Economies of growth: A study of corporate and productivity growth rates in two service industries

Productivity has long been an issue of importance to scholars and practitioners of business administration, with business academics turning their attention to the study of productivity at the levels of the firm, the plant or service outlet, and the production process. This study adds to the research of productivity issues, particularly in the field of operations management, by exploring two primary research questions related to labor productivity.; First, this study explored relationships between corporate and productivity growth rates in two service industries, bank holding companies and eating places. Major findings were that in bank holding companies, a positive, linear relationship existed between corporate growth rate and the rate of growth in labor productivity. Such a relationship is termed economies of growth in this study. Classical economies of scale in labor (using the ratio model) were found to be present in bank holding companies, and an examination of the hypothetical effects of scale economies and growth economies, respectively, on terminal employment levels in growing bank holding companies revealed that growth economies consistently resulted in a larger magnitude of economies in labor. Finally, the economies of growth relationship was not found to be significant for the eating places.; This study also examined the presence of a well-recognized phenomenon related to productivity: the learning curve. In this study, the exploration of the presence of the learning curve was moved from the traditional manufacturing setting to the context of the multisite service organization. It was found that a significant conventional univariate log-linear learning curve was present in the data of a service product at a large, multisite restaurant chain. The study also encompassed a review of the methods of transferring learning among the outlets of three large, multisite service organizations. Results seemed to indicate a relationship between the degree of standardization across outlets and the presence of a formal system of transferring learning among the outlets.