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The aim of this study is to empirically investigate the effect of real wages on labour productivity in Malaysia's manufacturing sector using annual data from 1980 to 2009.
Abstract
Purpose
The aim of this study is to empirically investigate the effect of real wages on labour productivity in Malaysia's manufacturing sector using annual data from 1980 to 2009.
Design/methodology/approach
This study uses the Johansen cointegration test to examine the presence of long‐run equilibrium relationship between labour productivity and real wages in Malaysia. In addition, the Granger causality test within the vector error‐correction model (VECM) is used to ascertain the direction of causality between the variables of interest.
Findings
The Johansen test suggests that real wages and labour productivity are cointegrated. Moreover, labour productivity and real wages have a quadratic relationship (i.e. inverted U‐shaped curve) instead of linear relationship. Hence, the effect of real wages on labour productivity is non‐monotonic. Furthermore, the Granger causality test indicates that real wages and labour productivity are bilateral causality in nature.
Research limitations/implications
This study is limited to the labour productivity in the manufacturing sector only.
Originality/value
This study demonstrates that the effect of real wages on labour productivity is non‐monotonic; hence increase in real wages alone does not always enhance labour productivity. Thus, other incentives should be offered to stimulate long‐term labour productivity growth in Malaysia.
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Adnan Enshassi, Sherif Mohamed, Peter Mayer and Karem Abed
Labor productivity is one of the most important factors that affect the physical progress of any construction project. In order to improve labor productivity, site production…
Abstract
Purpose
Labor productivity is one of the most important factors that affect the physical progress of any construction project. In order to improve labor productivity, site production should be measured on a regular basis, and then compared to acceptable standard benchmarks. The objective of this paper is to measure masonry labor productivity in Gaza Strip, Palestine, using a consistent benchmarking approach.
Design/methodology/approach
Production data were collected from nine different construction projects located in Gaza. For each project, values for baseline productivity, disruption index, performance index and project management index were calculated.
Findings
Based on the nine targeted projects, the baseline productivity of masonry works in Gaza seems to range from 0.29 to 0.80 work‐hours per square meter. Calculated values were utilized to develop a correlation between two project benchmarks (i.e. disruption and project management indices). AS only four out of the targeted nine projects performed reasonably well, the paper strongly recommends developing a benchmarking standard for each local construction firm in Palestine which may lead to an improvement in the national construction productivity.
Originality/value
The outcome of this research will improve the national construction productivity in Palestine and highlights the benefit of improving benchmarking standard.
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Ryspek Usubamatov, Abd Alsalam Alsalameh, Rosmaini Ahmad and Abdul Rahman Riza
The paper aims to study car assembly line, to show its productivity rate, and to derive a mathematical model for the productivity rate of the assembly line segmented into sections…
Abstract
Purpose
The paper aims to study car assembly line, to show its productivity rate, and to derive a mathematical model for the productivity rate of the assembly line segmented into sections with embedded buffers.
Design/methodology/approach
The paper performs productivity calculations based on data obtained from the assembly processes of a car and shows the maximum productivity of the assembly line. The equations of the assembly line productivity, the optimal number of assembly stations, and the necessary number of the assembly line's sections with buffers are derived via the criterion of maximum productivity.
Findings
The paper provides the productivity diagram of the assembly line that illustrates various measures of productivity, one that depends on the number of assembly stations, the number of sections in the line, and the capacity of the buffers. The diagram is based on the proposed mathematical equations for the productivity of the assembly line as a function of the assembly technology, number of stations, number of sections, and the capacity of the buffer.
Research limitations/implications
Solutions towards increasing the productivity of the assembly line are given based on the results of the study and analysis of the assembly processes in real industrial environments.
Practical implications
The paper includes the equation for the productivity of the assembly line, which is segmented into sections with limited capacity of the buffers, thereby enabling the calculation of its maximum productivity and the optimal number of assembly stations.
Originality/value
The paper presents an analysis of productivity and a mathematical model for calculating the productivity of the assembly line, which is segmented into sections with embedded buffers of limited capacity. The initial results of the research have been obtained from a real industrial environment.
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The purpose of this paper is to contextualize a productivity contest between a local manufacturer versus a foreign one, both of whom sell an identical product in the local market…
Abstract
Purpose
The purpose of this paper is to contextualize a productivity contest between a local manufacturer versus a foreign one, both of whom sell an identical product in the local market, within the two companies' respective economies. The intent is to delineate the conditions under which one firm gains a competitive advantage over the other.
Design/methodology/approach
The purchasing power parity model is reformulated to account for differential rates of macroeconomic productivity gain in the two countries. The implications of these differential rates vis‐à‐vis the productivity contest between the local and foreign manufacturer are then explored.
Findings
To gain a competitive advantage over its foreign rival, the local firm must achieve a net productivity improvement relative to its (local) economy that surpasses the net productivity improvement of the foreign rival relative to its (foreign) economy. Thus, the local firm stands in a rivalrous relationship not solely with its foreign competitor but also with the average firm in its very own (local) economy and in a complementary relationship with the average firm in the foreign economy. The foregoing is shown to be a generalization of the Dutch disease phenomenon and to imply that national efforts to attain competitive advantage are self‐contradictory.
Practical implications
In its productivity contest with its foreign rival, the local firm's management should not focus myopically on a comparison of the two firms' rates of net productivity improvement. Rather, the focus should be on the two firms' differential rates of net productivity improvement relative to their respective economies.
