04 Explain limitation of using the number of employees to compare business size.

[hassanalizafar]

[KN] Limited when comparing with capital intensive firm because it doesn’t reflect the level of technology or capital used.
[APP] For intance, a car manufacturer like Tesla uses advanced robots in production so it has fewer employees but still operates on a very large scale.
[AN] This means fewer workers don’t always equal a smaller business which leads automation increasing productivity which allows higher output with fewer staff which give them a lower cost of production and better avg cost per unit which gives misleading comparisons with labour intensive firms may undervalue the companys true size and lead to poor policy or investment decisions.
MODERATOR COMMENT:
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[Mustafa Khan]

kn]it cannot be compared with capital intensive business.
app]for example, a manufacturing based business cannot be compared with an agriculture based business. Because mainly machinery is used in manufacturing business and labor is used in agricultural business.
an]This means the 2 business cant be compared as 1 business might have more workers but generate less revenue as compared to the other and therefore can give inaccurate results which can mislead the investors, because of which they might experience financial loss and will eventually increase market volatility.
moderator comment:
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[Wahaj Ashraf]

[KN] The number of employees dosent give an actual picture especially when comparing different types of businesses
[AP] A company like Google may earn billions with fewer employees due to automation, while a factory may need many more workers to generate the same revenue.
[AN] Thus this shows that Businesses that use a lot of technology or automation may need fewer staff, yet still be very large in terms of output or revenue
MODERATOR COMMENT: This answer is copied exactly from muhmamad ali
KN:
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[MuhammadAli91191]

[KN] The number of employees dosent give an actual picture especially when comparing different types of businesses
[AP] A company like Google may earn billions with fewer employees due to automation, while a factory may need many more workers to generate the same revenue.
[AN] Thus this shows that Businesses that use a lot of technology or automation may need fewer staff, yet still be very large in terms of output or revenue
MODERATOR COMMENT: The answer is exactly copied from wahaj

[Hajra]

K: Using the number of employees to compare business size can be limited because not all firms need the same amount of labour.
App: For example, a car factory using robots may have fewer workers than a hotel but still be much larger.
An: This makes comparisons unfair, doesn’t show how efficient or productive a business is, and ignores differences in technology or automation levels.
MODERATOR COMMENT:
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[abdurrehman waseem]

KN: Different industries have varying labour requirements.
App: For instance, a car manufacturer may need thousands of workers, while a software company with fewer employees might still earn higher revenue.
An: This means comparing businesses by employee numbers alone can be misleading because it ignores productivity and industry differences.
MODERATOR COMMENT:
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[Aayan Zaidi]

KN: The number of employees shows how many people work in a business, but it's not always a fair way to compare size.
APP: E.g a car factory may need many workers, while a software company might earn more money with fewer staff.
AN: So, it can be misleading because different industries need different number of employees.
MODERATOR COMMENT:
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[Shaliza khawaja]

KN number of employees is not a accurate factor to measure a busienss size as a large business might be capital intensive and hence have less employees for example a clothing business have a large company but ony a few employees, if we relay on number of emloyee then we will ignore the productivity and revenue of the business, giving an unfair result furthermore number of employee also over look the market influence which is a major factor in measuring number of employees

[AliAzeem]

[KN]It will be hard to compare business size if the business is capital intensive.
[APP]For example a factory may employ more capital intensive machinery than a labour intensive accounting firm.
[AN]If number of employees is used to measure business size,it might lead to an inaccurate result and will give labour intensive firms an advantage over capital intensive firms which might lead to mismanagement.
MODERATOR COMMENT:
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[Mamoona Hussain]

KN: Some of the forms are capital intensive.
APP: For instance, a furniture manufacturing factory will employ hundreds of employees and still generate lesser revenue/profit margin than a car manufacturing factory which is automated and has much less employees.
AN: This can mislead the stakeholders of the businesses like shareholders, banks, investors and they might invest more in the furniture factory, which will decrease their returns/rewards on investment and also limit the finance raised by the car manufacturer, which could have been used to improve the quality of their cars, add new features or to expand, through all of which they could have improved their brand image and earn more revenue/profit. However this would not be possible as the method of measuring the business size through the number of employees can give a misleading view of the business size

[Mamoona Hussain]

KN: Some of the firms are capital intensive.
APP: For instance, a furniture factory will have much more employees than a car manufacturer which may be automated and have lesser employees but still generate more revenue/profit.
AN: This can give the stakeholders of the business like investors, shareholders, and banks the wrong idea and they may decide to invest more in the furniture factory which will decrease the chances of returns/rewards on investment and also limit the finance raised by the car manufacturer, which could have been used to improve the quality of the cars, add new features or to expand. However, this would not be possible as the method of comparing businesses through the number of employees they hire can give a misleading view of the business size.

[sarah_naeem]

[KN]: It can be misleading to capital intensive firms as some business firms do not need high number of employees to do their operations effectively.
[APP]: For example, a factory invests in better expensive machinery so that they can produce higher quality products with less employees.
[AN]: Thus, this means less employees doesn't always mean the business is smaller hence this leads to work being done quicker, higher output and more production despite less employees which decreases their cost and further leads to customer loyalty as customers can now see better quality products which also leads to long term growth of business.

[Mashal Umair Niazi]

KN: It will not be accurate for a capital intensive buisness.
APP: E.g. A company like Mehran may have less employees compared to CSD which may have more but Mehran could be the bigger buisness.
AN: This is because eg Mehran has more machines that replace the employee number, hence may make it look like a smaller business in terms of employees however more machines mean faster production therefore more output, aswell as more consistent output so more better output hence leading to an increase in sales, which adds to the revenue and overall size of the buisness.

[Areeba Arshad]

[KN] The number of employees measures how many people a business hires, which is one way to indicate its size.
[APP] However, in capital-intensive industries like car manufacturing or airlines, firms rely more on machinery and technology than on large numbers of workers.
[AN] This means a business could have few employees yet operate on a huge scale, making employee numbers a poor indicator of actual size or value and leading to misleading comparisons with labour-intensive firms that appear larger but may generate less output or revenue.

[Abdul Hadi]

KN: using the number of employees to measure the business size can be misleading as it shows only how many workers work in business and not reflect its true size or value.
APP: For example, a large autoated car manufacturing company may employ fewer emplyees but its production will be higher dur to use of machinery.
AN: So capital intensive business can use machinery for production so measuring its size with number of employees can underestimate its actual size, it can make comaparing comapny sizes misleading as manufacturing company and retail copany requires different work force sizes, a company using advance technology may appear small with employees size but may operate globally.