Is capital intensive better than labour intensive ,ok first capital intensive means that the company have machine in high numbers while labour in low numbers while labour intensive means that they employ many numbers of labors but they only have little numbers of machines the question is whether capital intensive better than labour intensive each of this following have each of their owns advantages but mostly people choose capital intensive because making a capital intensive firms can give them advantages such as this below
First is the non stop production ok we all now machines are powered by electricity and without electricity stoppage they wont stop day and night and they wont took Holliday breaks and wouldn't get tired while humans need to take food breaks , go home takes Holliday breaks and many more so they can really makes a certain company production rates decreased drastically buy by using machines they can increase the number of their productions.
Second is lower working cost so this means that if we have thousands of workers we will have a problem paying their jobs because if the minimum wages is high and we have that much workers the company can be bankrupt while having machine don't because u don't need to pay them every annum not to mention if the workers go to work stoppage which can also makes the company soars of high amount of loss that can create the company bankrupt because if they will do work stoppage there will be no production so the company wont sell anything which can lead to bankrupt thats why many firms uses capital intensive rather than labour intensive.
Third is error free using a machine to do the job can provides us no error because there is no more human error if you have many labors there is many chances of fail products that could make customer unhappy but if to use machine the error will be gone so u will have better products by this it decreased or minimize the company cost .
Fourth is better to control production process by this it means if you use machine its easier for you to control the production because its hard to control humans while its easy to control machine on productions .
Fifth is machine is more efficiency than humans so this means that using machine can benefit the owner more than using labour because of speed quality and many more while labour took a lot of time and their quality are not so certain by this it means that labour are not so efficiency as machine they are highly different.
So in my conclusion capital intensive is highly better than labour intensive because of many advantages that i mention above but they also have disadvantages such as making unemployment but they have more advantages which are non stop production, high efficiency , lower working cost or wages, error free and .better to control production process thats why many big firms change from labour intensive to capital intensive because of the advantages that i mention above.
Okay , first of all , we must know what is meant by ; (a) Capital Intensive , (b) Labour Intensive . (a) A business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labour that is required. Some industries commonly thought of as capital intensive include oil production and refining, telecommunications and transports such as railways and airlines. In all of the above industries, a large financial commitment is required just to get the first unit of good or service produced. Once the upfront investments are made, there may be economies of scale with regards to ongoing expenses and sales growth. But the initial hurdle to get into the business tends to keep the list of competitors small, creating high barriers to entry.Companies in capital-intensive industries are thus often marked by high levels of depreciation and fixed assets on the balance sheet.(b) A process or industry that requires a large amount of labor to produce its goods or services. The degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business. Labor intensive industries include restaurants, hotels, agriculture and mining. Advances in technology and worker productivity have moved some industries away from labor-intensive status, but many still remain.Labor costs are considered variable, while capital costs are considered fixed. This gives labor-intensive industries an advantage in controlling expenses during market downturns by controlling the size of the employee base. Disadvantages include limited economies of scale (you can't pay workers less by hiring more of them), and susceptibility to wage forces within the labor market. So , why do capital intensive is better than labour intensive ? because capital intensive requires large amounts of money and other financial resources to produce goods and services . Capital intensive is better that labour because capital intensive is a business which requires large amounts of money and other financial resources to produce a goods and services . Labour intensive is include worker productivity . Example of labour intensive as shown above : restaurants , hotels , agriculture and mining . Those are some examples that i know . So in conclusion , capital intensive produce higher goods and services to people and labour intensive produce lesser . Labour intensive include ; restaurants , hotels , agriculture , mining . etc . Labour costs are considered variable , while capital costs are considered fixed cost. So , that's all from me . Thank You , LEONARDO STEVEN 8B
A labor-intensive company is a process or industry that requires a large amount of labor to produce its goods or services, the degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business. Examples of a labor-intensive company are garment companies(batik, Balinese lace, songket, etc.), cigarette companies, banking, insurance, and many more.
Whilst a capital-intensive company is a business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required. The examples of a capital-intensive company would be car manufacturing, oil refining, airlines, auto manufacturers, drilling operations, etc.
There are pros and cons to both sides, labor intensive and capital intensive. One factor to consider is the efficiency. Capital intensive is higher in efficiency than labor is. If the company uses labor intensive, they’ll have lower efficiency since we cannot work non-stop and also they’ll be more prone to mistakes. Unlike humans, machinery could work 24/7, they can also do jobs that are dangerous and hazardous to humans or even mundane jobs; hence they will be more efficient. Also a capital-intensive company is better on controlling the production process than humans are, they are also able to produce a high volume of goods. Capital-intensive companies may seem relatively expensive however in the long run it’ll cost less than labor-intensive companies. Thus due to these factors, research shows that many companies are now switching from labor intensive to capital intensive.
A capital-intensive company is more likely to have high barriers to entry. What I mean by this is that they need a lot of money to keep the company going. Because of this barrier it will difficult new companies to begin a capital-intensive industries like themselves. For instance, it is highly unlikely a new aircraft firm would begin operations and compete with the likes of Boeing, since it costs billions in capital to begin producing airplanes. There is also a downside to capital intensive companies, one of them is that it is very time consuming and costly to the increase or decrease of the scale of production. Aside from that you will also need to pay for the maintenance of the machinery. There are also some things machinery can’t do that humans can, such as having personal contact, and also answering individual queries.
On the contrary however, there are some industries that requires handmade process such as garment company (batik, Balinese lace, etc.), also cigarette company {to put in the tobacco into the cigarette}, etc. Many people also search for hand-made products, which are usually, are of higher prices since it takes man energy and also it’s often difficult and time consuming. If you are labor intensive, the ones working for you could also contribute into giving creative ideas, hence you can also receive new ideas from them and improve your products. Contradicting capital-intensive companies, labor-intensive companies they are very responsive to change.
But there are also disadvantages to labor-intensive companies; for instance, labor-intensive companies are very expensive for the long term. Compare the amount of money you spend for a machine that can last for years and the money you have to divide amongst thousands of employees, it’s obvious that it’ll be more expensive. Humans could also make errors in doing their job, aside from that it’ll be time consuming and it wont be as efficient as capital-intensive companies. Also as humans we need a time off, like a holiday or for instance if we got sick, we wont be able to attend, then it’ll delay the production.
To sum up my analysis, I think that both labor and capital-intensive companies have their own advantages and disadvantages but to me I think that capital-intensive companies have more advantages compared to labor intensive (more efficiency, error free, better control on production process, etc)
Capital intensive companies are companies who use more machines than workers to produce goods, some examples of capital intensive companies are companies that change their workers in the factory with automatic machines, some companies change their workers who records transactions with computer systems. To start capital intensive companies the company needs to have a lot of funds, because computer systems, machines, equipments and other man made resources are more expensive than normal workers. As the time goes by machines are cheaper than the salaries and wages of normal workers. Labor intensive companies are companies that use workers more than machines to produce goods and services. Sometimes machines can have problems and to fix it it needs some time, so if a machine have any problems the production activity will be postponed, this can affect the capability of company to provide consumer orders of goods and services. Using electronic devices or man made resources make the company become more efficient and effective. As we know there are some goals of companies they are efficient, effective, and economic. Efficiency can be measured by the method of production, the better and the quiker method of production can reduce the cost of production of a company. Economic means the company can make profit to survive and to expand and develop their products. Having a capital intensive company means that the company is investing for the long term future, because as time goes by the advantages of machines will be very useful for the company like they can produce products in the right time, avoid errors in mking products or recording transactions, it can reduce the risks of fraud. For the long term using man made resources or machines are cheaper than workers because if company employs many workers they must increase the wages every year, they have to give bonus every year, company must give fringe benefits to them and they must also protect the unity of the company. Labor intensive companies sometimes are better than capital intensive companies, as we know machines can only work in its program if there is a sudden error or problem the machine will not be able to do anything. If the company is labour intensive they can fix the error made by the machines if it happens suddenly, the workers are able to find a solution and the cause of the error and they can avoid another error in the future. If the company uses machines, every year the company must pay to maintain the machines, and if the machine is broken they must pay even more . Company must take care of the machines so that they can use it for a long time, so they must train their workers to use the machines well. To train the workers they need to pay even more, and sometimes the workers are not ready and cannot use the machines that are available. So in conclusion capital intensive and labor intensive companies must be balanced, there should not be too many machines or computer systems but there should not have too many workers because if a company employs too many workers the expenses of the company will increase and there is a big possibility for errors.
