Four Factors of production Land Labor Capital and Entrepreneur

Table of Content

The scientific discipline of concern activity says that there are four major factors of production: Land, Labor, Capital and Entrepreneur. The enterpriser is finally responsible for forming and apportioning all other factors of production. When a concern activity is set up, the resources are by and large allocated harmonizing to functional sections viz. Production, Marketing, Accounting and Finance, and Human Resource. The larger a house, the more functional sections it is likely to hold. What needs to be noted here is that the aim behind spliting the whole organisation into sections is to guarantee the efficient use of resources. In the older times, there was small construct of holding a Human Resource section in organisations. However, as the field of direction scientific disciplines evolved, the map of Human Resource began to pull attending and importance. This is because, a human resource, or employees in simple words, are as much of an of import plus to an organisation, as any other fixed resource. It is these human resources that come together to work and lend towards the efficient direction and use of all other resources and therefore the efficiency of overall organisation.

While larger houses have began to acknowledge the importance of it human resources, smaller houses still tend to disregard the fact that the efficiency if their human resource is an ultimate subscriber to the efficiency of their organisation. They tend to disregard the fact that the efficiency of human resource is straight related to human head, which needs to be motivated in order to give the needed consequences.

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As the field of human resources began to derive importance, the topic began an of import academic subject and accordingly attracted attending from academic research workers. This led to the outgrowth of a whole new subject of organisational behaviour. Equally simple as it seems, the field of organisational behaviour involves many complexnesss and foreground how people, single and groups act within an organisation. It takes into history several factors that might impact that efficiency of the work force, such as motive, leading, communicating, managerial accomplishments, struggle direction, and most significantly, the overall organisational construction. When it comes to workforce direction, out of all elements of organisational behaviour, leading has emerged as the most of import 1. This does non intend that all other elements have small importance. The ground why leading is given more importance is that it is the leader who supervises, manages and trades with all other behavioural elements refering to his work force.

While in larger organisations, the function of leading can be taken up by departmental caputs, supervisors and undertaking caputs, nevertheless, in smaller houses, the enterpriser himself takes the function of a leader. It is his leading accomplishment that straight contributes to how motivated and efficient his work force is traveling to be. Generally, despite of a much smaller work force, the employees in smaller houses are found to be more mismanaged, inefficient and demotivated than those in larger houses. This is because the enterpriser ignores the demand of giving his workers, a sense of importance, and he tends to keep a more bossy leading manner. This frequently leads to demotivation and therefore, inefficiency of work force. The same job was faced by JayDee Consultancy, an accounting house located in Nashville, TN.

The Problem

JayDee Consultancy is a little accounting house located in Nashville, TN. The steadfast trades in supplying accounting and consultancy services to other concerns. JayDee Consultancy consists of chiefly 3 associates. Two of the associates, Mr. John and Mr. David are spouses in the house with both holding an investing of 50 per centum each and hence have an every bit of import function in determination devising. The 3rd associate, Mr. Robert is a Chartered Financial Analyst, and works in the house as an adviser and adviser with regard to legal affairs refering to investing consultancy, hazard advisory, corporate jurisprudence, accounting and revenue enhancement. Besides, Mr. Robert is the 1 who mainly trades with the clients and is working on the land. The fact that Mr. Robert does non hold any investing in the concern and is working as an employee, makes him 2nd to both Mr. John and Mr. David. Although he is non a spouse in the house in footings of investing, nevertheless, he is of huge importance due to his expertness in the field and his specialisation in covering with complicated legal affairs. Mr. John is a Chartered Accountant while Mr. David is a Cost and Management Accountant ; hence both specialize in different Fieldss of Accountancy.

The biggest job with JayDee Associates is that the house fails to hold a clear organisation construction that could clear up occupation descriptions, occupation specifications, and duties and governments of the three associate. Both Mr. John and Mr. David experience, that given their pecuniary investings in the concern, they have the ultimate determination doing authorization in the house. As a consequence, they both ever end up in a struggle when it comes to determination devising. Not merely this, but they besides tend to disregard the expertness, specialisation and importance of Mr. Robert in their house. The job and its deduction with regard to the overall organisational behaviour of JayDee Associates is discussed as follows:


It is really of import for any and every organisation, be it big or little, to hold a clear and good defined organisational construction. It is this organisational construction of the house that defines the duties, responsibilities, and governments of each person within that organisation ( Robbins, 2003 ) . A clear organisational construction besides helps specifying the corporate civilization of the organisation. An ill-defined organisational construction would intend a complete misdirection of the human resource.

The job with JayDee Consultancy is that it fails to hold a clear organisational construction. Both Mr. John and Mr. Robert fail to esteem and acknowledge the expertness and sentiment of other associates, particularly their employee. Mr. Robert finds it really hard when it comes to converting the two spouses that their determinations are in contradiction to what the accounting Torahs and standard say or what the clients require.


