The reward for entrepreneurship is increased profit.AmosWEB means Economics with a Touch of Whimsy! These concrete decisions can only be made by the entrepreneur. In order to realize an effective production, there must be coordination of critical activities, for instance labor needs to be controlled, and capital on the other hand needs wise investment and management decisions. Today the latter has become synonymous with business. Classical theorists never paid much attention to entrepreneurship. It refers to the process of organizing land, labor, and capital in the right proportion to achieve an effective production process. A solid infrastructure is likely to support organizational processes such as communication, transport and logistics, warehousing, and manufacturing. More money for instance would lead to increased volumes of business activities. An increase in capital especially financial capital is likely to influence production activities. Capital depends on labor to produce and remains the most susceptible to risks. Capital may include roads, buildings and factories, machineries, and money. CapitalĬapital is defined as man made resources that are used to create other goods and services for consumption. However, given the volatile and dynamic nature of the current global economy, there is a shift from industrial economy to knowledge based economy therefore the use of unskilled labor may awkwardly disadvantage an organization. The type of labor required may be determined by the nature of the activities of the organization. On the other hand unskilled labor is cheap but may not be efficient in the long run. The type of labor used at any given point is likely to influence production level skilled labor is perceived to be efficient and therefore may affect production positively though it is expensive. Skilled labor refers to human personalities with technical and professional training backgrounds while unskilled labor constitutes a workforce with a relatively lower training skills and competency. There are two main categories of labor skilled and unskilled. Labor also relies on factory buildings and infrastructure. Labor uses capital to produce goods and is subject to the availability of natural resources and raw materials. Labor refers to any mental or physical efforts of man used in the production of goods and services to satisfy human wants. This is so because the question is about achieving maximum returns using the limited resources. Under the principal of scarcity of natural and economic resources, entrepreneurs are expected to make rational decisions before any investment is undertaken. The main characteristic of land that is relevant to economists is that its supply is limited. Land is therefore referred to as a passive factor of production and may include water, air, minerals, plants and animals. Land can never be moved and at the same time may be difficult to increase. While capital, labor and entrepreneurship remain flexible, land exhibits a unique characteristic of being fixed in supply. Land refers to all the natural resources that are found on the earth surface but are used in the creation of goods and services to satisfy human wants. This is the basis on which this paper is built. However, a decrease in the factors will likely lead to a fall in the production level. Where there is abundant presence of all the required factors of production in the right proportion, production is likely to increase. The purpose of this paper is to expand the reader’s knowledge in understanding how factors of production contribute to affect production. However effective production must be supported by constant availability of factors of production. Production is an important activity in the business environment for it ensures continuity by creating place and form utility for goods and services. This is seen especially in developed countries like Japan, China, India, United States, Britain, Ghana, Egypt, Qatar and etc. Countries whose economic resources are abundantly available coupled with robust existence of human resources would always achieve economic growth thorough its financial years. Adequate supply of factors of production would translate to better production and consequent provision of goods and services.
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