There are two types of market in an industrial life, Capital intensive and Labour Intensive. Capital intensive is the modern industrial life way or using hi-tech machinery way to create business productivity. But labour intensive is an old way of industrial life. It is still using labour as the main production resources or the one who create business productivity. But different types of business market will have the most suitable production worker, either using labour intensive or capital intensive, because there are business that will be a bit useless if using capital intensive and there are business that are useful to have capital intensive as its main production resources.
In common, capital intensive is better than labour intensive because it has many hi-tech features that may include these advantages: 1.Faster to produce output It require less time to produce output 2.More perfect to produce output Even a small particle of an output can’t be missed by the machine to be produced 3.Save Production efficiency More efficient and require less of other production resources 4.Require less cost to operate the machines than operating a labour intensive system Only require electricity as its main energy to operate and no need any wage payment as if labour intensive does. 5.Produce accurate wondered output The machine can produce the wanted output by the owner 6.Can be reliably programmed The owner can programmed the machines with any desire
Those factors is the main reasons that explain why capital intensive can easily win the labour intensive.
But in other side, even though in common capital intensive is much better than labour intensive, capital intensive have some disadvantages for business productivity creation process. Capital intensive is only suitable for Heavy Industries Companies, Electronics, Building Management Appliances, Food and Drinks, Plastics and other basic home required materials, books endorser and publishing, Security provider, etc. But some business have factors that using labour intensive is more beneficial for them such as Cathering or Food in Canteen, Books, Newspaper or Magazine creation process, Batiks, Origami Paper and other arts product, art of pictures and drawings, Souvenirs, etc. Because human is the one who create machines, so machinery systems are still having no any features that human had. Such as the skill of art, sensitivity, Writing skills, creation of drawings motives, food taste scaler, etc. These are the disable factors of machines: 1.It can’t scale the food taste like a professional restaurant or canteen chef 2.It can’t write using its brain idea like a book, newspaper and magazine authors 3.It can’t go around and snap for environment surroundings moment like an professional photographers 4.It can’t draw using the skills of real or true art in batik t-shirt 5.It can’t fold origami paper to make various of forms creations 6.It can’t create special souvenirs that made of clay that usually done by professionals hand-craft maker Those are the examples factors which machines can’t do or only can be done by labour intensive or production resources.
So in conclusion, capital intensive is very more useful to be used in industrial companies or business that mainly require less cost, less time or production time efficiency but have large scale of output and outputs accuracy. But capital intensive is not largely required for business that produce professional output or art creation product or which require brain thinking such as only labour intensive does.
Above response is all of the ideas that popped out from my brain, thank you for reading!
There are two ways how to increase the productivity. There are labor intensive and capital intensive. Labor intensive is the one that’s increasing the productivity by increasing the number of workers. Capital intensive is the one that increasing the amount of capital such as machine to increase the productivity. Now , the question is Discuss whether capital intensive is better than labor intensive to increase a firm's productivity. Well the answers wont be always capital intensive . Labor intensive may also become better than the capital sometimes.
So , capital intensive will always usually better than the labor intensive . In this question , we cant say it wrong because in fact its true. Firms that doing this will usually got more advantages than the one that’s doing the labor intensive .Here are some of the advantages in doing the capital intensive. First , capital intensive will have more output because they are doing the non stop production. In labour intensive , we cant force all the workers to work 24 hours because they might be tired or sick . And also workers is a human so sometimes they might be so slow in making the product or sometimes they may be fast . But workers sometimes didn’t want to come to work and leave at a day , so if they are doing this , the production will be so slow compare to the capital intensive. Second , if we are doing the capital intensive , there will be error free. Capital intensive Is worked by a machine , and machine can do anything according to what the controller said. So of course the machine will be error free because the machine will jut do what the people said . If the machine have an error , means its already too old or broken , so it just need to be changed with the new one. Third , capital intensive will have lower working cost . The main problem that have interrupt many businesses now is the high cost in paying the workers . Now in Indonesia every workers must be paid minimal about 2 million . And actually this payment is very high for the workers that don’t do anything and make many mistakes for the company . So instead hiring the workers , we can just hire the machine . Machine will not always make a mistakes and they have a high productivity. They don’t need to be paid and can produce 24 hours non stop . So ofcouse the capital intensive will be far more better than the labor. Fourth , capital intensive will have higher efficiency and fifth , capital intensive will have better control on production process .
But , there are also some lack in capital intensive and some times labour intensive will be better than the capital intensive. first, Machine can sometimes make a mistakes. We can fix them or buy a new one , but the cost is too expensive . For some small businesses that’s capital intensive and have a problem with their productivity , sometimes they cant pay the bill and get bankrupt because there will be no production again. second , sometimes , workers can be easier to be told than the machine. We can tell anything to the workers and they can easily get it . But for a machine sometimes its hard to set in according to what we want . So it will be more difficult.
So , the conclusion is that capital intensive will not always be better than the labor intensive . There are also some lack in that. But most of them ,capital intensive will be better . We can get more advantages by doing the capital intensive instead of doing the labour intensive. Capital intensive will only have several disadvantages and it can be solved easily for the big firms.
Capital intensive is being more focused on capital for production than labor, examples of these would be car manufacturing companies. ‘Capital’ refers to the equipment, machinery, vehicles and so on that a business uses to make goods and services. Labor intensive on the other hand is being more focused on using labor for production than capital, examples of these would be art workshops. For some reasons capital intensive production would be better for certain cases because: Capital intensive generally have very little amounts of errors. Errors are common in a labor intensive production, but very uncommon for a capital intensive production .Because unlike labor, there are no human errors, providing a more accurate production, and overall a much smoother flow of production due to errors being far more uncommon. The cost for capital intensive are more or less cheaper than labor intensive because some people are paid more, in capital intensive even there is a difference between the importance in each capital their expenses are usually equal to the cheapest capital to run. Also, labor intensive production needs training unlike capital, people that are hired as labor will most likely not be prepared to work, therefore they will need training which will increase total costs. Capital intensive production is much easier to organize than labor intensive production. Sometimes labor would demand a higher cost to be employ, but capital production doesn’t do that whatsoever. And unlike labor capital production always follows a change in a company’s production format. Capital intensive has automated production for the company. Providing easier production for the company this would help greatly especially for mass scale production for the company. This is never the case for labor though. Though some would argue that labor intensive would be better for production because: Labor intensive production demands labor, therefore more jobs available. This is good for the economy as the overall unemployment will be reduced. The economy benefits from increased activity and governments receive more tax dollars, which can then be spent on schools or hospitals. Labor are very innovative. This is a trait that capital, do not and will not ever have, for industries that relies on innovation this is really important. Examples like the entertainment industry or the art industry. Labor can provide feedback unlike capital, this is very useful for improvements in a company as the company could know how to improve itself for the sake of better production, which in a long run can lead to a more profitable company. Labor are very flexible, which means they can change to the needs of the consumers. This is another trait that capital intensive production will never have, and a very beneficial one. In conclusion, labor intensive and capital intensive have their own unique advantages, which suites the needs of different types of companies. Some companies are better with labor intensive while some others with capital intensive. Either way which is better will depend on the needs of the company and not the actual advantages themselves.
To increase the firms productivity there are capital intensive and labor intensive, they both are different. Capital intensive is a business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required. Some industries commonly thought of as capital intensive include oil production and refining, telecommunications and transports such as railways and airlines. While labor intensive is a process or industry that requires a large amount of labor to produce its goods or services. The degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business. While some of the business can increase their productivity by capital intensive but not always some of the business also can increase their productivity by labor intensive.