The function of integrity holds a great importance in organisational behaviour. Integrity is categorized into Unity of Command and Unity of Direction. Unity of Command says that an employee must be taking orders, and should describe to merely one authorization ( Robbins, 2003 ) . Harmonizing to the construct of Unity of Direction, each aim must be synchronized with one individual program merely ( Robbins, 2003 ) . If integrity of bid does non exists, it means that the subsidiaries will be left in confusion about whom they should take orders from, whose determinations they should stay by, and whom should they describe to. This besides consequences in communicating spreads and misinterpretation of communicated information. On the other manus, if integrity of way is non existing, it would intend that the organisation fails to adhere to one individual program. This will ensue in delayed, and in some instances, inaccurate or incorrect determination devising. Coordination related jobs will besides be common in such organisations.

Unfortunately, both these constructs of integrity are virtually nonexistent in JayDee Consultancy. Both Mr. John and Mr. David want to maintain the entire control and authorization to themselves. This leaves Mr. Robert in province of confusion about whom he should be listening to. Due to miss of integrity of way, the house fails to do speedy and accurate determinations as both the spouses have their ain programs to the marks. Furthermore, they frequently tend to disregard the suggestions and recommendations given by Mr. Robert.

Integrity is besides of significance in an organisation because integrity between top degrees of direction Acts of the Apostless as a function theoretical account for employees working down the span of control to demo integrity which really promotes team working. In this instance, if Mr. David and Mr. John face struggles with each other often


The theory of organisational behaviour says that any person in the organisation must non give precedence to his personal involvement over the involvement of organisation. Giving precedence to personal benefits would intend that organisational involvement is being compromised. This job is faced by JayDee Associates at a terrible degree. Both Mr. John and Mr. David want to maintain the control in their ain custodies and they both ignore the fact that it is their single accomplishments integrated together that will assist the house to accomplish its organisational. If each of them will work independent of each other, the demand of their services will see a crisp demand


It is really of import for an overall successful public presentation of an organisation that its work force, from top degree to the lower degree, is focused on the purposes, aims, and marks it wants to accomplish. The first thing which is to be noted here is that this focal point on marks means that the organisation must be clear about what precisely does it desire to accomplish and in what clip span. Without a clear sense of way, the work force, no affair how skilled it is, will ever be left in confusion. Once clear and realistic marks are set, it must be ensured that each person works in the best involvement to accomplish those marks without any aberrance. The roadmap to accomplish those ends must besides clear and coordination and attachment to that program must be ensured at all times by every person. Coordination is where JayDee Associates fails. The deficiency of coordination among Mr. John, Mr. David and Mr. Robert leads to mismanagement and failure to accomplish aims. This besides effects the efficiency of Mr. Robert, who on an single degree, tries his best to maintain the organisation on the way to success, but can non make much because of the fact that the each of the two spouses consider themselves excessively of import to esteem anybody else ‘s recommendations and expertness.

Literature Review

As mentioned earlier, the field of human resource direction has attracted huge academic and corporate attending over a period of clip. This invited a batch of research workers to research the topic. Sing the fact that the organisational behaviour besides deals with human psychological science and sociology along with conventional corporate techniques, it attracted psychologists and sociologists to research about assorted methodological analysiss involved in work force direction. This in bend led to a creative activity of whole new subject of organisational behaviour.

Leadership and Motivation

Refering to the direction jobs faced by JayDee Associates, there are two schools of ideas that exist in general. The first school of idea suggests that leaders, particularly in smaller organisation, need to be more bossy and a centralised signifier of corporate civilization must be maintained. They argue that since there are less promotional opportunities in smaller houses, merely those people work in little houses, whose ultimate end is to gain money. Such work force is merely motivated by pecuniary benefits and therefore it is non of concern to them even if they are non involved in determination devising procedure.

Lepper, Greene and Nisebett ( as cited at ) argue that workers are motivated through touchable wagess. They show willingness to execute good if touchable. Particularly pecuniary wagess are associated with the undertakings they are delegated. This means, leaders need non utilize intrinsic attacks in order to actuate these workers. This farther implies that such workers need non be involved in any sort of determination doing procedure as their public presentation is straight related to the pecuniary inducements they earn.

Peter Ducker ( 1974 ) takes the antecedently discussed statement to another degree, by reasoning that pecuniary wagess are the ultimate function participant in actuating any sort of work force. They are so indispensable that no human dealingss, sense of accomplishment, degree of importance, and determination doing authorization can counterbalance for pecuniary benefits. He argues that no affair how progressive the corporate universe grows, trade brotherhoods and work force are ever known to supercharge employers for higher wages and rewards. He besides claims that although self-motivation and other intrinsic elements are of import in workforce motive, nevertheless, they can merely be triggered through pecuniary wagess that are which the employees work for.

