Question

1. What is the relationship among money, labor costs, profitability, and knowledge in the modern democratic-capitalistic society?

2. Why should managers be concerned about developing a reward system?

3. What is the connection between labor costs in the United States and outsourcing?

Need answers to questions.

Answer 1

Answer 1=Democratic capitalism can be seen as the market situation which is independent of the capitalist market economy and the political system or the government controls the country. This is the type of market economy in which the people are responsible for their protection and the private sector is commonly in the control of the production activities in place of the government. The demand and supply forces govern the production of the goods. The productivity factor will decide the relationship among money, labor costs, profitability, and knowledge in the modern democratic capitalistic society as demand and supply of the odes of productions are connected with each other. Thus, we can say that money has arbitrary power, the cost of labor affects the overall profitability, and profitability can be improved temporarily with the help of knowledge management.

Answer 2= It is very important for any organization to have the correct form of reward system as the rewards system used or adopted by any organization has a very important role in the overall motivation of the manpower that will in turn have its impact on the profitability and productivity of the organization. The manager has to find the right type of reward system for the different employees. Some employees are motivated with the help of extrinsic rewards while some are motivated with the help of intrinsic rewards. The manager must identify which motivating factor has greater value for the employees and depending upon that, the reward system has to be developed.

Answer 3= There is a direct relationship between labor cost and outsourcing practices in the USA. The labor cost is the most significant cost that affects the overall cost of production. This constitutes a major part of the per-unit cost of the product. Thus the organizations which are looking to be competitive and offer their products at a lower price, need to find out the ways through which they can control the labor cost. The best option for these companies is to look for those locations where they can find the talented employees with less cost and this is the reason why most of the companies in the USA are outsourcing their operations and production activities to other countries where the labor cost is relatively low as the cost of labor in the USA is quite high that makes it tough for the companies to control or reduce their cost of production.

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