Capital intensive sometimes better than labor intensive, why? Here are some of the advantages of capital intensive, first it can produce more product or maybe it can have nonstop production, because we can set the machine whatever we want, example it must produce the product 1000 per day, and if you use labor intensive they have the limit or not they may be very tired. Second, higher efficiency, means with capital intensive or with a machine it is more efficiency than people or labor, machine can produce the faster, more and good rather that people r labor that may have a mistake on producing the product. Third is lower working cost, capital intensive or using machine may result in lower working cost, why because we just need to buy at the first and the rest of the day we no need to pay them again, while if we use labor we must to pay them for example per month or per week so capital intensive will result in lower working cost. Fourth, using the machine may also result in error free; unlike using the labor intensive may result in much error. Fifth, better control in production and process, using machine may result in better process on production why? Because we have set it unlike when we are using labor intensive it may not be smooth like the capital intensive using the machine. Example making a shirt, using the machine, we just needed to put the things needed and item needed to the machine, while if using labor we need sewing machine and the labor must fully concentrated or not the product won’t be good.
But not always using capital intensive or using machine is always good; it also may result very badly. Well, first if the machine is already old and you didn’t do any services to repair the machine it make some errors and result in bad quality of product or the process of the production won’t be good and smooth. The major disadvantage of capital intensive technology is the increase in business costs. Capital intensive technology increases costs to purchase machines, maintenance costs and costs to train employees to use the purchased equipment. So there is also some disadvantage of capital intensive.
In the conclusion, there are some of the business that use capital intensive to increase the productivity but there are also some business that use labor intensive because the there are some disadvantages of capital intensive, like the advantages is it is error free and can make more production, while the disadvantages is need more cost and we need a lot of money.
First, there are 2 types of firms, a capital intensive or labor intensive, capital intensive means that the firm focused on capital more than labor, that mean the firm can only have certain number of workers but it have a lot of capital, it can be called a big firm, a capital intensive firm. And the other type is the labor intensive, which means that the company focused more to the number of employees they employ, and they don’t need many capital because all they need is the work of the cow-worker. It can be called a big firm when it has more than 50 workers, without many capital. The example for a labor intensive company is a cigarette company, it needs lot of people to work in the factory, which help countries, example is Indonesia to reduce the number of employment. And the example of a capital intensive company is a handphone company. They only need some ppl in the production place and the fee for making the phones is expensive, so they need a lot of money to o that, so theyre called capital intensive though they have lil mount of workers. Capital intensive can be better than labor intensive to increase the firm’s productivity because it has a non-stop production, for example is it’s a machine, a machine can work day and night without rest, and human labor need to rest and they can get sick, or they’ll need to take holiday breaks, Chinese new year and stuffs. And if they don’t come to the firm/factory because of sick leave, the productivity will decrease and might not reach their target. The other reason is by having more machines than human is there will be less or no error, which means there’re more % for error free. Human labor always make mistakes, no one is perfect and can do their work perfectly without mistakes at all. But machines, if theyre not broken they’ll provide us with error free production. And when the machine is in a good condition, they’ll produce good products and will make producer and consumer happy. The other reason is a lower working cost, because when we employ workers, we should pay them, and the higher their position is, the higher salary the company must pay them and sometimes the company must give them bonuses and stuffs. But machines don’t need something like those, they only need to be serviced once in a particular period of time and if theyre broken, they can be easily replaced, no need to find one like finding a worker, no need interviews and all. Simple and easy! Using machines will have more efficiency than using a worker, a machine can have more efficiency compared to human and give more satisfying products to the owner. A machine have many benefits and they can work really fast. The last reason is its easier for the owner or shareholder to control the business, they only have to take care of the machines and some lil amount of workers, and its easier to handle machines rather than human, so machine has higher efficiency. So the conclusion is, yes, capital-intensive firm is better for aiming to increase the business’s productivity, because its explained above that having more machines than labor can have many benefits, but to build a capital intensive need a lot of money, so its kinda hard for some people to build it. Thankyou
first of all we need to know what is the definition of capital intensive and labour intensive. Capital intensive is companies that invest more capital (machinery, robots, computers) than labour (employee) to produce goods and services. Unlike capital intensive, labour intensive invest more employees rather than capital.
Different types of business that they are producing can vary what type of intensive should they apply in their business. For instance, firms and business that produces handicrafts such as batik, paintings, and sculptures required employees and labour to do the job, machine is less required therefore the firm is based on labour intensive. Whilst a firm that produces cars, laptop, and smart phones will invest more on capital since the firm will need more machine to produce.
A firm’s productivity based on labour and capital intensive is depending what type of intensive do they need to increase the firm’s productivity example, sculpturing needs men, labour to do the job, they cannot use machine to make the sculpture so the business will increase its productivity if they employ more employees and labour. Another example, is a business that makes canned foods; canned foods are produced by machines in factories, by this method, the firm will have to invest more factories and machines to increase its productivity.
In some occasion, business will also need both capital and labour to run the business, for example, a car factory, yes they will invest more machine than labour, but they will also need to employ workers to monitor the activity just in case if the machines were error or accidentally made a mistake.
Even though business employs more workers or capital, there will also be advantages and disadvantages for each of them. Sometimes if a business decides to invest more capital, some advantages can be obtained such as non-stop production, this means that machines can work and do their production non-stop, unlike men, they have to take a rest and limit their working hours. Higher efficiency is also obtained in investing capital, since machines can work without boring and the rate of producing is quite efficient. Lower working cost also for capital because the business wouldn’t need to pay annual wages to machines because we will only need to pay once and pay for the fuel
(continue) which is relatively cheaper than employing workers. In investing capital, error is less likely to happen, only in very rare cases. Unlike humans, we tend to do human-error mistakes, and machines wouldn’t do that.
In employing more labours and workers, there are also several advantages for the business, first, Staff, unlike machinery can be used flexibly to meet changing levels of consumer demand, example, temporary workers. Second, Can provide a ‘personal touch’ and be more in-tune with customer needs and wants. Third, Can provide tailor made products / services for different customer needs and wants. Machinery is not flexible enough to provide custom made products / services for individual customers. Labour can provide feedback that provides ideas for continuous improvement. Workers can adapt to introduce new ideas.
Besides the advantages, there will also be disadvantages. First, for capital. Initial high costs of investment and possible training costs. Second, Lack of flexibility in responding to a fall in demand. In contrast, labour can be used flexibly, example, using temporary workers. Machinery lacks initiative, example, it is unlikely to be innovative, provide ideas on how to improve production or take on extra responsibilities.
Here are the disadvantages for labour: first, Relatively expensive in the long-term when compared to machinery – higher per unit costs due to lower levels of productivity. Second, Relatively inefficient and inconsistent levels of effort. Third, Labour relation problems, example, may go on strike. And fourth, there could be a shortage of skilled labour, unlike machinery.
So in my opinion, there will be several firms and business that will rely on increasing its productivity by labour intensive, and also capital intensive, depending on their production. Some of the business will also need both to produce goods and services.
