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Case Study > Week 4 Holy Angel University ACCTG. OPMAN_Why is high productivity important for a nation? _ 2. Why do you suppose that service jobs have lower productivity than manufacturing jobs? _ Your Garden Gloves Case Study Joseph Murray, Grand Valley State University

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Readings It is sometimes easy to overlook the importance of productivity. National figures are often reported in the media. They may seem to be ho-hum; there’s nothing glamorous about them to get... our attention. But make no mistake; they are key economic indicators—barometers, if you will, that affect everybody. How? High productivity and high standard of living go hand-in-hand. If a country becomes more service-based, as the United States has become, some (but not all) high-productivity manufacturing jobs are replaced by lower-productivity service jobs. That makes it more difficult to support a high standard of living. Productivity levels are also important for industries and companies. For companies, a higher productivity relative to their competitors gives them a competitive advantage in the marketplace. With a higher productivity, they can afford to undercut competitors’ prices to gain market share, or charge the same prices but realize greater profits! For an industry, higher relative productivity means it is less likely to be supplanted by foreign industry. Questions 1. Why is high productivity important for a nation? 3. How can a company gain a competitive advantage by having higher productivity than its competitors have? Your Garden Gloves Case Study Joseph Murray, Grand Valley State University “Your Garden Gloves” is a small gardening business located in Michigan. The company plants and maintains flower gardens for both commercial and residential clients. The company was founded about five years ago, and has since grown substantially, averaging about 10 new clients and one new employee a year. The company currently employs eight seasonal employees who are responsible for a certain number of clients. E ach morning crews are assigned to jobs by the owner. Crew sizes range from two to four workers. Crew size and composition are a function of the square footage of the garden and requirements of the job. The owner feels that large jobs should be assigned to crews of four workers in order to complete the job in a reasonable amount of time. From time to time, the owner noticed that some jobs, especially the largest ones, took longer than she had estimated, based on the square footage of the garden space involved. The owner’s son, Joe, decided to investigate. He kept records of job times and crew sizes, and then used those records to compute labor productivity. The results were: [Show More]

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