Comment On Marginal Benefit As Related To Unemployment

September 3, 2009 0 Comments

Certainly, the linear increase of workers within an organization does not always result in a linear increase of the output. The fundamental reason behind this phenomenon is that businesses and organizations are not just collections of individual workers where the work of each one is added to the final output, but instead, they are systems that behave as a whole towards a common target. These systems act as a single organizational unit and its members execute different roles in order to achieve the common target. The fact that I want to emphasize is that this situation is true when you examine it within an organizational unit and not from outside. For example, if you put 100 doctors within a operating theater you will not achieve to finish the surgery earlier. Here you examine the situation withing the organizational unit of the operating theater. But, if you have 100 doctors within a hospital and you perform ten surgeries at a time, then here is where you will see the output increasing. Moving to the next level, hiring 1000 doctors for a hospital with 10 operating theaters will again not achieve an output increase. This is where marginal analysis can play a vital role, which is to determine the marginal benefit, thus the optimal number of workers within an organizational unit whether this a team, a small business or a large corporation. Marginal analysis must be based on this organizational unit concept. But, commenting various thoughts that have been heard recently, I cannot accept the argument that minimizing the unemployment will hurt the economy's productivity. A national economy is not a single organizational unit with a single way of wok and a single output, so it cannot be analyzed with techniques that are used for much less complex systems like business departments and factory units. Most of the times simplifying complex situations is the source of the biggest problems.

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