In a business, there are 2 ways to increase productivity : capital intensive and labor intensive methods. It is important to distinguish between capital-intensive and labor-intensive methods of production. A business is capital intensive if it requires heavy capital investment in buying assets relative to the level of sales or profits that those assets can generate. A capital intensive business will typically have some mixture of high depreciation costs, high barriers to entry and large amounts of fixed assets on the balance sheet. While, a labor intensive business is one in which the main cost is that of labor, and it is high compared to sales or value added. Labor intensive means use of manpower in production with little of technology while capital intensive means use of technology in production of a unit of output labor intensive means use of manpower in production with little of technology while capital intensive means use of technology in production of a unit of output. ‘Capital’ refers to the equipment, machinery, vehicles and so on that a business uses to make its product or service. Capital-intensive processes are those that require a relatively high level of capital investment compared to the labor cost. These processes are more likely to be highly automated and to be used to produce on a large scale. Capital-intensive production is more likely to be associated with flow production but any kind of production might require expensive equipment. Capital is a long-term investment for most businesses, and the costs of financing, maintaining and depreciating this equipment represents a substantial overhead. In order to maximize efficiency, firms want their capital investment to be fully utilized. In a capital-intensive process, it can be costly and time-consuming to increase or decrease the scale of production. ‘Labor’ refers to the people required to carry out a process in a business. Labor-intensive processes are those that require a relatively high level of labor compared to capital investment. These processes are more likely to be used to produce individual or personalized products, or to produce on a small scale. The costs of labor are: wages and other benefits, recruitment, training and so on. Some flexibility in capacity may be available by use of overtime and temporary staff, or by laying-off workers. Long-term growth depends on being able to recruit sufficient suitable staff. Labor intensive processes are more likely to be seen in Job production and in smaller-scale enterprises. As we analyse, capital intensive is better than labor intensive. This statement is agreed by many of us. Well, for a good production company, a capital intensive is always better than labor intensive. Capital intensive is much more important for them compared to labor intensive. Companies that produce goods will usually handle their machines, the newer the technology of their machines, the less employees needed to control them. Well, it is right. But for a service production company such as a company that provides servants which are ready to work for us, then labor intensive are more important to them, rather than capital intensive. So both capital and labor intensive have the same value, it just depends on what company it is up to. My conclusion is that both capital intensive and labor intensive is important, they are part of the factors of production. Both are needed to build a company. And by then, both have the same value in the company’s eyes. But , different companies have different needs. As I said before, for a good production company, capital intensive is more important. But for a service provider company, labor intensive is more important to them. Regina T. 8B
First, capital intensive is A business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required. Some industries commonly thought of as capital intensive include oil production and refining, telecommunications and transports such as railways and airlines. In all of the above industries, a large financial commitment is required just to get the first unit of good or service produced. Once the upfront investments are made, there may be economies of scale with regards to ongoing expenses and sales growth. But the initial hurdle to get into the business tends to keep the list of competitors small, creating high barriers to entry. Labour intensive is A process or industry that requires a large amount of labor to produce its goods or services. The degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business. Labor intensive industries include restaurants, hotels, agriculture and mining. Advances in technology and worker productivity have moved some industries away from labor-intensive status, but many still remain. Labor costs are considered variable, while capital costs are considered fixed. This gives labor-intensive industries an advantage in controlling expenses during market downturns by controlling the size of the employee base. Disadvantages include limited economies of scale (you can't pay workers less by hiring more of them), and susceptibility to wage forces within the labor market. Advantages of capital intensive is Can work 24 hours a day, Quality of work is consistent, Work is accurate and precise, Can do work which is too dangerous and unpleasant for people, More productive than labour – a machine can produce more output per hour than labour, Machines don’t need breaks or holidays. Disadvantages of capital intensive Initial cost is high – have to spend a lot of money to buy machinery at first, They need to maintained, They can break down – if they do it can halt production, Can only be used for the tasks they were designed to do, Can cause unemployment. Advantages of labour intensive Workers can learn new skills, People can think for themselves, Labour can be used to do many different tasks, Personal touch – people can interact better with customers – a lot of services cannot be provided by machinery eg hairdressing. Disadvantages of labour intensive Wage costs are high, Can only work for so long, Workers can take ill, need holidays. The conclution is capital intensive make more profit for a firm because from the capital they can buy a machine that can replace the labour. A machine energy can work 24 hours a day without stoping and the machine produce more than labour. The labour need to go to holiday but machine doesn’t need to go on a holiday. So for buying a machine the form will need to givemore capital to the business to buy a machine because a cost of a machine is very high. vincent cia 8B
Productivity is the measure of output per unit of input. Productivity is important to the economy because it allows us to produce more with less. There are two ways to increase productivity, 1) Labour intensive or 2) Capital intensive. Labour intensive is a process of economy that requires people to work (For example, Batik and handicraft workshop), labour intensive focuses on labour forces, people are required to be hires/employed and work. Capital intensive is a process of economy that focuses on capital, ‘Capital’ is referred to the resources (Machinery, equipment, vehicles, technology) that are used to produce the goods/sevices.
By being capital intensive, a company would save a lot of time in producing it goods/services as the machines which are bought are the ones doing the work and the workers there are only needed to supervise the machine which means that the company does not have to spend much money in the wages/salary department. And due to the advance technology nowadays, production has been increase also. But also due to technology, the machine build are more complicated, which mean if the machines are broken, the company would have to pay a large amount of money to repair it and if the damage is in a large scale, a company dependent to machines would need time before going back to producing. Being labour intensive means that the workers would adapt better without the need to change many things like in capital intensive and they would be more innovative rather that (Taking example of car industries) monotonously producing the same thing over and over, a handicraft worker could make many things out of something and makes them unique, attracting customers to buy the things, but on the other hand as humans, we do make errors, a small mistake would affect the company’s production, and maybe resulting customer complains.
By being capital intensive, we don’t need to give training to the machines, we just need to set them in order, which mean, we save some money from not giving training, which are usually given from the companies to their workers. But in labour intensive’s case, they have to spend money in order to give their workers training.
By being capital intensive, we could produce in large quantities of goods/services and it’ll be still relatively cheap, but with the labour intensive, as they are more into specialized goods, they must have high adaptation and those are mostly produced in small scales, unless they company has a lot of workers.
As labours are also human, they need to take the day off, slowing down the production, but machine rarely rests, it only needs a moment of fixing/checkup and It be back working.
In order to conclude what had been said above, Both capital and labour intensive has their advantages and disadvantages, it depends on the way a company is focusing on, if the company is focused on handicrafts or ones that needs creativity/hand-made, labour intensive is advised but for companies that produces in large quantities and ones that, without the machine would take a long amount of time, capital intensive is advised.
Capital intensive company is the company which needs a large amount of capital investment in plant to make it work and labor intensive company is a company which needs large numbers of workers. In this statement it is said that capital intensive company is better than labor intensive company to increase a firm’s productivity, as we know there are some factor that can differentiate the two of this from how they work Usually peoples are saying that capital intensive company is more productive than labor intensive company. It is partly true because it can work by non-stop, it has higher efficiency, lower working cost, error free, and the last is better control on production progress because capital intensive company consist of many machines, it can work by non-stop because it worked by machine, it has higher efficiency because it can work for longer time, lower working cost is because we only need to buy the resources to operate the machine like their oil, error free because they are working by machine so they only can do that job and it has been programed so it will always true and the last is better control on production progress. It mean we can control how many output that the machine should make, so it can be said that a capital intensive company is productive. They also can be said to be more productive because they will not get ever sick and they only need to have a maintenance and their maintenance don’t need much time if we seriously maintain it. But, labor intensive company also productive, because it can do a different job that depend on what the boss say. It can decrease the cost of buying machine like we only need workers to package the drinks than machine that we need to buy for an expensive price. It also can do the job faster than machine because machine need to be on the correct position, and human sometimes easier to control like a machine that we need to reset again but of a labor, we only need to command them. Human also sometimes stronger than machine because a machine need to be maintained but human can keep working everyday, except they are sick. They also can be more productive if they got their extras or they are feeling happy, they can be more productive. As the conclusion, in the statement said that capital intensive company is more productive than labor intensive company it can be wrong but it is true also, every side have their own positive and negative effects, but it also depend on what is our company, if our company need to have more workers, it is more productive to become labor intensive company but if we need many machines, it is more productive to become a capital intensive company and as I can say, labor intensive company also sometimes can be more productive than labor intensive company but we all back on what is the situation and what is our company.
