GMS 401 Lecture Notes - Lecture 2: North American Free Trade Agreement, World Trade Organization, Workforce Productivity

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 401
• Professor: Omid Jadidi

Document Summary

Productivity = ratio of outputs (goods/services)/inputs(resources: measure of process improvement, output relative to input, productivity increase -> standard of living increases. Measurement problems: quality may change while quantity of outputs and inputs remain constant. Productivity does not measure intangibles well: external elements may cause an increase or decrease in productivity. Productivity variables: labour about 10% of annual increase, capital about 38% of annual increase, management about 52% of annual increase. Key variables for improved labour productivity: basic education appropriate for labour force, diet of labour force, social overhead that makes labour available. Service productivity: labour intensive, unique individual attributes or desires, intellectual task performed by professionals, difficult to mechanize and automate, difficult to evaluate for quality. Productivity with a mix of capital, labour, management. Ex: boeing sales and production worldwide, sony components from suppliers worldwide. Reasons to globalize : reduce costs (labour, taxes, tariffs) Foreign locations w/ lower wages can lower direct and indirect costs.