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Production can be organized by command or by incentives.How do they differ?Which approach is in your opinion a better system for today’s economy?

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Incentive System vs. Command System in Production
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Incentive System vs. Command System in Production
In most companies, specifically manufacturing, the management is required to make choices when seeking to maximize company’s profit. Will pushing workers to do their job perfectly be more operative than giving them a concession for meeting the set targets of the market? Which system will increase productivity?
Interestingly, there are no direct answers since various aspects should be considered before entering into the decision to favor either of the systems. Some of the aspects include company’s management structure and bureaucracy, along with the nature of the work itself.
Incentive system as a method of organizing firm’s production stimulates workers to increase their performance. It is always viewed as what management has put in place that can motivate workers to perform with minimal supervision.They are things such as commissions, recognition from the senior staff, bonuses, promotions etc. These incentives are provided at each level of the firm, thus, allowing competition and growth.
On the other end, work that requires accuracy and in which any slight deviation from the exact figure or value can be costly to the firm demand close monitoring of employees activities.In such a setting, pressure is mounted from the senior most manger downwards to the workers as information is fed back upwards. This kind of system is inflexible because it has many levels of expertise in the management thus lacking competition.

Wait! Production can be organized by command or by incentives.How do they differ?Which approach is in your opinion a better system for today’s economy? paper is just an example!

In conclusion, the best way for a firm to organize its production so as to maximize its profit is by applying a combination of the two systems discussed. A firm will use a command system only when it is easier and cheaper to watch employee’s performance otherwise incentive system will be the most appropriate alternative. Being flexible to both systems influences company’s growth.

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