Is capital intensive better than labour intensive ,ok first capital intensive means that the company have machine in high numbers while labour in low numbers while labour intensive means that they employ many numbers of labors but they only have little numbers of machines the question is whether capital intensive better than labour intensive each of this following have each of their owns advantages but mostly people choose capital intensive because making a capital intensive firms can give them advantages such as this below
ReplyDeleteFirst is the non stop production ok we all now machines are powered by electricity and without electricity stoppage they wont stop day and night and they wont took Holliday breaks and wouldn't get tired while humans need to take food breaks , go home takes Holliday breaks and many more so they can really makes a certain company production rates decreased drastically buy by using machines they can increase the number of their productions.
Second is lower working cost so this means that if we have thousands of workers we will have a problem paying their jobs because if the minimum wages is high and we have that much workers the company can be bankrupt while having machine don't because u don't need to pay them every annum not to mention if the workers go to work stoppage which can also makes the company soars of high amount of loss that can create the company bankrupt because if they will do work stoppage there will be no production so the company wont sell anything which can lead to bankrupt thats why many firms uses capital intensive rather than labour intensive.
Third is error free using a machine to do the job can provides us no error because there is no more human error if you have many labors there is many chances of fail products that could make customer unhappy but if to use machine the error will be gone so u will have better products by this it decreased or minimize the company cost .
Fourth is better to control production process by this it means if you use machine its easier for you to control the production because its hard to control humans while its easy to control machine on productions .
Fifth is machine is more efficiency than humans so this means that using machine can benefit the owner more than using labour because of speed quality and many more while labour took a lot of time and their quality are not so certain by this it means that labour are not so efficiency as machine they are highly different.
So in my conclusion capital intensive is highly better than labour intensive because of many advantages that i mention above but they also have disadvantages such as making unemployment but they have more advantages which are non stop production, high efficiency , lower working cost or wages, error free and .better to control production process thats why many big firms change from labour intensive to capital intensive because of the advantages that i mention above.
Okay , first of all , we must know what is meant by ; (a) Capital Intensive , (b) Labour Intensive . (a) A business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labour that is required. Some industries commonly thought of as capital intensive include oil production and refining, telecommunications and transports such as railways and airlines. In all of the above industries, a large financial commitment is required just to get the first unit of good or service produced. Once the upfront investments are made, there may be economies of scale with regards to ongoing expenses and sales growth. But the initial hurdle to get into the business tends to keep the list of competitors small, creating high barriers to entry.Companies in capital-intensive industries are thus often marked by high levels of depreciation and fixed assets on the balance sheet.(b) A process or industry that requires a large amount of labor to produce its goods or services. The degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business. Labor intensive industries include restaurants, hotels, agriculture and mining. Advances in technology and worker productivity have moved some industries away from labor-intensive status, but many still remain.Labor costs are considered variable, while capital costs are considered fixed. This gives labor-intensive industries an advantage in controlling expenses during market downturns by controlling the size of the employee base. Disadvantages include limited economies of scale (you can't pay workers less by hiring more of them), and susceptibility to wage forces within the labor market. So , why do capital intensive is better than labour intensive ? because capital intensive requires large amounts of money and other financial resources to produce goods and services . Capital intensive is better that labour because capital intensive is a business which requires large amounts of money and other financial resources to produce a goods and services . Labour intensive is include worker productivity . Example of labour intensive as shown above : restaurants , hotels , agriculture and mining . Those are some examples that i know . So in conclusion , capital intensive produce higher goods and services to people and labour intensive produce lesser . Labour intensive include ; restaurants , hotels , agriculture , mining . etc . Labour costs are considered variable , while capital costs are considered fixed cost. So , that's all from me .
ReplyDeleteThank You ,
LEONARDO STEVEN 8B
A labor-intensive company is a process or industry that requires a large amount of labor to produce its goods or services, the degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business. Examples of a labor-intensive company are garment companies(batik, Balinese lace, songket, etc.), cigarette companies, banking, insurance, and many more.
ReplyDeleteWhilst a capital-intensive company is a business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required. The examples of a capital-intensive company would be car manufacturing, oil refining, airlines, auto manufacturers, drilling operations, etc.
There are pros and cons to both sides, labor intensive and capital intensive. One factor to consider is the efficiency. Capital intensive is higher in efficiency than labor is. If the company uses labor intensive, they’ll have lower efficiency since we cannot work non-stop and also they’ll be more prone to mistakes. Unlike humans, machinery could work 24/7, they can also do jobs that are dangerous and hazardous to humans or even mundane jobs; hence they will be more efficient. Also a capital-intensive company is better on controlling the production process than humans are, they are also able to produce a high volume of goods. Capital-intensive companies may seem relatively expensive however in the long run it’ll cost less than labor-intensive companies. Thus due to these factors, research shows that many companies are now switching from labor intensive to capital intensive.
A capital-intensive company is more likely to have high barriers to entry. What I mean by this is that they need a lot of money to keep the company going. Because of this barrier it will difficult new companies to begin a capital-intensive industries like themselves. For instance, it is highly unlikely a new aircraft firm would begin operations and compete with the likes of Boeing, since it costs billions in capital to begin producing airplanes. There is also a downside to capital intensive companies, one of them is that it is very time consuming and costly to the increase or decrease of the scale of production. Aside from that you will also need to pay for the maintenance of the machinery. There are also some things machinery can’t do that humans can, such as having personal contact, and also answering individual queries.
On the contrary however, there are some industries that requires handmade process such as garment company (batik, Balinese lace, etc.), also cigarette company {to put in the tobacco into the cigarette}, etc. Many people also search for hand-made products, which are usually, are of higher prices since it takes man energy and also it’s often difficult and time consuming. If you are labor intensive, the ones working for you could also contribute into giving creative ideas, hence you can also receive new ideas from them and improve your products. Contradicting capital-intensive companies, labor-intensive companies they are very responsive to change.
ReplyDeleteBut there are also disadvantages to labor-intensive companies; for instance, labor-intensive companies are very expensive for the long term. Compare the amount of money you spend for a machine that can last for years and the money you have to divide amongst thousands of employees, it’s obvious that it’ll be more expensive. Humans could also make errors in doing their job, aside from that it’ll be time consuming and it wont be as efficient as capital-intensive companies. Also as humans we need a time off, like a holiday or for instance if we got sick, we wont be able to attend, then it’ll delay the production.
To sum up my analysis, I think that both labor and capital-intensive companies have their own advantages and disadvantages but to me I think that capital-intensive companies have more advantages compared to labor intensive (more efficiency, error free, better control on production process, etc)
Charlene 8B
Capital intensive companies are companies who use more machines than workers to produce goods, some examples of capital intensive companies are companies that change their workers in the factory with automatic machines, some companies change their workers who records transactions with computer systems. To start capital intensive companies the company needs to have a lot of funds, because computer systems, machines, equipments and other man made resources are more expensive than normal workers. As the time goes by machines are cheaper than the salaries and wages of normal workers. Labor intensive companies are companies that use workers more than machines to produce goods and services. Sometimes machines can have problems and to fix it it needs some time, so if a machine have any problems the production activity will be postponed, this can affect the capability of company to provide consumer orders of goods and services.
ReplyDeleteUsing electronic devices or man made resources make the company become more efficient and effective. As we know there are some goals of companies they are efficient, effective, and economic. Efficiency can be measured by the method of production, the better and the quiker method of production can reduce the cost of production of a company. Economic means the company can make profit to survive and to expand and develop their products. Having a capital intensive company means that the company is investing for the long term future, because as time goes by the advantages of machines will be very useful for the company like they can produce products in the right time, avoid errors in mking products or recording transactions, it can reduce the risks of fraud. For the long term using man made resources or machines are cheaper than workers because if company employs many workers they must increase the wages every year, they have to give bonus every year, company must give fringe benefits to them and they must also protect the unity of the company.
Labor intensive companies sometimes are better than capital intensive companies, as we know machines can only work in its program if there is a sudden error or problem the machine will not be able to do anything. If the company is labour intensive they can fix the error made by the machines if it happens suddenly, the workers are able to find a solution and the cause of the error and they can avoid another error in the future. If the company uses machines, every year the company must pay to maintain the machines, and if the machine is broken they must pay even more . Company must take care of the machines so that they can use it for a long time, so they must train their workers to use the machines well. To train the workers they need to pay even more, and sometimes the workers are not ready and cannot use the machines that are available.
