. In the past, there was concern about a “productivity paradox” related to IT services. More recently,
there have been few references to this phenomenon. Using the internet, explain the term productivity paradox. Why do you think that the discussion of that topic has faded?
2. A U.S. company has two manufacturing plants, one in the United States and one in another country.
Both produce the same item, each for sale in their respective countries
. However, their productivity
figures are quite different.
The analyst thinks this is because the U.S. plant uses more automated
equipment for processing, while the other plant uses a higher percentage of labor.
Explain how that
factor can cause productivity figures to be misleading. Is there another way to compare the two
plants that would be more meaningful?