Tif Ltd., employed local workers to produce hand-woven bags as local workers were available easily. Tif Ltd. employed labour-intensive technology to leverage on skills of local workers but a newly appointed manager, Mr. Bond analysed scientifically and concluded that capital-intensive technology is the best method for Tif Ltd. as it would lower the production costs and utilise resources more efficiently than labour intensive method.

(i) Which technique of production was adopted by Tif Ltd. initially? Explain whether it will be useful.

(ii) Which technique of production was suggested by Mr. Bond?

(iii) Which study of scientific management does Mr. Bond want to apply and what purpose is it believed to serve?

(iv) Will Mr. Bond's technique be more useful than Tits initial technique of production?

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Solution

(i) Tif Ltd. had initially adopted labour-intensive technique of production that required long working hours and fatigue. This technique could have been supported with differential piece wage system that involved paying the employees based on a number of hand-woven bags produced at Tif Ltd. with the most efficient worker being paid the most. This wage system is relatively cost-effective and will ensure profit maximisation.

(ii) Mr. Bond suggested automation and capital-intensive techniques which could be more expensive than labour-intensive techniques.

(iii) Mr. Bond wants to conduct Motion Study that aims at smart work instead of hard work. The purpose of motion studies using human body with practical bodily movements, arranging workplace with relevant automation, tools, equipment, etc, making it comfortable and designing tools and equipment which are more feasible and efficient for workers.

(iv) Mr. Bond's method can be useful if the hand-woven bags made under capital intensive are as innovative and creative as labour-intensive. Mr. Bond's method should also be able to minimise costs and lead to profit maximisation. The capital. intensive techniques should not lead to more wear and tear if it has to be more effective than Tif labour intensive technique. The capital-intensive technique should be able to maintain competitive pricing and market share for Tif Ltd. as well.

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