Originality/value
The main conclusions of this paper, which derive from the effect of productivity changes on exchange rates, are both stark and original. A firm is engaged in a productivity contest with the average firm in its own economy. Thus, national efforts to enhance productivity are counter productive to a firm whose productivity improvement lags behind that of the average domestic firm.
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Tom Husband and Abby Ghobadian
As one small part of a research project funded by the Science Research Council we have been working recently inside several British factories in an attempt to isolate the…
Abstract
As one small part of a research project funded by the Science Research Council we have been working recently inside several British factories in an attempt to isolate the mechanisms of corporate productivity. Our ultimate objective is to derive robust measures of productivity in terms of batch manufacturing characteristics (e.g. product mix, throughput time, etc). But how does one measure productivity? It sounds simple until the range of possibilities is considered. After considering the range we eventually opted for “total productivity” measurement and this short article describes how we went about it. We applied this approach, for example, to a single, large machine shop in a heavy manufacturing firm; to the comparison of performance of several subsidiary firms within a group specialising in large batch production of high precision units; and to the overall performance of a firm in small batch production of technically complex units for military use.
Productivity growth in the United States slowed dramatically during the Seventies. One measure of total factor productivity growth averaged 2.6 percent from 1948 to 1966, and 1.7…
Abstract
Productivity growth in the United States slowed dramatically during the Seventies. One measure of total factor productivity growth averaged 2.6 percent from 1948 to 1966, and 1.7 percent from 1966 to 1973, but only 0.2 percent during the 1973–81 period. Other measures of productivity growth show a similar picture. Even after adjusting for the weakness in the economy in 1981—which adds only 0.2 to 0.3 percentage points to the 1973–81 growth rate—the average annual rate of productivity growth during the mid‐ and late Seventies declined over 2 percentage points from the early postwar period, and well over 1 percentage point from the 1966–73 period.
Considers the difficulties involved in applying the superficiallysimple concept of productivity as total output divided by total input.Discusses the systems view of productivity…
Abstract
Considers the difficulties involved in applying the superficially simple concept of productivity as total output divided by total input. Discusses the systems view of productivity, the economists′ approach to productivity, the UK productivity record, measuring organizational performance in public and private sectors, individual productivity and attitudes to productivity. Concludes that the assumptions on which productivity analysis is based should always be questioned to avoid misapplication.
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Rajesh Bheda, A.S. Narag and M.L. Singla
The apparel industry is truly global in nature. Apparel manufacturing being labour intensive has been migrating from the high wage developed world to developing countries…
Abstract
The apparel industry is truly global in nature. Apparel manufacturing being labour intensive has been migrating from the high wage developed world to developing countries. However, the developing countries will need to have efficient manufacturing operations if they are to retain their competitiveness in the apparel industry. This paper attempts to evaluate the productivity levels achieved by Indian apparel manufacturers vis‐à‐vis their counterparts from the rest of the world; to ascertain factors associated with productivity performance; and to recommend strategies for productivity improvement.
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Paul Dunlop and Simon D. Smith
With an increasingly competitive global market, the UK construction industry finally realised that in order to survive, a marked increase in efficiency and effectiveness have to…
Abstract
With an increasingly competitive global market, the UK construction industry finally realised that in order to survive, a marked increase in efficiency and effectiveness have to be achieved in all areas. This paper will describe the UK's approach to planning and designing the concrete operations that form a major part of many civil engineering construction projects. A productivity study has been carried out on three different construction projects and over 200 concrete pours have been observed. The data and knowledge collected on site have been subjected to lean construction philosophies, producing a “lean” measure of productivity, and it has been shown that major productivity increases could be achieved by implementing several relatively simple principles.
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The purpose of this paper is to return to a long-term business focus that uses Productivity Accounting methodology as a strategy tool for business operation and for making…
Abstract
Purpose
The purpose of this paper is to return to a long-term business focus that uses Productivity Accounting methodology as a strategy tool for business operation and for making investments to benefit all producers and consumers in the electricity markets.
Design/methodology/approach
The research subjected the published annual financial reports data to an analysis using the Productivity Accounting methodology to fathom productivity and price recovery with a focus on productivity changes over the year. Assessment is made of any comments on productivity or efficiency by the utilities in relation to the computed productivity from the methodology of analysis.
Findings
The financial data as well as the statistical data that went with it could be analysed independently and productivity and price recovery results obtained. It is possible use Productivity Accounting to measure productivity change and use it for influencing investment and operational productivity for each resource and the utility.
Research limitations/implications
The focus is on power utilities that are experiencing shifts in the way they do business in the environment. However, there is definitely value in using productivity as a strategy for sustainable utilities. It would seem the results may be applicable to other types of businesses.
Practical implications
It is possible for any utility to use Productivity Accounting as a strategic tool to run the operations and support that with continuous investments as a basis of productivity driven sustainable and profitable businesses. It highlights the faults of the booms and bust of the California power industry against a productivity strategy-led utility.
Social implications
For both developing and developed countries it would mean that electricity is affordable in the long term as it is not a luxury good. Electricity can be used to leverage economies of countries for competitiveness.
Originality/value
The paper provides a fresh look at productivity as a strategic focus of a sustained business performance, for all utilities based on their own unchanged data.
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