So in conclusion capital intensive and labor intensive companies must be balanced, there should not be too many machines or computer systems but there should not have too many workers because if a company employs too many workers the expenses of the company will increase and there is a big possibility for errors.
There are two types of market in an industrial life, Capital intensive and Labour Intensive. Capital intensive is the modern industrial life way or using hi-tech machinery way to create business productivity. But labour intensive is an old way of industrial life. It is still using labour as the main production resources or the one who create business productivity. But different types of business market will have the most suitable production worker, either using labour intensive or capital intensive, because there are business that will be a bit useless if using capital intensive and there are business that are useful to have capital intensive as its main production resources.
ReplyDeleteIn common, capital intensive is better than labour intensive because it has many hi-tech features that may include these advantages:
1.Faster to produce output
It require less time to produce output
2.More perfect to produce output
Even a small particle of an output can’t be missed by the machine to be produced
3.Save Production efficiency
More efficient and require less of other production resources
4.Require less cost to operate the machines than operating a labour intensive system
Only require electricity as its main energy to operate and no need any wage payment as if labour intensive does.
5.Produce accurate wondered output
The machine can produce the wanted output by the owner
6.Can be reliably programmed
The owner can programmed the machines with any desire
Those factors is the main reasons that explain why capital intensive can easily win the labour intensive.
But in other side, even though in common capital intensive is much better than labour intensive, capital intensive have some disadvantages for business productivity creation process. Capital intensive is only suitable for Heavy Industries Companies, Electronics, Building Management Appliances, Food and Drinks, Plastics and other basic home required materials, books endorser and publishing, Security provider, etc. But some business have factors that using labour intensive is more beneficial for them such as Cathering or Food in Canteen, Books, Newspaper or Magazine creation process, Batiks, Origami Paper and other arts product, art of pictures and drawings, Souvenirs, etc. Because human is the one who create machines, so machinery systems are still having no any features that human had. Such as the skill of art, sensitivity, Writing skills, creation of drawings motives, food taste scaler, etc. These are the disable factors of machines:
1.It can’t scale the food taste like a professional restaurant or canteen chef
2.It can’t write using its brain idea like a book, newspaper and magazine authors
3.It can’t go around and snap for environment surroundings moment like an professional photographers
4.It can’t draw using the skills of real or true art in batik t-shirt
5.It can’t fold origami paper to make various of forms creations
6.It can’t create special souvenirs that made of clay that usually done by professionals hand-craft maker
Those are the examples factors which machines can’t do or only can be done by labour intensive or production resources.
So in conclusion, capital intensive is very more useful to be used in industrial companies or business that mainly require less cost, less time or production time efficiency but have large scale of output and outputs accuracy. But capital intensive is not largely required for business that produce professional output or art creation product or which require brain thinking such as only labour intensive does.
Above response is all of the ideas that popped out from my brain, thank you for reading!
There are two ways how to increase the productivity. There are labor intensive and capital intensive. Labor intensive is the one that’s increasing the productivity by increasing the number of workers. Capital intensive is the one that increasing the amount of capital such as machine to increase the productivity. Now , the question is Discuss whether capital intensive is better than labor intensive to increase a firm's productivity. Well the answers wont be always capital intensive . Labor intensive may also become better than the capital sometimes.
ReplyDeleteSo , capital intensive will always usually better than the labor intensive . In this question , we cant say it wrong because in fact its true. Firms that doing this will usually got more advantages than the one that’s doing the labor intensive .Here are some of the advantages in doing the capital intensive. First , capital intensive will have more output because they are doing the non stop production. In labour intensive , we cant force all the workers to work 24 hours because they might be tired or sick . And also workers is a human so sometimes they might be so slow in making the product or sometimes they may be fast . But workers sometimes didn’t want to come to work and leave at a day , so if they are doing this , the production will be so slow compare to the capital intensive. Second , if we are doing the capital intensive , there will be error free. Capital intensive Is worked by a machine , and machine can do anything according to what the controller said. So of course the machine will be error free because the machine will jut do what the people said . If the machine have an error , means its already too old or broken , so it just need to be changed with the new one. Third , capital intensive will have lower working cost . The main problem that have interrupt many businesses now is the high cost in paying the workers . Now in Indonesia every workers must be paid minimal about 2 million . And actually this payment is very high for the workers that don’t do anything and make many mistakes for the company . So instead hiring the workers , we can just hire the machine . Machine will not always make a mistakes and they have a high productivity. They don’t need to be paid and can produce 24 hours non stop . So ofcouse the capital intensive will be far more better than the labor. Fourth , capital intensive will have higher efficiency and fifth , capital intensive will have better control on production process .
But , there are also some lack in capital intensive and some times labour intensive will be better than the capital intensive. first, Machine can sometimes make a mistakes. We can fix them or buy a new one , but the cost is too expensive . For some small businesses that’s capital intensive and have a problem with their productivity , sometimes they cant pay the bill and get bankrupt because there will be no production again. second , sometimes , workers can be easier to be told than the machine. We can tell anything to the workers and they can easily get it . But for a machine sometimes its hard to set in according to what we want . So it will be more difficult.
So , the conclusion is that capital intensive will not always be better than the labor intensive . There are also some lack in that. But most of them ,capital intensive will be better . We can get more advantages by doing the capital intensive instead of doing the labour intensive. Capital intensive will only have several disadvantages and it can be solved easily for the big firms.
Capital intensive is being more focused on capital for production than labor, examples of these would be car manufacturing companies. ‘Capital’ refers to the equipment, machinery, vehicles and so on that a business uses to make goods and services. Labor intensive on the other hand is being more focused on using labor for production than capital, examples of these would be art workshops. For some reasons capital intensive production would be better for certain cases because:
ReplyDeleteCapital intensive generally have very little amounts of errors. Errors are common in a labor intensive production, but very uncommon for a capital intensive production .Because unlike labor, there are no human errors, providing a more accurate production, and overall a much smoother flow of production due to errors being far more uncommon.
The cost for capital intensive are more or less cheaper than labor intensive because some people are paid more, in capital intensive even there is a difference between the importance in each capital their expenses are usually equal to the cheapest capital to run. Also, labor intensive production needs training unlike capital, people that are hired as labor will most likely not be prepared to work, therefore they will need training which will increase total costs.
Capital intensive production is much easier to organize than labor intensive production. Sometimes labor would demand a higher cost to be employ, but capital production doesn’t do that whatsoever. And unlike labor capital production always follows a change in a company’s production format.
Capital intensive has automated production for the company. Providing easier production for the company this would help greatly especially for mass scale production for the company. This is never the case for labor though.
Though some would argue that labor intensive would be better for production because:
Labor intensive production demands labor, therefore more jobs available. This is good for the economy as the overall unemployment will be reduced. The economy benefits from increased activity and governments receive more tax dollars, which can then be spent on schools or hospitals.
Labor are very innovative. This is a trait that capital, do not and will not ever have, for industries that relies on innovation this is really important. Examples like the entertainment industry or the art industry.
Labor can provide feedback unlike capital, this is very useful for improvements in a company as the company could know how to improve itself for the sake of better production, which in a long run can lead to a more profitable company.
Labor are very flexible, which means they can change to the needs of the consumers. This is another trait that capital intensive production will never have, and a very beneficial one.
In conclusion, labor intensive and capital intensive have their own unique advantages, which suites the needs of different types of companies. Some companies are better with labor intensive while some others with capital intensive. Either way which is better will depend on the needs of the company and not the actual advantages themselves.
To increase the firms productivity there are capital intensive and labor intensive, they both are different. Capital intensive is a business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required. Some industries commonly thought of as capital intensive include oil production and refining, telecommunications and transports such as railways and airlines. While labor intensive is a process or industry that requires a large amount of labor to produce its goods or services. The degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business. While some of the business can increase their productivity by capital intensive but not always some of the business also can increase their productivity by labor intensive.
