Select An Organization With Which You Are Familiar Or An Org

Select an organization with which you are familiar or an organization W

Select an organization with which you are familiar or an organization where you work. Develop a 15- to 20-slide Microsoft® PowerPoint® presentation to be presented to the CEO's executive committee that addresses how your chosen organization determines what quantity of labor to demand and what events could shift the demand and supply of that labor. Explain the following in your presentation: How your organization's production function is related to its marginal product of labor. How your organization's marginal product of labor is related to the value of its marginal product. How your organization's marginal product is related to its demand for labor. Examples of events that could shift the demand or supply of labor and why they do so. Reasons a worker's wages might be above the level that balances supply and demand. An analysis of the impact that government policies addressing income inequity and poverty could have on labor demand or supply. This assignment must have speaker notes, absolutely NO PLAGIARISM, and must hit ALL points (must be in complete thought, clear and concise). You must cite a minimum of three peer-reviewed sources not including your textbook. Format your presentation consistent with APA guidelines.

Paper For Above instruction

The determination of labor demand within organizations is a complex process influenced by various economic, operational, and external factors. Understanding how organizations decide on the quantity of labor to demand involves analyzing the production function, the marginal product of labor (MPL), and how external events or policies influence labor market dynamics.

Organization Selection: Amazon Inc. Amazon, as a leading global e-commerce and cloud computing company, offers an illustrative example of labor demand determination. Its extensive workforce spans warehouse operations, delivery services, technological development, and administrative functions. Amazon's decision on labor demand hinges on its production function, which describes how inputs such as labor and capital convert into outputs like shipped packages or cloud services.

Production Function and Marginal Product of Labor: Amazon’s production function illustrates how additional labor impacts output. Initially, an increase in labor results in a proportionate increase in output (diminishing returns eventually set in). The marginal product of labor (MPL) signifies the additional output generated by employing one more worker. For Amazon, MPL is highest at certain levels of staffing; for example, hiring additional warehouse workers initially increases the number of packages shipped per day.

Marginal Product and Marginal Product of Value: The MPL's value-based counterpart, the marginal product of value (MPV), quantifies the additional revenue generated by one more worker. Amazon’s management evaluates MPV by comparing MPL with the marginal revenue from selling additional units or services. When the value of the MPL exceeds the cost of employing an additional worker, Amazon increases its demand for labor; if it diminishes or falls below wages, demand contracts.

Labor Demand and Marginal Product Relationship: Amazon’s demand for labor aligns closely with the MPL and MPV. As MPL decreases due to diminishing returns beyond certain staffing levels, the organization reduces additional hiring. Conversely, when technological innovations or process improvements increase MPL, Amazon’s demand for labor rises, especially in expanding segments like Amazon Web Services.

Events Influencing Labor Supply and Demand: External events such as technological advancements (automation replacing manual tasks), economic shifts, and regulatory changes impact both supply and demand. For instance, technological innovation increases productivity (raising MPL), reducing demand for low-skilled labor but potentially increasing demand for highly skilled workers. Regulatory policies, like increased minimum wages, raise costs, potentially reducing demand, or shifting supply if workers find wages more attractive.

Wages Above Equilibrium: Wages may rise above the equilibrium level due to minimum wage laws, union bargaining power, or skill mismatches. Employers might offer higher wages to attract scarce skilled labor or because of labor shortages in critical areas, creating a disequilibrium where wages are above what market balance would suggest.

Impact of Government Policies: Policies aimed at reducing income inequality, such as increasing the minimum wage or expanding social benefits, can influence labor supply and demand. Higher minimum wages might reduce demand for low-skilled labor but increase overall consumer spending, boosting demand in other sectors. Conversely, welfare programs can affect workers' participation in the labor force, influencing supply.

In conclusion, organizations like Amazon utilize production functions and marginal productivity concepts to determine labor demand, adjusting their strategies based on cost, technological change, and external policies. External events and governmental policies significantly influence these dynamics, affecting overall labor market equilibrium. Organizations must continuously adapt to these factors to optimize their labor force and maintain competitive advantage.

References

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  • Smith, A. (1776). The Wealth of Nations. Modern Library Edition, 1999.
  • Nickell, S. (2004). The Supply of Labour. In O. Ashenfelter & D. Card (Eds.), Handbook of Labor Economics (Vol. 3, pp. 1761-1822). Elsevier.
  • Blanchard, O., & Johnson, D. R. (2013). Macroeconomics (6th ed.). Pearson.
  • Ranney, M. (2020). Technological Change and Labor Markets: Automation and Its Implications. Journal of Economic Perspectives, 34(4), 45-66.
  • Federal Reserve Bank of St. Louis. (2022). Minimum Wage Policies and Labor Market Outcomes. Economic Review. https://fred.stlouisfed.org
  • Organisation for Economic Co-operation and Development (OECD). (2021). The Role of Public Policies in Shaping Labor Market Dynamics. OECD Employment Outlook. https://www.oecd.org/employment-outlook/

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