Krugman Vs Marriott

Assignment Week 5 (Due 4 Feb)

Krugman vs. Marriott

Prepare a 2-3 page paper using APA format discussing problem 1 in the “Problems to Ponder” at the end of chapter 10. Be sure to address each question in this problem.

Organizations require resources to operate, and employees are one kind of resources. Employer and employee relationship has been evolving over time, but has always been that of mutual benefit. After all, a business cannot function without employees and people will not have a livelihood if they are not employed by a company. However, the balance of power has traditionally been with the employers, who in order to have the maximum profit have tried to get the maximum out of the employees. However, with greater education and awareness, employees are becoming more important to organizations than ever before. Every employee has a right to expect that he or she will be treated fairly by his or her employer, and that the employer will act in good faith (Mary Rau-Foster). With the increase in knowledge based business, employees are becoming the most critical resource for organizations on which depends their competitive advantage.

While it is true that some employers have treated their employees like commodities, the statement cannot be generalized like what Krugman did. When an employer does not treat its employees well, the long term success of that organization is questionable. This is because employees will leave the organization at the first chance they get and the loss of experienced staff is expensive for any organization. The training cost of new staff and the changed work environment is not conductive for business.  Therefore, there is always a balance of power between the employees and employers where neither one can cross their limits.

The market actions are determined by supply and demand equations. Depending on this, some sectors or products may go out of business and the demand has shifted to a different product. These shifts can create problems for employees or people who earn their livelihood from the sector which has seen reduction in demand. This nature of the market which does not consider the impact of switches on people is the reason why krugman calls the market as capricious. Even though people are troubled in the short term, one must remember that the job have merely shifted to another sector. Very often this is the cost of progress and the short term trouble will be more than compensated by the advantages of the shifts in the long term. Because, the jobs shift to a new sector and the people who are unemployed will eventually find employment and perhaps a better one. This is the very nature of capitalist economy and the market moves depending on the requirement of the consumers. On the other hand, the effects of trying to control markets can be seen in the economies of Cuba and the former Soviet Union. Therefore, while the market can be capricious in a capitalist system, the overall effects are positive.