ReplyDeleteCapital intensive sometimes better than labor intensive, why? Here are some of the advantages of capital intensive, first it can produce more product or maybe it can have nonstop production, because we can set the machine whatever we want, example it must produce the product 1000 per day, and if you use labor intensive they have the limit or not they may be very tired. Second, higher efficiency, means with capital intensive or with a machine it is more efficiency than people or labor, machine can produce the faster, more and good rather that people r labor that may have a mistake on producing the product. Third is lower working cost, capital intensive or using machine may result in lower working cost, why because we just need to buy at the first and the rest of the day we no need to pay them again, while if we use labor we must to pay them for example per month or per week so capital intensive will result in lower working cost. Fourth, using the machine may also result in error free; unlike using the labor intensive may result in much error. Fifth, better control in production and process, using machine may result in better process on production why? Because we have set it unlike when we are using labor intensive it may not be smooth like the capital intensive using the machine. Example making a shirt, using the machine, we just needed to put the things needed and item needed to the machine, while if using labor we need sewing machine and the labor must fully concentrated or not the product won’t be good.
But not always using capital intensive or using machine is always good; it also may result very badly. Well, first if the machine is already old and you didn’t do any services to repair the machine it make some errors and result in bad quality of product or the process of the production won’t be good and smooth. The major disadvantage of capital intensive technology is the increase in business costs. Capital intensive technology increases costs to purchase machines, maintenance costs and costs to train employees to use the purchased equipment. So there is also some disadvantage of capital intensive.
In the conclusion, there are some of the business that use capital intensive to increase the productivity but there are also some business that use labor intensive because the there are some disadvantages of capital intensive, like the advantages is it is error free and can make more production, while the disadvantages is need more cost and we need a lot of money.
-Shelvina Gabriela 8B-
First, there are 2 types of firms, a capital intensive or labor intensive, capital intensive means that the firm focused on capital more than labor, that mean the firm can only have certain number of workers but it have a lot of capital, it can be called a big firm, a capital intensive firm. And the other type is the labor intensive, which means that the company focused more to the number of employees they employ, and they don’t need many capital because all they need is the work of the cow-worker. It can be called a big firm when it has more than 50 workers, without many capital. The example for a labor intensive company is a cigarette company, it needs lot of people to work in the factory, which help countries, example is Indonesia to reduce the number of employment. And the example of a capital intensive company is a handphone company. They only need some ppl in the production place and the fee for making the phones is expensive, so they need a lot of money to o that, so theyre called capital intensive though they have lil mount of workers.
ReplyDeleteCapital intensive can be better than labor intensive to increase the firm’s productivity because it has a non-stop production, for example is it’s a machine, a machine can work day and night without rest, and human labor need to rest and they can get sick, or they’ll need to take holiday breaks, Chinese new year and stuffs. And if they don’t come to the firm/factory because of sick leave, the productivity will decrease and might not reach their target.
The other reason is by having more machines than human is there will be less or no error, which means there’re more % for error free. Human labor always make mistakes, no one is perfect and can do their work perfectly without mistakes at all. But machines, if theyre not broken they’ll provide us with error free production. And when the machine is in a good condition, they’ll produce good products and will make producer and consumer happy.
The other reason is a lower working cost, because when we employ workers, we should pay them, and the higher their position is, the higher salary the company must pay them and sometimes the company must give them bonuses and stuffs. But machines don’t need something like those, they only need to be serviced once in a particular period of time and if theyre broken, they can be easily replaced, no need to find one like finding a worker, no need interviews and all. Simple and easy!
Using machines will have more efficiency than using a worker, a machine can have more efficiency compared to human and give more satisfying products to the owner. A machine have many benefits and they can work really fast.
The last reason is its easier for the owner or shareholder to control the business, they only have to take care of the machines and some lil amount of workers, and its easier to handle machines rather than human, so machine has higher efficiency.
So the conclusion is, yes, capital-intensive firm is better for aiming to increase the business’s productivity, because its explained above that having more machines than labor can have many benefits, but to build a capital intensive need a lot of money, so its kinda hard for some people to build it.
Thankyou
ReplyDeletefirst of all we need to know what is the definition of capital intensive and labour intensive. Capital intensive is companies that invest more capital (machinery, robots, computers) than labour (employee) to produce goods and services. Unlike capital intensive, labour intensive invest more employees rather than capital.
Different types of business that they are producing can vary what type of intensive should they apply in their business. For instance, firms and business that produces handicrafts such as batik, paintings, and sculptures required employees and labour to do the job, machine is less required therefore the firm is based on labour intensive. Whilst a firm that produces cars, laptop, and smart phones will invest more on capital since the firm will need more machine to produce.
A firm’s productivity based on labour and capital intensive is depending what type of intensive do they need to increase the firm’s productivity example, sculpturing needs men, labour to do the job, they cannot use machine to make the sculpture so the business will increase its productivity if they employ more employees and labour. Another example, is a business that makes canned foods; canned foods are produced by machines in factories, by this method, the firm will have to invest more factories and machines to increase its productivity.
In some occasion, business will also need both capital and labour to run the business, for example, a car factory, yes they will invest more machine than labour, but they will also need to employ workers to monitor the activity just in case if the machines were error or accidentally made a mistake.
Even though business employs more workers or capital, there will also be advantages and disadvantages for each of them.
Sometimes if a business decides to invest more capital, some advantages can be obtained such as non-stop production, this means that machines can work and do their production non-stop, unlike men, they have to take a rest and limit their working hours. Higher efficiency is also obtained in investing capital, since machines can work without boring and the rate of producing is quite efficient. Lower working cost also for capital because the business wouldn’t need to pay annual wages to machines because we will only need to pay once and pay for the fuel
(continue) which is relatively cheaper than employing workers. In investing capital, error is less likely to happen, only in very rare cases. Unlike humans, we tend to do human-error mistakes, and machines wouldn’t do that.
ReplyDeleteIn employing more labours and workers, there are also several advantages for the business, first, Staff, unlike machinery can be used flexibly to meet changing levels of consumer demand, example, temporary workers. Second, Can provide a ‘personal touch’ and be more in-tune with customer needs and wants. Third, Can provide tailor made products / services for different customer needs and wants. Machinery is not flexible enough to provide custom made products / services for individual customers. Labour can provide feedback that provides ideas for continuous improvement. Workers can adapt to introduce new ideas.
Besides the advantages, there will also be disadvantages. First, for capital. Initial high costs of investment and possible training costs. Second, Lack of flexibility in responding to a fall in demand. In contrast, labour can be used flexibly, example, using temporary workers. Machinery lacks initiative, example, it is unlikely to be innovative, provide ideas on how to improve production or take on extra responsibilities.
Here are the disadvantages for labour: first, Relatively expensive in the long-term when compared to machinery – higher per unit costs due to lower levels of productivity. Second, Relatively inefficient and inconsistent levels of effort. Third, Labour relation problems, example, may go on strike. And fourth, there could be a shortage of skilled labour, unlike machinery.
So in my opinion, there will be several firms and business that will rely on increasing its productivity by labour intensive, and also capital intensive, depending on their production. Some of the business will also need both to produce goods and services.
Celine Kusnadi 8B
In a business, there are 2 ways to increase productivity : capital intensive and labor intensive methods. It is important to distinguish between capital-intensive and labor-intensive methods of production. A business is capital intensive if it requires heavy capital investment in buying assets relative to the level of sales or profits that those assets can generate. A capital intensive business will typically have some mixture of high depreciation costs, high barriers to entry and large amounts of fixed assets on the balance sheet. While, a labor intensive business is one in which the main cost is that of labor, and it is high compared to sales or value added. Labor intensive means use of manpower in production with little of technology while capital intensive means use of technology in production of a unit of output labor intensive means use of manpower in production with little of technology while capital intensive means use of technology in production of a unit of output.