The Monetary herding out theory suggests that pecuniary wagess and penalties play a great function in beef uping or weakening a workers desire to execute expeditiously. It implies that workers tend to be more inclined towards undertakings that have greater range of pecuniary or fiscal benefits. Similarly, they may hold to certain organisational determination because they fear that traveling against them may ensue in a pecuniary penalty for them for illustration, coming tardily to office may ensue in tax write-off in monthly wage.

Assorted other research workers have agreed that since workers work to gain high wages and all other desires and wants can be fulfilled by money merely, leaders need non take their input in any sort of determination devising. They should merely convey the instructions and associate pecuniary wagess and penalties to the completion of undertaking in order to acquire required consequences.

Taylor besides laid emphasis on the thought that workers merely work for fiscal additions because all their wants are dependent on money. Therefore, they should be kept under changeless supervising. He argues that if pecuniary benefits are subtracted from the inducement equation, and all other inducements are offered, so workers will non be willing to work.

There is another set of theoreticians who are wholly against the first school of idea. These theoreticians argue that although money is an of import motivational tool, nevertheless extrinsic wagess entirely can non carry through the duty of actuating an person to an extent that he gives the coveted consequences. These theoreticians besides argue that such workers need a sense of importance and accomplishment to execute good. Once their fiscal demand is fulfilled they aspire for ego realization.

Lewin suggests that bossy and dictatorial leading manner should merely be used where there is small clip for determination devising. Harmonizing to Lewin, being consistent with bossy leading manner, kills the sense of creativeness and invention in the work force and makes work humdrum and tiring for them. This consequences in terrible demotivation as workers work for the interest of acquiring the occupation done instead than matching it their full energy to acquire the coveted consequences.

Elton Mayo argued that fulfilling intrinsic desires of work force is more of import in order to trip their public presentation. Effective communicating and strong relationship between employer and employees is indispensable to guarantee full use of human resource. He claims that directors should guarantee effectual feedback one time they have communicated their instructions and information, in order to accomplish the coveted consequences. Mayo ‘s theory suggests that work force should be given more chances in the determination devising procedure so that they get a sense of importance and belonging to the organisation. The more the ain their work, the better they will execute.

Maslow and Herzberg, both agree that it is more of import to fulfill the psychological demands of work force than fiscal demands. They both claim that fiscal demands are merely one clip desires and one time they are satisfied they aspire to carry through their psychological demands which go up to the extent of ego realization. They besides claim that workers are more concerned of their occupation security and if they fear losing occupations, their efficiency will be sacrificed even if they will be paid moneymaking wages. They claim that leaders and directors must esteem the ego regard of their work force.

Herzberg ‘s theory suggests that apart from carry throughing physiological and psychological demands, workers look for making more varied and ambitious undertakings. They besides get motivated when they are delegated undertakings and are given more chances for determination devising.

There is one other theory that creates balance in both these schools of idea. Douglas McGregor classifies workers into theory X and Theory Y. He claims that theory X worker ‘s avoid working and are non intelligent plenty to take enterprises. They are non ambitious. In order to acquire the coveted consequences out of them, leaders and directors should pull them with fiscal inducements and keep an bossy manner of leading with them. On the other manus, Theory Y workers are self motivated. They look for disputing undertakings that give them sense of accomplishment. They do n’t wish to be directed and like to work on their ain. Such workers are originative and original and should be dealt with a more democratic manner of leading. They should be given undertakings where determination devising is involved so that they feel like they are lending to the organisation in an of import manner.

Conflict Management

Conflict direction is another of import facet of organisational behaviour that has attracted a batch of attending from research workers. It must be noted that squad motive and leading and managerial crisis are non the lone organisational crisis faced by JayDee Associates. Lack of struggle direction is another of import issue for the organisation. In theory, there are five major ways of covering with struggles.

The collaborative attack provinces that a determination should be reached where the involvements of both the conflicting parties is taken into history. Although this attack is ideal where relationships are to be strengthened, nevertheless, when using this attack to organisational patterns, it must be taken attention of that the organisation ‘s involvement must non be compromised in order to fulfill the personal involvement of the several conflicting parties. If a solution is worked out where the involvements of both the conflicting parties are met but the involvements and aims of the organisation are at interest, so such a solution must non be opted for.

Another attack is the compromising attack, which suggests that both the conflicting parties reach a impersonal and an indifferent solution where single concerns of both the conflicting parties is satisfied to some extent but non wholly. In an organisational position, this attack is more executable as compared to its old opposite number as both the conflicting parties compromise on some of their personal concerns in order to accomplish common organisational aims to which they both agree. Both the conflicting parties must allow travel their personal involvement to an extent such that the organisation ‘s aims are non compromised on.