ReplyDelete‘Capital’ refers to the equipment, machinery, vehicles and so on that a business uses to make its product or service. Capital-intensive processes are those that require a relatively high level of capital investment compared to the labor cost. These processes are more likely to be highly automated and to be used to produce on a large scale. Capital-intensive production is more likely to be associated with flow production but any kind of production might require expensive equipment. Capital is a long-term investment for most businesses, and the costs of financing, maintaining and depreciating this equipment represents a substantial overhead. In order to maximize efficiency, firms want their capital investment to be fully utilized. In a capital-intensive process, it can be costly and time-consuming to increase or decrease the scale of production.
‘Labor’ refers to the people required to carry out a process in a business. Labor-intensive processes are those that require a relatively high level of labor compared to capital investment. These processes are more likely to be used to produce individual or personalized products, or to produce on a small scale. The costs of labor are: wages and other benefits, recruitment, training and so on. Some flexibility in capacity may be available by use of overtime and temporary staff, or by laying-off workers. Long-term growth depends on being able to recruit sufficient suitable staff. Labor intensive processes are more likely to be seen in Job production and in smaller-scale enterprises.
As we analyse, capital intensive is better than labor intensive. This statement is agreed by many of us. Well, for a good production company, a capital intensive is always better than labor intensive. Capital intensive is much more important for them compared to labor intensive. Companies that produce goods will usually handle their machines, the newer the technology of their machines, the less employees needed to control them. Well, it is right. But for a service production company such as a company that provides servants which are ready to work for us, then labor intensive are more important to them, rather than capital intensive. So both capital and labor intensive have the same value, it just depends on what company it is up to.
My conclusion is that both capital intensive and labor intensive is important, they are part of the factors of production. Both are needed to build a company. And by then, both have the same value in the company’s eyes. But , different companies have different needs. As I said before, for a good production company, capital intensive is more important. But for a service provider company, labor intensive is more important to them.
Regina T. 8B
First, capital intensive is A business process or an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required. Some industries commonly thought of as capital intensive include oil production and refining, telecommunications and transports such as railways and airlines. In all of the above industries, a large financial commitment is required just to get the first unit of good or service produced. Once the upfront investments are made, there may be economies of scale with regards to ongoing expenses and sales growth. But the initial hurdle to get into the business tends to keep the list of competitors small, creating high barriers to entry. Labour intensive is A process or industry that requires a large amount of labor to produce its goods or services. The degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business. Labor intensive industries include restaurants, hotels, agriculture and mining. Advances in technology and worker productivity have moved some industries away from labor-intensive status, but many still remain. Labor costs are considered variable, while capital costs are considered fixed. This gives labor-intensive industries an advantage in controlling expenses during market downturns by controlling the size of the employee base. Disadvantages include limited economies of scale (you can't pay workers less by hiring more of them), and susceptibility to wage forces within the labor market. Advantages of capital intensive is Can work 24 hours a day, Quality of work is consistent, Work is accurate and precise, Can do work which is too dangerous and unpleasant for people, More productive than labour – a machine can produce more output per hour than labour, Machines don’t need breaks or holidays. Disadvantages of capital intensive Initial cost is high – have to spend a lot of money to buy machinery at first, They need to maintained, They can break down – if they do it can halt production, Can only be used for the tasks they were designed to do, Can cause unemployment. Advantages of labour intensive Workers can learn new skills, People can think for themselves, Labour can be used to do many different tasks, Personal touch – people can interact better with customers – a lot of services cannot be provided by machinery eg hairdressing. Disadvantages of labour intensive Wage costs are high, Can only work for so long, Workers can take ill, need holidays. The conclution is capital intensive make more profit for a firm because from the capital they can buy a machine that can replace the labour. A machine energy can work 24 hours a day without stoping and the machine produce more than labour. The labour need to go to holiday but machine doesn’t need to go on a holiday. So for buying a machine the form will need to givemore capital to the business to buy a machine because a cost of a machine is very high.
ReplyDeletevincent cia
8B
Productivity is the measure of output per unit of input. Productivity is important to the economy because it allows us to produce more with less. There are two ways to increase productivity, 1) Labour intensive or 2) Capital intensive. Labour intensive is a process of economy that requires people to work (For example, Batik and handicraft workshop), labour intensive focuses on labour forces, people are required to be hires/employed and work. Capital intensive is a process of economy that focuses on capital, ‘Capital’ is referred to the resources (Machinery, equipment, vehicles, technology) that are used to produce the goods/sevices.
ReplyDeleteBy being capital intensive, a company would save a lot of time in producing it goods/services as the machines which are bought are the ones doing the work and the workers there are only needed to supervise the machine which means that the company does not have to spend much money in the wages/salary department. And due to the advance technology nowadays, production has been increase also. But also due to technology, the machine build are more complicated, which mean if the machines are broken, the company would have to pay a large amount of money to repair it and if the damage is in a large scale, a company dependent to machines would need time before going back to producing.
Being labour intensive means that the workers would adapt better without the need to change many things like in capital intensive and they would be more innovative rather that (Taking example of car industries) monotonously producing the same thing over and over, a handicraft worker could make many things out of something and makes them unique, attracting customers to buy the things, but on the other hand as humans, we do make errors, a small mistake would affect the company’s production, and maybe resulting customer complains.
By being capital intensive, we don’t need to give training to the machines, we just need to set them in order, which mean, we save some money from not giving training, which are usually given from the companies to their workers. But in labour intensive’s case, they have to spend money in order to give their workers training.
By being capital intensive, we could produce in large quantities of goods/services and it’ll be still relatively cheap, but with the labour intensive, as they are more into specialized goods, they must have high adaptation and those are mostly produced in small scales, unless they company has a lot of workers.
As labours are also human, they need to take the day off, slowing down the production, but machine rarely rests, it only needs a moment of fixing/checkup and
It be back working.
In order to conclude what had been said above, Both capital and labour intensive has their advantages and disadvantages, it depends on the way a company is focusing on, if the company is focused on handicrafts or ones that needs creativity/hand-made, labour intensive is advised but for companies that produces in large quantities and ones that, without the machine would take a long amount of time, capital intensive is advised.
Grace - 8B
Capital intensive company is the company which needs a large amount of capital investment in plant to make it work and labor intensive company is a company which needs large numbers of workers. In this statement it is said that capital intensive company is better than labor intensive company to increase a firm’s productivity, as we know there are some factor that can differentiate the two of this from how they work
ReplyDeleteUsually peoples are saying that capital intensive company is more productive than labor intensive company. It is partly true because it can work by non-stop, it has higher efficiency, lower working cost, error free, and the last is better control on production progress because capital intensive company consist of many machines, it can work by non-stop because it worked by machine, it has higher efficiency because it can work for longer time, lower working cost is because we only need to buy the resources to operate the machine like their oil, error free because they are working by machine so they only can do that job and it has been programed so it will always true and the last is better control on production progress. It mean we can control how many output that the machine should make, so it can be said that a capital intensive company is productive. They also can be said to be more productive because they will not get ever sick and they only need to have a maintenance and their maintenance don’t need much time if we seriously maintain it.
But, labor intensive company also productive, because it can do a different job that depend on what the boss say. It can decrease the cost of buying machine like we only need workers to package the drinks than machine that we need to buy for an expensive price. It also can do the job faster than machine because machine need to be on the correct position, and human sometimes easier to control like a machine that we need to reset again but of a labor, we only need to command them. Human also sometimes stronger than machine because a machine need to be maintained but human can keep working everyday, except they are sick. They also can be more productive if they got their extras or they are feeling happy, they can be more productive.
As the conclusion, in the statement said that capital intensive company is more productive than labor intensive company it can be wrong but it is true also, every side have their own positive and negative effects, but it also depend on what is our company, if our company need to have more workers, it is more productive to become labor intensive company but if we need many machines, it is more productive to become a capital intensive company and as I can say, labor intensive company also sometimes can be more productive than labor intensive company but we all back on what is the situation and what is our company.
Richard Sanders -8B
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