The theory of suiting suggests that one of the conflicting parties gives up to the other such that the struggle is resolved in harmoniousness. This is merely feasible when one of the conflicting parties realizes that he is on the incorrect side. This attack is seldom applicable in an organisational scene. It is besides of import that the party that is giving up on his side of the statement must be taken on board with the determination of the winning party. The winning party must guarantee that there is no trust shortage in between the conflicting parties.

Competing theory of conflict direction can be used where accomplishing ends are more of import than personal involvement and where prompt determination devising is required. This theory is based on the thought that a individual may utilize everything in his or her power in order to achieve the coveted consequences. This attack is merely advisable to be used when a individual is confident about the fact that he is on the right side of the statement. However, the usage of power mean that power should be exercised in such a mode that other nonsubjective like work force motive should non be damaged.

Avoiding theory suggest that a struggle may be avoided by proroguing the issue to be discussed at a ulterior clip or by side stepping from the struggle. The job with this attack is that it merely gives a impermanent solution to the job. Apart from this, postponing of of import issues can non merely detain the determination devising procedure, but besides can ensue in doing things worse.

The five theories discussed earlier are by and large used when solution is to be reached without the engagement of any 3rd party. However if both the conflicting parties fail to make a solution utilizing any of the five schemes, so go-betweens and arbiters can be used to make a determination. These go-betweens and arbiters are a 3rd party that listen to the statements and demands of both the conflicting parties and so do them make an determination that non merely is indifferent but besides fulfills the demand of common good. However, a drawback of this attack is that it can really clip consuming and may detain the determination devising procedure.


Mixing the leading, motive and struggle direction theories discussed above two sorts of decisions can be reached. One theory says that leaders should be bossy and should non trouble oneself about taking inputs from their employees. Their employees are merely concerned with fiscal additions and that is what they work for. Therefore, their sentiments and suggestions do non count to the organisation. Furthermore, when it comes to conflict a leader must do certain that his involvements are protected at best and he must make everything in his power to implement his sentiments.

On the impudent side, a more broad and wide set of theoreticians suggests that leaders should keep a democratic manner. Workers should be allowed to take part in the determination devising procedure. Their sentiments and suggestions must be respected and they should be given both intrinsic and extrinsic benefits to work. These theories suggest that it is of import for directors to allow the work force have a clear sense of way and their ego regard must be respected. When it comes to making a solution to a struggle, power must merely be used where a director is confident that he is on the right side of the statement. He must step aside or at least show flexibleness if that is in the best involvement of the organisation as protecting the involvement of the organisation is more of import than chase of one ‘s personal benefits.


It should be noted that none of the two set of theories have once and for all been proven wholly accurate or wholly inaccurate. Both have been practically applied in assorted organisational scenes and have produced that were in some instances highly successful, while a complete failure in another instances. The success and/ or failure of any theory depends on how efficaciously it is applied along with the nature of the organisation, its corporate civilization and the psychological science and personality of its employees.

In instance of JayDee Associates, it is observed that Mr. Robert is an expert and professional worker who is ambitious and seeking his best to bring forth good consequences for the improvement of the organisation. His efficiency is merely enduring at the custodies of the obstinacy of his foremans. An ideal solution to this job would be that both Mr. John and Mr. David should esteem the fact that Mr. Robert is an expert in his ain field and his sentiments and recommendations must be respected. Even if the spouse ‘s feel that they can non hold with Mr. Robert ‘s suggestions as it goes against their aims, they should impart an ear to what he says and so take a determination that best suits their organisational involvement.

Equally far as the struggle between the spouses themselves is concerned, the spouses should maintain the involvements and aims of the organisation in the first topographic point. If either of the spouses realizes that he is at the incorrect side, he should step aside. In other instances both spouse ‘s should hold a duologue in a peaceable scene so that the corporate environment of the organisation is non disturbed.


JayDee Associates should do certain that their organisation has a clear and good defined organisational construction. Governments, duties, and responsibilities of each person must be good defined. It must be made certain that Mr. Robert does non acquire confused with whose orders he should stay by and whom he should describe to. It will besides be more practical if both spouses divide the determination devising functions harmonizing to their ain Fieldss of expertness. Given that JayDee Associates is a little house which non merely has an advantage of a short concatenation of bid but besides has a narrow span of control, if the house fixes up its jobs related to worker motive, communicating spreads, leading manners and struggle direction, jayDee Associates will be on its route to success.

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Four Factors of production Land Labor Capital and Entrepreneur. (2017, Jul 08). Retrieved from

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